“[10] In March 1996 Mr. Ellis falsified ERF's VAT return to show that the company was in a repayment position, that is, that it was entitled to claim repayment of VAT from H.M. Customs and Excise. The evidence suggests that at the time that may have been an isolated event, but by his own admission from the middle of 1997 onwards he falsified the VAT returns month by month, thereby enabling ERF to receive regular repayments of tax to which it was not entitled. He said that he did so in order to relieve the group's financial problems by obtaining regular injections of cash from Customs & Excise and I am satisfied that that was so. . . . [11] Following its take-over by Western Star ERF's financial year was changed to expire on 30th June instead of 31st March. Accordingly, a year-end balance was struck as at that date which was in turn adopted as the opening balance for the following year. Shortly afterwards the management of Western Star decided to introduce a new accounting and materials management system produced by BaaN Information Systems B.V. ("BaaN") throughout the group. . . . The introduction of the . . . BaaN system proved to be disastrous for ERF. . . It produced endless headaches for the accounts staff who for many months were unable to obtain a trial balance from the system. Difficulties in operating the BaaN system meant, among other things, that it was not possible, as it had been in the past, to produce monthly management accounts based on recorded figures for the benefit of ERF's own managers and Western Star. To overcome the difficulty Mr. Ellis produced monthly profit and loss accounts which, instead of containing figures drawn directly from the financial records, contained estimated figures based on his assessment of the group's performance derived from conversations with the Sales, Costs, Payroll and other relevant departments. In the case of the balance sheet he obtained basic information on items such as fixed assets, stock, and debtors, but used trade creditors as a balancing figure. Mr. Ellis failed to inform Western Star or indeed the management of ERF that the figures he was reporting were estimates and had not been drawn directly from the records. . . . [13] Following the end of the financial year at30th June 1998 Mr. Ellis and his staff began the preparation of the statutory accounts. By that time it was possible to transfer figures from the BaaN system to a spreadsheet which could be used to produce a profit and loss account and balance sheet. However, when he came to produce the balance sheet Mr. Ellis found that there was a discrepancy of about£18 million between the figures derived from the BaaN system and the figures he had reported in the monthly management accounts during the course of the year. In order to bring the general ledger into line with the figures he had previously reported, Mr. Ellis made a number of false journal entries in the purchase ledger control account, but these in turn gave rise to a discrepancy of about£18 million between the purchase ledger itself and the purchase ledger control account. In order to reconcile the two for the benefit of the auditors Mr. Ellis produced a reconciliation showing that various amounts totalling£18 million had been paid to suppliers before the end of the year but had not yet been entered into the purchase ledger. The payments to which he referred had indeed been made to suppliers, but in July 1998, the month following the year end. The reconciliation was therefore invalid and indeed false inasmuch as none of the payments was properly referable to the financial year ending30th June 1998 , as he was well aware. . . .”
“ . . . Unfortunately, E&Y (UK) failed to verify the reconciliation by reference to the underlying documents and therefore failed to detect that it was invalid.”
“[83] Having regard to the nature and extent of his involvement in the discussions with MN . . . Mr Ellis did make false and dishonest representations to MN before, during and after the due diligence exercise that the accounts of ERF on which those discussions were based had been honestly drawn and that as far as he knew they gave a true and fair view of ERF’s financial position at the various times to which they related.”
“12.1 Indemnification in Favour of MAN Subject to Section 12.3, Section 12.4 and Section 12.5, WS Holdings shall indemnify and hold each of MAN AG, its Affiliates, the ERF Companies and the Other ERF Subsidiaries (collectively, "MAN Indemnified Persons") harmless of and from any Damages suffered by, imposed or asserted against any of the MAN Indemnified Persons as a result of, in respect of, connected with, or arising out of, under or pursuant to: (a) any failure of WS Holdings . . . to perform or fulfil any of their respective covenants under this agreement; (b) any breach or inaccuracy of any representation or warranty given by WS Holdings . . . contained in this Agreement; 12.3 Time Limitations . . . (2) The representations and warranties of WS Holdings . . . contained in this Agreement . . . shall survive the Closing and . . . shall continue for a period of 12 months after the Closing Date, save for the representations and warranties relating to . . . taxation in Section 4.1(oo) (tax) [which] shall continue for a period of six years after Closing and any claim in respect thereof shall be made in writing during such time period. . . . (5) For the avoidance of doubt the time limits referred to in this Section 12.3 shall not apply to any claim (whether made by way of representation, warranty or indemnity) in respect of fraud or fraudulent misrepresentation. . . . 12.7 Exclusion of Other Remedies No Party shall have the right to bring any proceedings against any other Party for a breach of any representation, warranty, covenant or agreement contained in this Agreement, except for a proceeding brought in accordance with the provisions of this Article. This provision is not intended to preclude any proceeding by any Party against any other Party based on fraud or on a cause of action or right, including any statutory right, other than a cause of action in contract or tort for breach of a representation, warranty, covenant or agreement contained in this Agreement.”
