“Barclays contends that the Claimants cannot satisfy a central legal requirement concerning reliance – viz. that the claimant in a misrepresentation case must establish that it actively/consciously appreciated at the time that the alleged representation was being made to it.”
“for fraudulent, alternatively negligent, misrepresentations at common law, alternatively for fraudulent, alternatively negligent, misrepresentations undersection 2 of the Misrepresentation Act 1967 .”
“(1) for deceit and/or fraudulent misrepresentation (including claims based on express and/or implied representations by the Defendant about LIBOR and the matter in which it would be set); and/or (2) for negligence; and/or (3) under theMisrepresentation Act 1967 ; and/or (4) for breach of contract (including claims based on express and/orimplied terms relating to LIBOR and the manner in which it would beset); and/or (5) for restitution.”
“15. The Defendant advised and/or recommended and/or proposed the relevant loans and/or the parties entered into the relevant loans pursuant to which, as pleaded above, the Claimants’ obligations were set by reference to 6 month GBP LIBOR. Further, each relevant loan was (where it was a novation of an amendment to or cancellation of a previous loan) inseparably connected to the previous loan. In the premises, on and/or prior to the entry by the Claimant into each of the relevant loans the Defendant expressly, by its conduct and/or impliedly represented to the Claimant that: (1) As at the date of each of the relevant loans, LIBOR represented the interest rate as defined by the BBA (being the average rate at which an individual contributor panel bank could borrow funds for a specified period by asking for and accepting interbank offers in reasonable market size just prior to 11am on that date) so far as Barclays was aware; and (2) Prior to the date of the relevant loans, LIBOR represented the interest rate as defined by the BBA, so far as Barclays was aware; and (3) Barclays had no reason to believe that on any given date LIBOR had represented or might in the future represent anything other than the interest rate defined by the BBA; and (4) LIBOR was a rate which represented or was a proxy for the cost of funds on the interbank market for panel banks such as Barclays; and (5) Barclays had not on any given date up to and including the date of each of the relevant loans: (a) Made false or misleading LIBOR submissions to the BBA; and/or (b) Engaged in the practice of attempting to manipulate LIBOR such that it represented a different rate from that defined by the BBA (viz a rate measured at least in part by reference to choices made by panel banks as to the rate that would best suit them in their dealings with third parties); and (6) In the alternative to (5), that at the date of the relevant loans Barclays itself was not manipulating GBP LIBOR; and (7) Barclays did not intend in the future to: (a) Make false or misleading LIBOR submissions to the BBA; and/or (b) Engage in the practice of attempting to manipulate LIBOR such that it represented a different rate from that defined by the BBA (viz a rate measured at least in part by reference to choices made by panel banks as to the rate that would best suit them in their dealings with third parties); and (8) In the alternative to (7), that at the date of the relevant loans Barclays itself did not intend in the future to manipulate GBP LIBOR; and (9) So far as Barclays was aware, no other panel bank had on any given date up to and including the date of each of the relevant loans: (a) Made false or misleading LIBOR submissions to the BBA; and/or (b) Engaged in the practice of attempting to manipulate LIBOR such that it represented a different rate from that defined by the BBA (viz a rate measured at least in part by reference to choices made by panel banks as to the rate that would best suit them in their dealings with third parties); and (10) Where the relevant loan was a novation of, an amendment to or cancellation of a previous loan, the relevant loan would replace/ amend/ cancel a valid and enforceable previous loan and not a voidable previous loan. 16. In particular, the Defendant’s employees and agents (acting within the scope of their actual or apparent authority) made the LIBOR representations to the Claimant. The Defendant communicated with the Claimant in relation to the proposal that the Claimant should enter into the relevant loans based on a GBP LIBOR rate. It was inherent in those communications about the intended loans based on a GBP LIBOR rate that the Defendant made the implied representations and/or representations by conduct referred to above. Pending disclosure, the best particulars that the Claimant can give are that the LIBOR representations were made in: (1) the draft loan instruments prepared by the Defendant for each of the relevant loans; (2) each loan instrument entered into by the Claimant with the Defendant in which the Defendant proposed and required loans with an interest rate payable by reference to GBP LIBOR; (3) emails and other documents from the Defendant in which it proposed and/or advised and/or sold and/or recommended and/or described and/or referred to each of the relevant loans (and other potential loans) and/or each of the loan instruments; (4) meetings and telephone calls with the Defendant in which the Defendant proposed and/or sold and/or advised and/or recommended and/or described any of the relevant loans or other potential loans or any of the loan instruments; and (5) emails and other documents from the Defendant to the Claimant in which the Defendant referred to LIBOR rates and the Defendant: (a) purported to give an explanation to the Claimant as to why LIBOR rates were setting at the rate they were setting; or (b) purported to predict the future path of LIBOR. The Claimant refers, by way of example, to the email from Samantha Biddick of the Defendant to the Claimant dated17 August 2007 at 9.42 and the email from Samantha Biddick of the Defendant to the Claimant dated10 September 2007 at 11.26. It was inherent in such communications that LIBOR was being set, to the best of the Defendant's knowledge, by the Defendant and by other banks honestly and that the Defendant intended to make honest LIBOR submissions in the future. 17. Further, the LIBOR representations were not corrected by the Defendant and remained in effect at all material times.”
