Against this background, and when Mr. Nehemiah was aware of the importance of this for Mr. Knepfler, he should have informed him of the matter prior to the signing of the agreement. He could have presented him with all the explanations why this was an unimportant matter, and that it was possible to reach an agreement with the management company, but that was not done. Thus, the duty of disclosure was breached in a manner that amounts to deception within the meaning of section 15 of the Contracts Law, and failure to comply with the duty of good faith by virtue of section 12 thereof. This conclusion is strengthened by the fact that the information about which the excess accessibility, and emphatically, was Mr. Nehemiah's.
- It was found that in this specific matter, Knafler's claim of bad faith and misleading on the part of Mr. Nehemiah is substantial.
Despite the deception, Mr. Knefler chose to proceed with the transaction, to open only a small component of the consideration for the original transaction, and to try to acquire the full rights in the assets in France
- Can this non-disclosure on the part of Mr. Nehemia establish the neighborly relationship between him and Mr. Knepler, in a manner that gives him the status to sue him personally, while creating a direct legal rivalry with him? The positive answer is not at all necessary. As noted, this is only a specific matter. Its economic significance is not at all clear, since, as stated, there was a real chance that the differences with the management company would be settled in practice, or that the company would bear the excess cost. This is not fraudulent conduct, given that most of Mr. Knepfler's claims regarding the false representations he claimed he had received were rejected.
Against this background, it is not clear that this specific matter establishes those exceptional circumstances that can justify imposing personal liability on an officer such as Mr. Nehemiah. It was not established because he acted out of malice. He reported the matter to the board of directors. And the moves he promoted also came to serve the good of the company. Indeed, their promotion also touched on his personal interest, but it would have been promoted even if the engagement with Mr. Knepler had been carried out.
- In any case, I will not make a finding in this matter, since even if I assume that the door has been set up to sue Mr. Nehemiah personally, Mr. Knefler has not established his liability by virtue of the law of torts, since there is no causal connection between this matter and the damages he claims.
In order to understand these things, it is necessary to first note their context.
- Knepfler himself admitted that from the very beginning, immediately after the signing of the agreement with ADN, he was conscious that he had been deceived. Because the company's situation is problematic in a way that deviates categorically from the representations presented to it. These arguments were rejected, but what is important here is not their objective truth, but rather his subjective mindset.
In this regard, Mr. Kneffler noted: "From the moment I understood, really immediately after the deal, really immediately, if we signed it in May, I sat in June at my father Nehemiah's house [...] And my father suddenly tells me the problems that exist in cash flow, and he has a demand to bring more money to the banks, etc., and then at that moment I realized that everything was a lie... He didn't meet the conventions, and at that moment I realized that I wasn't going to transfer the funds directly to him, which was the right thing to do, but to transfer the funds only to the layer..." (p. 105, s.6).
- These are harsh statements made by Mr. Knefler. And under these circumstances, the question arises as to why he did not cancel the deal and backtrack? Isn't it said that this was the obvious course of action?
Here, Mr. Knepfler testified that he made a conscious decision to proceed with the transaction, back in June 2016. He noted, "From the moment I gave the advance, I am unfortunately a lot, so I decided that I was losing the 550,000 euros and I didn't want to lose it. I had no choice but to continue with the deal. I may have made a mistake, but that's the deal, that's what happened" (p. 122, s. 28). Later in his cross-examination, Mr. Knepfler confirmed that he was afraid to withdraw at this stage for fear of losing the said sum (p. 179, s. 12).