2002/197
ROYAL COURT
(Samedi Division)
18th October 2002.
Before: |
F.C. Hamon, Esq., OBE, Commissioner and Jurats Le Brocq and Georgelin |
Between |
Jakob Freyr Jakobsson |
Plaintiff |
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And |
Offshore Nautical Sales Limited |
Defendant |
Law of Agency - Principal consents that Agent shall act on his behalf and Agent consents - Agency by estoppel.
Advocate D. F. Le Quesne for the plaintiff
Advocate J. D. Kelleher for the defendants
judgment
the commissioner:
1. In this case we have to decide how the fraud of a man called Barnes affects the rights of two innocent parties, one the former owner of a yacht sold by Barnes and the other a company operating the Fairline Powerboat franchise in the Channel Islands of which company Barnes was the managing director.
2. The plaintiff's argument is based on the law of agency which is, no more nor less, the relationship that arises where one party (the principal) consents that the other party (the agent) shall act on his behalf and the agent consents so to act. The purpose of an agency is, of course, to establish privity of contract between the principal and a third party. Because the authority and the power of an agent to bind his principal is alleged to arise in this case by ostensible or apparent authority (or agency by estoppel) we shall have to examine that aspect of the law later.
3. The facts of the case are only partially in dispute but some of the disputed areas are crucial to the point of law we have to decide.
4. The points at issue are further complicated by the fact that we have little written documentation that will help us to make a decision.
5. Barnes was originally employed by a firm called Jersey Boat Brokerage Limited which traded from Gorey. The managing director of that company was a Mr.Mike Beard. The company no longer exists.
6. Mr. Jakob Freyr Jakobsson, ("Mr. Jakobsson") an Icelandic businessman, had met Barnes in 1994 and through Jersey Boat Brokerage he had bought a boat which eventually he took back to Iceland. Later this boat was sold (again through Barnes and Jersey Boat Brokerage) and a new boat was purchased.
7. The first boat was sold in Norway in 1996 for a total consideration of £59,800 which included a commission of £2,200 to Jersey Boat Brokerage. The net consideration of £55,000 was retained at Jersey Boat Brokerage for the purchase of a new Fairline Targa 39. This boat was purchased by a Bill of Sale dated 25th August 1996. It was called Klaas II.
8. Mr. Simon Neal and his brother, Mark Neal, are the sons of a well known and respected local property developer, Mr. John Neal of JCN Investments (Jersey) Ltd. Mr. Mark Neal, at the relevant time, was property manager of a business called Saar Neal & Co. Mr. Simon and Mr Mark Neal had purchased a boat from Jersey Boat Brokerage and because of that purchase Mr. Mark Neal and Barnes became friendly. At a meal in a local restaurant some time in 1997 Barnes told the brothers Neal that Jersey Boat Brokerage was in financial difficulties and that they should get in touch with a company Peters plc., the Fairline distributor operating from Chichester Marina.
9. Mr Simon Neal told us that on that information he decided to set up a new company in conjunction with the JCN Group (Mr. John Neal, Mrs. Christine Neal and himself). The Group was not averse to diversification.
10. On 23rd April 1998 Barnes received this letter from Peters plc addressed to 27 the Esplanade, the company's offices.
« Dear Neil
Port Fairline C.I.
Further to your discussion with Brian Peters regarding the use of Port Fairline C.I., as appointed Fairline dealers, we hereby authorise the use of the above name by your company from the first day of the agreement, 1st May 1998, for the period of agreement, or until the end of the agreement.
Where possible the trading name should reflect the same line as the Port Fairline logo which is the intellectual property of Peters plc, although different colourways are permitted to suit the dealers corporate colours. We would appreciate sight of any logo carrying this logo style before it reaches the public domain.
A disc will be sent today to enable you to match the typestyle and colours of the Port Fairline logo.
I hope the above is helpful and clear but should you have any queries please call me. I apologise for the lateness in sending this material."
