England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
LIVERPOOL DISTRICT REGISTRY

		Liverpool Civil & Family Courts 35 Vernon Street Liverpool L2 2BX
		7th May 2014

1. JUDGE HODGE QC: This is my extemporary judgment on the trial of a misrepresentation claim issued in the Liverpool District Registry of the Chancery Division shortly before the expiry of the limitation period on 10 July 2012. The claimant, Mr Roberts, is a qualified solicitor and public notary. The defendant, Mr Egan, is a qualified chartered surveyor who also acted as an investment advisor, specialising in commercial property investments. He was a founder member of a number of investment LLPs carrying the "Albemarle" brand, including Albemarle 5 LLP (established by a membership agreement dated 3 March 2004 and amended by way of a first addendum on 7 March 2005). It is admitted on the pleadings that Mr Egan was one of the members of the management committee of A5 and its "driving force". Mr Egan was at all material times a director and employee of Egan Lawson Limited, a commercial property agency and management company, which had become an additional member of A5 by the 2005 addendum.
2. Mr Roberts claims that he has suffered loss and damage in the total sum of £408,000 as a result of misrepresentations given in writing by Mr Egan through a mutual acquaintance, Mr Anthony Downes, in respect of an opportunity to invest in A5, which was itself investing in six new shopping centre developments in Sittingbourne, Norwich, Leicester, Peterborough, Newark and Milton Keynes (although Mr Egan asserted in oral evidence that the latter was later replaced by a site in Doncaster).
3. Mr Roberts's investment was made in two equal tranches of £204,000 paid to A5's solicitors, Boodle Hatfield, on 30 August and 11 September 2006. It is no part of Mr Roberts's case that he had any direct contact with Mr Egan before he made those investments; rather, everything was done through Mr Downes. Paragraph 6 of the Particulars of Claim pleads in terms that the representations were contained "in information provided to Mr Downes by the defendant".
4. Mr Downes is a chartered accountant who had known, and worked professionally with, Mr Egan since the late 1970s, and with Mr Roberts since the 1980s. Originally Mr Downes had been the second defendant to this claim; but proceedings against him were discontinued prior to service of the claim form. I was told by Mr Roberts that this was done on the advice of his solicitors and counsel. A second addendum to the 2004 membership agreement, adding Mr Roberts and another investor as members of the LLP, and also adding the six further properties to the existing investment portfolio (then comprising a shopping development at Worksop), was completed on 30 October 2006, although Mr Roberts had signed an earlier version of the 2006 addendum (in materially the same terms) immediately before making his first investment on 30 August 2006.
5. The two alleged misrepresentations were, first, and principally, the position with regards to the costs of the development of the shopping centres, which Mr Roberts says was presented on the basis that the developer, Henry Davidson Developments Limited ("Henry Davidson"), would assume all of the risks of the costs of their building and finance, and the risks associated with any shortfall in take-up by tenants. Reliance is placed on the statement (in a three-page report prepared for the existing investors by Mr Egan, which was copied to Mr Downes as an attachment to an email of 10 July 2006 at page 514) that "the debt for undertaking the developments will be organised by Henry Davidson via their own bank, RBS in Nottingham, and we will just continue to own the sites but have no responsibility for the development funding throughout the building period"; and a further statement (in a one-page summary of the investment proposal, also prepared by Mr Egan and copied to Mr Downes as an attachment to an email dated 17 July 2006 at page 527) that "… the developers will arrange their own bank finance with the LLP making balancing profit payments on completion". Mr Roberts says that in fact A5 ultimately bore the risk of the costs of the development as it provided security in the form of a third party charge over the properties in favour of the developer's bank (in the event NatWest) to cover the possibility of the developer defaulting on the borrowings which it incurred to fund development costs.
6. The second, and secondary, misrepresentation was that interest on the equity invested by Mr Roberts would be rolled up and paid at a guaranteed rate of 6.5 per cent per annum. Reliance is placed upon the statement in the one-page summary (at page 527) that "interest will be rolled and deducted from the price at 6.5 per cent per annum on the equity invested". Mr Roberts says that A5 was already committed to buying two of the shopping centres without detailed planning permission or pre-lets in place, and that this put at significant risk the success of the developments and the agreed return of 6.5 per cent per annum.
7. A peculiar feature of this case is that neither Mr Roberts nor Mr Downes has been able to retrieve the electronic versions of the emails of 10 and 20 July 2006, and their attachments, in which these representations are said to have been made by Mr Egan and passed on (by Mr Downes) to Mr Roberts; and there is a dispute of fact as to precisely which of these attachments were in fact passed on to Mr Roberts. Other relevant documents were also no longer available in any form (such as those requesting, and effecting, the two payments, each of £204,000, made by Mr Roberts to Boodle Hatfield, and those relating Mr Roberts's execution and return of the first version of the 2006 addendum and, indeed, that version of the addendum itself). Despite this, the contemporaneous documents extended to over 1,500 pages, located within six lever arch files (labelled B through to G), although only a fraction of these were referred to at the trial, with particularly important documents being reproduced in a running core bundle.
8. An unsatisfactory feature of this case is that immediately after the luncheon adjournment, on the afternoon of day four of the trial (yesterday), and after the conclusion of leading counsel's closing speech for Mr Roberts, Mr Egan produced three further short email trains, at least one of which (from Mr Egan to Mr Downes dated 21 August 2006 and stating that one of Mr Egan's associates would be sending to Mr Downes "the funding agreement we have signed") may have been of potential significance. It transpired that Mr Egan had obtained these emails over the weekend, and in the course of giving his evidence, by performing (apparently for the first time) a keyword search against the name of Reeta Nair (an associate solicitor with Boodle Hatfield, who had acted for A5).
9. In answer to questions from the Bench, it was revealed that no keyword search had been performed against Mr Downes's email address. In view of the number of missing emails, I find it surprising both that such a search had not previously been performed by Mr Egan or (given that the keywords against which he had searched had been disclosed in his disclosure list) that it had not been requested by Mr Roberts's solicitors. In response to a specific inquiry from the Court, both counsel confirmed that they were not seeking an adjournment of the trial to establish whether any further emails could be located. Mr Chaisty QC (for Mr Roberts) indicated that his client was content to proceed on the basis of the documentation that Mr Egan had seen fit to disclose. I am satisfied that I have not seen all the relevant emails that once existed; and I cannot be satisfied that even now I have seen all the relevant emails which may still be available.
10. Mr Roberts says that Mr Egan owed him a duty of care, as a prospective investor, to ensure that the representations made were correct; and that, in reliance upon those representations, made by Mr Egan through Mr Downes, Mr Roberts invested the sum of £408,000 in A5. Mr Roberts also says that, had the misrepresentations, or either of them, not been made, he would not have made the investment that he did.
11. By way of defence, Mr Egan says, first, that at all material times he was acting as a director and employee of Egan Lawson Limited, which was acting as a property management agent and intermediary for property and development investments. Mr Egan also says that Egan Lawson Limited was an agent of A5 for the purposes of raising investment funding. Mr Egan says that the investment, when viewed objectively, realistically and commercially, was not a simple investment but an investment in a new and uncertain series of developments, on similar terms to previous investments, and that realisation of the annual return of 6.5 per cent depended on the success of those developments.
12. Mr Egan says that under the terms of the funding agreement the developer's bank was to provide a side letter to confirm that its charge was to be treated as security for the loan advanced to the developer pursuant to the relevant loan agreement, and not for any other loans: see clause 36.3 of the funding agreement; and that A5 did not agree to be responsible for the funding granted to the developer.
13. By an amendment to the Defence made (without opposition) as recently as 22 April 2014, Mr Egan contends that he sent a copy of the funding agreement dated 21 July 2006, setting out the material terms of the joint venture in full, to Mr Downes by email on 25 July 2006.
14. Mr Egan says that he did not misrepresent the nature and terms of the investment. He also says that the information given to Mr Downes confirmed that the properties would be acquired "up front with either outline or detailed planning permission"; and that construction would commence only after "say 60 per cent of the units had been pre-let".
15. Mr Egan denies that he personally owed Mr Roberts any duty of care; and he also relies on clause 9.4 of the 2004 membership agreement to deny Mr Roberts any right to rely on the alleged misrepresentation. Clause 9.4 of the 2004 membership agreement comprises two sentences, each effectively with two clauses. For convenience of analysis I insert numerals within square brackets in front of each of these clauses. So edited, clause 9.4 reads as follows:

