Walsh v Jones Lang Lasalle Ltd

• Jurisdiction: Ireland
• Judge: Mr. Justice Quirke
• Judgment Date: 24 January 2007
• Neutral Citation: [2007] IEHC 28
• Court: High Court
• Docket Number: [2001 No. 15154P]
• Date: 24 January 2007

[2007] IEHC 28

THE HIGH COURT

[No. 15154 P/2001]

Walsh v Jones Lang LaSalle Ltd

BETWEEN

DAVID WALSH

PLAINTIFF

AND

JONES LANG LASALLE LIMITED

DEFENDANT

HEDLEY BYRNE v HELLER & PARTNERS LTD 1964 AC 465 1963 2 AER 575 1963 3 WLR 101 1963 1 LLOYD'S REP 485

SMITH v BUSH 1990 1 AC 831 1989 2 AER 514 1989 2 WLR 790

BANK OF IRELAND v SMITH 1966 IR 646

MCANARNEY v HANRAHAN 1993 3 IR 492 1994 1 ILRM 210

MCCULLAGH v LANE FOX & PARTNERS LTD 1996 PMLR 205

CA CAPARO PLC v DICKMAN 1990 2 AC 605 1990 2 WLR 358 1990 1 AER 568 1990 BCLC 273

WILDGUST & CARRICKOWEN LTD v BANK OF IRELAND & NORWICH UNION LIFE INSURANCE SOCIETY 2006 2 IRLM 28

GLENCAR EXPLORATION PLC & ANDAMAN RESOURCES PLC v MAYO CO COUNCIL 2002 1 IR 84

NEGLIGENCE

Negligent misstatement

Auctioneer - Special Relationship - Sale of commercial premises - Seller negligently measuring floor space - Claim that decision to purchase made in reliance on negligently published floor measurements - Whether special relationship existing to impose duty of care - Whether plaintiff sufficiently proximate so as to be reasonably within contemplation of defendant as being likely to be affected by its acts or omissions - Duty of care to prospective purchaser - Whether defendant owed duty of care to ensure that calculation of floor area of property in sale brochure accurate - Whether defendant in breach of duty - Whether presence of waiver within brochure sufficient to exclude defendant from liability - Whether fair and reasonable to allow reliance on waiver - Whether plaintiff guilty of negligence which contributed to loss sustained - Whether plaintiff entitled to recover damages from defendant - Glencar Explorations plc v Mayo Co Co (No 2) [2002] 1 IR 84 and Wildgust v Bank of Ireland [2006] IESC 19, [2006] 1 IR 570 followed - Damages of €350,000 awarded (2001/15154P - Quirke J - 24/1/07) [2007] IEHC 28

Walsh v Jones Lang LaSalle Ltd

the plaintiff purchased a commercial premises which had been advertised by the defendant auctioneers on behalf of the vendor. In its sales brochure, the defendant advertised the property as comprising a floor area of 23,057 square feet. It also contained a waiver which stated:- "whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers should satisfy themselves as to the correctness of the information given." The plaintiff later discovered that the premises comprised only 21,248, a difference of some 20%. He claimed that the defendant had been guilty of negligent misstatement by publishing the incorrect calculation of the floor area and sought damages therefor.

Held by Mr Justice Quirke in awarding the plaintiff €350,000 for loss of value in relation to the property that:

1. Where detailed and precise measurements of commercial properties were provided within the brochures of experienced and reputable auctioneers, it was the practice for prospective purchasers to rely upon the accuracy of those measurements, subject to minor miscalculations and the defendant knew or ought to have known that the plaintiff and other prospective purchasers, to whom the brochure was directed, would rely upon and be influenced by measurements of such apparent precision.

2. There was a duty to ensure that the information which the defendant provided for the benefit of a limited category pf persons was reasonably accurate in the circumstances and every care had not been taken in the preparation of the particulars set out in the brochure because the floor area had been overstated to a degree which was seriously misleading to prospective purchasers.

3. That the defendant failed to take appropriate steps to ensure that the information which it published in its brochure was accurate and the loss suffered by the plaintiff was reasonably foreseeable.

4. That the waiver was not effective to relieve the defendant of liability in respect of negligence and negligent misstatement.

Reporter: P.C.

1 Judgment of Mr. Justice Quirke delivered on the 24th day of January 2007

2 In this case the plaintiff, David Walsh, is claiming damages from the defendant to compensate him for loss and damage allegedly sustained by him as a result of negligence and negligent misstatement on the part of the defendant.