“17. In the course of proposing and/or transacting each of the LOBO Loans and, in particular, in putting forward transactions which were referenced to LIBOR, Barclays impliedly represented to each of the Claimants that: (1) Barclays was not itself manipulating LIBOR (or GBP LIBOR) and that it did not intend to do so in the future (“LIBOR Representation 1”); and/or (2) Barclays had no reason to believe that LIBOR (or GBP LIBOR) was being manipulated or that it would be manipulated in the future (“LIBOR Representation 2”). 18. The LIBOR Representations were not corrected by Barclays and remained in effect at the time of and/or were repeated by Barclays upon entering into each subsequent LOBO Loan.”
“19. The Claimant relied on the LIBOR representations, and each of them, when entering into each of the relevant loans and the LIBOR representations induced the Claimant to enter into each of the relevant loans.”
“ these authorities support the proposition that a claimant in the position of Marme in the present case should have given some contemporaneous conscious thought to the fact that some representations were being impliedly made …”
“It is denied that any natural person at Newham was aware (in the sense of giving contemporaneous and conscious thought to the matter) that the alleged LIBOR Representations (or any of them) had been made at the time of entering into the LOBO Loans or the Fixed Rate Loans.”
“15.3. The Claimant relies on the following in support of its case on reliance: (1) The Court must ask: what would have happened if the representation(s) had not been made. (2) There is a presumption of inducement in cases of fraud. The Defendant bears the burden of proof in seeking to displace the presumption of inducement. The Defendant will be unable to displace the presumption of inducement in this case. (3) LIBOR was an important benchmark to the Claimant, both in terms of the relevant loans and more generally in that the Claimant followed the path of LIBOR and the predicted path of LIBOR because LIBOR was used by the Claimant as a benchmark for forecasting, as a measure of the short term cost of borrowing and as a benchmark when the Claimant was investing. (4) The Claimant, as a public body, was at all relevant times only willing to deal with a reliable counterparty which was acting honestly and in good faith. (5) If those considering and/or making the decision on the proposed transactions at the Claimant in 2007/2008 including John Turnbull, Stephen Wild and Alison Mackie, had been told by the Defendant, prior to entry into the 10 LOBOs in 2007/2008 or the amendments thereto in 2007/2008, that the Defendant was manipulating LIBOR then they would have decided that the Claimant should not to enter into the relevant loans or into any transaction with the Defendant. (6) If those considering and/or making the decision on the proposed transactions at the Claimant in 2007/2008 including John Turnbull, Stephen Wild and Alison Mackie, had been told by the Defendant, prior to the Claimant agreeing to the amendments of any of the relevant loans in 200712008, that the previous loan was or may be invalid and/or voidable, then they would have decided that the Claimant should not enter into the amended loan or any transaction with the Defendant. (7) If those considering and then recommending to Cabinet the proposed amendments in 2016/2017 (including Stephen Wild and Alison Mackie) had been told by the Defendant, prior to the Claimant agreeing to the amendments in 2017, that the previous loan was or may be invalid and/or voidable, then they would not have recommended that the Claimant enter into the amended loan or any transaction with the Defendant. (8) What the Claimant would have done if told the truth is not the test of reliance/ inducement, but it is relevant evidence towards establishing reliance/ inducement. (9) In this case, given representations 15(1) to 15(9) were inherent in the conduct of the Defendant in putting forward the LIBOR linked loans, it would not have been possible for the Defendant in good faith to put forward each loan/amended loan in 2007/2008 without at the same time expressly informing the Claimant that the Defendant