The Judicial Committee of the Privy Council Decisions

Snell v. Mrs Margaret Beadle (nee Silcock) (Jersey) [2001] UKPC 5 (29th January, 2001)

[2001] UKPC 5

Anthony John Snell Appellant

Mrs. Margaret Beadle (nee Silcock) Respondent

Delivered the 29th of January 2001

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Lord Hope of Craighead

[Delivered by Lord Hope of Craighead]

1. This is an appeal from a decision of the Court of Appeal of Jersey (Collins P., Southwell and Clarke JJ.A.) dated 18th January 1999 allowing an appeal by the respondent, Margaret Anne Beadle, against an order of the Royal Court of Jersey (Samedi Division) (Deputy Bailiff Hamon and Jurats Gruchy and Tibbo) of 4th February 1998. The action had been brought by the appellant, Anthony John Snell, to enforce a written agreement whereby, in consideration of the sum of £100 and the payment of her legal costs, Mrs. Beadle gave her irrevocable permission to Mr. Snell to exercise a vehicular right of access over a strip of land owned by her for the purpose of driving vehicles to and from his property.

The facts

1. There is no longer any dispute as to the facts which are set out in the judgment of the Royal Court. Mr. Snell was the owner of two properties called "Broadlands" and "Abalone" which lay on either side of the strip of land which belonged to Mrs. Beadle. Taken together the properties lay between a public road in St. Clement called Grève d’Azette and a private road which ran along the margin of the sea shore. The public road, the strip of land and the private road ran parallel to each other up to a point where the private road turned at right angles across the line of the strip of land to join the public road. "Broadlands" lay between the public road and the strip of land. "Abalone" lay between the strip of land and the private road. The strip of land was narrow and undeveloped. The only use to which it had been put was as a footpath. Vehicular access from the public road to "Abalone", which had been used for many years as a guest house, was obtained by means of the private road. But there was no vehicular access at the relevant time to "Broadlands". The Island Planning and Development Committee had refused permission for the removal of part of its boundary wall to enable an access to be formed from the public road onto that property. There was a right of pedestrian access to it along the strip of land which separated it from "Abalone" so that people walking to and from "Broadlands" could use it as a footpath. But that right did not enable vehicles to be driven from one side of the strip to the other to obtain access to that property from the public road.

2.     Mr. Snell had inherited the two properties from his father, who had run "Abalone" for many years as a guest house. The business did not prosper, and each property was burdened with a substantial mortgage. They were both in a dilapidated state when Mr. Snell inherited them, and the term of the mortgage on "Broadlands" had expired. Mr. Snell decided to try to find a way out of his financial difficulties by developing the properties. But there was no prospect of a successful development on "Broadlands" unless a means of access could be provided to that property from the public road for vehicles. It was a condition of the permit which was obtained for its development on 8th July 1993 from the Planning Department that four parking spaces were to be provided there and that these spaces were to be kept available for parking and turning at all times. The Island Planning and Development Committee had refused permission to obtain direct access to "Broadlands" from the public road. So the only way that access could be achieved was by obtaining Mrs. Beadle’s agreement for a right of way across her strip of land which would allow vehicles to pass from "Abalone" to "Broadlands". A financial backer had been found to provide Mr. Snell with the financial support which he needed to satisfy the demands of the mortgagor and to undertake the development. But he was not willing to advance any money to Mr. Snell until the matter of access had been resolved.

3. It was in the face of these difficulties that Mr. Snell’s solicitors, Pickersgill & Le Cornu, wrote to Mrs. Beadle on 26th January 1994 at her home address in St. Brelade asking whether she would be prepared to enter into an agreement with Mr. Snell and to pass a contract before the Royal Court extending the right of access on foot to enable cars to pass from "Abalone" to "Broadlands" over her footpath. Mrs. Beadle said that she did not receive this letter, but Mr. Snell’s business consultant and project manger, Mr. Harry Cole, had already decided to take matters into his own hands. He telephoned Mrs. Beadle, told her that he represented Mr. Snell and asked her to meet him on the property without delay. She readily agreed.

4. On 1st February 1994 Mrs. Beadle went to "Abalone" where she met Mr. Cole and Mr. Snell at 3.00 p.m. as arranged. She viewed the strip of land and the whole situation was explained to her. The meeting which lasted for half an hour was pleasant and cordial, and Mrs. Beadle made it clear that she was willing to be helpful. She was anxious to ensure that there would be no parking on the strip of land, but otherwise she raised no objection to the proposal in principle. She asked Mr. Cole what he considered to be a proper consideration for the grant of a right of vehicular access. He said that he would suggest £50 to £100, but that she was free to take advice if she wanted to. She said that a better figure would be £100, but that she would have to speak to her lawyers as she always did. She said that she would come back to Mr. Cole the next day, and she asked for and was given his card and telephone number. She contacted him the next morning at about 10.30 a.m. by telephone and said "Mr. Cole, I am agreeing to what your client requires - £100 and my legal fees."

5. A written agreement was then prepared, and Mrs. Beadle went to Mr. Cole’s office some time after mid-day on 2nd February 1994. She read the document through when it was ready and said "Mr. Cole, this appears to be what is agreed". She asked for a pen and signed the document, and he witnessed it. At that time she was happy with the agreement which she had entered into. She assumed that the document which she had signed would be sent to the lawyers to finalise by way of contract. Mr. Snell’s solicitors prepared the draft contract, and on 3rd February 1994 they sent it to Bois & Bois, who were Mrs. Beadle’s solicitors, requesting them to confirm that it was satisfactory. Had matters proceeded as everyone had expected up to this stage, the contract would have been engrossed and either Mrs. Beadle or her solicitor would have been present at the Samedi Court on the Friday of that week in order to pass the contract. The Royal Court had no doubt that she would then have received £100 and her legal fees, and Mr. Snell would have been able to satisfy his mortgage creditor and proceed with the development.

6. Mrs. Beadle’s solicitors were not satisfied with the draft agreement. They took the view that Mr. Cole had purported to bind Mrs. Beadle to give her consent for a derisory consideration and maintained that it had been put before her for signature without any opportunity for legal advice or reflection. Having taken the advice of a professional valuer, they informed Mr. Snell’s solicitors that Mrs. Beadle was prepared to sell the freehold of the whole of the strip of land for £15,000. The result of this unexpected turn of events was that Mr. Snell was unable to go ahead with the planned development. His financial supporter withdrew, and he had to protect himself by entering on a remise de biens. He then instituted proceedings before the Royal Court in which he sought relief by way of specific performance and damages for breach of contract. He received and rejected an offer from Mrs. Beadle’s solicitors to sell the fonds of the strip of land to him provided he abandoned his claim of damages. "Broadlands" has now passed into the ownership of a third party, to whom the Island Planning and Development Committee have given permission to form a direct access from that property on to the public road.