"[i] This agreement sets out the entire agreement of the Members in relation to the constitution and operation of the LLP;

[ii] and each Member confirms that he is not relying on any commitment or representation by any of the other Members, except as set out in this Agreement.

[iii] In particular, each Member confirms that it has made its own evaluation of its participation in the LLP in the light of such legal, property and financial advice as he has seen fit to take; and

[iv] recognises that the information prepared by the LLP and its Members in relation to the Property has been derived from information provided by the proposed sellers of the Property and/or their representatives and/or the LLP's professional advisers."

16. In his Reply Mr Roberts puts Mr Egan to strict proof that he was acting at all times as a director and employee of Egan Lawson Limited. Mr Roberts disputes Mr Egan's version of events surrounding the developer's funding; and he asserts that A5 effectively underwrote the risk of the developer defaulting on its borrowings. Mr Roberts denies that the annual return of 6.5 per cent was dependent on the success of the developments; and he says that it was a guaranteed return, by virtue of the mechanism of calculation of the developer's remuneration pursuant to the funding agreement. Mr Roberts also says that clause 9.4 of the membership agreement did not bind him as it was not within his knowledge at the time of his investment. Furthermore, no admissions are made as to the effect generally of that clause. The parties agree that the value of the claim is the amount invested by Mr Roberts in A5 (£408,000) together with interest.
17. The trial commenced at 10.30am on Tuesday 29 April and the evidence and speeches concluded yesterday, Tuesday 6 May 2014. This is my extemporary judgment. Mr Roberts was represented by Mr Paul Chaisty QC (who did not settle his client's statements of case), instructed by Hill Dickinson. Mr Egan was represented by Mr Neil Berragan (of counsel), instructed by Squire Saunders. Unfortunately, due to pre-existing commitments, the Court was unable to sit on the afternoons of Tuesday 29 April or Thursday 1 May, or at all on Friday 2 May (when I was taking the applications list in Manchester); and Monday 5 May was a Bank Holiday. The Court therefore sat between 10.30am and 1pm on Tuesday 29 April; between 10.30 and 4.35pm (with an hour for lunch) on Wednesday 30 April; between 10am and 1pm on Thursday 1 May; and from 10.30am until just after 5pm on Tuesday 6 May, again with a short adjournment for lunch (which was slightly extended by the disclosure of the additional email trains to which I have already made reference).
18. Following a short break after the conclusion of Mr Egan's evidence, Mr Chaisty addressed me for about 45 minutes in closing. At the Court's invitation, he did not at that stage address me either on the issue of the capacity in which any representations had been made by Mr Egan or on the meaning and effect (if any) of clause 9.4 of the membership agreement.
19. After the luncheon adjournment, Mr Berragan addressed me in closing for just under two hours. Mr Chaisty then replied, dealing with the issues of capacity and clause 9.4, in addition to other matters, for about 45 minutes. I then adjourned until 2pm today, Wednesday 7 May, for the delivery of judgment. Unfortunately the pre-trial review on another case, which was listed before me at 10am this morning, was not finally concluded until about 12.30 this afternoon; thus this extemporary judgment is less polished than I would have hoped had I had more time to prepare it.
20. In support of his case, Mr Roberts relied on his own evidence and that of Mr Downes. Mr Roberts had made two witness statements, one dated 23 or 24 December 2013 - the actual witness statement is undated - and the other dated 25 April 2014. Mr Roberts gave evidence for a total of about 4¾ hours on the mornings of Tuesday 29 and Wednesday 30 April. I find that Mr Roberts is an experienced business and property lawyer and investor. He is clearly intelligent, knowledgeable and commercially astute (although he was constrained to acknowledge certain infelicities of expression in, for example, his use of the words "earning 6.5 per cent" and interest "accruing" in paragraph 51 of his first witness statement). However, Mr Roberts did not impress me as a witness in whom I could feel confidence; and I do not find him to be a satisfactory witness whose evidence I can safely accept on any of the matters in issue between the parties.
21. In his first witness statement Mr Roberts had said that, following his telephone conversation with Mr Downes on 20 July 2006, Mr Downes had sent him both an email dated 10 July 2006 from Mr Egan to Mr Downes together with its attachments (pages 512-523) and a further email dated 20 July 2006 (page 530) with attachments. Crucially, in his first witness statement Mr Roberts had maintained that (1) the 10 July email had attached to it (as the original undoubtedly had) the three-page report from Mr Egan on the Worksop and Henry Davidson portfolio (pages 513-515) which included the statement (previously cited) that A5 would "just continue to own the sites and [will] have no responsibility for the development funding throughout the building period"; and (2) this three-page report did not form part of the attachment to the 20 July 2006 email.
22. In his second witness statement, expressly made "following a review of the trial bundle and my first witness statement in preparation for the forthcoming trial", and effectively on the eve of the trial, Mr Roberts asserted (for the first time) that he had never received the 10 July 2006 email, but that the three-page report (at pages 513-5) had formed the second attachment to the 20 July 2006 email (described as "Investment appraisal"), with the first attachment (described as "Summary of investment proposal and returns") becoming two separate documents (pages 527 and 528) whereas page 528 had previously been said to be the second attachment to the 20 July 2006 email.
23. Paragraph 9 of the second witness statement concludes:

"Therefore paragraphs 25 and 30 of my first witness statement should properly record that I received only one email from Anthony Downes, that being the second email, and which included both the three-page summary and the one-page summary that the defendant sent to Anthony Downes on 10 and 17 July 2006 respectively."

