Extension of the Law of Misrepresentation – by implicit misrepresentation

Cramaso LLP –v- Viscount Reidhaven’s Trustees [2014] UKSC9 Supreme Court

Facts

Viscount Reidhaven’s Trustees (VRT) owned a grouse moor and marketed the shooting rights.  Mr Erskine was interested, but the terms available required him to make a heavy investment in improving the moor.  When he made enquiries, VRT assured him that the estate would give a yield of 800 brace of grouse. In reliance on this Mr Erskine proceeded to form a limited liability partnership.  The LLP entered into the contract for the grouse moor.  In fact the moor was in poor condition and there were not many grouse.  On an action for misrepresentation:

Supreme Court Held

Although the misrepresentation had not been made explicitly to the LLP, nevertheless the LLP had been induced to enter into a contract by the continuation of that misrepresentation, and this amounted to an implicit misrepresentation as to the state of the moor.

Comment

This was a Scottish case, heard ultimately in the Supreme Court on appeal from the Court of Session.  The Scottish law on misrepresentation is to be found at section 10 of the Law Reform (Miscellaneous Provisions) Scotland, 1985 rather than the English Misrepresentation Act, 1967.  The provisions are, for practical purposes, the same.

This is an important case which could easily have gone the other way.  This appears to be another example of the Courts addressing the justice of the case rather than the strict words of the statute.

Certainly this has changed the law and widened the ambit of the misrepresentation remedy.

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