Land was bought for development, but the purchaser later discovered a sewage pipe which very substantially limited its development potential. The existence of the pipe had not been disclosed on the sale, being unknown to the seller.
Held: Under the National Conditions of Sale, it is the purchaser who takes the risk of there being easements unknown to the seller. A seller was not liable for damages for misrepresentation if he had taken reasonable steps to make known to the purchaser what he himself knew. Clause 14 of the Conditions is not an exclusion clause, but rather qualifies the vendor’s obligations. It did not therefore fall to be tested for reasonableness. In replies to preliminary enquiries, the phrase ‘not so far as the vendor is aware’ represents that the solicitor and client have each made appropriate enquiries to support the statement, and: ‘knowledge may go beyond what is in somebody’s head, that it requires a solicitor to read his file and to read it properly and to make . . reasonable and prudent investigation of the grounds upon which the belief is based . .’
Lord Justice Russell Lord Justice Evans and Lord Justice Hoffmann
Ind Summary 28-Jun-1993, Times 08-Jun-1993,  NPC 82 CA,  1 WLR 1016,  3 All ER 932,  EWCA Civ 14
Misrepresentation Act 1967 2, Law of Property Act 1925 76
England and Wales
Cited – Wheeldon v Burrows CA 17-Jun-1879
Quasi-Easements granted on sale of part of Estate
S owned a workshop and an adjoining plot of land. The workshop had three windows looking out over the plot. The property was sold in separate lots at auction. The land was sold with no express reservation of any easements, and then similarly the . .
Cited – Heywood v Mallalieu 1883
A house was sold at auction by a mortgagee ‘subject to any easements.’ It turned out to be subject to an easement in favour of a neighbour entitling her to come and wash her clothes in the kitchen. The vendor’s solicitor had been told that the . .
Cited – Littledale v Liverpool College CA 1900
The mere storage of items in a property was insufficient to demonstrate the necessary intention to dispossess the rightful owner. It was a mere exercise of the rights under an easement. Enclosure of land is not necessarily decisive. Lord Lindley MR . .
Cited – Brown v Raphael 1958
This was a sale of an absolute reversion in a trust fund. The particulars stated that: ‘Estate duty will be payable on the death of the annuitant who is believed to have no aggregable estate’ and the name of the solicitors who prepared the . .
Cited – Cremdean Properties Ltd v Nash CA 1977
The defendant had relied on a non-reliance clause in the special conditions of a tender: ‘Messrs. Lalonde Bros and Parham for themselves, for the vendors or landlord whose agents they are give notice that (a) These particulars are prepared for the . .
Cited – Leeds Industrial Co-operative Society Ltd v Slack HL 1924
The plaintiff complained of a threatened interference with ancient lights.
Held: Damages may be awarded in lieu of an injunction even where the injunction sought is a quia timet injunction, but that power imports a further power to give an . .
Cited – Associated Japanese Bank (International) Ltd v Credit du Nord SA 1988
A contract of guarantee was made, but based upon a term of fundamental importance which was mistaken as to the existence of certain machines.
Held: The court must first look to the nature of the purported agreement. Steyn J said: ‘Logically, . .
Cited – Hill v Harris CA 1965
A lessor or vendor does not impliedly warrant that the premises are fit for any particular purpose. It is the contract which allocates the risk of the premises being unfit for such a purpose to the lessee. The lessee has duties to investigate the . .
Cited – Walters v Babergh District Council 1983
An action was brought for for negligence and/or breach of statutory duty under the 1936 Act. The plaintiff alleged that Melford Rural District Council (‘Melford’: the Defendant Council’s predecessor) had failed to inspect with reasonable care the . .
Cited – Grist v Bailey 1966
The parties believed that the property to be sold was occupied by a ‘protected tenant’. This was not so since the property could have been sold with vacant possession. It was argued that the contract could be set aside for common mistake.
Cited – Johnson v Agnew HL 1979
The seller had obtained a summary order for specific performance of a contract for the sale of land against the buyer.
Held: The breach was continuing and was still capable of being remedied by compliance with the order for specific . .
Cited – Laurence v Lexcourt Holdings Ltd ChD 1978
The purchasers sought rescission of a 15 year lease of business premises. Unknown to either party, the planning permission restricted their use as offices to a period of no more than two years.
Held: There had been a misrepresentation by the . .
Cited – Bell v Lever Brothers Ltd HL 15-Dec-1931
Bell was director and chairman of Niger, a subsidiary of Lever Brothers Ltd who dismissed him, offering and paying andpound;30,000 compensation. Lever then discovered that Mr Bell had made secret profits at the expense of Niger for which he could . .
Cited – Davis Contractors Ltd v Fareham Urban District Council HL 19-Apr-1956
Effect of Contract Frustration
The defendant appellants contended that their construction contract was frustrated because adequate supplies of labour were not available to it because of the war.
Held: The court considered how the frustration of the performance of a contract . .
Cited – Kemp Properties (UK) Ltd v Dentsply Research and Development Corporation 1991
The measure of damages is the same as for fraudulent misrepresentation i.e. all loss caused by the plaintiff having been induced to enter into the contract. . .
Cited – Jackson v Union Marine Insurance Co Ltd CCP 1874
The plaintiff ship owner, contracted under a charterparty to proceed with all possible dispatch to Newport. He insured the cargo. The ship ran aground before the cargo could be collected, and was delayed. The charterers threw up the charterparty and . .
Cited – Solle v Butcher CA 1949
Fundamental Mistake Needed to Allow Rescission
The court set out the circumstances in which the equitable remedy of rescission of a contract is available for mutual mistake. The mistake has to be as to some fundamental element of the contract. What is ‘fundamental’ is a wider category of event . .
Cited – MCI Worldcom International Inc v Primus Telecommunications Inc ComC 25-Sep-2003
The claimant sought judgment, and the defendant leave to amend its defence. The question was whether the proposed defence had any reasonable prospect of success.
Held: The misrepresentation alleged was made by the claimant’s in-house . .
Cited – Sykes and Another v Taylor-Rose and Another CA 27-Feb-2004
The appellants purchased a property from the respondents. The house had been the site of a partiularly horrendous murder in 1980, but the respondents did not disclose the fact.
Held: The doctrine of caveat emptor still had application. As . .
Cited – First National Commercial Bank Plc v Loxleys (a Firm) CA 6-Nov-1996
The plaintiff claimed damages from the seller of land and from their solicitors for misrepresentation in the replies to enquiries before contract. He appealed a striking out of his claim.
Held: A lawyer’s disclaimer placed on his Replies to . .
Cited – Graves v Graves and others CA 3-Jul-2007
The parties had divorced and settled financial provision, but the former wife and her children came to need a house and one of the claimant’s properties became vacant, and she was allowed to occupy it as a tenant, with the majority of the rent being . .
Cited – Morgan and Another v Pooley and Another QBD 7-Oct-2010
The claimants had bought a property from the defendants and now sought damages in misrepresentation saying that the defendants had failed to disclose a planning application for an adjacent farm as regards a track bordering the property.
Held: . .
Lists of cited by and citing cases may be incomplete.
Land, Professional Negligence, Contract, Legal Professions
Updated: 31 October 2021; Ref: scu.90518