Wickens v Cheval Property Developments Ltd

Where fixtures or fittings are removed after inspection but before exchange, the contractual subject matter will ordinarily be assessed at exchange. An earlier inspection does not, without more, establish that the buyer contracted for items later removed. However, a seller who knowingly or fraudulently conceals a material change may be unable to rely on contractual provisions referring to the property’s state at exchange or excluding reliance on representations. Knowledge of the change is ordinarily necessary for an obligation to correct an earlier representation. On a preliminary issue under Part 8, the court should decide construction only if the answer is unaffected by disputed facts. Where an arguable case of fraud may alter the construction, the issue should proceed under Part 7.

The claimant agreed to buy an unoccupied property from the defendant mortgagee in possession. He inspected it before exchange. Several fixtures and fittings were subsequently removed by intruders, and the parties disputed whether the sale included the items present at inspection or only those remaining at exchange.

The agreement included all fixtures and fittings, sold the property in its present state and condition, and contained an inspection and non-reliance provision. The claimant relied on Taylor v Hamer [2002] EWCA Civ 1130; [2003] 1 EGLR 103. The defendant contended that the relevant state was that at exchange. The central issue was whether construction could be determined without resolving disputed evidence about what the claimant had been told before exchange.

1. A preliminary construction issue under Part 8 should be decided only if the result is the same whichever version of disputed facts is accepted. If factual resolution is necessary, the matter must proceed with pleadings and evidence under Part 7.

2. Subject to fraud, the expressions referring to the property and its fixtures and fittings were provisionally construed as referring to the property in its state at exchange. The claimant knew before exchange that damage had been reported, knew that the agents had not inspected the property, and had declined an opportunity to reinspect. A reasonable buyer could not therefore assume that the property remained as previously inspected.

3. Taylor v Hamer [2002] EWCA Civ 1130; [2003] 1 EGLR 103 was not treated as applying in the absence of fraud. Its reasoning concerned a seller who deliberately concealed a material alteration and thereby continued an earlier representation. Fraud was also capable of overcoming a contractual non-reliance clause. The approach was considered consistent with Chartbrook Ltd v Persimmon Homes Ltd [2009] 1 AC 1101.

4. The claimant’s proposed case was that the seller’s agent deliberately or recklessly used guarded language to conceal knowledge of a break-in and further damage. That was an arguable case of fraud. Negligence by the deceived party would not excuse the deception, and ambiguity intended to mislead would not ordinarily provide a defence, applying Redgrave v Hurd (1881) 20 Ch D 1 and Low v Bouverie [1891] 3 Ch 82.

5. No final ruling was made on construction. The claimant was permitted to advance the fraud case, and directions were given for the claim to continue as a Part 7 claim.

First instance decision. No appellate history was stated in the judgment.