11. Offshore Power Boats C.I. Limited had been incorporated on 9th April 1998. The company changed its name by special resolution on 20th April 1998 to Offshore Nautical Sales Ltd.
12. As early as 27th April 1998 Barnes was writing to one of his potential customers, a Mr. N Timms, on Offshore Nautical Sales Ltd. paper from the offices 27, The Esplanade to say -
"As you may have heard Port Fairline CI will from 1st May 1998 be the new Fairline dealers for the Channel Islands of which I am the managing director. The aim of the new company is to offer a vastly improved service and after sales, backed up with finance to take in boats in part exchange and create a dedicated marine service facility."
13. A shareholders' agreement was drawn up by lawyers acting for the company. It is dated 31st January 2000. It took some time to pin Barnes down to signing it. It is between JCN Investments Limited, Neil Barnes and Offshore Nautical Sales Limited. The agreement states that Barnes is the beneficial owner of fifty percent of the issued shares of offshore Nautical Sales Limited and JCN is the beneficial owner of the other fifty per cent.
14. Inter alia, the agreement specified that all cheques drawn by the company on accounts in excess of £5000 are to be signed by two directors and no shareholder would enter into a contact arrangement or commitment involving expenditure which would exceed £2000 in any one year.
15. The premises 27 Seaton Place were taken on a sub-sub-lease from Sovereign (Jersey) Cars Limited from 1st April 1998 to 30th September 1999. The lease was guaranteed by JCN Investment (Jersey) Ltd.
16. The first meeting of Offshore Powerboat CI Limited was held on 17th April 1998. The two first directors were Mr. Simon Neal and Neil Barnes. Barnes was appointed chairman of the meeting. The Finance & Economics Committee under the Regulation of Undertakings and Development (Jersey) Law 1975 approved the application by Offshore Nautical Sales Ltd to commence the Fairline Boat franchise undertaking on 24th April 1998. We shall refer to the company as ONS.
17. Although Mr. Mark Neal was not made a director of the company until 18th February 1999, he signed as a director on the Bank mandate with Royal Bank of Scotland International Limited as one of any two directors who could sign cheques over £5,000. The mandate apparently reflects a minute of a meeting held at 27 Esplanade on 18th May 1998. Barnes and Mr. Simon Neal are the other two authorized signatories. In his evidence before us Mr. Simon Neal candidly admitted that the inclusion of Mr. Mark Neal on the Bank mandate had been a mistake. Mr. Mark Neal was running an estate agency at the time and had no part whatsoever to play in running the business.
18. There were clearly problems in setting up the business. The premises were damp so that a total refurbishment was put in place on 1st April and the technical equipment as well as much of the database system was worn and outmoded. All this was set out in a memorandum from Barnes to Mr. Simon Neal on 5th June 1998.
19. Whatever the situation within the company, there is no doubt but that Barnes was the managing director of ONS. As Mr. Simon Neal said it fell to him to sell boats and it was envisaged that he would run a staff of individuals providing services to boat purchasers and a back-office function for ONS. It was agreed that Barnes would have the day to day management of ONS. Mr Simon Neal would only be peripherally involved but it was for Barnes to keep his fellow shareholder regularly informed on how the business was progressing. We now know that Barnes was a convincing liar (that is clear from some of the correspondence that we have seen) but that is not the point, nor is it material that Barnes is now serving a term of imprisonment of three and a half years for a breach of trust case in relation to £110,000, including a fraudulent obtaining of a further £240,000 and an attempt to obtain a further £151,000.
20. What is relevant is that the company had a high degree of trust in Barnes as managing director and that he was solely responsible for the day to day running of the company. He did in fact sell a large number of boats.
21. The question of course is whether he had authority from the company, actual or implied, to sell the Klaas II for the Plaintiff on 16th May 1998.