disclaimed any such representations, such as by stating that ‘Barclays is not telling you whether or not it is manipulating LIBOR, or intends to do so, or is acting honestly and in good faith in putting forward LIBOR linked loans, you will have to make up your own mind’. (10) In this case those considering and/or making the decision on the proposed transactions at the Claimant in 2007/2008 (including John Turnbull, Stephen Wild and Alison Mackie) each: (a) Knew that relevant loans were referable to LIBOR; and (b) Would not have entered into the relevant loans if the Defendant had made the statement at sub-paragraph (9) above. (11) Further, in this case, given representation 15(10) was inherent in amending a LIBOR linked loan, representation 15(10) could only not be made on or prior to each amended loan if the Defendant had, prior to entry into each amended loan, made a statement which disclaimed any such representations, such as ‘Barclays is not telling you whether or not the loan you are considering amending is valid and enforceable or invalid and unenforceable for LIBOR misrepresentation, you will have to make up your own mind’. (12) In this case those considering and/or making the decision on the proposed amended transactions at the Claimant in 2007/2008 (including John Turnbull, Stephen Wild and Alison Mackie) each would not have entered into the amended loans if the Defendant had made the statement at sub-paragraph (11) above. (13) Further in this case those considering and then recommending to Cabinet the proposed amended transactions in 2016/2017 (including Stephen Wild and Alison Mackie) would not have recommended the amended loans in 2017 if the Defendant had made the statement at subparagraph (11) above. (14) Those considering and/or making the decision on the proposed loans and proposed amended loans at the Claimant in 2007/2008 (including John Turnbull, Stephen Wild and Alison Mackie) each expected and believed the Defendant was acting honestly and in good faith in putting forward the LIBOR linked loans and proposed amended loans. (15) Further, those considering and then recommending to Cabinet the proposed amendments in 2016/2017 (including Stephen Wild and Alison Mackie) each expected and believed the Defendant was acting honestly and in good faith in putting forward the proposed amended loans. (16) To the extent that it is necessary to prove conscious and/or active reliance rather than an assumption, it is averred that the matters pleaded above prove active reliance. (17) Further, those considering and/or making the decision on the proposed transactions and amended transactions at the Claimant in 2007/2008 (including John Turnbull, Stephen Wild and Alison Mackie) also each: (a) Believed that the Defendant was acting honestly and in good faith in putting forward the LIBOR linked loans and that LIBOR was not being manipulated; and (b) In the case of an amended loan, assumed the previous loan that was being amended was valid and binding and not invalid and unenforceable; and (c) Would not have entered into the relevant loans if the Defendant had made the statement at sub-paragraph (9) or (11) above and/or if they had known that the Defendant was manipulating LIBOR and/or if they had known that in the case of an amended loan it was amending a loan that was not valid and binding but voidable for misrepresentation. (18) Further, those considering and then recommending to Cabinet the proposed amendments in 2016/2017 (including Stephen Wild and Alison Mackie): (a) Believed that the previous loan that was being amended was valid and binding and not invalid and unenforceable; and (b) Would not have entered into the amendments if the Defendant had made the statement at sub-paragraph (11) above and/or if they had known that the amendments were amending a loan that was not valid and binding but voidable for misrepresentation. (19) It is averred that the aforesaid is in any event sufficient to prove reliance by the Claimant and to the extent that Picken J decided in Marme Inversiones 2007 SL v NatWest Market PLC[2019] EWHC 366 (Comm) that assumption is insufficient to prove reliance he was wrong and should not be followed.”