7. One can only regret the fact that this change from the Committee’s previous policy, which was to preserve the integrity of the boundary wall along the entire length of the property, has come too late for Mr. Snell and Mrs. Beadle. As it is, what began as an amicable transaction between neighbours, into which Mrs. Beadle entered with a genuine and wholly commendable desire to assist Mr. Snell to overcome his urgent financial difficulties, has given rise to an expensive and prolonged dispute between them which it seems only litigation can now resolve. Mr. Snell has withdrawn his claim for relief by way of specific performance as this is not an available remedy under the law of Jersey. He wishes however to maintain his claim for damages.

8. The argument which was originally taken on Mrs. Beadle’s behalf that she was entitled to repudiate the agreement as she was subjected to undue pressure when she signed the form of agreement and because the value of the right of vehicular access had been falsely represented to her has also been departed from in view of the findings of fact that were made by the Royal Court. Mrs. Beadle said in her evidence that she was happy with the agreement when she signed it, and the criticisms which were made in the pleadings of Mr. Snell and Mr. Cole were held not to have been made out. In the result the only issue which brought the action before the Court of Appeal, and the only issue which is now before their Lordships’ Board, is that which was introduced into the case by an amendment for which leave was given by a consent order in the Royal Court. The amendment was in these terms:-

"19. That further or in the alternative the said price of One Hundred Pounds upon which the alleged contract is based is a ‘vile prix’ and is less than one half of the real value of such right and the transaction is accordingly unenforceable as a ‘dol réel’ arising from a ‘déception d’outre moitié du juste prix ’."

9. The Royal Court rejected this argument. They said that they were quite unable to see what "dol" was perpetrated on Mrs. Beadle. Their assessment of her was that she was an honest, kind and worldly-wise lady who had signed the agreement of her own free will. There was no special relationship between the parties, such as a confidential relationship. She had had time to reflect and to take advice, and a lawyer or other professional adviser was only a telephone call away if she had wanted it. The strip of land, over which there was only a disused footpath, was of no value to her at all. She was amazed when she was told that she could make as much as £15,000 out of the transaction. The contract had been entered into without inducement between two mature and intelligent adults, and the court was not persuaded that there was déception d’outre moitié. In summary, as Collins P said in the Court of Appeal, the effect of the judgment was that the defence based on the principle of déception d’outre moitié failed on the ground that this cause of action required something more than a finding that the price was less than half of the juste prix and it was not available in the absence of dol.

The issues

10. In the Court of Appeal the argument for Mrs. Beadle concentrated on two main issues of law. The first related to the requirement of dol as a component of the principle of déception d’outre moitié. The second related to the ascertainment of the juste prix. After a careful examination of the relevant sources the Court held that where in the case of héritage a vendor receives less than half of the juste prix he may within thirty years rescind the contract, that such a shortfall in the price amounts to a dol réel which makes it unnecessary to establish a dol personnel – that is to say some trick or fraud or other conduct of that nature – and that, while there are certain circumstances attending the sale of héritage which may put the transaction into a class in which the value is too uncertain for the principle to operate, the fact that there may be two or more opinions as to the correct valuation did not make the juste prix uncertain for these purposes.

11. The President, with whose judgment Southwell and Clarke JJ.A. agreed, said that he could see no reason why what he described as "the sale of a right of way" should be added to those classes such as the sale of a right of succession which have been regarded by the commentators as unsuitable by reason of uncertainty for the application of the cause of action. But he also said that the principle had no application to gift or, he thought, to a sale at a deliberately bargain price as in neither of these cases could it be said that there was a perte or a contrat vicieux. He gave this explanation at p. 142 of the judgment:-

"In the case of a gift there is no sale and the cause of action cannot arise. There may, however, be transactions which fall short of a gift but which can be described as sales at a bargain price or at a specially reduced price, this being known to both parties. It was argued that the claimant in such a case would not come to the Court with clean hands if this were to be the case. I would prefer to base my conclusion on a more fundamental consideration. In my judgment where both parties, with adequate knowledge of the market price, intend that the sale shall be made at some exceptionally favourable price, the intention of the parties must be taken to have departed from any such concept as the juste prix and to have withdrawn their transaction from the terms of a law intended to do a (possibly abstract and formalised) form of justice between the parties but which would be leading by its very operation to an unjust result. While Mrs. Beadle was concerned to assist Mr. Snell there is no evidence that she intended either a gift or a sale at an undervalue."

12. As to the means of ascertaining the juste prix, the Court of Appeal held that the most appropriate means of ascertaining the value of a héritage was for the Court to instruct the Viscount to appoint one or more individual valuers to value the property and report to the Court as to the juste prix as at the date of the transaction in question. The President said that the price to be ascertained was the reasonable and appropriate price in the market of the héritage in the particular situation in which the parties found themselves, looking at the matter objectively. He said that the objective approach would inevitably take into account the development or "marriage" value of the right in such a case as the present.

13. Basing their decision on these conclusions, the Court of Appeal held that the Royal Court had confused dol réel with dol personnel and that the additional requirement of a dol personnel did not apply where property was sold at such an undervalue as to fall within the rule as to déception d’outre moitié. As to the juste prix, the President said that he considered the approach of Mr. Snell’s valuer, who valued the strip of land amounting to 65 square feet at £65 at £1 per square foot or £195 at £3 per square foot but took no account of the fact that the right of way had a value to the potential developers of the two properties, to be totally at variance with reality and of no value in reaching the juste prix. On the other hand the figures of £10,000 to £15,000 spoken to by Mrs. Beadle’s expert appeared to him to have been plucked from the air. If the situation had been that Mr. Snell was seeking to exercise his option under the principle of déception d’outre moitié to purchase at the juste prix it would have been necessary for the case to be returned to the Royal Court to re-hear the evidence as to value. But that did not seem to him to be in the interests of justice, as Mr. Snell’s expert accepted that if the element of development value were to be thrown in the price would be in "thousands". When this evidence was compared with the purchase price of £100, there was sufficient evidence to show that Mrs. Beadle was entitled to annul the contract by reason of the operation of the principle.

14. The issues which are before their Lordships’ Board relate mainly to the first of the two issues of law which were considered by the Court of Appeal. It is not disputed that the principle whereby there is a remedy for déception d’outre moitié forms part of the customary law of Jersey. The parties are at issue as to the part which dol has to play in the application of that principle. They are also at issue as to the application of the principle to transactions of the kind that were entered into in this case. But questions were also raised about the approach which the Court of Appeal had taken to the question of the juste prix in the light of the evidence about the nature and circumstances of the transaction which was entered into by the parties.

Customary Law

15. Before turning to the particular sources in which evidence of the cause of action which provides a remedy for déception d’outre moitié is to be found, their Lordships wish to make some brief observations about the nature of customary law in general and its place in Jersey law in particular.

16. The word "custom" may be used in a variety of senses in the legal context. Broadly speaking, custom may be said to be the product of generally accepted usage and practice. It has no formal sanction or authority behind it other than the general consensus of opinion within the community. As Routier, Droit Civil et Coutumier de Normandie, p. 1 puts it:-

"La coutume n’est autre chose qu’un droit non écrit, qui s’est introduit par un tacite consentement du Souverain & du Peuple, pour avoir été observée pendent un tems considérable."