22. Mr. Jakobsson first met Barnes when he was trawling through boat magazines looking for a suitable vessel. He had been sailing since he was 6 years old so that, at 37, he had some experience. He tried several boat yards but eventually Jersey Boat Brokerage looked the best and he visited them in 1994. After an initial abortive visit, a boat was found in Guernsey and Barnes helped to bring the boat to Jersey and have it repaired before Mr. & Mrs. Jacobsson purchased it. He regarded Barnes as the salesman although Mr Beard , who was clearly Barnes' boss, greatly helped with the repairs. When Klaas I was sold the money was retained by Jersey Boat Brokerage and eventually after an attempt at a Dutch auction by some boat owners in Majorca where Barnes was in constant touch with Mr Beard, Jersey Boat Brokerage made an offer of a new boat to be built - the Klaas II - and the offer was accepted. So that from early in 1996 to August of 1996, Jersey Boat Brokerage held part of Mr. and Mrs. Jakobsson's funds. When the finished boat was delivered in August 1996, Mr. Jakobsson sailed it from Chichester to Jersey and then on to Majorca. Mrs. Jakobsson had two children, both young and there were positive dangers to small children in the design of Klass II. Mr. Jakobsson called Barnes and asked if Jersey Boat Brokerage would sell Klaas II. Arrangements were made to take the boat overland to Jersey (one must presume that as the Klaas II was in Jersey in February 1998, it was perhaps (we heard no evidence on the point) the prospect of travelling through the Bay of Biscay in winter that made for an overland trip). While Klaas II was in Majorca, Barnes, who had by now ingratiated himself into Mr. Jakobsson's company, was staying with his girlfriend on Klaas II. Barnes had made friendly contact with a Jersey resident, Mr. Griffey, at the September 1996 Boat Show in Southampton. The following year, at the same Boat Show in September 1997, Barnes told Mr. Griffey about a Target 39 (Klaas II) and then told him eventually that an excellent Target 39 was for sale in Majorca. In early October 1997, Mr. Griffey went with his family to view the Klaas II. He remembers meeting Barnes on the boat. He remarked that the interior was rather dark. Barnes replied that it was attractive at night. There was a sea trial. Later Mr. Griffey had a second visit when Barnes had returned home. He collected the keys from the Fairline agent at the Marina. Mr. Griffey was told the owner's name and at some time in Majorca he saw the specification because he compared prices of items on it. The reason for the sale, he was told, was that Mrs. Jakobsson was expecting a baby - not quite the reason given by Mrs. Jakobsson.
23. When Mr. Griffey returned to Jersey, he told Barnes that he had decided not to buy it. Barnes told him that he was selling the boat as a favour for a friend. There was no mention of an agency but Mr. Griffey knew that at the time Barnes was working for Jersey Boat Brokerage.
24. In February 1998, when Klaas II was brought to Jersey, Barnes telephoned Mr. Griffey and asked if he would like to see the boat again. Mr. Griffey had already noticed that it was in the harbour. He decided to look at it again. It was late February. Another sea trial took place. He discussed the matter with his wife. An offer was made at that time on the basis of cash and the Drayton Flyer (Mr. Griffey's boat) in part exchange. There was a certain amount of haggling and eventually a price was settled at £40,000 (with the Drayton Flyer). The decision was made on Klaas II at the end of February or the beginning of March 1998.
25. The sale of the boat was made subject to a survey from a structural viewpoint and the tonnage had to be measured for registration at Lloyds.
26. Barnes instructed the surveyor, Peter Williams, on Mr. Griffey's behalf and Barnes arranged the lifting of the vessel on to the dock. The only problem with the survey was with the outdrives and the lower gearbox. Barnes had by now contacted Mr. Jakobsson because he wanted a contractor in Iceland to do the repairs. Mr. Griffey, for obvious reasons, wanted a local firm to do the work and his view prevailed after some three or four days.
27. We know that a Mr. Fred Daley carried out repairs to gelcoat damage at about this time and we know that Barnes paid that bill and other bills.
