Walker v Boyle

Claim by purchaser for return of deposit paid under contract for sale of a property consisting of a house and some acres of land — Allegation of misrepresentation by vendor in reply to preliminary inquiry — Inquiry related to existence of disputes as to boundaries and other matters — The answer referred to some difficulties which the vendor had had with a particular neighbour but failed to mention a boundary dispute with another neighbour relating to the position of a fence — Held that the purchaser was entitled to the return of his deposit with interest — Disclaimer in ‘small print’ in preliminary inquiries form ineffective — Condition 17 in National Conditions of Sale (19th ed) not a protection to the vendor in the circumstances of the case — Effect of section 3 of Misrepresentation Act 1967 as amended by the Unfair Contract Terms Act 1977 discussed — Condition 17 did not satisfy the requirement of reasonableness in section 3, as amended, in the present case — Judge’s comment that the survival through the ages of what became condition 17 did not entitle it to the ‘automatic accolade of fairness and reasonableness’ These were in fact consolidated cross-actions, in the first of which Mr Walker, the purchaser, was the plaintiff and Mrs Boyle, the vendor, the defendant; in the second action the roles were reversed. The question in both actions was as to whether a deposit paid by Mr Walker should be returned to him or forfeited to Mrs Boyle. The question arose under a contract for the sale of a property called Stall House, near Pulborough, Sussex. The amount of the deposit was £10,500. R J Furber (instructed by The Simkins Partnership) appeared on behalf of Mr Walker; R W Seymour (instructed by Streeter, Marshall & Wilberforce Jackson, of Croydon) represented Mrs Boyle. Giving judgment, DILLON J said: I have before me two actions which have been consolidated. In the first action Mr Walker is the plaintiff and Mrs Boyle the defendant. In the second action, Mrs Boyle is the plaintiff and Mr Walker the defendant. The substantive question which is raised in each action is whether the deposit of £10,500 which Mr Walker paid under a contract of October 1 1979 for his purchase of a property called Stall House, near Pulborough, in Sussex, ought to be returned to Mr Walker or is forfeit to Mrs Boyle. The claim by Mr Walker for the return of the deposit is based on an allegation that he was induced to enter into the contract by a misrepresentation in a reply to a preliminary inquiry before contract. There are four main issues. Firstly, was there a misrepresentation made on behalf of Mrs Boyle, the vendor?  Secondly, if so, was that misrepresentation one of the factors which induced Mr Walker to enter into the contract?  Thirdly, if the answers to questions (1) and (2) are in the affirmative, is Mr Walker none the less precluded by a general condition in the contract, namely, condition 17 of the National Conditions of Sale 19th ed, from claiming rescission on account of the misrepresentation?  Fourthly, and alternatively, even if condition 17 would otherwise be applicable, is Mrs Boyle precluded from relying on it by section 3 of the Misrepresentation Act 1967 as amended by the Unfair Contract Terms Act 1977? I should set out some of the facts which are not in dispute. Mrs Boyle purchased Stall House, which is a house, apparently, with four bedrooms and a couple of bathrooms and 4 or 5 acres of land including a pond or small lake near the northern boundary, in 1967, and it was the home of Mrs Boyle and her husband, Dr Boyle, although it was bought by Mrs Boyle alone. In 1979 Mrs Boyle’s marriage to Dr Boyle collapsed and on March 30 he left Stall House. He had in fact been living in London midweek for some time before. Mrs Boyle therefore decided to purchase another property and sell Stall House. She contracted to buy the other property in reliance on arrangements for a bridging loan from her bank, and she put Stall House on the market, but initially there was no purchaser. In August, however, or there-abouts, a possible purchaser, a Mr Hunter, agreed to buy Stall House subject to contract, and on August 15 1979 Mr Hunter’s solicitors submitted the usual formal inquiries before contract to Mrs Boyle’s solicitors, Streeter, Howe & Wilberforce Jackson, of Croydon. Those inquiries were replied to by Mrs Boyle’s solicitors on August 24 1979, and it is one of those replies which contains what is alleged to be the misrepresentation. In fact, Mr Hunter decided not to proceed with the purchase of Stall House. I do not know why, and anyhow the reason does not matter, and Mr Walker came forward as the prospective purchaser and agreed through Mrs Boyle’s estate agents, subject to contract, to buy Stall House for £105,000. It was in September 1979 that this agreement, subject to contract, was reached, and indeed Mr Walker saw round Stall House. Forthwith Mrs Boyle’s solicitor, Mr David Moore of Streeter, Howe, wrote on September 21 1979, to Mr Walker’s solicitor, Mr Rutteman of The Simkins Partnership, enclosing a draft contract for approval. Mrs Boyle was at that time anxious for a quick contract and a quick completion because of the purchase of her other property. Mr Walker was under no pressure. He had the money available and did not have to rely on selling other property. He liked Stall House very much, so he was keen to buy. The letter from Mrs Boyle’s solicitor of September 21 1979, which I have mentioned, besides enclosing the draft contract for approval, also enclosed, with a view to saving time, a photocopy of Streeter, Howe’s replies to Mr Hunter’s solicitors’ pre-contract inquiries. It enclosed a number of other documents which do not matter. The relevant pre-contract inquiry is no 2 which is headed ‘Disputes’. The inquiry is as follows: Is the vendor aware of any disputes regarding the boundaries, easements, covenants or other matters relating to the property or its use? The answer given to Mr Hunter’s solicitors and now submitted to Mr Walker’s solicitor, was: Not to the vendor’s knowledge, but see points 3 and 4 in the letter of Messrs Anderson, Longmore and Higham enclosed herewith. Anderson, Longmore & Higham had written a letter, which is