Alan Ronald Geoffrey Hardy and Another v William Robert Griffiths and Another
| Jurisdiction | England & Wales |
| Judge | Miss Amanda Tipples QC |
| Judgment Date | 02 December 2014 |
| Neutral Citation | [2014] EWHC 3947 (Ch) |
| Court | Chancery Division |
| Docket Number | Case No: HC-2012-000018 |
| Date | 02 December 2014 |
[2014] EWHC 3947 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
The Royal Courts of Justice
The Rolls Building, Fetter Lane,
London, EC4A 1NL
Miss Amanda Tipples QC
Case No: HC-2012-000018
Mr Jonathan Seitler QC (instructed by Cripps) for the Claimants
Mr Stephen Brown (instructed by GoodLaw Solicitors) for the Defendants
Hearing dates: 20, 21, 22, 24 October 2014
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
Introduction
Laughton Manor is a substantial country residence located a few miles to the east of Lewes in a beautiful area of East Sussex close to the South Downs. The house was designed and built in the mid-19th century by Sir James Duke Bart, a friend of Queen Victoria. It is said that the Italian style of the house, which includes a tower, has strong links with Osborne House on the Isle of Wight. In addition to the main house, Laughton Manor includes a walled garden, a cottage known as "the Pump House", a garage and flat, a small lake, a helicopter pad and 12 acres of land.
By a written contract dated 1 April 2011 the Defendants agreed to buy Laughton Manor from the Claimants for £3.6 million (" the Contract"). The deposit paid by the Defendants was £150,000 and the date for completion was 31 October 2011. However, by agreement between the parties, the date for completion was extended until 30 April 2012. Completion did not take place on 30 April 2012 and the Claimants' solicitors served a notice to complete. The Defendants failed to complete and the Claimants rescinded the Contract by a letter from their solicitors dated 16 May 2012.
The claim form in these proceedings was issued on 22 June 2012. Mr and Mrs Hardy (together " the Claimants") seek the following relief:
(1) a declaration that the Contract has been rescinded or no longer remains on foot;
(2) a declaration that the deposit of £150,000 and the accrued interest thereon is forfeited to the Claimants;
(3) £210,000 as damages for breach of the Defendants' obligation under the Contract to pay a further deposit; and
(4) £35,000 as damages for breach of a collateral agreement made between the parties in December 2011.
These claims are all disputed by Mr and Mrs Griffiths (together " the Defendants") mainly on the ground that, as a result of misrepresentation by the Claimants, it is the Defendants, and not the Claimants, who are entitled to rescind the Contract. The Defendants have counterclaimed for the following relief:
(1) a declaration that the Defendants were entitled to rescind the Contract;
(2) rescission of the Contract;
(3) repayment of the deposit of £150,000, together with £15,000 that was paid as compensation to the Claimants;
(4) damages for misrepresentation;
(5) damages for breach of contract or repudiation; and
(6) a declaration that the agreed deposit was £150,000 and not 10 per cent of the purchase price (and the Claimants are not therefore entitled to payment of any further deposit).
The misrepresentations alleged by the Defendants are not based on fraud and this was accepted by Mr Brown, Counsel for the Defendants, on the first day of the hearing. However, after the evidence had finished Mr Brown did seek permission to amend the Defence and Counterclaim to plead fraud. I refused the application, for the reasons I gave at the time. The application was, apart from anything else, made far too late.
The facts
Witnesses
I heard evidence from Mr Hardy and Mr Griffiths. I also read the witness statement of Mrs Griffiths, which was agreed by the Claimants. The Claimants called Mr Nicholas Butler MRICS, who gave expert evidence as to likely condition of the property in the period from late 2010 until the Contract was entered into on 1 April 2011. The Defendants called Mr Stephen Hendrie MRICS, who inspected Laughton Manor on behalf of Coutts & Co on 3 May 2012.
There were a few factual discrepancies between the evidence of Mr Hardy and Mr Griffiths. These related to their recollection of events that happened four years ago. Mr Hardy gave careful answers to the questions he was asked. Mr Griffiths, on the other hand, found it difficult to simply answer the question put. This was because he could not resist arguing his case. Having observed them both give evidence, insofar as there is any difference in their recollection of relevant events, I prefer the evidence of Mr Hardy to that of Mr Griffiths.
