Professional Documents
Culture Documents
Tort Law
Tort Law
ROLL NO. 76
SUBMITTED ON: 02.09.2014
RAIPUR, CHHATTISGARH
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A Comment on Byrne v. Heller, 1964 AC 465
ACKNOWLEDGMENTS
I, Kevin James, would like to humbly present this project to Dr. Aneesh V. Pillai. I would first
of all like to express my most sincere gratitude to Dr. Aneesh V. Pillai for his encouragement
and guidance regarding several aspects of this project. I am thankful for being given the
opportunity of doing a project on A comment on Burne v. Heller, 1964 AC 465.
I am thankful to the library staff as well as the IT lab staff for all the conveniences
they have provided me with, which have played a major role in the completion of this paper.
I would like to thank God for keeping me in good health and senses to complete this
project.
Last but definitely not the least, I am thankful to my seniors for all their support, tips
and valuable advice whenever needed. I present this project with a humble heart.
- KEVIN JAMES
SEMESTER III, SECTION A, ROLL NUMBER 76
BA LLB (HONS.)
CONTENTS
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1. Introduction......5
2. Retrospect: How the Present Judicial Appointments Mechanism came to
be....8
3. Models of Judicial Appointment: An International Move to the JAC Model..10
4. Prospect: Recommendations for further improving the Prospective Judicial
Appointments Mechanism.11
a. Preamble and Object.11
b. Constitutional Entrenchment12
c. Procedure for discharge of JAC functions inadequate...14
d. Qualifications for Appointment: Ensuring Merit and Diversity in
Appointments..14
i. Merit based appointment...14
ii. Diversity Mandate..16
e. Clarifying Recommendation and Powers of the President.17
5. Conclusion...18
6. References...19
7.
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A Comment on Byrne v. Heller, 1964 AC 465
INTRODUCTION
Facts: The Plaintiffs were considering supplying advertising services to a potential client,
Easipower. Through their bank, they sought a credit reference from the defendants,
Easipowers
bank. The defendant replied with a specific disclaimer of responsibility. They said that
Easipower
was sound. The plaintiffs supplied the services on basis of that reliance. Easipower went into
What did they want? They wanted the House of Lords to hold that the defendant owed them a
duty of care to ensure that their statements were accurate and correct.
Did they win? Even though the House of Lords recognised that a duty of care could be owed
for
negligent misstatements, they did not impose a duty here because of the explicit disclaimer of
liability.
What did they say about the test for negligent misstatements? Each of the Lords had a
different opinion about why a duty of care existed in this case. Consequently, it is very
difficult to
discern one all encompassing principle that runs through all the judgments. Weir, when
In Hedley Byrne v Heller [1963] 2 All ER 575, the House of Lords held that
claimant relied on the defendants skill and judgment or his ability to make
careful enquiry; (b) the defendant knew, or ought reasonably to have known,
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that the claimant was relying on him; and (c) it was reasonable in the
v Stevenson as an iconic principle governing the whole of the law of negligence that it is
difficult to appreciate how long it took for that understanding to take hold. The decision
of the House of Lords was greeted with open hostility by the leading academic writers of
the day; the case was for long argued to be confined to its particular category of facts, the
liability of manufacturers of goods to persons physically injured by them; and it was not
until the decision of the House of Lords in Dorset Yacht v Home Office in 1970 that the
majority of the Court of Appeal had firmly held in Candler v Crane Christmas that
Donoghue v Stevenson had not affected the principle that a false statement made by one
person to another and acted on by the latter to his detriment was not actionable in the
That was the position when Hedley Byrne fell to be decided in 1964. Although the facts of
the case are notorious, some aspects of them need to be stressed, not least to show how
unpromising the case was as a vehicle for reconsideration of the then current received
wisdom. Hedley Byrne asked its banker, NP, to obtain a report on the financial standing
who was NPs client) that a report was required as to whether Easipower would be good
for a contract of 9,000, and said that the information was sought without responsibility
on Hellers part. Hellers replied saying that Easipower was respectably constituted, and it
was believed that it would not undertake any commitment that it was unable to fulfil. NP
passed that information to Hedley Byrne, saying that it also acted without responsibility.
