The Gazette 1961 - 64

247 / 328

tion, no amendment of the pleadings was necessary,
and he awarded the plaintiff £465 IDS. damages.
The defendants appealed.
Willmer, L.J., said that the general allegation in
the pleadings had to be considered in the general
context of the plaintiff's pleaded case, which was
totally different from the judge's findings. His
lordship could not agree with the judge's view that
an amendment of the pleadings was not necessary
or that, notwithstanding the departure from the
plaintiff's pleaded case, the defendants were not
caused substantial embarrassment. The general
principle as to pleadings stated in the opening
paragraph of Lord Radcliffe's judgment in Esso
Petroleum Co., Ltd. v. Southport Corporation (1956)
A.C. 218, at p. 241, applied, although his lordship
did not say that there might not be cases where a
plaintiff whose own story had been disbelieved
could recover damages on the defendants' story.
His lordship would allow th eal.
Danckwerts and Diplock, , delivered con
curring judgments. Appeal ed.
(Kerr v. James Bridge Copper Works, Ltd.
Solicitors' Journal, July izth, 1963, page 552.)
The decision of the English Court of Appeal in
Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd.
(reported in the GAZETTE for October/November,
1961 at page 50) has been affirmed by the House of
Lords. In this case the appellants who were
advertising agents wanted to place certain forward
advertising orders on behalf of a certain firm,
E Ltd. The terms were that the appellants would
be primarily liable for the cost thereof and before
doing so they instructed their own bankers to
enquire from the respondents, Heller & Partners,
who were bankers for E Ltd. for references as to
the firm's financial position. Two enquiries were
made one by telephone and a subsequent enquiry
in a letter which was replied to. In each case the
reference was given by the respondents " without
responsibility " on their part. It was clear at the
trial that the respondents should not have given
the reference which they did as they should have
known well that E Ltd. had financial commitments
amounting to £50,000 in the form of an overdraft
with them but neither the Court of Appeal nor the
House of Lords addressed itself to the issue of
negligence. Relying on the references given, the
appellants placed orders totalling £22,000. E Ltd.
subsequently went into liquidation and the appellants
were able to recover only a small part of their
loss. It was held by the Court of Appeal (upholding
the trial judge) that (i) there was no general duty
imposed on the respondents to take care when
answering queries and (2) the fact of respondents
financing the firm created a special relationship
between the respondents and the subject of their
reference but this was not sufficient to create a duty
to take care in giving the reference. The House of
Lords in dismissing the appeal held that in this
particular case, but for the respondents' disclaimer,
the circumstances might have given rise to a duty
of care on their part, yet their disclaimer of respon
sibility for their replies on the occasion of the first
enquiry was adequate to exclude the assumption by
them of a legal duty of care, with the consequence
that they were not liable for any negligence. It would
appear, therefore, that if in the ordinary course of
business or professional affairs a person seeks
information or advice from another who is not
under contractual or fiduciary obligation to give the
information or advice, in circumstances in which
a reasonable man so asked would know that he was
being trusted, or that his skill or judgment was
relied on, and the person asked chooses to give the
information or advice without clearly so qualifying his
answer as to show that he does not accept responsibility,
then that person accepts a legal duty to exercise
care and will be liable for negligence if damage
results.
(1963 A11E.R. 575.)
As this statement was not necessary for the actual
decision it appears to be an obiter dictum, but it is
nonetheless important for solicitors and other who
give testaments or character references or give
general advice.
Note.—In giving this decision the House of Lords
disapproved of the judgment of the Court of Appeal
in the leading case of Candler v. Crane, Christmas
& Co. (1951 i All E.R. 426) which had been applied
by the Court of Appeal in giving judgment in the
present case. It was held by the Court of Appeal in
Candler v. Crane, Christmas & Co. that in the
absence of contractual or fiduciary relationship
between the parties the defendants owed no duty
to the defendants to exercise care in preparing a set
of accounts upon which the plaintiff had had relied
and that the plaintiff could not therefore maintain
against them an action for negligence. The House
of Lords in this present case held that the fact that
the person receiving the information was likely to
act in reliance on it (i.e., the circumstances were that
a reasonable man would be expected to know that
his skill and judgment were being relied upon)
would be sufficient to create liability in negligence.
In this particular case it was only the respondents
specific disclaimer of responsibility which had saved
them.