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Be Sure to Give Accurate Replies to Enquiries

Further to our recent article about the importance of giving accurate replies to pre-contract enquiries, another case has yet again emphasised this message.
In the case of Alison Quilter v Hodson Developments Ltd [2016] EWCA Civ 1125, the Court of Appeal upheld an earlier decision awarding a purchaser damages for losses incurred by misrepresentations made in replies to pre-contract enquiries.
The brief facts of the case were that a developer (Hodson Developments Ltd) sold an apartment to a purchaser (Alison Quilter). The development was serviced by a communal central heating and hot water system and disputes had arisen in relation to this system prior to the sale.
In response to standard pre-contract enquiries, however, the developer failed to disclose these disputes. The purchaser argued that the developer had therefore impliedly represented, by omissions, that it was not aware of these disputes.  The Judge sitting at Central London County Court found that two misrepresentations had been made and awarded damages in the sum of £15,000.
The developer then appealed arguing that:
1) these were no such misrepresentations as there were no disputes; and
2) even if there were disputes, the measure of damages in this case did not accord with the principle of compensation as;
a) the purchaser had since been able to sell the apartment for a significant uplift in value; and
b) when the disputes still existed and were disclosed they were then being addressed by NHBC pursuant to their guarantee.
Rejecting the appeal, the Court found that the Judge was correct to conclude that there were disputes and that the misrepresentations had been made.  Furthermore, on the measure of damages point, the Court followed reasoning supported by case law that essentially meant that the purchaser was entitled to retain any benefit received due to a rise in the market value of the property and did not need to account to the misrepresenting developer.  As to the fact that the purchaser was also able to benefit from the NHBC guarantee, being in the nature of an insurance, to reduce her loss, this was not to be brought into account.
This case ultimately reiterates previous case law and our previous article about the importance of giving accurate replies to pre-contract enquiries.
Whether you are looking to buy, sell or develop property then our Legal 500 recognised Commercial Property Team are here to help.  Contact Tom Warrender for further assistance.