Demco Investment v Commercial SA
| Jurisdiction | England & Wales |
| Judge | Lord Justice Longmore |
| Judgment Date | 16 April 2013 |
| Neutral Citation | [2013] EWCA Civ 559 |
| Court | Court of Appeal (Civil Division) |
| Date | 16 April 2013 |
| Docket Number | Case No: A3/2012/3352 |
[2013] EWCA Civ 559
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH COMMERCIAL COURT
(MR JUSTICE CHRISTOPHER CLARKE)
Royal Courts of Justice
Strand
London WC2A 2LL
Lord Justice Longmore
Case No: A3/2012/3352
Mr Ivan Krolick and Gary Hodkinson (instructed by Strain Keville Llp) appeared on behalf of the Applicant
The Respondent did not appear and was not represented
This is an application for permission to appeal by Mr Cohen from a judgment of Christopher Clarke LJ, holding him responsible in a contribution action for his appropriate share of the liabilities of the sellers of shares in an English insurance company called Interlife Assurance Company Limited.
The liabilities to the buyer of those shares arose pursuant to a purchase agreement of 21 April 1993 and a deed of indemnity of the same date. The agreement contained various representations or warranties given by the sellers to the buyer, and the deed promised to indemnify the buyer against losses incurred by the buyer in relation to a variety of matters.
Those documents contained an arbitration clause, and when the sellers made a claim for the balance of the price they were met with a counterclaim in respect of pension reselling liability which had necessitated, it was said, Interlife paying some £34 million in compensation and about £10 million in respect of the cost of reviewing and deciding to pay such compensation.
The arbitration was eventually settled by one of the sellers, GDH, paying a total of £26 million or so, and the claim against Mr Cohen for his proportionate part under the Civil Liability Contribution Act 1978 was then made.
Mr Cohen's ultimate defence was that he never signed the agreement or the deed, and that the managing director of Interlife, Mr Boris Sackville, who had purportedly signed the documents on his behalf, had no authority to do so.
He then asserted the documents were on that account forgeries. Mr Sackville said he had been told by a Mr Merrifield, now dead, in the presence of the seller's solicitor, Mr Yonge of Manches, that Mr Cohen had given Mr Sackville authority to sign the documents against an indemnity to protect Mr Cohen from any liability arising from the transaction. He added in oral evidence that Mr Yonge actually told him of Mr Cohen's authorisation of himself. Mr Yonge, in a statement (he did not give evidence), just said it was expressly agreed that Mr Sackville would sign the documents on Mr Cohen's behalf.
Mr Krolick has submitted that the judge's summary of Mr Yonge's evidence on this was seriously wrong because the judge accepted Mr Sackville's account, which Mr Yonge did not expressly confirm in that statement. However, the judge gave cogent reasons for preferring Mr Sackville's evidence to Mr Cohen's own evidence, which he said was not easy to follow and was unconvincing and unreliable. He also said that the conferring of an express authority was rendered highly probable by the fact that Mr Cohen, after the execution of the documents, (1) relinquished his shares against part payment of the purchase price; (2) claimed a loss in respect of the shares in his income tax return; (3) advanced a claim for part of the unpaid purchase price on the basis of the purchase agreement; (4) relied on the indemnity against which he agreed to sell the shares; and (5) participated in the arbitration and in the action without mentioning lack of authority or forgery until six months before the hearing.
In the light of these five findings he also held that, in any event, even if no express authority had been given, Mr Cohen had ratified the absence of authority and had held out Mr Sackville as having his authority for so long and in such a manner that he was now...
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