Lewin (Trading Standards Officer) v Barratt Homes Ltd

Prospective purchasers visiting development site and being shown pictures and show house – Purchasers entering into contract to buy properties – Houses constructed differing from pictures and show house – Whether pictures and show house amounting to misleading statements – Property Misdescriptions Act 1991, section1(1) – Magistrates dismissing charges – Appeal allowed In 1997 two prospective purchasers visited the site office of the respondent property developer, Barratt Homes Ltd (Barratt). They spoke to a site negotiator about houses that were being offered for sale prior to their construction. They were shown a large framed picture of a detached house on the office wall, and a further picture of the same house on an A4 sheet of paper. Beneath the framed picture was a small sticker, which stated that the details of the property had been amended and requested customers to refer to the site negotiator for details. Also on the office wall was a framed A4 document, which warned that there might be a difference between the accommodation depicted in Barratt’s literature and that on offer in particular developments. The purchasers then visited a show house on the site. They agreed to purchase houses and paid 10% of the purchase price on exchange of contracts. However, in November 1997, when they visited their respective completed houses, they noticed that they were different from the pictures and the show house in that: first, they had no gable roof over one window; second, they had no rendering to the top wall; third, there was no large window above the porch; and, fourth, there was no central lintel in the ground-floor window. The purchasers completed their purchases because they believed they would otherwise lose their deposits. They subsequently made complaints to a trading standards officer. On 20 January 1999 informations were laid against Barratt alleging offences contrary to section 1(1) of the Property Misdescriptions Act 1991. The justices held that false or misleading statements had been made about the physical or structural characteristics of the houses being built, which had not been effectively disclaimed by any contrary statement, and that no statutory defence within section 2 of the 1991 Act had been made out. However, the justices dismissed the charges holding that the statements were merely promises to the future and not statements of existing facts, and, accordingly, could not had been false or misleading within the scope of section 1(1) of the 1991 Act. The appellant appealed by way of case stated. Held: The appeal was allowed. 1. There was a fundamental and underlying contradiction in the justices’ conclusions in that they found that Barratt had made false and misleading statements, but yet concluded that they were merely promises. That was impossible, since a promise or a prediction about the future could not be false or misleading, as it could not be said to have been true or false at the time when it was made: see R v Sunair Holidays Ltd [1973] 2 All ER 1233. 2. Since January 1997, Barratt had known that it was unable to build the houses to the design shown in the pictures and the show house. However, by showing prospective purchasers the pictures and the show house, Barratt was stating that that was how it proposed to build the houses. In other words, that was its present intention so far as it knew and nothing stood in the way. Therefore, the pictures and show house amounted to statements of fact that had been misleading at the time, and accordingly, the magistrates were wrong to conclude that they had been merely promises to the future. The matter was to be remitted with a direction to convict. Karl Scholz (instructed by the solicitor to Northamptonshire County Council) appeared for the appellant; Timothy Jones (instructed by Gateley Wareing, of Birmingham) appeared for the respondent. Thomas Elliott, barrister