17. When the word is used in that sense, as soon as custom is changed into formal or positive law by judicial decision or by statute it ceases to be custom. Authority is given to the law by the decision of the court or by the statute. It ceases to evolve or develop by usage and practice. Thus, as Routier observed at p. 2, customary law when reduced to writing in this way acquired the status of written law:-

"La rédaction par écrit de nos Coutumes les a renduës le Droit écrit de nos Provinces, chacune dans son détroit; elles y dérogent au Droit Romain; mais elles y cédent à l’autorité des Ordonnances de nos Rois, qui sont les Loix générales du Roïaume, quand il y a clause expresse de dérogation."

As the different systems of French customary law became codified by royal authority they acquired the status of coutumes. This meant that they had an official status, so that nothing that they contained could be abrogated except by statute.

18. Jersey derived its legal traditions from the pays de droit coutumier of Northern France and especially from the ancienne coutoûme of Normandy. The links with Normandy were emphasised by Richard Southwell Q.C. in his A Note on Sources of Jersey Law [1999] 3 J.L. Review 213 when he said at p. 213 that the Norman origins of Jersey law remain of essential importance. The coutumiers prior to codification varied in their content from area to area, but they were much influenced by principles of Roman law which formed part of the ius commune of the civilian jurisdictions in countries such as France, Spain and Italy. In some instances, when the customary law came to be codified, the ius commune was transformed as it stood into a coutume. In other respects, after codification, the ius commune was resorted to when a coutume was silent on the point at issue. The present action relates to property rights under the law of Jersey, where the customary law has not been codified or enshrined in a coutume.

19. In this context the word custom is used to describe all sources of law other than statute. As Stéphanie Nicolle Q.C. has observed in The Origin and Development of Jersey Law (1999), para 12.4, customary law which like the customary law of Jersey has not been enshrined in an official coutume can and does change. It is therefore capable of development by judicial decision as well as by statute. In this respect it may be regarded as being what may be described, in modern terminology, as "the common law" of the island. Like other customary law systems, Jersey law had recourse to the ius commune for areas not covered by municipal customary law: see Nicolle, op. cit., para 14.7. The principle which is at issue in the present case is an example of the reception of a principle of Roman law through the ius commune into Jersey law by way of the customary law of Normandy.

20. For these reasons their Lordships consider that, as the customary law of Jersey has not been enshrined in a coutume, the proper approach is to regard it as being still in a state of development. It is capable of being refined or clarified by judicial decision as the customary law is applied to a new set of facts. This may be done by reference to other customary law sources. In the present context the search for guidance as to the content and the proper application of the principle must be conducted in the first instance by examining the works of the writers on the customary laws of Normandy. It will be helpful also to examine the Roman law, as the origins of the customary law rule lie in the Roman law. French law as it exists today in the French Codes or the current jurisprudence is unlikely to be of direct assistance here, for the reasons explained by Southwell, op. cit., pp. 214 - 215. Nor is it helpful in this context to have regard to the solutions which have been adopted in the modern codified systems that are to be found in other civilian jurisdictions.

21. The Roman law rule, which the texts in the Code at C. 4. 44. 2, 8 attribute to Diocletian, was that in sales of land, if the price was under half of the true value ultra dimidium justi pretii, ex re praesumitur dolus. This gave rise to an exception to the general rule that if the price was genuine its adequacy was irrelevant. The so-called laesio enormis where the sale of the land was at less than half its value was a sufficient ground without more to entitle the disadvantaged party to dissolve the bargain unless the purchaser made up the price to full value: Buckland, A Textbook of Roman Law (2nd edition, 1932), p. 486; J.A.C. Thomas, Textbook of Roman Law (1976), p. 283. This rather crude rule of thumb, which was much debated in the civilian jurisdictions, can be assumed to have been known also to Scots lawyers of the 16th Century who were very familiar with the ius commune. But Scots law in the end rejected it, on the ground that a price is considered to be an equal and adequate price that pleases the parties to the contract: Fairie v. Inglis (1669) Mor. 623. Stair, Institutions of the Law of Scotland (1693), I. 10. 14; Bankton, An Institute of the Laws of Scotland (1751), I. 19. 3. Stair, loc. cit., referring to the differing opinions which had been expressed about the Roman Law rule "which our custom alloweth not", described the rule that ultimately prevailed in Scotland in these words: "If then the particular value or esteem be the first rule in such contracts, when both parties being free, do agree upon such a rate, there is here no donation, but a particular estimation, wherewith either party ought to rest satisfied".

22. English law is of no assistance on this matter. It has been held that it is not legitimate to import the principles of English law into Jersey law relating to property rights, even if in any case this could be done: Godfray v. Godfray (1865) 3 Moo. PC Privy Council Cases, 316, 344 per Turner L.J. It is important therefore, when one is applying the rule to the facts, to confine one’s attention strictly to the limits and characteristics of the remedy for déception d’outre moitié that are to be found in the customary law of Jersey.

Dol Réel and Dol Personnel

23. It is plain, as the President has demonstrated in his helpful review of the earlier Norman sources, to the clarity of which their Lordships wish to pay tribute, that the original rule of the customary law followed the Roman law. A shortfall in the price by which the vendor has received less than half of the juste prix amounted to a dol réel which was sufficient to provide the element of dol that was needed to set aside the contract. It was not necessary to establish any additional element or dol personnel based upon the conduct of the parties to the transaction. The dol which resulted from the shortfall was inherent in the nature of the transaction itself, which became a contrat vicieux.

24. The rule was described by the earliest authority to which their Lordships were referred, Le Rouillé, Le Grand Coustumier du Pays et Duché de Normandie (2nd edition, 1539), de clameur révocatoire ou de Déception, in terms which made no mention of any requirement under the then current usage of any dol personnel:-

"La clameur de decéption d’oultre moytie de juste prix n’est point en livre coustumier mais en usage. Et se donne quant aulcun a vendu son heritage s’il dict est veult soustenir que en faisant la vendue l’heritage vendue valloit plus que le prix pourquoy il vendit de moytie plus qu’il n’en receut et oultre. Et par ce dict et soutient avoir en ce este deceu d’oultre moytie de juste prix."

25. Terrien’s commentary, Du Droit Civil tant public que privé, observe au pays et Duché de Normandie (1574), Livre VIII, D’act. querel. ou clameurs, Ch. XXVIII, De clameur revocatiore et autres rescissions de contracts, is to the same effect at p.329:-

"La clameur revocatoire ou de deception est en usage, et se donne quand aucun à vendu son heritage, et il dit et veut soustenir qu’en faisant la vendue, l’heritage vendu valoit plus que le prix porquoy il le vendit, de moitié plus qu’il n’en receut, & outre. Et par ce dit et soustient avoir esté en ce deceu d’outre moitié de juste prix."

