Naughton and Another v O'Callaghan
| Jurisdiction | England & Wales |
| Judgment Date | 09 February 1990 |
| Date | 09 February 1990 |
| Court | Queen's Bench Division |
Queen's Bench Division
Before Mr Justice Waller
Damages - breach of contract - misrepresentation
Where a racehorse was purchased on the basis of an erroneous pedigree and it diminished in value through poor performance on the racetrack, the measure of damages recoverable was the difference between that diminished value and the value the horse would have had if rescission had been effected before the horse had been raced.
Mr Justice Waller so held in the Queen's Bench Division when awarding damages to the plaintiff purchasers, Thomas Naughton and Vincent Kilkenny, against the defendant, Gay O'Callaghan, and the third parties, the owners of the stud farm where the horse was bred.
Mr William Norris for the plaintiffs; Mr Thomas Brudenell for the defendant and the third parties.
MR JUSTICE WALLER said that in September 1981 the plaintiffs had been intent on buying a yearling at the sales in Newmarket to be put in training in Ireland with Mr Adrian Maxwell who was to bid and advise on the purchase.
Mr Maxwell picked out a colt named Fondu in the catalogue whose pedigree, there set out, seemed suitable for the plaintiffs. The colt was purchased for £27,300.
In 1982 and 1983 the colt was raced with a marked lack of success.
In about June or July 1983 the plaintiffs discovered that they had not bought a colt as described. In a letter from the plaintiffs' solicitors to the defendant it was explained that they would not have bid for Fondu had they known its true breeding and invited the defendant to take the horse back and settle by paying the purchase price plus the training fees.
A writ was issued in March 1985 claiming breach of contract and misrepresentation, negligent or innnocent.
If Fondu had been correctly described in the catalogue he would have had a substantial value to persons other than the plaintiffs. An expert appearing for them accepted that a bid of about £5,000 less than that paid would have been appropriate.
The price that might have been obtained for Fondu as he should have been described was, say, £23,500 and the price when the misdescription was discovered and he had been unsuccessfully raced was £1,500.
If the misdescription had been corrected in, for example, October 1981 the plaintiffs could have gone out into the market and obtained whatever value Fondu, properly described, would have fetched.
Under section 2(1) of the Misrepresentation Act 1967 the basic principle...
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