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Some three months later Hedley Byrne asked NP to make further enquiries, this time in
respect of a proposed contract valued at 100,000. NP raised the enquiry with Hellers,
and received back a letter of 11 November 1958: For your private use and without
considered good for its ordinary business arrangements. Your figures are larger than we
are accustomed to see. NP passed the letter to Hedley Byrne, without comment as to its
distinctly cautious terms. Hedley Byrne relied on Hellers letter in entering into contracts
with Easipower, over which they lost some 15,500 when Easipower went into liquidation.
On the assumption (which the judge did not accept) that Hellers owed a duty of care
McNair J held that (1)Mr Heller was guilty of negligence in giving such a reference
without making plain-as he did not-that it was intended to be a very guarded reference,
and (2) that properly understood in its ordinary and natural meaning the reference was not
justified by the facts known to Mr Heller. That was a striking finding, which the
defendants wished to contest in the House of Lords, but were not heard on it because the
appeal was decided in their favour in any event. Hellers letter of 11 November 1958 was
written not to a layman but to a banker. A banker was entitled in such a letter to use the
private language of bankers, in which the phrase Your figures are larger than we are
accustomed to see sounds warning bells. And as Lord Reid pointed out, the fatal
condition, that the information was given by Hellers without responsibility on our part, had
been proposed by NP in the original telephone call that they made on behalf of Hedley
Byrne. It was not a good start to an attempt to change the law on responsibility for words
Nothing daunted, counsel for Hedley Byrne, Mr SBR Cooke QC, argued that as a result
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of Donoghue v Stevenson there was no logical reason why there should be a distinction
between liability in negligence for financial loss and liability in negligence for physical
injury, and that Candler v Crane Christmas had looked at that question too narrowly. It
was recognised that that argument had to be reserved for the House of Lords; but at the
level of the Court of Appeal it was further submitted that Candlers case was
distinguishable because there had been a special relationship between Hedley Byrne and
Hellers. That alleged relationship was not based on the relationship of enquirer and
enquiree between NPs undisclosed principal and Hellers. Rather, it was based on the fact
that Easipower was only able to survive because of support from Hellers, who therefore
had a vested interest in Easipower continuing in business. That special relationship was
argued to place Hellers in the position of a fiduciary, a status that had been acknowledged
exists between, as it was in that case, solicitor and client The Court of Appeal in Hedley
Byrne held that special, fiduciary, duties could only be based on such an existing
relationship between the speaker and the maker of the enquiry. A relationship between the
speaker and a third party, such as Easipower, did not count. The Court of Appeal not
having called on the respondent, and in a case that was bound to fail on its facts,
nonetheless gave permission to appeal to the House of Lords. According to the printed
case in the House of Lords settled by the appellants new counsel, Mr Gerald Gardiner
QC, they did so at least partly so that the significance of Donoghue v Stevenson could be
further examined.
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Stevenson regarded as a general rule, extending to all cases in which negligence was
alleged. Second, and alternatively, the special responsibilities of a person holding himself
out as exercising a special skill. Third, that a duty of care in the particular and highly
peculiar circumstances of this case. That argument ran into heavy weather from Mr John
Foster QC, also appearing in the case for the first time, who made effective observations
on the nature of the particular transaction and the disruption that a finding of liability
would cause to bankers general practices. In accordance with the common law tradition
noted earlier there was no expert evidence to support this attempt to define the nature and
legal acceptability of banking business, but no doubt Mr Foster was thought to be as good
an authority on that subject as any other . Passing on to the law, Mr Foster submitted that
the categories of a special duty to take care were closed, as demonstrated by Candler v
Crane Christmas, and that the only recourse for plaintiffs complaining about incorrect but
The fiduciary obligation originally alleged had been rejected and not sought to be revived;
and the relationship between Hedley Byrne and Hellers now relied on looked nothing like
the sort of fiduciary relationship that had been recognised in earlier cases.
