Pankhania v The London Borough of Hackney

 

[2002] All ER (D) 22

 

Pankhania purchased a building plot from the London Borough of Hackney (LBH). LBH had represented that National Car Parks Ltd (NCP), who occupied a car park which formed part of the property, was a contractual licensee whose occupation was terminable upon 3 months' notice. In fact NCP was a tenant protected by the Landlord and Tenant Act 1954.

 

The judge, Rex Tedd QC, held that LBH's representation was a misrepresentation.

 

The defendants argued that the misrepresentation was as to law, not fact, and that there is a long established rule that no action lies for a misrepresentation of law.

 

Rex Tedd QC

 

48. ... The leading academic authors regard that as a debatable proposition, awaiting reconsideration in the light of the decision of the House of Lords in Kleinwort Benson Ltd -v- Lincoln City Council [1999] 2 AC 349. Passages to this effect are to be found, for example in Treitel on Contract at 308; Virgo: The Principles of the Law of Restitution (1999 ed. 182- 183; Hedley: Critical Introduction to Restitution (April 2001 ed.) at 207; and Chitty on Contract (28th edn), 6-011.

49. In Kleinwort Benson, the House of Lords held that "the rule precluding recovery of money paid under a mistake of law could no longer be maintained". Does the "misrepresentation of law" rule survive that decision?...

57. I have concluded that the "misrepresentation of law" rule has not survived the decision in Kleinwort Benson Ltd -v- Lincoln City Council (supra). Its historical origin is as an off-shoot of the "mistake of law" rule, created by analogy with it, and the two are logically inter-dependent . Both are grounded in the maxim "ignorantia juris non excusat", a tag whose dubious utility would have been enhanced, had it gone on to explain who was not excused, and from what. As it stands, it means no more than that ignorance of the general law does not excuse anyone from compliance with it, a proposition with which criminal lawyers are familiar. In translation, it has become distorted and amplified in meaning, in such expressions as "everyone is taken to know the law", from which follow two further propositions, (underpinning the "mistake of law" and "misrepresentation of law" rules respectively) (i) "as you are taken to know the law, it is your own fault if you are mistaken as to it, and because of that you should have no relief" and (ii) "as you are taken to know the law, it is your own fault if you are mistaken as to it, even if I have misrepresented it to you, and because of that you should have no relief". Those two propositions bear little relation to, and do not follow logically from, the maxim "ignorantia juris non excusat", but save for its Latin roots, no basis for the "misrepresentation of law" rule is to be found, as Lane L.J. remarked in Andre. The distinction between fact and law in the context of relief from misrepresentation has no more underlying principle to it than it does in the context of relief from mistake. Indeed, when the principles of mistake and misrepresentation are set side by side, there is a stronger case for granting relief against a party who has induced a mistaken belief as to law in another, than against one who has merely made the same mistake himself. The rules of the common law should, so far as possible, be congruent with one another, and based on coherent principle. The survival of the "misrepresentation of law" rule following the demise of the "mistake of law" rule would be no more than a quixotic anachronism. Its demise rids this area of the law of a series of distinctions, such as the "private rights" exception, whose principal function has been to distinguish the "mistake of law" rule, and confine it to a very narrow compass, albeit not to extinguish it completely.

58. I return to the misrepresentation as to the nature of N.C.P.'s interest in the car park. It follows from the fall of the "misrepresentation of law" rule that this misrepresentation is actionable (assuming that all other legal requirements are satisfied). Even had the "misrepresentation of law" rule continued in existence, it would not have availed the Defendants in this particular case, as the misrepresentation was as to (a) private rights and (b) the sub-stratum of fact to which the general law had been applied.