Date: Thu, 12 Jul 2007 01:45

From: David Cheifetz

Subject: Negligent misrepresentation - duty to speak

Neil,

I've not yet read the House of Lords case. In Canada, the SCC said as early as 1905 and more recently in 1987 (of cases that I can recall, off hand) that there can be estoppel by silence where there is a duty to speak.

The cases are Ewing v. Dominion Bank (1905), 35 S.C.R. 133 at p 153: "Mere silence per se on the part of one who should speak is not, I grant, sufficient as an admission or adoption of liability or as an estoppel to prevent him denying his signature. But such silence coupled with material loss or prejudice to the person who should have been informed and which prompt and reasonable information would have prevented will so operate. Such a person under such conditions comes within the rule that where a man has kept silent when he ought to have spoken he will not be permitted to speak when he ought to keep silent."

And Canadian Pacific Hotels Ltd. v. Bank of Montreal, [1987] 1 S.C.R. 711 at para 28, 40 D.L.R. (4th) 385: "Reference should now be made to the English and Canadian cases recognizing a duty to inform a bank promptly upon learning of forgery or material alteration to determine what conclusions are to be drawn from them concerning the issue in the appeal. There are several things to be noted about these cases. They stand for the principle that an estoppel by representation will result from silence where there is a duty to speak. They recognize that such a duty may arise where there is no contractual relationship. In such a case the duty has been based on usage or on a principle of fair dealing. The cases were all cases in which there was actual knowledge of the forgery or alteration. I do not find in them an implication that the duty will arise, as was held in Leather Manufacturers' Bank, where there is not actual knowledge, but the means, by the exercise of reasonable care, of learning of the forgery or alteration. The consideration of these cases which follows is with particular reference to the points I have noted."

David

________________________________
From: Neil Foster
Sent: July 11, 2007 7:21 PM
Subject: ODG: Negligent misrepresentation - duty to speak

The decision of the House of Lords in Hamilton and others (Appellants) v. Allied Domecq plc (Respondents) (Scotland) [2007] UKHL 33 turns in the end on a question of fact, but there are some interesting comments in the judgement of Lord Rodger at paras [19]-[23] on the question whether, in an action for negligent misrepresentation, there can be liability for a "failure to speak". His Lordship seems to endorse the remarks of Slade LJ in Banque Keyser [1990] 1 QB 665 that there might be such cases, but they would need to involve "voluntary assumption of responsibility in the relevant sense and reliance on that assumption". Here the defendant businessman who had allegedly failed to advise about the consequences of adopting one form of marketing over another, had not in any way "assumed responsibility" to advise the plaintiff, with whom he was in commercial negotiations.

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