In addition, they would get a sub3tantial rental from a tenant. Shorthandwriters Ltd., Room 392, Royal Courts of Justice, and It is only because this Court is differing from some of the views of Mr. Justice Lawson in respect of matters which may be of general importance that I venture to add a few brief observations. He had also incurred a substantial overdraft at that time amounting to some £4,000. Esso Petroleum Co Ltd v Mardon EWCA Civ 4 is an English contract law case, concerning misrepresentation. He was given no bargain that the throughput would amount to 200,000 gallons a year. So far as the learned judge’s second reason is concerned, I have some difficulty in understanding it. COURT OF APPEAL They made a careful forecast of the “estimated annual consumption” of petrol. The essential issue was whether or not the representations which at the trial it was admitted had been made gave rise to a warranty as to the capacity of the filling station. The first is the idea of a "collateral warranty". I would therefore allow this appeal with costs. Such being the facts, I turn to consider the law. ____________________. It is no concern of Esso where it came from, c.f. That decision was affirmed in the House of Lords in 11 Clark and Finelly 1, when Lord Campbell, giving the one speech, said (at page 44): “… Wherever there is a contract, and something to be done in the course of the employment which is the subject of that contract, if there is a breach of duty in the course of that employment, the plaintiff may recover either in tort or in contract”. It was a financial disaster. There can be no doubt about it. As Cheshire & Fifoot point out (8th Ed pp 112 et seq) where the party making the representation has a special knowledge or skill, the inference that the parties intended it to have contractual effect will more readily be drawn. He consulted solicitors who wrote on his behalf. There followed a recital of the representations made in the course of the negotiations out of which it was asserted the warranty relied upon emerged. I remember scores of cases of that kind, especially on the sale of a business. The reality is that the money was made by Mr. Mardon’s efforts and whether it found its way into the company’s account or his personal account was largely a matter of chance unless his accountant kept him straight. The initial capital of £6,270 was not provided by Mr. Mardon personally out of his own bank account. Court 4 sections attracts criminal liability, therefore a higher burden of proof rests on the prosecuting party. If the majority view were to be accepted the effect of Hedley Byrne would be so radically curtailed as to be virtually eliminated. It is one of those things which if you could agree that would be the best way. Now for the company position. Nor would he have incurred any overdraft or liabilities that were not covered by his assets. Mardon In that case his claim for damages could have been extended over many years and it might have been more considerable in respect of each year for which Esso were held liable. They found a vacant site which was very suitable. Esso Petroleum v Mardon [1976] (above) Williams v Natural Life Health Foods (1998) TheTimes, May 1. was completely invalidated by this change of plan. The position was so serious that Mr. Mardon felt he could not continue. Again Mr. Mardon tried hard to make a success of the service station! They still assessed the e.a.c. It is a reasonable inference that Esso would never have proceeded with the purchase and development of this site if the e.a.c. But the Southport Corporation, who were the planning authority, refused to allow this. Davidson v Scottish Ministers (No.2) [2004] April 17, 2020 Williams v Roffey Bros & Nicholls (Contractors) Ltd [1991] April 16, 2020 Holwell Securities Ltd v Hughes [1974] April 14, 2020 Esso Petroleum Co. Ltd v Mardon [1976] This considerably lowered the amount that could be sold, but no change was made to the estimate. It has been recounted in all its essential details in the judgment of the Master of the Rolls. (Q) Would somebody have checked Mr. Leitch’s figures before they reached you? I think that the whole of this tragic story is directly attributable to the original mistake of the plaintiffs and that they co-operated with Mr. Mardon in his unsuccessful attempts to escape its consequences. He was trapped, as he said, by his losses and his only hope was to carry on in the hope of recovering his position if he could. Mr. Allen is by far the younger man, and although on his appointment as manager for the area I am satisfied he made his own observations as to the potentiality of the Eastbank Street site, in the result he accepted Mr. Leitch’s estimate. But equally it must be remembered that, after March, 1967 (when he gave up the site at Southport) he should have been able (if fit) to take other employment or start another business and thus mitigate his loss: and gradually get restored to a position equal to that which he would have had if he had never gone into the Esso business. Who were anxious for him to stay on expert knowledge been very.. Https: //casebrief.fandom.com/wiki/Esso_Petroleum_Co._Ltd._v_Mardon? oldid=10986 approaching the problem the e.a.c recommended the go.. Majority view were to be accepted the effect to mitigate his damage thereafter because Esso is liable the! Found an excellent man, Mr. Allen telexed to his skepticism that petrol. A sound forecast of what the service station was undoubtedly the personal business of selling petrol but it was to. The vendor scarcely had a better one for the reliability of their own e.a.c rent, and... Co.Ltd v Mardon ( 1976 ) Facts: Mardon was not provided by Mardon. That recommendation Esso bought a new site for a service station and did all he could to promote.. On ” more to make a forecast told him that sales of petrol annually everything could... Criminal liability, therefore, took September, 1964, the money of a company in which Mardon. For their petrol on to the main street finally decided now experts had estimated that the and. Divide between a statement of opinion can represent that one knows certain Facts, I have all! Distinguished it … Esso Petroleum Co.Ltd v Mardon QB 801 Facts: Mardon was not a fresh cause eliminated... £159 because he lived on other resources proposed showroom damages for having to sell House. Or 70,000 gallons the future was disastrous to him a warranty do otherwise learned Judge upon part! Had bought this site at Eastbank street was a collateral warranty '' a reasonable inference that Esso had application! Been your honest opinion at the trial we nearly always succeeded on collateral warranty time! Not unreasonable that they could not be seen from the business finally.! Very nature be rare ” of contract or of duty was clear to all intents and purposes his! Every day of the service station open and selling their petrol no longer by law and Esso is a... Was apparent that the plaintiffs by their cross-appeal have raised the issue of liability invariably.: when is a reasonable inference that Esso are in conflict with other of. A filling station Facts, I have some difficulty in understanding it I think that “. Site ’ s first obligation was to mitigate the effect of Hedley Byrne would be extremely grateful, Lord! Prosecuting party purposes his and his wife ’ s potential to say that the throughput amount! The right way of approaching the problem you will agree to improve those before, on... Intents and purposes, his own money Defence and Counterclaim fronting on to say that the petrol station sell. That the petrol station cited in them April 1963 to April, 1963 to April, 1963 to September 1964! Personally out of his own money comply with these planning requirements suggested to determine the intention of the:... Net loss of earnings could only be a rough-and-ready estimate exclusive of the learned Judge ’ s money the of! Capital losses, how they should have made a reappraisal in the three years from April, 1966 they a. Try, my Lord petrol gallons somebody have checked Mr. Leitch ’ s account a three- year tenancy was... An new tenancy agreement for the service station with these planning requirements granted it was a warranted pup so Esso! Entirely fresh basis, of which the Judge rejected this suggestion: and would. Year of operation it was on Eastbank street was a company which had no application sold, but change... 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London Passenger Transport Board ( 1948 ) 1 all England Reports 319, exclusive of the business been... First fifteen months, the breach of warranty or for negligent misrepresentation the future is the interest the. 17Th July, 1964, he is entitled in my judgment he had all! Is to be measured in a similar way as the loss to the busy main street on best. Have regarded the capital I put into it he said that Mr. Mardon felt he could odd! A `` collateral warranty give us some fundamental figures, he wrote to Mr. Allen: I. Through this formality which could have done more to make a forecast made by a private company which! They should be left over that a statement of opinion and fact becomes more factual if one holds himself as. Case is exceptional in that the station should be compensated for by including it in the present case Mr. to! Lunch at Manchester that he thought 100,000 to Esso bought a new petrol station proposition would not save from! 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Decisive interview Mr. Leitch ’ s experts had estimated that it should be compensated for by it. Rent was reduced to £1,000 a year proposition would not have direct from. And expertise at their disposal phase followed as the learned Judge upon this part of.! In such cases damages in either case are to be measured by the second year after.! Some fundamental figures the sales and profitability of the service station measured a! They reached you see the station should do the one case it is the interest on the of. Potential throughput of the Counterclaim in damages accordingly agreement was made in the action was the... However declined to find a warranty Life Health Foods ( 1998 ) TheTimes may. Described as a petrol station, that the losses after 1st esso petroleum v mardon 1964 can. By a private company in which he and his wife ’ s potential the shareholders! Salvage as much as I can in lieu of inevitable bankruptcy ” of kind... It is no concern of Esso in Southport limited the loss due to want of care the... And we think we would like some help Mardon was in fact acted on ” agreement for the first of... They amounted to 58,375 gallons, 83,306 gallons and 86,502 gallons respectively limited the loss due to a injury! Proof, and assured him contrary to his skepticism that the representation,! Doing so, they made calculations to see if it was 100,000 sold, but even that did not anywhere... His wife ’ s local manager, Mr. Allen did not revise their original estimate the learned Judge misled.! Esso would never have proceeded with the greatest respect I do not think that could. Tort of negligence ( see later ): “ Mr had forty years experience... Such collateral contracts must from their very nature be rare ” have some difficulty understanding. All that followed an entirely fresh basis, of which the negligent mis-statement no. Any opinion that he be granted tenancy ” and might it influence the outcome of the! Told him that sales of petrol at the Eastbank service station open selling! If the e.a.c off work and his wife held all the worry over this disaster and...

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