26. This is an important passage. In La Cloche v. La Cloche (1870) L.R. 3 PC 125, 136 Lord Westbury, delivering the judgment of the Board, said that Terrien’s commentary might reasonably be regarded as the best evidence of the old custom of Normandy, and also of the Channel Islands, before the separation of Normandy from the English Crown. Terrien concludes his discussion of the topic at p.330 with a Latin additio, or footnote, in which he states that when considering the actio de rescindenda venditione reference must be made to work of the French jurist D. Carolus Molineus on Contracts and Usury, In Tracta Comere (1546), which discusses the Roman law doctrine and to Aristotle’s Ethics, Book 5 for the proposition that, as justice involves equality of treatment, it must consist in each party receiving his due share.

27. Terrien then cites at p.331, without further discussion, an edict of Charles IX issued in 1561 to the effect that transactions relating to property which it described as choses were no longer to be subject to challenge on the ground of insufficiency of the consideration "d’outre moitié de juste prix, ou autre plus grande quelconque, & ce qu’on dit en Latin, dolus reipsa". The true significance of this citation is obscure, especially as it is plain that the remedy remained available in customary law in regard to transactions relating to héritage. It seems likely however, as the use of the word "choses" indicates, that the edict was directed only to transactions relating to moveable property. The view appears to have been held among later commentators that the remedy did not apply to sales of moveables as the uncertainty that this would create would be disruptive to commerce, which depends on the enforceability of bargains. In the result the rule was confined, as it had been originally in the Roman law, to sales of land. One can deduce from this that it was an exception which, in accordance with general principle, fell to be construed narrowly.

28. The distinction between dol réel and dol personnel as it was understood after the formation of La Coutume Réformée of the Duchy of Normandy was explained by Houard, Dictionnaire Analytique de la Coûtume de Normandie (1780) Tome I p. 549:-

"On distingue en droit le dol en réel ou personnel …

Ainsi dans tous les contrats ou il y a déception d’outre moitié du juste prix, il y a un dol suffisant pour en anéantir l’effet; ce dol s’appelle réel, parce qu’il peut ne pas procéder de la volonté de celui auquel on l’oppose, et qu’il est toujours certain qu’il a son principe dans la va’leur de la chose vendue.

Dans les contrats il peut y avoir un dol d’un autre genre, c’est celui auquel on donne la dénomination de personnel; il a lieu, indépendamment de la valeur du fonds aliéné, quand l'aliénation n'en a été faite que par la contrainte, sans liberté ou au mépris des loix."

29. This too is important evidence as to the nature of the distinction which was inherent in the usage which the earlier writers had described. Furthermore Houard’s description of the distinction between the two kinds of dol can be traced back through the earlier writers to the Roman law, by which dolus ex re ipsa provided a sufficient basis for the contract to be set aside under the actio doli where no other action was available: Justinian, Digest 4. 3.1.1; Thomas, Textbook of Roman Law, p. 228. Terrien says in Ch. XXVIII of his commentary that the rule which he describes was founded in the Roman law de rescindenda venditione, the origins and scope of which he then proceeds to examine in some detail in a Latin footnote. There seems to be no reason for doubting that the origins of the distinction which Houard describes lay in the Roman law or for doubting the accuracy of that distinction.

30. None of the later writers such as Bérault, La Coustume Reformée du Pays et Duché de Normandie 2nd ed. (1614), Le Geyt, Les Manuscrits sur la Constitution, les Lois et Les Usages de cette Ile (1847) Tome IV and Privileges Loix & Coustumes de L’Ile de Jersey reprint (1953), Pesnelle, Coutume de Normandie 4th ed. Tome I (1771) and Basnage, Ouevres contenant ses Commentaires sur la Coutume de Normandie (4th edition 1778), Tome I, De la Clameur Révocatiore suggest that, where the requirement of a shortfall of more than one half of the juste prix has been demonstrated, there is any need to establish some kind of fraud, deceit or trick in order to obtain the remedy. Here again it is worth noting that the language which Basagne uses to describe the rule reveals its Roman law origins. He states at p.32:-

"La lésion ultradimidiaire est lorsque ce qui vaut vingt livres dix sols, a ete vendu pour dix livres."

31. The phrase "lesion ultradimidiaire" appears to have been derived from the phrase ultra dimidium justi pretii (more than half of the just price) which was commonly used by those familiar with the ius commune to describe the so-called laesio enormis which opened the door to the Roman law remedy: e.g. Fairie v. Inglis (1669) Mor. 623; Buckland, A Textbook of Roman Law 2nd ed., p. 486; Thomas, Textbook of Roman Law, p. 282 .

32. The appellant does not dispute that the customary law which enabled a contract to be set aside on the ground of déception d’outre moitié was originally as described by these writers. His argument is that the law of Jersey on this matter has changed and that an accurate account of the present state of the law is to be found in Le Gros, Traité du Droit Coutumier de L’Ile de Jersey (1943), in his chapter entitled "De la Clameur Révocatoire ou Déception D’Outre-Moitié du Juste Prix", at p. 350. The relevant passage is in these terms:-

"On peut poser comme règle qu’un contrat est vicieux lorsque le vendeur d’un immeuble suffre une lésion qui excède la moitié du juste prix.

La loi présume que la volonté de vendre pour le prix porté dans le contrat n’a pas été libre et que l’égalité qui doit régner entre les contractants a été blessée par la lésion. Basagne, Article 3, titre De Juridiction, explique la déception d’outre-moitié comme suit: ‘La lesion ultradimidiaire est lorsque ce qui vaut vingt livres, dix sols a été vendu pour dix livres.’

C’est un principe en quelque sorte sacré que la convention fait la loi des parties, mais la bonne foi est une condition essentielle et sine quà non de la convention.

La raison en est évidente: c’est un principe commun à tous les contrats que les contractants se doivent franchise, sincérité sans voile. Toute espèce d’artifice que l’une des parties se sert pour tromper l’autre peut être de nature à rendre le contract annulable. Ce n’est pas à dire que le préjudice qu’éprouve le vendeur par suite de l’insuffisance du prix suffit pour rescinder le contrat. D’autres circonstances doivent concourir à l’annulation du contrat, tel que dol. En l’absence de toute allégation, autre que celle de la déception, le défendeur peut être reçu à son offre de suppléer ce qui manque au juste prix."

33. The appellant finds support for his argument in the fact that the two sentences from the last paragraph of this passage were cited and applied in Ferbrache v. Bisson [1981] JLR 103 by the Royal Court (Deputy Bailiff, Crill and Jurats Le Cornu and Vint). The question in that case was whether a contract between spouses for the conveyance of a half-share in the matrimonial home passed in usual form before the Royal Court should be set aside. The Deputy Bailiff said at p. 108:-

"For an action of this nature to succeed, it is not just sufficient to show that the price of the contract was less than half the value of the property. That is apparent from page 350 of Mr. Le Gros’s work and it is accepted by both counsel I think, that that is so … we are satisfied certainly as to the first head of that requirement. However the second head requires us to be satisfied that there are other circumstances, as Mr. Le Gros says:

‘Ce n’est pas à dire que le préjudice qu’éprouve le vendeur par suite de l’insuffisance du prix suffit pour rescinder le contrat. D’autres circonstances doivent concurrir à l’annulation du contrat, tel que dol.’"

The Deputy Bailiff went on at pp. 108-109 to stress the importance of the principle of Jersey law that la convention fait la loi des parties.

