Negligent Misstatements one to one situation

General Approach: Whether a special relationship exists between P & D, as laid

down in Hedley Bryne v Heller (1964)
3 elements to special relationships:
1. Representor must possess a special skill (position changed NOT necessary
now)
Whether A possess special skills? although it is irreverent
Mutual Life and Citizens Assurance v Evatt (1971):
PC held that liability only arise when the statement was made in the course of
business
q/ dissenting opinion that a duty was owed by anyone who took it upon
himself to make respresentations knowing that another person would
reasonably rely on those statements
Dissenting opinion followed by Esso Petroleum v Mardou Gelato v Richcliffee
(1992) & Howard Marine v Ogden
Spring v Guardian Assurance Plc (1994): Lord Goff the referene to special skill
in Hedley Bryne should be understood in the broad sense that I would include
special knowledge
2. Representee must reasonably rely on the representations made:
Whether B would reasonably rely on information given by A?
Smith v Eric Bush (1990): reasonable for purchaser of a modest house to rely on
the survey carrued out by lenders surveyor
Edwards v Lee: held that it was reasonable for the recipient of a reference
provided by a solicitor concerned a client to rely on the reference
Royal Bank Trust (Trinidad) v Pampellone (1987): PC held that there was a
difference between the giving of advice and the passion on of information that it
may be more reasonable to rely on the former than the later
Chaudry v Prabhaker (1989): May LJ said that one would no impose a duty of
care regarding statements made on social occasions
Lam Ching Sheung v Official Receiver (2009):
-a duty of care usually arises from Ds act

-what D says or does is examined in light of relevant contextual scene

CF meates v AG: if advice or information given by D is in business context, it
may be easier to argue that D has assumed responsibility for his advice or
information, and the case would fall within the ambit of Hedley Bryne Principle
Yiu Chow Leung v Chow Wai Lam: Bokhary PJ: the test for existence of such
duty is an objective one; whether it can reasonable be said that by his conduct
accepted responsibility
3. Representor must have some knowledge of the type of transaction envisaged
by representee & representee suffered loss
Where it is not 1 to 1, does duty extend beyond the direct recipient of
information or advice?
Statements made to the public
Unidentified and unintended users
-usually do no entitle to be sue on Hedley Bryne b/c proximity too hard to
establish between unidentified & unknown users reluctance for court to
establish liability
Shown in Caparo v Dickman (1990):
holding D liable would subject D to indeterminate amount for an indeterminate
time to an indeterminate class it is also to confer on the world at large a quite
unwarranted entitlement Lord Bridge
limit of control mechanism imposed on the liability of a wrongdoer towards those
who have suffered economic damage in consequence of his negligence
(Candlewood case 1986) -> essential ingredient of proximity
1. advice is required for a propose, whether particularl specified or generally
described, which is madeknow, either actually or inferentially to the representor
when advice is given
2. Representor knows, either actually or inferenetially that his advice will be
communicated to the representee either specifically or as a member of an
ascertainable class, in oreder that it should be used by the representee for that
purpose
3. It is known, either actually or inferentially, thatadice is communicated is likely
to be acted upon by representee w/o independent inquiry

4. Representee acted upon it to his detriment

Lord Oliver -> these conditions are neither conclusive nor exlsive, but merely that
Hedley Bryne did not warrant any broader properties
Known users but not the intended recipients of information or advice
D has knowledge that specific class of people will rely on reports made by him
even though info not directly supplied to them. (i.e. accountants, auditor)
Smith v Eric S Bush there is known user to the information (P) but the
surveyors did not directly give the information to P
-

house purchaser mortgaged house to borrow money from building society

- building society sent surveyors to inspect house fee paid by P
known to both society & surveyor P would rely on report report
negligently prepared P relied on report & bought house structural
defect nt discovered & roof collapsed P sued for financial loss suffered
Surveyors owed duty of care to P even though no contractual relationship
between them knows that P would rely on it
Immaterial that there was exclusion clause

Yue Xiu Finance Co Ltd & ANor v Dermot Agnew & Ors & Anor (1996):
D(accountants) prepared audits for 2 companies P let $ to these 2 companies
audit report made negligently relied on audits, P did not exercised repayment
rights & advance more $ to them company became insolvent
Whether D was liable to P for preparing reports negligenty?
CA said D, by accepting appointment as auditors, had immediately brought
themselves into close proximity with P and were liable for misstatememnt to P
Negligent advice or conduct by professional basis for that is assumption of
responsibiltty
Negligent performance of a service can make a D liable for pure economic loss
suffered by P (Henderson v Merrett Syndicate (1995)
Midland Bank Trust Co Ltd v Hett Stubs & Kemp (1979) solicitor who failed to
register an option to purchase was liable for economic loss suffered by client as a
result of not being able to purchase the land.
White v Jones (1995) Solicitors were liable to P (beneficiary) who lost their
benefit under a will because solicitor failed to write a will before father died

Reliance on negligent statement causing loss to 3rd party

Lord Browne-Wilkinson said that the soclitor by accepting the instruction, had
entered upon and therefore assumed responsibility for the task of procuring the
execution of s skillfully drawn will.
Dean v Allin & Watts extend the intended beneficiary a remedy under the
Hedley Bryne principle by holding that the assumption of respobsility by solicitor
towards his client to intended benef
Ross v Caunters (1980) Ch 297 - the D who was a solicitor did not warn a
testator that if his will was witnessed by the spouse of a beneficiary, any gift to
that beneficiary would be void. The Ps husband had witnessed the will and she
later sued for the loss of her gift.
Statutory tort of misrepresentation

Statutory tort of misrepresentation: Misrepresentation Ordinance (Cap 284)

Misrepresentation Ordinance (Cap 284) based the UKs Misrepresentation Act
of 1967.
Section 3(1) allows damages to be awarded where economic loss was suffered
after negligent
statements were made it is wider than Hedleys rule:
No need to prove the duty of care or special relationship
Damages are awarded on tortious basis not contractual
Negligent misrepresentation induced the representee to enter into a contract
with representor