Thorpe v Abbotts


Reference:
[2015] EWHC 2142 (Ch)

Date:
20th October 2015

Court:
Chancery Division

Comment:

Facts

The Claimants purchased a property in Worcestershire. They alleged that the answers given by the Defendants in their seller's property information form were deliberately false and claimed damages for fraudulent misrepresentation.   The property in question lay on the edge of a town. It was immediately surrounded by a strip of woodland and overlooked farmland.

The SPIF had asked whether the seller had sent or received any communication or notices which in any way affected the property. Question 3.2 asked whether the seller had had any negotiations or discussions with any neighbour or any local or other authority affecting the property in any way. The Defendants had answered "no" to both questions.

Contracts were exchanged in September 2010 with completion in October. In November, a planning application was submitted for a very substantial residential development on a site the closest point of which was about 250m from the property. The site had been identified as a preferred site in a consultation process on a planning core strategy which had begun in 2006. In May 2011 an application was made for a further large-scale development on another nearby site. That site had also been identified, but later dropped, as a preferred option under the planning strategy.

The sellers had attended public meetings about the core strategy, had received leaflets from a local campaign group which opposed both developments and had had conversations with a member of the group about the developments.

The Court held that there had been no misrepresentation:

  • The Defendants had known that the first site was a preferred option in the core strategy. It was highly likely that an application for development on the site would be approved but it was a sufficient distance from the property not to affect it. In respect of the second site, no application had been made and after 2009 it was not a preferred option. Although there was no policy in place to prevent development, there was no likelihood that development would be favoured by the planning authority.

  • The questions in the SPIF were intended to be answered by lay people and so were not to be construed in such a way that expert advice would be required to understand the scope of the information required. It should not be a matter of subjective assessment whether information was relevant. Caveat Emptor remained the guiding principle.

The other questions on the form were consistent with the interpretation that the enquiry concerned matters either directly about the property itself or concerning immediately adjoining properties. “Neighbours" in the questions meant owners of property with some shared service or right with the subject property or which was so close that something done on their property could affect the use and occupation of it.

  • Question 3.1 required disclosure of a "notice or communication" which affected the property. "Notice" would include notices with some legal effect or which were legal prerequisites to some action or to the exercise of some right. "Communication" was aimed at catching less formal notifications, but still notifications of some reasonably definite intention to take some step affecting the recipient's property. The notice or communication had to be from someone who was proposing to take some action or from some regulatory body responsible for authorising that action. The question did not apply to communications coming from other persons.

  • The reference in question 3.2 "negotiations or discussions" with a neighbour or authority affecting the property was aimed at circumstances in which there was some proposal to do something that would affect the property, and the negotiations or discussions were with someone whose proposal it was or an authority able to authorise it.

  • The seller's statement as to whether the property was affected by communications or discussions was objective: the question was whether a reasonable person with the seller's knowledge of the facts would consider that the property was affected. "Affecting the property" required that the possible future event would, if it happened, have some effect on the property itself, or the use or enjoyment of it. A possible effect on its value would not be enough on its own. Nor would a general effect on the locality be sufficient.
     
  • The discussions in this case had not been with a "neighbour" as that term was used in the SPIF. K's house had been too far away. Nor were they discussions affecting the property, since K was not himself putting forward any proposal. Likewise, the campaign group's flyers were not communications affecting the property. “Communications" has been received from the core strategy authorities and had "discussions" with them. However, at the date of exchange those were not matters affecting the property. The reasonable person would have concluded that the likely development of the first site would not affect the property and that the core strategy was not such as to show any sufficient risk that the second site would be approved for development. The answers in the form had not been misrepresentations.

 

Comment

Thorp v Abbotts provides the first judicial interpretation of the provisions of questions 3.1 and 3.2 of the standard Law Society SPIF. Importantly, despite the potentially wide wording of the questions, the Court has emphasised the dominant principle of caveat emptor. The questions in the SPIF are to be construed in a non-technical way. The guidance offered by the Court in relation to the terms “notice or communication” and “neighbour” is informative. Importantly, the Court emphasised that in considering whether a proposal “affects” a property, the test is objective.

 

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