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You are here: BAILII >> Databases >> Jersey Unreported Judgments >> Mackie v Scott [2018] JRC 102A (14 June 2018) URL: http://www.bailii.org/je/cases/UR/2018/2018_102A.html Cite as: [2018] JRC 102A |
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Before : |
T. J. Le Cocq, Esq; Deputy Bailiff, sitting alone. |
Advocate M. H. D. Taylor for the Plaintiff.
Advocate W. A. F. Redgrave and Advocate C. F. D. Sorensen for the Defendant.
judgment
the deputy bailiff:
1.
By
contract passed before the Royal Court of Jersey on 17th January,
2014, ("the Contract"), Linda Susan Mackie
("the
Plaintiff") purchased a property known as St Christopher's from
Samantha Jane
Scott
("the Defendant").
2. The Contract contained a standard provision known informally as "the tout tel" clause. This name is based on the French expression of the clause before conveyancing was conducted in the English language. The tout tel clause in the Contract reads as follows:-
"The property was sold
with all such rights, appurtenances and dependencies as may attach thereto, in
the state in which it was at the date of sale with all its apparent or hidden
defects (vices
cachés), if any, situated in the parish of St Peter, in
the
Vingtaine
of St Nicolas."
3. Both the Plaintiff and the Defendant appeared through attorneys to pass the Contract who each took the customary oath before the Court.
4. By Order of Justice dated 21st June, 2017, the Plaintiff commenced proceedings against the Defendant claiming damages based on misrepresentation. The Defendant, whilst disputing the allegations of the Plaintiff as to misrepresentation, argues, in any event, that the Plaintiff's claim must fail because any representations made do not withstand the passing of the Contract containing as it does the tout tel clause.
5.
For the
reasons set out in his judgment of 26th October, 2017, (Mackie
v
Scott
[2017]
JRC
179) the Master certified the hearing of a preliminary
issue in the following terms:-
6. It is that preliminary issue which has been argued before me and it is the meaning and therefore ambit of the tout tel clause that falls to be determined.
7. Prior to the passing of the Contract there was, as is invariably the case, an exchange of correspondence between the conveyancers acting for the Plaintiff and the Defendant. Within the correspondence a number of queries were raised on behalf of the Plaintiff and confirmations sought. In the responses the Defendant, through her legal advisers, made a number of confirmations which, so the Plaintiff alleges, were false and give rise to her claim in damages. There is no allegation that any representations or confirmations given by the Defendant were deliberately false but merely they were representations that were wrong in fact.
8. It is not necessary to deal with all of the alleged misrepresentations. An example or two will suffice. In a communication of 6th January, 2014, marked "Subject to Contract" by the Defendant's legal advisers answers were provided, by interlineation in the Plaintiff's legal adviser's email, with regard to, by way of example, the following matters:-
"12.3 - "3.4 Please confirm that whether or not (sic) the property has ever been affected by ... structural defects, defective drains or problems with the drains, damp penetration... or any other defect. OUR CLIENT SO CONFIRMS"
12.4 - "3.6 Please confirm that no ... substance known or suspected to be unsuitable for its purpose, unstable or hazardous, has been used in the present structures forming part of the property ... OUR CLIENT SO CONFIRMS"
12.5 - "3.7 Please confirm that all warranties, guaranties, permissions, permits and/or approvals ... will be provided to and if necessary assigned to our clients (sic) on completion. OUR CLIENT SO CONFIRMS. Please provide full details thereof. ALL DETAILS WILL BE LEFT AT THE PROPERTY."
9. It is the Plaintiff's case that the interlineation amounted to positive representations that were material and induced the Plaintiff to enter into the Contract. Furthermore, it is the Plaintiff's case that each of the representations of fact were false.
10. It can be readily seen that, in determining the ambit of the tout tel clause, and specifically whether its existence defeats any claims made by the Plaintiff arising out of representations, this matter directly bears upon the effect of any pre-contractual enquiries of the sort typically made in conveyancing in Jersey.
