SPS Groundworks & Building Ltd v Ms Satvinder Kaur Mahil
| Jurisdiction | England & Wales |
| Judge | Mr Justice Cotter |
| Judgment Date | 23 February 2022 |
| Neutral Citation | [2022] EWHC 371 (QB) |
| Docket Number | Case No: BM10112A |
| Court | Queen's Bench Division |
[2022] EWHC 371 (QB)
IN THE HIGH COURT OF JUSTICE
HIGH COURT APPEALS CENTRE BIRMINGHAM
QUEEN'S BENCH DIVISION
ON APPEAL FROM THE COUNTY COURT AT LEICESTER
CLAIM F6QZ7Z7F
BEFORE HIS HONOUR JUDGE MURDOCH
Birmingham High Court Appeals Centre
33 Bull Street, Birmingham B4 6DS
Mr Justice Cotter
Case No: BM10112A
Mark Diggle, Counsel (instructed by Pattersons Commercial law) for the Claimant/Respondent
Steven Taylor, Counsel (instructed through direct access) for the Defendant/Appellant
Hearing dates: 31 January 2022
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.
This is an appeal against the order of His Honour Judge Murdoch made on 7 th July following a three-day trial. The Judge ordered that there be judgment for the Claimant (the Respondent to this appeal) in the sum of £43,440 and dismissed the Appellant's counterclaim.
Permission to appeal was granted by Mr Justice Jacobs by his order of 4 th November 2021.
Introduction
The case concerns the sale by auction held on 12 th February 2019 of a plot of land situated to the east side of a house known as the White House, Gaulby Lane, in the village of Stoughton, Leicestershire (“the Land”). The Appellant was the highest bidder with the hammer falling for the sum of £130,000 plus VAT. She signed a memorandum of sale and paid a deposit of £13,000 with an agreed completion date of 12 th March 2019. The Appellant did not complete. The Respondent sent a notice to complete but the Appellant refused to do so and the Respondent accepted her refusal as a repudiatory breach of contract. The property was later sold at a second auction and the Respondent brought these proceedings in respect of the shortfall between the price agreed by the Appellant and that subsequently obtained.
It was and is the Appellant's case that she was induced into entering into the contact by misrepresentation, that there was a failure to disclose a defect in the title to the land and that she validly rescinded the contact. She relies on the description of the land in the auction catalogue and also the absence from the sale documents of an overage covenant. She brought a counterclaim for the repayment of the deposit and the buyer's premium in the sum of £14,074.
Facts
The property register for the Land contained the following restriction:
“No disposition of the registered estate by the proprietor…is to be registered without a certificate signed by Co-operative Group Limited… that the provision of clause 5.1 of a Deed of Covenant dated 21st December 2017 made between (1) Co-operative Group Limited and (2) [the Respondent] have been complied with.”
The deed referred to within the restriction provided for payment to the Co-operative Limited of 50% of any increase in the Land's value attributable to obtaining planning permission (“the Overage Clause”).
In August 2017 the Respondent purchased the land. Mr Smith, a director, was fully aware of the covenant before purchase as he had looked at the documents in the legal pack. The purchase price was £87,000 plus VAT. The Appellant was to argue that this was more than the land's true market value.
After the sale Mr Smith was approached by the owner of the adjacent property, the White House, who wanted to buy the land and had bid against Mr Smith. Indeed, he virtually demanded that he be able to do so.
The Respondent met with the planning officer to discuss development on the land. Mr Smith was told that the large majority of the land was classified as an important open space. He was also told that if he amended existing plans there was a better chance of planning being granted and that he should engage with the Parish Council. Mr Smith did contact the Council but members were not persuaded that the land should be built upon. Mr Smith eventually decided to sell the land because of cash flow issues
The property was put up for auction through SDL Auctions Limited (“SDL”). The description of the land in the catalogue was
“Lot 17, land adj the Woodlands, Gaulby Lane, Stoughton, Leicestershire, Leicester, LE2 2FL. A small parcel of land set within the heart of the desirable village of Stoughton. Description: Stoughton is a highly sought after village on the south side of Leicester, situated close to Oadby and Evington. The village has a rural feel but there's plenty of amenities, schools and transport links close by. Benefitting from main road frontage and has residential properties on both sides and the rear. Approximately 0.5 acres. The site offers use for grazing or amenity space.
