Hedley Byrne and the Eager Business Man
| DOI | http://doi.org/10.1111/j.1468-2230.1968.tb01191.x |
| Author | Michael Dean |
| Published date | 01 May 1968 |
| Date | 01 May 1968 |
NOTES
OF
CASES
HEDLEY
BYRNE
AND
THE
EAGER
BUSINESS
MAN
IN
Hedley Byrne and
Co.
Ltd.
v.
Heller and Partners Ltd.'
the
House of Lords finally exploded the doctrine that English law
did
not recognise the possibility of liability in the tort of negligence
for the infliction of pecuniary loss by careless statement.= The
decision itself, however, gave only general guidance to the sort
of
considerations that would justify a finding of a
''
special relation-
ship
"
between the plaintiff and the defendant sufficient to give rise
to
a
duty
not
to
inflict economic loss by careless representations.
The decision of Cairns
J.
in
W.
B. Anderson
&
Sons Ltd. and Others
v.
Rhodes (Liverpool) Ltd. and Others
*
is an iinportant applicn-
tion of the general principles of
Iiedley Byrne
to a familiar com-
mercial situation resulting in the imposition of liability,
The action was brought by seven companies against Rhoda
(Liverpool) Ltd. and two of their employees, Jones, the manager,
and Reid, a salesman and buyer, as personal defendants. The
plaintiffs claimed damages for losses incurred by the failure of a
company called Taylors, which was not a party to the action, to
pay for potatoes supplied by the plaintiffs to Taylors upon credit
terms in reliance upon representations made by the defendants
8.5
to Taylors' credit. Taylors had enjoyed
a
brief existence trading
in
vegetables from March
1965
until the company was compul-
sorily wound up in July
1965,
being unable to meets its obligations.
Rhodes were
a
well-established concern and had themselves sold
potatoes to Taylors, at first for cash and then
on
credit, although
they had made no inquiries as to Taylors' standing. Taylors
soon
incurred large debts to Rhodes and the account was at least
E2,500
overdue at all material times having regard to the accepted usages
as
regards payment in the trade. The defendants conceded that
if
the extent of this debt had been appreciated they could not have
considered that Taylors were meeting their obligations in a satiw
factory manner.
It
was accepted, however, that
no
one in Rhodes
19641
A.C.
465; (19631
2
All
E.R.
675
(H.L.).
L
e Lieiire
V.
Could
[1893] 1
Q.B.
491;
Old
Gates Estates
Ltd.
v.
Toplis
[1939] 3
All
E.R.
209;
Candler
V.
Crane, Christmas
It
Co.
119511
2
K.B.
164;
cf.
Cann
v.
Willson (1888)
39
Ch.D.
39.
Hedley Byrne
was
restrictively
1.
istinguished in the
New
Zealand
case
of
Jones
v.
Still
[lo651
N.Z.L.R.
1071
but the principle
was
applied to impose liability
on
an
estate agent
for
the
negligent misstatement
of
the operating costs
of
a
block
of
flats to
a
prospective
purchaser in the Canadian
case
of
Dodds
d
Dodds
V.
MiZlman
(1964) 45
D.L.13.
(2d)
472.
and on
a
surgeon
for
the negligent misstatement
oP
an operationel
risk to
a
patient in the
New
Zealand case
of
Smith
V.
Auckland
Hospital
Board
f1965.J
N.Z.L.R.
191,
although in this case
the
damage
was
personal
injury.
19671
2
All
E.R.
850,
at Liverpod
Assizes.
322
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