the letter referred to, dated June 22 1979 to Mrs Boyle’s estate agents. They had written this letter on behalf of a Mr Allfrey who lived in a nearby house called The Gables and was the owner of land which adjoined the Stall House property on the south and east sides, and134 also was the owner of the lane by which access to Stall House was obtained. The letter drew attention to the following points: (1)  Access to Stall House is over a farm road belonging to our client; (2) the water supply to Stall House is by a spur from a private water pipe belonging to our client and is separately metered; (3) the boundary fence of Stall House on the eastward side belongs to the property, having been planted by Sir Howard Roberts and at the present time has grown out into our client’s field to an appreciable extent and interferes with cultivation of the field. Our client has on a number of occasions requested your client to trim the hedge but it has not so far been done; (4) your client has erected a wicket gate in the eastward boundary fence of Stall House so as to give access to our client’s fields without our client’s knowledge or permission. This gate should be closed up and removed and proposing purchasers informed that there is no right of access to or of way over our client’s land; (5) your client has formed two flowerbeds on either side of the front gate to his property at the edge of and encroaching upon our client’s farm road at the entrance to the farm yard. We understand that these beds are now edged with masonry, that these beds constitute a trespass on our client’s land should be pointed out to proposing purchasers. Our client requires these beds to be removed and the roadway reinstated as the beds are an interference with farm traffic. I accept the evidence of Mr Walker and Mr Rutteman, that Mr Rutteman went carefully through these five points in the letter with Mr Walker. Mr Walker was concerned to see exactly what was involved. As to point (1) he was satisfied that there was a right of way over the farm road referred to. As to point (5) he was satisfied that the flowerbeds concerned had already been removed as was stated in the letter of September 21 1979. As to the letter from Messrs Andersons as a whole he took the view that it was a case of a somewhat pedantic neighbour who had learned that Stall House was on the market and was concerned to put his position on the record for the avoidance of doubts, and after consideration he decided that these were all matters he could live with and which would cause him no trouble at all. As to point (4) he appreciated that there was no right of way from the eastern boundary and he took the opportunity, as I find, on a visit to Stall House after he had considered the letter of September 21 1979 and the letter from Messrs Andersons enclosed and the replies to the preliminary questions, of having a look at the wicket gate referred to to be sure precisely what was involved. Contracts were therefore exchanged on October 1 1979 for Mr Walker’s purchase of Stall House from Mrs Boyle at the price of £105,000. The deposit of £10,500 was duly paid to Mrs Boyle’s solicitors as stakeholders. The contract provided for a completion date on or before November 30 1979 and was on the usual form incorporating the general conditions known as the National Conditions of Sale, 19th ed. These included condition (13) That the vendor shall not be bound to show any title to boundaries, fences, ditches, hedges or walls, and condition (17), which is important for present purposes and which I should read. It is headed ‘Immaterial Errors’ and reads as follows: (1)  Without prejudice to any express right of either party or to any right of the purchaser in reliance on section 24 of the Law of Property Act 1969 . . . and I interpolate that that section has no relevance to the present case . . . to rescind the contract before completion, no error, misstatement or omission in any preliminary answer concerning the property or in the sale plan or the special conditions shall annul the sale, nor save where the error, misstatement or omission is in a written answer and relates to a matter materially affecting the description or value of the property, shall any damages be payable or compensation allowed by either party in respect thereof. (2)  In this condition a preliminary answer means and includes any statement made by or on behalf of the vendor to the purchaser or his agents or advisers, whether in answer to formal preliminary enquiries or otherwise before the purchaser entered into the contract. As I have already said, the important answer was the answer to preliminary inquiry no 2. That referred to the letter of Messrs Andersons on behalf of Mr Allfrey, but the trouble which has given rise to this action has nothing to do with Mr Allfrey or his land, or with the points (1) to (5) made in Messrs Andersons’ letter. It is a trouble in relation to the northern boundary of Stall House. As I have mentioned, there is in the Stall House property a small lake, and beyond the lake there is a house and garden known as Staalcot which belongs to a lady who at times has been Miss Bilbe-Smith and at other times Mrs Earle. I shall for convenience refer to her as Mrs Earle. She is in fact a niece of Mr Allfrey and the granddaughter of a former owner of Stall House, but that does not matter. The dispute concerns the boundary in the vicinity of the edge of the lake between Mrs Earle’s property and Stall House. When Mrs Boyle purchased Stall House in 1967 she and her husband decided to erect a substantial fence along the boundary between Stall House and Mrs Earle’s property. They were, of course, entitled to do that. Their reason was partly that Mrs Boyle owned a couple of Great Danes — she wanted to keep them in her property and prevent other dogs or animals coming in — and partly that Dr Boyle was minded to get a couple of swans to put on the lake. However, a dispute arose in 1967 over where the boundary should run. Solicitors were involved and there was correspondence between solicitors, and ultimately there was a meeting on the site in the early autumn of 1967. After that meeting Dr Boyle got their gardener, Mr Cox, to put up a fence under Dr Boyle’s