There is also excellent scope for development, subject to any required planning permissions, making a superb investment opportunity. All planning enquiries should be made to Harborough District Council. We have been informed that VAT is chargeable on the lot. Tenure, freehold. Vacant possession upon completion. Viewing direct on site. Guide price, £75,000 plus fees.”
Newspaper advertisements contained similar words.
Mr Smith then discovered a letter pinned to the Auction board on the land. It stated as follows
“Dear Sirs, land adjacent to Woodlands, Gaulby Lane, Stoughton, LE2 2FL. Stoughton Parish Council is aware you are selling this plot by auction on 12 February 2019 at the King Power Stadium, Leicester. Our concern is that the land has previously been sold without full disclosure of certain important facts and we wish to prevent this happening again. Your own prospectus speaks of ‘excellent scope for development.’ For the sake openness and honesty we feel the following should be disclosed to potential bidders.”
Then it lists three things:
“i) The paddock is registered with Harborough District Council as local green space as LGSSTO-2, and is therefore protected from development.
ii) There exists an uplift covenant, 50% to the original pre 2017 owner.
iii) A recent test case in Stoughton has stated that any further development within the village is unsustainable. This is robustly confirmed by the wording of the new Harborough local plan. All this makes the definition of ‘excellent scope for development’ somewhat far from the truth. Consequently, we wish you to warn potential purchasers of these facts. Yours faithfully, Miss Coco Smith, clerk to Stoughton Parish Council.”
As the learned Judge recorded
“The Claimant says this letter was not on parish council letter-headed paper and was not signed or dated. He says that he formed the view the letter had been constructed by the owner of the White House as a tactic to undermine the sale of the property at the forthcoming auction. The Claimant says that he drove to the White House to speak to the owner but the owner was not in. He, that is Mr Smith, therefore ripped up the letter and posted it through the letterbox to demonstrate to the White House owner that he was not being taken in by that tactic. The Claimant says he then spoke to Coco Smith direct and she told him that she knew nothing about the letter.”
On 9 th January 2019 the clerk to Stoughton Parish Council contacted SDL to put them on notice that the land was registered with Harborough District Council as local green space and was therefore protected from development, that the overage covenant existed and that there was a recent test case which established that any further development in the village would be unsustainable
SDL amended the description of the land adding that the planning enquiry should be directed to Harborough District Council, but did no more.
The legal pack prepared for bidders/potential purchasers contained the deed of covenant dated 21 st December 2017, the Land Registry Office copy entries which include reference to that deed within a restriction in proprietorship register and a TP1 form which included a reference to the clause in favour of the Co-op.
The Judge set out that Mr Mahill, stated in evidence;
“…his wife saw the advert in the Leicester Mercury for the sale of the land at an auction. They looked at the auction website and noticed there was a legal pack. He tried to download the legal pack but it would not download because it kept buffering. He says they went to the auction together. His wife asked for a copy of the legal pack when she was told to download it from the internet, but no hard copy was available and they were unable to download the pack from the internet.”
and
“He says they looked at the land themselves prior to the auction, and that he understood that planning permission would be required to change the land from grazing land to residential. He said that he had wanted to look at the legal pack. He wanted to see for himself all the details contained within it. He knew there must be something of importance in the legal pack, and he wanted to make sure that everything was in order.”
The Appellant visited the property. The Judge noted:
“She said that prior to the auction her husband and she went to see the land. She says they were looking at the land for the purpose of building a family home for herself. She denied looking at it for the development potential of two or more houses. She accepted that she understood that planning permission would be needed. She accepted that the best people to speak to about such planning permission were Harborough District Council. She thought that because there were houses on either side of the land there would no problem in getting planning permission. She said she was relying on what she saw on the site, and this was reinforced by the fact:”
“ There was a church opposite and other people or houses.”
She stated that she did not look at the SDL...
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