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APRIL 30, 1965


[1965] 1 W.L.E.

a fact t h a t this was a mere ehimaera, and without such inference

it cannot be said t h a t no injury would be done by the modification.
Finally I come to the question of exercise of discretion,
assuming there was jurisdiction. I do not for myself think t h a t
the particular situation of the applicant, as having not very long
since struck a bargain inconsistent with this particular outcome,
is a factor in the exercise of discretion. I do not think t h a t the
personality of the applicant or his past behaviour is relevant to
the exercise of the discretion. I refer again to the fact t h a t
tomorrow a n assign may make the same application. I think
t h a t the decision (including the exercise of discretion) m u s t be
related to the property and its history as such. Nor would I be
prepared to rest m y decision on the exercise of discretion on t h e
fact t h a t by its choice of words the L a n d s Tribunal appears to
have asked itself why, having jurisdiction, it should not exercise it.
I would fault the exercise of discretion on the fact, first, t h a t
it was overlooked t h a t 200 would not be payable; second, I
would say t h a t in this case the discretion should be otherwise
exercised by analogy with section 84 (12), which was not in the
mind of the tribunal. I t is to be inferred from subsection (2) t h a t
the legislature considered t h a t in the case of leasehold land there
should be n o modification until 25 years had elapsed from the
definition of the restriction. H e r e the restriction was expressly
redefined in 1950. Therefore by analogy the discretion should
not be exercised in 1965.
Accordingly, for these reasons, I would allow the appeal.

C. A.
' V.

Russell L.J.

HARMAN L . J . Diplock L . J . , who cannot be here this afternoon,

has authorised m e to say t h a t he has read both judgments and
concurs in t h e m .
Appeal allowed with costs.
Order of Lands Tribunal
Leave to appeal to House of Lords.
Solicitors: Boodle,


& Co.; Isaac Joslin & Co.

C. J . E .



C. A.

Mar. 2, 8
[ P l a i n t N o . S. 5 4 3 . ]

Lord Denning
M.R., Danckwerts and

Sale of GoodsWarrantyCollateral
made Salmon L.JJ.
with intention of, and inducing, other party to act on itNo
reasonable foundation for representationSale
of motor car
Statement of mileageSubsequent ascertainment of history of car
supporting inference of substantially greater mileageMaker of


[1965] 1 W.L.E.

C. A.




representation in position to discover true

warranty or innocent

APRIL 30, 1965


The plaintiff B., who was a customer of the defendant oar dealers
and had told them that he wanted to buy a well-vetted oar (a
'' quality '' British car, the history of which could be obtained
from its makers), was told by S. on behalf of the dealers that he had
found such a car. B. inspected it on the morning of January 23,
1960. The speedometer showed a mileage of 20,000. S., during the
inspection, stated, inter alia, that the car had done only 20,000
miles since being fitted with a replacement engine and gearbox ; that
the price was 1,850; and that he would guarantee it for 12 months.
In the afternoon B. brought his wife to see the car and repeated to
her in S.'s presence the statement by S. that it had done only 20,000
miles. After taking it for a short trial run, B. bought and paid for
the car. Troubles began almost at once and continued throughout
and beyond the guarantee period.
In an action by B. claiming damages for, inter alia, breach of
the warranty as to mileage, the dealers, while admitting a statement
as to mileage, claimed that it was made in the belief that it was
true, and denied that it was in law a warranty or that B. was
induced thereby to buy the car.
The county court judge, having inferred from the history of the
car supplied by the makers and other evidence that the mileage done
was nearer 100,000, held that the statement as to the mileage was a
warranty and that it had been broken; and he awarded damages to
the plaintiff.
On appeal by the defendants:
Held, dismissing the appeal, that the representation as to the
mileage was a warranty binding on the seller, for, tested by what
the intelligent bystander would infer from the conduct of the parties,
it was a statement, made by a seller in a position to find out, but
not having found out, the facts, in the course of negotiations for a
contract, which was intended to, and did, induce the buyer to enter
into the contract; and as the seller had not rebutted that inference
by showing that it was an innocent misrepresentation and that he
ought not to be bound by it, he was in breach of the warranty, and
liable in damages.
Oscar Chess Ltd. v. Williams [1957] 1 W.L.R. 370; [1957] 1 All
E.R. 325, C.A. distinguished.
APPEAL from Judge Herbert, sitting at Westminster county
A company, Dick Bentley Productions L t d . , and Charles
Walter Bentley (known as " Dick Bentley ") brought an action
in the county court, claiming damages against the defendant
company, Harold Smith (Motors) L t d . I t was agreed t h a t the
effective plaintiff was the individual, Bentley. B y his amended
particulars of claim he alleged t h a t by an agreement partly in
writing and partly oral, made in J a n u a r y , 1960, between Bentley
and one Harold Smith, acting for the defendants, the defendants
had agreed to sell and the plaintiff to buy a Park Ward drop-head
coupe Bentley motor car for the sum of 1,850. By paragraph
2 it was alleged t h a t Smith had represented or alternatively
warranted t h a t " (c) the said car had throughout most of its life
" been owned by Bolls Boyce L t d . and loaned by t h a t company
" to a German baron and had had only one owner since it arrived

