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Misrepresentation, Summary of remedies (explained in detail above with…

- - - - Kleinwort Benson Ltd v Malaysia Mining Corp [1989]
    - - Dimmock v Hallett (1866): a description of land as ‘fertile and improvable’ did not amount to a representation but was viewed as mere puff.
    - - Gordon v Selico (1986)
    - - How? example?
    - - generally does not give rise to actionable misrepresentation (Bisset v Wilkinson [1927]). ---- Facts: the vendor (defendant) had said that he thinks that the land can hold two thousands of sheeps". claimant knew that no one ever has used the land for keeping sheep.
      - Exception to the general rule: if the representor is considered to have greater knowledge than the representee, then the implied statement that there are facts which justify the opinion can significantly mislead the representee (Smith v Land and House Property Corporation (1885)). ---- facts: "most desirable tenants" property !
      - Exception to the general rule: if the opinion is given based on substantial skill and expertise which comes from the superior position of the representor then it is a statement of fact (Esso v Mardon [1976]) ---- Facts: sale of a petrol station where the annual throughput would be 200,000.
    - - generally does not give rise to actionable misrepresentation (Beattie v Ebury (1872)): it is not misrepresentation if a person promises to so sth but then cannot do it because the situation has changed.
        
        Another example: Wales v Wadham [1977]: the wife promised to not remarry but she accepted a marriage proposal during the divorce settlement -. the court held that The wife had not misrepresented her then current intention when she told her husband that she would not remarry, and she was under no duty to disclose her change of intention.
      - Exception to the general rule: Edgington v Fitzmaurice (1885): if the representor make a statement that he/she would do sth, but at that they do now that they would not be able to do it or not intend to do it, then it is a misrepresentation. ---- Facts: company invited public to buy debenture and said the money would be used to improve the company’s premises and expand its business. A claim was brought saying that this was a misrepresentation and they never intended to do so.
    - - generally does not give rise to actionable misrepresentation
        
        As a general rule, there is no duty to disclose facts which, if known, might affect the other party’s decision to enter the contract. (Keates v The Earl of Cadogan (1851)
      - Exception to the general rule (where silence is considered as continued representation and disclosure is imposed)
        
        1/Half-truths (Nottingham Patent Brick & Tile Co v Butler (1866))
        
        if the statement is true But Misleading, then it is a misrepresentation (Dimmock v Hallett (1866)): property described as "fully let" which was true but the tenants have given a notice to quit.
        
        2/Continuing representations
        
        With v O’Flanagan [1936]: an statement which is true at the beginning of negotiations but not anymore true prior to entering to the contract should be disclosed. failing to do so is misrepresentation.
        
        Contrasting with Wales v Wadham: O’Flanagan is concerned with a representation relating to existing fact, whereas Wales v Wadham related to a statement of future intention.
        
        3/Contracts uberrimae fidei (utmost good faith)
        
        contracts in which one party is in a particularly strong position to know the material facts which form the basis of the contract.
        
        Insurance contracts
        
        in a fiduciary relationship
        
        company and its directors
        
        a trustee and beneficiary of a trust
  - - - Question 1
        
        was the representation material? (from an objective point of view)
        
        Pan Atlantic Co Ltd v Pine Top Insurance Co Ltd [1995]: to see whether it has been material, we should answer this question: would a reasonable person be influenced?
        
        yes
        
        then the inducement is a matter of fact (Smith v Chadwick (1884))
        
        can the defendant show that the claimant was not subjectively induced?
        
        2 more items...
        
        No
        
        then the inducement is not a matter of fact
        
        Can the claimant show that she/he was subjectively induced? (Museprime Properties Ltd v Adhill Properties Ltd (1990)
        
        1 more item...
      - Question 2
        
        was the misrepresentation one of the motif of entering into contract?
        
        Edgington v Fitzmaurice (1885): even if the claimant entered to the contract partly because of his own mistaken believe, his claim was successful as the company had misrepresented his financial prosperity.
      - Question 3
        
        did the representee chose to investigate the validity of the statement himself?
        
        the separate enquiries do not automatically prevent a claim for misrepresentation because there is no general duty to check the presentor's statement (Redgrave v Hurd (1881))
        
        Attwood v Small (1838) applies: a party cannot bring a claim in misrepresentation when it has relied not on the misrepresentation, but on its own investigations. ---- Facts: the purchaser of the mine recruited an agent to investigate the prosperity of the mine because he did not trusted the statement made by the vendor. the agent presented the same presentation and he bought the mine but he discovered the mine was worthless.
        
