Walsh –v- Jones Lang LaSalle Ltd [2017] IESC 38
Judgement of Ms. Justice Laffoy delivered on 1st day of June 2017
The Appeal - The death knell of Mr. Walsh's claim against JLL
There has been some clarity on the law in relation to negligent misstatement following this Supreme Court majority decision.
In its long running appeal against property developer David Walsh, JLL was found to have no liability for damages which were sought arising from a dispute regarding a disclaimer contained in a property sales brochure.
Negligent misstatement relates to a representation of fact, which is carelessly made, and is relied on by another party to their disadvantage. It is possible to claim for economic loss arising out of a negligent misstatement where no contractual or fiduciary relationship exists between the parties, provided however, that a special relationship or a sufficient proximity exists between the parties. Generally, a special relationship will exist where the adviser knows that the other party is justifiably relying on him for his skill, expertise or knowledge.
High Court 2007 - Decision
The case centred on a two page JLL brochure which contained incorrect floor area measurements but also a disclaimer in smaller print which stated that "every care" was taken in the preparation of the brochure but that the intending purchaser should "satisfy themselves as to the correctness of the information given.
Mr. Walsh, a purchaser for investment purposes of commercial premises in Dublin, claimed that he was entitled to rely on the statement in a sales brochure that the floor area was a given square footage. The actual square footage was less than was stated in the brochure.
Mr. Walsh alleged that by miscalculating the floor area of the property by 20% and publishing the incorrect calculation within its sales brochure, JLL acted in breach of a duty of care which it owed to him. He thereafter argued that JLL was guilty of negligence and negligent misstatement, which resulted in Mr. Walsh sustaining loss and damage.
JLL contended that it did not owe any duty of care to Mr. Walsh to ensure that the details published in its sales brochure were accurate. JLL claimed that there was no special relationship between the parties, in circumstances where Mr. Walsh had been expressly advised to satisfy himself as to the correctness of the information provided by JLL and that it would be unfair, unjust and unreasonable for the Court to impose upon JLL a duty of care in the circumstances.
In the High Court in 2007, Justice Quirke disagreed and found that the disclaimer offered JLL no protection, that JLL were in breach of their duty of care and he awarded Mr Walsh €350,000 in damages. He found that the specific legal ingredients necessary to impose a duty of care on JLL to ensure that the calculation was accurate were met.
This decision was appealed to the Supreme Court.
Supreme Court 2017 – The Appeal
JLL's appeal to the Supreme Court was on liability only.
It was noted that the core issue on the facts of this case was whether, in furnishing the brochure to Mr. Walsh, having regard to the existence of the disclaimer on the first page of the brochure, JLL can be found to have assumed responsibility to Mr Walsh for the accuracy of the information, including the floor area measurements, contained in the brochure. Having read the disclaimer as a whole and, upon interpreting the disclaimer objectively, the Court stated that it was clear and unambiguous that JLL assumed no responsibility for the correctness of the particulars. The Court remarked that even though JLL were stating that it had done its best to ensure that the information was correct, they made it clear that they were not guaranteeing that such was the case and that Mr. Walsh was told in clear terms that he should satisfy himself as to the correctness of the information. The Court found, on the facts of the case, that it was clear that Mr. Walsh was in a position to satisfy himself as to the correctness of the internal measurements set out in the brochure. The Court stated that he could have instructed his surveyor, Mr. O'Brien to measure the internal areas on the 27th July, 2000, when he was conducting the "condition survey".
The Court stated that it would be difficult to conclude that it would be fair, just or reasonable to impose a duty of care on JLL for the benefit of Mr. Walsh in relation to the accuracy of the particulars set out in the brochure, given the existence and effect of the express disclaimer of responsibility of which Mr. Walsh was aware, even if, on the basis of his evidence, he misunderstood that effect. The Court concluded that he should have got advice as to its meaning
Negligent Misstatement - The Court went on to note that references in the disclaimer to every care having been taken, and the particulars being believed to be correct, could not be read on their own as a representation that there was no misstatement or incorrect information in the brochure. Having regard to the context in which they appear, there was no basis on which those words could be taken as a representation that everything was correct and that Mr. Walsh need not enquire or satisfy himself any further. Laffoy J stated that "what is required is that a person in the position of JLL should clearly and unambiguously state that it is not assuming responsibility for the task of ensuring that the information furnished is correct, and that the recipient of the brochure has responsibility for such task". The Court stated that it was satisfied that, on the proper interpretation of the disclaimer, JLL did so in this case.
The Disclaimer - The Court considered that, read objectively, JLL's disclaimer clearly conveys the message that JLL is not assuming responsibility for the accuracy of the particulars in the brochure and that it is for the intended purchaser to satisfy himself of the correctness of the information. It was stated that any other interpretation would ignore the part of the message to the effect that the correctness of the particulars was not warranted. Further and more importantly, it would wholly ignore the part of the message which tells the intending purchaser that they should satisfy themselves as to the correctness of the information given. In short, the Court concluded that there was no ambiguity in the message conveyed in the disclaimer.
In allowing the appeal Laffoy J. stated that she fundamentally disagreed with the reasoning in the judgement of the High Court which ultimately led to the incorrect conclusion that JLL owed a duty of care to Mr Walsh and was in breach of that duty, was the failure to recognise that there was no assumption of responsibility on the part of JLL in relation to the task of furnishing accurate internal measurements to Mr Walsh and that the consequence was that the law imposed no duty of care on JLL. The Court stated that "the conclusion that JLL did not owe a duty of care to Mr Walsh in respect of the accuracy of the internal measurements of the Property as shown in the brochure furnished by JLL to Mr Walsh spells the death knell of Mr Walsh's claim against JLL for damages for negligent misstatement". Accordingly, whether there was negligence or contributory negligence on the part of Mr Walsh in failing to have the internal measurements checked, in addition to having the "condition" survey carried out does not have to be considered.
Points to note from this decision
- In cases where the concept of "assumption of responsibility" is central, the existence of a disclaimer is potentially crucial. The existence of a disclaimer may be sufficient, depending on the particular circumstances, to negative the existence of a duty of care;
- Liability for negligent misstatement is to be confined to situations where the writer has expressly or by implication assumed some responsibility;
- A disclaimer will be interpreted, not as an exemption clause, but rather as part of the evidence as to whether a risk had been assumed, and a duty of care arisen;
- A disclaimer of a duty of care can be evidence that no duty of care is assumed.
1 Hedley Byrne & Co. Ltd. –v- Heller & Partners Ltd [1964] AC465