“[130] For those reasons I am satisfied that MN was induced to enter the Share Purchase Agreement by fraudulent statements made by Mr Ellis about ERF’s accounts and financial statements and that as a result it is entitled to recover from Freightliner damages for deceit at common law.”
“[143] . . . the question as to the circumstances in which knowledge held by one person can properly be attributed to another, or in this case to a company, [is] a question which is governed by principles which are quite distinct from those which govern the vicarious liability of a principal for torts committed by his employee or agent.”
“[210] For the reasons given earlier I have reached the conclusion that although some of the representations made by Western Star in the Share Purchase Agreement were false, they were not made fraudulently and that therefore, apart from a claim under section 4.1(oo) [which contains tax warranties], it is now too late for MN to pursue a claim for an indemnity under Article 12. However, its right to pursue a claim in deceit in respect of statements made outside the Share Purchase Agreement is unaffected by the terms of the agreement. [211] Section 12.1 is limited in its application to breach of warranty and innocent or negligent misrepresentation; it has no application in the case of fraudulent misrepresentation. MN is entitled to pursue a claim for misrepresentation based on section 4.1(oo), but since the misrepresentation was not made fraudulently, it can only obtain an indemnity in accordance with the terms of section 12.1 which is limited to losses caused by the inaccuracy of the representation. ”
“[405] . . . The one thing that was not foreseeable at the time when the audit statement was signed and the accounts of ERF delivered to Western Star was that the nature of [Mr Ellis’] participation in the negotiations coupled, perhaps, with the inclusion in the Share Purchase Agreement of section 1.6, would cause Western Star to incur a liability to MN for fraudulent misrepresentation. I am unable to accept that a loss of that kind fell within the scope of any duty of care that E&Y (UK) could have owed to Western Star.”
“[327] . . . The loss is not one which arises out of the mismanagement of ERF but one which was caused by dishonest statements made by Mr. Ellis on behalf of Western Star in the course of negotiations for the sale of the company. It may be that if E&Y (UK) had carried out its audits of ERF's 1998 and 1999 statutory accounts with proper skill and care his actions would have come to the attention of Western Star, but it does not follow that the loss suffered by Western Star in this case was within the scope of the general audit duty. In my view it was not.”
“[329] . . . The auditors' duty is to take care to prevent the company suffering loss through frauds committed against it. The fact that the exercise of proper care would also have prevented harm of another kind being caused to an individual shareholder (or even all the shareholders in their individual capacities) does not mean that such loss falls within the scope of the auditors’ duty of care or that they can be held liable in respect of it.” (2) The judge’s conclusion that Freightliner could not rely on the general audit duty owed by E&Y (UK) to Western Star to recover loss in the present proceedings led him to the further conclusion (at paragraph [331]) that, for Freightliner to succeed, it had to establish what its counsel had described as a “special audit duty”: that is to say, “a duty at common law to take reasonable care when carrying out their audit to protect Western Star from the kind of harm that it suffered in this case”
“[332] . . . the courts have recognised that a duty of care to prevent economic loss may arise when one person provides information or advice to another in circumstances where the relationship between them is sufficiently close, the purpose for which the information or advice is given is sufficiently clear and the risk of harm to the recipient if the information turns out to be wrong is sufficiently obvious for it to be fair and just to impose such a duty on the person giving the information or advice.”
“[332] . . . However, although the general principle is now well established, its application in any given case is by no means free from difficulty, partly because the courts have remained very conscious of the dangers of imposing on professional advisers duties of care to persons other than their own clients.”
