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Disappointment for Tycoon Who Lost Millions on Executive Jet Purchase

Published: 04 November 2014, in categories: Legal Updates | Commercial Litigation Updates | News and Updates

Disappointment for Tycoon Who Lost Millions on Executive Jet Purchase

In a case which raised vital issues in respect of the personal legal responsibility of corporate officers, a tycoon who lost millions after buying an executive jet which he said did not come up to scratch will go uncompensated following a Court of Appeal ruling.

The businessman had paid $5 million for the jet, which was one of the first of its kind ever built. He had been told by the chairman of the company from which he bought it that it was ‘as new’ and that it had never been involved in an accident.

The jet failed to meet the businessman’s requirements and he eventually sold it at a loss of more than $2.3 million. After discovering that it had been involved in a ‘hard landing’ before he bought it, he sued the company and the chairman personally to recover his loss.

A judge found that the chairman’s representation that the jet had not been involved in an accident was negligent and upheld the businessman’s claim against the company. However, that judgment was worthless to him as the company had no assets. His personal claim against the chairman failed.

Dismissing the businessman’s appeal against the latter decision, the Court rejected arguments that the chairman had acted fraudulently. It had also not been established that he was ‘the undisclosed principal’ behind the deal or that he had assumed personal responsibility for the representation which he had made on the company’s behalf.

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