October and November 2010
Laughton Manor was privately owned until 1930 when it was purchased by the Ministry of Health to be used as offices. It was sold in about 1990 by the Eastbourne Health Authority. The Claimants bought Laughton Manor in December 2006. Mr Hardy is a businessman and was engaged in brick production before he retired.
There are four floors to the main house at Laughton Manor, a lower ground floor, ground floor, first floor and second floor. The access to the tower is from the second floor. There is a balustrade around the house and, between the balustrade and the house, there is a sunken walkway which is at lower ground floor level. The lower ground floor is therefore at a lower level than the garden, but it is not below ground. The house has 44 rooms and, according to the estate agent's sales particulars, the house has a gross internal area of 1,227 square metres or 13,203 square feet. The lower ground floor is made of stone, which Mr Hardy described as "concrete like blocks". The other floors are made of brick. The other feature I should mention is that behind the main house there is a large area of grassland, some one or two acres, which has a gradual slope leading upwards away from the house.
In October 2010 the Claimants put Laughton Manor on the market for sale for £4.5 million. Their estates agents were Winkworth. The Defendants first visited the property on 9 October 2010.
Mr Griffiths is a Queen's Counsel. He is the joint head of chambers at 4–5 Gray's Inn Square, was called to the bar in 1974 and took silk in 1993. His principal area of expertise is in the law of planning and public law and he also has some experience in property and construction law. Mrs Griffiths is a solicitor whose practice was libel and employment law. At one point she was the managing partner of Oswald Hickson Collier & Co.
On 9 October 2010 the Defendants were taken round the main house by Mrs Sarah Turck, who worked for Winkworth. Mrs Turck began her tour of the main house with the guest cloakroom and she told the Defendants that this was the only part of the house which had not been totally refurbished by the Claimants. This was confirmed by Mr Hardy to the Defendants in a conversation which took place at the end of the viewing. This was important to the Defendants as they wanted to purchase a property which had been renovated and, as a result, was in very good condition.
During the course of the tour, Mrs Griffiths was concerned about a distinct smell of damp throughout the lower ground floor and also on the second floor, in the area just below the tower. Mr Griffiths did not notice any signs of damp or rot and he had no recollection of discussing the smell of damp with his wife. Indeed, Mr Griffiths said that he "tended to leave these things to my wife" and she took the lead in discussions with Mrs Turck and Mr Hardy. In any event, Mrs Griffiths raised her concerns about the smell of damp with Mrs Turck and Mr Hardy on 9 October 2010. In response, Mr Hardy told the Defendants that works had been carried out to the exterior of the house, including the roof and balustrade, to prevent damp penetration and Mr Hardy took the Defendants to the top of the house to show them the repairs that had been carried out.
Mrs Griffiths says that she also raised her concerns about the smell of damp in the lower ground floor on subsequent visits to the property (although it is not clear from her witness statement whether this was in October 2010 or February 2011), when she noticed a ventilation fan in the lower ground floor. Somebody suggested to her, although Mrs Griffiths cannot remember who made the suggestion, that the smell might be attributable to the sauna in the lower ground floor. Mr Hardy was asked about this in cross-examination. His evidence was that he did not think Mrs Griffiths had raised any issues with him about smells in the basement (by which he meant the lower ground floor).
The Claimants bought Laughton Manor in 2006 without a survey. The main house is a very large property and it was in disrepair. In particular, Mr Hardy explained that:
(1) The roof needed mending as, only a week after the Claimants had moved in, it was leaking. Mr Hardy said that the roof needed major work to make it water-tight and this was done by re-felting and re-tiling it.
(2) There were areas of penetrating damp. The cause of this was the deterioration in the teraline paint finish applied to the exterior of the building by the Eastbourne Health Authority. Mr Hardy said the cracks in the paintwork allowed water penetration which had then given rise to damp on the interior of the house. In 2007 and 2008 the Claimants re-painted the whole building and, at the same time, repaired the cracks in the paintwork and around the windows to stop water getting in.
(3) There was penetrating damp in the external walls of "the Oriental room", the large room at the southern end of the lower ground floor. In cross-examination Mr Hardy explained he was aware of this problem in early 2007. He said the cause of this damp was unfilled holes in the exterior of the house, which...
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