28. Mr. Jakobsson and Mr. Griffey never met. Mr. Griffey carried out works of anti-fouling and polishing the keel while the boat was on dry land. It was a loss that he would have to bear if the survey were not satisfactory. He said as much to Mr. Fred Daley in the week of 20th April 1998 when they were both working on the boat. "This is going to be a job for nothing if the deal falls through".
29. Some time during this period, Barnes told Mr. Griffey that he would be leaving Jersey Boat Brokerage to start "his own business" with the Fairline agency.
30. On 14th May 1998 Klaas II was in the water ready for the opening of the Marina. A final sea trial took place and Klaas II was moored alongside the Drayton Flyer. Mr. Griffey's cheque for £40,000 was paid on 16th May 1998. It was only then, post survey with the works completed and a satisfactory sea trial made that the contract was complete. The cheque was made out to Barnes, not to his company. The transfer document for the Drayton Flyer was made on the same day. Unbeknown to anyone at that time the signature of Mr. Jakobsson as transferor was forged by Barnes. The witness to Mr. Griffey's signature, a Mr. Andrew Cruickshank, was appended after Mr. Griffey had signed for the Drayton Flyer and left the papers with Barnes.
31. When the cheque for £40,000 was made out, Barnes asked that his name be placed on the cheque "as the account had not yet been set up". Mr. Griffey did not give the matter much thought. There is no reason why he should. On reflection, he told us that he thought that Barnes was probably acting for the owner. Certainly no mention was made of ONS.
32. What of Mr. Jakobsson? When he decided to sell the boat he telephoned Barnes. It is very difficult to pinpoint the date of that call. It was probably late autumn or early winter of 1997. The boat, as we know, was taken to Jersey. Mr. Jakobsson was not there. He was a busy tradesman. He constantly telephoned Barnes at Jersey Boat Brokerage. When the gears had to be repaired (Mr. Jakobsson knew nothing of Mr. Griffey), he remembers asking for the engine to be repaired by the Volvo agent in Iceland.
33. It was around the end of February 1998 that Barnes told Mr. Jakobsson that there were financial problems within Jersey Boat Brokerage. A new marina was to be built in Jersey and Barnes felt that he could do well. He had new partners. He named them. He mentioned the name of Mr. Mark Neal. He told him of the offices and how the new company was to take over the Fairline agency. He explained that if Mr. & Mrs. Jakobsson were prepared to wait then he would take care of everything. Mr. Jakobsson understood that the new company would be selling Klaas II. He was happy for Barnes. He knew of the part-exchange boat. He and his wife had business in London and decided at that time to come to Jersey.
34. Mr. and Mrs. Jakobsson came to Jersey. They were here between 12th and 14th April. Their belief that the Klaas II was to be sold by the new company was confirmed by a series of events. In 1998, the Klaas II was in Jersey and was for sale for about £129,000. That fact was known both to Barnes and to Mr. Jakobsson. The Jakobssons knew nothing at the time of Mr. Griffey nor of his offer "subject to survey" in late February or early March.
35. Barnes met Mr. & Mrs. Jakobsson at the airport and took them to the company's new offices. They were being redecorated but no doubt seeing his Satellite TV equipment from Klaas II in the office had a positive effect.
36. We now have a complete conflict of evidence. Mr. & Mrs. Jakobsson said that they were then taken by Barnes to the Marina and the boat of Mr. Mark Neal (who was not connected with the company at that time apart from being on the Bank mandate). There they met Mr. Mark Neal and his estranged wife Louise (then his fiancée). We heard of their conversation and then they went on to a family reception at the Grand Hotel.
37. Mr. Mark Neal and Mrs. Louise Neal remembered the gathering at the Grand Hotel the evening before the Jakobssons came to Mr. Mark Neal's boat. Mrs. Louise Neal was not on the boat according to her and to Mr. Mark Neal's evidence.
