The High Court has ordered a modular trial in Bernadette Goodwin’s Belfry investment case on whether her right of action was concealed by fraud, an issue that could affect whether her claim is time-barred. The court also directed her to deliver revised Points of Claim. It did not decide the concealment issue or the limitation question.
Mrs Goodwin’s claim is one of six test cases representing about 280 claims concerning Belfry investment funds. She alleges that she and her late husband invested £150,000 in Belfry 3 in 2003 after AIB arranged the investment. She says the investment’s risks were understated and that the sales material did not explain its structure or borrowing terms, including a loan-to-value covenant. The claim is that property values later fell below the covenant threshold, properties were sold and the investment was lost. These remain allegations, not findings in this ruling.
The Court of Appeal previously held that the claims were brought outside the six-year limitation period, subject to the possibility that time was postponed for negligence and misrepresentation claims if the right of action had been concealed by fraud. That issue returned to the High Court. The present ruling concerned how it should be pleaded and heard, following an application by AIB to narrow parts of Mrs Goodwin’s Points of Claim.
The judge ruled that the proposed hearing could address alleged concealment of the loan-to-value covenant, any other onerous clauses in the borrowing facility, and the structure of the fund. The judge said evidence about what was disclosed before the investment could provide background, but could not by itself establish concealment after the investment for this hearing. The hearing is limited to the statutory concealment issue; it is not a trial of the underlying claims.
The judge ordered that the revised pleading identify the underlying claims separately, remove the claim for damages for fraudulent concealment and remove specified paragraphs, including a speculative plea about the loan’s duration. Other pleas may remain but must be confined, as appropriate, to the covenant, other alleged onerous borrowing terms and the fund structure. The plaintiff may seek to amend if discovered documents support further claims. The judge did not require a complete rewrite of the pleading.
The judge said a modular hearing should proceed promptly, citing Mrs Goodwin’s age and ill health and the risk of further delay if all six test cases proceeded together. The parties were to return for directions on the revised pleadings, discovery and a proposed trial date. The ruling also said an undertaking that an adverse outcome for Mrs Goodwin would bind the other five test cases should be confirmed at the next hearing. No trial date was fixed in this ruling.