A assigned his rights under a shipbuilding contract to B on certain representations as to the stage of construction reached by the vessel which were in fact false. B thereafter subassigned his rights to C, making practically the same representations to C as had been made to him by A. On C discovering that the representations were false, and intimating that he repudiated the contract, B was advised that he had no defence, and it was arranged that judgment should be allowed to go against him in the English Courts. B then brought an action against A for reduction of his contract with A and for damages, but at the time of raising his action judgment had not been pronounced by the Court in England annulling the sub-assignation, though such judgment was obtained before the record was closed. In the action by B against A objection was taken that B had no title to sue in respect that at the date of raising the action he had not been reinvested in his right to the contract, and therefore was not in a position to make restitutio in integrum. Held ( aff. the judgment of the First Division) that B had a good title to sue.
The sub-assignees of a shipbuilding contract, after discovering the falsity of the representations on which they had bought, requested the shipbuilders to make a slight alteration in the design of the ship. Thereafter in an action at their instance the sub-assignation was annulled. The assignees having thereafter sued the original cedents for rescission of their contract with them on the ground of misrepresentation and for damages, held ( aff. the judgment of the First Division) that the act of the subassignees in agreeing to the suggested alteration on the design of the ship did not bar the assignees from insisting in their action, and that the unimportant character of the alteration did not make restitutio in integrum inequitable.
Circumstances in which held ( aff. the judgment of the First Division) that in an action for the rescission of a shipbuilding contract on the ground of misrepresentation, a fall in the value of the subject of the contract owing to a slump in freights did not render restitutio in integrum inequitable, and appeal dismissed.
Earl of Birkenhead, Viscount Finlay, Lord Dunedin, Lord Atkinson, and Lord Shaw
[1923] UKHL 625, 60 SLR 625
Bailii
England and Wales
Contract
Updated: 22 January 2022; Ref: scu.633267
