Thorp & Anor v Abbotts & Ors

Questions in a seller’s property information form should be interpreted as an ordinary lay seller would understand them. Questions about notices, communications, negotiations or discussions affecting property are directed to identifiable steps towards a reasonably definite proposal or event, rather than local opinion, speculation or campaigning. A communication must indicate a present real likelihood of action and generally come from the person proposing the action or an authority able to authorise it. The relevant effect must be on the property, or its use or enjoyment. A possible effect on value, the general character of the locality or its desirability is insufficient by itself. The assessment is objective, having regard to the seller’s knowledge. On the facts, the planning communications and discussions did not affect the property within the meaning of the form, so the answers were not misrepresentations.

The claimants purchased Oakwood Lodge from the defendants in October 2010 for £625,000. They alleged that answers given in the 2007 version of the Law Society’s Seller’s Property Information Form were fraudulent misrepresentations.

The answers to questions 3.1 and 3.2 were “No”. The claimants contended that the defendants should have disclosed communications and discussions concerning the South Worcestershire Joint Core Strategy and possible housing development at Copcut Rise, South Pulley Lane and Yew Tree Hill. No planning application had been made before exchange of contracts. The central issue was whether those matters were communications, notices, negotiations or discussions “affecting” the property within the meaning of the form.

1. Claim dismissed. The defendants’ answers in the Seller’s Property Information Form were not misrepresentations.

2. The form was to be construed in the way an ordinary lay seller would understand it. Its questions should, so far as possible, avoid subjective assessments of relevance. The surrounding questions indicated a relatively confined focus on the property itself, immediately adjoining property, or nearby property whose use could affect the property.

3. Question 3.1 required a notice or communication indicating a reasonably definite intention to take action affecting the property. It generally had to come from the person proposing the action or from a regulatory authority able to authorise or permit it. A communication had to be a step towards implementing the proposed action and indicate a present real likelihood that the event would occur. Local warnings, campaigning, gossip and speculation were outside the question.

4. Question 3.2 concerned negotiations or discussions with the person proposing the relevant action, or with an authority able to authorise it. A discussion with someone who could neither implement nor permit the event could not itself affect the property.

5. Whether a matter affected the property was assessed objectively, by asking whether a reasonable person with the seller’s knowledge would regard the property as affected. The possible event had to affect the property, or its use or enjoyment. A possible effect on value, or a general effect on the locality or its attractiveness, was insufficient alone.

6. The defendants’ discussions with the campaign group were not discussions with a relevant neighbour or authority and did not themselves affect the property. Communications from the planning authorities were capable of falling within the questions, but the Copcut Rise development would not materially affect Oakwood Lodge. The planning process did not create a sufficient risk that development at Yew Tree Hill or South Pulley Lane would proceed and affect the property.

7. Alternatively, had there been a misrepresentation, the defendants’ statements would have been honestly and reasonably held opinions rather than negligent or fraudulent statements. The court expressed no concluded view on damages for mental distress in an innocent misrepresentation claim.