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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Latkter v General Guarantee Finance Ltd & Anor [2001] EWCA Civ 875 (5 June 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/875.html Cite as: [2001] EWCA Civ 875

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM COLCHESTER COUNTY COURT
(Mr Recorder Foy QC)

		Royal Courts of Justice Strand London WC2 Tuesday, 5th June 2001

Tuesday, 5th June 2001

1. LORD JUSTICE PETER GIBSON: The claimant, Richard Latker, on 23rd October 1998 purchased for £6,500 a Triumph Thunderbird motorcycle which was being sold by the second defendant, Ongar Motorcycles Limited ("Ongar"). The purchase was effected on hire purchase by an agreement with the first defendant, General Guarantee Limited ("General"). As a matter of contract Mr Latker purchased the vehicle from General, Ongar acting as the agent of General in the transaction. The vehicle was delivered on 5th November 1998.
2. The vehicle purchased was manufactured in August 1995 and was of a 1996 specification. It had been exported but was not sold abroad and so was returned to this country and became available for sale here. Mr Latker complained that Alan Gurden, the managing director of Ongar, had represented to him that the vehicle was of a 1997 specification. That was denied by Ongar.
3. On 10th February 1999 Mr Latker commenced proceedings against General and Ongar, claiming that Ongar had fraudulently, alternatively negligently, misrepresented to him that the vehicle was a 1997 specification Triumph Thunderbird. He also claimed that in breach of contract the vehicle did not correspond to the description provided to him and was not of a satisfactory standard, nor was it free of defects. He averred that, by reason of the misrepresentation and the breaches of contract, he suffered loss in the sum of £2,000, being the difference between the value of the vehicle as an August 1995 model with the defects which he pleaded and a 1997 model without the defects. He therefore claimed £2,000. In its defence Ongar pleaded that Mr Gurden had represented to Mr Latker that the vehicle had been supplied in 1997 and was of a 1996 specification.
4. In paragraph 11 of his witness statement dated 22nd June 1999 Mr Gurden said that Mr Latker had on 3rd October 1998 visited Ongar's premises and asked how much the vehicle would cost on finance, and Mr Gurden had prepared a quotation and provided Mr Latker with a copy. The quotation, he said, was for a "Thunderbird 1996 new on the road". Mr Latker was given a customer number. In his witness statement Mr Latker agreed that Mr Gurden had printed out a schedule of payments on hire purchase, but Mr Latker said that the document contained no information of any kind about the model, year or date of manufacture of the vehicle. Mr Latker, however, did not retain that document.
5. The case was allocated to the fast track. The quotation was supplied to the solicitors for Mr Latker before trial. The case came before Mr Recorder Foy QC on 1st December 1999. Mr Latker gave oral evidence, as did his wife. Mr Gurden and an expert, Mr Tagliaferri, gave evidence for Ongar. Mr Gurden was examined in chief and cross-examined about the quotation. In the course of the cross-examination counsel for Mr Latker, Mr Chapman, asked Mr Gurden if those in his office could produce documents relating to customer numbers either side of that given to Mr Latker. The Recorder allowed Mr Gurden to leave the witness box to telephone his office. When some documents had been faxed through, Mr Gurden's cross-examination was resumed. The documents with customer numbers closest to that given to Mr Latker were documents relating to a Mr Stephen Boakes and to a Mr Duncan Gardner.
6. The Recorder, when he gave judgment, dealt first with the question of misrepresentation. He said that if the quotation was a genuine document and it was given to Mr Latker at the relevant time, it was hard to see how that was consistent with Mr Gurden saying on the same occasion that it was a 1997 model as Mr Latker had alleged. The Recorder held that the quotation in the form disclosed by Ongar was not a fraudulent document and that, on the balance of probabilities, it was given to Mr Latker. The Recorder preferred the evidence of Mr Gurden and held on balance that there was no misrepresentation. He also held that there was no breach of contract. He then went on to deal with the question of loss, and he said this (at page 5 E of the transcript):

"It does not seem to me in this case that the Claimant has proved a quantified loss. There is no claim in the Particulars of Claim for general damages for inconvenience or loss of use, even if they were appropriate.