38. A conflict of evidence where the Court has no reason to doubt the truthfulness or the integrity of any of the witnesses is always difficult. We can only think that after such a long period someone is likely to be confused. The Court prefers the evidence of Mr. & Mrs. Jakobsson, simply because the meeting in Jersey would have had far more importance for them than for Mr. Mark Neal. We also have to deal with an earlier meeting in a public house near to the company's office in Seaton Place. Barnes had no money - apart from a promised but non-existent share portfolio - to purchase his half share in the company. Mr. Mark Neal said that the sale of Klaas II was mentioned and Barnes was told not to involve the company. "That is fine by me", he said. If that is so, it would have been very easy for Mr. Mark Neal to have put Mr. Jakobsson straight when the question of the sale of Klaas II came up in conversation on Mr. Mark Neal's boat. He clearly did not do so. He told us that he thought that by that time the boat had been sold. That strikes us as implausible. The Jakobssons had come to Jersey for some three days. They came to look at Klaas II and to examine the Drayton Flyer which was being given in part-exchange. It is inconceivable that they would not have spoken at length on the matter. In the circumstances, we have taken the scenario as explained to us by Mr. & Mrs. Jakobsson as correct. This does not mean that we in any way impugn the integrity of Mr. Mark Neal or of his estranged wife. It does seem to us surprising that if the discussion turned on Mr. Jakobsson accepting the Drayton Flyer in part-exchange that Mr. Mark Neal did not say that it was company policy that they did not buy second-hand boats nor that the Neals had together at the public house told Barnes that the sale of the Klaas II was not to be performed through the company. It would have been simple if that were company policy for someone to have written to Mr. Jakobsson to say that the sale of Klaas II was a personal matter which in no way involved the company. Nobody thought to write that letter. The Jakobssons clearly trusted Barnes. We heard how later when Barnes was in Florida he told them that his wallet had been stolen from a hotel bedroom. Mr. Jakobsson gave him his credit card and a substantial amount of cash.
39. Eventually, Mr. Jakobsson heard that he had sold the Klaas II and owned the Drayton Flyer. He was prepared to leave the funds in Jersey as the Icelandic Kroner was not of great value at the time. He phoned Barnes perhaps twice a month on his mobile and often got through to a secretary at "Offshore Nauticals". In late 1998 Barnes told Mr. Jakobsson that the Drayton Flyer had been sold and that the proceeds with the £40,000 already held would approximate the £129,000 Mr. Jakobsson was expecting.
40. In May 1999 Mr. Jakobsson received a telephone call in Iceland from Barnes to say that the company was splitting into two branches and that later he was going to break from the company entirely and set up on his own in business in England.
41. Mr. Jakobsson met with Barnes in London. He was told of Barnes' dissatisfaction with the company, but that he could not pay over the money as he could only write cheques up to a limit of £5,000, that he needed to go back to Jersey and arrange to put the money in a private account or send the money to Mr. Jakobsson. Mr. Jakobsson was concerned but he was still convinced that his money was safe.
42. The story of Barnes taking the money from a bank in Geneva and getting mugged there and losing all the cash is the fabrication of a desperate fraudster who knows that his time has run out. His appalling letter of "explanation" is dated 15th December 2000. It was only in early December that Mr. Jakobsson went to ONS to meet Mr. Simon Neal. It was a cordial meeting although it was clear that Mr. Jakobsson was deeply shocked by what had happened. There is no doubt in the Court's mind that Mr. Simon Neal co-operated as far as possible. It was a hopeless situation. Mr. Simon Neal offered an ex gratia payment, a boat at cost (£70,000). By the time investigations began, Barnes had shredded much documentation and not one piece of concrete written evidence concerning Klaas II was ever found.
43. Those are the bare facts of this sordid affair. Mr. Jakobsson has lost all his money, the company has gained nothing and Barnes has begun to serve his prison sentence.