11. The principles to be applied in interpreting
the clause are largely agreed between the Plaintiff and the Defendant. These have been usefully re-stated in
the recent judgment of the Parish of St Helier -v-
Minister for Infrastructure
[2017] JCA 027 at paragraph 12 in which the Court of Appeal said:-
12. Where there is a latent ambiguity in a contract
passed before the Royal Court the Court in Minister for Infrastructure
-v-
Parish of St Helier [2016]
JRC
153 said:
13. It may at this point also be appropriate to
emphasise the importance of the terms of the contract actually entered
into. In Grove and Briscoe
-v-
Baker [2005] JLR 348 at para 10, the Court said:-
14. That principle is even more important when
looking at a contract passed before the Court. In Fogarty -v-
St
Martin's Cottage Limited [2015]
JRC
068 at para 33 the Royal Court
said this:-
15. In Carry -v-
Liston [2017]
JRC
144
at para 34, the Royal Court added to the observations in Fogarty in the
following terms:-
16. In Hong Kong Foods Limited-v-Gibbons
[2017]
JRC
050 ("Hong Kong Foods"), citing Kwanza (below) at paragraph
134, the Court defined a representation as:
17. A statement of opinion (unless not honestly held) is not a representation of fact; nor is a mere commendatory statement e.g. mere puff, accordingly neither of these, even if incorrect can amount to misrepresentation.
18. In Hong Kong Foods, at paragraph 145 of the judgment, the Court made clear the effect of a misrepresentation albeit innocent, on a contract. It said this:-
19. I am conscious that in citing this passage,
which was obiter, the Court was there considering whether Jersey law required
that a misrepresentation was a 'vice
de consentement' and accordingly caused a contract to be
void
ab initio instead of merely
voidable.
That does not fall to be
considered here.
20. The current form of the tout tel clause flows directly from the judgments of the Royal
Court and of the Court of Appeal in the case of Kwanza Hotels Ltd -v-
Sogeo Company Limited ([1981] JJ 59 Royal Court; [1983] JJ 105 Court of
Appeal).
21. The Royal Court in Kwanza was called upon to consider the questions of both misrepresentation and implied terms in the contract of sale of a guest house. At page 4 of the judgment Ereaut, Bailiff, characterised two of the three questions he was called upon to answer in the following terms:-
22. In dealing with the first question the Royal Court at page 4 said this:-
23. The Court then went on to answer the first
question posed above in the negative.
In other words, the vendor
had made no representation.
24. A further argument for the Plaintiff in that
case was that the absence of the necessary consents for the occupation of the
chalet as dwelling accommodation was a "vice
caché" or hidden defect and that a buyer was
entitled to rescind the contract even though the defect was not known to the
seller. There was, it was argued,
an implied warranty that there were no such "
vices
cachés".
25. After examining the authorities the Royal Court, at page 77 said this:-
26. Accordingly the answer to the second question
was also in the negative. The
implied term that there were no "vices
cachés" had been negated by the "le tout tel qu'il est ..." clause.
27. In Kwanza the form of clause that the contract contained and which was considered by the Royal Court was in the form that was invariably at that time used in contracts of sale of land. All contracts at that time were written in the French language and the standard clause read as follows:-
28. The clause in that form may be translated as follows:-
29. It is important in my view
to understand what
the Royal Court in Kwanza was determining. It was not determining whether or not
the tout tel clause which applied at
that time had an exculpatory effect with regard to representations. The court had already dealt with the
question of misrepresentation by determining that there were no representations
as alleged made by the
vendor
in the first place. The ambit of the tout tel clause, insofar as it may relate to representations, was
not part of the Royal Court's determination.
30. The Royal Court was, however, dealing with the effect of the tout tel clause, in the form that then existed, on the question of implied terms and held that the formulation of the clause was sufficient to negate any implied terms other than that as to title.
31. The matter went to the Court of Appeal and that
court upheld the decision of the Royal Court. The Court of Appeal did not consider
that there had been a misrepresentation nor did it consider the effect of the tout tel clause if there had been a
misrepresentation. Furthermore, the
Court of Appeal concluded that there was no vice
caché in the property
sold and said this:-
32. It is interesting to note that no similar paragraph appears after the determination that there was no representation. It may be inferred that the Court of Appeal thought that a similar question would not arise with regard to the effect of the tout tel in the case of misrepresentation.
