E A Grimstead & Son Ltd v McGarrigan [1999] EWCA Civ 3029 (27 October 1999)

E A Grimstead & Son Ltd v McGarrigan [1999] EWCA Civ 3029 (27 October 1999)

The Court of Appeal held that the trial judge erred in finding that the representations as to the company's assets and liabilities being in balance excluded stock and included accrued interest. On the evidence, both parties understood the balancing of assets and liabilities to include stock and to exclude accrued interest. Therefore, the representations were not false or negligently made in the sense relied upon by the purchaser. The exclusion and entire agreement clauses did not preclude liability for misrepresentation, but as the representations were not false, the claim failed.

Citation
[1999] EWCA Civ 3029
Parties
Respondent: E A Grimstead & Son Ltd; Appellant: Francis Patrick McGarrigan
Jurisdiction
England and Wales
Judgment Date
27 October 1999
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeal From High Court (queen's Bench Division)
Outcome
Appeal allowed; judgment for the respondent (E A Grimstead & Son Ltd) set aside.
Legal Topics
Pre Contractual Representations, Misrepresentation Act 1967, Exclusion Clauses, Share Sale Agreements, Damages for Misrepresentation, Interpretation of Entire Agreement Clauses
Contract Law Misrepresentation Commercial Law Pre Contractual Representations Misrepresentation Act 1967 Exclusion Clauses Share Sale Agreements Damages for Misrepresentation +1 more

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Parties

E A Grimstead & Son Ltd

Respondent

Francis Patrick McGarrigan

Appellant

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeal From High Court (queen's Bench Division)

Legal Issues

  1. 1 Whether pre-contractual representations regarding the company's financial position were made and, if so, whether they were false or negligently made
  2. 2 Whether exclusion/entire agreement clauses in the share sale agreement precluded liability for misrepresentation
  3. 3 Whether damages were properly awarded for negligent misrepresentation

Ratio Decidendi

The Court of Appeal held that the trial judge erred in finding that the representations as to the company's assets and liabilities being in balance excluded stock and included accrued interest. On the evidence, both parties understood the balancing of assets and liabilities to include stock and to exclude accrued interest. Therefore, the representations were not false or negligently made in the sense relied upon by the purchaser. The exclusion and entire agreement clauses did not preclude liability for misrepresentation, but as the representations were not false, the claim failed.

Court Disposition

Appeal allowed; judgment for the respondent (E A Grimstead & Son Ltd) set aside.

Orders

  • Damages award of £84,227.84 and interest set aside
  • Claim for misrepresentation dismissed