Madden v Elliott

• Jurisdiction: Jamaica
• Judge: Rowe, P.,Patterson, J.,Downer, J.A.,Patterson, J.A.
• Judgment Date: 31 May 1993
• Neutral Citation: JM 1993 CA 37
• Docket Number: Civil Appeal No. 88 of 1991
• Date: 31 May 1993
• Court: Court of Appeal (Jamaica)

Court of Appeal

Rowe, P.; Downer, J.A; Patterson, J.A (Ag.)

Civil Appeal No. 88 of 1991

Madden

and

Elliott

Appearances:

Mrs. M.E. Forte instructed by Gaynair & Fraser for the plaintiff/appellant.

David Batts instructed by Livingston, Alexander & Levy for the defendant/respondent.

Tort - Damages — Deceit — Fraud — Misrepresentation — Negligent misstatement — Sale of property — Contractual relationship — Appeal dismissed — Appellant unable to prove the essential ingredient in the tort of deceit namely that the representation made by the respondent was false to his knowledge, that he did not believe it to be true, or that he was reckless in making the alleged representations — Respondent's cross — appeal allowed — Judgment set aside in Court below — Judgment in favour of the respondent with costs — Appellant must therefore pay to the respondent the taxed or agreed costs in both Courts.

Rowe, P.

1 I have read in draft the judgment of Patterson, J.A. (Ag). He has set out the facts fully and I will not repeat them.

2 In this action sounding in deceit the appellant, pleaded that the respondent falsely and fraudulently refused to complete an agreement to sell and transfer to her an undetached dwelling house at 8 Gwendon Park Avenue, Norbrook, St. Andrew and identified as the particulars of fraud the four following matters:

• (i) That he represented to the appellant that he had the authority to and would sell to the appellant the dwelling house at Gwendon Park Ave;

• (ii) That he induced the appellant to sell her own dwelling house in order to purchase 8 Gwendon Park Ave;

• (iii) That he contracted to sell the said dwelling house to a third-party when he knew or ought to have known that the appellant had divested herself of her own dwelling house for the sole purpose of purchasing 8 Gwendon Park Ave;

• (iv) That he induced or procured the appellant to expend money or incur expenses when he knew or ought to have known that she was acting to her detriment in this regard.

3 By paragraph 12 of the defence the respondent denied that, he had contracted to sell the disputed property to a third person, claimed that it was still in his possession and that was the last salvo fired in relation to the third and potentially most blame-worthy allegation of fraud made in the Statement of Claim.

4 Paragraph 10 of the defence sought to deal inter alia, with the first particular of fraud in that the respondent stated:

“The defendant had every intention of selling the property to the plaintiff. The defendant had the authority of his wife at that time (she being a joint owner of the property with the plaintiff) to enter intro the oral agreement.

The defendant did not change his mind until early March 1981 when his wife indicated that she was not prepared to sign the contract of Sale she having taken a dislike to the plaintiff.”

5 Harrison, J., in his written judgment at page 9, accepted the respondent's allegation contained in the defence and supported by the viva voce evidence of the respondent and his wife that initially the respondent had intended to sell and in addition had his wife's permission to contract on her behalf in the sale. He said:

“The defendant Francis Elliott entered into an oral contract along with his wife, with the plaintiff for the sale of the Gwendon Park Property, this contract was not enforceable. The defendant was therefore initially making a true representation of fact namely that his wife and himself intended to convey the legal estate in the said property to the plaintiff and that he and his wife had the power to so convey it.”

6 There was some variation between the evidence for the appellant and that for the defence but in all material respects the appellant and the respondent agreed upon the sequence of events and the nature and content of the oral conversations which passed between them.

