Candler v Crane, Christmas & Co
Encyclopedia
Candler v Crane, Christmas & Co [1951] 2 KB 164 is an English tort law
case. In it, Denning LJ delivered an important dissenting judgment, arguing for a duty of care for negligent statements. This was later upheld in Hedley Byrne v Heller & Partners Ltd [1963] 2 All ER 575 by the House of Lords.
in Cornwall
. He needed more capital, so he put an advertisement in The Times
on July 8, 1946, which said,
Mr Candler responded, saying he was interested in investing £2000, if he could see the company's accounts. Mr Ogilvie instructed Crane, Christmas & Co, a firm of auditors, to prepare the company’s accounts and balance sheet. The draft accounts were shown to Mr Candler in the presence of Crane, Christmas & Co’s clerk. Mr Candler relied on their accuracy and subscribed for £2,000 worth of shares in the company. But the company was actually in a very bad state. Ogilvie used the investment on himself and then went bankrupt. Mr Candler lost all the money he invested. He brought an action against the accountants, Crane, Christmas & Co. for negligently misrepresenting the state of the company. As there was no contractual relationship between the parties, the action was brought in tort law for pure economic loss
.
Denning LJ delivered a powerful dissent, in which he argued that any person in the reasonable contemplation of someone making a statement who might rely on that statement is owed a duty of care in tort. He was asked to read his decision first.
English tort law
English tort law concerns civil wrongs, as distinguished from criminal wrongs, in the law of England and Wales. Some wrongs are the concern of the state, and so the police can enforce the law on the wrongdoers in court – in a criminal case...
case. In it, Denning LJ delivered an important dissenting judgment, arguing for a duty of care for negligent statements. This was later upheld in Hedley Byrne v Heller & Partners Ltd [1963] 2 All ER 575 by the House of Lords.
Facts
Donald Ogilvie was the director of a company called Trevaunance Hydraulic Tin Mines Ltd, which mined tinMining in Cornwall
Mining in Cornwall and Devon began in the early Bronze Age approximately 2,150 BC and ended with the South Crofty tin mine in Cornwall closing in 1998...
in Cornwall
Cornwall
Cornwall is a unitary authority and ceremonial county of England, within the United Kingdom. It is bordered to the north and west by the Celtic Sea, to the south by the English Channel, and to the east by the county of Devon, over the River Tamar. Cornwall has a population of , and covers an area of...
. He needed more capital, so he put an advertisement in The Times
The Times
The Times is a British daily national newspaper, first published in London in 1785 under the title The Daily Universal Register . The Times and its sister paper The Sunday Times are published by Times Newspapers Limited, a subsidiary since 1981 of News International...
on July 8, 1946, which said,
"10,000l. Established Tin Mine (low capitalization) in Cornwall seeks further capital. Instal additional milling plant. Directorship and active participation open to suitable applicant - Apply"
Mr Candler responded, saying he was interested in investing £2000, if he could see the company's accounts. Mr Ogilvie instructed Crane, Christmas & Co, a firm of auditors, to prepare the company’s accounts and balance sheet. The draft accounts were shown to Mr Candler in the presence of Crane, Christmas & Co’s clerk. Mr Candler relied on their accuracy and subscribed for £2,000 worth of shares in the company. But the company was actually in a very bad state. Ogilvie used the investment on himself and then went bankrupt. Mr Candler lost all the money he invested. He brought an action against the accountants, Crane, Christmas & Co. for negligently misrepresenting the state of the company. As there was no contractual relationship between the parties, the action was brought in tort law for pure economic loss
Pure economic loss
Economic loss refers to financial loss and damage suffered by a person such as can be seen only on a balance sheet rather than as physical injury to the person or destruction of property...
.
Judgment
The majority of the Court of Appeal (Cohen LJ and Asquith LJ) relied on the case of Derry v Peek to refuse a remedy to the plaintiff, holding that loss resulting from negligent misstatement was not actionable in the absence of any contractual or fiduciary relationship between the parties.Denning LJ delivered a powerful dissent, in which he argued that any person in the reasonable contemplation of someone making a statement who might rely on that statement is owed a duty of care in tort. He was asked to read his decision first.
See also
- Cann v WillsonCann v WillsonCann v Willson 39 Ch D 39, is an English tort law case, concerning negligent valuation.-Facts:A valuer instructed by a mortgagor sent his report to the mortgagee who made an advance in reliance on the valuation.-Judgment:...
(1888) 39 Ch.D 39, a valuer instructed by a mortgagor sent his report to the mortgagee who made an advance in reliance on the valuation. The valuer was held liable in the tort of negligence to the mortgagee for failing to carry out the valuation with reasonable care and skill. - Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465
- Ministry of Housing and Local Government v SharpMinistry of Housing and Local Government v SharpMinistry of Housing and Local Government v Sharp [1970] 2 QB 223, is an English tort law case concerning assumption of responsibility.-Facts:...
[1970] 2 QB 223, the local authority was held liable to the Ministry because of the failure of an employee of the authority to exercise reasonable skill and care in searching for entries in the local land charges register. The search certificate prepared by the clerk negligently failed to record a charge of £1,828 11s. 5d. in favour of the Ministry. Lord Denning MR, 268, rejected that a duty of care only arose when there was a voluntary assumption of responsibility, rather "from the fact that the person making it knows, or ought to know, that others, being his neighbours in this regard, would act on the faith of the statement being accurate." - Smith v Eric S. Bush
- Caparo Industries plc v Dickman
- White v JonesWhite v JonesWhite v Jones is a leading English tort law case concerning professional negligence and the conditions under which a person will be taken to have assumed responsibility for the welfare of another.-Facts:...
- Her Majesty's Commissioners of Customs and Excise v Barclays Bank PlcHer Majesty's Commissioners of Customs and Excise v Barclays Bank PlcHer Majesty's Commissioners of Customs and Excise v Barclays Bank Plc [2006] is a leading English tort law case concerning negligent misstatement and pure economic loss.-Facts:...