Fraudulent misrepresentation: How false promises unravelled investment in a tech start-up

Nicola Sharp explains why this case in fraudulent misrepresentation was successful, awarding a British businessman £4.6 million in damages.

Nick Candy, a British businessman, has succeeded in a claim of fraudulent misrepresentation against Dutch businessman Robert Bonnier.

The High Court found that Mr Bonnier had lied to Mr Candy about investing in a technology start-up, Aaqua BV, saying that Apple and LVMH Moet Hennessy Louis Vuitton were preparing to invest one billion dollars in the venture.

Representations around the proposed investment led Mr Candy to signing three agreements between Candy Ventures SARL (his portfolio of companies) and Aaqua BV. As part of the arrangement, CVS would swap shares in the podcasting firm Audioboom for shares in Aaqua, but those Aaqua shares turned out to be worthless without the promised investment from Apple and LVMH. 

CVS was awarded £4,623,919 (plus interest) in damages.

The representations

CVS alleges that it was induced to enter into three agreements by fraudulent misrepresentations made by Mr Bonnier on behalf of Aaqua, which were:

1. That Mr Bonnier was in the course of ongoing discussions with Apple and LVMH about their investing in Aaqua, and that he honestly and reasonably believed that those companies would invest in Aaqua.
2. That there existed binding conditions precedent between Aaqua and Apple/LVMH which, once satisfied, would lead to those companies becoming unconditionally obliged to invest in Aaqua.
3. That negotiations with Apple and LVMH were at an advanced stage, and Apple and LVMH had commented on draft contractual documents during those negotiations.

After the agreements had been signed, Mr Bonnier continued to tell Mr Candy that the Apple/LVMH investments in Aaqua were close to finalisation.

Falsity

Proving that a representation is false is often a difficult hurdle for a claimant. The gravity of fraud allegations requires the evidence to be more convincing than for other less serious allegations. 

However, in this case the lack of relevant documentation was telling. 

The judge observed that the representations could only have been true if Mr Bonnier had been in significant discussions with Apple and LVMH. This would have included meetings and advanced contractual negotiations. 

If that had happened, then there would have been documents evidencing these meetings and negotiations. No such documents were disclosed or identified. 

Motivation

Where it is alleged that somebody has told deliberate lies, the case makes more sense if the motivation for lying can be explained.

In this case, the judge considered that Aaqua’s lack of liquidity provided a cogent explanation for Mr Bonnier’s lies. He had an urgent need for a source of income. He told his lies in order to induce CVS to invest in Aaqua, by providing Audioboom shares which could then be sold readily. He knew that the involvement of prestigious companies such as Apple and LVMH would add credibility to Aaqua. Then he relied on the supposedly advanced stage of the negotiations with Apple and LVMH to hustle CVS into acting swiftly, without proper due diligence.

The only explanation for Mr Bonnier lying “repeatedly and determinedly” was in order to secure CVS’s investment. 

Damages

One of the reasons for pleading fraudulent misrepresentation (as opposed to negligent misstatement) is that the measure of damages is more expansive. Damages include any loss that flows from the deceit, even if it was not reasonably foreseeable. 

The correct measure of damages in deceit is an award which puts the claimant into the position he would have been in if the representation had not been made. In this case damages were assessed on the basis of the value of the Audioboom shares on 15 February 2021, less the value of the AAA shares for which CVS exchanged its shares in Aaqua.

Comment

There are often practical difficulties in proving a case in fraudulent misrepresentation, because it relies on proving the subjective mental state of a person. The claimant must show that the defendant’s state of mind was dishonest.

In this case, the judge considered the evidence that should have been available, if the representations had been true. And Mr Justice Bright took into account Mr Bonnier’s motivation for lying to illuminate the narrative. 

Read the decision here: Candy Ventures SARL v Aaqua BV & Anor [2025] EWHC 2877 (Comm)