Morgan & Anor v Pooley & Anor

A seller’s negative answer to a property information enquiry is not a misrepresentation where the seller neither received nor read the relevant notice and honestly believed the answer to be correct. Receipt of information about a notice is distinct from receipt of the notice itself.

A contractual clause stating that replies are given only to the seller’s knowledge, information and belief may displace an implied representation that the seller took reasonable steps to investigate. A clearly drafted non-reliance clause may also be effective and reasonable under section 3 of the Misrepresentation Act 1967. A standard contractual remedy for misleading descriptions or statements of value is construed narrowly.

The claimants bought a substantial country property from the defendants. Before exchange, the defendants answered “No” to a question in the Seller’s Property Information Form asking whether they had sent or received letters or notices affecting their property or neighbouring property.

A neighbouring owner had applied for planning permission to convert an adjoining farm track into a driveway. The claimants alleged that the defendants knew of the application and that their answer amounted to misrepresentation and breach of contract. The central issues were whether the defendants had received or read a notification, whether the contractual provisions excluded reliance or liability, and what damages would follow.

1. Claim dismissed. The defendants had not received the council’s letter concerning the planning application and had not read the planning notice displayed near the neighbouring property. Their answer to question 3.1 of the Seller’s Property Information Form was therefore not a misrepresentation.
2. The court applied the balance of probabilities. Although the council’s documents would, standing alone, have supported receipt of the letter, the defendants’ firm denials and the surrounding evidence meant that dishonesty or knowing concealment could not properly be inferred. The court required appropriately cogent evidence before finding dishonesty.
3. The defendants did not impliedly represent that they had reasonable grounds for believing that they had received no relevant letter or notice. Such an implied term would have undermined the express contractual clause providing that replies were given only to the seller’s best knowledge, information and belief, without further enquiries.
4. Obiter, the court considered that the express clause displaced any implied representation that reasonable steps had been taken to investigate. The non-reliance clause was sufficiently clear and, on the facts, reasonable under section 3 of the Misrepresentation Act 1967, because it had been communicated before contract in a short and readily readable document and the claimants had an opportunity to challenge it.
5. The alternative contractual claim also failed. The relevant Standard Conditions provision was construed narrowly because it could operate without proof of reliance. It concerned a misleading description of the property or a statement as to its value, not a statement that the seller had never received a letter affecting neighbouring property.
6. Had damages fallen to be assessed, the diminution in value would have been approximately £50,000, representing about 3 per cent of the property’s value. The court rejected the higher valuation and considered that suitable replanting could substantially reduce the loss of privacy.