supervision, but on October 16 Mrs Earle’s solicitors, who happened to be Anderson, Longmore & Higham, wrote to Dr Boyle’s solicitors, Peachey & Co, as follows: We refer to your letter of October 5. Our client has telephoned us today telling us that your client, Dr Boyle, has in her absence put up a fence which for a certain length is on her property and not on Dr Boyle’s, and in connection with this work has pulled up and otherwise damaged various sections of a hedge which is her property. She also tells us that Dr Boyle and his agent had at various moments trespassed on her land. We are taking further instructions and shall be in touch with you again, but meanwhile on behalf of our client we protest most strongly at the action taken. A ‘without prejudice’ letter was written to Dr Boyle’s solicitors at the same time offering a plan to help explain the situation. These were acknowledged by Dr Boyle’s solicitors, but in fact no further action was taken by or on behalf of Mrs Earle at that stage in relation to the boundary or the fence. I accept Mr Anderson’s evidence that in fact from 1967 until 1979 Mrs Earle was away in the United States for the greater part of the time, and only made occasional short visits to Staalcot. There were between 1967 and 1979 various rows from time to time between Mrs Earle and Mrs Boyle about other minor matters. They were rows in the course of which tempers seem to have flared. If, however, the preliminary inquiry as to boundary disputes had fallen to be answered late in 1978, it could fairly have been said in my judgment by and on behalf of Mrs Boyle that there was no boundary dispute with Mrs Earle. However, on February 22 1979 Messrs Andersons wrote a further letter on Mrs Earle’s behalf to Dr Boyle’s solicitors, Peachey & Co. In this they said: I refer to our correspondence with you in October 1967 and now write to inform you that having cleared some overgrowth along the bank of the lake at the bottom of her garden, our client has uncovered a strong growth of alders, willows and brambles having their roots in her bank and growing up on both sides of the fence. It is her intention to trim back all these saplings and small trees and ultimately to plant a screen of selected evergreen and coniferous trees along the top of the bank. You will recall that in our letter to you of October 16 1967 we objected that your client had erected part of the fence on our client’s property by placing it on our client’s side of a line of stakes which our client had erected at the northwest corner of the lake along the water’s edge which forms the boundary. Our client pointed this out to your client at the time and again in the spring of last year, and we are now instructed to repeat our client’s objection to the incorrect position of the wire fence at this point. In conclusion, we are to reiterate that our client sees no need for the fence, and would prefer to see it removed to give a more natural appearance to the landscape. There is no evidence before me, despite the reference in the letter, to indicate that Mrs Earle did point out the incorrect position of the fence to Dr Boyle in the spring of 1978. Accordingly, I ignore that reference in the letter. 135 Messrs Andersons sent Messrs Peachey a further letter on March 28 1979 objecting to the condition of two large trees growing on Mrs Boyle’s land. It was said that these trees were dangerous. Nothing turns in this action on the condition of those trees. The letter is, however, part of the history of the matter in relation to Mrs Earle. I have no doubt that Dr Boyle received copies of both these letters from Messrs Peachey immediately after Messrs Peachey received them, and I have no doubt that Dr Boyle told Mrs Boyle the substance, as he understood it, of the two letters. When in August 1979 Mr Hunter’s solicitors submitted their preliminary inquiries to Mrs Boyle’s solicitors, Mrs Boyle’s solicitor, Mr David Lloyd, sent Mrs Boyle a copy of the form of inquiries and asked her to fill in the answers. Mrs Boyle, throughout her married life, had left all business matters to Dr Boyle. She is a lady who is somewhat vague on points of detail, and had not been used to dealing with any business matters, and accordingly, she passed the form of inquiries to Dr Boyle for him to complete on her behalf. He dealt with the inquiry no 2 by simply inserting the one word ‘No’, and sent that back to Messrs Streeter, Howe. They converted the answer into that which appears in the reply sent out, which I have already read, because they were aware, as Dr Boyle probably was not, of Messrs Andersons’ letter of June 22 1979, written on behalf of Mr Allfrey, and they thought it prudent, as it undoubtedly was, to draw any purchaser’s attention to that letter. Dr Boyle is a consultant physician at the Middlesex Hospital. He also had, and indeed he may still have, a Harley Street practice. He is a highly intelligent man, firm and decisive in handling matters, and of a dominant character, but I think he is prone to see only his own side of any question that he has to consider. I do not doubt that he was upset at the collapse of his marriage, but I do not think he is the sort of man who would be prevented by his own personal distress from handling business matters competently and firmly. I have no doubt that he had no intention to deceive or to suppress matters which he felt that he ought to disclose, but I think his attitude was, as he said in evidence, that he did not mention the dispute with Mrs Earle when he prepared the reply to the preliminary inquiry because to his mind there was no dispute. It had been resolved in 1967. His view of the letters from Messrs Andersons of October 16 1967 and February 22 1979 was that they were quite incorrect in saying that the fence was not in the correct position. The letters were misconceived and so there was no dispute. It seems to me, with all respect to Dr Boyle, that that approach was misconceived. He ought to have disclosed the claim made by Mrs Earle’s solicitors in the letter of February 22 1979, even if he also indicated that he thought that the claim was totally misconceived, because it was for the purchaser, whoever he might be, to satisfy himself as to the