NGM Sustainable Developments Ltd v Wallis & Ors

Fraudulent misrepresentation must be pleaded in the clearest terms, with utmost specification and particularisation. The case advanced is determined from the pleadings as a whole. A claimant cannot recast on a permission application a case that was pleaded and tried more broadly. Where the trial judge correctly understands the pleaded case, considers the evidence, and finds no dishonest misrepresentation, disagreement with the factual findings or pleading construction does not establish a procedural error or a real prospect of success on appeal.

NGM Sustainable Developments Ltd alleged that the defendants fraudulently represented, during negotiations for finance to purchase land and water areas at Surbiton, that they intended to provide long-term funding under a Side Letter. The High Court, Chancery Division, dismissed the actions on 22 July 2015. Mr Justice Peter Smith found no actionable misrepresentation and considered that the damages claim would have failed in any event.

On a renewed application for permission to appeal, the claimant argued that the judge had misunderstood the pleaded representation. The central issue was whether the pleading alleged an intention to provide funding under the Side Letter only, or alleged that no long-term funding was intended in any circumstances.

1. Disposition. The renewed application for permission to appeal was refused.
2. Construction of the pleading. The claimant’s pleading, read as a whole, alleged that the defendants never intended to enter into a long-term funding arrangement in any circumstances. The words extending the allegation to funding on other terms were not inserted merely as a precaution. The claimant could not narrow the case on appeal to an alleged intention to fund under the Side Letter alone.
3. Particularity. Allegations of fraudulent misrepresentation must be made in the clearest possible terms and with the utmost specification and particularisation. The Side Letter did not bear the significance which the claimant sought to place upon it, and the alleged representation was not proved false.
4. Factual findings and alleged procedural error. The judge had considered the witnesses and documents and found no evidence of dishonest misrepresentation. His conclusion was that the negotiations failed because the claimant had no money and because of a serious falling-out between important participants. The claimant had therefore lost on the facts. This was not a procedural error and did not provide a real prospect of success on appeal.
5. Relief. Arguments concerning rescission and residual damages did not overcome the primary failure to establish fraudulent misrepresentation. The claimant’s alternative arguments on relief did not justify permission.

• Court of Appeal (Civil Division): renewed application for permission to appeal refused in [2016] EWCA Civ 619.
• Single Lord Justice: an earlier paper application for permission to appeal was refused.
• High Court of Justice, Chancery Division: Mr Justice Peter Smith dismissed the claimant’s actions on 22 July 2015, finding no misrepresentation and concluding that the damages claim would have failed in any event.