The plaintiff had been an investor with the defendant. He asked them about an associated company. He was given advice which was incorrect. He claimed damages for negligence.
Held: The company was not itself in the business of giving such advice. The advice had been gratuitous. The company had appreciated that he might act on the advice. However they owed him no duty of care, and therefore were not liable in damages. The company made no claim to have the necessary skill to give advice on investments, and their only duty was to give honest advice, which they had done. Lord Reid and Lord Morris of Borth-y-Gest dissenting.
Judges:
Lord Reid, Lord Morris of Borth-y-Gest, Lord Hodson, Lord Guest and Lord Diplock
Citations:
[1971] 2 WLR 23
Links:
Jurisdiction:
Commonwealth
Citing:
Applied – Low v Bouverie CA 1891
If a trustee chooses to answer questions from a stranger about the cestui que trust, his legal obligation is only to answer honestly and to the best of his information. He need not make enquiries to support those answers.
Bowen LJ said: . .
Cited – Anderson (W B ) and Sons Ltd v Rhodes (Liverpool) Ltd 1967
The plaintiff and defendants traded in fruit and vegetables. The defendant began to accept credit orders from a third party, but he was tardy in payment. The plaintiffs asked as to the third party, and repeesentations were made that the company was . .
Cited – Candler v Crane Christmas and Co CA 15-Dec-1950
Though the accounts of the company in which the plaintiff had invested had been carelessly prepared and gave a wholly misleading picture of the state of the company, the plaintiff could not recover damages. A false statement, carelessly, as . .
Cited – Cann v Willson 1888
Liability of surveyor . .
Cited – Derry v Peek HL 1-Jul-1889
The House heard an action for damages for deceit or fraudulent misrepresentation.
Held: The court set out the requirements for fraud, saying that fraud is proved when it is shown that a false representation has been made knowingly or without . .
Cited – Dorset Yacht Co Ltd v Home Office HL 6-May-1970
A yacht was damaged by boys who had escaped from the supervision of prison officers in a nearby Borstal institution. The boat owners sued the Home Office alleging negligence by the prison officers.
Held: Any duty of a borstal officer to use . .
Cited – Fish v Kelly 1864
Mere casual observations are not to be used to found a duty of care. . .
Cited – Hedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
Cited – Le Lievre v Gould CA 6-Feb-1893
Mortgagees of the interest of a builder under a building agreement, advanced money to him from time to time, relying upon certificates given by a surveyor as to stages reached. The surveyor was not appointed by the mortgagees, and there was no . .
Cited – Low v Bouverie CA 1891
If a trustee chooses to answer questions from a stranger about the cestui que trust, his legal obligation is only to answer honestly and to the best of his information. He need not make enquiries to support those answers.
Bowen LJ said: . .
Cited – Nocton v Lord Ashburton HL 19-Jun-1914
The defendant solicitor had persuaded his client to release a charge, thus advancing the solicitor’s own subsequent charge on the same property. The action was started in the Chancery Division of the High Court. The statement of claim alleged fraud . .
Cited – Parsons v Barclay and Co Ltd and Goddard CA 1910
An inquiry was made between banks as to the financial position of a customer of the defendant Bank. It was answered by the manager containing the words: ‘This information is for your private use only, and is given without any responsibility on our . .
Cited – Shiells v Blackburne 1789
A merchant agreed without taking any reward to enter a parcel of goods of another, along with his own at the Customs House for export. He negligently entered the goods under the wrong denomination, and both parcels were seized.
Held: The . .
Cited – Woods v Martins Bank Ltd 1958
If a bank chooses to give advice to a customer, then the Bank’s obligation is to advise with ordinary skill and care. The liability is primarily on contract: ‘In my judgment, the limits of a banker’s business cannot be laid down as a matter of law. . .
Lists of cited by and citing cases may be incomplete.
Negligence, Financial Services
Updated: 11 February 2022; Ref: scu.175507