rights or wrongs of the claim over the boundary and to decide for himself whether he would be willing to proceed in the face of a claim, the answer to which depended on matters which were not within the purchaser’s own knowledge, but on which he would have to rely for evidence on Dr Boyle or others. I take the view, therefore, that the answer to the preliminary inquiry no 2 involved a misrepresentation in that there was to the knowledge of Mrs Boyle and Dr Boyle on whom Mrs Boyle relied, a dispute over the position of the fence which had been put on record again by Messrs Andersons in the letter of February 22 1979. My attention has been drawn to certain small print which appears above the replies on the form of preliminary inquiries. This small print reads as follows: These replies on behalf of the vendor are believed to be correct, but accuracy is not guaranteed and they do not obviate the need to make appropriate searches, inquiries and inspections. This may be a warning to a purchaser’s solicitors to do what any experienced solicitor would know was his duty and make appropriate searches, inquiries and inspections, but it cannot prevent the answers that are given from being representations of fact. The object of a purchaser in making preliminary inquiries is to obtain information on which the purchaser can decide whether to proceed to exchange contracts. Any vendor will know that that is the object of asking the questions, and will know that the answers are likely to be relied upon. A person who makes a representation of fact cannot negative the representation by words such as those in the small print which I have quoted. I accordingly ignore those words. I should now deal with the way the matter developed after the preliminary inquiries were replied to in August 1979. I have already explained that Mr Hunter dropped out; Mr Walker came on the scene, saw the property in September and the letter of September 21 was sent with the enclosures I have mentioned. At some stage Mrs Earle, or more likely agents on her behalf, removed a length of the fence which had stood since 1967 to which objection had been taken in the letter of February 22 1979. The length removed seems to have been some 20 or 30 yards, and she had the bank dug away so as to extend the lake to where the fence had formerly stood. Mr Cox, who was the Boyles’ gardener and who worked at Stall House in 1979 for 5 1/2 days per week, has said that this happened before September 20, which was the date on which Mrs Boyle moved out of Stall House, and that he, Mr Cox, discussed the removal of the fence with Mr Walker in September, that is to say, before Mr Walker exchanged contracts. If that is correct, Mr Walker knew all about the removal of the fence before contracts were exchanged, knew perfectly well, despite the reply to the preliminary inquiry, that there was a boundary dispute with Mrs Earle, but none the less decided to proceed. If that were right, Mr Walker can have no claim whatsoever to the return of his deposit on the grounds of misrepresentation. Mr Walker’s evidence is that he had two or possibly three discussions with Mr Cox. One was a discussion in September before contracts were exchanged of a somewhat general nature. The other was a discussion on October 13 about taking Mr Cox into his own employment if he completed the purchase, and Mr Walker says that it was on that occasion, and not before, that he saw that the fence had been removed and discussed with Mr Cox what had happened, and was told that it had been removed by Mrs Earle. Mrs Boyle, as I have said, is vague on dates, but her recollection is that she was told of the removal of the fence after she had left Stall House, that is, after September 20. What is clear beyond doubt is that on October 18 Mr Walker’s solicitors wrote to Mrs Boyle’s solicitors raising a query in relation to the northern boundary and referring in that letter to the removal of the fence. They ask to know what the correct boundary is and what problems there have been in the past regarding the boundary. It seems to me that all the probabilities are that Mr Cox is wrong in his placing of his discussion with Mr Walker, and Mr Walker is right. I find, as a fact, therefore, that the fence had not been removed by the time of Mr Walker’s visits to Stall House before contracts were exchanged. It was removed during the period between the last of those visits in September and October 13. Mr Walker had no knowledge of the removal of the fence or of any problem in relation to the fence or the boundary with Mrs Earle before contracts were exchanged. The fence was removed after Mrs Boyle had moved from Stall House. There is no evidence that its removal was before October 1 rather than during the period from October 1 to 12 and there is no evidence that the removal of this length of fence was made known to Mrs Boyle before contracts were exchanged. Accordingly, the fact of the removal of the fence cannot be relied on as imposing any obligation on Mrs Boyle to correct the answer to preliminary inquiry no 2 before contracts were exchanged. Mr Walker’s attitude after he had learned in October of the removal of the fence was that he wanted to know what it was all about. In a letter of November 6 1979 his solicitors asked Messrs Streeter, Howe to confirm that there had been no previous disputes regarding the boundary, and matters proceeded as far as Mr Walker was concerned towards completion in the usual way, subject to the qualification that he needed to be satisfied on this outstanding matter. In a postscript to a letter to Streeter, Howe of November 14 1979 his solicitors said that Mr Walker could complete on Friday November 23 provided the boundary question was satisfactorily resolved. On November 10 Streeter, Howe acknowledged that letter, and they sent a copy of a letter of October 30 which they had received from Messrs Andersons as solicitors to Mrs Earle, together with136 copies of letters supplied by Messrs Andersons and a copy of a letter to themselves from their own client, Mrs Boyle. The letter from Messrs Andersons is somewhat difficult to follow because it says at one stage, ‘Our client’s fence has always been in the correct position’. It is plain that