Rechtsanwalt Dr Michael Jaffé & Anor v Greybull Capital LLP & Ors

In a fraudulent misrepresentation claim, the claimant must prove that the words used would reasonably be understood as conveying the pleaded representation. A contemporaneous note is important, but it must be tested against the whole evidential context and the possibility of early recording error.

Under Article 4(1) of Rome II, the applicable law is determined by the place of the direct and immediate damage, not the place of the event or indirect financial consequences. Under German law, the claimant ordinarily bears the burden of proving conditio sine qua non causation. A reversal requires a policy justification and was unavailable between substantial corporate parties on these facts. The alleged representations were neither proved nor shown to have caused the transaction.

The claimants, comprising an insolvency administrator for Wirecard Technologies GmbH and Wirecard Bank AG, sued Greybull Capital LLP and Marc Meyohas. They alleged that, at a meeting in Munich on 17 October 2016, Mr Meyohas falsely represented that the money recently injected into Monarch Airlines was equity from Greybull and its family investors and had not originated from Boeing.

The central issues were whether the oral representations were made, whether they induced Wirecard to enter Side Letter 7 and whether English or German law governed the claim. The defendants also raised German limitation. The claim was decided at first instance after a trial focused on conflicting recollections, contemporaneous documents, causation and choice of law.

The claim failed. The pleaded representations were not made and, alternatively, were not causative of Wirecard’s decision to enter Side Letter 7.

1. Representations. An oral representation need not be proved in the precise words pleaded, but the claimant must show that a reasonable person would have understood the words used to convey the alleged representation, applying IFE Fund SA v Goldman Sachs International [2006] EWHC 2887 (Comm). Mr Meyohas probably used language close to the agreed script. Family language may have been used, but the alleged statement that all the money came from a family investment pool was not proved. Nor was the alleged categorical denial of Boeing’s involvement established.
2. Evidence. The court treated Mr Hilz’s note as important but not decisive. The approach in Gestmin SGPS SA v Credit Suisse (UK) Limited [2013] EWHC 3560 (Comm) required the documentary record to be tested against the full context, including the possibility that an inaccurate impression had been encoded and recorded shortly after the meeting.
3. Applicable law. Under Article 4(1) of Rome II, the relevant place was where the direct and immediate damage occurred. The strongest connections were with Germany: the meeting, the relevant decisions and Wirecard’s contractual activity occurred there. The English connections were derivative and contingent. German law therefore applied.
4. Reliance and causation. German law did not impose a general reversal of the burden of proof. In this case the burden remained on the claimants and the applicable test was conditio sine qua non. Wirecard’s evidence and documents showed a focus on liquidity, financial fundamentals, collateral and processing volume, with no adequate evidence that the alleged representations caused the later decisions. Even if English law applied, the representations would not have played a real and substantial part in the inducement.
5. Limitation. Hypothetically, the claim would not have been time-barred. The English claim form was functionally equivalent to the German proceedings required to suspend limitation, because its essential features identified the claim and enabled the defendants to decide whether to defend it. This issue was unnecessary to the merits decision.

Not stated in the judgment.