(Quote unchecked)

24. Such a fundamental change in Mr Roberts's evidence on a matter going to the heart of his case is hardly calculated to inspire confidence in the reliability of his powers of recollection. In cross-examination, Mr Roberts's evidence was more equivocal. He stated that he had no actual independent recollection of what he had received on 20 July, but that he had no need to rely on having received the 10 July email and its attachments because his re-analysis of the 20 July email and its attachments still meant that he had received pages 513-515. Mr Roberts said that he believed he had received two emails of 10 and 20 July with all their attachments; but, since he could not be sure of that, he had amended his written evidence to confine it to what he said he had undoubtedly received.
25. In view of the way it has developed, combined with my other concerns about the reliability, and the probity, of Mr Roberts's evidence, I fear that I cannot place any reliance upon his assertions as to the nature of the documentation which was sent to him on 20 July 2006.
26. When asked by me whether he could recall a conversation with Mr Downes in which he had asked for documents for his file at about the time of Mr Downes's email to Mr Egan of 29 August 2006 (at page 877A), Mr Roberts said that he could not recall the events of 2006 (although he acknowledged that such a conversation could well have taken place). In an email to Mr Downes dated 8 June 2010 (at page 1317E) Mr Roberts had asserted that he had been told "that sites would be bought with the benefit of detailed planning permissions and pre-lets to predetermined levels. Once that stage was achieved my understanding was that the LLP would buy the land and fund the building works and pay the developer a predetermined sum based on an agreed yield based on the actual rent following PCC. Is that not right?" It was wrong; and during the course of his cross-examination on this email, Mr Roberts accepted that (1) that was why he could not advance any such claim in this action, although he would have liked to have done so; (2) in June 2010 his recollection had been as set out in that email; and (3) four years after making the investment, Mr Roberts had been confused about what he had been told in 2006. Since then, a further four years have elapsed; and I am satisfied that Mr Roberts's powers of recollection have not improved.
27. In the course of his oral evidence I found Mr Roberts to be arrogant in his demeanour and answers to questions, reluctant to engage in the forensic process, unforthcoming and evasive in certain of his evidence, and less than completely open and frank with the Court. He was unwilling to provide clear answers to questions, or to accept self-evident propositions. Examples are Mr Roberts's persistence in the assertion (at paragraph 91 of his witness statement) that "it was not portrayed in the information supplied by Mr Egan that I would be investing in undeveloped property"; and his reluctance to accept that his two payments of £204,000 had been used towards the purchase of the Sittingbourne and Norwich sites.
28. I am satisfied that Mr Roberts has trawled through the documents in this case with a view to establishing that someone other than himself is to blame for the failure of his investment in A5; and that his evidence to the Court (given almost eight years after the event) is the product of reconstruction, considerably assisted by the benefit of hindsight and (within the perspective of this litigation) wishful thinking, rather than actual recollection. Mr Roberts could not remember precisely where on holiday in West Cork he had been when he had had his initial telephone conversation with Mr Downes about the investment in A5 (which does not feature in his Particulars of Claim); and Mr Roberts was only able to place it on the afternoon of 20 July 2006 by reference to the terms of Mr Downes's email of that date (at page 530). Nor did Mr Roberts have any independent recollection of receiving any of the July 2006 emails or their attachments. Yet, at paragraph 24 of his first witness statement, Mr Roberts said that Mr Downes had explained that "all the risk of the development was with" the developer; and in cross-examination he claimed that he could recall Mr Downes using the words "there is no risk to you. I suggest you go ahead". I reject this evidence of selective recollection on Mr Roberts's part as inherently implausible. I am also satisfied that on occasion Mr Roberts deliberately used the search for precision in his answers as an excuse for not giving a direct answer to questions from Mr Berragan.
29. At times, and despite the further evidence elicited from Mr Roberts by Mr Chaisty in re-examination, I found it difficult to follow, or to accept, Mr Roberts's answers to questions in cross-examination, and his explanations for, or his inability to explain, his acts and omissions in 2006 and subsequently. Examples are (1) Mr Roberts's attempts to explain away the change in his evidence between his first and second witness statements; (2) his professed failure to ask Mr Downes for copies of the funding agreement, or any documentation relating to the Sittingbourne property, before he released the first tranche of his investment of £204,000, which included the answers (which I find difficult to reconcile with Mr Roberts's evidence, and case, on the issue of reliance, that clause 36.3 of the funding agreement was "a major issue" and that he would not have invested had he seen it) that he "was not micro-managing this investment" and (consistently with paragraphs 10, 11 and 50 of Mr Roberts's first witness statement) that he had made his investment in reliance on someone he knew and respected; (3) Mr Roberts's evidence as to how he came to sign and return the first version of the 2006 addendum on or about 30 August 2006 whilst he was still on holiday in West Cork, which is difficult to relate to the chronology disclosed by the few emails which are still available from this time; (4) Mr Roberts's professed failure to press Mr Downes for a satisfactory explanation as to why he had not forwarded to Mr Roberts the documentation evidencing the completed funding agreement, which had been sent to Mr Downes by Mr Egan on 25 July 2006 (page 766), at the time that Mr Roberts alleges that he first discovered this on, or shortly after, 22 November 2010 (page 1318); (5) Mr Roberts's alleged failure to pick up on the £8,000 difference between his actual investment in A5 (£408,000) and the £400,000 recorded in schedule 2 to both versions of the 2006 addendum (page 982), and his professed ignorance (until 22 November 2010) that £8,000 of his investment was being, and had been, paid by A5 to Mr Downes by way of commission; and (6) Mr Roberts's failure to make any complaint about the terms of clause 36.3 in his detailed four-page critique of the funding agreement dated 12 August 2009 (pages 1298-1302), or in later correspondence with Boodle Hatfield, or when instructing Kirk Reynolds QC (in April or October 2011) or until the commencement of these proceedings. I am satisfied that Mr Roberts was not being frank with the Court, or accurate, in his evidence on any of these matters; and I reject such evidence.
30. Mr Downes had made two witness statements (dated 19 December 2013 and 25 April 2014); and he gave evidence for about one hour and forty minutes on the afternoon of Wednesday 30 April. Like Mr Roberts, I do not find Mr Downes to be a satisfactory witness whose evidence I can safely accept on any of the matters in issue between the parties. I am satisfied that he has no actual recollection of relevant events, and that his evidence to the Court was both unreliable and also partial, being deliberately calculated to further the case of Mr Roberts.
31. During the course of the trial, Mr Downes produced a copy of an entry in his diary for Thursday 6 July 2006 (recording a lunchtime meeting with Mr Egan) which he introduced at the beginning of his evidence; but Mr Downes had to accept that his initial explanation in cross-examination of what had led him to look for his diary – which was that Mr Egan had changed his evidence – was incorrect.