APRIL 30, 1965


[1965] 1 W . L . E .

"back in England in 1959 "; and " (d) the said car had covered
" only 20,000 miles since the fitting of " a replacement engine
and ancillary parts and gearbox. The plaintiff claimed that, relying on those representations or warranties he bought the motor car,
but that, contrary to the representations or warranties, the car was
defective and in bad condition. By their defence, the defendants
admitted that Smith had stated, inter alia, that " to the best of
" his belief the vehicle had done 20,000 miles since the replace" ment engine and ancillary parts and gearbox, that most of its
" life it had been owned by Eolls Eoyce Ltd. and that it had been
" lent to a German baron "; but it was denied that the statements
were in law either representations or warranties, and it was
claimed that they were made honestly and in the belief that they
were true. Further, it was claimed that if the statements did
amount to representations or warranties, the plaintiffs did not
rely on them, and were not by reason thereof induced to purchase
the motor car. The defendants also counterclaimed on matters
not relevant to the present report, which is confined to the
question of representation and warranty.
The facts, substantially as stated by Lord Denning M.R. and
found by the county court judge, were as follows: Bentley had
been dealing with Smith for a couple of years, and had told Smith
that he was on the look-out for a well-vetted Bentley car. In
January, 1960, Smith found one and bought it for 1,500 from a
firm in Leicester. He wrote to Bentley and said: " I have just
" purchased a Park Ward power-operated hood convertible. It is
" one of the nicest cars we have had in for quite a long time."
Smith had told Bentley earlier that he was in a position to find
out the history of cars. It appeared' that with a car of that
quality the makers kept a complete biography of it.
Bentley went to see the car. Smith told him that a German
baron had had this car. He said that it had been fitted at one
time with a replacement engine and gearbox, and had done 20,000
miles only since it had been so fitted. The speedometer on the
car showed only 20,000 miles. Smith said that the price was
1,850, and that he would guarantee the car for 12 months, ineluding parts and labour. That was on the morning of January
23. In the afternoon Bentley took his wife over to see the car.
He repeated to his wife in Smith's presence what Smith had told
him in the morning; and in particular that Smith said it had done
only 20,000 miles since it had been refitted with a replacement
engine and gearbox. Bentley took it for a. short run. He bought
the car for 1,850, gave his cheque, and the sale was concluded.
The car was a considerable disappointment to Bentley. He
took it back to Smith from time to time. A good deal of work
was done oa it during the first 12 months' guarantee period.
Further work was done on the car outside the guarantee period,
the details of which are relevant only to the counterclaim. Thereafter the car was a good deal better; but it had given the plaintiff
a lot of trouble, and eventually he brought the present action.


C. A.




[1965] 1 W . L . B .
C. A.




