Doyle v Olby [1969]

Court: Court of Appeal

Facts: Herbert Doyle purchased a business from Olby (Ironmongers) Ltd for £9,500, based on the representation that the business was 'all over the counter.' In reality, half of the business came from a traveling sales representative, which significantly differed from what Doyle was led to believe. Following the discovery of the misrepresentation, Doyle sued for deceit and claimed damages. After operating the business for three years, Doyle sold it for £3,700 and incurred additional debts in running the business. Initially, Doyle was awarded £1,500 in damages, but he appealed the decision.

Issue: What is the appropriate measure of damages that Doyle is entitled to under the tort of deceit?

Held: The Court of Appeal held that Doyle was entitled to damages not only for the difference between the purchase and sale price but also for the additional liabilities incurred while running the business.

Key Judicial Statement - Lord Denning MR: In fraud cases, damages should compensate the plaintiff for all losses directly resulting from the fraudulent inducement, regardless of foreseeability. The damages aim to place the plaintiff in the position they would have been had the fraud not occurred.

💡 Leveluplaw: The case underscores that in fraudulent misrepresentation claims, damages are comprehensive and include all losses directly attributable to the deceit. Unlike breach of contract cases, where damages are limited to foreseeable losses, fraud allows for recovery of all losses resulting from the fraudulent act.