32. At paragraph 18 of his first witness statement Mr Downes said that Mr Egan had "clearly said to me that there was no risk to the investors". When cross-examined about when this had been said, Mr Downes explained that this was based upon the information Mr Egan had provided. When it was put to Mr Downes that Mr Egan had not expressly used the words "there is no risk", and that this was simply Mr Downes's understanding of what had been said, Mr Downes accepted that he could not remember Mr Egan expressly saying this. Mr Downes accepted that there were clearly undocumented telephone conversations between himself and Mr Roberts which had preceded Mr Downes's emails to Mr Egan of 7 August 2006 (page 877) and 29 August 2006 (page 877A) but which he could no longer recall and which had not featured in his witness statements.
33. In his first witness statement (at the end of paragraph 10) Mr Downes had blandly stated that "at the end" Mr Roberts had paid him a fee for his role in introducing Mr Roberts to an investment in Swansea which had been promoted by Mr Egan. In cross-examination Mr Downes accepted that he "may have expressed annoyance" to Mr Egan that Mr Roberts had not paid him an introducer's fee for Swansea; yet he did not choose to volunteer this fact in either of his two witness statements. I am satisfied that, even in cross-examination, Mr Downes deliberately chose not to tell the full story about it, both because he felt that it would reflect poorly upon him and because it was inconsistent with Mr Roberts's evidence that he knew nothing about this payment of a secret commission until he had belatedly received a series of emails and other documents from Mr Downes on 22 November 2010 (page 1318). I accept Mr Egan's evidence in cross-examination that, whether at the lunch on 6 July 2006 or otherwise, Mr Downes had told him that he (Mr Downes) was "cheesed off" that he had not received anything for putting Mr Roberts in touch with Mr Egan in connection with the Swansea investment. Mr Downes had said that he would not do another such deal unless he (Mr Downes) got something out of it. Mr Downes said that Mr Roberts would be prepared to pay £8,000, so Mr Egan said that A5 would match it. It was in these circumstances that Mr Roberts's investment was increased from £400,000 to £408,000, and that Mr Downes raised an invoice to A5 on 4 October 2006 (page 966) for £16,000 (plus VAT). This finding of fact accords with Mr Downes's email of 11 September to Mr Egan (at page 942) stating: "In respect of fees for my firm, we verbally agreed £16,000 plus VAT, £8,000 from Tudor and the balance from Egan Lawson". (In fact, the balance came from the pocket of A5, and the whole of the fee was invoiced to that entity). I am satisfied that, contrary to the evidence of both Mr Downes and Mr Roberts, Mr Roberts knew that the additional £8,000 of his investment represented half of Mr Downes's commission, and that neither witness was being frank with the Court in this regard. Having seen and heard Mr Roberts, I cannot accept that he did not pick up on the £8,000 discrepancy in his investment recorded in both versions of the 2006 addendum which he executed; and nor can I accept that Mr Downes would have taken the chance that Mr Roberts would not spot this. I am satisfied that (contrary to his evidence) Mr Roberts knew, and accepted (no doubt reluctantly) that this £8,000 should be paid to Mr Downes; and this explains the absence of any documented protest from Mr Roberts when he received the emails which disclosed this on 22 November 2010.
34. Mr Downes's second witness statement made significant corrections to his earlier witness statement, which Mr Downes acknowledged had been made at the request of Mr Roberts's solicitors. I am satisfied that these were not the spontaneous product of second (and better) thoughts on the part of Mr Downes, but were introduced to accord with Mr Roberts's second witness statement. There is no other satisfactory explanation for these changes, or for Mr Downes's departure from his previous evidence, supported as it was by the fact that the printed version of the 20 July 2006 email on Mr Downes's own file (which is the best evidence of what it contained) omits the three-page report at pages 513-515, and that Mr Downes accepted in cross-examination that he had no independent recollection of sending his email of 20 July 2006 without referring to his printed copy. When pressed in cross-examination to explain this, Mr Downes said that he knew that on 20 July he had sent Mr Roberts everything that he had received from Mr Egan; but he then had to concede (consistently with both his second witness statement and the printed version on his file) that he may well not have sent the artist's impression of the Worksop scheme (at page 516), although he could not remember. In re-examination Mr Downes said that he had not attached any importance to this artist's impression, although he accepted that he did not know whether Mr Roberts might have done so. In this connection, I note that Mr Downes did include within his 20 July email the Worksop tenancy schedule and the plan which had accompanied the 10 July email. I am satisfied that Mr Downes did not send the three-page report at pages 513-515 through to Mr Roberts with his email of 20 July 2006. I am satisfied that Mr Downes saw no need to do so because it was a report to the original investors in A5, and the proposal embodied therein (to raise £3.4 million from the existing investors in A5) had been replaced by a new proposal (summarised in the one-page document at page 527 and Mr Downes's own email of 20 July itself) to raise a further £600,000 of equity from outside investors. I am satisfied that (consistently with Mr Downes's first witness statement, supported by his paper file) the first two enclosures to Mr Downes's email of 20 July were the one-page summary at page 527 and the document at page 528, both of which had been forwarded to Mr Downes with Mr Egan's email of 17 July 2006 (at page 526). In my judgment, the description "Summary of investment proposal and returns" is an entirely accurate description of the one-page summary at page 527 (which includes the heading "returns"); and the description "investment appraisal" is an entirely accurate description of the document at page 528. It does not seem to me to be an accurate description of the three-page report at pages 513-5 since the nature and amount of the investment had changed since this document was prepared. I reject the attempt to re-characterise the descriptions so as to incorporate the three-page report in the email of 20 July as a self-serving fiction.
35. At paragraph 18 of his witness statement Mr Downes said that he did not forward Mr Egan's email of 25 July 2006 (at page 776), attaching the funding agreement (as a word document at pages 790-876) and manuscript amendments (as a PDF form at pages 777-789) on to Mr Roberts because Mr Downes regarded it as "a work in progress". I cannot accept this evidence. Nor can I accept the evidence of Mr Roberts that he did not receive this email and its attachments. The email itself says that "this is a copy of the agreement we have completed on the new portfolio". Upon opening the PDF file, as on Mr Downes's own evidence he must have done, the front sheet (page 777) clearly states in manuscript "Formula B 5:57pm Taplin/Streeton" [the names of the parties' solicitors]; and the execution page (page 788) states that it was signed by Helen Streeton (of Boodle Hatfield) on behalf of A5. Mr Downes continues (at paragraph 16 of his first witness statement) by saying that he did speak to Mr Egan about this and he tried to get a complete copy of any documents being prepared; but he asserts that Mr Egan was not easy to deal with over this sort of detail. Mr Downes says that he "assumed a lot of work was ongoing and it would all be completed eventually". I accept that Mr Downes did contact Mr Egan and asked for a copy of the completed funding agreement. That is consistent with Mr Egan's own evidence (when cross-examined about what he would have made of the 25 July email and its attachments) that he would have asked for the correct documents; and it is also consistent with the recently disclosed email of the 21 August 2006 from Mr Egan to Mr Downes stating that a member of Mr Egan's staff "is sending you the funding agreement". However, I am also satisfied that Mr Downes would have forwarded such documentation as he then had to Mr Roberts for the following reasons:

