Cases - Duncan Investments Ltd v Underwoods

Record details

Name

Duncan Investments Ltd v Underwoods

Date

[1997]

Citation

PNLR 521

Keywords

Estate agency

Summary

The defendant agents were instructed to sell 16 properties for receivers. A partner of the agents showed the plaintiff the properties. The plaintiff expressed an interest in buying the properties with a view to reselling them individually at a profit. At the plaintiff's request, the partner told him what should be the asking price and the 'minimum achieve' price for each property. Subsequently, the defendants sent to the plaintiff sales particulars which included a printed disclaimer. Relying upon the partner's advice, the plaintiff purchased the properties but resold them at a substantial loss. The plaintiff sued the defendants for the loss in tort. The defendants relied upon the disclaimer. The disclaimer stated:

'Underwoods for themselves and for the vendors of this property whose agents they are given notice that ... the vendor does not make or give, and neither Underwoods nor any person in their employment has any authority to make or give any representation or warranty whatever in relation to this property.'

The judge at first instance held that Underwoods owed the plaintiffs a duty of care as the partner knew that the plaintiffs would rely on his advice and that it was unlikely that they would obtain independent advice (see McCullagh v Lane Fox on this point). He also held that the disclaimer did not protect them. This second issue was appealed against, but the Court of Appeal affirmed the judge's decision. It was held that the disclaimer was limited to statements on behalf of the vendor in relation to the sale. It was not intended to cover statements by Underwoods in relation to a hoped-for future transaction by the intended purchaser. Therefore the defendants were liable.