Nottingham Patent Brick & Tile Co v Butler (1886) 16 QBD 778
Representations, restrictive covenants and avoiding a contract
The owner of land divided it into thirteen plots and sold these to various buyers over a period of three years. The conveyances all contained covenants restricting the use of the land as a brickyard together with other restrictions. The defendant bought plot 11, but the deed conveying the land to him did not contain the restrictive covenants. The claimant was a company involved in the manufacture of bricks which sought to buy plot 11 from the defendant. The condition of the sale was stated to include a term that the property was sold subject to any matter or thing affecting it, whether or not this was disclosed at the time of the sale. It also stated that any error or omission in the sale should not annul it nor allow a purchaser to seek compensation. The contract did not mention the restrictive covenants, but during negotiations the defendant mentioned their existence in respect of the limit on use as a brickyard. The claimant sought clarification on this point from the defendant’s solicitor who stated that he was not aware of any covenant. The claimants paid the deposit and subsequently, when they became aware of the covenant, sought to rescind the contract and recover the deposit. The judge at first instance found in favour of the claimant, the defendant appealed.
The issues in this context were whether the covenants were enforceable and, if so, whether the representations made by the defendant’s solicitor were such as to mislead the claimant as to the nature of the land purchased.
It was held that the covenants were enforceable against the claimant and it would therefore be prevented from using the land as a brickyard. It was also held that the claimant’s solicitor misled the defendant in respect of the existence of these covenants on the basis that he held out to have knowledge that he did not have. This misrepresentation allowed the contract to be voided irrespective of the terms of sale. The appeal was dismissed.