Royscot Trust Ltd v Rogerson [1991]

Royscot Trust Ltd v Rogerson [1991] EWCA Civ 12 is a significant case in English contract law case on misrepresentation. The court delved into the Misrepresentation Act 1967, specifically addressing the extent of damages available under Section 2(1) for negligent misrepresentation.

The facts of the case revolved around Rogerson acquiring a used Honda Prelude through hire purchase from a car dealer, Maidenhead Honda Centre Ltd, with the financing provided by Royscot Trust Ltd. The dealer misrepresented the total cost and deposit on the application forms submitted to Royscot. Royscot approved the loan based on these misrepresentations. Subsequently, Rogerson faced cashflow difficulties, leading to his dishonest sale of the car. Royscot, upon discovering the misrepresentation, sued the car dealer for damages, claiming that the losses incurred were due to the dealer's misrepresentation.

The judgment, delivered by Balcombe LJ and Ralph Gibson LJ, established that, for negligent misrepresentation under Section 2(1), the correct measure of damages was tortious and aligned with that for the tort of deceit. The court held that the car dealer was liable for all the consequences of the misrepresentation, requiring them to compensate Royscot for the losses incurred.

The judgment also addressed the foreseeability of Rogerson's wrongful sale of the car, concluding that it was foreseeable and did not break the chain of causation. The court emphasised that damages for negligent misrepresentation under Section 2(1) should be assessed as if the representation had been made fraudulently, aligning with the severity of the deceit rule.

While academic criticism has been directed at the literal interpretation of the statute and the finding that a deliberately false document was made negligently, the court maintained its stance that damages under Section 2(1) should follow the principles of deceit. The judgment rejected alternative views that sought to apply different measures of damages for innocent misrepresentation compared to fraudulent misrepresentation.

In conclusion, the Royscot Trust case set a precedent for the application of damages in cases of negligent misrepresentation under the Misrepresentation Act 1967, aligning them with the principles governing fraudulent misrepresentation.
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