Williams v Natural Life Health Food Ltd [1998] 1 BCLC 689

Williams v Natural Life Health Food Ltd [1998] 1 BCLC 689

Facts: The director of the company made misrepresentation to the claimant who was buying the company. The claimant felt that he was giving personal representations and statements and not one of the company. The claimant suffered loss as a result of the defendant’s negligent advice.

Issue: The claimant took personal claim against the director. The action proceeded against the director on the basis of an assumption by him of personal responsibility towards the claimant.

Held: The court applied Hedley Byrne principle and argued that the director was liable to pay damages. The defendant appealed. Appeal was allowed – it was argued that in order for a director or employee of a limited company to be personally liable for negligent misstatement under the Hedley Byrne principle, there had to be reasonable reliance by the plaintiff on an assumption of personal responsibility by the defendant so as to create a special relationship between plaintiff and defendant. On the evidence, there had been no personal dealings between the claimant and the defendant which could assume personal liability on the basis of which the D could be liable to remedy the loss.

Moreover, it was argued that company has separate personality and if there is an injury caused by an employee in the course of the company’s business, the company is liable.

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