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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Al-Hasawi v Nottingham Forest Football Club Ltd & Ors [2018] EWHC 2884 (Ch) (01 November 2018) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2018/2884.html Cite as: [2018] EWHC 2884 (Ch) |
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BUSINESS AND PROPERTY COURTS OF ENGLAND AND WALES
CHANCERY APPEALS (ChD)
On Appeal from Master Bowles
The Rolls Building London EC4A 1NL |
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B e f o r e :
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Fawaz Al-Hasawi |
Claimant |
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- and - |
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Nottingham Forest Football Club Ltd |
Defendant |
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-and- |
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NF Football Investments Ltd |
Third Party/ Appellant |
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-and- |
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NFFC Group Holdings Ltd |
Fourth Party/ Respondent |
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for the Appellant
Tony Hickman (instructed by Browne Jacobson LLP) for the Respondent
Hearing date: 24 October 2018
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Crown Copyright ©
HHJ David Cooke:
"12. Entire Agreement
This agreement (together with the documents referred to in it) constitutes the entire agreement between the parties and supersedes and extinguishes all previous discussions, correspondence, negotiations, drafts, agreements, promises, assurances, warranties, representations and understandings between them, whether written or oral, relating to its subject matter. "
"This agreement… [constitutes] the entire agreement and understanding between you and us in relation to the subject matter thereof… This agreement shall supersede any prior promises, agreements, representations, undertakings or implications whether made orally or in writing between you and us relating to the subject matter of this agreement…"
"First, he expressed the purpose of such a clause in these terms, at para 7:
'The purpose of an entire agreement clause is to preclude a party to a written agreement threshing the undergrowth and finding in the course of negotiations some chance remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim such as the present to the existence of a collateral warranty… For such a clause constitutes a binding agreement between the parties that the full contractual terms are to be found in the document containing the clause and not elsewhere.'
88. He distinguished between collateral warranties and misrepresentations in the following remarks:
'An entire agreement clause does not preclude a claim in misrepresentation, for the denial of contractual force to a statement cannot affect the status of the statement as a misrepresentation. The same clause in an agreement may contain both an entire agreement provision and a further provision designed to exclude liability e.g. for misrepresentation or breach of duty.' "
"Nevertheless the word 'representations' does appear, albeit it will be seen that it is completely sandwiched between words of contractual import, namely prior 'promises, agreements… Understandings or implications'. It will also be observed that [it] does not in terms date either that no representations have been made, or that no reliance has been placed on any representations, or that liability for (mis)representations has been sought to be avoided.
81. In the circumstances, I would be inclined, subject to authority, to regard clause 24 as being concerned only with matters of agreement, and not with misrepresentation at all. The essence of agreement is that it is concerned with matters which the parties have agreed. The essence of misrepresentation, however, is that it is not concerned with what the parties have agreed, but rather with inaccurate statements (innocently, negligently or fraudulently inaccurate statements) which have been made by one party to the other, have been relied on by the representing in entering into their agreement, and which may give the representing rights to rescind that agreement and/or claim tortious or quasi tortious damages by reason of loss arising out of entering into the agreement. "
"Those words do not, in my judgment, amount to an agreement that representations are withdrawn, overridden or of no legal effect so far as any liability for misrepresentation may be concerned. The provision is concerned with the terms of the Agreement. It provides that the Agreement represents the entire understanding and constitutes the whole agreement. It is in that context that the Agreement supersedes any previous representations. That is, representations are superseded and do not become terms of the Agreement unless they are included in the Agreement. If it had intended to withdraw representations for all purposes then the language would, in my judgment, have had to go further."
"… 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."
The Master's Judgment
"20. Except as expressly provided in this agreement, the rights and remedies provided under this agreement are in addition to, and not exclusive of, any rights or remedies provided by law. "
"15. The foregoing… is sufficient to demonstrate, as I see it, that the parties to the agreement in this case went to considerable trouble to set up contractual procedures to deal with claims likely to arise under and in respect of the agreement within the four walls of the agreement.
16. This, as it seems to me, was particularly the case and particularly the apparent intention of the parties in respect of claims relating either to any misstatement of liabilities or claims arising out of a failure to accurately identify material contracts or play such contracts in the virtual data room, or to accurately identify the effect of the share purchase agreement, or its implementation, in generating new liabilities for the club. Both these latter failures would, inevitably, have had the effect of minimising the liabilities of the club and it is, as I see it, for this reason that misstatements in respect of those matters were made the subject of similar contractual indemnities and a similar regime of notification and limitation as is provided by the share purchase agreement in respect of any under declaration of liabilities as at the Liability Statement Date.
