Roder UK Ltd v West & Anor

The Court of Appeal considered the proper construction of section 6 of the Statute of Frauds (Amendment) Act 1828 (Lord Tenterden’s Act) and the application of that provision to an alleged fraudulent representation by company directors. The court accepted the majority view in Lyde v Barnard that the clause should be read as requiring an intent or purpose that the third person should obtain money or goods upon credit. Applying that construction, the court held that the directors’ oral representations did not have the purpose that Titan obtain money or goods upon credit and so section 6 did not bar the tort of deceit claim. The district judge’s findings that the directors made fraudulent representations, that Roder relied on them and thereby lost the opportunity to recover goods under a retention of title clause, and the award of £6,500, were upheld.

Background and parties: Roder (a wholesaler) supplied goods to Titan Marquees Limited. Titan’s directors (the appellants) were defendants in proceedings brought by Roder for unpaid invoices and in damages in the tort of deceit. Roder alleged that the directors made false representations about forthcoming payments which induced Roder to refrain from suing and from exercising rights under a retention of title clause, resulting in loss when Titan ceased trading and its assets passed to a third party.

Nature of the claim and relief sought: Roder sought debt against Titan for unpaid invoices and damages against the directors for deceit in respect of representations that led Roder to delay enforcement and lose the ability to recover certain goods. The district judge entered judgment against Titan and awarded Roder £6,500 against the directors.

Procedural posture: Appeal by the directors to the Court of Appeal from judgment of District Judge Kirby in Cambridge County Court (OCB00761).

Issues framed:

• How section 6 of the Statute of Frauds (Amendment) Act 1828 should be construed: whether the representation must be made with the intent or purpose that the third person obtain "money or goods upon credit".
• Whether the directors’ representations were made with the requisite intent such that the statutory provision would bar an action based on the oral representations.
• Whether, on the facts, Roder had refrained from enforcing its contractual and proprietary rights in reliance on the representations and suffered loss recoverable in deceit.

Court’s reasoning: The court reviewed historical authorities, notably Lyde v Barnard, and concluded the proper construction is that the intent or purpose clause requires that the representation be made to enable the third person to obtain money or goods upon credit. The court observed that if that construction were not adopted, difficult questions would arise about whether mere postponement or informal acquiescence amounted to obtaining credit. On the facts, the representations did not have the purpose of obtaining money or goods upon credit because no prospect existed in 2009 that Roder would supply further money or goods, and the goods in issue had been supplied earlier. Consequently section 6 did not apply to bar Roder’s deceit claim. The Court of Appeal dismissed the appeal and thereby upheld the district judge’s findings of fraudulent misrepresentation, reliance and the award.

Ancillary observations: The judgment briefly compared the English provision with the Scottish Mercantile Law (Scotland) Amendment Act 1856, which expressly referred to postponement of payment, but concluded that comparison did not alter the construction of the English statute.

The appeal is dismissed. The Court of Appeal adopted the majority construction in Lyde v Barnard that section 6 of the Statute of Frauds (Amendment) Act 1828 must be read as requiring an intent or purpose that the third person obtain money or goods upon credit; on the facts the directors’ representations were not made with such an intent, so the statutory bar did not apply and the district judge’s findings and award for deceit were upheld.

Appeal from the judgment of District Judge Kirby at Cambridge County Court (OCB00761) in which judgment was entered against Titan and the directors were held liable in deceit for £6,500. The appeal to the Court of Appeal was heard and dismissed ([2011] EWCA Civ 1126).