Sale of land – Highway authority – Reply to search – Claimant purchasing property with car parking spaces – Defendant highway authority replying to searches that land fronting property private land not maintainable at public expense – Claimant seeking damages from defendants for loss suffered when land found to be part of public highway – Whether defendants negligent in failing to record ongoing investigation into highway status of land – Claim allowed
The claimant was a family-run property development company which acquired three properties in Henley-on Thames in Oxfordshire, registered at the Land Registry under a single title number. The title included some land fronting the properties comprising a footway, a driveway, car parking spaces and a triangular area of land containing five trees. A statutory declaration was provided by the vendor confirming that the car parking spaces were controlled by the vendor and not used by the public.
The claimant exchanged contracts with the then owner of the properties to purchase them for £1,245,000. In advance of the exchange of contracts, the claimant had made the usual pre-contract inquiries. The claimant’s intention was to carry out various works to two of the properties and sell each of them with two parking spaces each. In relation to the third property, the intention was to obtain a change of use from commercial to residential and redevelop it as two cottages and sell them with one car parking space each. The remaining car parking spaces would be sold. The response to the inquiries by the defendant local authority expressly stated that the area and land fronting the properties were not highway maintainable. So for all intents and purposes, the entire title comprising the properties was stated to be private land.
When the claimant came to sell the redeveloped properties, the prospective purchasers learnt about the investigation and the purchase prices had to be reduced as a result of the uncertainty surrounding the parking spaces.
The claimant subsequently issued proceedings against the defendants claiming damages. It contended that the defendants were under a common law duty of care to cause a list to be made of the streets which were highways maintainable at the public expense, to keep that list corrected and up to date, and to supply to each district council within their area an up-to-date list of the streets within the area of the district that were highways maintainable at the public expense. It contended that it had lost the difference between the actual price paid for the properties given that the land fronting the properties including the parking spaces formed part of the highway.
Held: The claim was allowed.
(1) A local authority might be liable to a member of the public in tort and owed a duty of care in respect of an incorrect answer to inquiries that certain land was maintainable as a highway at the public expense. A highway authority could not be taken to know for what purpose a particular inquiry was being made but it would know that answers to inquiries were provided within a well-worn conveyancing framework: Gooden v Northamptonshire County Council [2001] EWCA Civ 1744; [2001] PLSCS 253 applied.
(2) In the present case, the defendants owed the claimant a duty of care at common law with respect to their replies to inquiries for the purpose of the decision, which the claimant made to acquire the properties. The result of the search amounted to a statement by the defendants that the car parking spaces were not part of the highway and not maintainable at public expense but were private land capable of being used as such and sold on as such and which would pass to the claimant on the acquisition of the properties. It was the defendant’s proper role, as required by section 36 of the Highways Act 1980, to answer the inquiries made on the search accurately and it had not done so. It was not sufficient that the result of the search showed accurately what was on the highway map. The statute required the list of streets, which were highway maintainable at public expense to be kept correct and up to date. Had the list been correct and up to date, it would have been marked as showing that an investigation was going on. On the evidence, if the reply had been accurate, the claimant might not have proceeded at all, and would definitely not have proceeded at the same price.
It was acknowledged by the defendants’ witness in evidence that purchasers would rely on the results of searches in making decisions about property purchases. More specifically, it was clear that the defendants knew that a purchaser of the land question would inevitably want to know if the land comprised was private land or public highway, or highway maintainable at public expense. The conditions for the creation of a duty of care were therefore present, as were the conditions for liability for misstatement. Reliance had also been proven.
(3) It was entirely foreseeable by the defendants that if the result of the search was wrong, a purchaser might go ahead at a price which was higher than if an accurate response had been given. That was because a purchaser would believe that the parking spaces were private land as the title suggested and would not know that they were in fact highway. The difference between the price paid and the value without parking spaces was a foreseeable head of loss: Banque Bruxelles SA v Eagle Star Insurance Co Ltd [1994] 2 EGLR 108 and South Australia Asset Management Corporation v York Montague Ltd [1996] 2 EGLR 93 considered.
James Pickering (instructed by Blaser Mills, of Amersham) appeared for the claimant; Andrew Warnock QC (instructed by Clyde & Co) appeared for the defendants.
Eileen O’Grady, barrister