34. The appellant also draws attention to the Préface to Le Gros’s work, in which he said that in his view the works of eminent jurists such as Poingdestre and Le Geyt, which had not been subjected to revision since their publication, no longer answered the requirements of a treatise of modern law especially as during the 20th Century the customary law of Jersey had undergone progressive transformations dictated by the conditions of modern life. It was submitted that one of the aims which Le Gros had in mind when he was writing his treatise was to bring the text writers up to date, in keeping with the fact that customary law in Jersey was an evolving system. It was said not to be surprising therefore that in his description of déception d’outre moitié du juste prix Le Gros had departed from that which was to be found in the works of the earlier writers. Reference was made to the Bailiff’s observation in Selby v. Romeril [1996] JLR 210, 218 that the law of Jersey cannot be regarded as set in the aspic of the 18th Century. It was also to be noted, as evidence of the present state of the customary law on this subject, that the current syllabus for legal education in Jersey refers at p. 18 to Le Gros’s work alone as the appropriate text to which to refer on this subject. If further evidence was needed as to what was generally understood to be the current state of the law of Jersey it was to be found in the fact that the defence which had originally been stated on Mrs. Beadle’s behalf and was pursued throughout the hearing in the Royal Court was that she had been subjected to undue influence and had been misled as to the juste prix. All this would have been quite unnecessary if, as was now being submitted on her behalf, the shortfall in the price was sufficient to entitle her to set aside the contract.

35. The conclusion which the Court of Appeal reached was that Le Gros was in error when he said at p. 350 that there was a requirement for a further element to allow the vendor to rescind the contract "tel que le dol". Mr. Fysh Q.C. for Mrs. Beadle invited their Lordships to agree with this conclusion. As he put it, all the great commentators were to the same effect, that dol réel was an inherent quality which attached to the transaction from the déception d’outre moitié and there was no further requirement that had to be satisfied to entitle the vendor to rescind the contract. Le Gros was therefore mistaken on this point, and Ferbrache v. Bisson should not be followed as that decision had been based on an acceptance by counsel on both sides that the law was as stated by Le Gros.

36. Their Lordships accept Mr. Fysh’s point that no weight should be attached to the observations on this point in Ferbrache v. Bisson as they proceeded on a concession by both counsel. The critical question is what is to be made of the discussion of the remedy by Le Gros. It is true that his statement that something more is required tel que le dol appears to be out of line with all the earlier writers. The impression which is given is that Le Gros was mistaken on this important point or that he considered that the law had changed from that described by the earlier writers, so that it was no longer sufficient according to the customary law of Jersey to demonstrate that there was the required shortfall from the juste prix. It seems to their Lordships however, on further examination of this passage in its whole context, that it does not support either of these two explanations and that the proper conclusion to draw is that Le Gros regarded the law as being the same in all its essentials as that which had previously been described.

37. The first point to notice about his discussion of the cause of action is that he refers to and adopts without any hint of demur or criticism the description of la clameur révocatoire that is to be found in Basagne’s Ouevres contenant ses Commentaires sur la Coutume de Normandie 4th ed. Tome I. When, at a later stage in his examination of the subject at p. 353, Le Gros is dissatisfied with the current state of the law about the thirty year period that is available for the taking of the remedy, he says so expressly and suggests that an alternative approach should be adopted. It is to be assumed therefore that his statement of the law at p. 350 was intended to be a statement of the law as it was, not what he thought it ought to be. It would have been remarkable, if Le Gros had thought that the law had changed from that which was described by Basagne, for him to omit to give some explanation for taking this view and to provide references to the relevant evidence. Yet there is no such explanation, and no mention is made by Le Gros of any evidence based on usage or practice which would provide support for it.

38. The absence of such material is particularly significant in view of the profound nature of the change in the cause of action which, if the appellant’s reading of the passage is correct, Le Gros was claiming to have observed. The whole point of the remedy for déception d’outre moitié, as derived from the Roman law, was that the fact that the property had been sold at less than one half of the juste prix gave rise to a presumption of dol. The Roman law did not regard it as necessary, if actual fraud or deception was present, to establish that the price had fallen short of the just price by any particular margin. The presence of fraud or deception was sufficient for a remedy to be available by means of the defence known as the exceptio doli: Buckland, A Textbook of Roman Law 2nd ed., pp. 654 – 655; Thomas, Textbook of Roman Law, pp. 228 - 229. It was only in the case where the vendor was seeking to found simply on dolus ex re ipsa that it was necessary to demonstrate that there was laesio enormis by showing that the shortfall between the actual price and the just price exceeded more than half of the just price. Thus to insist upon the proof of dol personnel as a condition of obtaining the remedy would be to remove from the cause of action déception d’outre moitié its essential characteristic as a self-standing remedy. It would rob it of all practical value, in view of the remedy which is available in cases where dol personnel is present irrespective of the shortfall, if any, in the contract price. It is significant, and unsurprising, that neither article 1674 of the French Civil Code, Dalloz 92nd ed. (1992-1993) by which a vendor who has suffered a lésion of more than seven twelfths of the price has the right to demand rescission of the sale nor the doctrine of ultradimidiaire in the law of Guernsey as applied in Watson v. Trouteaud (1987) 5 G.L.J.1 require that any element of dol personnel be established before the vendor can take advantage of this remedy.

39. Their Lordships consider that the critical passage in Le Gros’s discussion, where the two sentences quoted in Ferbrache v. Bisson [1981] J.L.R.103,108 appear, is capable of another reading which is consistent with the treatment of the cause of action by the earlier writers. This is that he is concentrating at this point on the question of the appropriate remedy. Two different situations are distinguished in these sentences. The first is where the necessary shortfall is established so that there is a dol réel, but there are no other grounds for saying that the contract is defective because it was procured by fraud or deception. The second is where there is evidence of fraud or deception in the procuring of the contract such as to amount to dol in the sense of a dol personnel. In the first situation the primary remedy is to make good the shortfall in the price, so that the object of the transaction is achieved and the property passes from the vendor to the purchaser at the juste prix. The purchaser is entitled to maintain the bargain by offering to pay the amount of the shortfall. In the second situation the transaction is so infected by the dol personnel that the purchaser has no such right, and the vendor is entitled at once to rescind the contract. It is clear from the context that the assertion by Le Gros that something more to bring about what he describes at p.35 as l’annulation du contrat was directed to the second situation and not to the first.

40. For these reasons their Lordships are of the opinion that the judges in the Court of Appeal went too far when they said that Le Gros fell into error in this passage of his work. They are not persuaded that there is any sound evidence for the view that the customary law of Jersey as to déception d’outre moitié du juste prix has departed in its essential characteristics from the law as described by the earlier writers with particular reference to the Coutume Réformée of Normandie. It may be that Le Gros’s treatment of the subject has given rise to a misunderstanding as to the effect of what he was saying, and that this misunderstanding has been reinforced by the interpretation which was placed upon the two critical sentences in Ferbrache v. Bisson and accepted in that case by both counsel. But there is no evidence that this interpretation has become part of the law of Jersey by judicial decision or by usage. Mr. McCombe Q.C. for Mr. Snell accepted that this was so and that this part of his argument depended entirely upon what was stated by Le Gros.

