Misrepresentation – terms of speed and consumption warranty not in themselves a representation by the owners – on the facts, introductory letter held to be a misrepresentation but element of inducement absent and, in any event, contract affirmed by charterers
The facts
Shelltime 4 charterparty form.
A misleading data sheet had been compiled by an inexperienced employee which served as an introduction to prospective time charterers of 4 VLCC’s. Four separate contracts.
Speed and consumption guarantees were given on the basis of the incorrect data.
Claims settled in respect of 3 vessels but the contract iro the 4th vessel, the “C Challenger” was the subject of this case.
Despite refusing to pay hire and complaining of the over-consumption of fuel, the time charterers fixed the vessel on a week long voyage to Malaysia. Thereafter they purported to cancel.
Owners cancelled in turn for repudiation.
Proceedings
After a 10 day trial, Foxton J held an introductory letter containing the incorrect data was a false representation. The representation was negligent rather than fraudulent. Also it did not induce the contract. Further, the Malaysia fixture amounted to affirmation of the charterparty.
For good measure, he held that even if there had been inducement and no affirmation, he would have exercised his discretion to hold the contract subsisting under s2(2) of the Misrepresentation Act of 1967.
Males LJ, Phillips and Carr LJJ concurring upheld the judge but did not endorse his obiter dictum regarding s2(2), saying that it was doubtful whether the section was intended to have application after the contract had already ended.
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