It was the yardstick (the e.a.c.) But, as a result, he put in a written report to his superiors recommending that Mr. Mardon’s rent should be reduced to £1,000 a year, plus a surcharge according to the amount of petrol sold. In the first place, he relied on the views of the majority of the Privy Council in the case of Mutual Life and Citizens Assurance Ltd. v. Evatt 1971 Appeal Cases 793, that the duty of care is limited to persons who carry on or hold themselves out as carrying on the business or profession of giving advice, and urged this court to adopt the same view. If it is necessary in this context (which I doubt) to draw a hard and fast distinction between statements of fact and statements of opinion, the learned judge, rightly in my view, regarded this as a statement of fact. On 1st December, 1966 they issued a writ against him claiming possession and £1,139.33 for petrol supplied. As foreshadowed by this pleading there was little that was material in controversy between the parties as to the factual course of the negotiations which had led up to Mr. Mardon taking the tenancy of the Eastbank filling station. (estimated annual consumption) of petrol at 200,000 gallons. Such are the actions against attorneys, surgeons and other professional men for want of competent skill or proper care in the service they undertake to render … The principle in all these cases would seem to be that the contract creates a duty and the neglect to perform that duty, or the non-feasence, is a ground of action upon a tort”. This defeated him. He was committing himself to further their commercial interest by the use of his capital as well as by the application of his energy and effort. Hew were they then related respectively to the subject matter? Take your favorite fandoms with you and never miss a beat. Where the contract is entirely oral, the difficulties are less, but where it has been reduced to writing the common law’s mistrust of oral evidence, particularly of the parties themselves, and its reluctance to impugn the certainty of the written word, comes into conflict with the principle that the law should so far as possible give effect to the presumed intention of the parties. Bisset v. Wilkinson (1927) Appeal Cases 117 fits into this scheme. It was very much in their interest to keep this service station open and selling their petrol. Mr. Allen in the course of his cross-examination put it in these words (Day 5 page 274): “I would have told him that in our opinion the site was assessed as being capable of doing an estimated throughput of 200,000 gallons in the second full year of the site’s operation”. This was a serious drawback and was bound adversely to affect the station’s potential. It was argued for the vendor that this was a statement of opinion and that it imported no representation of fact; but the Court of Appeal held otherwise. Davidson v Scottish Ministers (No.2) [2004] April 17, 2020 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] April 16, 2020 Holwell Securities Ltd v Hughes [1974] April 14, 2020 Esso Petroleum Co. Ltd v Mardon [1976] Court of Appeal of England and Wales cases, https://casebrief.fandom.com/wiki/Esso_Petroleum_Co._Ltd._v_Mardon?oldid=10986. They made a careful forecast of the “estimated annual consumption” of petrol. They, for their part, wanted to preserve the Eastbank site as a going concern with no break in the continuity of the business there. Mardon relied on this information which was made negligently, and he suffered loss. Mr. Ross-Munro cited the New Zealand case if Bissett v. Wilkinson 1927 Appeal Cases 117 in the Privy Council but he cannot get much assistance or support from it. 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. There were associated losses which are set out in Schedule III of the Counterclaim. Much will depend upon how the law on warranties is applied. On 28th August, 1966 (when by some mistake or misunderstanding whilst Mr. Mardon was away) they came and drained his tanks of petrol and cut off his supplies. MR. MUKRO: Obviously we will try, my Lord. It is the interest on the capital losses, how they should be assessed for what period, and thing like that. Whether it be called breach of warranty or negligent misrepresentation, its effect was not to warrant the throughput, but only to induce him to enter into the contract. Smith, Master of the Rolls, in De Lassalle v. Guildford (1901) 2 King’s Bench 215 is “(was the representation) seriously intended to be the basis of the contractual relations between the parties”. In addition, they would get a sub3tantial rental from a tenant. They had no other suitable tenant to replace him. It has been most helpful to the determining of the case. They still assessed the e.a.c. That was a matter which everybody agreed should be left over. It never got anywhere near the 200,000 gallons. United Kingdom In Esso Petroleum Ltd v Mardon,13 an experienced representative employed by Esso estimated that the likely throughput of petrol on a garage site would reach 200,000 gallons by the third year of operation. 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. Mr. Ross-Munro Q.C. On the other hand, the plaintiffs have had the use of the money representing Mr. Mardon’s capital losses up to the present. Esso freely acknowledge this. But such collateral contracts must from their very nature be rare”. University of Virginia School of Law 76,873 views 45:34 MOOT LIKE A MO FO! 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”. 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. He said that from 1st September, 1964, Mr. Mardon was carrying on the business. It would follow, as the Judge held, that such late loss was not to be taken into account in assessing the compensation to which Mr. Mardon was entitled. In these circumstances I think that Mr. Mardon has established the warrantly alleged in paragraph 6 of the Defence and Counterclaim and is entitled to damages for breach of contract. in Nocton v. Lord Ashburton (1914) Appeal cases 932 at page 950: “… The solicitor contracts with his client to be skilful and careful. Esso Petroleum Co Ltd v Mardon [1976] EWCA Civ 4 is an English contract law case, concerning misrepresentation. Had I taken the same view as Mr, Justice Lawson on the warranty point I would certainly have held, with him, that Mr. Mardon had proved his case in negligence. In my judgment he had scarcely an option to do otherwise. He is only to be compensated for having been induced to enter into a contract which turned out to be disastrous for him. Eventually on 1st January, 1966, he wrote to Esso appealing to them to find a solution. of this site at Eastbank Street was a vital factor in the calculations of both parties. Respondent He was doing what he could to retrieve the position, not only in Ms own interest, but also in the interest of Esso. 