Parties bringing actions for misrepresentation must establish that they relied on the representations made to them.

In Francis v Charles Knapper [2016] EWHC 3093 (QB); [2016] PLSCS 333, the claimants brought an action for misrepresentation against both the sellers and their solicitors. They claimed that the replies to the Commercial Property Standard Enquiries (CPSEs) provided to them had induced them to buy a holiday park and alleged that the replies misrepresented aspects of the physical condition of the park. The judge dismissed the claim against the sellers’ solicitors. He ruled that the replies given were representations by the seller. Indeed, the CPSEs contain a statement to this effect at the front of the form, as well as including a disclaimer stating that “the replies are given without liability on the part of the seller’s solicitors, its members or employees”. The judge also drew attention to the principle that a seller’s solicitor does not owe a duty of care to a buyer in respect of the seller’s pre-contractual representations: Gran Gelato v Richcliff [1992] Ch 560. The buyers would need to provide evidence that the seller’s solicitor had stepped outside his role, and had undertaken personal responsibility to the buyers for the replies given, in order to circumvent that rule. The judge went on to dismiss the buyers’ claim against the sellers themselves on the ground that the replies to the CPSEs had not influenced them at all. The judge decided that the only consideration operating on the buyers’ minds in deciding to buy was their belief that the cost of any maintenance, repair, renewal or rebuilding that might be required could be re-charged to chalet owners through the service charge. The buyers also complained that the sellers and their solicitors had misrepresented the number of chalet owners who had, and had not, paid their service charges. This meant that the service charges had been wrongly apportioned on completion – and, had the calculations been based on the correct figures, the buyers would have been allowed £35,000 more. The representations in question were made in correspondence in which the sellers’ solicitor confirmed that the buyers could “rely on the figures given by this firm”. The judge indicated that, in saying so, the sellers’ solicitor had accepted a degree of responsibility for the figures that would have deprived the firm of the protection of the rule in Gran Gelato. However, matters did not rest there. The buyers’ solicitors asked for further assurances from the sellers’ solicitor because they were concerned that the sellers were unlikely to have sufficient funds to meet any subsequent claim for damages. The sellers’ solicitor replied that he could not give personal assurances, but had “made all enquiries of the managing director and the company secretary and that the information that has been provided by them has been passed to you”. The judge ruled that the seller’s solicitor resiled from his previous statement by saying this. Therefore, his firm was not liable for the inaccuracies in the figures that subsequently emerged. Furthermore, the buyers had declined a proposal to put a sum in escrow so that they could sort the figures out later and had, therefore, chosen to accept the risk of inaccuracy in order to finalise matters on completion. Allyson Colby is a property law consultant