Buy-to-let fraud claim struck out
Posted: 8th February 2013
A buy-to-let investor who alleged that she was induced by fraudulent misrepresentation into the disastrous purchase of a portfolio of seven properties at home and abroad has had her compensation claim struck out. The High Court ruled that her case against a businessman who she had argued was a ‘shadow director’ of a company that provided seminars for would-be property investors stood no realistic prospect of success.
The investor claimed to have lost hundreds of thousands of pounds as a result of her attendance at seminars which, whilst purporting to be educational, were alleged to be ‘mere marketing exercises’. The defendant businessman was not alleged to have given any of the seminars but it was argued that he was one of the company’s ‘controlling minds’ and that he should be fixed with responsibility in law for the investor’s losses.
Dismissing the investor’s appeal against an earlier decision that her claim was not reasonably arguable, the court noted that there was no evidence to support her plea that the businessman had played a central role in drafting scripts for the seminars. Although he had had an interest in developing the company and promoting its profitability with a view to its onward sale that did not mean that he was involved in its day-to-day operation.