Damages and the Misrepresentation Act

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*L.Q.R. 547 IN Royscot Trust Ltd. v. Rogerson [1991] 3 W.L.R. 57 the plaintiff finance company (“Royscot”) was induced into entering into a hire-purchase agreement with a customer (“Rogerson”) through the misrepresentation of a car dealer (“Maidenhead Honda”). The subject-matter of the transaction was a second-hand motor car which was sold by Maidenhead Honda to Royscot and then hired by Royscot to Rogerson on hire-purchase terms. It was Royscot's policy to enter into such hire-purchase agreements only if the customer paid at least 20 per cent. of the purchase price of the vehicle to the dealer as a deposit. In this case Rogerson's deposit of £1,200 was less than 20 per cent. of the purchase price of £7,600 but Maidenhead Honda nevertheless presented inaccurate figures to Royscot inducing them to believe that the precondition had been met. Rogerson took possession of the motor car but then wrongfully sold it to an innocent third party who took good title under the provisions of the Hire Purchase Act 1964 (as re-enacted by the Consumer Credit Act 1974). Rogerson subsequently stopped his hire-purchase payments and Royscot brought an action against him (for, inter alia, conversion of the car) and Maidenhead Honda (for misrepresentation under s.2(1) of the Misrepresentation Act 1967) entering judgment in default against both of them for damages to be assessed. As against Maidenhead Honda a county court judge awarded the difference between the sum advanced by Royscot for purchase of the car *L.Q.R. 548 (£6,400) and the sum Royscot would have advanced if Rogerson's deposit of £1,200 had in truth represented 20 per cent. of the purchase price of the car (£4,800). Damages, therefore, were assessed at £1,600 and it is against this award that Royscot appealed. Overturning this assessment the Court of Appeal (Balcombe and Ralph Gibson L.JJ.) held that Royscot were entitled

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