CA-2024-001254 - [2025] EWCA Civ 961

Ground 4 is that the Judge erred in holding that JNFX had no realistic prospect of disputing that Mr Mervyn had ostensible authority to enter into the contracts on behalf of JNFX.

Again it is only necessary to consider contract 10, but it is helpful to set this in context. As Mr Giwa explains in his evidence, he was told by Mr Mervyn when he first met him that he was based in the UK and working for JNFX. E-mails in evidence from 2017 when Mr Giwa first entered into transactions with him (for another client) show that Mr Mervyn wrote from a JNFX e-mail address and signed off his e-mails as “Ashay Mervyn, Head of Emerging Markets, JNFX” with contact details including an address in the City of London and reference to JNFX’s website. In an e-mail of 21 September 2017 Mr Mervyn writes to Mr Giwa asking for confirmation as to the source of his client’s funds and adds “Thank you very much for trading with JNFX Ltd”. In an e-mail of 25 September 2017 Mr Giwa thanks Mr Mervyn for his services and says “I intend buying at least $1m weekly from your company…”.

So there is no real doubt that Mr Mervyn was holding himself out as representing JNFX and able to commit the company to trades, and that Mr Giwa understood him to be able to do so. By the time Mr Giwa was placing MultiChoice contracts with Mr Mervyn in September 2020, Mr Mervyn, still writing from a JNFX e-mail address, was signing himself off as “Head of Global Markets”. On 14 October 2020 he signed a letter addressed to MultiChoice Africa in relation to contract 2 confirming that JNFX would complete the settlement of $5m by 22 October 2020. This letter was on JNFX headed notepaper and again signed by him as Head of Global Markets and included this:

“On the behalf of JNFX, thank you very much for your business and I look forward to a continued business relationship.”

In November 2020 Mr Mervyn asked Mr Giwa to obtain various confirmations from MultiChoice including:

“please may we also have an email or letter stating the following people to issue trade instructions”

That e-mail, and Mr Giwa’s response, were copied to Mr Eisenberg, to JNFX’s compliance department, and to another individual at JNFX. There is no evidence of any objection from them.

By the end of February 2021 (at the time of contract 7) Mr Giwa was sufficiently concerned at various delays in payment that he messaged Mr Mervyn to the effect that “going forward I will need your partners to also agree to the transaction before we proceed”. He explains that by “your partners” he meant the directors of JNFX, Mr Eisenberg and Mr Green. In May 2021 Mr Giwa e-mailed Mr Mervyn in relation to contract 9 to the effect that it was extremely important for the client that there were absolutely no delays, and asked:

“Please be 100% sure that the funds will get to them on the day stated.”

This e-mail, and Mr Mervyn’s response that “This is understood and agreed” were copied to Mr Green. Again there is no evidence of any objection by him.

In August 2021 Mr Giwa e-mailed Mr Mervyn in relation to a trade for another client, saying:

“I am extremely concerned about going ahead with the order without getting 100% assurances from your firm on when the payment will be received.”

This was copied to Mr Eisenberg. Mr Mervyn replied that “we will settle” this trade on 23 August 2021. Mr Giwa’s response, copied to Mr Eisenberg, was:

“I need your partners to be committed to this date. A penalty of N10 per dollar will kick in from the 24th of August 2021 if the payment has not been received in the customer’s account.

Kindly confirm this and let one of your other partners second this confirmation.”

This was also copied to Mr Eisenberg. He replied “That’s confirmed”.

It is against that background that the e-mail exchanges of 8 September 2021 in relation to MultiChoice contract 10 took place. I have set them out above (see paragraph 52). As there appears, Mr Giwa was not happy with Mr Eisenberg’s first response which was to the effect that they would send out dollars when they arrived, and pressed Mr Eisenberg directly (“Dear Nathan”) for the company to commit to payment of the funds by 17 September. He duly received Mr Eisenberg’s agreement that “We are committed to meeting the date below … and appreciate the continued business”.

Subsequently, when payment was not made, Mr Giwa e-mailed Mr Green on 15 October asking for an update on the MultiChoice and Delphinus payments. On 19 October he e-mailed again saying that “We really need to ensure the payments go out today”. The response from Mr Green was:

“I completely understand. It is very important for me to complete our co[m]mitment so we can start to repair our business relationship.”

The Judge said (in his judgment at [34]) that the evidence that Mr Mervyn acted with the ostensible (if not actual) authority of JNFX in respect of the MultiChoice contracts was overwhelming, adding:

“Importantly, it is also clear that Mr Green and Mr Eisenberg were aware from having been copied into or forwarded communications from Mr Mervyn to Mr Giwa and third parties … of the role being claimed by Mr Mervyn and at no time disclaimed that role or indicated that he lacked the authority to transact the business which he was transacting.”

At [35] he referred in relation specifically to contract 10 to the e-mail exchanges I have set out above; and at [38] he concluded that he was not persuaded that JNFX had a realistic prospect of establishing that Mr Mervyn lacked the ostensible authority to conclude the MultiChoice contracts.