The way the claim is put in relation to quantum is that the Claimant is entitled to recover the difference between the cost of the motorcycle as it was with its defects and a 1997 model. Unfortunately, however, the Claimant has called no evidence to quantify that difference. Mr. Chapman, on behalf of the Claimant, submits that the Court can make its own assessment. It is certainly right that in some circumstances the Court can do that. It has to sometimes do it on sparse evidence.

However, in the course of argument, I asked him what figure he was asking for a judgment sum in. He had considerable difficulty in giving me a figure and, in the end, had to rely upon a statement put in in evidence by Mr. Lilley."

7. The Recorder then said that Mr Lilley's evidence did not assist. He referred to some evidence from an expert for Mr Latker, Mr Seeley. Mr Seeley had put in a witness statement, but Mr Latker had wanted Mr Seeley to give further evidence orally. This application was refused because the Recorder took the view that Mr Latker was wanting in effect to fill gaps in Mr Seeley's evidence.
8. The Recorder then went on to refer to the expert evidence of an expert for the defendants, Mr Tagliaferri, and he said that he accepted the evidence of Mr Tagliaferri, whom he described as an impressive witness. The Recorder then said this:

"I find that the Claimant has not proved any loss in this case. I have no doubt that the Claimant found the vehicle for some time to be unsatisfactory ... , but ultimately that has not cost him money. No material has been placed before the Court on which I could make a finding that the Claimant was entitled to a judgment in any particular sum.

I find, therefore, that the Claimant has not proved, on a balance of probabilities, misrepresentation. Nor has he proved any quantified loss."

9. Accordingly, the action was dismissed.
10. Mr Latker appeals with the permission of this court (Brooke LJ). He appeals on one ground only. He relies on new evidence which he asks this court to admit which, he submits, demonstrates that the Recorder was wrong in his conclusion on the authenticity of the quotation. The new evidence is from Mr Boakes and Mr Gardner. General and Ongar resist that application, and Ongar submits that if the new evidence is admitted, it should be permitted to put in further evidence from Mr Gurden and also from his secretary, Maureen Roney.
11. One of the points taken by Mr Case for General and Mr Head for Ongar is that in any event this appeal is bound to fail because there is no appeal from the Recorder's decision that no loss was established. I shall deal with this question first because if that is right, then it is unnecessary to consider the question of the admission of new evidence.
12. Mr Jarvis, who appears before us for Mr Latker, though he did not appear below, submits that the Recorder did not consider the question of inducement. He argues that if this court were to hold that, with the new evidence, the judge was wrong about misrepresentation, there should be a rehearing at which the question of inducement and also the question of loss should be considered afresh. He accepts that it is of the gist of an action in deceit as well as an action under the Misrepresentation Act 1967 that damage should be shown to have been suffered. He submits that the Recorder did not in fact consider whether there had been loss suffered by Mr Latker, and what the Recorder was considering was merely the question of whether Mr Latker had been able to prove a quantified loss. Mr Jarvis says that the loss may well be very small. He invited this court to say that it would be in the region of £50. But he submitted that the requirement of damage for an action to succeed in deceit and negligent misrepresentation would thereby be satisfied. He referred us to the decision of the House of Lords in Smith v Chadwick [1884] 9 AC 187, and in particular to the remarks made by Lord Blackburne at pages 195 and 196. Lord Blackburne said this:

"Whatever difficulties there may be as to defining what is fraud and deceit, I think no one will venture to dispute that the plaintiff cannot recover unless he proves damage. In an ordinary action of deceit the plaintiff alleges that false and fraudulent misrepresentations were made by the defendant to the plaintiff in order to induce him, the plaintiff, to act upon them. I think that if he did act upon these representations, he shews damage; if he did not, he shews none. And I think the plaintiff in such a case must not only allege but prove this damage."

