Corporate Liability But No Individual Director Liability For Misrepresenting A Cypriot Property Investment Scheme (Barclay-Watt V Alpha Panareti Public Limited And Anor)

• Published date: 12 September 2022
• Subject Matter: Finance and Banking, Corporate/Commercial Law, Litigation, Mediation & Arbitration, Financial Services, Corporate and Company Law, Arbitration & Dispute Resolution
• Law Firm: Gatehouse Chambers
• Author: Mr Phillip Patterson

Dispute Resolution analysis: The Court of Appeal has upheld the decision at trial that a Cypriot property development company is liable for losses caused to individual investors by way of misrepresentation but the individual director of that company is not liable as an accessory.

Barclay-Watt v Alpha Panareti Public Limited and anor [2022] EWCA Civ 1169

What are the practical implications of this case?

In this appeal and cross-appeal against the decision of Sir Michael Burton following a lengthy trial, the Court of Appeal has upheld in full the trial judge's decision. The judgment offers guidance on two distinct areas, one substantive and one procedural. On the substantive question, the Court of Appeal has confirmed that claims for accessory liability against the directors of corporate tortfeasors should be confined to fairly narrow grounds. Applying the decision of the Supreme Court in Fish & Fish v Sea Shepherd [2015] UKSC 10, the Court of Appeal emphasised that "it should be possible to carry on business by means of a limited liability company without exposing the individuals carrying on that business to personal liability." Procedurally, the Court of Appeal has confirmed that Wolff v Trinity Logistics USA Inc [2018] EWCA Civ 2765 is correctly decided. Where a Claimant proceeds to trial on two alternative grounds, succeeding on one and failing on another and the Defendant appeals, permission is required for the Claimant to appeal against the rejection of the failed ground of claim. A cross-appeal on such a basis cannot properly be described as merely an attempt by the Claimant to uphold the trial judge's order.

What was the background?

The Claimants were UK residents who were persuaded to invest substantial personal savings in a scheme by which three sites in Cyprus were being developed. One Defendant, Alpha Panareti Public Limited ("APP") is a property developer in Cyprus and was the developer of the three sites. The other remaining Defendant was Mr Andreas Iannou, a director of APP and the driving force behind the marketing of the scheme. Planning permission was given for the sites in 2005 and 2007 and properties were marketed and sold to the individual UK residents between 2005 and 2007. Following the economic downturn after the financial crash problems were encountered and none of the Claimants received completed properties. One site was completed by December 2011 and another in April 2013. The other site remains only 30-60% complete. At a trial...