Faced with that onslaught, Mr Gardiner somewhat reformulated his case, in terms which
influenced the subsequent statements of the law. He continued to argue for Donoghue v
Stevenson as extending generally to persons who if they thought of it would realise that if
they did not take care they would injure anothers person or property, which general
principle at least covered skilled persons obliged to use their skill and care in tasks that
they chose to undertake; but no doubt seeing difficulties in extracting that principle from
the law of tort also contended that on the facts there was in any event a fiduciary
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relationship between the parties. Having seen how it had been handled by the Court of
Appeal he abandoned the fiduciary obligation that his predecessor had alleged, with its
Mr Gardiners fiduciary obligation sprang entirely from the exchange of question and
answer between Hellers and NPs undisclosed principal. Hellers relationship with
Easipower was irrelevant to this argument. What placed Hellers in the same position as
the solicitor in relation to his client in Nocton v Ashburton was simply that they had been
asked a question in a professional matter by a third party, and had chosen to give a reply,
The House rejected the invitation to generalise Donoghue v Stevenson the mission to do
just that having been the original motive force of the case, and a substantial reason why
the case found itself before the House of Lords at all. Rather, the House reached a
purported to form part of the law of negligence in fact depended on taking into fresh
waters the law of fiduciary obligation that had been recognised in Nocton v Ashburton.
plaintiff and defendant, and sprang instead from the nature of the particular transaction on
which they were engaged. If a person with special skill takes it upon himself to give
advice which he knows is to be relied on so that he accepts responsibility for the answer
being given carefully thus making the relationship equivalent to one in contract, a duty to
That very broad statement, undoubtedly accepted by all five members of the House, was
nonetheless subject to some qualifications. Lord Morris of Borth-y-Gest thought that there
was much to be said for imposing a duty of honesty only; and Lord Hodson thought that it
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would impose an excessive burden on bankers if anything other than honesty were
required when answering enquiries. As Lord Morris made clear, their Lordships did not
think it necessary to reason out their doubts because Hedley Byrne was in any event going
to lose because of the without responsibility point. Similarly, Lord Devlin noted Mr
Fosters argument that, since NP had not revealed the name of their client nor stated that it
was the client who wanted the report, the only proper construction of the enquiry was that
it was for NP itself to use in its own advice to that client. Lord Devlin clearly saw the force
of that argument, and said that he would have considered it necessary to examine it were it
not for the general disclaimer of responsibility, which appeared to him to be in any event
conclusive. Those issues were therefore left in the air, as is likely to happen if attempts are
made to lay down very broad principles that are not necessary for the decision of the case
Hedley Byrne therefore had some remarkable features. In the course of argument it
departed a long way from its original agenda, which had sought to investigate the general
world of negligence as well as the particular world of professional statements. The judges
were strongly determined to craft some sort of liability for negligence by word to add to the
generalised liability for negligence by deed that had been recognised in Donoghue v
between A and B, based not on any continuing relationship or pre-existing duty between A
and B, but on As agreement to answer a question put to him by B. The judgments could
only reach that conclusion by formulating very broad statements of principle, that did not
address at all the particular circumstances of bankers, and went beyond any previous
authority. And as a matter of jurisprudence the case uncomfortably straddled two rather
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different chapters of the law, the law of negligence and the law of fiduciary obligation.
