It held that for there to be an effective assumption of responsibility, there must be some direct or indirect conveyance that a director had done so, and that a claimant had relied on the information.

So Mr Williams sought to hold the company's managing director and main shareholder personally liable.

The trader who incorporates a company to which he transfers his business creates a legal person on whose behalf he may afterwards act as director.

He observed, at [1994] 2 AC 145, 181B-C: "... especially in a context concerned with a liability which may arise under a contract or in a situation 'equivalent to contract,' it must be expected that an objective test will be applied when asking the question whether, in a particular case, responsibility should be held to have been assumed by the defendant to the plaintiff" The touchstone of liability is not the state of mind of the defendant.

Subject to this qualification the primary focus must be on exchanges (in which term I include statements and conduct) which cross the line between the defendant and the plaintiff.

That conclusion was possible because the director wrote to the customer, and rendered an invoice, creating the clear impression that he was personally answerable for the services.

He said that there "was no singular feature which would justify belief that Mr. Ivory was accepting a personal commitment, as opposed to the known company obligation."

In his 1997 Hamlyn Lecture Lord Cooke of Thorndon commented that if the plaintiff in Trevor Ivory Ltd v Anderson "had reasonably thought that it was dealing with an individual, the result might have been different:" see Taking Salomon Further, Turning Points of the Common Law, p 18, note 50.

Such a finding would have required evidence of statements or conduct crossing the line which conveyed to the plaintiff that the defendant was assuming personal liability.

In his Hamlyn Lecture Lord Cooke of Thorndon referred to two judgments of La Forest J in the Canadian Supreme Court on the element of reliance.

The plaintiffs allegedly lost money as a result of errors in the specifications and drawings prepared for the province by an engineering company.

The Supreme Court held that the plaintiffs had a prima facie cause of action against the engineering company for negligent misrepresentation.

But the Supreme Court unanimously held that by affixing their seals to the drawing the individual engineers did not assume personal responsibility to the plaintiffs.

It would seem quite unrealistic, as my colleague observes, to hold that the mere presence of an individual engineer's seal was sufficient indication of personal reliance (or for that matter voluntary assumption of risk)."

The test is whether the plaintiff could reasonably rely on an assumption of personal responsibility by the individual who performed the services on behalf of the company.

In The Pioneer Container [1994] 2 AC 324, 335, Lord Goff of Chieveley (giving the judgment of the Privy Council in a Hong Kong appeal) said that it was open to question how long the principles of consideration and privity of contract will continue to be maintained.

Returning to the particular question before the House it is important to make clear that a director of a contracting company may only be held liable where it is established by evidence that he assumed personal liability and that there was the necessary reliance.

The brochure made clear that this expertise derived from Mr Mistlin's experience in the operation of the Salisbury shop.

Secondly, great emphasis was placed on the fact that it was made clear to the franchisees that Mr Mislin's expertise derived from his experience in running the Salisbury shop for his own account.

Postulate a food expert who over ten years gains experience in advising customers on his own account.

Surely, it cannot be right to say that in the new situation his earlier experience on his own account is indicative of an assumption of personal responsibility towards his customers.

There were no exchanges or conduct crossing the line which could have conveyed to the respondents that Mr Mistlin was willing to assume personal responsibility to them.

Accordingly, he submitted, Mr. Mistlin was a joint tortfeasor with the company, the latter being liable to the respondents on the extended Hedley Byrne principle.

A moment's reflection will show that, if the argument were to be accepted in the present case, it would expose directors, officers and employees of companies carrying on business as providers of services to a plethora of new tort claims.

In the present case liability of the company is dependent on a special relationship with the respondents giving raise to an assumption of responsibility.