Gordon v Selico
Encyclopedia
Gordon v Selico 18 H.L.R. 219 is an English contract law
on the subject of misrepresentation
by action. It was held that positive actions - in this case, the concealment of dry rot
- could amount to operative misrepresentations.
. Prior to the first inspection by the plaintiffs in about November 1978, the second defendants had instructed some painters to conceal patches of dry rot from view, by painting them. The plaintiffs obtained a detailed survey of the flat in February 1979, which concluded that no dry rot had been found (although only one floorboard had been lifted, and it could not be guaranteed that it did not exist elsewhere in the flat). The plaintiffs moved into their flat on January 1, 1980, and subsequently discovered extensive dry rot in the front bedroom, bathroom, and lavatory.
that the painting of dry rot to conceal it amounted to a misrepresentation. The court distinguished the set of facts from other cases, where it was held that reliance on an independent surveyor's findings defeated a claim of misrepresentation:
English contract law
English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...
on the subject of misrepresentation
Misrepresentation
Misrepresentation is a contract law concept. It means a false statement of fact made by one party to another party, which has the effect of inducing that party into the contract. For example, under certain circumstances, false statements or promises made by a seller of goods regarding the quality...
by action. It was held that positive actions - in this case, the concealment of dry rot
Dry rot
Dry rot refers to a type of wood decay caused by certain types of fungi, also known as True Dry Rot, that digests parts of the wood which give the wood strength and stiffness...
- could amount to operative misrepresentations.
Facts
Mr Gordon and Mrs Teixeira, contracted in November 1978 to purchase a 99 year lease of a flat owned by the defendant, Selico Ltd. The flat was in poor condition, as was the block that contained it, with some evidence of dry rotDry rot
Dry rot refers to a type of wood decay caused by certain types of fungi, also known as True Dry Rot, that digests parts of the wood which give the wood strength and stiffness...
. Prior to the first inspection by the plaintiffs in about November 1978, the second defendants had instructed some painters to conceal patches of dry rot from view, by painting them. The plaintiffs obtained a detailed survey of the flat in February 1979, which concluded that no dry rot had been found (although only one floorboard had been lifted, and it could not be guaranteed that it did not exist elsewhere in the flat). The plaintiffs moved into their flat on January 1, 1980, and subsequently discovered extensive dry rot in the front bedroom, bathroom, and lavatory.
Judgment
Ordinarily, a misrepresentation is made by a statement of supposed fact, or otherwise a statement of intent. It was held by the Court of AppealCourt of Appeal of England and Wales
The Court of Appeal of England and Wales is the second most senior court in the English legal system, with only the Supreme Court of the United Kingdom above it...
that the painting of dry rot to conceal it amounted to a misrepresentation. The court distinguished the set of facts from other cases, where it was held that reliance on an independent surveyor's findings defeated a claim of misrepresentation: