Sale of land – Misrepresentation – Online auction – Appellant purchasing land in online auction – Respondent vendor claiming unpaid balance of deposits – Appellant seeking to rescind contract for misrepresentation – County court giving judgment for respondent – Appellant appealing – Whether sales particulars containing implied representations of fact – Whether judge erring in findings of fact – Appeal dismissed
In September 2020, the respondent, a company registered in Ireland, sold three plots of land known as plots G, I and L, opposite Clay Pightles, Stoke Row Road, Kingswood, Henley on Thames at an online auction.
The appellant, a company registered in England and Wales, was a small family company. Other than the three plots, its only possession was land consisting of seven parking spaces.
The appellant was the winning bidder for the three plots and thereby agreed to buy them. It completed the purchase of plot G at a total cost of £26,539. The contract of sale obliged it to pay a deposit of £6,000 for each of plots I and L but it paid only £2,000 for each plot. The respondent claimed the unpaid balance of the deposits, totalling £8,000.
By its defence and counterclaim, the appellant sought to rescind the contract for misrepresentation and to recover the sums already paid, plus sums incurred for professional advice, making a total counterclaim of £33,859.
The respondent denied that the sale particulars contained any representation, alternatively any representation of fact, alternatively any false representation of fact. It also denied that the appellant had relied on any misrepresentation or that any misrepresentation induced the making of the contract of sale.
The county court gave judgment for the respondent and dismissed the appellant’s counterclaim. The appellant appealed.
Held: The appeal was dismissed.
(1) It was necessary to assess what the statements in the auction particulars, read as a whole, would have meant to a reasonable purchaser at the time of the sale. Such a purchaser, at an auction, might not be sophisticated or experienced in property matters. The appellant’s primary case was that the particulars of sale contained an implied representation of fact, namely that there was a realistic possibility of permission being granted for residential development.
Although the traditional view was that a misrepresentation had to be a false statement of fact, nevertheless a statement of opinion might be a misrepresentation if the maker did not in fact hold the opinion stated. A statement of opinion might also amount to an implied representation that the maker had reasonable grounds for his opinion: see Chitty on Contracts, 34th edition.
(2) The judge found, amongst other things, that there was no prospect of the land being deemed acceptable for residential development. It consisted of ancient woodland, in an area of outstanding natural beauty, with many trees subject to a tree preservation order. It had been open to each of the parties to make enquiries as to the planning and development potential and status of the land before deciding what to do with it.
The respondent did not undertake local searches in relation to the land and the judge was not satisfied that the respondent knew that there was no realistic residential development potential, or only very limited commercial development opportunity.
It could not be inferred from the sales particulars that there was a realistic potential for residential development and the respondent was not in a stronger or better position than the appellant to know the facts about the planning position, which could have been ascertained by either party from the local planning authority.
(3) The court was not persuaded that there was any error in the judge’s findings of fact. Although the appellant submitted that the respondent was in a stronger position than the appellant to make enquiries of the local planning authority, there was no basis on which the judge’s finding should be disturbed. The respondent therefore did not have any relevant knowledge or any relevant source of knowledge about the planning status of the land which were not readily available to the appellant.
That was a key finding. At first glance, it might be thought that publishing sale particulars which referred to development potential and included computer-generated images of houses which in fact could not be built on the land was reckless. But, having heard evidence from the respondent, the judge was not persuaded that any opinion was not honestly held. That finding was fatal to the appellant’s case in relation to any representation of opinion. If what the respondent said about the land contained an implied representation of opinion about any potential for development, the only fact impliedly represented was that that opinion was honestly held.
(4) The appellant could not succeed in relation to any representation of fact. The key words in the sales particulars were “a number of opportunities for a purchaser to consider alternative uses or even development of each plot, subject to the necessary consents”, which were immediately followed by the “deemed to rely solely on their own enquiries” sentence. The phrase “alternative uses” was entirely vague. The word “development” was heavily qualified by “even”, and then qualified again by the express statement of the requirement for the “necessary consents”. The clear meaning of the next sentence was that the vendor was not making any representations about development potential, and the reference to development potential was again heavily qualified by the word “any”, meaning that there might be none.
The only factor leaning the other way was the CGIs, which at best encouraged unwise speculation. But they were marked “STPP” (subject to planning permission) and the advertisement went on to explain that their proposed use was as a subject for pre-application planning advice, rather than for a planning application. They might have contributed to an implied representation of opinion that there could be some purpose in seeking such advice but, on the judge’s findings, that representation was not contrary to the respondent’s true state of mind.
(5) Even if the alleged implied representation had been made, it would have been too vague to have any legal consequences. It was not clear what a “real” or “realistic” possibility of use for residential development was. The question whether the land was usable for any residential development at all was a binary question. To say that it was, or was not, would have been a representation of fact with an ascertainable meaning. But to say merely that it might have been, would not. Accordingly, the judge had not made any error.
Richard Alford (instructed by JMP Solicitors, of Grantham) appeared for the appellant; Daniel Black (instructed by Co Mayo Estates Legal Department) appeared for the respondent.
Eileen O’Grady, barrister
Click here to read a transcript of Co Mayo Estates Ltd v Hidden Gem Ltd