13. That was said in the context of a case relating to fraudulent misrepresentation in the prospectus of a company. In reliance on a statement in that prospectus the appellant had been induced to part with £5,000 of his money, and the trial judge had held that he should recover £5,000 by way of damages. I do not regard Lord Blackburne as saying that, in order to prove damage in an action for deceit, it is sufficient to show that there had been reliance upon the misrepresentation. That would be, in my judgment, far too sweeping a statement. In certain cases, as in Smith v Chadwick, the facts of the case may be that, once there has been proof of reliance, it will be obvious that damage will have resulted. Mr Jarvis conceded that if what is purchased in reliance on a fraudulent misrepresentation is worth more than what the purchaser was induced to pay, no damage would have been suffered and an action in deceit would not lie.
14. In the present case it is apparent from the passage which I have cited from the Recorder's judgment that the question of loss was a matter which was gone into by the parties before the Recorder. It is clear that the Recorder pressed counsel then appearing for Mr Latker to say what was his loss. It is true that the Recorder did not expressly deal with the question of inducement, perhaps because it was obvious that if there had been a misrepresentation Mr Latker relied on it. But the Recorder certainly considered carefully whether loss resulted and that must have been on the footing that Mr Latker had been induced by the representations to buy the vehicle. The claim that had been made by Mr Latker was for monetary relief, and I have set out the method of quantification of the loss. The Recorder was not satisfied that Mr Latker had proved the quantified loss. He also noted that there was no claim for general damages for inconvenience or loss of use, or indeed for any other loss. Mr Chapman for Mr Latker had been in difficulty in putting forward any sum as being the amount of the loss Mr Latker had suffered. We were taken by Mr Jarvis to Mr Seeley's written statement which was in evidence, but it is clear from the Recorder's judgment that the Recorder preferred the evidence of Mr Tagliaferri, and I do not see that we are in any position to say that the Recorder was wrong on that point.
15. In truth, as the Recorder expressly found, Mr Latker had not proved any loss in this case. That being so, in my judgment this appeal has no prospect of success, even if it could be shown that it was otherwise appropriate to admit the new evidence and even if we could find that that new evidence was so convincing as would have required that the question of whether there had been a misrepresentation be reheard. In my judgment, on this point therefore, this appeal must founder.
16. I fully accept that fraud is a serious matter. We were told that the fraud alleged by Mr Latker has been looked at in a criminal context. Mr Gurden as well as Ongar were prosecuted, and the Magistrates' Court convicted both. However, on appeal to the Crown Court they were acquitted save on one charge; and that related to an invoice prepared by an employee of Ongar, Mr Hart, which had contained in it a reference to the vehicle sold as being one with a 1997 specification. We are told that a £500 fine was imposed in respect of that offence. Despite the seriousness of the allegations in these civil proceedings it would seem to me to be plain that it would not be right to allow any further points to be argued on this appeal when it has no prospect of succeeding.
17. For these reasons therefore, I for my part would dismiss this appeal.
18. LORD JUSTICE CLARKE: I agree. The decision of the House of Lords in Smith v Chadwick (1884) 9 App Cas 187 is not authority for the proposition that where a claimant is induced to enter into a contract by a fraudulent misrepresentation he is entitled to recover damages. The House of Lords was not considering that question. The claim was a claim for damages for deceit. It was not in issue that, if the plaintiff was induced to buy shares by the defendant's deceit, he was entitled to recover £5,000 by way of damages. The sum of £5,000 was paid under the contract to purchase the shares: see (1882) 20 Ch D 27 at 40 per Fry J at first instance, and (1884) 9 App Cas 187 at 197 per Lord Blackburn. There is nothing in the decision which suggests that, if the plaintiff had paid nothing until the contract and suffered no loss, he would have been entitled to recover damages if he established the inducement. In each such case, in order to recover damages, the claimant must, in my opinion, show on the balance of probabilities what loss he sustained. Here, as Peter Gibson LJ has indicated, the Recorder held that the claimant had failed to establish any such loss. I agree that we are not in a position to hold that that conclusion was wrong.
19. In all the circumstances, I agree that this appeal should be dismissed.
20. MR JUSTICE MAURICE KAY: For the reasons given by both of my Lords, I too would dismiss this appeal.
Order: Appeal dismissed. We will summarily assess the costs of the successful respondents in the amounts which have been claimed by General and Ongar and set against that the costs which were incurred by Mr Latker on Ongar's unsuccessful application for security for costs. (Order does not form part of approved Judgment)