The Court of Appeal has allowed solicitor John Spencer’s appeal over his €1 million investment in a geared property fund linked to the Whitgift Shopping Centre in Croydon, London. It remitted the case to the High Court to assess damages; it did not determine the amount payable.
Spencer sued Irish Bank Resolution Corporation Limited, alleging negligent misstatement and misrepresentation in statements about the fund. Stapleford Finance Limited, which had acquired the loan connected to his investment, counterclaimed for judgment under the loan agreement. Spencer argued that damages could be set off against the loan. The Court of Appeal’s judgment did not quantify damages or set out a separate final ruling on the counterclaim.
The appeal concerned written promotional material for the fund. The High Court had dismissed Spencer’s claim, but the Court of Appeal disagreed with its conclusion that the earlier brochure could not ground liability because more formal investment documents followed. The court said pre-contractual statements could support a claim and found that the promotional brochures were intended to persuade clients to invest.
The appeal court identified several misleading statements. A brochure presented two developments on the same site as separate opportunities without explaining that they could not both proceed. It also said the Whitgift Foundation had confirmed it would support and fund plans to maximise the centre’s value. The court found there was no basis for that claim: the development proposals had not been put to the Foundation, which had made no commitment to approve or fund them.
The court also found that the material gave investors a misleading impression that a planned 80,000-square-foot retail development could proceed promptly. The site was occupied under a lease due to run until December 2010, and the Home Office refused to surrender it in October 2005. The formal fund brochure did not correct the central misrepresentations about the Foundation’s position or the site’s availability.
The court concluded that the development potential had contributed to Spencer’s decision to invest, and that it could not be separated from the other features promoted by the bank. It allowed the appeal and dismissed notices to vary filed by the bank and Stapleford against High Court findings of misrepresentation. The matter was returned to the High Court for assessment of damages.