Taberna Europe CDO II Plc v Selskabet AF 1.September 2008 in Bankruptcy

A representation in an investment document may be actionable by a recipient outside its original audience where the maker actively invites that recipient, or an identifiable class, to rely on it for a particular investment purpose. Mere publication on a website is insufficient.

A clear and reasonable non-contractual disclaimer may limit the scope of statements in the document or exclude responsibility for them. In commercial dealings, contra proferentem is not the starting point and applies only to genuine ambiguity. The court also expressed the view that Misrepresentation Act 1967, section 2(1), is confined to loss caused by the representee entering into a contract directly with the representor.

Taberna bought subordinated notes issued by Roskilde from Deutsche Bank. It alleged that an Investor Presentation published by Roskilde materially understated its non-performing loans and induced the purchase. Roskilde relied on a disclaimer in that presentation.

Eder J gave Taberna judgment for €26,421,585 under section 2(1) of the Misrepresentation Act 1967: [2015] EWHC 871 (Comm). Roskilde appealed. The issues were whether the presentation contained a representation made to Taberna, whether the disclaimer defeated the claim, whether section 2(1) covered a purchase from a third party, and whether damages were subject to contributory negligence.

1. Appeal allowed. Roskilde was entitled to rely on the disclaimer in the Investor Presentation. Taberna therefore could not recover damages for misrepresentation.

2. The judge was entitled to find that Roskilde had made the presentation available to Taberna for reliance in deciding whether to invest in its debt securities. A document initially directed to a limited class will not ordinarily create liability to a secondary-market investor merely because it is available online. However, liability may arise where the maker actively invites a potential investor, or an identifiable class, to use it for a particular transaction or type of transaction.

3. The disclaimer was effective. A non-contractual notice may qualify the nature and scope of statements in the document, so that they are not representations on which reliance is invited. It may also exclude responsibility for misstatements if it is clear and reasonable. Section 3 of the Misrepresentation Act 1967 concerns contractual terms and did not render a non-contractual notice ineffective. The wording here made clear, fraud apart, that Roskilde accepted no responsibility for the document's accuracy.

4. In a commercial context, the proper task is to construe the language fairly in its documentary and commercial setting. Contra proferentem is available only to resolve genuine ambiguity. It was not a basis for cutting down this clear disclaimer.

5. Although unnecessary to the disposition, the court expressed a clear view that section 2(1) of the Misrepresentation Act 1967 covers loss flowing from the representee entering into a contract directly with the representor. It does not cover the price paid under a separate contract with a third party merely because acquiring the asset also creates contractual rights against the representor. The court also provisionally held that contributory negligence is available in principle, but reduction depends on whether it is equitable on the particular facts.

• Court of Appeal (Civil Division) Allowed Roskilde's appeal and held that the disclaimer defeated Taberna's claim.
• High Court, Commercial Court Eder J gave judgment for Taberna for €26,421,585 under section 2(1) of the Misrepresentation Act 1967: [2015] EWHC 871 (Comm).