MAD Atelier International BV v Mr Axel Manes
| Jurisdiction | England & Wales |
| Judge | Sir Michael Burton GBE |
| Judgment Date | 09 December 2021 |
| Neutral Citation | [2021] EWHC 3335 (Comm) |
| Docket Number | Case No: CL-2019-000250 |
| Year | 2021 |
| Court | Queen's Bench Division (Commercial Court) |
[2021] EWHC 3335 (Comm)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
COMMERCIAL COURT
Royal Courts of Justice,
Rolls Building
Fetter Lane, London, EC4A 1NL
Sir Michael Burton GBE
Sitting as a Judge of the High Court
Case No: CL-2019-000250
Jasbir Dhillon QC, Stewart Chirnside and Robert Ward (instructed by Mishcon de Reya LLP) for the Claimant
Richard Hill QC, Gregory Denton-Cox and Emma Horner (instructed by Macfarlanes LLP) for the Defendant
Hearing dates: October 2021, 11–14, 19–22, 25 – 26, 28 – 29 and November 2021, 1 – 2,
Approved Judgment
This has been the hearing of a claim by an international restaurant chain (the Claimant being MAD Atelier International BV, a Dutch company, part of the Dogus Group primarily based in Turkey (“Dogus”)), in deceit (alternatively breach of contract) against the Defendant Axel Manes (“Mr Manes”), a renowned French chef, executive chef of L'Atelier de Joel Robuchon (“ADJR”) in St. Germain (“the Paris Restaurant”), one of the youngest chefs to obtain a Michelin star. The claim results from the sale by the Claimant to Mr Manes' company MA Developpement S.A.S. (“MADV”) of the shareholding in MAD Atelier S.A.S. (“MAD Atelier”), which owns the Paris Restaurant, by a transfer entered into on 3 August 2016.
The Claimant's case is that it was tricked by Mr Manes into the transfer of its shares to MADV by Mr Manes, and it claims damages by way of the lost value of the Paris Restaurant and the loss of profit arising out of the consequent unlawful termination of a Joint Venture Agreement between them dated 6 July 2015 (“the JVA”). The parties to the JVA were the Claimant, Dogus' subsidiary Dream International Cooperatief UA (“Dream”), Mr Manes and the company whose shareholding Mr Manes represented (by Recital B and clause 1.4 of the JVA) that he legally and beneficially owned, namely Ragnar Investment Ltd (“Ragnar”); and the aim of the JVA was for the parties together to open, in addition to the Paris Restaurant, other ADJRs in London, Dubai and elsewhere.
By the Share Purchase Agreement of 1 July 2015 (the SPA), MADV sold MAD Atelier (and thus the Paris Restaurant) to the Claimant for €7.5 million, for the purposes of the Joint Venture. By the impugned transfer of 3 August 2016 MAD Atelier was purportedly sold back for €3,086,698, signed by Mr Padberg, a director of the Claimant appointed by Dogus. not knowing, the Claimant alleges, that he was executing such a transfer, and induced by Mr Manes' deceit. There are subsidiary claims and defences, to which I will refer, which have been pursued and addressed in argument by Counsel for the Claimant Jasbir Dhillon QC (with Stewart Chirnside and Robert Ward) and for the Defendant Richard Hill QC (with Gregory Denton-Cox, to whom the task of addressing quantum was delegated, and Emma Horner). The Defendant has relied upon an alleged repudiatory breach of the JVA by the Claimant prior to 3 August 2016, which was allegedly accepted by the Defendant in July. That contention seemed to me to become progressively more difficult for the Defendant as the trial proceeded, but the matters said to amount to such repudiatory breach were in any event relied upon by Mr Hill as explaining why the Defendant had complaints, and why the Claimant was, as Mr Hill asserted, willing to sell the Paris Restaurant back to Mr Manes. There is also an issue as to the representation by Mr Manes, both in the JVA and otherwise, that he owned Ragnar being in fact false, in that, unknown to the Claimant, the entire shareholding in Ragnar had been sold by him to a Mr Alcan at par value (€ 1200) on 4 July 2015, 2 days before the JVA; but Mr Dhillon primarily relied upon that to support his case of dishonest conduct by Mr Manes for the purpose of his deceit claim. There are other claims against Mr Manes in respect of alleged breaches of the JVA, but all of those are dependent upon the establishment of the primary question, namely whether, on the balance of probabilities, Mr Manes tricked Mr Padberg of the Claimant into signing over the transfer of the Paris Restaurant, or whether such transfer was voluntarily and knowingly entered into by the Claimant.
