SPS Groundworks & Building Ltd v Mahil [2022] EWHC 371 (QB) (23 February 2022)

SPS Groundworks & Building Ltd v Mahil [2022] EWHC 371 (QB) (23 February 2022)

The vendor's duty of disclosure in respect of defects in title was not satisfied by merely including the Overage Clause in the legal pack; specific reference in the auction particulars or by addendum or announcement was required. The purchaser was entitled to assume, absent such disclosure, that there were no unusual defects. The contractual terms deeming knowledge did not save the vendor. However, the purchaser did not rely on the misrepresentations as an inducing cause for entering the contract, so the misrepresentation claim failed on reliance.

Citation
[2022] EWHC 371 (QB)
Parties
Claimant/respondent: SPS Groundworks & Building Limited; Defendant/appellant: Ms Satvinder Kaur Mahil
Jurisdiction
England and Wales
Judgment Date
23 February 2022
Procedural Posture
Appeal / Judgment on Appeal From County Court at Leicester
Outcome
Appeal allowed in part; judgment for the Claimant set aside on ground of inadequate disclosure of defect in title, but misrepresentation claim fails for lack of reliance.
Legal Topics
Disclosure of Defects in Title, Misrepresentation, Auction Sales, Formation of Contract, Pleading Requirements
Property Law Contract Law Equity Disclosure of Defects in Title Misrepresentation Auction Sales Formation of Contract Pleading Requirements

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Parties

SPS Groundworks & Building Limited

Claimant/respondent

Ms Satvinder Kaur Mahil

Defendant/appellant

Procedural Posture

Appeal / Judgment on Appeal From County Court at Leicester

Legal Issues

  1. 1 Whether inclusion of a defect in title (Overage Clause) in the legal pack satisfies the vendor's duty of disclosure at auction
  2. 2 Whether the vendor's representations about development potential were honestly held and reasonable
  3. 3 Whether the purchaser relied on alleged misrepresentations

Ratio Decidendi

The vendor's duty of disclosure in respect of defects in title was not satisfied by merely including the Overage Clause in the legal pack; specific reference in the auction particulars or by addendum or announcement was required. The purchaser was entitled to assume, absent such disclosure, that there were no unusual defects. The contractual terms deeming knowledge did not save the vendor. However, the purchaser did not rely on the misrepresentations as an inducing cause for entering the contract, so the misrepresentation claim failed on reliance.

Court Disposition

Appeal allowed in part; judgment for the Claimant set aside on ground of inadequate disclosure of defect in title, but misrepresentation claim fails for lack of reliance.

Orders

  • Original order for judgment in sum of £43,440 set aside
  • Matter remitted for further determination as appropriate