An action by a beneficiary under a trust might be brought in respect of any fraud or fraudulent breach of trust to which the trustee was party or privy against both that trustee and any other person who dishonestly assisted him in such fraud or fraudulent breach of trust, in either case, after the expiration of the six-year limitation period for which section 21(3) of the Limitation Act 1980 provided.

The Court of Appeal so held when dismissing an appeal by the defendant, Central Bank of Nigeria, from the order of Supperstone J [2011] EWHC 876 (QB) dismissing the defendant’s application to set aside service in Nigeria of the claim form and particulars of claim issued by the claimant, Dr Louis Emovbira Williams.

In 1986 the claimant, a national of Nigeria who had been resident in England since 1979, participated in a transaction whereunder, he alleged, he was defrauded of $6,250,190. He asserted, in proceedings commenced by him on 10 March 2010 against the defendant alone, that an English solicitor held that sum of money in his client account in trust for the claimant on terms that he would release it if and when certain funds had been paid in Nigeria. He asserted that in May 1986 the solicitor fraudulently paid away $6,020,190 to the account of the defendant with Midland Bank in England, that the defendant was a party to the fraud and that the solicitor retained the balance of $500,000 for himself.

Limitation Act 1980, section 21(1) provides: “No period of limitation prescribed by this Act shall apply to an action by a beneficiary under a trust, being an action— (a) in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy; or (b) to recover from the trustee trust property or the proceeds of trust property in the possession of the trustee, or previously received by the trustee and converted to his use.”

SIR ANDREW MORRITT C said that the point was whether the claimant’s claims were barred by section 21(3) of the 1980 Act, as the defendant contended, or preserved by section 21(1)(a) thereof, as the claimant submitted. His Lordship referred to the following cases, among others: GL Baker Ltd v Medway Building and Supplies Ltd [1958] 1 WLR 1216, Cattley v Pollard [2007] Ch 353, Statek Corpn v Alford [2008] EWHC 32 (Ch) and Peconic Industrial Development Ltd v Lau Kwok Fai [2009] 5 HKC 135. Was it implicit in section 21(1)(a) that the cause of action there described might only be pursued outside the primary limitation period against the trustee (the singular including the plural) who was party or privy to the fraud or fraudulent breach of trust? The only words which could import that requirement was the passage reading “being an action … in respect of any fraud or fraudulent breach of trust to which the trustee was a party or privy”. The definite article preceding the word “trustee” connoted the trustee of the relevant trust, but the phrase of which it formed a part was descriptive of and a limitation on the generality of the phrase “any fraud or fraudulent breach of trust”. Of itself it could not justify any implication that “the action” might only be brought against that trustee. The terms of subsection (1)(b) were in stark contrast. In that paragraph the relevant limitation was clearly expressed.

BLACK LJ gave a concurring judgment.

TOMLINSON LJ agreed that the appeal should be dismissed for the reasons given by Sir Andrew Morritt C.