33. The Court of Appeal did however consider the
question as to whether, had there been a mispresentation, "the
action [should] be dismissed because the appellants did not take the
precautions which a prudent purchaser would have taken to verify
this"
(at 122). The Court concluded,
however, at 124 that there is no obligation on a purchaser to
verify
the truth
of representations of fact made by a
vendor:
34. Further, the Court of Appeal observed, at p114:
35. In my view
the Court of Appeal recognised the
principle that misrepresentation operates separately from express or implied
contractual warranties.
36. The Court of Appeal considered, but did not
rule on, the question whether the implied warranty as to the absence of vices
cachés was negated by the tout tel
clause which was present in that conveyance. In answering the second of the three
questions before it, the Court found that there was no
vice
caché in
that case so the issue did not need to be decided.
37. It was following the judgment of the Court of Appeal in Kwanza that the tout tel clause in its present form was adopted and became the standard clause. This change was a direct response to the decision in Kwanza.
38. The current tout tel clause (in French, as it was originally drafted and which takes precedence) states:
39. It can be readily seen that the variation
between the new clause and that considered in Kwanza is simply the
addition of the words "et dans
l'etat ou il se trouve avec tous ses
vices
apparents ou caches,
s'ils existent". In
other words it adds the terms "in
the state in which it is with all its apparent or hidden defects if any
...". The amendment
makes no reference to representations whether innocent or otherwise even though
the question of representations was key in the judgments of both the Royal
Court and the Court of Appeal in Kwanza. It would not have been difficult, had it
been the intention to include exculpatory words to deal with innocent
misrepresentations, to include them expressly possibly by the inclusion of an
"entire agreement" provision that is often found in commercial
contracts. Furthermore, the words
actually introduced appear to be dealing with the second part of the judgment
of the courts in Kwanza, namely the implied warranty that there were no
vices
cachés. The words
appear to me to be introduced to strengthen the original formulation of the
clause which had not as to its effect been affirmed by the Court of Appeal
which had not dealt with it.
40. I should at this point interject that the Defendant sought to deploy an affidavit sworn by Advocate Richard Falle in the evidence before me. Advocate Falle, who is a senior and eminent lawyer was, it may be noted, one of the counsel in the Kwanza case. To the extent that the affidavit purported to contain opinions of Jersey law I of course did not consider it. The Court is the arbiter of what the law of Jersey is on any particular matter and the opinion of counsel, no matter how eminent, contained in an affidavit and sought to be proven therefore as a matter of fact, must be irrelevant.
41. Advocate Falle did, however, write an article in the Jersey Law Review in June 2004 under the title "The structure of a pro-forma Jersey conveyance". At paragraph 31 of his article Advocate Falle says this of the revised form of the tout tel clause:
"... In a typical conveyance, the purchaser will now, and save for his remedy in the case of deliberate misrepresentation, take the property "warts and all", whether apparent or hidden at the time of the conveyance. This has imposed a heavier burden of enquiry upon the purchaser and, on those who advise him, a greater duty of care hitherto."
42. It appears, from this excerpt, that Advocate
Falle expresses the view
that a purchaser will have a remedy for "deliberate misrepresentation" but,
presumably, because Advocate Falle does not mention it, not that the purchaser
has any remedy for innocent misrepresentation. That is, of course, an expression of
opinion.
43. An amount of English authority was cited to me. Whilst I have considered it, I do not consider that it assists me in particular.
44. De La Haye-v-AG
[2010] JLR 218, in which the Court of Appeal said at para 79:-
45. The Plaintiff accepts that in customary law
there is an implied warranty that a property is sold free of hidden defects and
that the new version
of the tout tel
clause (which followed the Kwanza case) and particularly the addition of
the words "
vices
apparents au
cachés" confirms that the risk of patent and latent defects
falls on the buyer other than in cases of fraud. The Plaintiff accepts also that it would
have been possible to convert any representations made during the course of the
pre-contractual negotiation to contractual warranties or indeed to suggest an
amendment to the tout tel
clause. That did not happen.
