Jurisdiction(s):
United Kingdom

Fraudulent misrepresentation: inducement presumption (no reversal of burden) and limits of transferred loss and corporate separateness—BV NIVE v Rembrandt [2019] EWCA Civ 596 (England and Wales)

Published on: 16 April 2019

Published by a LexisNexis Dispute Resolution expert

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Article summary

BV Nederlandse Industrie Van Eiprodukten v Rembrandt Enterprises, Inc. [2019] EWCA Civ 596

What are the practical implications of this case?

This appeal sharpens the test for fraudulent misrepresentation and evidential presumption. The representee must show that the statement was a real, factor in the decision to enter the contract, consciously operating on their mind. Where a statement is of a kind likely to persuade, the law presumes it did so. Although that presumption is not easily displaced, the ruling underlines that the burden of proof remains with the claimant and is not flipped. The court also addressed transferred loss, confirming it as a helpful yet narrow exception to the basic rule that a claimant recovers only the loss they have sustained. In addition, the judgment serves as a reminder to respect the distinctness of companies in a corporate group when assessing loss. Parties cannot take advantage of the legal personality of group companies when convenient, to seek to collapse those distinctions when they become awkward.

What was the background?

In May 2015, Rembrandt entered into a contract with BV Nederlandse Industrie Van...

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