Esso bought a new site for a service station. Before considering how those damages are to be computed, it is necessary to consider the “cut off” of the incidence of damage at 1st September, 1964 as found by the Judge. So a tenancy was granted to Mr. Mardon. But the throughput was most disappointing. They did not revise their original estimate which they had made in 1961. If you can agree, very well; if you cannot, perhaps you could give us some fundamental figures. For a breach of that duty, he is liable in damages: and those damages should be, and are, the same, whether he is sued in contract or in tort. But the Southport Corporation, who were the planning authority, refused to allow this. In addition, they would get a sub3tantial rental from a tenant. It holds that a statement of opinion can represent that one knows certain facts, and therefore one may have still made a misrepresentation. by which they measured the worth of a filling station. If the second agreement had not been made, Mr. Mardon, denuded as he was of his savings and surrounded by debt, might not have found employment for a very long time. It was a “fatal error”. Denning MR and Ormrod and Shaw LJJ The fact was that this assessment of 200,000 gallons was reasonable when it was made; unfortunately, the plaintiffs never revised it in the light of subsequent developments which made it quite unrealistic. On 17th July, 1964, he wrote to Mr. Allen: “I reluctantly give notice to quit forthwith. Instead he drew cheques on his company’s account. Mardon ____________________. He goes on to say that the Hedley Byrne principle also applies, and that damages can be awarded on that basis. He had lost all his capital and had incurred a large overdraft. Esso Petroleum Co Ltd v Mardon [1976] QB 801 is an English contract law case, concerning misrepresentation.It holds that the divide between a statement of opinion and fact becomes more factual if one holds herself out has having In this regard I would differ from the finding of the learned judge below in holding as he did that no warranty was given by Esso. THE MASTER OF THE ROLLS: Very well; then we will not make any final order today. The plaintiff, Mr Mardon, entered into a tenancy agreement with the defendant, Esso Petroleum, in respect of a petrol station owned by the latter. Owing to it, I have lost all the capital I put into it. It was not a fresh cause which eliminated the past. It was on Eastbank Street, one of the busiest streets of the town. It is only because this Court is differing from some of the views of Mr. Justice Lawson in respect of matters which may be of general importance that I venture to add a few brief observations. Esso realized this and renegotiated the contract, but even that did not properly assess how much could be sold. On the other hand there are dicta, particularly in the speeches in Heilbut Symons & Co. v. Buckleton (supra), which suggest a more restrictive or conservative approach, for example, Lord Haldane at page 37 said; “It is contrary to the general policy of the law of England to presume the making of a collateral contract in the absence of language expressing or implying it”. Applying this principle, it is plain that Esso professed to have – and did in fact have – special knowledge or skill in estimating the throughput of a filling station. To such a situation, Mr. Ross-Munro submitted, the Hedley Byrne principle had no application. ____________________. Like Mr. Justice Lawson I much prefer the reasoning of the minority in this case and think that it should be followed. Take your favorite fandoms with you and never miss a beat. It would take him some time to do this. The plaintiffs did not reject this and discussions took place over a period of time but came to nothing and the end came in April 1967. He took the view that the new agreement then made between Mr. Mardon and Esso, having been entered into voluntarily by Mr. Mardon, had no relation to the first agreement and its consequences. Negligent misrepresentation: Assuming that there was no warranty, the question arises whether Esso are liable for negligent mis-statement under the doctrine of Hedley Byrne v. Heller & Partners Ltd.