Wakilii

De Souza v George Brothers Limited (Civil Appeal No. 79 of 1956)

East African Court of Appeal · [1957] EACA 179 · 1957 Appeal Dismissed AI-generated summary ↓ Download Pin to watchlist Add to matter
Jurisdiction
Uganda
Case Type
Civil appeal from High Court judgment dismissing claim for damages
Decision
Appeal dismissed with costs to the respondent

Observed later treatment

No later-treatment classification is recorded for this judgment.

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Holding

Held that the respondent company owed no duty of care to the appellant in respect of advice given about a business purchase. The relationship between the parties was not one that gave rise to a duty to take care in making statements. The appellant failed to establish that the respondent assumed responsibility for the accuracy of information provided or that the respondent knew the appellant would rely on such information without independent verification. Appeal dismissed.

Outcome

Appeal dismissed with costs to the respondent

Facts

The appellant sought to purchase a business and approached the respondent company for advice. The respondent provided information about the business opportunity. The appellant proceeded with the purchase and subsequently claimed he suffered loss because the information provided was inaccurate or misleading. The appellant sued the respondent for damages alleging negligent misrepresentation. The trial court dismissed the claim. The appellant appealed, contending that the respondent owed him a duty of care when providing the advice and that the respondent breached that duty causing him loss.

Issues

  1. Whether the respondent company owed a duty of care to the appellant when providing advice about the purchase of a business.
  2. Whether the respondent's conduct constituted negligent misrepresentation giving rise to liability in damages.
  3. Whether the appellant established that he relied on the respondent's advice to his detriment.
  4. Whether the relationship between the parties was sufficient to ground a duty of care in respect of statements made.

Orders

  • Appeal dismissed.
  • Costs of the appeal to the respondent.

Rules and key headnotes

Negligent Misrepresentation — Duty of Care — Advice Given in Commercial Context
A duty of care in respect of statements or advice arises only where there is a special relationship between the parties such that the person making the statement knows or ought to know that the recipient will rely on the statement without independent verification and the maker of the statement has assumed responsibility for its accuracy.
Negligent Misrepresentation — Reliance — Burden of Proof
A plaintiff claiming damages for negligent misrepresentation must establish that he relied on the defendant's statement to his detriment and that such reliance was reasonable in the circumstances.
Pre-Contractual Statements — Duty to Verify
In commercial dealings, a party seeking to enter into a contract is generally expected to make his own inquiries and verify information provided by the other party, particularly where the parties are dealing at arm's length and no special relationship of trust or confidence exists.

Legislation cited (2)

Cases cited (5)

  • Mafo v Mafo (1930) 1 K.L.R. 41
  • Seton v Slade (1802) 7 Ves. 265
  • Lagunas Nitrate Co v Lagunas Syndicate [1899] 2 Ch. 392
  • Nocton v Lord Ashburton [1914] A.C. 932
  • Derry v Peek (1889) 14 App. Cas. 337

Full judgment

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The original judgment as reported. Read the original PDF before relying on any passage.

De Souza v George Brothers Limited (Civil Appeal No. 79 of 1956) [1957] EACA 179 (17 January 1957)
Source: this page presents Wakilii’s issue analysis and metadata for a publicly reported Ugandan judgment. Any AI-generated summary is marked as such. Judgment text is sourced from the Uganda Legal Information Institute (ulii.org). Wakilii is not affiliated with ULII.