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Misrepresentation Act (1967)

Last modified: Thu Feb 23 16:37:37 2006

s.2(1) of this Act is extremely important for claimant seeking compensation for Misrepresentation. It has the effect of shifting the burden of proof from the claimant to the defendant; that is, if the claimant alleges that the defendant made a negligent misrepresentation, the onus is on the defendant to show that he had good grounds for believing the representation to be true.

The Act also makes it possible for the court to award damages in misrepresentation cases, where Rescission would not be available.

Another effect of the Act, or at least of the way the Act has been interpreted by judges, is to allow the claimant to recover not just forseeable losses, but all direct losses. This seems to follow from the wording -- the Act says that a misrepresentation should be treated as deceitful, despite there being no dishonesty, unless the defendant can show that he was not negligent. It seem unlikely (to me at least) that the creators of the statute had in mind that damages for negligent misrepresentation should be as extensive as fraudulent misrepresentation, but there are a number of cases that suggest that judges don't see things the same way.

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