Lloyd's Maritime and Commercial Law Quarterly


Timothy Liau*

RBC Properties v Defu Furnitures [2014] SGCA 62
The English Misrepresentation Act 1967 has had a chequered history.1 Section 2(1) was enacted to extend to victims of pre-contractual misrepresentations damages for non-fraudulent misrepresentations,2 before which the sole recourse for damages lay in the tort of deceit.3 Unfortunately, its clumsy wording and uncertain relationship with the common law rules have produced a confusing conceptual tangle.4
In the controversial decision of Royscot Trust v Rogerson,5 the English Court of Appeal held that the measure of damages under a s.2(1) claim is the same as that in a claim for fraudulent misrepresentation in the tort of deceit. Despite acknowledging fierce opinion to the contrary by leading contract academics, both Ralph Gibson and Balcombe LJJ held that the “plain words” of s.2(1) compelled this conclusion, even though it had the objectionable “effect of treating . . . an innocent person as if he were fraudulent”.6 Royscot’s reading of s.2(1) is now commonly referred to as the “fiction of fraud”, a phrase first coined by Treitel and Atiyah in their seminal article on the Act.7 Subsequent judicial reception to Royscot has been cold, but the English courts have stopped short of overruling it.8 Instead, the prevalent strategy has been to admit that Royscot still remains good law, while chipping away at it piecemeal by artfully navigating around the full force of its implications in each instant case.9 The resulting situation is highly complex.10 Atiyah has even described it as an “embarrassment for English law”.11
Considering how much attention has been focused on criticising the fiction of fraud and trying to confine its impact,12 contract lawyers will be keen to know that the

1. See eg PS Atiyah and GH Treitel, “Misrepresentation Act 1967” (1967) 30 MLR 369; also MG Bridge, “Innocent Misrepresentation in Contract” (2004) 57 CLP 277, 304.
2. Law Reform Committee, Tenth Report on Innocent Misrepresentation (Cmnd 1782) (1962) (“LRC, Tenth Report”), [17].
3. “[Derry v Peek (1889) 14 App Cas 337] was intended to be a reaffirmation of the old common law doctrine that actual fraud was essential to an action for deceit, and it finally settled the law that an innocent misrepresentation gives no right of action sounding in damages”: Heilbut, Symons v Buckleton [1913] AC 30 (HL), 49 (Lord Moulton).
4. S Smith, Atiyah’s Introduction to Contract Law, 6th edn (Clarendon, 2005), 263.
5. [1991] 2 QB 297.
6. Ibid, 306.
7. Atiyah & Treitel (1967) 30 MLR 369, 373.
9. See the cases in the preceding footnote.
10. Atiyah & Treitel (1967) 30 MLR 369, 369 : “The Act has altogether failed to simplify the law. It has left in force many of the distinctions which existed before and has superimposed its own structure upon them. The resulting state of the law is almost incredibly complex.”
11. Smith, Atiyah’s Introduction to Contract Law, 6th edn (2005), 263.
12. See eg I Brown and A Chandler, “Deceit, Damages and the Misrepresentation Act 1967, s.2(1)” [1992] LMCLQ 40; J Poole and J Devenney, “Reforming Damages for Misrepresentation: the case for coherent aims and principles” [2007] JBL 269; H McGregor, McGregor on Damages, 18th edn (Sweet & Maxwell, 2009) (“McGregor”), [47.053].



The rest of this document is only available to i-law.com online subscribers.

If you are already a subscriber, click Log In button.

Copyright © 2023 Maritime Insights & Intelligence Limited. Maritime Insights & Intelligence Limited is registered in England and Wales with company number 13831625 and address 5th Floor, 10 St Bride Street, London, EC4A 4AD, United Kingdom. Lloyd's List Intelligence is a trading name of Maritime Insights & Intelligence Limited.

Lloyd's is the registered trademark of the Society Incorporated by the Lloyd's Act 1871 by the name of Lloyd's.