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 LORD JUSTICE ORMROD Yet Mr. Leitch professed to Mr. Mardon during a lunch at Manchester that he was confident about the forecast he had given. This is, I think, a difficult point for it is an attractive argument that, when a contract results, the rights of the parties should be governed by the terms agreed, subject, of course, to the right to sue for damages for fraud or under the Misrepresentation Act,1967. The new agreement was an attempt to mitigate the effect. The remedies are rescission (subject to exceptions discussed later) and damages in the tort of negligence (see later). Accordingly, he is entitled to recover his capital losses up to the time when the business finally closed. In fact, as the plaintiffs’ internal memoranda make perfectly plain, they were more than anxious to retain him as a tenant of this service station because they foresaw great difficulty in finding anyone – to take it over. : 10 Law School Mooting Tips - … Mr. Mardon simply regarded the capital of the company as, to all intents and purposes, his own money. It is not necessary to speak of it as being collateral. Now at this point Esso made an error which the Judge described as a “fatal error”. He, therefore, took September, 1964 as the “cut-off point”. When they purchased it they estimated that it could sell 200,000 gallons of petrol a year. It was a “fatal error”. 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. It is also fair to assume (as he is a very good man of business) that he would have invested it sufficiently well so that he would not have lost the capital. Now for the measure of damages. If he negligently gives unsound advice or misleading information or expresses an erroneous opinion, and thereby induces the other aide into a contract with him, he is liable in damages. “Mr. While not directly calculated on the e.a.c. On 25th May, 1961, the Esso local representatives recommended the go ahead. They could not be seen from the main street. It was under the influence of this “fatal error” that Esso sought to find a tenant for the service station. In consequence they made a new agreement with him cancelling the original three-year tenancy agreement at a rent of £2,500 and substituting for it a so-called Rental Surcharge Agreement by which the rent was reduced to £1 ,000 per annum and a proportion of the petrol sales were paid directly to Esso. The third phase followed as the trading position failed to improve. After paying all outgoings, such as rent, wages and so forth, there was a net loss of £5,800. They gave the figures, and said: “We feel most strongly that this does genuinely represent a first-class opportunity of gaining representation in the centre of Southport”. Lord Denning distinguished it … It was all wasted endeavour. By that time his overdraft stood at £7,774 and his creditors stood at £2,716 as set out in Schedule 1 of the Defence and Counterclaim. 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. Esso Petroleum Ltd v Commissioners of Customs and Excise [1976] 1 WLR Intention to create legal relations and consideration for a contract of sale in the formation of contracts. Mr. Mardon was not then saying that he had made a bad bargain and that he wanted a better one for the future. An experienced sales representative from Esso visited him and told him that sales of petrol would be 200,000 gallons in Year 3. Mr. Mardon’s first obligation was to mitigate his damage thereafter. He was seen by Esso’s local manager, Mr. Leitch. Esso bought a new site for a service station. 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”. In a well known passage Lord Justice Bowen said: “It is often fallaciously assumed that a statement of opinion cannot involve the statement of fact. They leased it to Mardon, and assured him contrary to his skepticism that the site could sell 200,000 gallons a year. 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. In the one case it is by reason of a term implied by law. In that case his claim for damages could have been extended over many years and it might have been more considerable in respect of each year for which Esso were held liable. The Reverend Doctor John Inglis and others v Thomas Mansfield, Esq. Mr. Ross-Munro, Q.C., retaliated, however, by citing Bisset v. Wilkinson (1927) Appeal Cases 177, when the Privy Council said that a statement by a New Zealand farmer that an area of land “would carry 2,000 sheep” was only an expression of opinion. Mardon But then something happened which falsified all their calculations. It does not appear to have had any creditors either. Appellant 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 Petroleum v Mardon QB 801 (Case summary) A statement of opinion may amount to an actionable misrep where the representor was in a position to know the … Nevertheless, in their negotiations with Mr. Mardon, Esso adhered to their original estimate. Mr. Ross-Munro’s second point is that this principle has no application to statements made in pre-contract negotiations where they result in a contract. Esso’s experts had estimated that the petrol station would sell 200,000 gallons of petrol. They must be proved strictly. The rent is calculated on that footing”. I remember scores of cases of that kind, especially on the sale of a business. They insisted that the station should be built “back to front”. It holds that the divide between a statement of opinion and fact becomes more factual if one holds himself out as having expert knowledge. For this misrepresentation they are liable in damages. ____________________. Second, that it was a negligent misrepresentation. However, building regulations made them put the pumps on the back of the property. This was agreed at the figure of £6,270. They knew the throughput of comparable stations. But they never found him one. 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 would reduce the throughput greatly. He was trapped, as he said, by his losses and his only hope was to carry on in the hope of recovering his position if he could. I agree with this conclusion. 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. By paragraph 2 of their amended Defence to Counterclaim the plaintiffs averred that “save that the matters alleged to constitute representations and warranties are not admitted each and every allegation in paragraph 6 of the amended Counterclaim is denied”. 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