“Under paragraph 30 Of: ‘... the Claimants relied on and/or were induced by each of the LIBOR Representations in entering into each of the LOBO Loans’ Request: 3. Please clarify whether, in respect of each Claimant, it is alleged that a natural person or persons actively and/or consciously understood the alleged LIBOR Representations (or any of them) had been made at the time at which the LIBOR Representations are alleged to have been made. Response: 3. The Claimants’ case as to reliance/inducement is adequately pleaded … for the avoidance of doubt: (1) …; (2) inducement is established by showing that the representee was influenced or affected by the misrepresentation; (3) further, there is a presumption of inducement where a representee has entered into a contract with the representor after a material misrepresentation was made to the representee by the representor. …; (4) inducement is made out where, as here, the relevant natural persons who authorised each of the Claimants to enter into each of the LOBO Loans (as identified at Schedule 1 hereto) would not have taken this course of action if they had known the true position. This further supports the presumption of inducement and also shows that the Claimants were influenced by Barclays' misrepresentations; (5) insofar as any additional mental element is required (which is denied), it is in any event satisfied on the facts. The matters set out above show that the representations were actively present to the mind of the individuals identified in Schedule 1. Further, the very fact that they did not query the matter in itself demonstrates that the relevant representations were influencing or affecting their minds. For the avoidance of doubt, where an implied representation by a dishonest party has the effect of reinforcing an assumption by the (honest) counterparty that the contractual benchmark is honest and is not being manipulated, inducement is made out.”
“Under paragraph 30 of the Particulars of Claim and Response 3 of the First RFI Response Of: […] Requests 1. Please clarify whether or not it is alleged as a matter of fact that the natural persons identified at Schedule 1 of the First RFI Response consciously understood the alleged LIBOR Representations (or any of them) had been made at the time at which the LIBOR Representations are alleged to have been made. For the avoidance of doubt, ‘consciously understood’ (the phrase used in Request 3 of the First RFI but not addressed in Response 3 of the First RFI Response) is to be distinguished from unconscious or subconscious ‘assumption’ and involves a person giving contemporaneous conscious thought to the LIBOR Representations alleged. … Responses: 1. It appears that there is a dispute between the parties as to the correct legal test for reliance and/or inducement in relation to a representation made impliedly or by conduct (such as in this case): (1) The Claimants acknowledge that, in Marme Inversiones 2007 SL v Natwest Markets Plc[2019] EWHC 366 (Comm) , Picken J held at [286] that, … (2) If that is the correct legal test, then it is not alleged that any of the Claimants gave any ‘contemporaneous conscious thought’ to the fact that the LIBOR Representations were being made by Barclays, in the sense of actively asking themselves at the time Barclays was proposing and/or transacting each of the LOBO Loans whether Barclays was making any representations to them about LIBOR. (3) However, for the avoidance of any doubt: (a) It is denied (if it is alleged) that it would be necessary, as a matter of law, for any of the Claimants to establish that this was the case. To the contrary, the Claimants’ position is that it would be sufficient for them to establish that (as honest contracting parties) they were influenced or affected by the LIBOR Representations, in the sense that the LIBOR Representations operated on their minds, whether consciously or subconsciously. It is alleged that this was the case. To hold otherwise would be to licence a rogue’s charter. (b) If and to the extent that Picken J intended to apply a different and/or more onerous test in the Marme Inversiones case, then the Claimants will respectfully submit that Picken J was wrong to so hold, and that the decision in the Marme lnversiones case should not be followed in this respect. (c) In the premises, the relevance of Request 1 is denied.”
“Reliance is an essential element of the cause of action in misrepresentation. And awareness is an essential component of reliance. Awareness cannot be established unless the claimant has a present active understanding that the communication is being made.”
“50. In determining whether there has been an express representation, and to what effect, the court has to consider what a reasonable person would have understood from the words used in the context in which they were used. In determining what, if any, implied representation has been made, the court has to perform a similar task, except that it has to consider what a reasonable person would have inferred was being implicitly represented by the representor’s words and conduct in their context.”
“80. In order to succeed in its claim RZB must show: (a) that RBS made representations to it; (b) that it understood that those representations were being made; (c) that such representations were false; (d) that it was induced by those representations, or one or more of them, to subscribe to the Syndication Agreement and thus to lend RBSFT£10 million ; (e) that RBS intended that such representations should induce RZB to enter into the contract; (f) that RZB is not precluded by the terms of certain provisions in the IM and the Confidentiality Agreement and elsewhere (‘the Relevant Provisions’) from advancing its claim.”
“does not, in my judgment, establish that he understood that RBS was actually making those representations.”
“In light of these authorities it seems to me that the law at the end of the 19th century had assimilated the requirement for inducement in the tort of deceit and in actions for rescission for fraudulent misrepresentation and could be stated as being that the representee had to prove he had been materially ‘influenced’ by the representations in the sense that it was ‘actively present to his mind’.”