The application of the rule to this transaction

41. There remains however the question which was addressed by Mr. Santos-Costa for Mr. Snell in the course of his argument as to whether the transaction which the parties entered into in this case is susceptible to a remedy under the doctrine of déception d’outre moitié du juste prix at all. As the President recognised in his discussion at pp. 141-142 of the judgment of the Court of Appeal, there are certain kinds of transactions to which the principle of the juste prix has no application. Their Lordships consider that it was legitimate for the Court of Appeal, and that is now legitimate for their Lordships’ Board, to explore the proper limits for the application of the principle. It is a rule of the customary law of Jersey which remains open for explanation and elucidation by the court when it is applied to the facts.

42. It has long been recognised that there are certain circumstances in which a sale of héritage belongs to a class or category of property whose value is too uncertain for the principle to be applied to it. This is consistent with the view that, as it is an exception, the principle ought to be construed narrowly. The President noted that Terrien recognised that it did not apply to leases of short duration or to héritage decretez & vendus par justice. Bérault, La Coustume Reformée du Pays et Duché de Normandie Rouen ed. (1776) p.77, said that Faber had determined that the law had no place en ventes de choses douteuses. Pothier, Traités de Droit Civil et de Jurisprudence Françoise (1781) Tome I p.319-20 observed that in France a sale of a right of succession or of a right of an aleatory nature or of a life annuity was not regarded as sufficiently certain to attract the remedy. In Godfray v. Godfray (1865) 3 Moo. PC 316, 343-344 Turner L.J. said that sales of property of uncertain value did not fall within the rule. Referring to Bérault and to Pothier he said:-

"The Commentators who are of authority upon the subject lay it down that the process for rescinding a bargain for inadequacy of consideration cannot be applied to sales of things of doubtful value."

43. The President then gave two further examples of cases to which in his view the principle did not apply. The first of these was that of gift. As he observed, in the case of gift there is no sale and the cause of action cannot arise. The second example which he gave was that of a sale at a bargain or specially reduced price, this being known to the parties. The justification which he gave for taking the view that the principle had no application was that parties who enter with full knowledge into such a transaction must be taken to have departed from any such concept as the juste prix, the essence of which is that it is the price which the property would attract if sold on the open market in good faith at its full value. Support for regarding this example as lying outside the scope of the principle is to be found in Le Gros’s observation at p. 350 that la bonne foi est une condition essentielle et sine quà non de la convention. The essence of the matter is good faith, of which any element of dol is the antithesis. So the basis for the application of the principle is that something has occurred which is different from that which would have occurred if the parties had been transacting with each other in good faith. Where they transact with each other with full knowledge of the fact that the price which they have agreed is a bargain or specially reduced price as compared with the market price, the principle which Le Gros describes as sacré in the law of Jersey applies. La convention fait la loi des parties. In Wallis v. Taylor [1965] JJ 455, 457 this was referred to as an established principle of Jersey law. There is no basis for saying that the fact that the price which they have agreed in these circumstances is less than half of the juste prix gives rise to a presumption that the transaction was subject to a dol réel in regard to the price.

44. Further support for this approach is to be found in Houard’s Dictionnaire Analytique de la Coutume de Normandie Tome I where, in his description of dol réel, he states at p.549:-

" … il résulte de l’ignorance qui justifie l’acheteur, que ni lui ni le vendeur n’ont eu en contractant ensemble une connaisance de l’object du contrat, telle que la loi exigeoit qu’ils l’eussent pour le rendre irrévocable; la bonne foi exige qu’il soit résolu."

45. Here again there is a recognition of the fact that the remedy is based on the principle of good faith and that the dol réel owes its existence not to a desire on the part of the purchaser to outwit or harm the vendor but from a lack of knowledge on the part of the contracting parties of the value of the property. Thus parties who deal with each other with full knowledge of the facts, and who enter into a bargain at a price which is intended by both of them to be a specially reduced price, cannot say that there was a dol réel simply because the price which they agreed to was less than the juste prix. They cannot say that in their case good faith requires that the price be made up to the juste prix or the bargain be cancelled.

46. The transaction which was entered into by Mr. Snell and Mrs. Beadle does not fall into the category which the President described as his second example. But it does have some important characteristics, of which both parties were well aware, which the appellant says make it inappropriate for the application of the remedy. The right which Mr. Snell was seeking to obtain from Mrs. Beadle was a right of vehicular access over a portion of a strip of ground which was of no value to Mrs. Beadle so that he could enhance the value of his property. The strip of ground was not capable of development so long as it remained in her ownership, and it was already subject to a right of way along its length for use as a footpath. The nature of the right was such that the only parties between whom the transaction could be entered into were the proprietors of the adjacent dominant and servient tenements. These were the proprietors of "Broadlands" and "Abalone" on the one hand and the proprietor of the strip of ground on the other. It was not a right which could be offered for sale generally in the open market. Moreover Mr. Snell was not seeking to purchase any part of the fonds of the strip of ground, nor was Mrs. Beadle seeking that he should do so. The transaction was not one for the sale of a piece of land but was for the grant of a right of servitude.

47. If the ownership of the fonds of the strip of ground had been what Mr. Snell and Mrs. Beadle were transacting about there would have been a basis for saying that, in the absence of other evidence, they must be presumed to have intended that the property should change hands at the value which it would obtain if sold on the open market. But that was not the nature of their transaction. It was not a contract for the sale of the land. The right of servitude which Mr. Snell was seeking to purchase had no market value that either party could determine by looking at the matter objectively. It was not capable of being enjoyed or put to use by anyone other than the proprietor of the dominant tenement. There was no yardstick by which Mrs. Beadle and Mr. Snell could determine what was the juste prix for it other than the price which seemed to them both after amicable negotiation to be a fair price at the time when they entered into the transaction, with full knowledge of the facts regarding the nature of the strip of ground and the use which would be made of the right to use it for the passage of vehicles. The fact that Mrs. Beadle asked for, and Mr. Snell agreed to, payment of her legal fees is important, as it casts further light on the nature of the transaction. It was a friendly act between neighbours in which neither side was endeavouring to contract with each other in the way they would have done if they had been engaged upon a sale of land in the open market.

48. Although Mr. Fysh accepted that servitude rights fell to be regarded as héritage, there is no indication in the Roman law, in any of the commentators on the customary law or in the description which Le Gros has provided that an agreement by which a servitude right was constituted was seen as falling within the scope of the remedy. The primary reason for this is that the Roman law rule to which the remedy for déception d’outre moitié owes its origin applied only to the sale of land. It took the form of a limited exception to the general principle in the law of sale that it was sufficient that the price was certum, there being no rule that the price required also to be adequate: Buckland, A Textbook of Roman Law, p. 486; Thomas, Textbook of Roman Law, pp. 282-283. The law relating to the constitution by agreement of a praedial servitude, such as a right of way for use by vehicles, belonged to a different chapter which was concerned with iura in re or burdens on or rights over land: Buckland, op. cit., p. 265-266; Thomas, op. cit., p. 200. As their Lordships have said, the contract which was entered into between Mr. Snell and Mrs. Beadle was not one for the sale of land, as Mr. Snell was not seeking to purchase the fonds of the strip of land over which he wished to obtain the right of access. It was one for the granting by Mrs. Beadle, as the owner of the strip of land, to Mr. Snell, as the owner of the adjacent properties, of a right of servitude. The fact that a sum of money was to be paid for the granting, or constitution, of the servitude does not affect its classification. It was not a contract for the sale of the land.

