Roder UK Ltd v West & Anor

Section 6 of the Statute of Frauds (Amendment) Act 1828 applies only to representations made to enable another person to obtain money or goods upon credit. It does not cover representations made solely to postpone recovery of an existing debt, prevent proceedings or avoid repossession where no further money or goods are intended to be obtained. The Court of Appeal followed the long-standing majority construction in Lyde v Barnard (1836) 1 T.R. 101, while leaving unresolved when a creditor’s forbearance amounts to obtaining credit.

Roder supplied goods to Titan Marquees Ltd on credit. Titan’s sole directors and shareholders, West and Phillips, made oral representations concerning an insurance payment and the sale of the business. Roder relied on those representations by refraining from suing Titan and from exercising retention-of-title rights.

The Cambridge County Court found the representations fraudulent and awarded Roder £6,500 in deceit damages against the directors. The appeal concerned whether section 6 of the Statute of Frauds (Amendment) Act 1828 prevented enforcement because the representations were made to enable Titan to obtain credit.

1. The appeal was dismissed unanimously. Lord Justice Longmore gave the judgment, with Lady Justice Hallett and Lady Justice Black agreeing.
2. Section 6 of the Statute of Frauds (Amendment) Act 1828 is grammatically defective. The Court of Appeal was not bound by decisions of the Exchequer sitting en banc, but the majority construction in Lyde v Barnard (1836) 1 M & W 101 had stood for 185 years and was not lightly to be departed from. The provision was therefore read as applying where the representation was made so that the other person might obtain money or goods upon credit.
3. The court accepted that an enforceable agreement is probably unnecessary for credit to be obtained within the provision. Creditor assent may be sufficient. It left unresolved whether mere failure to sue, or failure to repossess goods subject to retention of title, amounts to such assent. That issue was unnecessary to the result.
4. When the representations were made, the directors did not intend that Titan should obtain money. They had even less intention that it should obtain goods, since the relevant goods had been supplied months earlier. The representations were directed to avoiding payment, proceedings and repossession. They therefore fell outside section 6, leaving the deceit claim unaffected.
5. The Scottish wording in section 6 of the Mercantile Law (Scotland) Amendment Act 1856, which expressly refers to postponement of payment, could not be used to construe the English Act as if it contained those words.

• Court of Appeal (Civil Division): [2011] EWCA Civ 1126. Appeal dismissed unanimously.
• Cambridge County Court: District Judge Kirby found the directors liable in deceit and awarded Roder £6,500, following judgment against Titan on the debt claim.