“[339] . . . The auditors will only be held to have incurred such a duty if it can be shown that they knew and intended that their statement as to the company's accounts would be communicated to and relied on by a particular person or class of persons for a particular purpose in connection with a particular transaction.”
“[342] The transaction which gave rise to the loss in the present case was the sale of ERF by Western Star to MN. It is that transaction, therefore, to which attention must be directed when considering whether E&Y (UK) assumed a responsibility to Western Star or anyone else for the correctness of its audit statements. The loss suffered by Freightliner in this case takes the form of liability in damages for deceit arising from the statements made by Mr. Ellis in the course of the negotiations with MN. In order to succeed in its claim Freightliner must show, therefore, that E&Y (UK) owed Western Star a duty to take reasonable care to protect it from liabilities of that kind. . . .”
“[343] Given the nature of relationships between Western Star and ERF and between E&Y (UK) and E&Y Canada, E&Y (UK) must have realised that both the 1998 and 1999 audit reports would be passed to Western Star who could be expected to rely on them both for the purpose of producing consolidated accounts for the Western Star group as a whole and for the purposes of making decisions about the future conduct of ERF's business.”
“[343] . . . at the time it produced its 1998 audit report E&Y (UK) can be taken to have known that Western Star would rely on it for any other purposes. At the time the audit certificate was given in May 1999 . . . there was no indication that Western Star was actively seeking . . . [a] purchaser for the ERF group. . . . The fact that E&Y (UK) may have recognised that Western Star might decide to dispose of ERF at some uncertain date in the future did not give rise to a relationship between them that would normally be regarded as sufficiently close to support a duty of care. [344] In the middle of November 1999, however, E&Y (UK) did undoubtedly become aware that Western Star intended to provide MN with a copy of the 1998 accounts when they were asked to make copies of their working papers for that year's audit available for review by Deloitte & Touche. They agreed to do so . . . However, that was not sufficient in my view to establish a duty of care in favour of Western Star. E&Y (UK) were not asked to, and did not, give any confirmation to Western Star at that time that the accounts were accurate and could safely be relied on for any particular purpose in connection with the sale of ERF to MN and in those circumstances it is difficult to see how they can be treated as having assumed any responsibility to Western Star for their accuracy.” (6) In this context there was a distinction to be drawn between the 1998 accounts and the 1999 accounts. As the judge pointed out: “[345] The position in relation to the 1999 accounts is rather different. Not only was E&Y (UK) aware by September 1999 of the existence of the current negotiations with MN, it was made clear before the audit certificate was signed that Western Star was anxious to obtain the audited accounts as soon as possible in order that they could be made available to MN for its consideration in connection with the purchase of ERF. The audit certificate was signed on4th November 1999 shortly before Mr. Bryant and Mr. Ellis collected the audited accounts from E&Y (UK)'s offices in Manchester. They returned immediately to the Cottons hotel where Mr. Bryant gave a copy to Mr. Wagner for use in connection with the negotiations generally.” (7) The judge rejected the submission that E&Y (UK) did not provide a copy of the June 1999 accounts to Western Star for any purpose relating to the sale of ERF and did not undertake any responsibility to Western Star for their accuracy in relation to any aspect of that transaction. He accepted that Mrs Sinderson (the partner at E&Y (UK) who had been responsible for the audit) did not regard herself as having given a copy of ERF's accounts to Western Star on4 November 1999 ; but only to ERF. He accepted that Mr. Bryant and Mr. Ellis were the managing director and financial controller respectively of ERF and that they had collected the audited accounts from E&Y (UK) in that capacity. But he went on to say this: “[347] It must have been obvious to Mrs. Sinderson, however, both from her knowledge of the fact that it was the parent company of ERF and from her knowledge of the negotiations, that copies of the accounts would be sent by ERF to Western Star as soon as possible, as indeed they were. She could certainly foresee, therefore, and in my view must be taken to have known, that Western Star would itself rely on the accounts in the negotiations with MN as presenting a true and fair view of ERF's financial position. . . .” (8) Nevertheless, foresight alone was not enough to give rise to a duty of care. It was also necessary for there to have been a relationship between the parties of such proximity as to support the conclusion that there was an assumption of responsibility. It was for Freightliner to show, in this case, that E&Y (UK) assumed responsibility to Western Star for the accuracy of its audit statement “so as to be under a duty to take care to protect it from the kind of loss which Freightliner seeks to recover.”
