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Downs and Another v Chappell and Another

Downs and Another v Chappell and Another

Postby dls » Mon Aug 01, 2016 8:25 pm

Downs and Another v Chappell and Another; CA 3 Apr 1996
References: [1996] EWCA Civ 1358, [1996] 3 All ER 344, [1996] CLC 1492, [1997] 1 WLR 426
Links: Bailii
Coram: Butler-Sloss, Roch, Hobhouse LJJ
Ratio: The plaintiffs had suceeded in variously establishing claims in deceit and negligence, but now appealed against the finding that no damages had flowed from the wrongs. They had been sold a business on the basis of incorrect figures.
Held: Where a plaintiff has been induced to enter into a transaction by a misrepresentation, whether fraudulent or negligent, he is entitled to recover as damages the amount of the (consequential) loss which he has suffered by reason of entering into the transaction. The principle is the same. Where the representation relates to the profitability and, by necessary inference, the viability of the business, the plaintiff can recover both his income and his capital losses in the business.
'Causation and the assessment of damages is a matter of fact. In a misrepresentation case, where the plaintiff would not have entered into the transaction, he is entitled to recover all the losses he has suffered, both capital and income, down to the date that he discovers that he had been misled and he has an opportunity to avoid further loss. The diminution in value test will normally be inappropriate. Where what is bought is a business the losses made in the business are prima facie recoverable as is the reduction in the value of the business and its premises. Foreseeable market fluctuations are not too remote and should be taken into account either way in the relevant account. These cases do not however discuss whether there is any question of causation beyond the no-transaction test. In my judgment it may still be necessary to consider whether it can fairly and properly be said that all the losses flowing from the entry into the transaction in question were caused by the tort of the defendant. '
This case cites:
    - Cited - Doyle v Olby (Ironmongers) Ltd CA ([1969] 2 QB 158, Bailii, [1969] EWCA Civ 2, [1969] 2 All ER 119, [1969] 2 WLR 673)
    The plaintiff had been induced by the fraudulent misrepresentation of the defendant to buy an ironmonger's business for £4,500 plus stock at a valuation of £5,000. Shortly after the purchase, he discovered the fraud and started the . .
    - Cited - Esso Petroleum Company Ltd v Mardon CA ([1976] QB 801, Bailii, [1976] EWCA Civ 4, [1976] 2 All ER 5)
    Statements had been made by employees of Esso in the course of pre-contractual negotiations with Mr Mardon, the prospective tenant of a petrol station. The statements related to the potential throughput of the station. Mr. Mardon was persuaded by . .
    - Cited - County Personnel (Employment Agency) Ltd v Alan R Pulver & Co (a Firm) CA ([1987] 1 WLR 916, [1987] ANZ Conv R 391, [1987] 1 All ER 289)
    The claimant sought damages after his negligent solicitors had saddled him with a ruinous underlease. They had had to buy themselves out of the lease. The court considered the date at which damages were to be calculated.
    Held: The starting . .
    - Cited - Hayes v Dodd CA ([1990] 2 All ER 815)
    . .
    - Cited - Naughton v O'Callaghan ([1990] 3 All ER 191, [1991] CLY 1319)
    In 1981 the plaintiffs had bought a thorough­bred yearling colt called 'Fondu' for 26,000 guineas. In fact a mistake had been made and its pedigree was not as represented. Its true pedigree made it suitable only for dirt track racing in the United . .
    - Cited - Livingstone v Rawyards Coal Co HL ((1880) 5 App Cas 25)
    User damages were awarded for the unauthorised removal of coal from beneath the appellant's land, even though the site was too small for the appellant to have mined the coal himself. The appellant was also awarded damages for the damage done to the . .
    - Cited - The United Motor Finance Company v Messrs Addison and Company Limited PC (Bailii, [1936] UKPC 85, [1937] 1 All ER 425, Appeal No 60 of 1936)
    (Madras) 'Nor can they [the dealers] modify the resulting damages on the footing that though in the absence of misrepresentation the plaintiff firm [the finance company] would not have made the contract with the defendants [the dealers] or with the . .
    - Cited - Phillips v Ward CA ([1956] 1 WLR 471, [1956] 1 All ER 874)
    A negligent survey had been provided to prospective purchasers of a house. It would have cost £7,000 to put the property into the condition in which it had been described in the report.
    Held: The correct measure of damages was not . .
    - Cited - Perry v Sidney Phillips & Son CA ([1982] 1 WLR 1297, [1982] 3 All ER 705, [1983-84] ANZ Conv R 72)
    In 1982 the surveyor failed to observe serious defects, including a leaking roof and a septic tank with an offensive smell. The plaintiff purchaser could not afford major repairs and executed only minor repairs himself. At the date of the trial the . .
    - Cited - Hayes v Dodd CA ([1990] 2 All ER 815)
    . .
    - Cited - Johnson v Agnew HL ([1980] AC 367, [1979] 2 WLR 487, [1979] 1 All ER 883)
    The seller had obtained a summary order for specific performance of a contract for the sale of land against the buyer.
    Held: The breach was continuing and was still capable of being remedied by compliance with the order for specific . .
    - Cited - Banque Bruxelles Lambert Sa v Eagle Star Insurance Co Ltd and Others Appealsz CA (Times 24-Feb-95, Gazette 22-Mar-95, Times 21-Feb-95, [1995] QB 375, [1995] 2 All ER 769)
    The plaintiffs were mortgagees. The defendants were valuers. The defendants negligently over-valued properties and the plaintiffs then accepted mortgages of the properties. Later the property market collapsed and the various borrowers defaulted and . .
    - Cited - Watts & Co v Morrow CA (Gazette 08-Jan-92, [1991] 4 All ER 939, [1991] 1 WLR 1421, Bailii, [1991] EWCA Civ 9)
    The plaintiff had bought a house on the faith of the defendant's report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his . .
    - Cited - East v Maurer CA ([1991] 1 WLR 461, Bailii, [1990] EWCA Civ 6, [1991] 2 All ER 733)
    The plaintiffs had bought a hair dressing salon from the defendant, who continued to trade from another he owned, despite telling the plaintiffs that he intended not to. The plaintiffs lost business to the defendant. They invested to try to make a . .
    - Cited - Johnson v Agnew HL ([1980] AC 367, [1979] 2 WLR 487, [1979] 1 All ER 883)
    The seller had obtained a summary order for specific performance of a contract for the sale of land against the buyer.
    Held: The breach was continuing and was still capable of being remedied by compliance with the order for specific . .
    - Cited - Sheffield Corporation v Barclay HL ([1905] AC 392)
    Authorised irredeemable stock in Sheffield Corporation was registered in the joint names of Timbrell and Honnywill. Timbrell executed an appropriate form of transfer of the stock in his own name but forged the signature of Honnywill. The forged . .
    - Cited - Dodd Properties (Kent) Ltd v Canterbury City Council CA ([1980] 1 WLR 433, Bailii, [1980] 1 All ER 928, [1979] EWCA Civ 4)
    The defendants had, in the course of building operations, caused nuisance and damage to the plaintiff's building. The dispute was very lengthy, the costs of repair increased accordingly, and the parties now disputed the date at which damages fell to . .
(This list may be incomplete)

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