Standard form of enquiries — Incorrect answer — Planning proposal not disclosed — Whether plaintiffs entitled to damages — Ascertainment of diminution in value of property — High Court holding plaintiffs would not have purchased property with knowledge of planning proposal — Entitlement to damages
In 1989 the plaintiffs, who were property developers, wished to sell a property at Kerswell, near Cullompton, Devon, for £185,500. B wished to sell St Andrews House for £245,000. The parties agreed to an exchange. In the result, the plaintiffs acquired a property on offer at £245,000 for one on offer for £185,500 plus a cash payment of £600. Enquiry 7B(iii)(b) of the standard form of Enquiries of District Councils provided: “Do any of the proposals made public by the Council in relation to local plans … (b) include any provisions for the property?”. The reply to that enquiry in relation to St Andrews House was “No”. An accurate answer would have been: “proposed vehicular access to proposed residents’ car park at Lower Lane crosses the property”. The plaintiffs sued to recover damages from the council resulting from their admitted negligence in giving an incorrect answer.
Held Judgment for the plaintiffs.
1. Because of the admitted negligence, the plaintiffs were denied the chance of deciding whether to purchase the property despite the proposal. On a balance of probabilities it could not be said that, had they been told of the proposal, they would have purchased the property. The plaintiffs had persuaded the court that, had the planning proposal been disclosed, they would not have purchased the property.
2. The ascertainment of any diminution in value of the property should take account of any effect of the existence of the planning proposal: see Watts v Morrow [1991] 2 EGLR 152.
3. It was not correct to view the value of the property simply from the viewpoint of the developer. The sale of the separate elements of the property had to be considered.
4. In the circumstances, the difference in value between what was paid for the property and what it was worth, subject to the proposal, was £17,000 (the aggregate of £2,000 in respect of the building plot and £15,000 in respect of St Andrews House and the retained garden).
5. The plaintiffs were under no duty to mitigate their losses by serving a blight notice on the council under the Town and Country Planning Act 1990. They never qualified as owner-occupiers within section 168.
6. A plaintiff might be entitled to recover, in addition to damages for diminution in value, expenditure necessarily or reasonably incurred in extracting himself from the transaction into which, but for the breach he would never have entered: see Watts v Morrow.
7. However, the court had to be careful to distinguish between expense directly attributable to extrication from the transaction from expenditure attributable to some other cause (ie a falling market).
8. The plaintiffs were entitled to recover so much of the legal costs of acquiring the property as, but for the council’s negligence, they would not have incurred: their legal costs of acquiring a drainage easement; and the legal costs, insurance premiums, advertising costs and community charge payments which they necessarily incurred in disposing of the property in order to realise its value (for which they had to give credit in computing their losses): the total allowance was £2,000.
Bernard Weatherill (instructed by Adams & Remers, of Lewes) appeared for the plaintiffs; Robin Tolson (instructed by Veitch Penny, of Exeter) appeared for Mid Devon District Council.
