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Court of Appeal allows appeal from High Court, and determines that claims by investors against funds for losses arising from alleged negligence and misrepresentation in negotiating contracts with 'loan to value' (LTV) covenants were statute-barred, on the grounds that the cause of action accrued at the time the funds entered into the LTV covenants, which was not a 'latent' defect but was capable of being discovered on enquiry.
Relief sought in proceedings: Damages against funds for alleged negligence and misrepresentation in failing to inform investors of 'loan to value' (LTV) covenants.
Application before the court: Appeal from determination of limitation period in High Court.
Outcome: Appeal allowed.
Grounds: The negligence occurred at the time the funds entered into the LTV covenants, which could have been discovered on enquiry.
Baker J (nem diss): Appeals by bank from determination of limitation period - several linked actions - distinction between categories of claim - investors in funds - funds investing in commercial properties in UK - decrease in value - negligence - alleged failure to specify, refer to or explain 'loan to value' covenants or consequences of same - conclusion of High Court that claims in contract were statute-barred - categories of claim: negligence simplicity; negligent misstatement / misrepresentation concerning LTV covenants; negligence and breaches of fiduciary duty - Section 11(2) of the Statute of Limitations 1957 - manifestation of loss - distinction from previous case law - borrowing to invest - summons issued on 6 August 2014 - knowledge of LTV covenants - whether before or after 6 August 2008 - fixed term bond - management of funds - whether investment was 'bound to fail' - test of when damage becomes manifest - whether previous decision was limited in scope to property damage claims - mere possibility of loss - discoverability - charges imposed at time of investment.
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