Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd
Encyclopedia
Howard Marine and Dredging Co Ltd v A Ogden & Sons (Excavations) Ltd [1978] QB 574 is an English contract law
case, concerning misrepresentation
. It explains the test of "reasonable grounds for belief" under the Misrepresentation Act 1967
s 2(1), and raises the issue of the reasonableness test under s 3.
s in order to dump excavated clay at sea. Mr O’Loughlin, Howard Marine Ltd’s employee, told Mr Redpath, Ogden Ltd’s employee that their German built barges could carry 1600 tonnes (deadweight, rather than cubic capacity). This was based on the Lloyd’s Register for barges. Unfortunately and unusually the Lloyd's Register was incorrect. The true capacity was 1055 tonnes. Mr O’Loughlin was aware that the German shipping documents stated the correct figure of 1055 tonnes. But he preferred the Lloyd’s Register. The charterparties (ship hire documents) said Ogden Ltd’s acceptance of the barges showed they were in every way satisfied. When the barges proved to be insufficient for the job, Ogden Ltd refused to pay the full price. Howard Marine Ltd terminated the agreement and sued for the outstanding payments. Ogden Ltd counterclaimed for,
Howard Marine Ltd argued they had reasonable grounds to believe their false statement, because the Lloyd's Register was the ‘bible’.
Under MA 1967 s 2(1) Bridge LJ noted Howard Marine Ltd had to prove a reasonable ground to believe what he said about the barge’s capacity.
Bridge LJ said Mr O’Loughlin was always honest, but his eagerness to prefer the Register over the documents was not reasonable. They held liability had not been validly excluded, because in agreement with the judge he felt that it did not pass the reasonableness test under MA 1967 s 3. Shaw LJ agreed.
Lord Denning MR dissented saying that there were reasonable grounds to prefer the Lloyd’s Register. He also argued that the exclusion clause was valid, and was reasonable.
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
case, concerning misrepresentation
Misrepresentation in English law
Misrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...
. It explains the test of "reasonable grounds for belief" under the Misrepresentation Act 1967
Misrepresentation Act 1967
Misrepresentation Act 1967 is an Act of the Parliament of the United Kingdom, which regulates English contract law and unjust enrichment, so far as relevant for misrepresentations.-Section 1:-Section 2:...
s 2(1), and raises the issue of the reasonableness test under s 3.
Facts
Ogden Ltd wanted to hire some bargeBarge
A barge is a flat-bottomed boat, built mainly for river and canal transport of heavy goods. Some barges are not self-propelled and need to be towed by tugboats or pushed by towboats...
s in order to dump excavated clay at sea. Mr O’Loughlin, Howard Marine Ltd’s employee, told Mr Redpath, Ogden Ltd’s employee that their German built barges could carry 1600 tonnes (deadweight, rather than cubic capacity). This was based on the Lloyd’s Register for barges. Unfortunately and unusually the Lloyd's Register was incorrect. The true capacity was 1055 tonnes. Mr O’Loughlin was aware that the German shipping documents stated the correct figure of 1055 tonnes. But he preferred the Lloyd’s Register. The charterparties (ship hire documents) said Ogden Ltd’s acceptance of the barges showed they were in every way satisfied. When the barges proved to be insufficient for the job, Ogden Ltd refused to pay the full price. Howard Marine Ltd terminated the agreement and sued for the outstanding payments. Ogden Ltd counterclaimed for,
- breach of collateral warranty
- breach of duty under s 2(1) MA 1967
- negligent misrepresentation under Hedley Byrne
Howard Marine Ltd argued they had reasonable grounds to believe their false statement, because the Lloyd's Register was the ‘bible’.
Judgment
The Court of Appeal (Lord Denning MR, Bridge LJ and Shaw LJ) all held there was no breach of warranty, but decided by a majority that Howard Marine Ltd was liable for breach of duty under MA 1967 s 2(1). It was not necessary, therefore, to decide the Hedley Byrne point, but each judge said something different.Under MA 1967 s 2(1) Bridge LJ noted Howard Marine Ltd had to prove a reasonable ground to believe what he said about the barge’s capacity.
Bridge LJ said Mr O’Loughlin was always honest, but his eagerness to prefer the Register over the documents was not reasonable. They held liability had not been validly excluded, because in agreement with the judge he felt that it did not pass the reasonableness test under MA 1967 s 3. Shaw LJ agreed.
Lord Denning MR dissented saying that there were reasonable grounds to prefer the Lloyd’s Register. He also argued that the exclusion clause was valid, and was reasonable.
See also
- English contract lawEnglish contract lawEnglish contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
- Misrepresentation in English lawMisrepresentation in English lawMisrepresentation in English law is an area of English contract law, which allows a person to escape a contractual obligation or claim compensation for losses. If one person can show that she entered an agreement because of another person's false assurances, then the other person will be unable to...