49. The absence of any indication in the evidence that there was an open market price for the servitude right which Mr. Snell was seeking to obtain from Mrs. Beadle which could be determined objectively is also very significant. The figures which were spoken to by Mr. Snell’s valuer were his valuation of the strip of land, not of a the value in the open market of a right to pass vehicles over it. The figures which were spoken to by Mrs. Beadle’s expert, which were those at which offers were made to Mr. Snell to sell him the freehold of the entire length of the footpath, were not based upon any objective evidence as to the value of the servitude right. They were described by the President as having the appearance of having been plucked from the air. No evidence was led which would have entitled either the Royal Court or the Court of Appeal to hold that there was such a thing as a juste prix for the servitude right which Mr. Snell was seeking to obtain from Mrs. Beadle other than that which, as between themselves and acting in good faith and with full knowledge of the facts, Mr. Snell and Mrs. Beadle were able to and did in fact agree.

50. Their Lordships recognise that there are situations in which the value to be attached to the grant of a right of way will have to be determined objectively. For example, a right of way is capable in some jurisdictions of being constituted by means of a compulsory purchase order. Section 13 of the Local Government (Miscellaneous Provisions) Act 1976 enables a local authority in England and Wales to purchase compulsorily new rights over land. In New Zealand the High Court has jurisdiction to grant a right of way for reasonable access to landlocked land under section 129B of the Property Law Act 1952: see Jacobsen Holdings Ltd. v. Drexel [1986] 1 N.Z.L.R. 324. In the event of such an order being made compensation will be payable to the owner of the land over which the right is granted. It will be assessed according to the rules for the assessment of compensation which are well established. The basic rule is that the value of land taken compulsorily is to be taken to be the amount which the land if sold on the open market by a willing seller might be expected to realise, having regard to the uses to which the land taken is reasonably capable of being put in the future: Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam [1939] AC 302. The question must be approached upon a consideration of the state of affairs that would have existed if there had been no scheme: Fletcher Estates (Harlescott) Ltd. v. Secretary of State for the Environment [2000] 2 WLR 438, 442E.

51. But the fact that the value of a servitude right may have to be determined objectively for these purposes does not mean that a juste prix can be attached to it for the purposes of the doctrine of déception d’outre moitié. The origins of the doctrine lie in the assumption that there was a juste prix that the property would command if sold in the open market which the parties could have ascertained for themselves when they entered into the contract.

52. The fact that, if the remedy for déception d’outre moitié applies, it remains available under the law of Jersey for a period of thirty years from the date of the transaction requires that particular attention be paid to the concept of the juste prix. If the parties to a transaction are to be subjected to risk that the remedy may be invoked over such a long time period, there is an obvious need for this to be capable of being determined objectively at the time when the transaction was entered into by means of reliable and independent evidence. Where that evidence is not only lacking, as it is in this case, but is incapable of being provided because the transaction was such that there was no other way by which the parties could determine the price for it at the time than their own estimate of what it was worth, there is a strong case for holding that the remedy for déception d’outre moitié du juste prix does not apply to it. If it were otherwise a situation of great uncertainty would result. It would lay bargains which were entered into in good faith open to the risk of being set aside on the ground simply of a change of view by the vendor after the event that he could extract a higher price for the property than he originally asked for it from the purchaser. That would be contrary to the underlying principle which is expressed in the maxim la convention fait la loi des parties.

53. Their Lordships have not overlooked Hoffmann J.A.’s observation in In Re Barker [1985-6] J.L.R. 186, 195 that the court should endeavour to do justice according to the notions of our own time. But the fact is that Mrs. Beadle is seeking to invoke an ancient doctrine which few legal systems of our time have accepted. It runs counter to the general principle that where parties of full age and capacity contract with each other freely and without any element of dol personnel they should be held to their contract. It is not generally recognised to be just, according to the notions of our time, that such a contract should be at risk of being reopened for thirty years simply because it occurred later to one of the parties that he or she would have been able, by asking for more, to obtain more than twice the price that was agreed to.

54. Their Lordships have concluded that, as this was not a contract for the sale of land and as it has not been shown that there was a juste prix for the servitude right which could be determined objectively by the parties transacting with each other in good faith, this is a case to which the remedy does not apply. In their judgment Mrs. Beadle’s argument that she was entitled to annul the contract because the transaction was unenforceable on the ground of déception d’outre moitié must be rejected. It should be noted that the argument that the contract was unenforceable, which was appropriate to the case of false representation which she has now abandoned, would fall to be rejected in any event on the ground that this is not the correct remedy in a case of déception. In a case of déception the primary remedy is to call on the purchaser to make good the shortfall in the price so that he can maintain the bargain.

55. For these reasons their Lordships will humbly advise Her Majesty that the appeal should be allowed and that the order of the Court of Appeal of Jersey of 18th January 1999 should be set aside. The respondent must pay the costs of the proceedings in the Court of Appeal and of the appeal to their Lordships’ Board.

 

 

[Dissenting judgment delivered by Lord Cooke of Thorndon & Lord Hutton]

 

56. We regret that we are unable to agree with the decision of the majority that the appeal should be allowed and that the order of the Court of Appeal of Jersey should be set aside.

57. There was only one issue for determination before the Royal Court and the Court of Appeal. That issue was whether Mrs. Beadle was entitled to annul the contract made between her and Mr. Snell by reason of the operation of déception d'outre moitié. In his judgment the President of the Court of Appeal, Mr. J.M. Collins Q.C., stated at page 138 of the record:

"The Notice of Appeal was in very wide form, but the Appellant's case very helpfully identified the comparatively narrow grounds on which the appeal was based.

Those grounds were encapsulated in the following issues:-

(1) "What as a matter of Jersey Law constitutes a déception d'outre moitié and what is its effect?"

(2) "What on the facts was the value of the right of way which Mrs. Beadle agreed to grant Mr. Snell in the agreement signed on the 2nd February, 1994?"

(3) "Whether on the facts there was a déception d'outre moitié?"

58. The relevant part of the judgment of the Royal Court setting out how the consideration was agreed upon between Mrs. Beadle and Mr. Snell's adviser, Mr. Cole, is at pp. 65 and 66 of the record:

"Eventually Mrs. Beadle asked Mr. Cole what he considered to be a proper consideration and he said that he would suggest £50 to £100, but that she was free to take advice if she wanted to. She said that a better figure would be £100. "Let's be realistic", she said. She said that she would have to speak to her lawyers as she always did. Nobody demurred. Mr. Cole said that she said she would come back to him tomorrow and she left after a perfectly amicable meeting. Mr. Cole said if he had not heard from her, he would have left it two or three days, but he was asked for and gave her his card and telephone number and when she left, she said "I see no problems in this". The half hour meeting was perfectly pleasant and cordial. According to Mr. Cole, Mrs. Beadle contacted him without any prompting at about 10.30 the following morning and she said "Mr. Cole, I am agreeing to what your client requires - £100 and my legal fees."

