Contract for sale of land — Construction — Appellant buyer inspecting property before purchase — Seller later removing flagstones but concealing removal and lying to appellant — Judge finding seller liable for tort of deceit but not under contract — Whether contract including flagstones in sale — Whether buyer entitled to cost of relaying them — Appeal allowed
The appellant was interested in purchasing the respondent’s property, Eastington Hall Estate. During viewings of the property, he observed an area known as the Dog Garden, a large part of which was covered in old flagstones. A contract for sale was subsequently concluded, clause 8(1) of which read: “THE Buyer is deemed to have inspected the Property whether or not the Buyer has in fact done so.” Clause 13 provided that the contractual document constituted the entire agreement between the parties, apart from any “statement or representation… given by the Seller’s Solicitors in the written replies to preliminary enquiries [or to] an enquiry made by the Buyer’s Solicitors prior to the date of this agreement upon which it is hereby agreed that the Buyer does rely.” The contract also incorporated the national conditions of sale, standard condition 3.2.1 of which provided that the buyer accepted the property in its physical state as at the date of the contract.
Prior to the exchange of contracts, the respondent removed the flagstones from the Dog Garden and stacked them elsewhere on the property. The appellant’s solicitor noticed the stacked flagstones during an inspection of the property, and wrote to the respondent inquiring whether they had been removed from the curtilage of the property. The respondent’s solicitor replied that they had not, and that they were not included in the sale. The sale was duly completed.
In subsequent proceedings by the appellant, the respondent was found liable for the tort of deceit for her solicitor’s false statement concerning the flagstones. In rejecting the appellant’s contractual claim, the judge construed clause 8(1) as deeming the appellant to have inspected the property immediately before exchange of contracts. He awarded damages based upon the cost of acquiring, but not laying, replacement flagstones. On appeal, the appellant contended that he was entitled to the flagstones under the contract, and that the judge should have ordered the respondent both to return them and relay them or pay the cost of purchasing and laying replacements.
Held: The appeal was allowed.
Per Ward and Sedley LJJ: The appellant was entitled to an order requiring the respondent to restore the flagstones to the Dog Garden or to indemnify the appellant for the cost of doing so. The flagstones were part of “the Property” on a correct construction of the contract, and would, if left in place, have passed to the appellant under that contract without need for them to be specifically mentioned in it. The respondent, having removed the flagstones, could not rely upon her fraudulent answer to the inquiry by the appellant’s solicitor to argue that the flagstones were not included in the contract. The appellant had been entitled to treat that answer as honest, and to enter into the contract upon that basis. Treating the respondent’s statement as true meant assuming that the stacked flagstones had not come from the curtilage of the property, and that, accordingly, the flagstones in the Dog Garden remained in place as part of the property, and had passed to the appellant on the sale.
The entire agreement clause did not assist the respondent because it specifically excluded reliance upon statements made by the respondent’s solicitor in response to preliminary and precontract inquiries. Nor was clause 8(1) of assistance, even if it did, as found by the judge, refer to an inspection immediately before exchange of contracts. The appellant’s solicitor had in fact carried out an inspection, but the removal of the flagstones had been deliberately concealed. If a vendor surreptitiously made an alteration to a property and then sought to conceal it, and lied about it to the purchaser, it could not rely upon a clause such as clause 8(1) to protect it from the consequences of its dishonesty. The principle of caveat emptor did not apply in such circumstances: Gordon v Selico Co Ltd [1986] 1 EGLR 71 applied. Similar considerations applied to standard condition 3.2.1.
Per Arden LJ, dissenting: The contract could not reasonably be interpreted in the way contended for by the appellant. It had not become binding until signed, and, at that date, the flagstones were not fixtures attached to the land, nor was there any separate provision for their acquisition as chattels. On no basis did the word “Property” in the contract include a pile of flagstones. No representations by the respondent on the matter could form contractual terms because of the entire agreement clause. Moreover, the appellant’s contention that the “Property” had to mean the property as it stood at the date of his inspection was contrary to standard condition 3.2.1. The application of clause 8(1) arose only if the appellant was correct in his interpretation of the contract, which he was not.
Oliver Ticciati (instructed by Wilmot & Co, of Cirencester) appeared for the appellant; Sara Hargreaves (instructed by Charles Russell, of Cheltenham) appeared for the respondent.
Sally Dobson, barrister
