Invertec Ltd v De Mol Holding BV & Anor

Invertec Ltd v De Mol Holding BV & Anor

The Defendants, through Mr de Mol and Mr de Wit, fraudulently misrepresented the financial position of Volante by providing management accounts for July and August 2005 that were not prepared in good faith or on a consistent basis, concealed Volante's cash flow insolvency, and failed to disclose material corporation tax liabilities and arrangements. Invertec relied on these misrepresentations and warranties in entering into the SPA and associated agreements. The Defendants are liable for damages for fraudulent misrepresentation, and the counterclaims fail.

Parties
Claimant: Invertec Limited; First Defendant: De Mol Holding BV; Second Defendant: Henricus Albertus de Mol
Jurisdiction
England and Wales
Judgment Date
09 October 2009
Procedural Posture
Civil (commercial/fraud) / Final Judgment After Trial
Outcome
Judgment for the Claimant (Invertec Limited) against both Defendants for fraudulent misrepresentation; counterclaims dismissed.
Legal Topics
Fraudulent Misrepresentation, Breach of Warranty, Negligent Misstatement, Corporate Insolvency, Damages, Share Purchase Agreements
Contract Law Commercial Law Tort Law Company Law Fraudulent Misrepresentation Breach of Warranty Negligent Misstatement Corporate Insolvency +2 more

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Parties

Invertec Limited

Claimant

De Mol Holding BV

First Defendant

Henricus Albertus de Mol

Second Defendant

Procedural Posture

Civil (commercial/fraud) / Final Judgment After Trial

Legal Issues

  1. 1 Whether the Defendants fraudulently misrepresented the financial position of Volante prior to and in the SPA
  2. 2 Whether there was a breach of warranty as to the accuracy of management accounts, solvency, and tax liabilities
  3. 3 Whether the Defendants are liable for damages for fraudulent misrepresentation and/or breach of contract

Ratio Decidendi

The Defendants, through Mr de Mol and Mr de Wit, fraudulently misrepresented the financial position of Volante by providing management accounts for July and August 2005 that were not prepared in good faith or on a consistent basis, concealed Volante's cash flow insolvency, and failed to disclose material corporation tax liabilities and arrangements. Invertec relied on these misrepresentations and warranties in entering into the SPA and associated agreements. The Defendants are liable for damages for fraudulent misrepresentation, and the counterclaims fail.

Court Disposition

Judgment for the Claimant (Invertec Limited) against both Defendants for fraudulent misrepresentation; counterclaims dismissed.

Orders

  • Defendants to pay Invertec £1,512,113 (initial consideration) as damages.
  • Defendants to pay Invertec £532,000 (loans advanced to Volante to December 2005) as damages.