Messrs Andersons are persisting in the claim which Mrs Earle had made through them earlier. They enclosed copies of the letters of February 22 and March 28 1979 and these were thus sent on to Mr Walker’s solicitors. The letter from Mrs Boyle herself to Mr David Moore, a copy of which was also sent on, says this: I herewith enclose your Ordnance Survey plan marking the boundaries of Stall House. Mrs Earle has been nothing but a trouble-maker ever since we have been there because for one thing she said it spoilt the country to have fences. What she really wants is to have use and pleasure of the lake. She has left some of the fence which should really be on the top of the bank but to keep her happy we put it almost in the water. She has just had it hacked and smashed down and should be made to replace it at once at her expense. She said her solicitor told her to do it. Seeing a letter describing Mrs Earle as nothing but a trouble-maker naturally did not reassure Mr Walker. Moreover, the way Mrs Boyle has happened to phrase her letter suggests that Mrs Earle had been nothing but a trouble-maker over the fence and the lake. I think Mrs Boyle did not really do herself justice. She was writing at a time of considerable worry, both owing to the breakdown of her marriage and because she had the commitment to bridging finance for her new house, and it appeared now that after Mr Hunter had fallen out a difficulty was arising, thanks to Mrs Earle, with Mr Walker. The facts were that there had been incidents and some acrimony between Mrs Earle and Mrs Boyle, but not over the fence or the boundary by the lake. Mr Walker took, on advice, the sensible course of suggesting that a meeting should be arranged to find out what the issue really was and to see if that issue could be resolved. The meeting was set up as a matter of urgency by Mrs Boyle’s solicitor. It took place on November 27 at the site. It was attended by Mrs Boyle, Mr David Moore, her solicitor, Mr Walker, Mr Rutteman, his solicitor, Mrs Earle, who had arrived back in this country only a day or so before, and Mr Anderson, her solicitor, and by a surveyor from Mrs Boyle’s estate agents to help if he could. Mrs Boyle’s son may have been present for part of the time, but took no part in the meeting. The first task was to find out what the dispute was really about. That had its complications. Mr Anderson has a point that the boundary on the deeds was fixed by reference to the boundary of the lake, but that the lake was subsequently extended, and so the boundary should be by the old lake boundary and not the current lake boundary. Dr Boyle, however, has told me that the boundary of the lake varied from time to time, because the lake was fed by a stream which collected drainage water from surrounding lands, and so at times there was more water in the lake than at other times and the boundary moved up the bank. Unfortunately, the meeting failed to resolve the dispute or reach any conclusion at all, and it ended, as I find, in acrimony and bad temper on the part of Mrs Boyle and Mrs Earle, and a threat by Mr Anderson to have Mrs Boyle removed from the land. Mr Walker’s position was that he was not concerned to take any part in the meeting but he wanted the dispute resolved between the two owners, Mrs Boyle and Mrs Earle. The actual line of the boundary did not matter very greatly to him, but he could not accept a position where there was still a continuing dispute with all the trouble that might involve for him as a successor coming into an acrimonious situation. Accordingly, after the meeting, having discussed the matter with his solicitor, Mr Rutteman, he claimed the return of his deposit, rescinding the contract on the ground of misrepresentation, and the writ in the first action was issued. On the same day on which that writ was issued Mrs Boyle’s solicitors served a notice to complete on Mr Walker under condition 22 of the National Conditions of Sale. Mr Walker failed to comply with that notice, and Mrs Boyle’s solicitors, treating his failure to comply as a breach of the contract, forfeited his deposit and issued the writ in the second action. The position as to this notice to complete is, as I see it, quite simply this. If Mr Walker was entitled to rescind the contract for misrepresentation then the notice to complete cannot have any effect. If, however, Mr Walker was not entitled to rescind the contract then the notice to complete was a valid notice with which Mr Walker failed to comply. The subsequent history of the matter is that the property was sold in the spring of 1980 to another purchaser at a price in excess of £100,000, taking account of payment for chattels, but slightly lower than the price Mr Walker had agreed to pay. The facts of the dispute with Mrs Earle were fully disclosed in answers to preliminary inquiries to the other purchaser, but he, a Mr Smith, was not troubled and proceeded to completion. Now, I have already said that there was in my judgment a misrepresentation and a failure to disclose the dispute with Mrs Earle in the answer to preliminary inquiry no 2. Had that dispute been disclosed before contracts, I have no doubt, and I find as a fact, that Mr Walker would have wanted to know all about it, and would have wanted the dispute resolved before contracts were exchanged. I do not regard that as an unreasonable attitude on his part. He could live with the boundary when settled, but was not prepared to accept hassle and trouble from a continuing dispute. Had there been disclosure, therefore, I think the meeting to resolve the situation would have been set up before contracts were exchanged, but I have no reason to suppose that a meeting at a slightly earlier date would have been more successful or less acrimonious than that which took place on November 27 and I find as a fact that had there been such a meeting before contracts were exchanged, Mr Walker would not have exchanged contracts. In view of this and in view of the care which Mr Walker took over the matters in relation to Mr Allfrey which were disclosed in the reply to preliminary inquiry no 2, that there was not to the vendor’s knowledge any boundary disputes except as indicated in Messrs Andersons’ letter, I find