“… in Pan Atlantic Lord Goff, accepted at 517C and 517E respectively that in gauging materiality it suffices if the misrepresentation (or nondisclosure) had ‘an impact on the mind’ or an ‘influence on the judgment’. In the same case Lord Mustill adopted references to inducement not being established where the misrepresentation (at 545E) ‘did not influence the judgment’, (at 546C) ‘did not influence the mind’ or (at 551C) ‘had no effect on the decision’.”
“ it was incumbent upon them to prove that such representations were understood to have been made since otherwise there could be no reliance”) ii) Cassa di Risparmio della Repubblica di San Marino SpA v Barclays Bank Ltd[2011] EWHC 484 (Comm) at [224]: “As further observed in Raiffeisen, at [87], the claimant must show that he in fact understood the statement in the sense (so far as material) which the court ascribes to it; and that, having that understanding, he relied on it. Analytically, this is probably not a separate requirement of a misrepresentation claim but rather is part of what the claimant needs to show in order to prove inducement.” iii) Foster v Action Aviation at [101]: “Unless one understands that a representation is being made, it is difficult to see how it can be said to have been relied upon. Mr Foster’s evidence was that had he known at the time that the factory had financial issues he would not have signed the contract. However, the case is one of positive representation, not non-disclosure. He gives no evidence that he understood that the Defendants were representing to him or telling him that the factory had no financial issues, still less that they were making the more specific representations set out in the pleading. I am accordingly not satisfied that inducement has been sufficiently proved.”
“…a claimant must show that it understood that the representation alleged was being made to it. Without such an understanding, there can be no question of any reliance on the representation”; b)at [164]: “Even if Dr Higgs had dishonestly intended to lead Mr Ritson to believe that the farm-out process had not begun in earnest or that there had been no serious negotiations, LGO must prove that Mr Ritson did understand that this was what he was being told.”
“In my opinion it would not be right in an action of deceit to give a plaintiff relief on the grounds that a particular statement according to the construction put on it by the court is false and that the plaintiff does not venture to swear that he understood the statement in the sense that the court puts on it.”
“It is possible that, even when tested objectively, a statement could equally well be understood in different senses: it is simply ambiguous. It will then be for the representee to establish the meaning of the words which he actually understood; it is not enough for him simply to claim that one of the meanings was actionable, or to leave it to the court to decide the “ordinary” meaning.”
“What would have happened if you had been told the truth?” - to which I shall refer as “the counterfactual of truth”
“182. A claimant who gives credible evidence that, if he had been told the truth (there is no celebrity next door), he would not have entered into the contract is likely to establish that if the misrepresentation had not been made he would not have contracted and that it was thus an effective cause of his doing so, since such evidence is likely to establish both the importance to him of what he was told and its effect on his mind …. 185. Per contra, a claimant who says that even if he had been told the whole truth it would have made no difference to his readiness to enter into the contract will be likely to fail to establish that he was induced to enter into the contract by the misrepresentation in question. There is an inherent contradiction in someone saying that a representation was an inducing cause and accepting that, if the truth had been told, he would have contracted on the same terms anyway…. 187. It is not, therefore, necessary for the representee to establish that he would have acted differently if he had known the truth. And it may not be sufficient, either. If it were, a claimant who gave no thought to any representation, or did not understand it to have been made, might be entitled to recover.”
“I consider that any case of implied representation is fact specific and it is dangerous to dismiss summarily an allegation of implied representation in a factual vacuum.”
“It was also submitted that doing nothing cannot amount to an implied representation. But it is (arguably) the case that the banks did not do nothing in that they proposed transactions which were to be governed by LIBOR. That is conduct just as much as a customer’s conduct in sitting down in a restaurant amounts to a representation that he is able to pay for his meal, see DPP v Ray[1974] AC 370 , 379D per Lord Reid.”
“[Mr Lord] submits that … matters may be implicitly communicated by conduct and sub-consciously understood, even if they were not consciously considered at the time. He also relies upon Spice Girls Ltd v Aprilia World Service BV [2002] EMLR 27 in which it was held that when making an agreement to publicise a product, a band had impliedly represented that they had no reason to believe that one of their number had an existing intention to leave the band during the term of the agreement”
“It seems to me therefore, that there was no understanding of what are extremely complex and intricate pleaded representations meant and for the most part, the matters which were pleaded did not cross Mr Russell and Mr Wyse’s minds. On that basis, in my judgment, they could not have understood the implied representations to have been made and therefore, did not rely upon them. …. At best, it seems to me that both Mr Russell and Mr Wyse assumed that LIBOR, which they understood to be a commercial rate of interest, would be set in a straightforward and proper manner. In my judgment, therefore, they gave no thought to the LIBOR Representations in the form pleaded and did not rely upon them.”
