Morris v Jones & Ors

A misrepresentation remains material where it is relevant to the claimant’s decision to contract and forms part of the information relied upon, even though other information also contributes to the decision. Subsequent information will dispel the effect of a misrepresentation only if it corrects the false impression. A claimant need not prove that the misrepresentation was the sole cause of entering the contract.

Where the evidence does not permit a reliable assessment of damages, the appropriate course may be an inquiry before the trial judge, confined to the unresolved issues. A claimant who abandons an untenable statutory claim may be ordered to pay the costs of defending it.

The claimant purchased a long lease of a flat from the defendants. He later discovered serious dampness in the basement and sued for deceit and fraudulent misrepresentation, alleging that the defendants had falsely denied previous damp defects. The trial judge awarded damages.

The defendants appealed on liability and quantum. The claimant cross-appealed against costs orders relating to an abandoned claim under the Defective Premises Act 1972 and against refusal of an indemnity for other costs. The central issues were whether the misrepresentation remained material and causative after the claimant received survey reports, how damages should be assessed, and whether the costs orders were proper.

1. Liability. The appeal against liability was dismissed. Materiality meant relevance to the claimant’s decision to enter the contract. The claimant had to prove reliance and inducement, but the misrepresentation did not need to be the sole cause of the transaction. It was sufficient that it formed part of the body of information relied upon when the claimant decided to exchange contracts. The principles in Smith v Chadwick [1884] 9 App. Cas. 187 and Edgington v Fitzmaurice [1885] 29 ChD 459 supported that conclusion.
2. The survey reports and the vendor’s subsequent answers did not correct the representation that there had been no previous dampness other than the problem covered by the guarantee. The trial judge was entitled to accept the claimant’s evidence that he had considered the replies with his solicitor and relied on them together with the other information available.
3. Damages. The appeal on damages was allowed. The evidence did not justify the figure awarded by the trial judge, who had not adequately explained why he preferred one estimate of remedial costs over lower estimates or dealt with the submission that more limited works were sufficient. This court could not assess the correct figure on the existing evidence.
4. An inquiry into damages was ordered before the trial judge. It was to be confined to the damages issues, including remedial costs, consequential losses and loss of enjoyment. The parties remained free to negotiate or mediate.
5. Costs. The claimant’s appeal concerning the abandoned claim under the Defective Premises Act 1972 was dismissed. The alleged estoppel by deed did not prevent the judge exercising his discretion to award the defendants their costs of defending that claim. The appeal concerning an indemnity for costs payable to other defendants was also dismissed. Permission for the defendants to appeal the order for the claimant’s costs of the successful misrepresentation claim was refused.

• Court of Appeal (Civil Division): allowed the defendants’ appeal on damages and ordered an inquiry before the trial judge; dismissed the claimant’s costs appeals; refused permission to appeal the costs order relating to the successful misrepresentation claim.
• Technology and Construction Court, Cardiff District Registry: judgment for the claimant on misrepresentation in the sum of £39,722.69 plus interest and costs; the claimant was ordered to pay the defendants’ costs of the abandoned claim under the Defective Premises Act 1972.