Downs & Anor v Chappell & Anor [1996] EWCA Civ 1358 (3 April 1996)

Downs & Anor v Chappell & Anor [1996] EWCA Civ 1358 (3 April 1996)

The plaintiffs were induced by fraudulent and negligent misrepresentations to enter into a transaction they would not otherwise have entered. The correct measure of damages is the loss suffered as a result of entering into the transaction, assessed at the point when the plaintiffs had an informed opportunity to mitigate their loss. The plaintiffs' loss was £44,000, being the difference between the purchase price and the value at the time they could have sold after discovering the misrepresentation. Both defendants are equally liable for this loss.

Citation
[1996] EWCA Civ 1358
Parties
Plaintiff/appellant: Michael Robert Downs; Plaintiff/appellant: Jane Rena Downs; Defendant/respondent: Kevin Paul Chappell; Defendant/respondent: Stephenson Smart (a firm)
Jurisdiction
England and Wales
Judgment Date
03 April 1996
Procedural Posture
Appeal (civil) / Appeal From High Court (queen's Bench Division) to Court of Appeal
Outcome
Appeal allowed
Legal Topics
Deceit, Negligent Misrepresentation, Damages, Causation, Assessment of Damages, Contribution Between Tortfeasors
Tort Law Contract Law Professional Negligence Deceit Negligent Misrepresentation Damages Causation Assessment of Damages +1 more

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Parties

Michael Robert Downs

Plaintiff/appellant

Jane Rena Downs

Plaintiff/appellant

Kevin Paul Chappell

Defendant/respondent

Stephenson Smart (a firm)

Defendant/respondent

Procedural Posture

Appeal (civil) / Appeal From High Court (queen's Bench Division) to Court of Appeal

Legal Issues

  1. 1 Whether the plaintiffs suffered loss caused by the defendants' deceit and negligence
  2. 2 Proper approach to causation and assessment of damages in misrepresentation cases
  3. 3 Appropriate measure of damages for fraudulent and negligent misrepresentation

Ratio Decidendi

The plaintiffs were induced by fraudulent and negligent misrepresentations to enter into a transaction they would not otherwise have entered. The correct measure of damages is the loss suffered as a result of entering into the transaction, assessed at the point when the plaintiffs had an informed opportunity to mitigate their loss. The plaintiffs' loss was £44,000, being the difference between the purchase price and the value at the time they could have sold after discovering the misrepresentation. Both defendants are equally liable for this loss.

Court Disposition

Appeal allowed

Orders

  • Judgment for the plaintiffs against both defendants for £44,000 in damages
  • Liability apportioned equally between defendants under the Civil Liability (Contribution) Act 1978