M – Misrepresentation
19/3/24
FAROL HOLDINGS LTD v CLYDESDALE BANK PLC [2024] EWHC 593 (Ch)
The court dismissed claims relating to so-called tailored business loans. Under the loans the lender hedged its interest rate risk in the market and the customers’ interest liabilities were capped at fixed rates but increased if market rates fell. The customers were liable for break costs incurred by the lender when the loans and hedges terminated. Claims that the lender had no liability to pay break costs were rejected and the lender’s terms were held to have entitled it to recover loss arising from break costs. The court summarised principles of deceit and misrepresentation [206] but found that none of the representations about break costs were false and allegations of deceit were not made out. Claims that the lender misrepresented that its profit was limited to the interest rate margin also failed because a reasonable person in the position of the customers would not have understood any such representation was being made. Although the primary limitation periods for the claims had expired, the limitation periods for a number of the claims would have been extended under s.14A and/or s.32 Limitation Act 1980 by reason of the customers’ lack of knowledge. The court also reviewed principles for finding an unfair relationship [751] but rejected the claim made on this basis.
25/2/19
MARME INVERSIONES 2007 SL v NATWEST MARKETS PLC [2019] EWHC 366 (Comm)
A claim to rescind interest rate hedging contracts on grounds of manipulation of the EURIBOR reference rate failed. The court reviewed the principles for implying representations [115]. None of the pleaded representations could be implied. A representation that RBS was not manipulating or attempting to manipulate EURIBOR had not been pleaded and even if implied, there was no evidence to show it would have been false. The court reviewed the requirements for fraudulent misrepresentation [253] (including where knowledge of falsity is not known to the person making the representation) and the circumstances in which an adverse inference can be drawn from destruction of documents [268] or from a witness not being called [271]. The court also reviewed principles of reliance [278] (including the need for the claimant to have given some thought to any implied representation) and causation [289]. On the facts no reliance was established, the contracts had in been affirmed and could not be partially rescinded. An alternative claim for damages would also have failed.
22/7/15
NGM SUSTAINABLE DEVELOPMENTS LTD v WALLIS [2015] EWHC 2089 (Ch)
Claims of fraudulent misrepresentation dismissed.
31/3/15
HAYWARD v ZURICH INSURANCE COMPANY PLC [2015] EWCA Civ 327
A claim by insurers to set aside a settlement agreement for fraudulent misrepresentation failed. Although the underlying claim which had been settled had been falsely exaggerated, the insurer had already known or perceived that to be the case at the time of the settlement. The fact that better evidence of the fraud only came to light after the settlement made no difference.
4/11/14
UBS AG v KOMMUNALE WASSERWERKE LEIPZIG GMBH [2014] EWHC 3615 (Comm)
Considers the legal principles for setting aside contracts on grounds of bribery of agents [587], conflict of interest on the part of an agent [621], attribution of an agent’s knowledge to a company [628], fraudulent misrepresentation [642], contractual estoppel [773] and rescission [783].
4/4/14
NATIONAL CRIME AGENCY v NAMLI [2014] EWCA Civ 411
It could properly be inferred that a bank lending to a customer relied on statements that funds coming into the customer’s account were from a legitimate source. The statements had been false because the funds were in fact derived from criminal activities, as the defendant was aware. The making of false statements as to the source of funds coming into an account, made to a bank which has had concerns about the integrity of its customer, is inherently likely to be relied on by the bank to which they are made in relation to all its subsequent dealings with him. Such a misrepresentation is material to it and likely to induce any loan contracts it enters into with the client. In such circumstances inducement may be inferred without the need for direct evidence (St Paul and Marine Insurance Co Ltd v McConnell Dowell Construction Ltd, 1996). The monies loaned were, for that reason, obtained by or in return for unlawful conduct and profits derived from the use of the funds could be made the subject of a civil recovery order under POCA.
27/3/14
LENI GAS & OIL INVESTMENTS LTD v MALTA OIL PTY LTD [2014] EWHC 893 (Comm)
Analyses the applicable principles for claims in deceit. On the facts the claim failed as no implied representations had been made nor was causation made out.
8/11/13
Proposed amendments to plead false and fraudulent implied representations made by the bank and implied terms that the LIBOR rate applicable to loan and swap transactions was genuine and the bank had not manipulated or attempted to manipulate it and did not intend to do so, gave rise to a sufficiently arguable case for permission to amend to be given.
4/11/13
LLOYD v BROWNING [2013] EWCA Civ 1637
Where parties had equal bargaining power, a non-reliance clause in a contract of sale which prevented the buyer from relying on pre-contractual representations, satisfied the reasonableness test for the purpose of s 3 Misrepresentation Act 1967.
23/4/13
EC03 CAPITAL LTD v LUDSIN OVERSEAS LTD [2013] EWCA Civ 413
Summarises the key ingredients for a claim in deceit, being a false representation, knowledge that the representation is false or being reckless as to its truth, an intention that it be relied on, reliance by the claimant and loss. Intent to deceive is not a separate element. On the evidence the trial judge had been entitled to find the claim had been made out.
28/2/13
DEUTSCHE BANK AG v UNITECH GLOBAL LTD [2013] EWHC 471 (Comm)
The defendants were refused permission to amend their pleadings against the bank to plead false implied representations by the bank that the LIBOR rate applicable to a swap transaction was genuine and the bank did not intend to manipulate it. The proposed amendments were not sufficiently arguable. Permission might be given to plead reliance on an implied term that the bank would not manipulate the rate.
21/12/12
WILSON v DODD [2012] EWHC 3727 (Ch)
Contains a useful summary of the principles of fraudulent misrepresentation at [78] – [99]. On the facts a statement that a third party had invested in the defendant's business did amount to a fraudulent misrepresentation.
30/11/12
SYCAMORE BIDCO LTD v BRESLIN [2012] EWHC 3443 (Ch)
In a share sale agreement which drew distinctions between warranties and representations, warranties did not amount to representations which could give rise to an action for misrepresentation.
29/10/12
GRAISELEY PROPERTIES LTD v BARCLAYS BANK PLC [2012] EWHC 3093 (Comm)
The claimant was given permission to amend its claim against the bank to plead false and fraudulent implied representations made by the bank and implied terms that the LIBOR rate applicable to a swap transaction was genuine and the bank had not and did not intend to manipulate it. The proposed amendments gave rise to a sufficiently arguable case.