Donald Ogilvie

was the director

of a company
called
Trevaunance
Hydraulic Tin
Mines Ltd, which
mined tin in
Cornwall. He
needed more
capital, so he put
an advertisement
in The Times on
July 8, 1946

Mr Candler
responded, saying
he was interested
in investing
2000.The draft of
companys
accounts and
balance sheet
accounts were
shown to Mr
Candler in the
presence of Crane,
Christmas & Cos
clerk

Mr Candler relied on
their accuracy and
subscribed for 2,000
worth of shares in the
company. But the
company was actually
in a very bad state.
Ogilvie used the
investment on himself
and then went
bankrupt. Mr Candler
lost all the money he
invested. He brought
an action against the
accountants, Crane,
Christmas & Co. for
negligently
misrepresenting the
state of the company.
As there was no
contractual
relationship between
the parties, the action
was brought in tort law
for pure economic
loss.

The only
defences raised
by the
accountants at
the hearing of
the appeal
were: (1) that
Fraser was not
acting in the
course of his
employment;
and(2) that, even
if he were, they
owed no duty of
care to the
plaintif

The majority of the

Court of Appeal
(Cohen LJ and
Asquith LJ) relied
on the case of
Derry v Peek to
refuse a remedy to
the plaintif,
holding that loss
resulting from
negligent
misstatement was
not actionable in
the absence of any
contractual or
fiduciary
relationship
between the
parties.