• In the case of Heilbut Symons v Buckleton 1913 ac 30, it was held that no fraudulent misrepresentation had occurred as the representation made was not reckless nor did the company have intention to create a realtionship upon making the statement.

Facts of the Case

  • The claimant asked the local manager of a firm of rubber merchants whether his firm were bringing out a rubber company. He replied that they were.
  • The claimant then asked if the company was all right.
  • The manager replied that his firm were bringing it out, to which the claimant re-joined that that was good enough for him.
  • The manager after further questions, told the claimant that he could have 5000 shares at a certain premium.
  • The claimant agreed.
  • The shares fell in value and the claimant brough an action against the firm for fraudulent misrepresentation and for a breach of warranty (The alleged warranty that the company as a rubber company).
  • The jury found that there was no misrepresentation but found that the company could not be described as a rubber company and that the manager had given a warranty as alleged.

Issues in Heilbut Symons v Buckleton 1913 ac 30

  • Whether the defendants remarks as to the new rubber company could be considered a representation or a binding contractual promise.

Held by House of Lords

  • Both grounds rejected

Lord Moulton

  • At first instance, it was held that there had been an innocent misrepresentation but on appeal it was determined no fraudulent misrepresentation had occurred as the defending party were not reckless as to the trust of their statement.
  • “It is, my Lords, of the greatest importance, in my opinion that this House should maintain in its full integrity the principle that a person is not liable in damages for an innocent mis- representation, no matter in what way or under what form the attack is made. In the present case the statement was made in answer to an inquiry for information. There is nothing which can by any possibility be taken as evidence of an intention on the part of either or both of the parties that there should be a contractual liability in respect of the accuracy of the statement. It is a representation as to a specific thing and nothing more. The judge, therefore, ought not to have left the question of warranty to the jury, and if, as a matter of prudence, he did so in order to obtain their opinion in case of appeal, he ought then to have entered judgment for the defendants notwithstanding the verdict.” P.51