3 The plaintiff claims that on the 28th September, 2000 he purchased a property, (No. 77 Upper Gardiner Street in Dublin), for the sum of IR £2,342,000.00 for investment purposes. It was his intention to let the property in units to commercial tenants.

4 The defendant is a well-known firm of auctioneers which was retained by the owner to sell the property.

5 The plaintiff claims that it was expressly represented to him by the defendant that the property comprised a total floor area of 23,057 square feet. The precise measurement of the floor area of the property was so described within the defendant's sales brochure, which was provided to the plaintiff by the defendant. The plaintiff claims that he relied upon the defendant's calculation of the floor area when making his decision to purchase the property.

6 In fact the total floor area of the property was 21,248 square feet, (1,817 square feet less than what was represented to the plaintiff by the defendant). The plaintiff claims that by miscalculating the floor area of the property the defendant acted negligently and that, by publishing this incorrect calculation of the floor area within its sales brochure, the defendant was guilty of negligent misstatement.

7 He says that the defendant failed to exercise the requisite and appropriate standard of care which a purchaser is entitled to expect from a reputable auctioneer and valuer and breached the duty of care which was then owed by the defendant to the plaintiff. The plaintiff claims that as a result of the defendant's negligence and negligent misstatement he has suffered losses including loss of income.

RELEVANT FACTS

8 1. In July, 2000 the defendant was retained, (by the owner), to sell a two storey corner building at Upper Gardiner Street in Dublin, by private treaty for the best possible price.

9 The defendant prepared and published a single-page sales brochure which advertised the property inter alia as "a mixture of retail, storage and office accommodation over two floors...... situated in the heart of Dublin's north inner city approximately five minutes walk from Dublin city centre"

10 On the front page of the brochure the property was described under its address as "2,142 m2- (23,057 square feet). - Site Area 0.13 Hectares (0.31 Acres)"

11 On the back page of the brochure, under the heading "Accommodation", (a), the ground floor was described as having an area of 12,594 square feet, (b), the first floor was described as having an area of 10,463 square feet, and (c), the total area of the property was described as having a total area of 23,057 square feet. Corresponding measurements were provided in square meters.

12 The correct measurement of the first floor area was 8,573.5 square feet. The correct measurement of the total floor area of the property was 21,248 square feet.

13 The brochure contained a coloured photograph of the premises, a location map, descriptions of the use to which property could be put, its location and other similar details. The following paragraph was published in small print at the bottom of the front page:

14 "Whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers/lessees should satisfy themselves as to the correctness of the information given."

15 2. In July, 2000 the plaintiff was interested in acquiring a premises for business and investment purposes in the north inner city of Dublin. He was at that time the owner of a property at Cumberland Street North, in Dublin.

16 He became aware that the property, No 77, Gardiner Street was for sale. He visited the premises on the 13th July, 2000 and returned to the premises on the 14th July, 2000.

17 He spoke to Mr. "Woodie" O'Neill of the defendant company and expressed an interest in purchasing the property. Mr. O'Neill provided him with the sales brochures, to which reference has been made earlier.

18 3. By letter dated the 21st July, 2000, Mr. O'Neill advised Mr. Walsh inter alia as follows:

" Dear Dave,

19 77 Upper Gardiner Street.

20 I refer to on-going discussions in relation to the sale of the above property. A number of interested parties have shown an interest and we are instructed to finalise offers on the premises. Each of the interested parties are notified that final and "best offers" on the subject property are to be received in writing to this office no later than 12 noon on Friday next 28th July, 2000."

21 The letter enclosed a copy of a draft contract and conditions of sale in respect of the property and directed enquiries to the vendor's solicitors.

22 4. The plaintiff engaged a solicitor to examine the title to the property and retained a Mr. Val O'Brien, (a property surveyor), to conduct what was described as "an informal condition survey" of the property. Mr.O'Brien stated in evidence that he regularly carries out "condition surveys"of properties but has never been required by prospective purchasers to take measurements of the floor areas of properties prior to the submission of offers.

23 5. By an undated hand written letter, submitted by the plaintiff to Mr. O'Neill on the 28th July, the plaintiff advised the defendant inter alia as follows.

24 "I refer to your letter of the 21st July and would offer IR£2,342,000.00 for this property. ... Please contact me at 4961753 if anything requires clarification."

25 In evidence the plaintiff said that his offer was based...