“[414] Perhaps the first point to make in relation to the remaining three allegations is that in reality they are all complaints about the conduct of the audit and if well-founded could be the subject of a claim by ERF itself. None of them relates to the services that E&Y (UK) were engaged by Western Star to perform in connection with MN's due diligence exercise.”
“[414] . . . E&Y (UK)'s sole function in that regard was to make working papers and explanations available to Deloitte & Touche. They were not engaged to act in a general supervisory capacity to ensure that information provided to MN was correct; nor was it part of their function to review and confirm the work that had previously been carried out for the purposes of the audit. They were not instructed by Western Star to investigate the tip-off or the [related] rumour as part of the due diligence exercise and insofar as either of them might be relevant to ERF's accounts their evaluation was a matter that was directly relevant to the performance of their duties as auditors. It was not the subject of a separate undertaking to Western Star. ”
“[472] . . . If Freightliner is to obtain a contribution from E&Y (UK) it must show not only that E&Y (UK) are liable to MN but also that they are liable in respect of the same damage within the meaning of the Act.”
“[474] . . . By the time the 1999 audit statement was issued the position had changed. E&Y (UK) were aware that Western Star was actively pursuing negotiations with MN for the sale of ERF and were also aware not only that MN wanted to see the audited accounts but that it had insisted on being provided with a copy of them before embarking on its due diligence. Mrs. Sinderson may not have known exactly what aspects of the accounts MN was mainly interested in, but I am satisfied that she must have known that MN would rely on them as providing a reliable statement of ERF's financial affairs as at30th June 1999 .”
“[476] The present case differs in certain important respects, however. In the first place, there was no direct communication of any kind between E&Y (UK) and MN. That is not necessarily fatal to the claim since it was recognised in Hedley Byrne v Heller itself (see per Lord Morris of Borth-y-Gest at pages 502-503 and Lord Hodson at page 514) that liability for negligent misstatement may arise in cases where the maker of the statement intends that the person to whom it was originally made will communicate it to another for him to rely on for a particular purpose in connection with a particular transaction. In order to hold the maker of the statement liable, therefore, the same requirements must be satisfied, albeit at one remove. [477] In this case Mrs. Sinderson was clearly aware that both Western Star and MN were likely to rely on the accuracy of the audited accounts in their negotiations for the sale and purchase of ERF. However, that by itself is not enough to give rise to liability in circumstances where the primary purpose of producing audited accounts is to enable the shareholders to exercise their collective powers of management. That much is clear from what was said in Caparo v Dickman. As in the case of Western Star, the critical question in my view is whether E&Y (UK) provided the audited accounts to MN through Western Star in such circumstances as make it fair to hold that they assumed a responsibility to MN for their material accuracy. . . . The fact that MN was, and was known to be, receiving advice from Deloitte & Touche is a factor which tends to count against the existence of a duty of care since the very purpose of instructing them was to enable MN to obtain independent verification of the audit procedures implemented by E&Y (UK). The most important factor in my view, however, is the absence of any direct relationship between E&Y (UK) and MN. When considering the position of statutory auditors I think it is important to maintain a clear distinction between those cases in which all that can be said is that the auditors can foresee that a third party (perhaps even an identifiable third party) may make use of the company's accounts when deciding on a course of action and those cases in which the auditors have entered into a closer relationship with a third party of the kind necessary to give rise to an assumption of responsibility. A failure to observe such a distinction creates the risk of imposing a duty of care on auditors in favour of third parties in cases where they cannot fairly be said to have stepped outside their statutory function. [478] In the present case all that can be said is that Mrs. Sinderson knew that Western Star would provide copies of the audited accounts to MN and that MN might rely on them. She was not asked to agree to copies being provided to MN for any particular purpose, or indeed at all, because Western Star was entitled to make them available to anyone it chose without her agreement. In the circumstances it is difficult to see how the position of MN in this respect could be any stronger than that of Western Star. In neither case can it be said that E&Y (UK) provided the accounts for the purpose of the transaction or otherwise acted in such a way as to assume a responsibility for their accuracy. In these circumstances I am satisfied that E&Y (UK) did not owe a duty of care to MN and that Freightliner's claim to recover a contribution must therefore fail. . . .”
