Patrick David Wigglesworth v Vanessa Kim Beetson
[2024] EWHC 2886 (Ch)
Co Mayo Estates Limited v Hidden Gem Limited
26 February 2024
[2024] EWHC 401 (KB)
High Court
A buyer sued a seller for misrepresenting the potential for building houses on land they bought at auction. The seller's advert had pictures of houses and mentioned 'potential', but the land was unsuitable for building. The court decided the advert, taken as a whole, didn't make false claims about the land's suitability for building. The buyer lost the case.
Key Facts
- •Co Mayo Estates Limited (Claimant) sold three plots of land to Hidden Gem Limited (Defendant) at an online auction.
- •Defendant failed to pay the full deposit for plots I and L.
- •Defendant counterclaimed for rescission of the contract due to misrepresentation in the sale particulars.
- •The alleged misrepresentation concerned the development potential of the land, which was described as having 'potential' and was accompanied by computer-generated images (CGI) of houses.
- •The land was actually ancient woodland with little to no development potential.
- •The sale particulars included a clause stating that 'Buyers are deemed to rely solely on their own enquiries with regard to any development potential'.
Legal Principles
The meaning of a representation depends on how the words would be understood by a reasonable person in the factual context.
Chitty on Contracts (34th edition)
A statement of opinion may be a misrepresentation if the maker does not in fact hold the opinion stated.
Chitty on Contracts (34th edition)
A statement of opinion may also amount to an implied representation that the maker has reasonable grounds for his opinion.
Chitty on Contracts (34th edition), Brown v Raphael [1958] Ch 636
In assessing misrepresentation, consider whether a reasonable representee would naturally assume that the true state of facts did not exist and that, had it existed, he would in all the circumstances necessarily have been informed of it.
Raffeisen Zentralbank Osterreich v Royal Bank of Scotland 2010 EWHC 1392 (Comm)
A clause acknowledging non-reliance on a representation, as opposed to agreeing not to assert such reliance, is insufficient to exclude liability for misrepresentation.
First Tower Trustees Ltd v CDS (Superstores International) Ltd [2018] EWCA Civ 1396
Outcomes
Appeal dismissed.
The judge's findings of fact were not overturned. The court found that the sale particulars, read as a whole, did not contain a misrepresentation of fact. The 'deemed to rely' clause and the qualification of 'development' with 'subject to necessary consents' prevented the CGI images and references to 'potential' from creating a misrepresentation. Even if an implied representation of opinion existed, the claimant honestly held it and had no superior knowledge unavailable to the defendant.
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