“125… the law relating to misrepresentation fulfils a different function from the law relating to implied terms. The former deals with the present not the future and gives potential remedies which may be more appropriate than a claim for damages. A party to a contract containing a swap needs to be certain of the counterparty's honesty at the beginning of the deal not just in the future but throughout its course. If a claimant has suffered no loss, that may be relevant to remedy but should not exclude a right to rely on misrepresentation if any misrepresentation has occurred. 126. All this does not mean that the court should be too ready to find an implied representation … On any view it is by no means impossible that a representation can, in theory, be made by conduct alone. 127. The facts of those cases are, of course, a long way from a typical swaps case…. 128. In Geest plc v Fyffes plc [1999] 1 All ER (Comm) 672 the defendant had promised to use reasonable endeavours to obtain a bank's agreement to substitute itself for the claimant as a guarantor of its subsidiary's obligations under charterparties and in any event to indemnify the claimant in respect of its liability under the guarantees it had given. When the claimant sued for breach of these obligations, the defendant alleged that the claimant had failed to disclose that the claimant had confirmed to the shipowners that its subsidiary would remain its subsidiary for the duration of the charters. In fact the subsidiary had been disposed of and was no longer the subsidiary of the claimant. … The judge said … ‘In evaluating the effect of the beneficiary's conduct a helpful test is whether, having regard to the beneficiary's conduct in such circumstances, a reasonable potential surety would naturally assume that the true state of facts did not exist and that, had it existed, he would in all the circumstances necessarily have been informed of it.’ … 132. The present case appears to be the first in which Colman J's test has been considered by the Court of Appeal. We do think it is a helpful test, in relation to the existence of an implied representation, to consider whether a reasonable representee would naturally assume that the true state of facts did not exist and that, if it did, he would necessarily have been informed of it. To that extent we would approve the dicta of Colman J in Geest plc v Fyffes plc [1999] 1 All ER (Comm) 672 but that is not to water down the requirement that there must be clear words or clear conduct of the representor from which the relevant representation can be implied. 133. In the present case there were lengthy discussions between PAG and RBS before the swaps were concluded as set out by the judge in the earlier part of her judgment…. RBS was undoubtedly proposing the swap transactions with their reference to LIBOR as transactions which PAG could and should consider as fulfilment of the obligations contained in the loan contracts. In these circumstances we are satisfied that RBS did make some representation to the effect that RBS itself was not manipulating and did not intend to manipulate LIBOR. Such a comparatively elementary representation would probably be inferred from a mere proposal of the swap transaction but we need not go as far as that on the facts of this case in the light of the lengthy previous discussions. In this sense the case is comparable to the UBS case[2014] EWHC 3615 (Comm) in which a not dissimilar representation was implied from what Depfa had been told by UBS and the fact that the relevant transaction was put forward to Depfa by UBS. It is true that UBS had also told Depfa that it had done due diligence on KWL but we do not consider that fact to have been decisive on its own in the mind of Males J in that case.”
“There are two aspects to this issue since, in the first place, a claimant must establish that it was aware of the representation at the time that it was made and, secondly, the claimant must show a causal connection between the making of the representation and its decision to enter into the contract which ensued from the making of the representation.”
“I find myself in the present case reaching the conclusion that, since Mr Maud merely made certain assumptions concerning EURIBOR without giving any thought to the EURIBOR Representations, reliance has likewise not been established by Marme. Mr Maud did not understand any of the alleged EURIBOR Representations to have been made to him at the time, and so it follows that those representations (or something approximating to them) were not, and cannot, have been ‘actively present to his mind’.”
“I do not base this conclusion merely on the change of mind that had occurred for that in itself was not manifest at the time and did not amount to ‘conduct’ on the part of the respondent. But it did falsify the representation which had already been made because that initial representation must, in my view, be regarded not as something then spent and past but as a continuing representation which remained alive and operative and had already resulted in the respondent and his defaulting companions being taken on trust and treated as ordinary, honest customers… Holding for these reasons that the respondent practised a deception, I turn to what I have referred to as the second question. Was the respondent’s evasion of the debt obtained by that deception? I think the material before the justices was enough to show that it was. The obvious effect of the deception was that the respondent and his associates were treated as they had been previously, that is to say as ordinary, honest customers whose conduct did not excite suspicion or call for precautions. In consequence the waiter was off his guard and vanished into the kitchen.”
