Legal Updates

Commercial Litigation – Commercial Law – Commercial Property - Sale of Contaminated Land – Fraudulent Misrepresentation – Chemical Manufacture

The case of Lambson Fine Chemicals Ltd v Merlion Capital Housing Ltd [2008] involved fraudulent misrepresentation and deceit in a commercial contract case for the sale of land. The claimant in this case was a company that specialised in chemical manufacture and production.

The land which was sold by the claimant was a 40 acre site (“the Property”). The claimant had owned the Property for many years, and subsequently sold it to the defendant. However, the claimant then leased the Property back for around 15 months in order to carry out a number of demolition projects.

Part of the purchase price was retained by the defendant. The claimant subsequently commenced proceedings for the outstanding sum of money.

The defendant argued that it had entered into the sale agreement with the claimant in reliance upon a written representation made by the claimant as to the extent of the chemical contamination at the Property. It contended that the written representation was fraudulent due to the fact that after the sale the defendant found the property had been extensively contaminated with cyanide, especially the central areas.

The court held that on the evidence it was clear that it was known to everyone that the Property was heavily contaminated. There had been widespread chemical contamination across the entire site. Accordingly, the court was of the opinion that the representation made was accurate. It should be noted however that had a more specific question been asked about the central areas, a different answer might have been obtained. Despite this fact, it did not mean that there was any fraud or deceit, which accordingly meant that there was no actionable misrepresentation.

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© RT COOPERS, 2008. This Briefing Note does not provide a comprehensive or complete statement of the law relating to the issues discussed nor does it constitute legal advice. It is intended only to highlight general issues. Specialist legal advice should always be sought in relation to particular circumstances.


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