(1) Both the email and the PDF attachment made it clear that the funding agreement had been completed. Mr Downes accepted in cross-examination that he should have taken more notice of these documents and that he could not stop apologising. I am satisfied that Mr Downes did appreciate that the funding agreement had been completed. Had he entertained any doubts in that regard, they must have been dispelled when he spoke to Mr Egan, who must have reiterated what had been said in his email, that the funding agreement had been completed.

(2) As Mr Downes acknowledged, Mr Roberts was an experienced lawyer and, of the two of them, Mr Roberts was the one who would have been able to make more sense of the documents.

(3) In relation to the attachments to the 10 and 17 July emails from Mr Egan, Mr Downes's evidence was that he had sent everything through to Mr Roberts. I have rejected that evidence; but, had I accepted it, I would have found it even more difficult to accept that Mr Downes had not forwarded the email of 25 July and/or its attachment to Mr Roberts.

(4) In cross-examination Mr Downes accepted that he must have spoken to Mr Roberts before he released the personal details recorded in his email to Mr Egan of 7 August 2006 (at page 877) and that he must have told Mr Roberts what he knew about the investment proposal by then, yet he did not accept that he would have told Mr Roberts about the 25 July email. When asked why not, he replied that he must put his hands up and say that he did not know why. I simply cannot accept this evidence.

(5) Mr Downes accepted that he would not have expected Mr Roberts to have disbursed any moneys without the funding agreement in place yet there were no emails asking Mr Egan for the funding agreement. I do not accept Mr Downes's evidence that the question in his email to Mr Egan of 11 September 2006 (at page 942): "Is the amended agreement ready?" was a request for the funding agreement. Such a form of question was not appropriate given that I am satisfied that Mr Downes already knew (from the 25 July email) that the funding agreement had already been completed (as indicated by the recently disclosed email of 21 August and the terms of the loan agreement for the Sittingbourne site, which had been sent to Mr Downes by the email of the 29 August at page 878). If this were not a reference to the second version of the 2006 addendum (because this only surfaced as an issue on or about 28 September: see page 945), then I am satisfied (contrary to Mr Downes's evidence) that this was a request for copies of the 2004 LLP agreement and its first, 2005 amending addendum (which Mr Egan had previously promised in his emails of 25 July at page 776 and 29 August at page 877A) and for which Mr Roberts was still asking after he had signed the second version of the addendum on 16 October 2006 (at page 967) and which he only received on 17 September 2008 (at page 1217). Those are my reasons for rejecting the evidence of Mr Roberts and Mr Downes.

