Sale of land — Contract to purchase by auction industrial building — Action by purchasers for rescission on the ground of misdescription, alternatively for specific performance with an abatement of price — Counterclaim by vendors — Purchaser signed contract and paid deposit, but stopped cheque after discovering what he took to be an inaccurate description — The auction description referred to three acres of vacant industrial building and spoke of ‘a single storey steel portal framed building with plastic steel cladding providing 50,000 sq ft and seven vehicle inspection pits, two paint spray booths and ancillary accommodation’ — One of the conditions of sale excluded liability for any incorrect statement, error or omission in the particulars or special conditions of sale — In fact the workshop, including the pits and booths, amounted to 36,025 sq ft and the ancillary buildings, comprising offices and storage, amounted to 10,725 sq ft — Held that to describe such a workshop as providing 50,000 sq ft and ancillary accommodation when it provided only 36,025 sq ft and ancillary accommodation was a substantial misdescription — This view was reinforced by the description of the building as a ‘single storey steel portal frame building with plastic steel cladding’ when in fact the building was only in part steel cladding — Order for rescission of contract and dismissal of vendor’s counterclaim — Flight v Booth cited
The following
case is referred to in this report.
Flight
v Booth (1834) 1 Bing NC 370
In this action
the plaintiff purchasers, King Brothers (Finance) Ltd, claimed rescission, and
in the alternative specific performance with an abatement of the purchase
price, against the vendors, North Western British Road Services Ltd, in respect
of a contract to purchase by auction at a sale in Manchester ‘lot 24’,
described in the order of sale as ‘197 Great Howard Street, Liverpool — three
acres vacant industrial building’. The defendant vendors counterclaimed for
specific performance and, alternatively like the plaintiffs, specific performance
with abatement
C I Howells
(instructed by Cattermoles) appeared on behalf of the plaintiffs; J Simpkiss
(instructed by J M Watterson) represented the defendants.
Giving
judgment, MERVYN DAVIES J said: In this action the plaintiff purchaser asks for
rescission of a contract for the sale of land and, failing that, for an order
of specific performance with an abatement in the purchase price. The defendant
vendor counterclaims for specific performance and, failing that, like the
plaintiff, for specific performance with abatement.
The plaintiff
is King Brothers (Finance) Ltd. The defendant is North Western British Road
Services Ltd.
On September
12 1985 Messrs Longden & Cook conducted an auction sale in Manchester.
There were on offer 99 lots of real property in various parts of the North and
Midlands. Particulars of the properties on sale were contained in a catalogue
issued by the auctioneers before the sale. This action is concerned with lot
24, described in the ‘Order of Sale’ in the catalogue as: ‘197 Great Howard
Street, Liverpool — three acres vacant industrial building’. One then turns the
pages and sees that some particulars are given of lot 24. There is a heading:
‘50,000 sq ft. Single storey workshop stores’. Some particulars follow. So far
as now material, the particulars state that 197 Great Howard Street is a
freehold ‘vacant commercial vehicle workshop.’
It is said to have an ‘approximate site area’ of three acres. There
follows this information:
Accommodation:
A single storey steel portal framed building with plastic steel cladding
providing 50,000 sq ft and seven vehicle inspection pits, two paint spray
booths and ancillary accommodation. There is a 2,000 gallon diesel fuel
installation.
On the same
page there is a small plan of the land and a photograph. The plan has no
measurements. It outlines an area of land that is rectangular save that one
side or boundary is irregular. There is a frontage to Great Howard Street and
within the area there appears to be a rectangular building built on part of the
land so as to leave open ground on each side of the building and to its front
towards Great Howard Street. Outside there appear to be three small bays and a
small building marked, ‘E Emery Limited’. I am not concerned with the Emery
building. Reverting to the main building, one sees that it is divided into
three areas marked ‘vehicle workshops’, ‘offices’ and ‘storage’. The photograph
that I have mentioned shows the offices and storage flat-roofed and running
along the front of the building with the vehicle workshop part of the building
behind with a higher roof.
Mr Levi King
is the managing director of the plaintiff company. He attended the auction
sale. He had acquired a copy of the catalogue beforehand and was interested in
several lots. He bid for several of them, including lot 24. This he did without
ever having seen it. Three of his bids were successful — one was for lot 24,
the others were for properties in Gateshead and Bishop Auckland. He acquired
lot 24 for £125,000.
Later in the
day he signed a contract and also received a copy contract signed on behalf of
the vendors. I mention that the two parts of the contract do not precisely
agree, but neither counsel before me took any substantial point as to that. The
contract incorporates some general conditions of sale, which, in turn,
incorporate the Law Society’s Conditions of Sale (1980 edition). General
condition 9 reads:
Each lot is
believed to be and shall be taken as correctly described and any incorrect
statement, error or omission found in the auction particulars or special
conditions of sale shall not annul the sale or entitle the purchaser to rescind
the contract nor shall the purchaser claim or be allowed any compensation in
respect thereof.
Mr King paid
the required deposit, but, as I understand, stopped the cheque when he came to
the conclusion that, in his opinion, lot 24 was not accurately described. In
his evidence Mr King said he thought he was buying three acres of concreted
land with a building of 50,000 sq ft standing on it, together with seven
inspection pits, two spray booths and ancillary accommodation. He said he did
not suppose he was buying a totality of area built upon of 50,000 sq ft but
rather 50,000 sq ft of building plus pits and booths and ancillary
accommodation. It then occurred to Mr King, looking at the particulars, that
the area of the land built upon did not seem proportionate to an overall area
of three acres. He wondered whether the overall acreage was inaccurate or
whether the building area was inaccurate. Having consulted a surveyor he was
confirmed in his opinion that there was a misdescription.
He consulted
his solicitor.
