John Stewart Hamilton & Stebbings Inc v Allied Domecq Plc [2001] ScotCS 80 (30 March 2001)

John Stewart Hamilton & Stebbings Inc v Allied Domecq Plc [2001] ScotCS 80 (30 March 2001)

Under Scots law, following the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, a party to a contract induced to enter into it by a negligent misrepresentation of another party may recover damages for loss suffered as a result, without the need to prove fraud or a Hedley Byrne special relationship. The pursuers' pleadings, though bald, are sufficient to allow proof before answer on whether the misrepresentation occurred, was negligent, induced the contract, and caused loss.

Citation
[2001] ScotCS 80
Parties
Pursuer: John Stewart Hamilton; Pursuer: Stebbings Inc.; Defender: Allied Domecq Plc
Jurisdiction
Scotland
Judgment Date
30 March 2001
Procedural Posture
Civil / Interlocutory (debate on Relevancy and Specification of Pleadings; Decision on Whether to Allow Proof Before Answer)
Outcome
Proof before answer allowed; action not dismissed at this stage.
Legal Topics
Negligent Misrepresentation, Inducing Contract, Shareholder Rights, Damages for Economic Loss
Contract Law Delict (tort) Company Law Negligent Misrepresentation Inducing Contract Shareholder Rights Damages for Economic Loss

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Parties

John Stewart Hamilton

Pursuer

Stebbings Inc.

Pursuer

Allied Domecq Plc

Defender

Procedural Posture

Civil / Interlocutory (debate on Relevancy and Specification of Pleadings; Decision on Whether to Allow Proof Before Answer)

Legal Issues

  1. 1 Whether a negligent misrepresentation by one contracting party inducing another to contract gives rise to damages under Scots law without proof of fraud
  2. 2 Whether a 'special relationship' in the Hedley Byrne sense is required between contracting parties for liability for negligent misrepresentation
  3. 3 Whether the pursuers have averred a relevant and specific case of loss caused by the alleged misrepresentation

Ratio Decidendi

Under Scots law, following the Law Reform (Miscellaneous Provisions) (Scotland) Act 1985, a party to a contract induced to enter into it by a negligent misrepresentation of another party may recover damages for loss suffered as a result, without the need to prove fraud or a Hedley Byrne special relationship. The pursuers' pleadings, though bald, are sufficient to allow proof before answer on whether the misrepresentation occurred, was negligent, induced the contract, and caused loss.

Court Disposition

Proof before answer allowed; action not dismissed at this stage.

Orders

  • Allow proof before answer on the pursuers' averments.