Latkter v General Guarantee Finance Ltd & Anor

Reliance on a fraudulent or negligent misrepresentation does not, by itself, establish recoverable damage. A claimant seeking damages must prove, on the balance of probabilities, the loss sustained. Where the trial judge has carefully considered loss and found that no loss was proved, an appeal cannot succeed merely because the finding on misrepresentation is challenged or new evidence is proposed. [1884] 9 AC 187 does not establish a contrary rule.

The claimant bought a Triumph Thunderbird motorcycle under a hire-purchase arrangement involving General Guarantee Finance Ltd and Ongar Motorcycles Ltd. He alleged that Ongar had represented the motorcycle to be of a 1997 specification and claimed damages for fraudulent or negligent misrepresentation and breach of contract.

The Colchester County Court, before Mr Recorder Foy QC, rejected the misrepresentation and contractual claims. It also found that the claimant had failed to prove any quantified loss and dismissed the action. On appeal, the claimant sought to adduce evidence challenging the authenticity of a quotation. The respondents argued that the appeal was bound to fail because no loss had been established. The central issue was whether the absence of proved loss was fatal to the appeal.

1. Appeal dismissed. The court held unanimously that the appeal could not succeed because the claimant had failed to prove any loss, even if the proposed new evidence established that the finding on misrepresentation should be reconsidered.
2. Per Lord Justice Peter Gibson, damage is an essential element of an action in deceit and of a claim under the Misrepresentation Act 1967. Reliance on a misrepresentation is not, without more, proof of damage. In some cases reliance may make damage obvious, but the claimant must still establish that damage was suffered.
3. The Recorder had considered loss on the footing that, if there had been a misrepresentation, the claimant had been induced to buy the vehicle. He examined the proposed measure of loss, the evidence relied upon, and the absence of any claim for general damages for inconvenience or loss of use. His conclusion that no loss had been proved was one which the Court of Appeal could not say was wrong.
4. Per Lord Justice Clarke, [1884] 9 AC 187 was not authority for the proposition that inducement into a contract by fraudulent misrepresentation automatically entitled the claimant to damages. The claimant had to prove what loss had been sustained.
5. Mr Justice Maurice Kay agreed with both judgments. The appeal was dismissed, with the successful respondents’ costs summarily assessed, subject to the stated set-off for costs incurred on the unsuccessful security-for-costs application.

• Court of Appeal (Civil Division): Appeal from the Colchester County Court dismissed. The court upheld the finding that no loss had been proved.
• Colchester County Court: Mr Recorder Foy QC rejected the misrepresentation and breach of contract claims and dismissed the action.