These considerations are important, for two separate reasons. First, a new class of liability
had been created for professionals and possibly for others without any clear indication of
the limits of that liability. Doubt continued for many years as to what the case had
decided. In 1981, eighteen years after the speeches in the House of Lords, the leading
text-book on the law of tort told its readers that many further decisions would be required
to elucidate their significance. And in 1990, twenty-six years after the decision, leading
judges emphasised the difficulties of definition that it had caused. Second, the Hedley
Byrne jurisprudence proved difficult to reconcile with developments in the general law of
That general law of negligence was freed in Dorset Yacht from the previously limited view
of the effect of Donoghue v Stevenson that had been adopted, or at least not rejected, in
Hedley Byrne. However, that proved to be only the start of a voyage of discovery that took
in Anns v Merton LBC Peabody v Sir Lindsay Parkinson and Sutherland Shire Council v
Heyman, before alighting on the threefold analysis of duty, proximity and fair, just and
reasonable made famous by Caparo v Dickman. In the development of the law before
difficult to explain as clearly a case in negligence rather than in fiduciary duty. However,
Caparo appeared at least at first sight to be a Hedley Byrne case. The claim was brought
against the auditors of the company by shareholders who had lost money when buying
further shares on the strength of an inaccurate picture of the position of the company that
would appear to lead to recovery, because the auditors had plainly assumed responsibility
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to the shareholders for the accuracy of the accounts; and there was nothing here, nor
could there be, about without responsibility on our part. That the auditors were liable was
indeed the view of a very strong majority of the Court of Appeal. But that width of that
liability caused alarm; so the House of Lords fell back on the limitation, not obviously
stressed in Hedley Byrne, that the scope of the responsibility was restricted to the particular
use of the information that had been foreseen. In the case of accounts presented to a
shareholder the auditors could not be taken to accept responsibility for loss caused to
That rationalisation thus depended more on the application of general principles of the
law of negligence rather than upon any detailed explication of the Hedley Byrne doctrine.
The two were eventually brought together, 40 years after the decision in Hedley Byrne, in
Henderson v Merrett Syndicates Ltd. Liability under Hedley Byrne depended on an actual
or notional assumption of responsibility for the accuracy or, perhaps more precisely, the
non-negligent nature of what was said. If that criterion was met, that was enough to bring
the case under the umbrella of Caparo And Lord Browne-Wilkinson explained that the
liability of a fiduciary for the negligent transaction of his duties is not a separate head of
liability but the paradigm of the general duty to act with care imposed by law on those who
take it upon themselves to act or advise others. Thus the law had come full circle. The
Hedley Byrne because of the reluctance to apply the general tort of negligence in that
case, had now emerged as an example of the application of that same tort of negligence.
It may be that the law of negligence can only progress by the formulation of very broad
general statements which are then qualified and adapted in the light of experience. The
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price that has to be paid is of a great deal of uncertainty, and litigation, before the law
settles down. In the case of Hedley Byrne developments over a period of 45 years have
largely controlled the original difficulties that the case presented. The same cannot be
The defendant bank gave a reference to the plaintiff's bank in respect of a customer,
Easipower Ltd. The plaintiff entered into business relations with Easipower Ltd and as result
of this relationship, the plaintiff became personally liable under a number of contractual
agreements, and they requested a credit reference from Easipower Ltds bank. The defendant
bank stated in their letter that the advice given was for the defendant's "private use and
without responsibility on the part of the bank or its officials". The letter confirmed that
Easipower Ltd was in a sound financial position. Sometime later, Easipower Ltd went into
liquidation and the plaintiff suffered financial loss as a result. The House of Lords held that
the defendant was absolved from responsibility for the negligent advice because of the
disclaimer contained within the letter. However, the decision was of particular importance as
the House of Lords recognized for the first time that there could be a recovery for pure
it should now be regarded as settled that if someone possessed of a special skill undertakes,
quite irrespective of contract, to apply that skill for the assistance of another person who
relies
upon that skill, a duty of care will arise... Furthermore, if, in a sphere in which a person is so
placed that others could reasonably rely upon his judgement or his skill or upon his ability to
make careful inquiry, a person takes it upon himself to give information or advice to, or
allows his information or advice to be passed onto, another person who, as he knows or
should know, will place reliance upon it, then a duty of care will arise.