The witnesses called by the Claimant, Mr Padberg, an experienced businessman, then the Dutch resident director of the Claimant, who signed the transfer in Paris on 3 August (but no longer employed by the Claimant since December 2018), Mr Akdag, CEO of a number of Dogus Group compamies, Mr Sahenk, the Chairman of the Dogus Group, Mr Umur, Mr Patel and Mr Schmidt (and one witness by a Civil Evidence Act statement, Mr Beylik), all supported and explained the Claimant's case that there was no oral agreement in July 2016 on the telephone to sell the Paris Restaurant back (such as is asserted by Mr Manes) and that they had no knowledge of the alleged transfer said to have been signed, as part of a number of documents in French, by Mr Padberg on 3 August at a meeting with Mr Manes. All of these witnesses are said by Mr Hill to have been lying, and indeed for the Defendant's case to be true all (save possibly Mr Patel and Mr Schmidt) must indeed have lied. The only witness called for the Defendant (save for M. Rolot, who prepared a Note of valuation of MAD Atelier at the Defendant's instruction) was Mr Manes himself, and on the Claimant's case he has lied and indeed set up the entire scheme to trick the Claimant, who had no intention of selling back the Paris Restaurant to him, into doing so. I must decide which side is lying. There is no halfway house.
Both sides have reminded me of the authorities to be borne in mind by a judge who has to take such a course. In this case there has been no dramatic confession and largely both sets of witnesses stuck to the case which they had always put forward, so that I am left with the task of deciding which party's case accords more with the likelihoods and realities, and indeed with common sense, on the one hand, and with the contemporaneous documents on the other. In the latter regard the Claimant has given a very substantial amount of disclosure of documents, none of which undermines their case that they did not know of or agree to the transfer. On the Defendant's side there has not been much disclosure, because the Defendant in various circumstances, to which I shall refer, destroyed and/or disposed of his emails or records for the entire relevant period. However in such disclosure as there has been there is nothing which, save with regard to the content of a number of WhatsApp messages preserved by the Claimant, could be said to be inconsistent with or damaging to the Defendant's case. I turn then to the central dispute.
The onus of proof is of course upon the Claimant to establish that, on the balance of probabilities, they were deceived by the Defendant into transferring back to him the Paris Restaurant, and in particular that Mr Padberg signed the documents at his meeting with Mr Manes in the Paris Restaurant without knowing or, given his relative lack of French, at least understanding that they were or included a transfer of the shares in MAD Atelier. However, since it is the Defendant who sets out what on his case happened leading to the Claimant's agreement to sell him back the Paris Restaurant, I propose to analyse his case first. I need briefly to summarise the two conflicting accounts of why Mr Padberg went from Amsterdam to Paris to meet Mr Manes at the Paris Restaurant to sign documents on 3 August 2016. Mr Padberg, supported primarily by Mr Akdag, says that he was asked by Mr Manes to come to Paris to sign the 2015 accounts of MAD Atelier on behalf of the Claimant as its sole shareholder, because, he was told by Mr Manes, as a matter of French law the fact that there had been an AGM of MAD Atelier on 30 June 2016 including a resolution approving those accounts was not sufficient, but the accounts needed to be signed off in the presence of the company auditor, which Mr Padberg was consequently asked to come to Paris to do. Hence Mr Padberghad come to Paris, signed what was placed in front of him, which he understood to be or include those accounts, not having any understanding of French: and he had no idea that he was signing, and had no intention to sign, a transfer of sale in respect of the shareholding in MAD Atelier or the Paris Restaurant. There had been no prior discussion of such a course, and neither he nor any of those at Dogus, to whom he was responsible, would have agreed, not least after an investment of some €20 by Dogus in the Joint Venture.
Mr Manes on the other hand says that he had spoken in mid-July 2016 to both Mr Akdag and then Mr Padberg, during a telephone conversation with whom Mr Manes agreed that the Paris Restaurant should be sold back to him at a valuation based upon the same methodology as in the SPA of a year before. They agreed, and Mr Manes said he would produce the paperwork and a valuation on that basis, which Mr Padberg said he had no need to see in advance, and it was agreed that Mr Padberg would come to Paris to sign the transfer. At the meeting on 3 August accordingly, Mr Padberg signed such a transfer, at a price based upon a Note of valuation which Mr Manes had procured Mr Rolot to prepare. Mr Padberg says that he does not speak or read French and signed what he thought were the 2015 accounts as had been explained to him, that he trusted Mr Manes as to what he was signing, and that he did so not appreciating that with the 2015 accounts, of which he signed each page, there was also included a transfer and a Note of valuation. Mr Manes...
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Commercial Court Finds Renowned Michelin Star Chef Liable For Fraud
...MAD Atelier International B.V. v Axel Manes [2021] EWHC 3335 (Comm) On 9 December 2021, Sir Michael Burton GBE gave judgment awarding damages of '11,383,359 to MAD Atelier International B.V. ("MAD International") on its claim for fraud and breach of contract against Axel Manes ("Mr MAD Inte......
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Commercial Court Finds Renowned Michelin Star Chef Liable For Fraud
...MAD Atelier International B.V. v Axel Manes [2021] EWHC 3335 (Comm) On 9 December 2021, Sir Michael Burton GBE gave judgment awarding damages of '11,383,359 to MAD Atelier International B.V. ("MAD International") on its claim for fraud and breach of contract against Axel Manes ("Mr MAD Inte......