Aitsan Limited & Ors v Stuart Robert Duffy & Anor

Facts

The appellants are individuals and companies who in July 2017 invested off plan in units in a development of student flats in Newcastle-under-Lyme built by Sky Building Ltd. Under their contracts they paid a deposit and staged payments, with a final completion payment falling due only once an architect's certificate confirmed the flat was complete. Certificates signed by the first respondent, Mr Duffy, a former architect, were fraudulent: the flats were far from finished and could not be occupied. In reliance on the certificates the buyers paid the completion payments and took 250-year leases. Taking the first appellant, Aitsan Ltd, as the example, it had paid £39,000 before the certificate, a completion payment of £13,000, and later sold its unfinished lease for £32,000. The second respondent, Mr Duffy's company, is in liquidation and took no part. The claimants sued in deceit in 2020. Master Pester gave summary judgment on liability on 25 March 2021; HHJ Keyser KC dismissed an appeal on liability but allowed an appeal on quantum and directed an assessment. At the assessment Master Pester held the completion payments were a direct loss, but that full credit had to be given for the lease sale proceeds and none for the earlier payments, leaving most lease-selling claimants with nothing. The Chancellor refused permission to appeal on the sale-proceeds point but granted it on the treatment of the pre-completion payments.