The purchasers of a nursing residential home in north Devon have failed in a High Court claim against the previous owners for damages for misrepresentation.
In May 1997 Grant and Janine Banks bought the 50-year lease of the Grenville Nursing Home, at 81 Meddon Street, Bideford, Devon for £250,000 from John and Sonia Cox.
The Banks’ claimed they were misled over the rate of occupancy at the home. They said they later discovered a letter, allegedly sent to the Coxs by the local social services department in February 1997, outlining, among other things, proposals to reduce the funding of nursing care in the district.
Counsel for the buyers, Tim Penny, argued that the contents of the letter were of obvious significance to potential purchasers of the business, 70% of which relied on state funding. He claimed that the letter should have been disclosed in response to pre-contract enquiries as constituting a notice of “material change in the nature or conduct of the business since the last accounts”.
However, counsel for the Cox’s, Michael OSullivan, said that they had never received the letter and that as far as they were concerned there had been no indications of any change in the local social services policy.
Mr O’Sullivan said the Banks had been keen to purchase the business and there had been no suggestion that the accounts were false. The home was full and had been full in the past. He claimed that the Banks had seized on the letter as an explanation for their failure in running the home and that it had given them an opportunity to place blame on others rather than blaming their own way of managing the business.
Dismissing the claim, Lloyd J said that the letter was unlikely to have been noted by the Cox’s and that in any case it was not a notice which the Coxs needed to mention in reply to the buyers enquiries. He also dismissed a claim for damages against the Banks’ former solicitors over their conduct of the purchase.
Banks & another v Cox & others Chancery Division (Lloyd J) 17 April 2000
Tim Penny (instructed by Cartier & Co) appeared for the claimants; Michael OSullivan (instructed by Seldon Ward & Nuttall, of Bideford) appeared for the defendants.
PLS News 18/4/00
