Salt v Stratstone Specialist Ltd [2015]

Court: Court of Appeal (England and Wales)

Facts: A buyer purchased a sports car from a dealer who falsely represented the car as brand new. After discovering defects, the buyer sought to rescind the contract and claim damages, but only after a year of ownership. The case centered on whether the depreciation of the car and the time lapse would prevent rescission and affect the availability of damages under Section 2(2) of the Misrepresentation Act 1967 (MA 1967).

Issue: Whether the depreciation in the value of the car and the time elapsed since the purchase barred the remedy of rescission and whether damages could be awarded under Section 2(2) of the MA 1967 when rescission was available.

Held: Rescission was granted. The Court held that neither the depreciation of the car nor its intermittent enjoyment should prevent rescission. The burden was on the representor (the dealer) to prove evidence of depreciation or usage if they wished to claim compensation for these factors. The delay in seeking rescission was not unreasonable. The buyer discovered the misrepresentation only during pre-trial disclosure, justifying the timing of the rescission request. Rescission remains the primary remedy for misrepresentation and should be granted if possible. Damages under Section 2(2) of the MA 1967 can only be awarded if rescission is available. If rescission were barred, it would also bar the damages under Section 2(2).

Key Judicial Statements: Longmore LJ emphasized that rescission should not be hindered by the car's depreciation or the passage of time if it is feasible to return to the pre-contractual position. He clarified that Section 2(2) of the MA 1967 does not create a new remedy but allows the court to limit rescission.