Advanced Multi-Technology for Medical Industry & Ors v Uniserve Limited
[2024] EWHC 1725 (Ch)
Pharmapac UK Ltd v Elev8 Global Ltd & Anor
7 September 2023
[2023] EWHC 2449 (Comm)
High Court
A company sold fake face masks. The buyer sued the company and the company's boss. The company had to pay for the fake masks and storage. The boss was careless but not a liar, so he didn't have to pay.
Key Facts
- •PharmaPac UK Ltd (Claimant) contracted Elev8 Global Ltd (First Defendant) for the supply of 400,000 3M 8833 face masks.
- •Ajay Patel (Second Defendant) was the sole director and shareholder of Elev8 Global Ltd.
- •The masks supplied were counterfeit.
- •The Claimant sought damages from both the First and Second Defendant.
- •Summary judgment was granted against the First Defendant for breach of contract.
- •The claim against the Second Defendant was for fraudulent misrepresentation.
Legal Principles
Fraud is proved when a false representation is made knowingly, without belief in its truth, or recklessly.
Derry v Peek (1889) 14 App. Cas. 337
For reliance, it's sufficient if the misrepresentation materially influenced the claimant's decision-making.
Chitty on Contracts 34th ed., paragraph 9-47
Mere carelessness is insufficient for fraud; gross carelessness might suggest dishonesty.
Chitty on Contracts, paragraph 9-056
Outcomes
The First Defendant (Elev8 Global Ltd) was found liable for breach of contract.
The supplied masks were counterfeit, constituting a failure of consideration.
The Second Defendant (Ajay Patel) was found not liable for fraudulent misrepresentation.
While grossly careless in verifying the masks' authenticity, his actions did not meet the threshold for fraudulent misrepresentation.
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