that that reply was a factor among many which induced Mr Walker to enter into the contract, and the representation in the reply was a material representation. I turn now to condition 17 and the argument that condition 17 precluded Mr Walker from claiming rescission or other relief in respect of the misrepresentation, which, as I find, was made. The gravamen of condition 17 is that: No error, misstatement or omission in any preliminary answer concerning the property shall annul the sale nor save where the error, misstatement or omission is in a written answer and relates to a matter materially affecting the description or value of the property, shall any damages be payable or compensation be allowed in respect thereof. I am not concerned with the part of the condition which relates to damages or compensation, but it is strange that the condition should purport to exclude compensation for any oral misstatement, however grave. On its literal reading the words ‘No error, misstatement or omission in any preliminary answer shall annul the sale’, would preclude a purchaser from obtaining rescission, even though the misstatement or omission was deliberately fraudulent on behalf of the vendor. Plainly, that cannot have been the intention of the condition, and no one has suggested that it would preclude relief for fraud. Mr Furber, for Mr Walker, has submitted that the condition should be taken as inapplicable where the error, misstatement or omission was in respect of facts which the vendor knew or ought to have known. Mr Seymour, for Mrs Boyle, has said that it is to be qualified as inapplicable to matters of title because the vendor has an overriding duty to deduce a good title to the property and to disclose defects in his or her title. These interpretations are derived from certain authorities. The authorities make it quite clear that the clause is not, in a court of equity, given literal force. I do not adopt quite either of the formulations by counsel of the limitations which the courts have put on the clause. The most helpful authority, I think, in many ways is Nottingham Patent Brick & Tile Co v Butler (1885) 15 QBD 261, which was decided at first instance by Wills J. In that case certain restrictive covenants affecting the title had not been disclosed, but it was said, firstly, that the purchaser would not be bound by the covenants and secondly, whether bound or not, he was bound to accept the title because of two conditions, no 4 and no 12 in the137 conditions of sale in the contract. No 4 provided that the property was sold subject to all matters, rights of way, tenants’ rights and other easements and other matters or things affecting the property, whether disclosed at the time of the sale or not, and condition 12 provided that the property was believed to be and was to be taken to be correctly described, and any incorrect statement, error or omission found in the particulars or the special conditions was not to annul the sale or entitle the purchaser to be discharged from his purchase, nor was the vendor or purchaser to claim to be allowed any compensation in respect thereof. Wills J dealt with the matter at p 271 of his judgment. He said: The fourth condition provides that the property is sold subject to any matter or thing affecting the same whether disclosed at the time of sale or not. Such a condition, however, does not relieve the vendor from the necessity of disclosing any incumbrance or liability of which he is aware but simply protects him if it should afterwards turn out that the property is subject to some burden or right in favour of a third person of which he is unaware. (Dart on Vendors and Purchasers 5th ed p 156). It would be nothing short of a direct encouragement to fraud if a vendor were at liberty by a condition of this kind to sell to a purchaser as an absolute and unburdened freehold, a property which he knew to be subject to liabilities which would materially reduce its market value. In the present instance the vendor knew of some of the restrictions and had the means of knowledge of all of them, and he cannot escape from the necessity of fairly disclosing them by omitting to make himself acquainted with his deeds or by forgetting their contents. In honesty and in law alike he was bound to give the purchaser full and fair information what it was that he had for sale and was inviting him to buy, and having failed to do so he cannot insist upon the bargain procured by the suppression of material matters affecting the nature of the subject of a sale. Then at the foot of the page Wills J goes on: The 12th condition provides that any error or omission in the particulars is not to annul the sale nor to entitle the purchaser to compensation. It is however, settled law that such a condition will not protect the vendor where the misdescription being of such a nature as but for the condition would avoid the contract is due to the wilful reticence or negligence of the vendor. Wills J’s decision was affirmed by the Court of Appeal. The decision of the Court of Appeal is reported in (1886) 16 QBD 778. In the course of his judgment Lord Esher, in referring to Wills J’s decision, says, starting at p 786: But supposing he was right in the view which he took of that and that the case stands in the same position as if no statement had been made, then it is said that by reason of the conditions of sale and of the provisions of the Conveyancing Act, although there is a defect in the title, yet it can be forced upon the purchasers. It seems to me an astounding proposition that a vendor can by means of such conditions of sale force upon a purchaser a defective title, even though he (the vendor) knew of the defect. Now, that Butler did not know of the defect seems to have been assumed by Wills J. If you treat him as dealing himself with the purchasers he knew of the defect, and if the conversation between his solicitor and the plaintiffs’ solicitor at which he was present amounted to nothing at all, then it comes to this, that he, knowing the defect, by his agent put forth the condition of sale. If that is so the case is absolutely within the authority of Heywood v Mallalieu (1883) 25 ChD 357 as it seems to me. It is impossible for a vendor knowing of a defect in his title either by himself or his agent to put forward conditions of sale which are to force upon a purchaser a bad title of which he knew, but which he did not disclose. A court of equity would not be of much use if it could not meet such a case as that, and it seems to me clear that a court of equity would never have enforced a contract under such circumstances. Does the Conveyancing Act make any difference?  