        Exception
        
        if we can argue that they have partially relied on their investigation then we can argue that they was not induced by their own investigation but partly by their investigation and partly by vendors presentation. Edgington v Fitzmaurice (1885): even if the claimant entered to the contract partly because of his own mistaken believe, his claim was successful as the company had misrepresented his financial prosperity.
        
        if the representee is a commercial and fails to investigates where it is reasonable in the eyes of the court or even do a negligible investigation, then the "contributory negligence " defence can be invoked by the defender (Smith v Eric Bush [1990])
        
        1 more item...
- - - - the representee communicate the intention to rescind the contract, establishes the misrepresentation and the court decide whether it will order for rescission or not. normally court orders rescission when parties can return to their original position by returning all the property transferred.
        
        why it is not rewarded sometimes?
        
        when the representee affirms the contract (impliedly or expressly)
        
        long lapse of time before demanding a rescission is an evidence of affirmation
        
        when it is impossible to return the parties to their previous position before the contract.
        
        to respect the right of third parties
        
        example?
  - - - Whittington v Seale Hayne (1900): difference between the indemnity and damages
      - when the claimant has a right to damages, the indemnity will not be rewarded.
  - - - general rule
        
        Doyle v Olby (Ironmongers) Ltd [1969]: damages are rewarded to a measure to place the innocent party in its original place.
        
        2 things to consider
        
        1/the claimant must mitigate as soon as the fraud is discovered
        
        2/any amount benefited by the claimant as a result of the contract will be deducted from the damages.
      - Standard Chartered Bank v Pakistan National Shipping Corporation (No.2) [2003]: Contributory negligence is not available as a defence to a claim for fraudulent misrepresentation
    - - contributory negligence defence is available
      - General rule
        
        Section 2(2): The remedy of damages in lieu of rescission is available only at the discretion of the court and is only available for negligent and innocent misrepresentation (ie not fraudulent misrepresentation).
        
        UCB Corporate Services v Thomason [2005]: In exercising its discretion, the court must have regard to the nature and seriousness of the misrepresentation, the loss that would be caused if the contract were upheld, and the loss that rescission would cause to the other party >> this rule also comes from S2(2).
      - Royscot Trust v Rogerson (1991): damages are calculated based on the tort of deceit, this means that for example the claimant is entitled to recover all losses even if those losses are unforeseeable.
    - - section 2(2) applies if the court decide to not order rescission and if applicable indemnity.
- - - - Conditions (coming from Derry case)
        
        1/ there must be a proof of fraud
        
        2/Fraud is proved it is shown that a false representation has been made (a) knowingly, or (b) without belief in its truth, or (c) recklessly, careless whether it be true or false.
        
        Knowingly or without belief in its truth
        
        Derry: A company says that has the authorisation to use steam power instead of animals which will result in considerable savings (but it had not the authorisation at the time and later after demanding it, it just had it for limited roads). The claimant buys shares in this company but the company wounds up. Has the company made a fraudulent misrepresentation? the claim failed because claimant could not show that there was an absence of belief in its truth.
        
        Recklessly
        
        Thomas Witter Ltd v TBP Industries Ltd [1996]: level of recklessness required is a ‘flagrant disregard for the truth’.
        
        3/if the fraud is proven, the motive of the person guilty of it is not important.
        
        *in failing to disclose a change, it must be deliberate or dishonest to be considered as a fraud.
    - - S2(1) Misrepresentation Act 1967: the defendant is liable for the negligible misrepresentation until he can prove that there was reasonable ground at the time of making the contract to believe that the statement was true.
        
        Royscot Trust Ltd v Rogerson [1991]: if the defendant is liable, he/she will treated will face legal consequences similar to those faced by someone who intentionally made a fraudulent misrepresentation in a contract. >> important for damages.
        
        Example: Howard Marine and Dredging Co. Ltd. v A. Ogden & Sons (Excavations) Ltd. [1978]: the capacity of the ship was told by the vendor to be 1600 tonnes but it was 1050. he had negligently used the figures of lloyds rather than directly look in the ships document. the court held the defendant liable.
    - - section 2(1) MA 1967: when representor has shown reasonable grounds to believe and actual belief up until the contract was made, then this is a innocent misrepresentation