The parties were buyers and sellers of land. The seller’s husband removed a large area of flagstones after the buyer’s first inspection but before exchange. He seeded over the land so that, on a second inspection by the buyer’s solicitor, the removal was not obvious. The solicitor, did not appreciate that the flagstones had been removed, but, seeing a pile of flagstones asked about them. He was told (deceitfully) that these had not been taken from the property, and that they were not included in the sale, but were to be removed by the seller, as in fact happened. The contract contained a deemed inspection clause and Standard Condition 3.2.1. An incomplete schedule of fixtures and fittings to be included or excluded did not mention the flagstones. Standard Condition 5.1.1 referred to the ‘physical state . . at the date of the contract’). An entire agreement clause precluded reliance on statements or representations other than those contained in written replies to preliminary inquiries. The parties disputed the effect of the clause in relation to replies to preliminary inquiries.
Held: (By majority) The buyer had a contractual claim. The reference to the property being sold was to be interpreted to refer to the property with the fixtures which the buyer saw on his inspection, or reasonably believed to be included in his sale when he made his initial offer.
Sedley LJ said: ‘In the manner seminally described by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society . . the meaning to be ascribed to ‘the Property’ is the meaning it would be given by a reasonable person who knows what the parties knew at the time they contracted . . It includes the facts that the claimant had been shown premises which included the flagged dog garden and that he had not been told before contract that this was no longer part of the realty. In my judgment such facts are not within the exclusion zone of prior negotiation and subjective intent described in Lord Hoffmann’s third principle . . They are the normal means by which the subject matter of any offer and acceptance is identified.
This would probably be enough . . to make the flagstones part of ‘the Property’ for which the parties went on to exchange contracts. But here, additionally, the vendor deliberately induced the buyer, through his solicitor, to believe that there had been no such alteration. To Arden LJ’s question: why tell this lie? Ms Hargreaves [Counsel for the Seller] had no answer.
Against this background of fact any reasonable person, in my judgment, would have understood the property which was being bid for and contracted for to include the flagstones in the dog garden. The case falls outside the caveat emptor paradigm . . because the vendor, by his conduct in inviting an offer for the property as shown to the purchaser and without any explicit subtraction from it, represented that it was to include the flagged garden.
In everyday house purchases people are entitled to be confident that, unless some different agreement is reached and recorded, the property which is to pass includes its fixtures. If before the sale takes place the seller has given the buyer no reason to think that the fixtures (at least those the buyer knows of) are not part of the premises for which an offer is being invited, simple morality says that he cannot remove them without telling the buyer that they are no longer for sale. To fail to do so is to invite a bid for something which is no longer what the bidder still reasonably believes it to be; not to put too fine a point on it, it is cheating. Surreptitiously removing fixtures does not mean that the seller is stealing them, for they are his. It means that if the sale goes through he will be failing to convey what the eventual buyer has become entitled to have conveyed.’
Judges:
Arden, Sedley LJJ
Citations:
[2002] EWCA Civ 1130, [2003] 1 EGLR 103
Jurisdiction:
England and Wales
Cited by:
Cited – Sykes and Another v Taylor-Rose and Another CA 27-Feb-2004
The appellants purchased a property from the respondents. The house had been the site of a partiularly horrendous murder in 1980, but the respondents did not disclose the fact.
Held: The doctrine of caveat emptor still had application. As . .
Cited – Wickens v Cheval Property Developments Ltd ChD 8-Sep-2010
The buyer of land sought a reduction in the purchase price complaining of the removal of several items (worth possibly andpound;300,000) by intruders after exchange. The seller said that the fixtures had been excluded under the contract.
Held: . .
Lists of cited by and citing cases may be incomplete.
Contract, Land
Updated: 09 May 2022; Ref: scu.194793