Jaffé and Another v Greybull Capital [2024] EWHC 2534 (Comm): The fallacy of memory, half-truths and the role of contemporaneous documents

The recent High Court decision in Jaffé and Another v Greybull Capital LLP and Others [2024] EWHC 2534 (Comm) (“Jaffe ”) is a timely reminder of the boundaries of “half-truths,” causation in misrepresentation claims and the commercial realities of reliance on financial assurances. The case also highlights issues relating to the reliability of witnesses and contemporaneous record that is of value to all civil practitioners.

 

Case Background: Funding Monarch Airlines and the Disputed Representations

The case arose from the collapse of Monarch Airlines (“Monarch ”), which Greybull Capital (“Greybull ”) acquired in 2014. By October 2016, Monarch’s financial stability was again in question, prompting critical negotiations between its stakeholders and financial partners. This included Wirecard, which provided Monarch with card-acquiring services.

The Claimants, including Wirecard’s insolvency administrator, alleged that Greybull misrepresented the source of a £165 million capital injection during an October 2016 meeting and subsequent correspondence. Greybull publicly stated that this funding came “from its shareholders”, whereas, in reality, most of the funds were facilitated through a restructuring agreement with Boeing.

 

Assessing Recollections: The Limits of Oral Evidence

The central issue in the case was whether Greybull’s representative, Mr Marc Meyohas, made fraudulent misrepresentations during a meeting on 17 October 2016. Given the oral nature of the representations and the passage of time, Mrs Justice Cockerill DBE gave significant regard to the inherent unreliability of recollections, even from honest witnesses, at [4] and [227]:

The case is in some respects a classic one, in that at its heart it involves a clash of recollection between two sets of witnesses as to the content of oral statements made at an in-person meeting some years ago. It is also quite unusual in that it requires me to decide, as between the evidence of two equally patently honest and truthful witnesses, which of their recollections is to be preferred.

[…]

Whether these representations were made or not, the clash of recollections mentioned at the start of the judgment is at the heart of this question. That cannot simply be resolved on the basis of an assessment of the credibility of the witnesses. All agreed that their “unrefreshed” _recollection was vestigial. And as I have made clear, there were very credible witnesses on both sides. I have no doubt the individual witnesses’ _truths – _in the sense of what they either do (now) recall or what they honestly think they recall – are simply different.

 

Mrs Justice Cockerill DBE set out the Claimant’s reliance on the well-established approach to assessing recollections from Leggatt J’s judgment in Gestmin v Credit Suisse [2013] EWHC 3560 (Comm) (“Gestmin”) at [22]:

“… the best approach for a judge to adopt in the trial of a commercial case is, in my view, to place little if any reliance at all on witnesses’ recollections of what was said in meetings and  conversations, and to base factual findings on inferences drawn from the documentary evidence and known or probable facts. This does not mean that oral testimony serves no useful purpose – though its utility is often disproportionate to its length. But its value lies largely, as I see it, in the opportunity which cross-examination affords to subject the documentary record to critical scrutiny and to gauge the personality, motivations and working practices of a witness, rather than in testimony of what the witness recalls of particular conversations and events. Above all, it is important to avoid the fallacy of supposing that, because a witness has confidence in his or her recollection and is honest, evidence based on that recollection provides any reliable guide to the truth.”

 

Mrs Justice Cockerill DBE continued by referencing a similar passage from the Court of Appeal’s judgment in Simetra Global Assets Ltd v Ikon Finance Ltd [2019] 4 WLR 112 (“Simetra”) at [48]:

“In this regard I would say something about the importance of contemporary documents as a means of getting at the truth, not only of what was going on, but also as to the motivation and state of mind of those concerned. That applies to documents passing between the parties, but with even greater force to a party’s internal documents including e-mails and instant messaging. Those tend to be the documents where a witness’s guard is down and their true thoughts are plain to see. Indeed, it has become a commonplace of judgments in commercial cases where there is often extensive disclosure to emphasise the importance of the contemporary documents. Although this cannot be regarded as a rule of law, those documents are generally regarded as far more reliable than the oral evidence of witnesses, still less their demeanour while giving evidence….”

 

These two passages are commonly referenced, but Mrs Justice Cockerill DBE potentially introduced a new approach influenced by Popplewell LJ’s lecture to COMBAR titled, “Judging Truth from Memory”. In summary, the key points were:

1. Witness State of Mind: Fact-finding in litigation is about what happened and why it happened. A witness’s knowledge, beliefs, intentions, or state of mind are often critical to understanding events and their significance.

2. Memory Encoding: Memories are not objective recordings but interpretations influenced by personal schemas—beliefs, experiences, and attitudes—which shape what is encoded into memory. The passage notes, “We don’t see things as they are, but as we are.”

3. Memory Retrieval: At the retrieval stage, memories are influenced by current schemas, beliefs, and worldviews, which may differ from those at the time of the events. This can distort recollections, making memories unreliable, particularly regarding past beliefs.

4. Influence of Pride and Bias: Wishful thinking or a desire to present oneself in the best possible light can shape encoding and retrieval and impact how witnesses remember or interpret events.

5. Contemporaneous Records: Even documents created near the time of an event can be affected by memory fallibility during the encoding process, making them potentially unreliable. This approach significantly departs from Gestmin and Simetra in that the weight afforded to contemporaneous documents is reduced.