36. Mr Egan relied upon his own witness evidence. He had made two witness statements (dated 23 December 2013 and 24 April 2014); and, perhaps surprisingly (since he had had no direct dealings with Mr Roberts before the latter made his investment in A5) Mr Egan gave evidence for a total of some five hours, beginning late on the afternoon of Wednesday 30 April and continuing on the mornings of Thursday 1 and Tuesday 6 May. I found Mr Egan to be considered and thoughtful in his evidence and, unlike Mr Roberts, someone who was prepared to engage in the forensic process. I accept that he was genuinely trying to assist the Court, although on occasion (and under the pressure of Mr Chaisty's questioning) he was prone to exaggeration (which he then acknowledged), as when he referred to the insolvency of Tesco as a potential risk facing the investors. Unfortunately, the assistance I derived from Mr Egan was limited because I am satisfied that (as he acknowledged throughout his cross-examination) he genuinely (and unsurprisingly) has no independent recollection of emails and specific conversations, and much of his evidence was based (as he also expressly acknowledged) upon guesswork. He frankly acknowledged that he could not recall whether the first version of the 2006 addendum was ever completed by all the executing parties. He also accepted that nothing in the three-page report at pages 513-515 corresponded to the conviction which he recorded at paragraph 36 of his first witness statement (and which I accept he genuinely held throughout) that "the NatWest charge would only cover Henry Davidson's loans that were secured against the commercial retail elements of the Six Sites"; and that was why he had sent the funding agreement to Mr Downes on 25 July.
37. I accept Mr Egan as a reliable and truthful witness (so far as his evidence goes); and where that evidence differs from that of Mr Roberts and Downes, I prefer the evidence of Mr Egan. I find: (1) that Mr Egan did not deliberately omit information regarding the provision of a third party charge to be given by A5 in respect of each of the six development sites to secure the development funding to be raised by Henry Davidson (in accordance with clause 36.3 of the funding agreement dated 21 July 2006) from either the three-page report or the one-page summary. He regarded both documents as outline proposals, designed to encourage investor interest in the proposed scheme, and not as a detailed investment package; and he intended that such matters of detail would be addressed in the "usual long-form agreement" envisaged by Mr Roberts at paragraph 84 of his first witness statement; (2) that Mr Egan intended that Henry Davidson would be responsible for the development funding, in the sense that Henry Davidson had the job of procuring and paying for the costs of the development funding and carrying out the development work; (3) that Mr Egan sent the funding documentation to Mr Downes on 25 July on the assumption that Mr Downes would forward it on to Mr Roberts, which is what Mr Downes had done on the previous transaction; and (4) that Mr Downes did not regard clause 36.3 as important at the time and, had he done so, he would have brought it to the specific attention of Mr Downes.
38. Based upon my assessment of the witnesses and my evaluation of the evidence, I make the following findings of fact, for the reasons I have already given:
39. (1) The first meeting between Mr Egan and Mr Downes took place at lunchtime on Thursday 6 July 2006. As Mr Chaisty acknowledged in closing, neither Mr Downes nor Mr Egan was able to say who had made the first approach about a possible investment by Mr Roberts in A5. In my judgment, it is not possible, nor is it necessary, to make any express finding on that issue.
40. (2) Although I no longer understand that this forms part of Mr Roberts's case, I expressly find that the 10 July email and its attachments were never forwarded by Mr Downes to Mr Roberts. There is no documentation evidencing the forwarding of the 10 July email and, had it been forwarded by Mr Downes, there would have been no need for him to have included within the 20 July email any of the documents which had formed attachments to the earlier 10 July email.
41. (3) The three-page report at pages 513-515 did not form part of the attachments to the 20 July email from Mr Downes to Mr Roberts. The first attachment to that email was the one-page summary (at page 527) and the second attachment to that email, described as "investment appraisal", was the one-page document at page 528.
42. (4) Mr Downes did forward the email of the 25 July from Mr Egan to Mr Downes and its attachments (comprising the Word document version of the funding agreement and the PDF document comprising the manuscript amendments to the funding agreement) on to Mr Roberts Mr Roberts therefore knew that the funding agreement had been completed and that its precise terms were available to him.
43. (5) If it were necessary for me to make a finding of fact on this issue, on a balance of probabilities I would conclude that Mr Roberts had opened the attachments to the 25 July email and had looked at the two attachments to the email that had been sent to Mr Downes by Mr Egan on 25 July. I say "if necessary" because I am not sure that it is necessary for me to make an express finding on that issue. What is abundantly clear to me is that Mr Roberts has not satisfied me that he did not open those attachments. It is impossible for me at this stage to say whether Mr Roberts read, or even noticed, clause 36.3 of the funding agreement; but, if he did, I am satisfied that he did not regard it as a material issue. That is consistent with the fact that, when he did review the funding agreement in detail in 2009, he made no reference to, and raised no criticism of, the terms of clause 36.3.
44. (6) Mr Downes did pass on to Mr Roberts the various attachments to the email of 29 August 2006 relating to the Sittingbourne site. Those documents were received by Mr Roberts before he made his first investment in A5 and were available for him to review. If he reviewed them, and again I am not satisfied that he did not, he would have seen again (as he already knew) that there was in existence a funding agreement between A5 and Henry Davidson.
45. (7) The reference to the amended agreement in Mr Downes's email of 11 September 2006 is not a request for the funding agreement, which had been completed some six weeks earlier. Rather it is a request for, if not the second version of the 2006 addendum, then the original LLP agreement of 2004 and the completed first addendum of 2005.
46. (8) Mr Roberts knew that £8,000 of his £408,000 investment was being paid by way of commission to Mr Downes.
47. (9) At the time Mr Roberts made his two investments, each of £204,000, in A5, Mr Roberts had not seen any copy of the original 2004 LLP agreement or the first 2005 addendum to it. He had no express knowledge at the time of the terms of clause 9.4 of the membership agreement. Mr Roberts did not receive any copy of the 2004 membership agreement, or the first 2005 addendum, until 17 September 2008.
48. (10) I reject Mr Roberts's evidence and case that the first he knew that the funding agreement had been sent to Mr Downes on 25 July, and the first he knew that Mr Downes had received a commission, was upon receipt of the email of the 22 November 2010.
49. It is against those findings of fact that I must now address the issues in the case.
50. Before the trial commenced I had received and read helpful written skeleton arguments from Mr Chaisty, dated 23 April, and from Mr Berragan, dated 24 April 2014. The contents of those written skeleton arguments were supplemented and developed in the closing speeches. I have already identified the particular representations upon which Mr Roberts relies. I have already rejected his evidence and case that he received the three-page report at pages 513-515. Thus he cannot rely upon any representation contained within that document.
51. Mr Chaisty submits that, even without the three-page report, Mr Roberts is entitled to rely upon the representation in the one-page summary that the developers would arrange their own bank finance, with the LLP making balancing profit payments on completion. Mr Chaisty submits that that amounts to a representation that A5 would not be providing any third party security over any of the development sites to secure the developer's funding from its own bank. I reject that submission. I accept Mr Berragan's submission that the one-page summary contains nothing directed to the security position over any of the development sites. Even if, contrary to my finding of fact, Mr Roberts were entitled to rely upon the statement in the three-page report that A5 would "just continue to own the sites but had no responsibility for the development funding throughout the building period", then I would still have rejected the submission that that constituted a misrepresentation to the effect that there would be no security provided by A5 over any of the sites in respect of development funding.
52. I accept Mr Berragan's submission that one must take together all of the pre-contract communications made to Mr Roberts on behalf of Mr Egan concerning the investment scheme and view them objectively, and in a common sense and realistic fashion, so as to understand what, if any, representation was being made about development funding and the ownership of the sites by A5. I accept Mr Berragan's submission that there is no express reference in either the three-page report or the one-page summary to the issue of security. Neither document is telling, or purporting to tell, prospective investors about the security position. I accept that any objective reader of these documents in the position of Mr Roberts would have appreciated that these were no more than outline proposals, and that matters of detail would have to be addressed in the long-form security and other transaction documentation that would have to come into existence before the investment scheme could go ahead.
53. Mr Chaisty, in the course of his oral submissions, rightly placed considerable emphasis upon the statements (founded upon Redgrave v Hurd (1881) 20 Ch D 1) at paragraphs 6-042 and 6-043 of Chitty on Contracts (31^st Ed, 2012.). Mr Chaisty relied upon the proposition that, if a representee does not know that a representation is false, it is no defence to an action, either for damages or for rescission for misrepresentation, that the representee might have discovered the falsity of the representation by the exercise of reasonable care. Mr Chaisty relies upon the proposition, founded upon the Court of Appeal decision in Peekay Intermark Ltd v Australia & New Zealand Banking Group Ltd [2006] EWCA Civ 386; [2006] 2 Lloyd's Rep 511, that it is irrelevant that the true position is stated in the contract signed by the representee unless he was actually aware of the correction in the contract document. It is not enough to show that "the claimant could have discovered the truth, but that he did discover it". That is a citation from paragraph 40 of the judgment of Moore-Bick LJ in Peekay.
54. In the course of his submissions, Mr Berragan placed reliance upon the decision in Peekay and, in particular, he likened the situation in the present case to that described by Moore-Bick LJ at paragraph 52 of his judgment in Peekay. In my judgment, as Mr Chaisty submitted in his reply, the Peekay decision is of no direct application to the circumstances of the present case. That is because in the Peekay case the correction of the misrepresentation was contained within the contract itself, by which the contracting party was bound because he had signed it. In the present case, the correction of any misrepresentation is said to have been contained within a discrete, non-contractual document, namely the funding agreement. Therefore I accept Mr Chaisty's submission to the extent that Peekay is not directly determinative of the issues in the present case. But, nevertheless, as the footnote to the citation (footnote 216 of Chitty) makes clear, that is not the end of the position. The footnote reads:

"However, the misrepresentee must still prove inducement. If the misrepresentation was in very 'rough and ready terms', while the contract was a detailed financial instrument which the investor would be expected to read in order to discover the details which he claimed were of importance to him, but the investor signed the contract without reading it, he may be held not have relied on the misrepresentation."