“In order for a duty of care to arise in respect of a statutory auditor, is it necessary for a claimant to show ‘some kind of consent, permission, acceptance, agreement or objectively evinced intent’ on the part of the auditor that the audit report should be used for a particular purpose, or is knowledge of the kind found by the judge in the circumstances if this case (including knowledge that Western Star and MN would rely on the accounts in respect of a specific transaction) sufficient?” (Issue 8): “If ‘some kind of consent, permission, acceptance, agreement or objectively evinced consent’ is necessary, was it given in this case?” (Issue 9): “Did the scope of E&Y’s duty extend to protecting Western Star from the kind of damage which Freightliner has suffered?” (Issue 10): “Was E&Y’s engagement letter apt to limit any liability which it would otherwise have had?” (Issue 11) “Is the loss claimed by Freightliner merely a reflection of the loss suffered by ERF?”
“(a) In contrast to cases of physical damage to the property or person of another, in cases of economic loss, the mere fact that damage was reasonably foreseeable by the defendant is not sufficient to give rise to a duty of care to avoid such loss. (b) Three tests have been approved in the cases for the imposition of duties of care for economic loss. If properly applied, each test will often yield the same result, but need not necessarily do so. i. At the highest level of abstraction, the framework for considering the duty of care incorporates the ‘threefold test’: was there forseeability of damage, and a proximate relationship between the parties, and is it fair just and reasonable to impose the duty? ii. Especially in cases of economic loss, a core issue will be the assumption of responsibility test: did the defendant, viewed objectively, assume responsibility to the claimant for undertaking a particular task with care with a view to saving the claimant from the type of loss claimed? iii. The ‘incremental’ approach may also be considered: is the precise duty contended for consistent with other duties which have been accepted by the courts? (c) In relation to all of these tests, but perhaps particularly clearly present in the context of ‘assumption of responsibility’, one element which is invariably required is that, viewed objectively, the defendant’s statement was made or communicated to the claimant for the purpose of protecting the claimant from the type of loss which the claimant suffers. The defendant cannot have assumed responsibility to protect against that type of loss unless, objectively judged such protection was a purpose for which his statement was made or communicated to the claimant. (d) In some of the authorities, judges have spoken of the defendant ‘intending’ that reliance be placed on his statement. That is another way of putting the requirement that, viewed objectively, the statement was given for the purpose of such use being made of it. The language of intention can be less clear than the language of purpose because it is more easily confused with a subjective criterion, namely what the defendant actually, subjectively, intended. (e) In order to show that protection from the type of harm suffered by the claimant was a purpose for which the defendant made his statement or communicated it to the claimant, it will normally be necessary for the claimant to show some kind of consent, permission, acceptance, agreement or objectively evinced intent on the part of the defendant that the claimant should rely on his statement for such purpose. Such consent or intent cannot be implied simply from the carrying out of an act (such as the provision of an audit report to the company) pursuant to a separate duty. This is not a separate test or rule of law, but a practical, evidential consequence of the requirement for the claimant to show that protecting him from the relevant loss was a purpose for which the statement was made by the defendant or communicated to the claimant. (f) The requirement for some form of consent etc is particularly important where, as here, the statement relied upon is one that the defendant was obliged to make for another purpose, after which the defendant had no control over its further publication. Unless the defendant has a choice as to whether to make the initial statement, any assumption of responsibility would in effect be involuntary. (g) Contrary to Freightliner’s submissions, there is no question of distinguishing between ‘the defendant’s purpose’ and ‘the claimant’s purpose’. The purpose for which a statement is made or communicated is judged objectively. The question is whether a reasonable person in the position of the claimant would conclude from the circumstances in which the statement is made or communicated to him that the purposes for which the statement was made or communicated to him included protecting him from the type of loss which he suffered in reliance upon the statement.”
“The closer the facts of the case in issue to those of a case in which a duty of care has been held to exist, the readier a court will be, on the approach of Brennan J [in Sutherland Shire Council v Heyman 60 ALR 1, 48] adopted in Caparo v Dickman, to find that there has been an assumption of responsibility or that the proximity and policy conditions of the threefold test are satisfied. The converse is also true”
“[8] . . .[The]outcomes (or majority outcomes) of the leading cases cited above are in every or almost every instance sensible and just, irrespective of the test applied to achieve that outcome. This is not to disparage the value of and need for a test of liability in tortious negligence, which any law of tort must propound if it is not to become a morass of single instances. But it does in my opinion concentrate attention on the detailed circumstances of the particular case and the particular relationship between the parties in the context of their legal and factual situation as a whole.”