“I don't think we have anything for you. You are obviously in the wrong place.”
“In certain limited circumstances, reliance can be inferred. In Smith v. Chadwick (1884) 9 A.C. 187, Lord Blackburn stated: I think if it is proved that the defendants with a view to induce the plaintiff to enter a contract made a statement to the plaintiff of such a nature as would be likely to induce a person to enter into a contract, and it is proved that the plaintiff did enter into the contract, it is a fair inference of fact that he was induced to do so by the statement. Ms Fuzzi and Mr Bravazzo both gave evidence that Aprilia would not have entered into the agreement if it had been known that Ms Halliwell had declared an existing intention to leave the group …, and I have no doubt that AWS would have consulted Aprilia's marketing department if it had been told of Ms Halliwell’s intentions. Before the agreement was made, Aprilia incurred expenditure on the commercial shoot. …. Given that Aprilia had to sign the agreement to get the right to use the commercial shoot (and that there was no other reason for it to sign the agreement except to get the rights thereunder), it seems to me that the court can infer that indirectly it was induced to enter the contract by the representation made to it when it made the shoot.”
“In the circumstances no one at AWS gave any consideration at the time to what representations were to be implied into the statements and conduct of the Spice Girls. But this is not a case in which the representations were ambiguous, so that the problem exemplified in E. A. Grimstead & Son Ltd v. McGarrigan does not arise. There is no reason to think that AWS did not understand the representations in the sense alleged. The judge so inferred with regard to the other representations to which we have referred.”
“Whilst it is necessary to give each episode separate consideration it is also necessary to have regard to their cumulative effect. This is not a case of an isolated representation made at an early stage of ongoing negotiations. It is the case of a series of continuing representations made throughout the two months' negotiations leading to the Agreement. Later representations gave added force to the earlier ones; earlier representations gave focus to the later ones.”
“…where the evidence is that, had the claimant known the true position, he would have acted differently, that in itself demonstrates that the fraudulent misrepresentation, which by definition does not reveal the true position, “was actively present to the mind” of the victim of the fraud to a sufficient extent to establish inducement.”
“there is no evidence (or at any rate none that I accept) that KWL was conscious of any such representation having been made to it.”
“Inducement 78. … it is essential for a misrepresentation to have legal effect that it should have operated on the mind of the representee. It follows that if a representation did not affect the representee’s mind, because he was unaware that it had been made, or because he was not influenced by it, or because he knew that it was false, the representee has no remedy. 79. In Horsfall v Thomas (1862) 1 H&C 90, a seller delivered to a buyer a gun which was in a dangerous condition. The buyer alleged that the defect had been hidden at the time of the sale. The buyer’s claim failed because he had not examined the gun before buying it, and therefore if there was a fraudulent concealment of the defect it had no influence on him. Mr Howard submitted that the same principle applied in this case, because Mr Mitjavile accepted that he did not understand that Goldman Sachs was making any representation. Therefore, if there was a misrepresentation by the non-disclosure of the May reports, it did not operate on Mr Mitjavile’s mind. 80. Mr Nash submitted that although Mr Mitjavile agreed that he did not understand that Goldman Sachs was making any representation to him, to take that piece of his evidence on its own would be an over simplification of his mental state. Mr Mitjavile also said that he believed the arranger had an overall commercial responsibility, if it knew or had a strong hint of the ‘the real state of things’, to let the market know, and that if it failed in that responsibility IFE would look to the court to decide the legal question of responsibility. Mr Nash further submitted that the misrepresentation did operate on the minds of IFE’s decision makers, because if the May reports had been disclosed IFE would not have gone ahead with its investment. 81. It is not necessary and I do not propose to lengthen this judgment by exploring those legal arguments, particularly since I am conscious of the artificiality of doing so in the context of my finding that there was no implied representation as alleged by IFE.”