44. In this judgment we have to consider why it took an experienced businessman (as Mr. Jakobsson indubitably is) so long before he eventually contacted ONS.
45. When the deal between Barnes and Mr. Griffey was first entertained, ONS was not in existence. Barnes was given a very free hand but he was dismissed on 28th April 2000 and it was eight months later that Mr. Jakobsson went to meet with Mr. Simon Neal. It is clear that Barnes was treated by the Jakobssons as a family friend - he stayed with them in Iceland with a Mr. Liam Tattem on one occasion and with his girl-friend over New Year's Eve of 1997.
46. We have a specification for the sale of Klaas II which has at its foot -
"Offered for sale @ £129,950 extra less part exchange Drayton Flyer £89,950, lying Mallorca, Balance of £40,000".
47. If that was, (as appears to be the case) created on 23rd June 1997 and modified on 1st April 1998, it may be that the modification is the footnote which was agreed according to Mr. Griffey at the end of February or the beginning of March.
48. Article 21 of the Companies (Jersey) Law 1991 says this -
"Article 21
Transactions entered into prior to corporate existence.
(1) Where a transaction purports to be entered into by a company, or by a person as agent for a company, at a time when the company has not been formed, then, unless otherwise agreed by the parties to the transaction, the transaction has effect as one entered into by the person purporting to act for the company or as agent for it, and he is personally bound by the transaction and entitled to its benefits.
(2) A company may, within such period as may be specified in the terms of the transaction or if no period is specified, within a reasonable time after it is formed, by act or conduct signifying its intention to be bound thereby, adopt any such transaction and it shall thenceforth be bound by it and entitled to its benefits and the person who entered into the transaction shall cease to be so bound and entitled."
49. We remain unconvinced that the contract was made before the company was formed.
50. In JK Fruit and Vegetable Catering Limited v Harbour Lights Hotel Limited (1987-88) JLR 72 the Court (Crill, Bailiff and Jurats Perrée and Bonn) adopted the wording of Diplock LJ (as he then was) in Freeman & Lockyer v Backhurst Park Properties (Mangal) Ltd. (1964) 1 All ER 630 at 646.
"It must be shown: (a) that a representation that the agent had authority to enter on behalf of the company into a contract of the kind sought to be enforced was made to the contractor; (b) that such representation was made by a person or persons who had "actual" authority to manage the business of the company either generally or in respect of those matters to which the contract relates; (c) that he (the contractor) was induced by such representation to enter into the contract, i.e. that he in fact relied on it; and (d) that under its memorandum or articles of association the company was not deprived of the capacity either to enter into a contract of the kind sought to be enforced or to delegate authority to enter into a contract of that kind to the agent.
The confusion which, I venture to think, has sometimes crept into the cases is, in my view, due to a failure to distinguish between these four separate conditions, and in particular to keep steadfastly in mind (first) that the only "actual" authority which is relevant is that of the person making the representation relied on, and (second) that the memorandum and articles of association of the company are always relevant (whether they are in fact known to the contractor or not) to the questions (i) whether condition (b) is fulfilled, and (ii) whether condition (d) is fulfilled, and (but only if they are in fact known to the contractor) may be relevant (c) as part of the representation on which the contractor relied."
