Misrepresentation Deceit in UK Law

It must be shown that the defendant made a materially false representation which was intended to, and did, induce the representee to act to its detriment. To my mind it is not necessary, as a matter of law, to prove that the representee believed that the representation was true. For example, if the representee does not believe that the representation is true, he may have serious difficulty in establishing that he was induced to enter into the contract or that he has suffered loss as a result.

Given that I have found that the claim in deceit succeeds, it is not strictly necessary to decide whether this is an appropriate case in which to pierce the corporate veil and permit a claim which should otherwise be pursued against the company to be pursued against the defendant.

The Judge was wrong to ask how they would have acted if they had been told the truth. They were told lies in order to induce them to enter into the contract The lies were material and successful; they induced the Plaintiffs to act to their detriment and contract with Mr Chappell.

In a deceit case it is also necessary that the representor should understand that he is making the implied representation and that it had the misleading sense alleged. A person cannot make a fraudulent statement unless he is aware that he is making that statement. In other cases of misrepresentation this is not a requirement, but one would generally expect it to be reasonably apparent to both representor and representee that the implied representation alleged was being made.

I am not sure that the position in relation to a restitutionary claim is as clear as Mr Freedman suggests. It seems to me, in contrast, that whilst a person committing the tort of deceit should be liable for all the loss which flows from his misrepresentation, it would be unprincipled to impose a liability on him for the loss of bargain suffered by a misrepresentee in respect of a contract with a third party with whom he had been induced to contract by the misrepresentation.

It does not follow that B should be liable for contractual damages to A where the contract which he procured was one between A and C, even where C is the creature of B. To put the point another way, where in that example the principle of corporate separation exemplified in Salamon v A Salamon & Co Ltd [1897] AC 22 would apply absent a misrepresentation by the person controlling the company, there is no need, and it would be inappropriate, to lift the veil in order to provide A with a contractual remedy against B; A recovers all his loss arising as a result of the misrepresentation by his tortious claim in deceit.

But it is settled law that A's misrepresentation, however fraudulent and morally wrong, does not become tortious until B not merely receives it but acts upon it: see Briess v. Woolley (1974) Appeal Cases 333 per Lord Tucker at page 353; and the passage which was cited by Mr. Justice Aikens in the Original Blouses case from the 13th edition of Salmond on the Law of Torts and which I think is exactly reproduced in the current edition at page 387 of that learned work.