I entirely agree that, whatever construction you put upon it, it cannot have that effect. It cannot cure that defect in the title of the defendant. If that is true there was a defect in the defendant’s title, and he was insisting that the court should force on the purchaser from him a bad title. The court will not do that. He cannot have specific performance of the contract when he has a bad title which was within his knowledge, and it seems to be that he cannot keep the deposit. I have been referred to the passage in Emmet on Title, 17th ed pp 131 to 133 where the vendor’s duty to show good title is expounded, and Nottingham Patent Brick & Tile Co v Butler (1886) 16 QBD 778 and Heywood v Mallalieu (1883) 25 ChD 357 are both cited as good authority. The passage in Emmet proceeds immediately at p 133 to consider the effect of an express representation as to title. The passage says: An express representation by a vendor in regard to his title to the land relieves the purchaser from an investigation of the facts of the case as he is entitled to rely on such statement and it is no defence to say that he, the purchaser, had the means of discovery and might with reasonable care have discovered that the statement was untrue. Thus in Hunt (Charles) Ltd v Palmer [1931] 2 Ch 287 the particulars of sale of two leasehold shops described them as valuable business premises. In fact, the lease contained a covenant restricting the lessee from carrying on any trade or business other than that of a ladies’ outfitter, fancy draper or the manufacture of ladies’ clothing. The purchaser wanted the premises for use as a dairy. The conditions contained a condition as to the lease being open for inspection before the sale and that the purchaser should be deemed to have notice of the covenants in it. It was held by Clauson J that as the vendors had described the premises as valuable business premises, the purchaser was induced by that description to buy the and he was entitled to require that the premises should fairly answer that description. The fact that the purchaser must be deemed to have had notice of the covenant was not relevant. The action for specific performance against the purchaser was therefore dismissed. In fact in the report of Hunt (Charles) Ltd v Palmer it appears that the conditions of sale, which were the National Conditions of Sale of the time, contained not only the condition that the purchaser should be deemed to have bought with full notice of the contents of the lease, but also a condition no 10 that no error, misstatement or omission in the particulars, sale plan or condition should annul the sale, nor should any compensation be allowed either by the vendor or the purchaser in respect thereof. The argument by the plaintiffs in that case to enforce the contract relied, as the report shows, on both the conditions which I have mentioned, and that argument was rejected by Clauson J, who held that non-disclosure overrode both conditions. The Supplement to Emmet refers in relation to the passage on p 133 to a decision of my own in Laurence v Lexcourt Holdings Ltd [1978] 1 WLR 1128 where I applied Clauson J’s decision in Hunt (Charles) Ltd v Palmer [1931] 2 Ch 287. I there held that it made no difference whether the misrepresentation involving a misdescription of the property was actually a term of the contract or was made in the course of the negotiations before the contract and I referred to a passage in a judgment of Tindal CJ in Flight v Booth (1834) 1 Bing NC 370, which had been cited in a case referred to in Clauson J’s decision. Tindal CJ said: We think it is at all events a safe rule to adopt that where the misdescription, although not proceeding from fraud, is in a material and substantial point so far affecting the subject matter of the contract that it may reasonably be supposed that but for such misdescription the purchaser might never have entered into the contract at all, in such case the contract is avoided altogether and the purchaser is not bound to resort to the clause of compensation. It seems to me that the equitable barrier to specific performance extends not merely to matters of title where the vendor has failed to disclose defects known to him in his own title, but also to misrepresentation where the vendor has, albeit innocently, misdescribed the property or made some other misrepresentation about the property, when the true facts were within his own knowledge. A trifling misrepresentation where the truth would have had no effect on the purchaser and the purchaser would have none the less entered into the contract, rests in a different category, because there the contract has not been induced by the misrepresentation, but here, as I find, the purchaser would reasonably have refused to contract unless the boundary dispute it disclosed to him had first been resolved. Therefore, it seems to me that on equitable principles and consistently with the authorities I have mentioned, and consistently also with the fairly recent decision of Walton J in Faruqi v English Real Estates Ltd [1979] 1 WLR 963, the vendor, Mrs Boyle, is not entitled in equity to rely on condition 17 in the circumstances of this case. The alternative view is that whatever the position may previously have been in equity, the extent to which an exclusion clause can be valid is now governed by section 3 of the Misrepresentation Act 1967. As amended by the Unfair Contract Terms Act 1977, this section now reads as follows: If a contract contains a term which would exclude or restrict (a) any liability to which a party to a contract may be subject by reason of any misrepresentation made by him before the contract was made or, (b) any remedy138 available to any other party to the contract by reason of such a misrepresentation, that term shall be