Peaeson & Son, Ltd, v The Lord Mayor, Aldermen, and Burgesses of The City of Dublin

JurisdictionIreland
JudgeH. L.
Judgment Date30 May 1907
CourtKing's Bench Division (Ireland)
Date30 May 1907
Pearson & Son, Limited,
and
The Lord Mayor, Aldermen, and Burgesses of the City of Dublin (1).

H. L.

CASES

DETERMINED BY

THE KING'S BENCH DIVISION

OF

THE HIGH COURT OF JUSTICE IN IRELAND,

AND ON APPEAL THEREFROM IN

THE COURT OF APPEAL,

AND BY

THE COURT FOR CROWN CASES RESERVED.

1907.

Engineering contract — Actionable. deceit — Representations — Principal and agent — Fraud — Public Authorities Protection Act, 1893.

Held, that the 43rd and other like clauses of the specification (relied on in the Court of Appeal) did not protect the defendants from liability.

Held, also, that the defendants, though innocently delivering the plans and specifications to the plaintiffs, could not escape liability for any fraudulent representations made by their agents therein. Cornfoot v. Fowke (6 M. & W. 358) explained.

Held, also, that the Public Authorities Protection Act, 1893, did not apply.

On appeal from the judgment of the Court of Appeal, reported ante, p. 82, the House of Lords reversed the judgment, and restored the judgment of the King's Bench Division, ante, p. 34, directing a new trial:—

The Right Hon. J. H. Campbell, K.C., Danckwertz, K.C. (of the English Bar), and E. A. Collins, for the appellants.

Serjeant O'Connor, K.C., Ronan, K.C., Ignatius J. O'Brien, K.C., and P. A. O'C. White, for the respondents.

Lord Loreburn, C.:—

My Lords, this is an action for deceit brought by Messrs. Pearson & Son, contractors, against the Dublin Corporation. Inasmuch as I am about to propose that the case be remitted for a new trial, it is desirable that I should say no more than is necessary to explain my view.

The plaintiffs' case is, that they were induced to enter into a contract for the construction of certain sewage works by statements, made by and on behalf of the defendants, as to the existence to a depth of nine feet below Ordnance datum of an old wall. Undoubtedly evidence was adduced at the trial from which the jury might, if they thought right, conclude that the plaintiffs were so induced by statements made on behalf of the defendants. Also there was evidence for the jury, that those statements were made either with a knowledge of their falsity, or (which is the same thing) with a reckless indifference whether they were true or false, on the part of the engineers employed by the defendants to make the plans which were submitted to plaintiffs as the basis of the tender. And, had the case rested there, I gather that the Lord Chief Baron would have left the case to the jury, and that the learned Judges who subsequently had this litigation before them would have approved this course.

But another feature of the case was considered fatal to the plaintiffs' claim. The contract contained clauses, which I need not cite at length, to the effect that the contractors must not rely on any representation made in plans or elsewhere, but must ascertain and judge of the facts for themselves. And, therefore, the Lord Chief Baron withdrew the case from the jury. As I understand it, the view he held, in substance confirmed by the Court of Appeal, was that the plaintiffs, so forewarned, had no right to rely on any representation, and could not be heard to say they were induced to act on statements on which by contract they were not to rely. Or, at all events, it was said that the defendants, being themselves innocent, are protected by such clauses against the consequence of contractors acting on false statements made by defendants' agents, however fraudulent those agents might be.

Now, it seems clear that no one can escape liability for his own fraudulent statements by inserting in a contract a clause that the other party shall not rely upon them. I will not say that a man, himself innocent, may not under any circumstances, however peculiar, guard himself by apt and express clauses from liability for the fraud of his own agents. It suffices to say that in my opinion the clauses before us do not admit of such a construction. They contemplate honesty on both sides, and protect only against honest mistakes.