55. In my judgment, the position in the present case is different even from that. The issue here is whether any representation was made and, if so, the extent of the representation. The representations relied on did not expressly address the security position. The furthest that they go is in the statement in the three-page report (which I have already held was not even seen by Mr Roberts) that A5 would "just continue to own the sites but have no responsibility for the development funding throughout the building period". Implicit in that, says Mr Chaisty, is the misrepresentation that there would be no third party security over the sites themselves. As Mr Berragan points out, taken at its fullest, that would appear to preclude any security being granted over the sites, even in respect of A5's own acquisition funding; but Mr Chaisty says that whatever the position may have been with regard to A5's own funding, it is implicit in the statement that there would be no security for development funding over the site.
56. In my judgment, this is a very different situation from that in a case such as Redgrave v Hurd, where there had been a clear and unequivocal representation that the business in question brought in £300 a year. I can well understand that in such a situation it is no defence to a claim in misrepresentation that the representee might, by looking at other documentation, have seen that the representation was false unless he did in fact look at that documentation. But where the alleged misrepresentation is no more than an outline summary of the details of a proposed investment, then it does seem to me that the position is different, and that the provision of the detailed funding documentation, particularly to a qualified solicitor and experienced and astute commercial investor such as Mr Roberts, does operate to negate any misrepresentation or, in my judgment, and more accurately, any false impression there may have been. But, on the facts, I have found it is unnecessary to go that far because I am satisfied that Mr Roberts did not see the three-page report. All he saw was the one-page summary: and I am satisfied that the statement in that document that the developers would "arrange their own bank finance with the LLP making balancing profit payments on completion" cannot carry the representation alleged by Mr Roberts. I am satisfied that there was no misrepresentation in the terms of the first alleged misrepresentation. The reason for that is that nothing is said in terms about security in respect of the developer's own bank finance.
57. So far as the second alleged misrepresentation is concerned, I simply cannot distil from the statement that interest would be "rolled and deducted from the price at 6.5 per cent per annum on the equity invested" that there was any representation that that interest would be earned or accrued. The figure of 6.5 per cent, as Mr Berragan submits, represented a nominal, or deemed, rate of interest which both A5 and Henry Davidson agreed should be deducted from the developer's remuneration. It plainly could not be guaranteed, as any return on the investment would depend on the successful completion of the development. It was not a return on the investment but a means of reducing the amount to be paid to Henry Davidson on completion. There was no undertaking or warranty in the one-page summary or the three-page report that the development would be completed or that Henry Davidson would remain solvent and able, effectively, to fulfil the commitment that a 6.5 per cent return would be achieved.
58. For those reasons, I find that there was no misrepresentation as alleged by Mr Roberts. If I were wrong in that, however, in my judgment there was no reliance upon those representations by Mr Roberts.
59. In his witness statement Mr Roberts said that he considered Mr Egan to be a highly talented man of integrity who could be trusted to carry into effect what he said he was going to do. Mr Roberts knew him to have a solid reputation as an investment deal-maker. Mr Roberts held Mr Egan in high regard and trusted him. Mr Roberts had, on my findings, been provided with a copy of the funding agreement. If Mr Roberts chose not to scrutinise it in detail, he did so because he relied upon Mr Egan to have negotiated an appropriate form of funding agreement. In my judgment, Mr Roberts's present profession that clause 36.3 of the funding agreement was a material issue is said with the benefit of hindsight. What Mr Roberts relied upon was that Mr Egan had got the matter right. Mr Roberts had the funding agreement containing clause 36.3. If he did not scrutinise it in any detail, that was because he had relied upon Mr Egan to negotiate an appropriate form of agreement containing appropriate protection. I do not accept that there was any material reliance by the time Mr Roberts came to make his two investments, each of £204,000, upon the statements in the three-page report, even if he had received it, or the one-page summary, which he did receive. They were simply outline proposals which had been superseded by the detailed documentation.
60. So I reject the claims in misrepresentation on the grounds that there was no material misrepresentation and, if there were, there was no material reliance. In those circumstances, it is unnecessary for me strictly to address the issues of the capacity in which any representation may have been made by Mr Egan, or the meaning and effect of clause 9.4 of the 2004 members' agreement. I will, however, touch briefly upon those matters.
61. Had I otherwise upheld Mr Roberts's claims in misrepresentation, I would have rejected the defendant's contention that the misrepresentations were made, not by Mr Egan personally, but by Egan Lawson Limited. I derive no real assistance in that regard from the previous transaction concerning the scheme in Swansea; the documentation was very different and, perhaps even more importantly, Mr Egan himself personally was not one of the members of the relevant LLP.
62. In my judgment, in considering the issue of capacity, one must focus upon the documentation generated in relation to this particular investment proposal. Mr Berragan relies upon the fact that emails came from Mr Egan's business email address; but Mr Egan had no other. Mr Berragan relies upon the fact that the initial email from Mr Jacques of 6 July to the existing investors in the LLP, which was forwarded to Mr Downes as the first stage in this transaction (at page 512), was signed by Mr Jacques with the name Egan Lawson and its address. Mr Berragan also relies upon the fact that the email of 17 July to Mr Downes bore the name Egan Lawson together with its address and the name and email address of Kim Munday, who is described as the PA to Geoff Egan, Debbie Lawson and Ian Jacques of Egan Lawson Limited. In my judgment, there is nothing in those matters. There is nothing in the documentation which suggests that Mr Egan was communicating, not in his personal capacity as an investor in and, as admitted on the pleadings, the "driving force" of A5, but rather as a director of Egan Lawson Limited. True it is that Egan Lawson Limited had become an investor in A5 as a result of the first 2005 addendum; but Mr Egan himself was also a founder investor in A5 and was, as admitted on the pleadings, its "driving force".
63. Mr Berragan submits that Egan Lawson Limited was involved in finding the investors to invest in the new proposal concerning the six additional properties. That, however, is not borne out by either the terms of clause 7.2 of the second, 2006 addendum to the original membership agreement or the terms of the invoice actually rendered by Egan Lawson Limited (at page 999 of the bundle). Clause 7.2 provides that Egan Lawson Limited shall be entitled to an acquisition fee equal to 1.5 per cent of the open market value of, and as stated in the valuation report relating to, a relevant additional property, and then deals with the payment of such fee.
64. Clause 7.2 also entitles Egan Lawson Limited to a further management fee under the provisions of a separate management agreement to be entered into between it and the LLP in due course, to be calculated as a figure equivalent to no more than 2 per cent of the rents collected at any additional property.
65. Clause 7.3 provided that Pegasus should be entitled to a fee of £220,000 in respect of the UKCP (EL5) investment. There is nothing in clause 7 entitling Egan Lawson Limited to a fee for finding any additional investors in the LLP. The invoice (at page 999) is simply expressed to be in respect of a development portfolio for properties with a total purchase price of approximately £21 million, and is expressed to be in respect of arranging finance with Royal Bank of Scotland, instructing solicitors and liaising throughout the negotiations. Again, there is nothing about any fee for finding any investors in the investment scheme.
66. The emails of 6 July, sent by Mr Jacques to the original investors, and forwarding that email (on 10 July) on to Mr Downes were both expressed to be sent on behalf of Geoff Egan. There is no indication that they were sent in Mr Egan's capacity as a director of Egan Lawson Limited. There was nothing in the later email of 17 July to indicate that Mr Egan was not sending that email either in his personal capacity. In his oral closing, having cited from the speech of Lord Steyn in Williams v Natural Life Health Food Ltd [1998] 1 WLR 830 at pages 835B through to 837C, Mr Berragan submitted that that case established a fourfold test: (1) the test is objective; (2) the claimant must show that the defendant assumed personal responsibility for the representations; (3) the claimant must have relied as a matter of fact on that assumption of personal responsibility; and (4) the claimant must show that it was reasonable for him to rely on that assumption of personal responsibility. I am satisfied on the evidence that all four elements of that fourfold test are satisfied in the circumstances of the present case. Therefore, had it been necessary to do so, I would have rejected the defence founded upon the lack of personal assumption by Mr Egan for the representations which it is alleged he made.
67. Likewise, had it been necessary to do so, I would have rejected the defence founded upon clause 9.4 of the membership agreement. I would have done so as a matter of construction of that clause. Mr Berragan, in his written skeleton, had relied upon a number of authorities, culminating in the judgment of Rix LJ in the case of Axa Sun Life Services Plc v Campbell Martin Ltd [2011] EWCA Civ 133; [2012] Bus LR 203.
68. At paragraph 94 of his judgment Rix LJ said this:

