Co Mayo Estates Limited v Hidden Gem Limited

A statement in sale particulars must be construed in its full factual and contractual context. References to development potential, qualified by the need for planning consent and by an express direction that buyers rely on their own enquiries, may convey no representation of fact about the prospects of development.

If the material conveys an opinion, the implied representation is ordinarily that the opinion is honestly held. A representation that land might have a realistic possibility of residential development may also be too vague to have legal consequences where the legally material question is whether residential use is possible at all.

The claimant sold three plots of woodland at auction. The defendant purchased the plots but withheld part of the deposits, alleging that the auction particulars misrepresented their residential development potential. It sought rescission and recovery of sums paid and incurred.

The County Court gave judgment for the claimant and dismissed the counterclaim. On appeal, the defendant argued that the particulars contained an implied representation of fact or, alternatively, an opinion supported by an implied representation that the claimant had reasonable grounds for it. The central issues were the meaning of the particulars, the effect of the buyer-enquiry wording, and whether any alleged representation was sufficiently certain to found liability.

1. Appeal dismissed. The County Court judge had made no material error in finding that the claimant lacked relevant knowledge, or a relevant source of knowledge, unavailable to the defendant.
2. Where sale particulars convey an opinion about development potential, the relevant implied representation may be confined to the maker honestly holding that opinion. On the findings, the claimant honestly held any such opinion. The principle concerning an implied representation that the maker has reasonable grounds for an opinion, illustrated by Brown v Raphael [1958] Ch 636, therefore did not assist the defendant.
3. The particulars had to be read as a whole. The references to alternative uses and possible development were vague and heavily qualified by the need for necessary consents. The following statement that buyers were deemed to rely solely on their own enquiries made clear that the vendor was not representing that the land had development potential. The CGI images, marked as subject to planning permission, did not alter that conclusion.
4. First Tower Trustees Ltd v CDS (Superstores International) Ltd [2018] EWCA Civ 1396 did not materially assist. That authority concerned the effectiveness of contractual wording relating to reliance, whereas the present issue was the reasonable meaning of the auction particulars. The different view noted in Springwell Navigation Corpn v JP Morgan Chase Bank [2010] EWCA Civ 1221; [2010] 2 CLC 705 did not change the analysis.
5. In any event, an assertion that there was a real or realistic possibility of residential development was too vague to have legal consequences. The legally ascertainable question was whether residential use was possible at all.

1. High Court (King's Bench Division): Appeal dismissed. The decision of HH Judge Jonathan Owen in the Nottingham County Court dated 19 June 2023, giving judgment for the claimant and dismissing the counterclaim, was upheld.