(1964) Appeal Gases 465. It so happens that when that station had actually been developed, it was contemplated that the pumps would face the roadway so as to be in full view of passing traffic. The statement of such opinion is in a sense a statement of fact about the condition of the man’s own mind, but only of an irrelevant fact for it is of no consequence what the opinion is. And the Judges of the Commonwealth have shown themselves quite ready to apply Hedley Byrne between contracting parties; see in Canada Sealand v. Ocean Cement (1973) 33 Dominion Law Reports (3rd) 625; and New Zealand Capital Motors v. Beecham (1975) 1 New Zealand Law Reports 576. He, therefore, took September, 1964 as the “cut-off point”. (estimated annual consumption) of petrol at 200,000 gallons. I also incurred a large overdraft. I think that the whole of this tragic story is directly attributable to the original mistake of the plaintiffs and that they co-operated with Mr. Mardon in his unsuccessful attempts to escape its consequences. The effect on Mr. Mardon was catastrophic. I would therefore allow this appeal and dismiss the cross-appeal. Mr. Mardon did not go through this formality which could have been initiated over the breakfast table in his home. But he went too far in speaking of the “decisive test” which was strongly disapproved of by Lord Moulton in the Heilbut Symons case at page 50. Esso realized this and reneg… The defendant claims to have suffered damage far in excess of this sum. The award rests on three basic conclusions, all of which have been challenged by Mr. Hall, Q.C., on behalf of the appellant in an able and most helpful argument. As Lord Reid once said: “The life of the common law is not logic but common sense” (R. v. Haughton and Smith) (1974) 2 Weekly Law Reports 1. It is comparable to the duty of reasonable care which is owed by a master to his servant, or vice versa. Esso thought of putting in a bid for the site. Smith v Land and House Property Corporation (1884) LR 28 Ch D 7 is an English contract law case, concerning misrepresentation. he asked the Summery of some important cases of Misrepresentation These are Besides that experience, there have been many cases since I have sat in this Court where we have readily held a representation – which induces a person to enter into a contract – to be a warranty sounding in damages. ____________________, HTML VERSION OF JUDGMENT The learned judge’s reasons for rejecting Mr, Marlon’s contention that this was a warranty are summarised in this passage in his judgment: “I think the authorities indicate conclusively that to constitute a warranty a statement firstly must be intended on the part of the maker to constitute a promise which can be described as a warranty or, putting it into common language, a statement by which the maker says ‘I guarantee that this will happen’. That organisation stood in a very different position from Mr. Mardon in regard to the information available to them for the purpose of assessing the potential capacity of the filling station. They made the representation – they forecast a throughput of 200,000 gallons – intending to induce Mr. Mardon to enter into a tenancy on the faith of it. The decision of the New Zealand case itself proceeded on a number of grounds. This proposition is in line with what I said in Candler v. Crane Christmas & Co. (1951) 2 King’s Bench at pages 179-180, which was approved by the majority of the Privy Council in Mutual Life & Citizens Assurance Limited v. Evatt (1971) Appeal Cases 793. It was in these circumstances that Mr. Mardon attempted to carry on with the business. In fact, this was an erroneous estimate and as a result it... Read Case Study This considerably lowered the amount that could be sold, but no change was made to the estimate. : 10 Law School Mooting Tips - … He submitted that, when the negotiations between two parties resulted in a contract between them, their rights and duties were governed by the law of contract and not by the law of tort. Halsey v Esso Petroleum [1961] 2 All ER 145 < Back Facts Halsey lives down the road from an Esso Petroleum oil factory. But, before doing so, they made calculations to see if it would be a paying proposition. It seems to me that the losses after 1st September 1964, can be attributed to the original mis-statement, just as those before. Escalus Properties v Dennis [1996] Esso Petroleum Co Ltd v Mardon [1976] Esso Petroleum v Customs and Excise Commissioners [1976] Esso Petroleum v Mardon [1967] EU Law Competition law Effect of European Union law The representations which were admittedly made to Mr. Mardon conveyed and in my view were intended to convey that Esso warranted that information which they had available to them and on which the representations were founded, established the Eastbank filling station in the category of stations with a potential 200,000 gallons throughput attainable in two years or thereabouts. The plaintiffs by their cross-appeal have raised the issue of liability. This was agreed at the figure of £6,270. But, as I have indicated in my judgment, we feel that those are matters which probably counsel would like to consider and perhaps be able to agree between