PP 2010/128

In Wickens v Cheval Property Developments Ltd [2010] EWHC 2249 (Ch); [2010] PLSCS 240, the court had to decide whether a contract for sale included fixtures that intruders removed shortly before a buyer contracted to purchase a house from a mortgagee in possession. The buyer claimed that it would cost around £300,000 to replace the missing items and sought a corresponding reduction in the purchase price. The seller claimed that its agent had informed the buyer that a break-in might have taken place and that the buyer had declined to make a further inspection. It also relied on provisions in the contract for sale making the buyer aware of the condition of the property on the date of exchange. The seller argued that the provisions excluded anything that had been removed from the property before the date of the contract for sale. The decision turned on the scope of the judgment in Taylor v Hamer [2002] EWCA Civ 1130; [2003] 1 EGLR 103; [2003] 03 EG 127. In that case, the seller deliberately misled the buyer when replying to questions about items that he had surreptitiously removed from the property before contracts were exchanged. As a result, the court ruled that the property included fixtures that the buyer had seen on his inspection or reasonably believed to be included in the sale when he had made his offer to buy the land. The buyer claimed that the same reasoning should be applied here, irrespective of whether fraud was an issue, and that it would be wrong in principle to impose a requirement of fraudulent misrepresentation for Taylor to apply. The judge disagreed. He ruled that, in the absence of fraud, the reasoning in Taylor does not apply. The decision provides welcome clarification of the position. It confirms that the actions of a seller that removes fixtures without disclosing that it has done so will ordinarily amount to deceit if the seller invites offers based on an implied representation that items that the buyer has seen are included in the sale – and that this will unravel the effect of contractual provisions inserted to protect the seller, on which the seller might otherwise have relied. However, sellers cannot be required to disclose what they do not know. Consequently, knowledge that items have been removed is a prerequisite of the obligation to correct representations resulting from an inspection before contracting to sell land. The parties will now have to return to court so that the judge can decide whether the agent misled the buyer by using language that concealed more than it revealed. If the buyer can show that the agent deceived him, the decision in Taylor will apply and his decision not to inspect the property again will become irrelevant (because contributory negligence on the part of the party deceived does not excuse the deceiver from the consequences of its actions). Buyers can avoid such arguments, particularly where the property has been standing vacant or a lengthy delay occurs between the initial inspection and exchange of contracts, by reinspecting before proceeding. Allyson Colby is a property law consultant