of no effect except in so far as it satisfies the requirements of reasonableness as stated in section 11(1) of the Unfair Contract Terms Act 1977, and it is for those claiming that the term satisfies that requirement to show that it does. If condition 17 has any validity or relevance in the circumstances of this case, it is a term which would exclude liabilities to which Mrs Boyle would be subject by reason of misrepresentation, and so section 3 is applicable. The requirement of reasonableness in section 11 is that the term shall have been a fair and reasonable one to be included, having regard to the circumstances which were or ought reasonably to have been known to or in the contemplation of the parties when the contract was made. I do not regard condition 17 as satisfying that requirement in the circumstances of this case. Another way of putting it is that Mrs Boyle has not shown that it does satisfy that requirement. It has been submitted by Mr Seymour that as there were solicitors acting for both parties, it would be a very strong thing to say that any term of the contract which resulted is not a fair and reasonable one in the circumstances. That argument would have great force, no doubt, if the solicitors had specifically directed their minds to the problem and had evolved the clause which was under attack. In fact, however, neither solicitor directed his mind to condition 17, and they have both told me, and they are men of not inconsiderable experience as conveyancing solicitors, that they have never come across a case where any question under condition 17 has arisen. It was submitted that it was the duty of the purchaser’s solicitor to advise his client, Mr Walker, of the implications of condition 17 and of the other terms of the contract, which Mr Walker was going to enter into, and he must be taken to have discharged that duty and satisfied himself and Mr Walker that the terms were reasonable. It is, of course, the duty of a solicitor to advise his client about any abnormal or unusual term in a contract, but I think it is perfectly normal and proper for a solicitor to use standard forms of conditions of sale such as the National Conditions of Sale. I do not think he is called on to go through the small print of those somewhat lengthy conditions with a toothcomb every time he is advising a purchaser to draw the purchaser’s attention to every problem which on a careful reading of the conditions might in some circumstance or other conceivably arise. I cannot believe that purchasers of house property throughout the land would be overjoyed at having such lengthy explanations of the National Conditions of Sale ritually foisted upon them. It has also been submitted by Mr Seymour that the court should be very slow to hold that a common form clause like condition 17 is not fair and reasonable. Of course it is true that there are common form clauses which have been evolved by negotiation between trade associations, associations of merchants or associations of growers or trade unions or other such bodies concerned to protect the rights of their members, which can be regarded as representing what consensus in the trade regards as fair and reasonable. Again, the National Conditions of Sale are not the product of negotiation between such bodies and it is plain from the conditions I have cited in the Nottingham Tile Co case and Clauson J’s case of Hunt (Charles) Ltd v Palmer that what now appears in condition 17 has come down through the ages despite very drastic limitations imposed on it by the courts. I do not think it can be said that its precarious survival until 1977 entitles it to the automatic accolade of fairness and reasonableness. It follows that Mr Walker succeeds in my judgment in his claim to the return of his deposit. The solicitors for Mrs Boyle in fact put the amount of the deposit which they had previously held as stake-holders into a deposit account and gave up their position as stake-holders in February 1980. Mr Walker’s entitlement to the deposit carries with it, in my judgment, entitlement to the interest earned by the deposit since that date. In addition, Mr Walker claims damages for the loss of interest from the time when he paid the deposit to Mrs Boyle’s solicitors until they put it into an interest-earning deposit account. That claim is put as a claim for damages for misrepresentation under the Misrepresentation Act 1967. Before that Act, as the misrepresentation was, as I have found, innocent, no damages could have been recovered. Section 2(1) of the 1967 Act provides: Where a person has entered into a contract after a misrepresentation has been made to him by another party thereto and as a result thereof he has suffered loss, then if the person making the misrepresentation would be liable to damages in respect thereof had the misrepresentation been made fraudulently, that person shall be so liable notwithstanding that the misrepresentation was not made fraudulently, unless he proves that he had reasonable ground to believe and did believe up to the time the contract was made that the facts represented were true. In the present case the representation was not made fraudulently. If it had been made fraudulently Mr Walker would have had a claim for damages, but I take the view that Dr Boyle did not in the circumstances have a reasonable ground to believe, although he did believe, that the answer he prepared and which was adopted by Mrs Boyle’s solicitors was true. Therefore, I think Mr Walker is entitled to an inquiry as to the damage he has suffered by loss of interest over the period from his payment of the deposit to Mrs Boyle’s solicitors until January 23 1980 when the deposit ceased to be held by them as stakeholders and earned the interest to which he is entitled as I have already held. An order was made for the return of the deposit to the purchaser, with interest from the date when the deposit ceased to be held by the vendor’s solicitors as stakeholders, and an inquiry as to the damage suffered by the purchaser by loss of interest on the deposit for the period from payment of it to the vendor’s solicitors to the date when it ceased to be held by them as stakeholders; vendor to pay the purchaser’s costs of the action.