themselves; but, if they cannot, they can mention it to us again with any figures they would like to put forward on it. Subject to liability, Mr. Mardon will succeed on this appeal if he can show that any one of the judge’s three conclusions is wrong, and, if he can show that conclusion (3) and either of the other two are wrong, his damages will be substantially increased. He was an extremely good tenant and he tried every method to increase the sales and profitability of the service station. MR. MUNRO: I am much obliged, my Lord. A cardinal issue in the action was that raised by paragraph 6 of the amended Defence and Counterclaim. The Judge, however declined to find a warranty. at 200,000 gallons” and so on. He said that from 1st September, 1964, Mr. Mardon was carrying on the business. The site was simply not good enough to have a throughput of more than 60,000 or 70,000 gallons. However, it did not sell anywhere near this amount. Bisset v. Wilkinson (1927) Appeal Cases 117 fits into this scheme. On 7th March, 1967 he gave up the site. He submitted that the forecast here of 200,000 gallons was an expression of opinion and not a statement of fact: and that it could not be interpreted as a warranty or promise. How must the respective parties have regarded the representation when it was made? of this site at Eastbank Street was a vital factor in the calculations of both parties. THE MASTER OF THE ROLLS: We have been talking about it ourselves, and we think we would like some help. A variety of tests have been suggested to determine the intention of the parties. Thus, even if it were right that Esso did not give a warranty to Mr. Mardon, they would be liable to him in negligence following the principle enunciated in Hedley Byrne v. Heller & Partners Ltd. (1964) Appeal Cases 465 unless a further argument advanced by Mr. Ross-Munro stood in the way. 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. He had had some experience of the business of selling petrol but it was negligible compared with that of a leading oil company. It cannot, therefore, be said that Mr. Mardon failed to mitigate his loss. In any other case there is no valid argument apart from legal technicality for the proposition that a subsequent contract vitiates a cause of action in negligence which had previously arisen in the course of negotiation. In effect, he discarded the more highly coloured parts of Mr. Mardon’s evidence on the ground that he had been living with and brooding over his grievance for a period of years which had affected the accuracy of his recollection. Mardon was told that Esso estimated that the throughput of the Eastbank Street site, in its third year of operation, would amount to 200,000 gallons a year. He carried on as best he could with odd jobs for customers, like washing cars. Again Mr. Mardon tried hard to make a success of the service station! It remains to consider Mr. Ross-Munro’s final submission that in fact no capital loss fell on Mr. Mardon personally because the £6,270 came from a private company in which he and his wife held all the shares. Having induced Mr. Mardon to accept, Mr. Leitch and Mr. Allen sent this telegram to their head office: “We have interviewed a Mr. Philip Lionel Mardon for tenancy and find him excellent in all respects. They knew the throughput of comparable stations. QUEEN’S BENCH DIVISION They must be proved strictly. It would be extremely unrealistic and a denial of justice in a case like this to allow the plaintiffs, who were quite unaffected by the existence of this company, to take advantage of a piece of legalistic purism. Lord Reid and Lord Morris, both of whom had been parties to the decision in Hedley Byrne Co. Ltd. v. Heller 1964 Appeal Cases 465, however, dissented and re-stated the principle in these words: “It appears to us to be well within the principles established by the Hedley Byrne case .to regard his action in giving such advice as creating a special relationship between him and the inquirer and to translate his moral obligation into a legal obligation to take such care as is reasonable in the whole circumstances”. The one proposition which seems to have survived unscathed is Chief Justice Holts dictum, quoted with approval by Lord Haldane and others in Heilbut Symons & Co. v. Buckleton (supra), that “an affirmation can only be a warranty provided it appears on the evidence to have been so intended”. We have left open the question of interest on it, and we have left open the question of his loss of earnings, which he would have made if he had not been introduced to this business. And costs to be compensated for by interest on the part of.... 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