APRIL 30, 1965

The county court judge, in his judgment on July 3, 1964 (as

compiled from counsels' contemporary notes) referred to the
" real history " of the car as obtained from Bolls Royce Ltd.,
namely, that it had been owned by a German baron from 1949 to
1952, and that it had then been involved in an accident. It was
returned to the makers in 1952, when the speedometer read some
84,000 kilometres (viz. 50,000 miles). It was fitted with a completely.new 1952 body, the engine was reconditioned, and a new
gearbox fitted; and it was returned to the German baron. He
disposed of it in or about 1958 or 1959 and it came back to
England, when the makers saw it again. Thereafter it had passed
among dealers and at some stage the speedometer had been
changed from kilometres to miles, showirg at the time of the sale
to the plaintiff about 20,000 miles.
The judge said that on issues of fact he preferred the evidence
of the. plaintiff to that, of the defendant, and referred to " the
'' reckless way in which Smith was prepared when giving evidence
" to say things he thought would do him good, as when being
" cross-examined he said: ' I did not discuss mileage with Mr.
" ' B e n t l e y ' " when in paragraph 2 of the defence he had
admitted such discussion. The judge said that he was satisfied
that the statements were not expressed to be statements of
opinion but that they were statements of. fact, made at the time of
the contract; that the representations were not dishonest; but
that the important statement was that the car had done only
20,000 miles since the replacement engine and gearbox. He found
that to be " palpably wrong " ; and having regard to the evidence,
stated that: " I have no doubt at all that the car had done very
" near 100,000 miles." He held, on the totality of the evidence
that as a matter of law the statement as to mileage was a
warranty; that Smith had stated, a fact that should have been
within his knowledge; that he had jumped to a conclusion and
stated it as a fact; that it was a fact on which a buyer interested
in mileage would act; and. that there was, a warranty which was
broken. Having found on the claim that the proper value of the
car as it was at the time would be about 1,200 and that the price
paid< 1,850would be the right price if the car had done about
.20,000 miles since the reconditioned engine and gearbox had been
fitted in 1952, and that the difference was at least 400, he gave
jugdment for the plaintiff for 400 on the claim. The judge then
went on to consider the counterclaim, and judgment was
eventually entered for the plaintiff for 400 damages with costs
on scale 4.
The defendants appealed, the grounds so far as relevant being
as follows: (1) that the judge erred in law in holding that the
statements of fact made by the defendants to the plaintiff prior
to the sale of the motor car were warranties; (2) that his finding
that the car had done nearly 100,000 miles by the time the plaintiff
purchased it was not supported by any evidence, or alternatively


APRIL 30, 1965


[1965] 1 W . L . E .

was against the weight of the evidence; and (3) that the judge
misdirected himself in holding that Smith " stated a fact that
" should be within his knowledge."
Colin Ross-Munro for the defendants.
Graham Eyre for the plaintiff.

LORD DEXXIXG ILK. The plaintiff, Charles Walter Bentley,

sometimes known as Dick Bentley, brings an action against
Harold Smith (Motors) Ltd. for damages for breach of warranty
on the sale of a car. [His Lordship stated the facts set out above
and continued: ] The county court judge found that there was a
warranty, that it was broken, and that the damages were more
than 400; but as the claim was limited to 400, he gave judgment
for the plaintiff for that amount.
The first point is whether this representation, namely, that it
had done 20,000 miles only since it had been fitted with a replacement engine and gearbox, was an innocent misrepresentation
(which does not give rise to damages), or whether it was a
warranty. I t was said by Holt C.J., and repeated in Heilbut,
Symons & Go. v. Buckleton,1 that: " An affirmation at the time
" of the sale is a warranty, provided it appear on evidence to be so
" intended." But that word " intended " has given rise to
difficulties. I endeavoured to explain in Oscar Chess Ltd. v.
Williams 2 that the question whether a warranty was intended
depends on the conduct of the parties, on their words and
behaviour, rather than on their thoughts. If an intelligent bystander would reasonably infer that a warranty was intended,
that will suffice. What conduct, then? What words and
behaviour lead to the inference of a warranty?
Looking at the cases once more, as we have done so often, it
seems to me that if a representation is made in the course of
dealings for a contract for the very purpose of inducing the other
party to act upon it, and actually inducing him to act upon it, by
entering into the contract, that is prima facie ground for inferring
that it was intended as a warranty. I t is not necessary to speak of
it as being collateral. Suffice it that it was intended to be acted
upon and was in fact acted on. But the maker of the representation can rebut this inference if he can show that it really was an
innocent misrepresentation, in that he was in fact innocent of
fault in making it, and that it would not be reasonable in the

* (1854) 15 C.B. 130.

t [1954] 1 W . L . E . 615
All E . E . 855, C.A.

[1954] 1

[1913] A.C. 30, 49, H . L .

[1957] 1 W . L . E . 370,
[1957] 1 All E.E. 325, C.A.

G. A.


The following cases, in addition to those referred to in the

judgments, were cited in argument: Hopkins v. Tanqueray *;
Routledge v. McKay.t





[1965] 1 W . L . E .
C. A.



