Collins v Howell-Jones and another

Action for alleged innocent misrepresentation on the sale of a house — Action against vendors — Effect of clause disclaiming liability in respect of representations or warranties — Purchaser complained that a document supplied by the vendors’ agents included plans relating to a planning permission indicating that a part of the back of the house which had been demolished consisted of a two-storey projection — In fact the erection of a two-storey building at the back would have been prevented by a neighbouring proprietor’s rights of light — The wording of the disclaimer of liability was to the effect that the vendors did not make or give, and the vendors’ agents had no authority to make or give, any representations or warranty in relation to the property — Held, dismissing an appeal from the county court judge, that the vendors’ liability for the agents’ innocent misrepresentation was avoided by the disclaimer, which effectively excluded the agents’ authority to make representations This was an appeal by David Bernard Collins, the plaintiff in an action in Market Drayton County Court, from the decision of Judge Taylor in favour of the defendants, the present respondents, Christopher Kay Howell-Jones and Gillian Mary Howell-Jones. The action related to a contract for the sale by the respondents to the appellant of a house at 8 Church Street, Market Drayton. The appellant had claimed a reduction in the contract price on the ground of an innocent misrepresentation made by the respondents’ agents, Messrs Barber & Son. The Hon W D Spens (instructed by Forrester & Forrester, of Chippenham) appeared on behalf of the appellant; Andrew Lloyd-Davies (instructed by Fraser Brown, White & Pears, of Nottingham) represented the respondents. Giving judgment, WALLER LJ said: This is an appeal from a decision of Judge Taylor sitting at Market Drayton County Court and given on January 9 1979. He gave judgment for the defendants in an action by the plaintiff for innocent misrepresentation in the sale of a house. The facts were as follows. The defendants had purchased 8 Church Street, Market Drayton, in 1972 and it was a property that was in considerable disrepair. Some time between 1972 and 1978 a dangerous structure notice had been served upon the defendants and they had had to remove part of the building. The defendants wished to sell the property and put the sale in the hands of estate agents, Barber & Son. The male defendant gave evidence that he gave all the particulars to Barbers, including the documents which he had. The defendants had purchased the property in 1972 with existing planning permission for alterations in accordance with certain drawings and those drawings were among the papers that he handed over to his agents. In May 1978 the plaintiff saw the particulars of sale which the estate agents produced; he was attracted by them and, having first made an offer of £3,000, finally made an offer in June 1978 for £2,500, which was accepted. The solicitor instructed was the same solicitor acting for the defendants and he produced a contract for the plaintiff which was signed on June 12. The only proviso to the execution of that contract was that if a search revealed more than the fact that the building was a protected building, then the contract would be open to be set aside. The part of the structure which had had to be pulled down was the part projecting from the back of the house. The leg of a ‘T’, so to speak. The particulars of sale contained the following clause: Barber & Son for themselves and for the vendors give notice that these particulars do not constitute, nor constitute any part of, an offer or a contract. All statements contained in these particulars are made without responsibility on the part of Barber & Son or the vendor. None of the statements contained in these particulars are to be relied upon as statements or representations of fact. Any intending purchaser must satisfy himself by inspection or otherwise as to the correctness of each of the statements contained in these particulars. The vendor does not make or give, and neither Barber & Son or any person in their employment has any authority to make or give, any representations or warranty whatever in relation to this property. There was also contained in the particulars of sale this statement: Detailed plans have been prepared and approved by the local authority for conversion of the dwelling to provide the following accommodation. The accommodation was then set out. At some stage after getting the particulars of sale, the plaintiff obtained from the estate agents the drawings which were the subject of planning permission. These drawings showed that before the dangerous part of the structure had been removed, the building projecting from the house at the back was a two-storey building. After the contract had been signed, and after searches had been made but before completion, the plaintiff received a letter from his architects which said: It would appear that the owner of no 10 has previously made representations to the planning department in the matter of his rights of light, sufficient anyway to have caused previous application for planning permission involving the lifting of the roof of the rear portion of the property to be refused and without lifting the roof at the rear or excavating deep into the rock which would be enormously expensive, it is only possible to give accommodation at ground-floor level at the rear of the property. You will see on the enclosed sketch scheme we have shown only a small kitchen at first-floor level at the rear of the property with a dormer window to be constructed overlooking your own court. The plaintiff had entered the contract to purchase this property on the basis that he would be able to erect a two-storey projection at the back of the house and this indicated that that would be impossible without interfering with the light of the house next door. The plaintiff then refused to complete at that time but wished the contract to stand, subject to a reduction in price because of this information. On September 19 1978 the plaintiff started proceedings in the Market Drayton County Court claiming performance of the contract and damages reducing the contract price. The defendants counter-claimed for specific performance and so the matter came before the judge. The basis of the plaintiff’s claim was that the documents representing the planning permission contained a misrepresentation. He (the plaintiff) could not see the condition of the house as it was before the part was pulled down and those plans appeared to show that it was a two-storey projection at the back, and this was not true. 109 The learned judge found: That Document B1 amounts to a misrepresentation by the agent. It shows something to be apparently the case which was not the case. He went on: I am satisfied that this plan did have an influence on the plaintiff and was an inducement to enter the contract at the price he entered into the contract at. I am satisfied that the plaintiff would have bought, or at any rate offered to buy in any event, but not at that price. We have heard considerable argument from both Mr Spens, on behalf of the plaintiff appellant, and Mr Lloyd-Davies, on behalf of the defendant respondents; argument relating not only to the effect of the particulars of sale which I have already mentioned, but among other things, of the Law Society’s standard conditions. The substantial arguments, however, put forward on behalf of the plaintiff, was a submission that the agent, when he has been given express authority, cannot limit his authority: he can only do that when it is ostensible authority. Furthermore, it was submitted on behalf of the plaintiff that the representation was made not by the agent but by the defendant (the vendor) and that he could not limit his responsibility. The contrary was argued by Mr Lloyd-Davies, on behalf of the defendants, namely that the judge was right when he held that the representation was made by the agent and that the judge was correct when he said that the vendor was protected by the clause in the particulars of sale. In Overbrooke Estates Ltd v Glencombe Properties Ltd [1974] 1 WLR 1335, Brightman J held that where auctioneers had a clause similar to the present clause in their particulars of sale, their ostensible authority was limited by the catalogue containing a condition excluding the authority of the auctioneer to make representations in relation to the property. Mr Spens sought to differentiate that case on the grounds that while in that case the authority which was being excluded was ostensible authority, in this particular case it was express authority. In the Overbrooke Estates case, however, Brightman J says at p 1341: It seems to me that it must be open to a principal to draw the attention of the public to the limits which he places on the authority of his agent and that this must be so whether the agent is a person who has or has not any ostensible authority. If an agent has prima facie some ostensible authority that authority is inevitably diminished to the extent of the publicised limits that are placed on it. There is a fallacy in Mr Spens’ argument. Ostensible authority is what matters, because that is all the other party knows about. But if express authority specifically forbids any representation being made, then any representation in fact made is outside the authority given. In my judgment there is no warrant for the submission that where the authority is direct, any different conclusion should be arrived at. The principal announces to those who are dealing with his agent what are the limits of that agent’s authority. In this particular case the misrepresentation was not contained in the actual particulars of sale, and therefore the first part of the disclaimer at the top of the particulars does not apply. However, the last line reads: The vendor does not make or give, and neither Barber & Son or any person in their employment has any authority to make or give, any representations or warranty whatever in relation to this property. In my judgment that is precisely the limitation of authority which Brightman J had in mind. We were also referred to Cremdean Properties Ltd v Nash (1977) 244 EG 547, [1977] 2 EGLR 80, another case of innocent misrepresentation. There is a sentence at the end of the judgment of Bridge LJ, as reported, which reads: If it is not part of the contract, then it is not binding on the plaintiffs and it does not help Mr Newsom. This was mentioned by counsel as being against the defendant, but in my view there is an earlier paragraph in his judgment which indicates that the sentence is perhaps not fully reported*, because earlier in the same judgment he says: If the Act of 1967 [Misrepresentation Act] stopped short at section 2 it might very well follow without argument that the terms of the footnote to the special conditions are effective to exclude any liability for misrepresentation which would otherwise fall upon the first defendant. It follows that the Lord Justice was placing emphasis on the fact that the footnote was in the contract because section 3 of the Misrepresentation Act 1967 only deals with the contract. We heard other argument as to the effect if the misrepresentation was made by the defendant and not by his agent and argument also about the standard conditions which were attached to the contract. I do not deal with those arguments, however, because I have come to the conclusion that the learned judge was correct; firstly, in holding that this misrepresentation was made by the agents and, secondly, in holding that responsibility for the misrepresentation was effectively avoided by reason of the clause which I have quoted above. Accordingly I would dismiss this appeal. Agreeing, DAME ELIZABETH LANE said: The learned judge held that there was a misrepresentation and that it was made by the respondents’ agents, Messrs Barber & Son. In my judgment he was right in so holding. The misrepresentation, as my Lord has indicated, is contained in certain plans which had been the basis of an application for planning permission made and granted to the respondents’ predecessors in title. The plans purported to show that part of the premises in question which had been demolished by the time the appellant came on the scene had earlier been of a greater height than in fact they had been. The first question which arises for the determination of this court is whether the respondents are bound by this misrepresentation or can escape liability under the exclusion clause which is at the head of the particulars of sale, which particulars the appellant received from Barber & Son. Mr Spens’ submission that the exclusion clause was ineffective was persuasively made, but in my judgment cannot prevail. As I indicated at the beginning of this judgment, having accepted the learned judge’s finding that the misrepresentation was made by Barber & Son, the argument that a vendor cannot say, ‘I make this representation’, and then in the next breath say, ‘I make no representation at all’, does not persuade me on the facts of this case. I hold that the exclusion was effective and it is unnecessary for me to refer to the authorities which my Lord has referred to, save to say that in my view they do not contradict but support the submissions made by Mr Lloyd-Davies on behalf of the respondents. It is conceded by Mr Spens that the misrepresentation was not made in the contract and that, therefore, the Unfair Contract Terms Act 1977 has no application to this case. In any event, as to the award of interest to the respondents made by the learned judge, I concluded, after some hesitation, that Mr Spens’ argument that the appellant could not complete without losing his right to claim damages under section 2(2) of the Misrepresentation Act was outweighed by Mr Lloyd-Davies’ point that under clause 16(3) of the general conditions of sale the appellant could have protected himself from the payment of interest, but failed to do so. I find it unnecessary to deal with any of the other points so interestingly raised in this case. I agree that this appeal should be dismissed. The appeal was dismissed with costs. The sentence quoted by Walter LJ concluded Bridge LJ’s judgment and is exactly as it appears in the transcript revised by His Lordship. The report at (1977) 244 EG 547, [1977] 2 EGLR 80 reproduces the court’s judgments in full.