The High Court has ruled that 35 investors’ claims against Greymountain Management Ltd and four other defendants do not meet the legal test for being brought together in one action. The court has not yet decided whether the proceedings should be split, stayed or struck out, and made no finding on the investors’ fraud allegations.
The case concerns claims by investors who say they lost money in binary options schemes. Their accounts involved different trading brands and separate dealings. The judgment outlined examples involving Edgedale Finance and Bloombex, with payments processed through Greymountain. Those accounts were drawn from witness statements and were recounted for the application; the judge said he was not expressing a view on whether they would be established in evidence.
The Cartu defendants applied for proper replies to particulars and also sought to stay or strike out the proceedings because the claims of the 35 plaintiffs were separate. Greymountain, which is in liquidation, did not participate in the motion. The judge decided to address whether the action was properly constituted before considering particulars, noting that it would be illogical to order further replies for claims that might be stayed or struck out.
Under Order 15, rule 1(1), plaintiffs may be joined where their claims arise from the same transaction or the same series of transactions and a common question of law or fact would arise. The plaintiffs argued that the claims shared a series of transactions because Greymountain allegedly received, pooled and passed on their money as part of a fraud. The defendants disputed that interpretation.
Mr Justice Brian O’Moore held that “the same” applies to both a transaction and a series of transactions. Similar methods or allegations of fraud were not enough. Each investor’s claim, he said, depended on discrete dealings and losses specific to that plaintiff; one investor’s claim did not arise from the alleged theft of another’s money. He stressed that references to fraud or theft were not findings that either had occurred.
The judge concluded that the claims fell outside the joinder rule. He said he would hear further argument on the form of the order. The motion’s other requested reliefs, including particulars, therefore remained unresolved in the judgment.