Confining myself to contract 10, which is all that I need consider, I entirely agree. As I have said there is really no doubt on the documentary evidence both that Mr Mervyn represented himself as able to act for JNFX, and that Mr Giwa went into the transactions in the belief that he was so able. It is of course true that ostensible authority requires a representation not just by the putative agent (you cannot confer authority on yourself) but by the putative principal, but, as explained by Diplock LJ in his classic exposition of the principle in Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] QB 480 at 503, the commonest form of representation by the principal is by conduct, that is:

“by permitting the agent to act in some way in the conduct of the principal’s business with other persons”

(see also at 505 to like effect). Here the directors of JNFX plainly did permit Mr Mervyn to hold himself out as able to conduct business with clients such as MultiChoice.

Moreover, as the e-mails show, in the present case Mr Eisenberg and Mr Green went well beyond just allowing Mr Mervyn to transact business ostensibly on behalf of JNFX. For contract 9, Mr Giwa copied in Mr Green, who did not object that Mr Mervyn was acting without authority; by the time of contract 10, Mr Giwa had twice (once in relation to another client, and once for contract 10 itself) received confirmation directly from Mr Eisenberg; and then in October received an e-mail from Mr Green confirming “our co[m]mitment” and referring to “our business relationship”. This last e-mail of course comes after the representation in question but is confirmation of what is apparent from the earlier e-mails, namely that the directors of JNFX were themselves accepting that they were committed to the transaction.

Against this, Ms Addy had in effect two points. First, she referred to the principle that the third party cannot rely on ostensible authority if he knows that the agent’s authority is limited. See Armagas Ltd v Mundogas SA [1986] AC 717 at 777B-C per Lord Keith:

“Ostensible general authority may also arise where an agent has had a course of dealing with a particular contractor and the principal has acquiesced in this course of dealing and honoured transactions arising out of it. Ostensible general authority can, however, never arise where the contractor knows that the agent’s authority is limited so as to exclude entering into transactions of the type in question…”

The first sentence of this seems to fit the present situation precisely – the earlier contracts were honoured.

But Ms Addy relied on an e-mail footer which appears at the foot of at least some of Mr Mervyn’s e-mails. This contains a number of statements of the familiar type including the following:

“JNFX Ltd makes no warranty or representation as to the accuracy or completeness of any information and does not assume whatever commitment hereby. This material is by a representative of JNFX Ltd and is for information purposes only for market counterparties or intermediate customers and should not be construed as a solicitation or offer to buy or sell any financial related products. Legally binding obligation can only arise for, or be entered into on behalf of, JNFX Ltd by means of a written instrument signed by a duly authorised representative.”

This footer is in grey text and a small font and not easy to read, and I do not think it can be assumed that Mr Giwa ever in fact read it, or could be said to have known that Mr Mervyn had no authority to enter into transactions. If one does work through it, however, one finds both that Mr Mervyn is being held out as a representative of JNFX, and that a legally binding obligation can only be entered into by means of a written instrument signed by a duly authorised representative. Ms Addy submitted that an e-mail was not a written instrument, that the requirement for such an instrument to be signed was not satisfied by an e-mail signature, and that Mr Mervyn was not a duly authorised representative.

I think there is room for argument on all three points. But I do not propose to consider them further as there is to my mind a much simpler answer to the footer. This is that at best it leaves it unclear whether Mr Mervyn could commit JNFX or not to contracts such as MultiChoice contract 10. But Mr Giwa was not content to rest on the assumption that Mr Mervyn himself could commit the company. That was precisely why he required – and got – explicit confirmation from one of JNFX’s directors. As directors of JNFX, Mr Eisenberg and Mr Green had undoubted authority – almost certainly actual, but at any rate ostensible – to commit the company and indeed to waive any formalities in doing so.

Ms Addy submitted that all they were doing by their e-mail confirmations was to commit the company to make onward payment of dollars if and when received from Mr Mervyn. That seems to me an impossible reading of the e-mails, which have to be read as a reasonable objective reader would read them. In particular Mr Giwa’s e-mail of 11.46 on 8 September (see paragraph 52(4) above) made it clear that a confirmation that JNFX would send out the dollars as soon as they received them was not sufficient, following which Mr Eisenberg gave an unqualified commitment at 12.01. And the suggestion that Mr Giwa was not (on behalf of MultiChoice) doing business with JNFX, but only with Mr Mervyn, cannot stand with the acceptance both by Mr Eisenberg (in his e-mail of 12.01 on 8 September) and by Mr Green (in his e-mail of 19 October) that Mr Giwa was doing business with, and had a business relationship with, JNFX itself.

Ms Addy’s other point relied on the principle that the third party cannot rely on the apparent authority of a putative agent if he failed to make the inquiries that a reasonable person would have made in all the circumstances to verify that the agent had that authority: Philipp v Barclays Bank UK plc [2023] UKSC 25, [2024] AC 346 at [89] per Lord Leggatt JSC.

This principle I think only applies if the third party has reason to believe that the agent is acting without authority: see at [86]. I am rather doubtful that Mr Giwa had any reason to believe that Mr Mervyn was acting without authority, and the fact that the earlier contracts were honoured by JNFX would naturally have tended to reinforce his belief that he did have authority. But even if that is wrong, and he should have made reasonable inquiries, I do not see what else he needed to do than approach the directors and ask them to confirm their commitment. That is precisely what he did. In other words the answer to this contention is the same as the answer to the footer contention.

In those circumstances I think the Judge was entirely right to conclude that there was no reasonable prospect of the claim in relation to contract 10 failing for lack of ostensible authority, and I would dismiss this Ground.