Lord Denning


APRIL 30, 1965

circumstances for him to be bound by it. 3 In the Oscar Chess

case 4 the inference was rebutted. There a man had bought a
second-hand car and received with it a log-book- which stated the
year of the car, 1948. He afterwards resold the "car. When he
resold it he simply repeated what was in the log-book and passed
it on to the buyer. He honestly believed on reasonable grounds
that it was true. He was completely innocent of any fault. There
was no warranty by him, but only an innocent misrepresentation.
Whereas in the present case it is very different. The inference is
not rebutted. Here we have a dealer, Smith, who was in a position
to know, or at least to find out, the history of the car. He could
get it by writing to the makers. He did not do so. Indeed, it was
done later. When the history of this car was examined, his
statement turned out to be quite wrong. He ought to have known
better. There was no reasonable foundation for it.
What happened was this: This car had been owned by a German baron from 1949 to 1952. It had then been involved in an
accident. It was returned to the makers. The speedometer then
read some 84,000 kilometres (i.e., 50,000 miles). It was fitted
with a completely new 1952 body. The engine was reconditioned
and a new gearbox was fitted. That was in 1952. It was returned
to the German baron. He disposed of it in or about 1958 or 1959
and it came back to England. We do not know how many miles
it had done from 1952 to 1959; but the judge inferredand it
seems to me there was ample evidence from which he could infer
-that, during the whole time while the German baron had it, from
,1949 to 1959, it had done very nearly 100,000 miles. On that
footing, on its return to England in 1959 the speedometer would
have read 160,000 kilometres. Afterwards, when the plaintiff's
solicitors raised the point of mileage, Smith wrote a letter on
July 18, 1961, to the plaintiff's solicitors purporting to justify his
statement. He said: " From various sources it appears that the
car had a considerable amount of storage whilst abroad and very
little use to the extent that, when the car was returned in 1958 to
this country, either at the end of '58 or early '59, the speedometer reading was then only 90,000 odd kilometres. A standard
m.p.h. speedometer was fitted and, when Mr. Bentley bought
the car from my company, the speedometer reading was then
20,000 miles." The judge said that there was no evidence whatsoever as to the reading of 90,000 kilometres. It was an entire
invention of Smith. Nobody knew the mileage at the time, when
the car was returned to England.
The judge found that the representations were not dishonest.
Smith was not guilty of fraud. But he made the statement
as to 20,000 miles without any foundation. And the judge was
Note: The statement of the law
in relation to warranty and innocent
misrepresentation (supra) is in line
with the recommendations contained
in the 10th Report of the Law Reform

Committee on Innocent Misrepresentation ( (1962) Cmnd. No. 1782).

M. M. H .
* [1957] 1 W.L.R. 370, 375.

APRIL 30, 1965



[1965] 1 W.L.K.

well justified in finding that there was a warranty. The judge

said: " I have no hesitation [in saying] t h a t as a m a t t e r of law
". the s t a t e m e n t was a warranty.
Smith stated a fact t h a t
" s h o u l d be within his own knowledge. H e had jumped to a
" conclusion and stated it as a fact. A fact that a buyer would
" act o n . " T h a t is ample foundation for the inference of a
warranty. So much for the first point. [His lordship then dealt
with an issue on the counterclaim and on the county court judge's
award of damages, neither of which is relevant to this report, and
concluded: ] The judge says the diminution in value owing to the
breach of warranty is very considerably over 400, b u t making all
allowances the n e t sum would be at least 400.,
I t seems to me that on this point there is nothing wrong in
the way the judge has dealt with the case, and therefore on all
three points I would hold the appeal fails and should be dismissed.

C, A.


Lord Denning

DANCKWERTS L . J . ' I agree with the judgment of Lord Denning


SALMOSI L . J . I agree. I have no doubt a t all t h a t the judge

reached a correct conclusion when he decided t h a t Smith gave a
warranty to the plaintiff ar.d that that warranty was broken. Was
what Smith said intended and understood as a legally binding
promise? If so, it was a warranty and as such may be part of the
contract of sale or collateral to it. I n effect, Smith said: " If you
" will enter into a contract to buy this motor car from me for
." 1,850, I undertake t h a t you will be getting a motor car which
" h a s done no more than 20,000 miles since it was fitted with a
" new engine and a new gearbox." I have no doubt at all t h a t
what was said by Smith was so understood and was intended to be
so understood by Bentley. [His Lordship then considered the
issue on the counterclaim and concluded: ] I accordingly agree
t h a t the appeal should be dismissed.
Appeal dismissed

Solicitors: Goodman,



Monroe & Co.; Harris, Chetham

& Co.

M. M. H .



* S. W . S T B A N G E L T D . v. MANN.

Jan. 26,
27, 28, 29;
[1964 S. No. 2819.]
Feb. 1, 2,
3, 26.
Restraint of Trade Master and servant Bookmaker's manager
Stamp J.
Names and addresses of all customers known to employerCovenant
not to carry on the business of bookmaker within 12 miles of
[.Reported by Miss A. F. RICKETTS, Barrister-at-Law.]