Lord Reid stated that any reasonable man, knowing his skill and judgement were being relied
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1. he could keep silent and not give any advice or make any statement
In the first two scenarios, the maker of the statement would not be liable for any loss caused
to another as a result of reliance on the advice. However, where he took the latter course of
action and gave such advice without any qualification, he must, according to Lord Reid, "be
held to have accepted some responsibility for his answers are being given carefully, or to
have accepted a relationship with the enquirer which requires him to exercise such care as the
circumstances require."
Recovery under Hedley Byrne allows recovery for negligent misstatements where the
Prior to this decision recovery could only occur where either a fiduciary or contractual
The decision of the House of Lords in Hedley Byrne was endorsed by the Irish High Court in
A Mr Anderson held shares in the defendant company as a trustee for the plaintiff company.
Subject: Negligence
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Summary: In making a statement at the request of another, a duty of care would be owed by
the representor to the inquirer if it was plain that in seeking information or advice from the
representor the inquirer was reasonably trusting him to exercise such a degree of care as the
circumstances required and the representor knew or ought to have known that the inquirer
was doing so. If in those circumstances the representor gave information or advice which was
negligent he would be liable for any pecuniary or personal damage caused to the inquirer, but
where the representor had expressly excluded responsibility for reliance on his statement no
liability arose.
Abstract: The appellant company (H) appealed against the Court of Appeal's decision that it
could not recover damages arising from moneys lost in reliance on the credit reference given
by the respondent bank (X) in respect of one of X's customers (E). H was an advertising
agent who had placed substantial orders for advertising space for E, for which H was
personally liable. H had then enquired of X as to the creditworthiness of E, and in reliance on
the representations H refrained from cancelling the orders to relieve its personal liability. H
became doubtful about the financial position of E, and it sought a further reference "without
responsibility" from X. X's response to H, stated to be "for your private use and without
responsibility on the part of the bank", was that E was considered good for its ordinary
business engagements. After that communication, H lost money when E went into
liquidation. H sought to recover the money lost by a claim in negligence against X. By
authority binding upon them, both the judge at first instance and the Court of Appeal
considered themselves driven to the conclusion that no such action could lie in the absence of
a contract or fiduciary relationship, and that no special relationship involving a duty of care
could be inferred.
Appeal dismissed. (1) (Per Lord Reid) The principle in Donoghue v Stevenson [1932] A.C.
562 had no direct bearing on the instant case. Donoghue set out to reflect the standards of the
reasonable man but reasonable people often stated opinions without taking care, so the law
had to treat words and acts differently . It was clear that liability for negligent misstatement
could not be founded on the Donoghue principle alone; something more was required,
namely that the representor had expressly or impliedly undertaken responsibility for their
statement, Donoghue considered. The decision inDerry v Peek (1889) 14 App. Cas.
337 had not established any universal rule that, in the absence of any contract, an innocent
(not fraudulent) but negligent misrepresentation could not give rise to an action, Nocton v
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Lord Ashburton [1914] A.C. 932 applied, Derry considered. In the light of the decision
in Robinson v National Bank of Scotland Ltd 1916 S.C. (H.L.) 154 , concerning a duty of
care arising from other "special relationships",there was no logical stopping place short of all
those relationships where the party seeking the advice was reasonably trusting the other to
exercise such a degree of care as the circumstances required, and where the representor knew
or should reasonably have known that the inquirer would rely on
him, Robinson applied, Candler v Crane Christmas & Co [1951] 2 K.B. 164 overruled, Le
Lievre v Gould [1893] 1 Q.B. 491 not followed and Cann v Willson (1888) 39 Ch. D.