51. Let us apply the facts as we know them to these four conditions. (1) Mr. Jakobsson had sold and bought boats before where Barnes was the agent of Jersey Boat Brokerage. He was told that Barnes was moving to a new company; he saw the offices of that new company with some of his equipment in it - (Advocate Kelleher's surmise that that was because Barnes lived in rented accommodation with no room to store things is pure speculation); Mr. Jakobsson telephoned Barnes sometimes twice a month on his mobile and often got through to the company's secretary. Even Mr. Fred Daley sent his bill (although it was paid by Barnes personally) to Port Fairline, Offshore Nautical Sales Ltd., 27 The Esplanade. The address had the correct post code. The States of Jersey Harbour Office sent a bill to Barnes at 27 The Esplanade (although it was paid by Barnes personally); the bill of Peters plc for transporting Klaas II to Chichester was sent to Port Fairline Channel Islands at 27 The Esplanade (even though it was paid by Barnes personally). Barnes introduced Mr. Jakobsson to Mr. Mark Neal as his "business partner". Mr. Mark Neal did not demur. (2) Barnes was the Managing Director charged with the day-to-day running of the company and with a very wide discretion. (3) Mr. Jakobsson told us that he trusted Barnes and always assumed that he was working for the company and (4) there is not a mention in the memorandum and articles of association, nor in the only minute shown to us which limits Barnes' power not to purchase used boats. There is nothing that says that the Klaas II was not to be sold by the company but by Barnes personally.
52. Later on in that appeal case, Diplock LJ quoted words from the earlier case of Biggerstaff v Rowatt's Wharf Limited (1896) 2 ch.93 which he said were of the "utmost significance" -
"The agent whose authority was relied on had been acting to the knowledge of the company as a managing director and the act done was one within the ordinary ambit of the powers of a managing director in the transaction of the company's affairs".
53. We can see that there must be some representation made by the Principal which can of course be implied by conduct. In our judgment the meeting on Mr. Mark Neal's boat was crucial. Mr. Mark Neal had signing powers; he knew precisely what the company was about and yet he did nothing to disabuse Mr. & Mrs. Jakobsson that the company's managing director was acting alone. Why should he? The company knew that the Jakobssons were minded to buy a larger boat - the company gave Barnes a free hand. Mr. Mark Neal must have known that the Jakobssons had visited the offices in the Esplanade. Barnes certainly told Mr. Jakobsson that he was leaving Jersey Boat Brokerage to run the new company and it was, in our judgment, because of that reliance that Mr. Griffey made out his cheque to Barnes and because of that reliance that Mr. Jakobsson allowed Barnes to keep his funds - in exactly the same way as he had done when he sold his first boat through Barnes at Jersey Boat Brokerage.
54. We turn to the question of damages. Mr. Jakobsson instructed Barnes to sell Klaas II for £129,000. He instructed Barnes to take the Drayton Flyer in part exchange. It will be recalled that Peter Williams valued Klaas II at £129,000 on 12th April 1998. Klaas II was sold for £40,000 on 16th May 1998. The plaintiff is entitled to that sum. We are going to follow the basis of the calculation as decided by Lord Esher MR in Firbank's Executors v Humphreys (1886) 18 QBD 54 at 60.
"The damages under the general rule are arrived at by considering the difference in the position the plaintiff would have been in had the representation been true and the position he is actually in in consequence of it being untrue".
55. The value of the Drayton Flyer was £85,000. In effect there was a shortfall and looking at the matter realistically Mr. Jakobsson would have received £125,500 had the Drayton Flyer been sold on his behalf.
56. In our judgment the company must pay that sum to Mr. Jakobsson and interest at the court rate should be paid. We feel that interest should run on the total sum from 16th May 1998 and we order accordingly.
Authorities
Companies (Jersey) Law 1991: Article 21.
JK Fruit and Vegetable Catering Limited v Harbour Lights Hotel Limited (1987-88) JLR 72.
H L Bolton Engineering Co Ltd v T J Graham & Sons Ltd (1956) 3 All ER 624.
Eastern Distributors Ltd v Goldring (1957) 2 All ER 525.
Freeman & Lockyer v Backhurst Park Properties (Mangal) Ltd. (1964) 1 All ER 630 at 646.
Biggerstaff v Rowatt's Wharf Ltd (1896) 2 Ch.93.
Panorama Developments (Guilford) Limited v Fidelis Furnishing Fabrics Ltd. (1971) 3 All ER 16.
Lloyd v Grace, Smith & Co. (1911-13) All ER 51.
Firbank's Executors v Humphreys (1886) 18 QBD 54 at 60.