The Gazette 1949-1952

by the English Court o f Appeal (Lord Justice Denning dissenting), that in the absence o f a con­ tractual or fiduciary relationship between the parties, the defendants owed no duty to the plaintiff to exercise care in preparing the accounts and giving their certificate and that the plaintiff could not maintain against them an action for negligence. The case will probably rank as a leading decision on the principles laid down by the House of Lords in Donoghue v. Stevenson (1932, A.C. 502), the “ snail in the bottle ” classic, in which the manu­ facturers o f mineral waters, which were sold already bottled to wholesalers and ultimately consumed by persons with whom they were not in privity, were liable to the consumers for damage due to foreign matter introduced through the manu­ facturers’ negligence. In that case Lord Atkin suggested the following as the test o f liability: “ You must take reasonable care to avoid acts or omissions which you can reasonably foresee would be likely to injure your neighbour. Who, then, in law, is my neighbour ? The answer seems to be— persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.” This principle has, however, never been applied where the damage complained of was not physical damage either to person or property, and the Court in the present case refused to extend it in the manner sought by the plaintiff. Lord Justice Asquith said that in the present state of the common law different rules still seem to apply to negligent misstatement on the one hand, and negligent circulation or repair o f chattels on the other, and that Donoghue’s case did not seem to him to have abolished these differences. Instructions to Sue for Gaming Debt What is the duty of a solicitor on receiving instructions to sue in respect o f a gaming debt ? Since Hill v. Hill (1949), A.C. 530, it is no longer possible to succeed on an allegation of consideration, such as a promise not to report default to a union or sporting organisation, and apart from limited classes o f cases in which gaming debts are indirectly enforceable, as in the case o f loans to pay betting losses already incurred, it would seem to be impos­ sible to give full particulars on a writ of a gaming debt without disclosing that there is no cause of action. The Lord Chief Justice expressed the opinion, in giving evidence before the Royal Commission on Betting in June, 1950, that it was a contempt of court to endorse a writ for a gaming debt as for “ an account stated.” He added that

having discovered the mistake in the bills drew fresh bills and furnished them to the defendant claiming the full scale fee in each case. By consent the matter was referred by the Taxing Master for determination by the Court. Counsel for the plaintiff argued that under the implied contract of retainer the full scale fees were payable by the defendant and that no fresh contract was created by the furnishing and acceptance of the bills at a later stage. Counsel for the defendant submitted that the furnishing and acceptance o f the bills constituted offer and acceptance. It was held by Mr. Justice Kingsmill Moore that it was an implied term of the contract that the full scale fees should be paid by the defendant and that there was no accord and satisfaction. The judgment as reported does not disclose the costs which were recovered by the solicitor from the purchaser of the several holdings, who was not a party to the proceedings, but it would seem that in the bills as furnished he was charged with half the scale costs. Negligence by Firm o f Accountants The-case o f Candler v. Crane Christmas & Co. (1951, I. A ll E .R . 42b), although concerned with negligence by a firm of accountants in preparing client’ s accounts, is of interest to solicitors. The facts were that the managing director o f a private company, which was seeking fresji capital, instructed the defendants to prepare the company’s accounts and balance sheet. The immediate object o f the accounts, which was known to the defendants’ clerk who was dealing with the matter, was for production to an intending subscriber o f capital to satisfy him as to the financial stability of the com­ pany. The clerk concerned, who was held to be acting within the scope o f his employment, prepared the accounts and they were shown to the plaintiff, who was the intending subscriber of capital, in the clerk’s presence, and the plaintiff subsequently subscribed £2,000 for shares relying on the accuracy of the accounts. The accounts were subsequently certified by the defendant firm in the form in which they had been shown to the plaintiff. It was admitted that, without any fraud on his part, the accounts were completely misleading due to the failure o f the clerk of the defendant firm to check and verify information supplied by the managing director of the client company, and negligence ^vas admitted. The company went into liquidation and the plaintiff lost the money which he had invested. The question was whether the defendant firm in preparing the accounts owed any duty to a third party beyond their duty towards their own clients. It was held

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