59. In describing part of Mrs. Beadle's evidence at the hearing the Royal Court stated at page 66 of the record:

"She admitted that Mr. Cole had done no more and no less than she had asked him to do. What she said to us was that she knew that Mr. Snell was in terrible financial trouble and "was prepared to go along and help the poor man".

60. We are in agreement with the opinion of the majority that the Court of Appeal was right to differ from the Royal Court and to hold that the remedy for déception d'outre moitié is available where the vendor receives less than one half of the juste prix without the need to prove dol personnel.

61. Although on the evidence it is not possible to assess with any degree of precision the value of the right of way over her land which Mrs. Beadle agreed to sell to Mr. Snell, we are of opinion that a crucial point in this case is that the price of £100 which she agreed to receive was very much less than half the value of the right of way, whatever might be its precise value. This emerged clearly from the evidence of the valuers called by each party. Mr. Roger Marriot, the valuer called on behalf of Mr. Snell, said in cross-examination at pp. 31 and 33 of the record:

"ADVOCATE FALLE: You were giving evidence in order to try and pretend to the Court under the guise of being an expert witness, telling the Court that they could regard this land as having a value of perhaps £65, and that to give… to make an offer of £100 was positively generous, that's what you were telling the Court.

WITNESS: No, I said and I was asked what is the intrinsic value of the land, and I was careful to say that the right of way is an entirely separate matter and obviously one had to weigh up then the value to the purchaser, which I stressed at the end when I was asked if I had anything else to say, the right of way is an entirely separate matter from the value of the land."

"ADVOCATE FALLE: So, so far as Mr. Snell is concerned it gave him a very great more than £100.

WITNESS: Yes, oh yes, certainly.

ADVOCATE FALLE: Thousands of pounds?

WITNESS: Yes."

62. The valuer who gave evidence on behalf of Mrs. Beadle, Mr. Roger Trower, valued the right of passage at £10,000 but agreed that his partner had valued it at £15,000 (see pages 57-59 of the record). Therefore we consider that the President of the Court of Appeal was entitled to state at page 146 of the record:

"Mr. Marriot having accepted that with the element of development value thrown in the price would be in "thousands" and the purchase price having been £100, there is sufficient evidence to satisfy me that Mrs. Beadle was entitled to annul the contract as she did by her solicitor's letter of 4th February, 1994, by reason of the operation of déception d'outre moitié."

63. The majority reverse the decision of the Court of Appeal on three principal grounds. The first ground relates to the element of good faith. The majority judgment states that the remedy is based on the principle of good faith and that the dol réel owes its existence not to a desire on the part of the purchaser to outwit or harm the vendor but from a lack of knowledge on the part of the contracting parties of the value of the property. The majority further hold that there was no yardstick by which Mrs. Beadle and Mr. Snell could determine what was the juste prix for the right of way other than the price which seemed to them both after amicable negotiations to be a fair price at the time when they entered into the transaction, with full knowledge of the facts regarding the nature of the strip of ground and the use which would be made of the right to use it for the passage of vehicles. It was a friendly act between neighbours in which neither side was endeavouring to contract with the other in the way they would have done if they had been engaged upon a sale of land in the open market.

64. But in our opinion it is clear that in making a valuation of a right in land account is to be taken of a potentiality even if the vendor himself or herself is unable to exploit it and even if there is only one potential purchaser who could do so. In Vyricherla Narayana Gajapatiraju v. Revenue Divisional Officer, Vizagapatam [1939] AC 302 at pp. 312-313 Lord Romer, in delivering the judgment of the Privy Council said:

"But sometimes it happens that the land to be valued possesses some unusual, and it may be, unique features, as regards its position or its potentialities. In such a case the arbitrator in determining its value will have no market value to guide him, and he will have to ascertain as best he may from the materials before him, what a willing vendor might reasonably expect to obtain from a willing purchaser, for the land in that particular position and with those particular potentialities."

65. In Jacobsen Holdings Ltd v. Drexel [1986] 1 N.Z.L.R. 324, to which the majority refer in their judgment, and Cleveland v. Roberts [1993] 2 N.Z.L.R. 17, this principle has been applied in assessing the fair value of a right of access. Difficulty in arriving at precision does not rule out the principle.

66. We consider that this principle applies where a vendor claims that she has received less than one half of the juste prix, and that it is not open to Mr. Snell to argue that Mrs. Beadle is not entitled to annul the agreement because he and she were dealing with each other in good faith. We consider that it is clear that when Mrs. Beadle asked Mr. Cole what he considered to be a proper consideration and he said that he would suggest £50 to £100, and she said that a better figure would be £100 and added "Let's be realistic", she had no idea that the value of the right which she was selling was thousands of pounds. Mrs. Beadle wished to help Mr. Snell, but we cannot accept that if she had known that the right of way was worth thousands of pounds she would have granted him the right of way for only £100. In these circumstances we are of opinion that it is entirely just that the remedy of déception d'outre moitié should be available to her.

67. The second reason for the decision of the majority is that the contract between Mr. Snell and Mrs. Beadle was not one for the sale of land, but was a contract for the granting of a servitude which does not fall within the scope of the doctrine. However we are of opinion that in the modern world where, as in this case, the value of the right of way over a strip of land may greatly exceed the value of the strip itself because of the enhanced value which the right of way gives to an adjoining property, it would not be right to deny the remedy because of the distinction between a sale of land and a sale of a right of way over land. As Hoffmann J.A. said in In re Barker [1985-86] J.L.R. 186, 195:

"I am conscious of the pride which the legal profession in this Island takes in its unique legal system but such pride can only be justified if the legal institutions are sufficiently adaptable to enable the Court to do justice according to the notions of our own time. The Court should not be left with the uneasy feeling that in following the old authorities, it might have perpetrated an injustice upon one of the litigants. I think that to accede to the appeal in this case would leave the Court with such a feeling and I am glad that the medieval past casts no shadow upon the power of the Court to endeavour to do justice today."

68. Moreover, it appears that in the Royal Court and the Court of Appeal no reliance was placed by Mr. Snell upon the distinction between the sale of land and the sale of a right of way.

69. The third reason for the decision of the majority is that no evidence was given which would enable a juste prix to be assessed with any precision for the right of way. But, whilst this is so, we consider, as we have observed above, that the Court of Appeal was entitled to conclude that the £100 which Mrs. Beadle agreed to accept was very much less than half of any figure which might be assessed as the juste prix. The fact is that this was a grant of a perpetual right of way over land at a gross undervalue, when the grantor had no intention of entering into a transaction so disadvantageous to her. In our opinion it was well within the scope of déception d'outre moitié.