Burki v Seventy Thirty Ltd & Ors

A company is liable in deceit where its agent makes materially false representations about the size and quality of its available customer pool, intending the customer to rely on them. Damages place the claimant in the position she would have occupied had the representations not been made; rescission is irrelevant where damages for deceit are claimed.

For a profit-making company, Defamation Act 2013, section 1 requires serious reputational harm and serious financial loss. The two requirements are distinct, but each may be established by showing a tendency to cause the relevant harm. A defamatory online review may be substantially true in part, while an opinion based on those true facts may be protected as honest opinion.

Tereza Burki claimed that Seventy Thirty Ltd, a dating agency, induced her to pay £12,600 by falsely representing that it had a substantial number of wealthy, active male members who were suitable matches for her. She also claimed damages for distress.

Seventy Thirty brought claims concerning two online reviews in which Ms Burki described its service as fraudulent and a scam. The actions were tried together. The issues included the truth and meaning of the pre-contractual representations, liability for deceit, damages, the serious-harm threshold for corporate defamation, truth, honest opinion, and malicious falsehood.

1. Deceit. The court found that Seventy Thirty’s managing director represented that the agency had a substantial number of wealthy male members who were actively engaged in matchmaking and sufficiently matched Ms Burki’s criteria. In context, a reasonable person would understand the representations to concern current, paying and active members, rather than former members or headhunted individuals. The representations were false. The agency had at most about 100 active male members, probably fewer, which could not reasonably be described as substantial.
2. Ms Burki relied on the representations and was induced to enter the contract. The managing director acted within his authority, and his knowledge of the falsity was attributable to the company. The evidence established that he deliberately created a false impression, or deliberately used ambiguity to deceive her.
3. Damages. Rescission was irrelevant. Damages for deceit put the claimant in the position she would have occupied if the representation had not been made. The recoverable loss was the £12,600 membership fee. A further £500 was awarded for distress. Exemplary and aggravated damages were refused.
4. Defamation. The Google review bore the meaning that the agency lacked the means or intention to operate an effective service and was engaged in a fraudulent scheme. The Yelp review conveyed that the agency falsely represented the availability of suitable matches, introduced clients to unsuitable non-paying individuals, and operated fraudulently.
5. Both reviews conveyed serious defamatory meanings. Their publication was likely to cause serious reputational harm and serious financial loss within section 1 of the Defamation Act 2013. The positive reviews surrounding the Google review did not neutralise its impact for the purposes of serious harm.
6. The Google review was not substantially true. Its factual allegations were unproved, and the opinion that the business model was fraudulent was based on untrue facts. The Yelp review was protected by truth and honest opinion: the false representations about the size of the active membership were substantially true as the factual sting, and an honest person could have held the expressed opinion on that basis.
7. The Google review caused no proved special damage, but the proven deceit substantially reduced the damages. General damages were assessed at £5,000. The malicious-falsehood claims failed because Ms Burki honestly believed, albeit partly erroneously, that her complaints were well founded.
8. Ms Burki therefore recovered £13,100 on her claim. Seventy Thirty recovered £5,000 on the Google-review libel claim. The remaining libel and malicious-falsehood claims were dismissed.