Where a deceit was established leading to an award of damages, that award of damages was not capable of being reduced under the 1949 Act through a contribution to the loss occasioned by the claimant’s own behaviour, where that behaviour did not fall under the heads of contribution recognised by the Act.
The fourth defendants, Oakprime Limited (O), chartered to transport their cargo of bitumen. O had persuaded the shipowners, Pakistan National Shipping Corporation, to authorise signature of bills of lading which O knew to be false. O presented the bills of lading to Standard Chartered Bank in order to obtain payment under letters of credit. A question on the appeal was whether the third defendant, Mehra, a director of O, was personally liable for the false representations made to the Bank. The judge had held that he was, on the ground that he had authorised, directed and procured the acts complained of with full knowledge that those acts were tortious.
Held: The appeal succeeded, because although M was the person who was responsible for making the misrepresentations, he did not commit the deceit himself; the representations were made by O and the Bank relied upon them as representations by Oakprime and not as representations made by M. The Court went on to consider whether it had been open to the judge to hold that M was liable as a joint tortfeasor for authorising and procuring the misrepresentations. Lord Justice Aldous saw three circumstances in which a director or employee, acting as such, would be liable for tortious acts committed during the course of his employment. First, where the director or employee commits the tort himself. Lord Justice Aldous gave as an example the lorry driver who is involved in an accident in the course of his employment. Second, where the director or employee, when carrying out his duties for the company, assumes a personal responsibility. Lord Justice Aldous gives Williams v Natural Life Health Foods Ltd as an example of a case where alleged liability on that ground failed on the facts. Third, where the director does not carry out the tortious act himself, nor does he assume liability for it, but he procures and induces another, the company to, commit the tort. Lord Justice Aldous: ‘A person who procures and induces another to commit a tort becomes a joint tortfeasor (see Unilever Plc v Gillette (UK) Limited [1989] RPC 583 and Molnlycke AB v Procter and Gamble Ltd [1992] RPC 583). There is no reason why a director of a company should be in any different position to a third party and therefore it is possible that a director can be capable of becoming a joint tortfeasor by procuring and inducing the company, for which he works, to carry out a tortious act. However there are good reasons to conclude that the carrying out of duties of a director would never be sufficient to make a director liable. That was the view of the Court of Appeal in C Evans v Spritebrand Ltd [1985] 1 WLR 317.’ and ‘ . . public policy requires that the Courts will not lend their aid to a man who founds his action upon an immoral or illegal act. The action will not be founded upon an immoral or illegal act, if it can be pleaded and proved without reliance upon such an act. . . The fact that damage may not have resulted but for a decision to deceive is irrelevant to the cause of action when pleaded and proved.’
Aldous LJ,Ward LJ
Times 03-Oct-2000, [2000] EWCA Civ 230, [2000] 1 Lloyds Rep 218
Bailii
Law Reform (Contributory Negligence) Act 1945 1(1)
England and Wales
Citing:
Cited – Edgington v Fitzmaurice CA 7-Mar-1885
False Prospectus – Issuers liable in Deceit
The directors of a company issued a prospectus, falsely stating that the proceeds were to be used to complete alterations to the buildings of the company, to purchase horses and vans and to develop the trade of the company. In fact it was to pay off . .
Cited by:
Cited – Sweetman v Nathan and others CA 25-Jul-2003
The claimant had been engaged with his solicitor in a fraudulent land transaction. He now sought to sue the solicitor for negligence. The solicitor replied that the claimant was unable to rely upon his own unlawful act to make a claim.
Held: . .
Cited – MCA Records Inc and Another v Charly Records Ltd and others (No 5) CA 5-Oct-2001
The court discussed the personal liability of a director for torts committed by his company: ‘i) a director will not be treated as liable with the company as a joint tortfeasor if he does no more than carry out his constitutional role in the . .
Lists of cited by and citing cases may be incomplete.
Updated: 16 August 2021; Ref: scu.147263