6. Reconstruction and Assumptions: Witnesses often reconstruct memories based on assumptions of what they believe would or should have happened. This can lead to erroneous recollections, as events may not align with expectations or present attitudes.

 

Mrs Justice Cockerill DBE at [231] explained that, while Mr Hilz’s note, the contemporaneous record, provided a “compelling argument“, it needed to be assessed in its full factual context. This included considering unspoken but relevant factors from both parties that could have influenced the recording or interpretation of facts at the time. The key factual considerations included:

• Whether one witness deviated from the agreed script used in other presentations.
• The priorities of the parties at the time are shown in their exchanges.
• Counterfactual scenarios and underlying motives.
• The proximity of ambiguity to inaccuracy.

Ultimately, Mrs Justice Cockerill DBE concluded at [285] that “Mr Hilz’s record is in the critical respect (entirely innocently) inaccurate” regarding the specific alleged fraudulent misrepresentation. The key reasons were:

• The note was a reinterpretation of incomplete handwritten notes taken in a second language during a lengthy meeting.
• The note was not a verbatim transcription.
• The issue was not the primary focus of interest at the time.
• Memory decay and the risk of inaccurate recall in note-taking and interpretation, especially with post-meeting discussions, highlighted the fallibility of such records. This aligns with evidence on memory deterioration, as discussed by Popplewell LJ.

The decision in Jaffe is expected to elevate the role of Popplewell LJ’s lecture analysis in shaping future submissions and judgments and provide a practical example of how one can question the reliability of a contemporaneous record without accusing the author of dishonesty. If a document’s content is influenced by the recorder’s state of mind, understanding that state of mind becomes critical in assessing the document’s accuracy.

Contemporaneous records do not only reflect the facts but also the recorder’s perspective, including subjective elements like “pride” or “wishful thinking.” These factors influence the initial encoding of memories and their subsequent documentation as much as they affect later retrieval and interpretation.

Although near-contemporaneous records often serve as strong evidence, this decision offers valuable guidance for challenging their credibility by examining the “facts in the full context.”

 

Half-Truths and Misleading Statements

On September 21, 2014, The Sunday Times published an article regarding the proposed Greybull-led acquisition, titled “Vulture fund in talks to bail out Monarch airline“. Two days later, Monarch officially announced Greybull as the preferred bidder. The announcement stated:

“The Board of Monarch Holdings Limited (“Monarch” or the “Group”), the UK’s leading independent travel group, today announces that Greybull Capital LLP (“Greybull”) is the preferred bidder to acquire Monarch … Greybull is a family office with a focus on investing in private companies across a diversified range of industry sectors. … It views an investment in Monarch as a long-term opportunity in a very strong brand with great potential in all of its markets, and intends to be supportive shareholders throughout Monarch’s next chapter.

Completion of a deal remains subject to the successful outcome of ongoing negotiations, whereupon Greybull intends to provide significant capital to Monarch in order to grow the Group…

[Greybull] is a long-term active investor with significant or controlling stakes in all of its companies. Within its portfolio Greybull owns significant industrial, manufacturing and energy assets including:…”

Mrs Justice Cockerill DBE commented on Greybull’s public announcements and representations regarding the funding source. While technically accurate in stating that the capital came “from Greybull”, these statements were incomplete and could create a misleading impression.  At [126], she remarked:

 

It was very much the case advanced for Wirecard that this press release and Q&A was inaccurate and misleading, in that it said in terms that there was an investment from Greybull, whereas in fact while funds flowed from “Greybull” (in the sense of Petrol Jersey) the source of the vast majority of the money was Boeing. It is certainly right that it was not frank and forthcoming. It told half the truth. Boeing did not directly bail out Monarch, but they were instrumental in facilitating the rescue. Mr Meyohas agreed that the reality was that “Boeing were absolutely a key part of the overall transaction to save Monarch”. At the same time, despite the urgings of the Claimants, I reject the case that the statement that Boeing was not a lender or a shareholder was false. Boeing had not itself injected capital; it had not financed the Investment, nor did it directly fund the Investment. It facilitated the Investment by agreeing the Restructuring and it indirectly provided the funds for the Investment by paying them to Petrol Jersey.

 

This analysis highlights the risks of “half-truths” in commercial dealings. Statements that are factually correct but omit material information can lead to potential misrepresentation claims. The case also highlights the dangers of technically true statements that omit key details.

Practitioners should advise clients to ensure that representations, whether made publicly or privately, are accurate and complete. Failure to do so risks misrepresentation claims, even if no deliberate falsehood was intended.

These points arise in relation to all documentary evidence in civil litigation and emphasise the point that contemporaneous and other written records need to be critically examined within the overall factual context to test their reliability.

 

Conclusion

Mrs Justice Cockerill DBE’s judgment is a cautionary tale for businesses and legal advisors. It highlights the need for clear, accurate, and complete disclosures when engaging with key stakeholders.

For legal practitioners, the case provides valuable insights into proving misrepresentation, assessing causation, and navigating the practical challenges of commercial confidentiality. It reinforces the risks of incomplete communications and the importance of robust documentation and risk management processes for corporate clients.

Importantly, the case is of value to all civil practitioners on bringing together the factors and considerations relevant to the assessment of witness and documentary evidence in circumstances where there is no dishonesty alleged.

 

Analysis and review produced by Daniel Holt who is a Probationary Tenant at Farrar’s Building. Daniel accepts instructions in all of Chambers’ practice areas.  For further information, please contact his Clerking Team.

 

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