"In my judgment, this jurisprudence confirms my provisional conclusion on the wording of clause 24. No doubt all such cases are only authority for each clause's particular wording: nevertheless it seems to me that there are certain themes which deserve recognition. Among them is that the exclusion of liability for misrepresentation has to be clearly stated. It can be done by clauses which state the parties' agreement that there have been no representations made; or that there has been no reliance on any representations; or by an express exclusion of liability for misrepresentation. However, save in such contexts, and particularly where the word "representations" takes its place alongside other words expressive of contractual obligation, talk of the parties' contract superseding such prior agreement will not by itself absolve a party of misrepresentation where its ingredients can be proved."

69. As Rix LJ says, all the cases are only authority for each clause's particular wording. Exclusion of liability for misrepresentation has to be clearly stated. In one of the authorities referred to by Rix LJ (at paragraph 85 of his judgment) he cites from the earlier judgment of Jacob J in the case of Thomas Witter Ltd v TBP Industries Ltd [1996] 2 All ER 573 at page 596. There, in characteristic language, Jacob J said that:

"If a clause is to have the effect of excluding or reducing remedies for damaging untrue statements, then the party seeking that protection cannot be mealy-mouthed in his clause. He must bring it home that he is limiting liability for falsehoods he may have told."

70. In my judgment, this clause gets nowhere near to achieving that end. Mr Berragan relies upon Rix LJ's words that exclusion of liability for misrepresentation can be done by a clause stating that there has been no reliance on any representation. He submits that clause 9.4 includes a clear no reliance agreement of the type mentioned by Rix LJ. I disagree.
71. Clause 9.4 makes it clear in the section which I have numbered [i] that the membership agreement is setting out the entire agreement of the members in relation to the constitution and operation of the LLP. The second numbered element of clause 9.4 goes on to include confirmation by each member that he is not relying on any commitment or representation by any of the other members, except as set out in the membership agreement. In my judgment, it is quite clear that the second limb is confined only to representations in relation to matters covered by the membership agreement, namely matters concerning the constitution and operation of the LLP. It does not extend to representations in relation to the way in which any investment scheme into which the LLP might enter is to operate. Still less does it extend, in my judgment, to any representation concerning the terms of any funding agreement into which the LLP might enter with any developer who may be retained by the LLP to develop and fund the development of any property which may be acquired by the LLP.
72. The representations relied upon are not matters concerning the LLP membership agreement; the representations alleged are representations concerning a wholly separate and discrete agreement which, in my judgment, does not fall within the scope of clause 9.4.
73. The numbered limbs [iii] and [iv] in my judgment take the matter no further. Numbered clause [iii] merely confirms "in particular" that each member has made its own evaluation of its participation in the LLP in the light of such legal, property and financial advice as he has seen fit to take. That again is concerned with the terms of the LLP membership agreement and the constitution and operation of the LLP.
74. Numbered clause [iv] is a recognition that the information that the LLP and its members have prepared in relation to the property has been derived from information provided by the proposed sellers of the property and/or their representatives, and/or the LLP's professional advisers. It says nothing about any information concerning any funding agreement into which the LLP may have entered, or been proposing to enter into, with a developer of such property.
75. Had it been necessary to do so, I would have rejected the submission that clause 9.4 of the 2004 membership agreement, on its true construction, has any operation concerning the effect of the alleged misrepresentations. It is, in my judgment, wholly incapable of excluding liability for any misrepresentation there may have been as to the way in which the development of any property acquired by the LLP was to be carried out.
76. Mr Chaisty has also contended that the clause is incapable even of operating by way of a contractual estoppel. He has referred me not only to the Peekay case (previously cited) but also the lengthy and detailed decision of the Court of Appeal in the case of Springwell Navigation Corporation v JP Morgan Chase Bank [2010] EWCA Civ 1221; [2010] 2 CLC 705.
77. I have already made the necessary findings of fact concerning Mr Roberts's ignorance, at the time he made his investment, of the precise terms of the 2004 membership agreement, and thus of clause 9.4. Having made those findings of fact, and because it is strictly unnecessary for me to do so, I do not propose to express any view on the question whether, even if it were capable in principle of applying, Mr Roberts is, in any meaningful sense, contractually bound by the terms of clause 9.4.
78. I have made my findings of fact. If this matter goes further, it is a matter of pure law, which can be considered by the Court of Appeal. Equally, it would be wrong for me to express any view on Mr Chaisty's further submission that, in any event, it would be unreasonable (within the meaning of the Unfair Contract Terms Act 1977) for Mr Egan to be able to place any reliance upon the terms of clause 9.4.
79. I have expressed the view that there was no misrepresentation as a matter of fact in the present case. In those circumstances, any views I might express on the operation of the Unfair Contract Terms Act would be based upon that finding of fact; and, since the application of the 1977 Act is particularly fact-sensitive, it would be wrong for me to express any views when it is strictly unnecessary for me to do so.
80. In summary, therefore, and for the reasons I have given, I reject the claim by Mr Roberts on the footing that there were no material misrepresentations and no material reliance upon them. Had it been necessary to do so, I would have rejected the defences founded upon the capacity in which the representations were made and the terms of clause 9.4.