46. It is the Plaintiff's case, however, that no such adjustment to the clause was necessary in this case because the language of the tout tel clause does not have the reach to exclude a claim for a pre-contractual misrepresentation. The Plaintiff argues that express words of exclusion would be required or language that admitted of no other meaning and the Plaintiff points to an absence of authority to the contrary.
47. It is of relevance, as the Plaintiff argues, that the fact that a misrepresentation has been made would, under English law, make a contract subject to a claim in rescission. In Emmett and Farrand on Title (19th Edition) 1986 at paragraph 4.026 the authors state:-
48. The Defendant argues that the tout tel clause clearly extends to cover all defects that exist in a property, whether apparent or hidden, save to the extent that there was a fraudulent misrepresentation on the part of the Defendant in relation to the existence of such defects.
49. The Defendant argues that the use of the tout tel clause was intended and
generally understood to place the risk of all hidden and apparent defects
squarely on the respective purchaser and relies on the fact that the pre-conveyance
correspondence was conducted under the heading "subject to contract".
Furthermore, so the Defendant argues, the effect of pre-contractual
enquiries are not thereby negated because they can nonetheless assist a
potential purchaser to decide if they wish to buy the property or not, they may
lead to further enquiries, or if the purchaser wishes to bind the vendor
to any
of the answers given they can request the insertion of warranties into the
conveyance or indeed remove or
vary
the tout tel clause. Naturally a deliberately false
representation (which would amount to dol)
would be actionable.
50. The Defendant goes on to argue that for the
Plaintiff to prevail, the Court must adopt a construction of the clause which
excludes the defects claim brought in breach of contract but does not exclude a
claim framed in innocent misrepresentation arising out of pre-conveyance
correspondence. This, so the
Defendant argues, would render it unsafe for any vendor
to answer any pre-sale
questions. The Defendant argues
that this would "tip the balance of
the conveyancing process so far in favour of the purchaser that no properly
advised
vendor
would answer it".
51. The Defendant goes on in response to the Plaintiff to assert that the new tout tel clause has shifted the risk with regard to hidden and latent defects to the purchaser.
52. In my view
the Plaintiff's interpretation
and argument is to be largely preferred.
53. The starting point must of course be the words used in the clause. The words to be construed within the clause are, as I have indicated:-
54. It seems to me that those words must be taken
together and mean that the purchaser is taking the property with all its
apparent or hidden defects. It does
not expressly deal with or cover the position where a representation has been
made upon which the purchaser has relied.
I do not think that it is possible to extend the meaning of the clause
to cover circumstances in which the position of a hidden defect (where the risk
is, as was set out by Ereaut Bailiff in the Royal Court hearing of Kwanza,
on the purchaser) has been qualified by a positive representation made by the
vendor.
55. In my judgment the revised wording, as is to my
mind clear from the French iteration of the clause, is restricted to a clear
extension of the ambit of the clause to be certain that it covers vices
cachés. This was the subject
matter to which the clause was related in Kwanza and which the Court of
Appeal did not in fact consider.
56. I am reinforced in this view
by my analysis of Kwanza
set out above. The Royal Court,
when it considered the earlier form of the clause, was considering
vices
cachés. It was not
considering misrepresentation. The
Court of Appeal although it did not confirm (because it did not need to) the
effect of the clause was equally not considering misrepresentation with regard
to the clause. As I have said,
everything in the Court of Appeal judgment to my mind points to the fact that
the Court considered that misrepresentation stood separately from the effect of
the tout tel clause.
57. As I have said, there is no mention in the revised wording of the consequences when positive representations have been made about certain physical aspects relating to the property in pre-contractual correspondence. In my judgment clear wording would need to be incorporated into any such provision to remove the Plaintiff's right to sue on misrepresentation. No such wording is included and it would not have been difficult, had that been the clear intention in the clause, to include such wording.
