BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises, Inc. [2019] EWCA Civ 596 (09 April 2019)

BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises, Inc. [2019] EWCA Civ 596 (09 April 2019)

In cases of fraudulent misrepresentation, the representee must prove inducement, but there is a strong presumption of inducement if the representation was material and intended to induce. This presumption is evidential and difficult to rebut. On the facts, the presumption was not rebutted; Rembrandt was induced by NIVE's fraudulent misrepresentation and entitled to rescind the second contract. On transferred loss, NIVE could not recover Henningsen's losses as there was no intention to benefit Henningsen under the contract, nor was this intention known to Rembrandt.

Citation
[2019] EWCA Civ 596
Parties
Claimant/appellant: BV Nederlandse Industrie van Eiprodukten; Defendant/respondent: Rembrandt Enterprises, Inc.
Jurisdiction
England and Wales
Judgment Date
09 April 2019
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)
Outcome
Appeal dismissed
Legal Topics
Fraudulent Misrepresentation, Rescission, Inducement, Transferred Loss, Damages, Burden of Proof
Contract Law Commercial Law Tort Law Fraudulent Misrepresentation Rescission Inducement Transferred Loss Damages +1 more

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Parties

BV Nederlandse Industrie van Eiprodukten

Claimant/appellant

Rembrandt Enterprises, Inc.

Defendant/respondent

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (commercial Court)

Legal Issues

  1. 1 Whether the requirement for inducement in fraudulent misrepresentation differs from that in innocent/negligent misrepresentation, particularly regarding the burden of proof.
  2. 2 What standard of proof is required for inducement: would not, might not, or was influenced to enter the contract?
  3. 3 Whether, on the facts, the right to rescind for misrepresentation was made out.

Ratio Decidendi

In cases of fraudulent misrepresentation, the representee must prove inducement, but there is a strong presumption of inducement if the representation was material and intended to induce. This presumption is evidential and difficult to rebut. On the facts, the presumption was not rebutted; Rembrandt was induced by NIVE's fraudulent misrepresentation and entitled to rescind the second contract. On transferred loss, NIVE could not recover Henningsen's losses as there was no intention to benefit Henningsen under the contract, nor was this intention known to Rembrandt.

Court Disposition

Appeal dismissed

Orders

  • Rembrandt entitled to rescind the second contract for fraudulent misrepresentation; NIVE restricted to claim for loss of profit under the first contract.
  • NIVE cannot recover losses suffered by Henningsen; claim for transferred loss rejected.