“Third, if by virtue of establishing all the ingredients of a misrepresentation IFE would otherwise succeed in their case under that Act, I am very doubtful whether GSI would succeed simply on the issue of inducement by reference to Mr Mitjavile’s evidence. It is true he said he did not rely on any representation and that may be relevant to whether there was misrepresentation, but if there was a misrepresentation what one would then have to ask is what would have occurred if the misrepresentation had not been corrected. On that issue the judge accepted Mr Mitjavile’s evidence that disclosure of the reports would have led to non-completion.”
“it is sometimes hard to distinguish misrepresentation by conduct from implied misrepresentation, but it is usually unnecessary to do so.”
“It is therefore necessary, in analysing a claim for misrepresentation, to identify the false statement for which the defendant is responsible, and which was communicated to the representee”
“We consider that, at the least, and even accepting that Ukraine’s conduct in paying the Notes could amount to affirmation, a trial on the evidence would be required in order to determine: (a) whether Ukraine had the requisite knowledge of its alleged right to avoid the contract under English law; and (b) whether there was continuing duress and as to its extent. Such matters are not suitable for determination on a summary judgment application.”
“there can be no clearer affirmatory conduct than a payment under the policy in dispute.”
“Given that the Regulatory Findings were subject to extensive media reporting at the time, the Claimants accept that it is likely that they each became aware of the fact that some adverse findings had been made against Barclays in relation to its involvement in the actual or attempted manipulation of LIBOR either when the Regulatory Findings were first published in June 2012, or shortly thereafter.”
“knowledge of the facts which give rise to the right to rescind is not enough to prevent the plaintiff from exercising that right, but he must also know that the law gives him that right yet choose with that knowledge not to exercise it.” ii) At p. 494E, May LJ: “This being so, I do not think that a party to a contract can realistically or sensibly be held to have made this irrevocable choice between rescission and affirmation unless he has actual knowledge not only of the facts of the serious breach of the contract by the other party which is the pre-condition of his right to choose, but also of the fact that in the circumstances which exist he does have that right to make that choice which the law gives him.” iii) At p. 752G, Slade LJ: “With Stephenson and May L.JJ., I do not think that a person (such as the plaintiff in the present case) can be held to have made the irrevocable choice between rescission and affirmation which election involves unless he had knowledge of his legal right to choose and actually chose with that knowledge.”
“Officers have negotiated terms with the bank that this deal, if executed, will not prejudice the council’s position in participating in any future legal action against the bank concerning LOBO’s.”
“93. The burden of proving both aspect of the state of knowledge of the party said to have elected rests on the party alleging election. However, with regard to the electing party’s knowledge of the legal rights amongst which he can elect, in the absence of evidence to the contrary, such knowledge may be inferred from the fact that the party had legal advice: see Peyman v. Lanjani, supra, at page 487 per Stephenson LJ. May LJ agreed with the judgment of Stephenson LJ in general. So did Slade LJ. Although both gave full judgments, neither suggested that Stephenson LJ’s observations as to the basis of that inference were wrong. … 100. In my judgment, in a case where the party said to have elected has been represented by solicitors and counsel whose conduct is relied upon as amounting to an election, it is normally to be inferred that such conduct has been specifically authorised by the client and has been the subject of legal advice. If, on the evidence before the court it is established that either the legal advisers or the client had knowledge of the facts giving rise to the right said to have been waived at the time when the affirmatory conduct took place, there must be the further inference that the party has been given legal advice as to his rights arising out of those facts. If that inference is to be displaced, there must be evidence of the advice, if any, that was given by solicitors and counsel and of the extent to which the party concerned was aware or was made aware of the right which he appears to have abandoned.”
“The need for knowledge of the legal right, although established by authority, is difficult to justify in principle. The requirement is inconsistent both with the principle that ignorance of the law is no defence and with the principle that in the field of commerce the existence and exercise of legal rights should depend on objective manifestations of intent and not on a party’s private understanding. It is also potentially extremely difficult for the other party to prove such knowledge—all the more so since any relevant legal advice which may have been received will be protected from disclosure by legal professional privilege. The unfairness of the rule is mitigated, however, by a presumption that a party which had a legal adviser at the relevant time received appropriate advice. That presumption can only be rebutted by waiving privilege and proving otherwise: see Moore Large & Co Ltd v Hermes Credit and Guarantee plc[2003] EWHC 26 (Comm) ,[2003] 1 Lloyd’s Rep 163 (at [92]–[100]).”