Perry v Woodfarm Homes Ltd [1975] IR 104

Facts

  • The dispute arose from the sale of a residential property in County Dublin by Woodfarm Homes Ltd (defendant) to Mr. Perry (plaintiff).
  • Mr. Perry alleged he was induced to purchase the property by representations regarding its condition made by the vendor.
  • After taking possession, Mr. Perry discovered significant structural defects that had not been disclosed.
  • The plaintiff claimed the defendant knowingly concealed these defects, constituting fraudulent misrepresentation.
  • Woodfarm Homes Ltd argued any representations made were innocent misstatements, and that Mr. Perry had opportunity to inspect the property prior to purchase.
  • The plaintiff sought rescission of the contract and damages for losses from the defective property.

Issues

  1. Whether the defendant’s conduct amounted to fraudulent misrepresentation or was merely innocent misstatement.
  2. What remedies were available to the plaintiff in cases of fraudulent or innocent misrepresentation arising from a property sale.
  3. Whether both rescission and damages could be awarded where the purchaser has altered the property and defects cannot be remedied.
  4. What duties vendors and purchasers owe each other regarding disclosure and inspection of property condition.

Decision

  • The Supreme Court found that the defendant’s conduct constituted fraudulent misrepresentation.
  • The court held the plaintiff was entitled to rescind the contract and to be awarded damages reflecting losses incurred due to the defects.
  • The court recognized difficulties in restoring parties to their pre-contractual positions due to alterations made to the property.
  • Both rescission and damages were granted to achieve complete relief for the plaintiff.

Legal Principles

  • Fraudulent misrepresentation involves a deliberate falsehood or reckless disregard for the truth, while innocent misrepresentation lacks knowledge of falsity.
  • The burden of proving fraud rests on the party alleging it.
  • Remedies for innocent misrepresentation usually do not include damages unless negligence or fraud is shown; fraudulent misrepresentation entitles the injured party to both rescission and damages.
  • Rescission aims to restore parties to their original positions but may require damages if restitution is impractical.
  • Vendors are obliged to disclose material facts about property condition; purchasers are expected to exercise due diligence through inspection.

Conclusion

Perry v Woodfarm Homes Ltd [1975] IR 104 established that fraudulent misrepresentation in property sales entitles the purchaser to both rescission and damages, clarifying the duties of disclosure and the scope of equitable remedies in Irish contract and property law.

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