7 In summary, the situation which arose amounted to this. The respondent and his wife had agreed to sell their dwelling house to the appellant but there was no written agreement or payment of a deposit. Afterwards the respondent's wife voiced to her husband her unwillingness to consummate the sale. They were arguing about the matter. The wife had an emotional attachment to the house. The husband was undergoing financial strain in maintaining the house and there had been problems with tenants. He was confident, he said, that the wife's reservations would be overcome. This confidence he said was born out of his experiences with her during their marriage and specifically when he tried to sell the former matrimonial home in Harbour View. He considered himself the dominant partner in their business relationships as in the past she had acquiesced in his management of their financial and business affairs. In consequence of this confidence in his ability to win over his wife to his way of thinking, he stated and re-stated to the appellant that the sale of 8 Gwendon Park Avenue would proceed. He instructed his lawyers to prepare the Contract of Sale and gave them all the necessary information to do so. At the last moment he was faced with a rebellion. His wife's ultimatum was that if she was forced to sign the contract, their marriage would be at an end. She would wish a divorce. Then and only then, according to the respondent, did he realise that his wife had indeed taken up an intractable position.

8 Lord Herschell in giving his opinion in Derry v. Peek [1886–90] All E.R. Rep 1, expressly approved of the statement of Cotton, L.J., when he said:

“What in my opinion is a correct statement of the law is this, that where a man makes a statement to be acted upon by others which is false, and which is known by him to be false, or is made by him recklessly, or without care whether it is true of false, that is without any reasonable ground for believing it to be true, he is liable in an action of deceit at the suit of anyone of the class to whom it was addressed and who was materially induced by the mis-statement to do an act to his prejudice.”

9 Having regard to the assertions and the conduct of the respondent, Harrison J., was faced squarely with the question as to what was the state of mind of the respondent between the date of the oral contract of sale and the cancellation of the agreement in March 1981. Lord Herschell gave some guidance in his speech at page 25 of the report as to the appropriate approach of a Court to this question. He said:

“I quite admit that the statements of witnesses as to their belief are by no means to be accepted blindfold, the probabilities must be considered. Whenever it is necessary to arrive at a conclusion as to the state of mind of another person, and to determine whether his belief under given circumstances was such as he alleges, we can only do so by applying the standard of conduct which our own experience of the ways of men has enabled us to form, and by asking ourselves whether a reasonable man would be likely under the circumstances so to believe.”

10 In my opinion Harrison, J, did not embark upon this essential enterprise in order to evaluate the state of mind of the respondent. There was evidence from the appellant herself that the respondent's wife had been quite agreeable to the sale of the property to her and had shown little regard for the incumbent tenants. A husband might well have believed that this favourable impression of the appellant could be restored. In my opinion Harrison, J., focused on one aspect only of the respondent's defence and consequently deprived himself of the opportunity to view the defence as a whole and to determine whether a reasonable man placed in the position of the respondent would be likely to hold the belief which he asserted.

11 I find that the appellant's case fails because she was unable to prove an essential ingredient in the tort of deceit, viz, that the representation made by the respondent was false to his knowledge or that he did not believe it to be true, or that he was reckless in making the alleged representations.

12 Having regard to the decision to which I have arrived, I decline to consider the question of damages which was so exhaustively discussed during the arguments.

13 I would dismiss the appeal. I would allow the cross appeal and enter judgment for the respondent with costs both here and in the Court below to be agreed or taxed.

Downer, J.A.

14 Verna Madden, the appellant has made a claim against the respondent, Francis Elliott. Her claim was that in November 1980, the respondent Elliott agreed orally to sell her a semi-detached dwelling house in the fashionable suburb of Norbrook. The agreed price was $56,000. It emerges from the evidence that the joint owner, Elliott's wife, Patricia, was against the sale almost from the beginning and expressed her continuous opposition to her husband in no uncertain manner. Yet in response to the appellant's repeated enquiries, the respondent Elliott continued to give unqualified answers that he was selling the property. Not once did he disclose Patricia's vehement opposition to the transaction. The appellant secured a valuation and arranged a mortgage. She further signed a contract prepared by the lawyers for respondent Elliott. Then she sold her modest townhouse in Calabar Mew in reliance on the respondent's assurances. Yet, when the appellant paid her deposit it was returned and the sale withdrawn.

15 In those circumstances, the appellant averred that the respondent Elliott made false and fraudulent representations to her and in reliance on them, she suffered loss and damage. Harrison, J., agreed with her contention and found the respondent Elliott liable for deceit and ordered him to pay damages. The appellant was dissatisfied with the very low award of damages and so invoked the jurisdiction of this Court. Elliott cross appealed by way of a respondent's notice both on the issue of liability and...