Williams v Natural Life Health Foods Ltd
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is an important
English tort law English tort law concerns the compensation for harm to people's rights to health and safety, a clean environment, property, their economic interests, or their reputations. A "tort" is a wrong in civil, rather than criminal law, that usually requi ...
, company law and
contract law A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
case. It held that for there to be an effective
assumption of responsibility Assumption, in Christianity, refers to the Assumption of Mary, a belief in the taking up of the Virgin Mary into heaven. Assumption may also refer to: Places * Assumption, Alberta, Canada * Assumption, Illinois, United States ** Assumption Tow ...
, there must be some direct or indirect conveyance that a director had done so, and that a claimant had relied on the information. Otherwise only a company itself, as a separate legal person, would be liable for negligent information.


Facts

Mr Williams and his partner approached Natural Life Health Foods Ltd with a proposal. They wanted to get a
franchise Franchise may refer to: Business and law * Franchising, a business method that involves licensing of trademarks and methods of doing business to franchisees * Franchise, a privilege to operate a type of business such as a cable television p ...
for a health food shop in
Rugby Rugby may refer to: Sport * Rugby football in many forms: ** Rugby league: 13 players per side *** Masters Rugby League *** Mod league *** Rugby league nines *** Rugby league sevens *** Touch (sport) *** Wheelchair rugby league ** Rugby union: 1 ...
(i.e. they wanted to use the Natural Life brand to run a new store and pay Natural Life Ltd a fixed fee). Mr Williams was given a brochure with financial projections. They entered the scheme. They failed, and lost money. So Mr Williams sued the company, alleging that the advice they got was negligent. However, before the suit could be completed, Natural Life Health Foods Ltd went into
liquidation Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
. So Mr Williams sought to hold the company's managing director and main shareholder personally liable. This was Mr Mistlin, who in the brochure had been held out as having a lot of expertise. Mr Mistlin had made the brochure projections, but had not been in any of the negotiations with Mr Williams. The High Court allowed Mr Williams claim, and so did the Court of Appeal by a majority. The company and Mr Mistlin appealed to the House of Lords.


Judgment

The House of Lords held unanimously that Mr Williams' claim would fail. They emphasised that there had been no separate
assumption of responsibility Assumption, in Christianity, refers to the Assumption of Mary, a belief in the taking up of the Virgin Mary into heaven. Assumption may also refer to: Places * Assumption, Alberta, Canada * Assumption, Illinois, United States ** Assumption Tow ...
directly to Mr Williams, and no requisite reliance.
Lord Steyn Johan van Zyl Steyn, Baron Steyn, PC (15 August 1932 – 28 November 2017) was a South African-British judge, until September 2005 a Law Lord. He sat in the House of Lords as a crossbencher. Early life and education Steyn was born in Stellen ...
's judgment was as follows.


See also

*''
Lister v Romford Ice & Cold Storage Co Ltd is an important English tort law, contract law and labour law, which concerns vicarious liability and an ostensible duty of an employee to compensate the employer for torts he commits in the course of employment. Facts Martin Lister and his fa ...
'' 957AC 555 * Professional negligence


Notes

{{reflist, 2 United Kingdom company case law English tort case law English privity case law English enforceability case law House of Lords cases 1998 in United Kingdom case law