“[35] There is a tendency, which has been remarked upon by many judges, for phrases like ‘proximate’, ‘fair, just and reasonable’ and ‘assumption of responsibility’ to be used as slogans rather than practical guides to whether a duty should exist or not. These phrases are often illuminating but discrimination is needed to identify the factual situations in which they provide useful guidance. For example, in a case in which A provides information to C which he knows will be relied upon by D, it is useful to ask whether A assumed responsibility to D: Hedley Byrne & Co Ltd v Heller & Partners Ltd[1964] AC 465 : Smith v Eric S Bush[1990] 1 AC 831 . Likewise, in a case in which A provides information on behalf of B to C for the purpose of being relied upon by C, it is useful to ask whether A assumed responsibility to C for the information or was only discharging his duty to B: Williams v Natural Life Health Foods Ltd[1998] AC 830 . Or in a case in which A provided information to B for the purpose of enabling him to make one kind of decision, it may be useful to ask whether he assumed responsibility for its use for a different kind of decision: Caparo Industries plc v Dickman[1990] 2 AC 605 . In these cases in which the loss has been caused by the claimant's reliance on information provided by the defendant, it is critical to decide whether the defendant (rather than someone else) assumed responsibility for the accuracy of the information to the claimant (rather than to someone else) or for its use by the claimant for one purpose (rather than another). The answer does not depend upon what the defendant intended but, as in the case of contractual liability, upon what would reasonably be inferred from his conduct against the background of all the circumstances of the case. The purpose of the inquiry is to establish whether there was, in relation to the loss in question, the necessary relationship (or ‘proximity’) between the parties and, as Lord Goff of Chieveley pointed out in Henderson v Merrett Syndicates Ltd[1995] 2 AC 145 , 181, the existence of that relationship and the foreseeability of economic loss will make it unnecessary to undertake any further inquiry into whether it would be fair, just and reasonable to impose liability. In truth, the case is one in which, but for the alleged absence of the necessary relationship, there would be no dispute that a duty to take care existed and the relationship is what makes it fair, just and reasonable to impose the duty. ”
“[36] It is equally true to say that a sufficient relationship will be held to exist when it is fair, just and reasonable to do so. Because the question of whether a defendant has assumed responsibility is a legal inference to be drawn from his conduct against the background of all the circumstances of the case, it is by no means a simple question of fact. Questions of fairness and policy will enter into the decision and it may be more useful to try to identify these questions than simply to bandy terms like ‘assumption of responsibility’ and ‘fair, just and reasonable.’ In Morgan Crucible Co plc v Hill Samuel & Co Ltd[1991] Ch 295 , 300-303 I tried to identify some of these considerations in order to encourage the evolution of lower-level principles which could be more useful than the high abstractions commonly used in such debates”
“[34] . . . it is critical to decide whether the defendant (rather than someone else) assumed responsibility for the accuracy of the information to the claimant (rather than to someone else) or for its use by the claimant for one purpose (rather than another).”
“. . . It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless. ‘The question is always whether the defendant was under a duty to avoid or prevent that damage, but the actual nature of the damage suffered is relevant to the existence and extent of any duty to avoid or prevent it’: see Sutherland Shire Council v Heyman, 60 ALR 1, 48, per Brennan J .”
“[15] . . . The scope of the duty, in the sense of the consequences for which the valuer is responsible, is that which the law regards as best giving effect to the express obligations assumed by the valuer: neither cutting them down so that the lender obtains less than he was reasonably entitled to expect, nor extending them so as to impose on the valuer a liability greater than he could reasonably have thought he was undertaking.”
“There is no reason in principle why the law should not penalise wrongful conduct by consequences which would not have happened but for the wrongful act” but pointed out that that was not the normal rule. Rules which make the wrongdoer liable for all the consequences of his wrongful conduct were exceptional and needed to be justified by some special policy. As he put it (ibid [18]; 213C-D) in a passage to which the judge referred at paragraph [352] of his judgment in the present case: “[18] . . . Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.”
“We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the accounts are free from material misstatement whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the accounts.”