Car-Wizard v Vixen Surface Treatments: misrepresentation, collateral contracts and a second-hand lathe sold as new

In a judgement handed down on 26 March 2026, HHJ Paul Matthews (sitting as a Judge of the High Court) found in favour of Car-Wizard Limited against Vixen Surface Treatments Limited, a supplier of specialist wheel-refurbishment lathes. The case — Car-Wizard Limited v Vixen Surface Treatments Limited [2026] EWHC 685 (Ch) — raises important points on collateral contracts, the scope of negligent misrepresentation, and the limits of exemption clauses under the Unfair Contract Terms Act 1977.

Car-Wizard, a Bristol-based vehicle repair business, sought to expand into diamond-cut alloy wheel repairs. Following demonstrations and discussions with Vixen's industrial sales manager, the claimant was assured the defendant's lathe could perform full wheel restorations, including cutting tapered edges and mapping black surfaces. The machine was described as new. Ultimately, Car-Wizard acquired it through a hire-purchase arrangement with Paragon Business Finance Plc, rather than by direct contract with Vixen — a structuring decision that shaped the entire legal analysis.

The lathe proved defective from the outset. It leaked oil continuously, was not level, contained 47 pre-existing wheel maps in its software, and bore clear signs of prior use. It could not cut tapered edges to a diamond-cut finish — a function central to the claimant's business — and required masking tape to map black alloy surfaces, significantly reducing productivity. Expert evidence confirmed the machine failed to comply with applicable safety standards, including BS EN ISO 23125:2015 and the Supply of Machinery (Safety) Regulations 2008.

Collateral contract

The absence of a direct supply contract between Car-Wizard and Vixen did not defeat the claim. Applying Wells (Merstham) Ltd v Buckland Sand and Silica Ltd [1965] 2 QB 170, the court found a collateral contract had arisen: the defendant made promises and assertions about the lathe's quality and suitability, Car-Wizard relied on those representations in procuring Paragon to purchase the lathe, and that procurement constituted sufficient consideration. Vixen's standard terms and conditions — which purported to exclude any warranty as to fitness for purpose and limit liability to the invoice value — were held not to be incorporated into the collateral contract, as clause 1 applied expressly to "contracts for the supply of goods or services", a description that did not fit a collateral arrangement. Even if incorporated, they were found to be unreasonable under UCTA 1977 and were overridden by express oral warranties given during pre-contractual negotiations.

Negligent misrepresentation

The court was satisfied that Vixen assumed responsibility towards Car-Wizard within the Hedley Byrne principle and that a duty of care arose accordingly. The representations made — that the lathe was new, capable of full restorations, and of merchantable quality — were untrue in material respects, and the defendant had been negligent in making them. The Misrepresentation Act 1967, section 2(1), was held applicable to the collateral contract, placing the burden on Vixen to disprove negligence — a burden it failed to discharge.

Allegations of deceit were not sustained. The court accepted that Vixen's sales manager honestly, if mistakenly, believed the representations he made.

Mitigation and quantum

The judge's treatment of mitigation is particularly noteworthy. Car-Wizard had ordered a replacement lathe from an alternative supplier but cancelled the order, citing storage constraints and concern that moving the Vixen machine might be attributed as causing further damage. The court found this cancellation unreasonable: independent evidence of the machine's condition could have been secured before any move, and other storage arrangements were available. As a result, recoverable loss of profits was capped at nine months from September 2020.

The "expert" accountancy evidence from both sides was treated as sophisticated written submissions rather than opinion evidence within the Civil Evidence Act 1972, s 3(1) — neither accountant having deployed specialist forensic expertise, both having performed arithmetical exercises on data supplied by others.

Final calculation of damages was adjourned for further submissions, with findings of fact in the main judgement carrying over to the assessment.

Copyright & permissions