39 approved. The relevant question in the instant case was whether an undertaking to assume
a duty to take care could be inferred. Since H's inquiry had been requested "without
responsibility" from X, it was clear that no such duty could be inferred. (2) (Per Lord Morris)
It should be regarded as settled that if someone possessed of a special skill undertook,
irrespective of contract, to apply that skill for the assistance of another person who relied
upon such skill, a duty of care should arise. That the service was given by words made no
difference. Where a person was so placed that others could reasonably rely on his skill, and
that person allowed his advice to be passed on to another whom he knew or should have
known would rely on it, a duty of care also arose. (3) (Per Lord Hodson) A banker giving
references as to credit-worthiness was not under a legal obligation to do more than to give
honest answers to the best of his actual knowledge. However, in accordance with Lord
Morris, where a person gave advice in the knowledge that it would reasonably be relied upon,
a duty of care arose. (4) (Per Lord Devlin) The problem in issue was a by-product of the
doctrine of consideration in English law. The special relationship required to establish a duty
of care arose in relationships "equivalent to contract" where there was an assumption of
responsibility which, but for the absence of consideration, would constitute a contract. The
responsibility was not one implied by law, but one which was voluntarily accepted either
generally where a general relationship was created or specifically in relation to a particular
transaction. Where there was a general relationship (such as that of solicitor/client,
banker/customer, although there were others yet to be established) it was unnecessary to
prove any more than its existence, and the duty followed. Where a particular relationship was
created ad hoc (as in the instant case) the facts had to be examined to see if there was an
express or implied undertaking of responsibility. (5) (Per Lord Pearce) To import a duty of
care, the relationship between the parties had normally to concern a business or professional
transaction whose nature made clear the gravity of the inquiry.
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Judge: Lord Reid; Lord Morris; Lord Hodson; Lord Devlin; Lord Pearce
Counsel: For the appellants: Gerald Gardiner QC, DGA Lowe. For the respondents: John
Foster QC, JM Shaw, L Blom-Cooper, B Anns.
Solicitor: For the appellants: Evill & Coleman. For the respondents: Franks Charlesly & Co.
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REFERENCES
Arghya Sengupta Historys Lessons for Constitutional Reforms in Seminar (Vol.
642, February 2013).
Article 10, UN Basic Principles on the Independence of the Judiciary
Basic Principles on the Independence of Judiciary, endorsed by General Assembly
resolution 40/32 or 29 November, 1985 and 40/146 of 13 December, 1985.
Judicial Appointments for the 21st Century: Independence, Responsibility and
Accountability Response of the Judicial Appointments Commission to the Ministry
of Justice Consultation Paper The Governance of Britain: Judicial Appointments
(2008)
Arghya Sengupta Judicial Independence and the Appointment of Judges To The
Higher Judiciary in India: A Conceptual Enquiry in Indian Journal of Constitutional
Law (Vol. 5, 2011)
Judicial Selection: The Process of Choosing Judges (American Bar Association,
2008).
Summary of the Criteria Used by the Judicial Services Commission when
Considering Candidates for Judicial Appointments, Republic of South Africa.
Dr Cheryl Thomas Judicial Diversity in the United Kingdom and Other Jurisdiction
(2005); commissioned by Her Majestys Commissioners for Judicial Appointments
Madhav Khosla, Sudhir Krishnaswamy Inside Our Supreme Court Book Review of
George H. Gadbois Jr. Judges of the Supreme Court of India (OUP, 2011) in
Economic and Political Weekly (Vol.XLVI No. 34, Aug 2011)
South African Constitution.
Judicial Appointments for the 21st Century: Independence, Responsibility and
Accountability Response of the Judicial Appointments Commission to the Ministry
of Justice Consultation Paper The Governance of Britain: Judicial Appointments
(2008)
Constituent Assembly Debates, 24th May, 1949; Vol. VIII.
Abhinav Chandrachud Age, Seniority, Diversity Frontline (May 3rd, 2013)
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