17. In my view, the apparent intention of the parties to deal with putative claims under, or in respect of, the share purchase agreement by way of contractual processes created within the structure of the share purchase agreement forms an important part of the contractual matrix and, for that reason, affords helpful guidance to the court in construing the Entire Agreement clause. "
"27. I do not, however, read Rix LJ's judgment as establishing that an effective clause purporting to exclude liability for misrepresentation must, as a matter of law, or construction, be set out in a particular form, or in one of the particular ways mentioned in his judgment. The effect and meaning of a particular clause in the contract must always be a matter of the construction of the particular clause set in its particular context.
28. In this case, I am satisfied that the intention of the parties, in respect of clause 12 of the share purchase agreement, was that it should exclude claims in misrepresentation, including statutory misrepresentation and, therefore, that clause 20 of the agreement does not operate to preserve [the Buyer's] right to make such a claim.
29. It seems to me that the deliberately wide language used in clause 12, read in context of the considerable steps which have been taken by the parties to enable claims of a kind likely to arise under, or in respect, of the agreement to be dealt with within the four walls of the agreement and by reference to contractual structures created within the agreement, demonstrates that the parties' core contractual intention was that disputes arising under, or in respect of, the agreement should be resolved within the contractual framework established by the share purchase agreement and, consequently, that the parties were intended to be precluded, or excluded, to a significant extent, from making any claims arising out of, or in respect of, the agreement other than via the contractual structures created by the share purchase agreement; including, therefore, claims in statutory misrepresentation should such claims otherwise arise.
30. .. I do not think that the matters which, by clause 12, are expressed to be superseded, or extinguished, by the clause are intended, or expressed, to be confined only to matters of a contractual nature or intended, therefore, to exclude any claims which may might arise out of, or be based upon, prior, informal, or collateral, agreements made between the parties…
31. The matters said to be superseded or extinguished by clause 12 are expressed in the widest terms. They include matters or a potentially contractual nature, such as 'drafts',' agreements, 'understandings',' promises' and 'warranties'. They also include matters such as 'correspondence',' negotiations', 'assurances' and of course 'representations', which do not necessarily, or even obviously, embrace matters of an exclusively contractual nature but which would, awkward, equally, refer or relate to factual matters asserted, or assured, in the course of negotiations, or in correspondence, or, as stated in clause 12, made otherwise the subject of representations.
32. I do not think, therefore, that this case can be equated with AXA, where the word 'representation' was sandwiched in between words of an obviously contractual nature and which in consequence derived its meaning (as relating only to representations of a contractual nature) from that context. In this case the word 'representations' is to be found among a range of words, some of which may have the flavour of contract and some which do not. The word itself, other than where a different meaning can, as in AXA, be derived from context, is a word which in its usual legal context relates to or refers to, factual statements of a noncontractual nature. In the circumstances, I can see no reason to conclude that the parties intended to limit the meaning of the word 'representations' in clause 12 such that it embraces something less than it is usually understood legal meaning.
33. Rather, it seems to me that the other language of clause 12 tends, strongly, towards the conclusion that the word 'representations' should bear what I see as it is more usual meaning.
34. Had it been the case, as in AXA, that clause 12 only provided that the share purchase agreement should supersede the various matters catalogued in the clause, one could well see that the phraseology would be apt to the supersession, or replacement, of a prior agreement, of whatever nature, but would not be apt, or appropriate, language to negate a previous factual statement. One readily talks of an agreement superseding another. One does not readily talk of an agreement superseding a fact.
35. Again, however, that is not the language used in this case. In this case, the clause provides that the share purchase agreement 'extinguishes… all previous… representations'. That language is apt to negate a previous factual statement. Its clear effect is to record that, as between the parties, it has been agreed that all previous representations have been extinguished and, therefore, that as from the execution of the agreement there are extant no existing representations upon which a claim for misrepresentation, statutory or otherwise, could be founded.
36. That this is the intended construction and meaning of the words used…is supported… by the context against which clause 12 is to be construed; namely a context in which the parties have set up alternative contractual structures to deal with claims of the kind likely to arise in respect of the agreement and where, therefore, the likely and, as I find, their actual intention was to preclude the parties from bringing such claims other than within and via the agreed framework. "
Discussion and conclusion