Royscot Trust Ltd v Rogerson [1991]

Court: Court of Appeal (England and Wales)

Facts: Royscot Trust Ltd financed the purchase of a used car by Rogerson from Maidenhead Honda Centre Ltd. The dealer misrepresented the deposit amount and total cost on the application forms submitted to Royscot. Based on these misrepresentations, Royscot approved the loan. When Rogerson defaulted and sold the car, Royscot discovered the fraud and sued the dealer for damages.

Issue: What is the proper measure of damages for negligent misrepresentation under Section 2(1) of the Misrepresentation Act 1967, and does the wrongful sale of the car affect the claim?

Held: The Court of Appeal held that damages for negligent misrepresentation under Section 2(1) should be assessed similarly to damages for fraudulent misrepresentation. This includes all consequential losses resulting from the misrepresentation. The wrongful sale of the car did not break the chain of causation, and thus, Royscot could recover damages for the full extent of its loss.

Key Judicial Statements - Balcombe LJ: The measure of damages for negligent misrepresentation under Section 2(1) of the Misrepresentation Act 1967 aligns with that of the tort of deceit. Therefore, damages do not need to be foreseeable to be recoverable; they need only flow directly from the misrepresentation.

💡 Leveluplaw: This case underscores that under Section 2(1) of the Misrepresentation Act 1967, damages for negligent misrepresentation are calculated broadly, encompassing all losses directly resulting from the fraud, similar to fraudulent misrepresentation. The wrongful act of selling the car does not affect the recoverability of damages as long as it is a direct consequence of the misrepresentation.