The writ in
the action was issued on November 6 1985. Rescission is claimed in the
statement of claim on the ground that the particulars that I have quoted from
the catalogue substantially misdescribe the property sold. Particulars of the
misdescription are given as follows:
A. The total
area of the property is only 2.7 acres
at the trial
that was amended to 2.73 acres
and not
approximately three acres as so described there being a shortfall (from three
acres) of nine per cent. B. The total internal area of the said single storey
building excluding the seven vehicle inspection pits, two paint spray booths
and ancillary accommodation (as the plaintiffs allege is the true construction
of such description) is considerably less than 36,000 sq ft and not 50,000 as
so described. C. In the alternative (which is denied) if such pits, booths and
ancillary accommodation are properly to be included in the area of such single
storey building the total internal area of such building is only 46,750 sq ft
and not 50,000 as so described.
If it be true
that lot 24 was substantially misdescribed, the plaintiff is entitled to
rescission: see Flight v Booth (1834) 1 Bing NC 370 at p 377 and Snell,
28th ed, p 589. So I proceed to consider the misdescription alleged. For this
purpose it was a great convenience to be given a large plan that was marked
‘XX’. Counsel agreed that plan XX showed the property sold with marked thereon
the pits, booths, office accommodation, storage etc that has been referred to.
As well, the plan shows various areas and measurements, some printed on the
plan and some as added by Mr Howells for the plaintiff with the agreement of Mr
Simpkiss for the defendant.
I extract the
following agreed information from plan XX:
(1) The site area is 2.73 acres (corrected from
2.7 acres). (2) The rectangular building on the site is 275 ft long and 170 ft
wide. (3) At the side of the building are three bays with areas of 819, 844 and
625 sq ft — total 2,288 sq ft. (4) Within the building there are two paint
spray booths with a total area of 2,772 sq ft. (5) Within the building there
are seven inspection pits with a total area of 4,620 sq ft. (6) The front flat
roofed part of the rectangular building comprising the office accommodation and
storage has an area of 10,725 sq ft. (7) The total area of the rectangular
building is 46,750 sq ft and in that area the pits and booths are included, but
the three bays are not included. (8) The area of the rectangular building
excluding the office accommodation, that is to say, the part thereof that is
workshop accommodation, is 36,025 sq ft. (9) If one takes out of the workshop
accommodation area of 36,025 sq ft the area covered by the booths and pits
there is left an area of 28,633 sq ft.
So the
question is whether the information in the catalogue when set alongside the
agreed information set out above amounts to a substantial misdescription of the
property sold. I see no substantial misdescription in the heading, ‘50,000 sq
ft single storey workshop stores on three acre site’ or in the statement
‘approximate site area, 3 acres’.
One then reads
the information given under the heading ‘Accommodation’ which I have set out
above. As I take the sense or meaning of those words there is offered for sale
a building providing 50,000 sq ft and seven pits, two booths and ancillary
accommodation. The building is not offered as a building providing 50,000 sq ft
including seven pits, two booths and ancillary accommodation.
Bearing in
mind that it is a ‘vehicle workshop’ or ‘workshop stores’ that was on offer,
one concludes, in my view, that by the words one is offered 50,000 sq ft
working space and as well some pits, booths and ancillary accommodation. This
view is, I think, partly displaced by looking at the words, together with the
lot plan. Looking at the lot plan, one sees that there was offered vehicle
workshop space with ‘offices’ and ‘storage’. Bearing in mind the words and looking
at the small rectangles within the vehicle workshop area, one would then
suppose that the pits and booths were within the workshop area. The ‘ancillary’
accommodation referred to in the words must be the area shown as ‘offices’ and
‘storage’. In this way I construe the words as meaning that there was offered
for sale a building providing 50,000 sq ft and ancillary accommodation. So the
question is whether the area shown on the lot plan as ‘vehicle workshops’
amounts to 50,000 sq ft. It was agreed that it does not. It was agreed at
36,025 sq ft, being 46,750 sq ft, the total area of the building without the
side bays, less 10,725 sq ft, the area of the offices and storage, that is, the
ancillary accommodation. It is not suggested that the area of the side bays
(2,228 sq ft) should be added to the 36,025 sq ft. Even if it were, it would
not affect the conclusion I am about to mention.
My conclusions
is that to describe such a workshop building as lot 24 as providing 50,000 sq
ft and ancillary accommodation is a substantial misdescription once it is
established that the building provides only 36,025 sq ft and ancillary
accommodation. The difference is substantial in that, according to the expert
evidence before me, more rent or a better sale price would be obtainable for
50,000 sq ft plus ancillary accommodation as opposed to 50,000 sq ft inclusive
of ancillary accommodation covering 10,725 sq ft of the 50,000 sq ft. In fact
Mr Simpkiss conceded that a shortfall from 50,000 to 36,025 was substantial.
The conclusion
that I make is reinforced, if that be necessary, when one considers the way in
which the building is described. It is
cladding’. It was accepted before me that the building shown on the lot plan
was steel cladded as to that part that is shown as ‘vehicle workshops’, the
flat-roofed front part of the building housing the offices and storage being of
a different construction. The fact that the whole building is part steel cladded
and part not is within the matrix of facts that may be taken into account in
construing the words describing the accommodation. If that be so, then there
was on offer a steel cladded building of 50,000 sq ft and, as well, ancillary
accommodation, ie, the non-steel cladded office and storage accommodation shown
on the lot plan.
It follows
that the plaintiff succeeds in obtaining an order of rescission and the
counterclaim is dismissed. I add that, since I regard the misdescription as
substantial, there is no occasion to consider the submissions as to abatement
and compensation that were put to me.
It was
ordered that the agreement be rescinded and the defendant’s counterclaim
dismissed, the plaintiffs being awarded the costs of the claim and counterclaim.