58. Although conscious of the caution necessary
when approaching the English law on construction of a Jersey contract I am
supported in my view
in The Interpretation of Contracts (6th Edition)
Sir Kim Lewison where the learned author states:
59. It seems to me that this principle is equally applicable to interpretation of contracts in Jersey law.
60. If I were to take the view
that the clause is
ambiguous, which I do not, I would nonetheless have held that the common sense
interpretation is that the effect of pre-contractual representations cannot be
ignored and the clause could not be reasonably interpreted to remove the legal
effect of a representation.
61. If the Defendant's interpretation of the
clause is correct that would render nugatory much if not all of the
pre-contractual correspondence and inquiries. It would not matter what answer was given
to any question provided the answer was not deliberately misleading or
false. I am accordingly not
persuaded of the force of the Defendant's argument that the
pre-contractual assertions on the part of a vendor
are still of
value
(on the
Defendant's interpretation of the tout
tel clause) because they assist a potential purchaser to decide if they
wish to buy or may lead to further enquiries. It seems to me that any pre-contractual
enquiries can only have the potential outcome argued for by the Defendant if
and to the extent they are answered accurately. How is a prospective purchaser better
informed about whether to proceed with the contract or make further enquiries
if the answers given to such enquiries are not accurate? If a material inaccuracy carries with it
no consequences because of the all-encompassing effect of the tout tel clause it seems to me that the
Defendant's argument leads to a position where the answers to
pre-contractual enquiries could be inaccurate or careless but provided they are
not fraudulent or deliberately false, nonetheless offer the deceived purchaser
no recourse.
62. Nor am I persuaded that the Plaintiff's
interpretation would render it unsafe for any vendor
to answer any pre-sale
questions. In my
view
that might
well be the case if one anticipates that the
vendor's
lawyers would
answer such questions inaccurately or without due enquiry. It seems to me, however, that the
Defendant's argument overstates the position. It will be perfectly possible for a
vendor
in answer to any question to express limitations on the extent to which
they have made enquiries or the extent to which they have been able to research
the point or indeed as to their knowledge generally. There may be answers to pre-conveyancing
questions that can be answered with absolute certainty and clarity by a
vendor
and others which cannot. It is open
to the
vendor,
in answering such questions, to express those answers in ways
that make it clear that they can be relied upon as to their finality or
accuracy by a purchaser or cannot.
In other words there might be a positive representation or merely an
answer not amounting to a representation that is as helpful as possible. That is a matter to be made clear on the
face of the pre-contractual correspondence.
63. I do not disagree with the Defendant's
argument that the risk with regard to hidden and latent defects are with the
purchaser. I think the current tout tel clause reinforces the finding
of the Royal Court to that end, but not, in my judgment, in circumstances in
which the absence of such a defect has been made the subject of a positive
representation on which the purchaser has relied. In my judgment the tout tel clause, in its current form, covers all defects whether
apparent or hidden, patent or latent, and if the vendor
makes no positive
representation about such defects, then in my judgment the tout tel clause is determinative of any question. Once there is a misrepresentation,
however, even if it is covering the same subject matter that would otherwise,
absent of representation, be covered by the tout tel clause, then that
representation stands alone and may in principle be actionable.
64. Whilst it is correct that Kwanza was dealing with a different form of the tout tel clause, the changed form of the clause does not, in my judgment, reach far enough to cover any misrepresentation and accordingly the statements of the Court of Appeal in Kwanza that suggest that misrepresentation continues to be available are an accurate statement of the position.
65. The Defendant's argument that because the
subject matter of the claim deals with latent defects, it is covered by the tout
tel clause, even though pleaded in the form of misrepresentation, ignores
to my mind the very
important argument that the situation changes where a
positive representation is made. It
would not to my mind accord with the justice of the case were a defendant who
has made the false representation (albeit innocently) on which a purchaser has
relied to be comforted about the purchase or to make no further enquiry, to be
able to rely on a clause such as the tout tel.
66. Accordingly, for the above reasons, I answer the question posed by way of a preliminary issue and set out at paragraph 5 above in the negative. In other words, the alleged liability of the Defendant for claims advanced by the Plaintiff in her Order of Justice are not excluded by operation of the tout tel clause to the extent that those claims are pleaded in misrepresentation.
67. I am not, of course, expressing any view
on
whether the claims in the pleadings of misrepresentation are well made.