Brown v Raphael

JurisdictionEngland & Wales
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE ORMEROD
Judgment Date03 October 1957
Judgment citation (vLex)[1957] EWCA Civ J1003-1
CourtCourt of Appeal
Date03 October 1957
Ernest Brown
and
Howard Osoar Raphael

[1957] EWCA Civ J1003-1

Before:

The Master of the Rolls

(Lord Evershed)

Lord Justice Romer

Lord Justice Ormerod

In The Supreme Court of Judicature

Court of Appeal

MR. I.J LINDWER, Q.O, and MR T. MICHAEL EASTHAM, instructed by Messrs. Osear Maeon & Co., appeared for the Appellant (Defendant).

MR. C. MONTGOMERY WHITE, Q.C., and MR E.I. GOULDING, instructed by Messrs. Charles H. Wright & Brown, appeared for the Respondent (plaintiff)

THE MASTER OF THE ROLLS
1

The present action and appeal arise out of a sale at auction on the 17th February, 1955, of a certaia property, an absolute reversion in a trust fund. Because I think much in the case depends upon the exact nature of the subject matter of the salt as stated as the particulars, I shall take time to read what was described as "Lot 11" more or less fully. It is stated thus "Lot 11. The absolute reversion receivable on the decease of a lady aged 69 (born 30th December, 1885) to the whole of a trust fund now represented by 8,000 2½ per cent consols, of estimated value 5,2lO Next in italics, appear these three lines: This sum has been set aside to pay an annuity of 200 per annum to the Lady mentioned above The trustee is the Public Trustee Estate duty will be payable on the death of the annuitant who is believed to have no aggregabe estate" Then appear additions conditions of sale as to Lot The first mstates that the reversion is derived under a will bearing a particular date and the probate of the will is to constitute the root of title. Then: "2. The vendor sells as the trustes in bankruptcy of the benefiolal owner. 3. The reversion is sold subject to all death and other duties which may be or become payable in respect thereof. The above information regarding duty so payable is believed to be correct, but the vendor accepts no responsibility as to what duties will in fact become payable nor as to the amount which will beoome payable and no compensation shall be paid or allowed in respect of any error as to duties". Condition 4 states where completion is to take place. 5 is that the particulars of the investment are as provided by the Public Trustee Office on a particular date "and are believed to be correct and the reversion is sold subject to such variation as may occur therein before completion of sale. The vendor accepts no responsibility for the estimated value of the investment". Condition 6 relates to expenses and condition 7 relates to requisitions of title. 8 says that the sale is subject to a reserved price. Condition 9 provides: "These additional conditions shall prevail notwithstanding anything inconsistent with or contrary thereto in the general conditions which (in so far as they are not varied by these conditions) shall apply to the sale of this lot" Then appears in heavy leaded type: "Solicitors as to Lot 11 - Messrs. Oscar Mason & Co Cliffords Inn Fleet street, E.C.4".

2

That subject matter having been put up for auction on the date I mentioned, the plaintiff in the present proceedings entered into a contract for purchase of the.reversion at the sum of 2,825: but the contract was not completed by January of 1956. In the end the plaintiff, the purchaser, stated that he had been misled by the representation which he said was to to found in the third line of the italics, the words "who is believed to have no aggre gable estate". He therefore sought reaoission of the contract. The trustee in bankruptcy repudiated that claim, and he on his side, by counterclaim, aought to enforce the contract.

3

The statement of claim in the action, as it is drawn, undoubtedly, upon the face of it, places the main emphasis on an allegation that the alleged representation was not only untrue but was made dishonestly. The learned Judgs acquitted the defendant and his agents and representatives of dishonesty, but he has held the plaintiff entitled to relief on the basis of an innocent material misrepresentation on which the plaintiff had acted.

4

At an early stage in this appeal the question arose whether, on the pleadings if fraud was rejected, it remained open to the plaintiff to proceed on the ground of innocent misrepresentation; and we cams to the conclusion that he was so entitled. No question now arises as to dishonesty, so that we must now consider the case on the footing that it is open to the plaintiff to prooeed on the basis of innocent misrepresentation.