Serjeant O'Connor and Mr. Ronan in their able arguments (and the arguments on both sides have been very able) make a further point. Thy say that though a principal is liable for the fraudulent representation of his agent, yet that rule only applies where the representation has, in fact, been made by the agent. I cannot accept that contention. The principal and the agent are one, and it does not signify which of them made the incriminated statement, or which of them possessed the guilty knowledge.

It is not necessary to say anything as to the Public Authorities Protection Act, for the Court of Appeal held that it did not apply to this case, and I am entirely of the same opinion.

I respectfully recommend to your Lordships that this case be sent for a new trial, and that the respondents pay the costs of this appeal and the costs in the Court of Appeal.

Earl Of Halsbury:—

My Lords, I concur in thinking that in this case there must be a new trial, and for that reason I wish to say as little as possible on the merits of the case. The Chief Baron refused to leave the case to the jury upon grounds to be presently examined; but in the course of what I have to say I wish to point out at once that all I wish to affirm is, that there was evidence produced by the plaintiff which he had a right to have submitted to the jury. I do not assume that the jury would have found that fraud had been committed by anyone, still less do I propose myself to find fraud proved as a fact, but simply that it was a question which ought to have been submitted to the jury.

The sole question here appears to me to be that question.

It was an ordinary action for fraud causing damage to the plaintiff. Tenders were invited for a contract to execute certain work, and certain plans and specifications were held out to intending contractors as what I will at present call notices of what the work was intended to be. A contract was ultimately concluded upon the terms thus held out; and I may say at once that apart from the question of fraud there was nothing proved which could have called for an answer from the defendants. It is not necessary to go far in reciting the questions of fact.

The Chief Baron pointed out with great clearness how the question of fact arises, and it turns upon the existence or non-existence of a certain wall. It is not denied that the wall was represented on the plan as going 9 feet below the datum line, and the Chief Baron himself states that this statement was acted upon by the contractors so as to induce them to send in the tender at a less sum than they would otherwise have done for the execution of that contract. It is better, perhaps, to quote the Chief Baron's own words. His Lordship says:— “In result, then (and, as I have said, I have arrived at the conclusion with regret), I think that there was a statement contained in these plans which was, in fact, an incorrect statement. I think the result of that incorrect statement was, that the plaintiffs sent in the tender which was accepted, and which was for a sum much less than that for which they would have tendered if they had known the truth. But I am obliged to hold upon this 43rd section, together with the 46th, 47th, and 48th, which I won't occupy public time in reading, that taken as a whole, or rather, taking the plans as controlled by the specification, they do not contain a representation intended to be acted upon, that this structure penetrated 9 feet below Ordnance datum.” It will be observed that the Chief Baron affirms both propositions—that the statement was inaccurate in fact, and that the tender was for a less sum than the contractor would otherwise have offered if he had known the truth.

The one point which led to the Chief Baron's judgment was, to use his own words, that the statement which he finds as a fact to be inaccurate does not contain a representation “intended to be acted on, that the structure penetrated 9 feet below datum line.” With the sincere respect that I have for anything said by the Chief Baron, I cannot help saying that there is some confusion here. The words may be the subject of contract, and they may be so qualified or cut down by other words as to alter their primary meaning; but the intention with which words are used is the condition of mind of the person using them, and that is a question of fact to be ascertained by a jury. If one assumes that the statement is false and that it has caused a person to act upon it to his prejudice, the question whether it was fraudulently made by the person who made it may and ought to be decided by a jury.

But the learned Judge seems to think that the 43rd section of the contract removes it...

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1 cases
  • FITZSIMONS v DUNCAN and KEMP & Company, Ltd
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    ...Held by the Court of Appeal, that the plaintiff was entitled to judgment against both K. & Co. and D. Pearson v. Corporation of Dublin ([1907] 2 I. R. 537; [1907] A C. 351) discussed and applied. This action, which was tried before Dodd, J., and a special jury, at Belfast, on the 17th Decem......

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