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        Landmark Supreme Court judgment to impact Irish property sector's reliance on disclaimers

        Global commercial property and investment management provider JLL last week won its long-running appeal before the Supreme Court against property investor David Walsh. Advised by legal business DWF, JLL was found to have no liability for damages which were sought arising from a dispute regarding a disclaimer contained in a property sales brochure.

        Date: 12/06/2017

        12 June 2017

        Background

        The high-profile case, David Walsh v Jones Lang LaSalle Limited, relates to the effectiveness and operation of a disclaimer clause in a sales brochure prepared by JLL in respect of the sale of a large commercial property at 77 Upper Gardiner Street, which the claimant, Mr Walsh purchased for £2,342,000 in September 2000.

        The sales brochure contained various particulars relating to the property including location, description, development opportunity and accommodation measurements. The measurements for the first floor area were in fact incorrectly stated, measuring approximately 1800 sq. feet or approximately 20% less than described. The brochure also contained a disclaimer, stating:

        "Whilst every care has been taken in the preparation of these particulars, and they are believed to be correct, they are not warranted and intending purchasers/lessees should satisfy themselves as to the correctness of the information given."

        Mr Walsh did not take any steps to have the property measured prior to making a tender offer and instead utilised the measurements in the brochure to make a "back of the envelope" calculation as to it's likely rental yield. It was only after he purchased the property that the discrepancy in measurements came to light. Mr Walsh instituted High Court proceedings against JLL alleging that he had suffered income loss as a result of the incorrect measurements contained in the brochure.

        High Court judgment – 2007

        In the High Court, Justice Quirke found that the specific legal ingredients necessary to impose a duty of care on JLL to ensure that the calculation was accurate, were met. Having done so, he then considered the terms of the disclaimer and found that the caveats contained within it were insufficient to negate the duty of care. Having found JLL to be in breach of their duty of care - the disclaimer having offered them no protection - the Court awarded Mr Walsh the sum of €350,000 in compensation for his losses.

        High Court judgment overturned by Supreme Court– 2017

        JLL appealed the High Court decision to the Supreme Court. The Supreme Court, in majority judgments delivered last week, found in favour of JLL. The judgments disagreed with the High Court's analysis of the applicable law in the area of negligent misstatement. Unlike the High Court's approach, they considered the existence and terms of the disclaimer as forming an important piece of evidence in determining whether a duty of care arose in the first instance. Having examined its wording, they found that as there had been a clear and unambiguous non-assumption of responsibility on the part of JLL in relation to the task of providing accurate measurements, no duty of care arose.

        Impact

        This judgment provides welcome clarification on this important legal issue and will prove significant for the wider real estate sector where the use of disclaimers is prevalent. This is especially so given the recent increase in property transactions in this jurisdiction.

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