Startwell Limited v (1) Energie Global Brand Management Limited and others

On 23 February 2015, Mr Justice Warby handed down judgment granting the Defendants’ application for strike out/summary judgment following a day-long hearing of various applications in the case. The main issue was whether it was permissible to plead deceit in the Reply to Defence when the Particulars of Claim were advanced on the footing of negligence.

The dispute arose from a franchise agreement of fitness clubs in Ireland. The claim was for damages in excess of €1m flowing from a number of alleged misrepresentations and breaches of contract.  The most recent of the pleaded misrepresentations occurred in February 2007, and the claim was issued on 1 August 2013. The Claimant had previously been refused leave to amend its Particulars of Claim to insert allegations of deceit, as that claim was time-barred. Defences of limitation and contractual estoppel were raised.

In its reply, the Claimant contended that the pleaded misrepresentations had been made fraudulently, whilst explicitly not relying on fraud as a cause of action. It contended that this defeated a defence of contractual estoppel, and brought the claim within ss32(1)(b) and (2) of the Limitation Act 1980.  The Claimant’s argument was that the alleged deceit established that facts relevant to the claim had been deliberately concealed and/or that the misrepresentations had been made knowingly.

The Judge rejected the Claimant’s arguments and granted summary judgment.  He found that Misrepresentation Act 1967 claim is in substance an allegation of negligence, and that the deceit pleaded in the reply was a new and distinct factual case inconsistent with the pleaded claim. He found that this both invited the Court to make inconsistent findings of fact and was contrary to PD16 9.2, and could not be permitted on that basis. The Judge cited contractual estoppel as a further and separate ground for summary judgment, reiterating his reasoning on the pleaded deceit.

The Defendants were represented by Owen White.

For further information, please refer to the judgment in Startwell Limited v (1) Energie Global Brand Management Limited (2) Energie Global Limited [2015] EWHC 421 (QB).