5

In order that he may succeed on such a ground it is, of course, necessary that three things should be established. He must, first, show that the language relied upon does import or contain a representation of some material fact. Second, he must show that the representation is untrue; and, third, he must show that the plaintiff in entering into the contract was induced so to do in reliance upon it. The learned judge concluded all those three matters in the plaintiff's favour, and he therefore gave to the plaintiff the necessary relief in the action and dismissed the counterolsim.

6

I will say at ones that, though Mr. Lindner has pat all the points forcibly and attractively before us, in my judgment there is no ground shown for this court to disturb the learned judge's conclusions. I will therefore deal, though I hope not at too great length, with each of the three essential points in turn.

7

The first is to my mind the must significant: and perhaps the most difficult: Is there here a representation of a material faot? The essential words are those which I have already read more than once - "who" - that in the annuitant - "is believed to have no aggregable estate". At first sight, therefore, this is a stateaent of an opinion; but, of course, a statement of opinion is always to this extent a stateaent of fact, that it is an assertion that the vendor does in fact hold the opinion which he states. But, if that was all there was in the matter, plainly the defendant would succeed on the judge's finding: for the judge has held that there wae here no dishonesty on the part of the defendant or his agent; in other words, he has held that the defendant through his agent did believe that the annuitant had no aggregable estate. The question therefore arises: Is that all that these few words import?

8

Upon that, there is some considerable guidance for us in the case in this court in 1884 of Smith v. Land and House property Corporation, reported in 28 Chancery Division, at page 7. The contract in that case was one for the sale of a hotel at Walton-on-the-Nase, which at that time, according to what is said in the report, was apparently regarded as being in the last stages of decay. The question which arose there emerged from a reference in the particulare to the effect that the tenant of the hotel was regarded by the vendor as a most desirable tenant. It turned out in fact that those words were singularly inappropriate to him, since he was one who was hebitually in arrear with his rent, and the business he was able to do in the decaying town was regarded as quite inadequate to support that or indeed any rent for the hotel. Those are matters of fact, however, peculiar to Smith's case. For present purnoses the guidance I seek to get is to be found in the language of lord Justice Bowen, at page 15 of the report. He saye: "In considering whether there was a misrepresentation, I will first deal with the argument that the particulars only contain a statement of opinion about the tenant. It is material to observe that it is often fallaciously assumed that a statement of opinion cannot involve the statement of a fact. In a case where the facts are equally well known to both parties, what one of them says to the other is frequently nothing but an expression of opinion. The statement of such opinion is in a sense a statement of a fact, about the condition of the man's own mind, but only of an irrelevant facts.for it is of no consequence what the opinion is But if the facts are not equally known to both sides, then a statement of opinion by the one who knows the facts beet involves very often a statement of a material fact, for he impliedly states that he knows facts which justify his opinion". It is that last sentence which is particulary pregnant for present purposes.

9

I observe two things; first that the learned Lord Justice is not laying down a universal rule. His language is: "a statement of opinion….involves very often…. a statement of a material fact". Second, he observes that for that possibility to arise one party must know the facts better than the other. observe that he is not saying that one party must know all the facts; it suffices for the application of the principle if it appears that between the two parties one is better equipped with information or the means of information then the other.

10

It is very often said, and truly said, that sach case must depend upon its own faots; and I apprehend that the real question for tho court is to say, on the basis of the fasts and the context of this case, whether this is an instance in which the representation that the vendor has reasonable grounds for his belief ought to be imported. Mr. Lindner argued that to hold,. as the judge did, affirmatively on that point was to lay down the principle that wherever it is stated that one party entertains a particular belief then it must follow that there is a represent that he has grounds reasonably supporting his belief. But I lay down no such general proposition. The question here is whether in this case and in the context of these particulars concerning lot 11 such a representation of reasonable grounds to support the belief ought to emerge; and, as the judge held, I think that in this case the answer is in the affirmative.

11

First, it is to be noted that the subject-matter of the sale was a reversion to a sum of consols under a will. Anybody seeking to buy such a property must obviously first...

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