In Iya Patarkatsishvili & Vevhen Hunyak -v- William Woodward-Fisher the High Court has ordered rescission of a contract for a multi-million-pound property sale plus payment of other damages due to a severe infestation of clothes moths in the property. The Judge considered that the seller knew about the infestation and had fraudulently misrepresented that there was no such issue during the conveyancing process.
In 2019 the Claimants purchased Horbury Villa, Ladbroke Road, London W11 from the Defendants and quickly became aware of moths in the property. After trying to resolve the infestation at considerable expense (the Claimants' claimed remedial works costs of circa £384,000), the Claimants became aware that the Defendant's wife had prior to the sale of the property sought pest control reports relating to moths. The Claimants therefore issued a claim for recission of the sale contract and return of the purchase price (£32.5m) plus other damages including for example stamp duty, the cost of remedial works and loss of expensive clothes.
The case centred on whether the Defendant had given false and untruthful replies to three pre-contractual enquiries which the Claimants' solicitors asked during the conveyancing process. The first enquiry asked the Defendant seller to comment on whether the property had ever been affected by vermin infestation. The second enquiry asked the Defendant to provide a copy of any report concerning any such vermin infestation or otherwise concerning the fabric of the property. The third enquiry asked the Defendant to comment on whether he was aware of any defects in the property which were not apparent on inspection.
The Defendant had responded to the above enquires to say that he was not aware of any such matters or defects. The Defendant did not disclose previous pest control reports that his wife had obtained regarding moths in the property. The Claimants asserted that the Defendant's replies to the enquiries were false and that they had relied on them in proceeding to purchase the property.
The Judge found that the Defendant's replies to all three enquires were false for the following reasons:
- The Judge concluded that insects generally are clearly capable of being regarded as vermin. More specifically, an infestation of clothes moths in a residential property would constitute an infestation of vermin as they could damage the property, require expense to remove and adversely affect enjoyment of the property. Accordingly, the Defendant's response to the enquiries to say that he was not aware of any vermin infestation was false.
- The Judge found that the Defendant's response to the enquiry that he was not aware of any reports relating to any vermin infestation or otherwise concerning the fabric of the property was also false, as the Defendant was aware of the pest control reports obtained by his wife. The reports referred to the property insulation, which the Judge held was part of the fabric of the property and therefore relevant regardless of whether the Defendant had considered moths to be vermin.
- In relation to the third enquiry concerning property defects not visible on inspection, the Judge had regard to the content of the pest control reports which identified defects with the insulation and the moth implications. The Judge considered that the Defendant's response in which he said that he was not aware of any defects in the property which were not apparent on inspection was false.
The Judge considered that the Defendant's false statements were made knowingly or recklessly in all three cases.
The Judge found that the Claimants had relied on the Defendant's false replies to enquiries in proceeding to purchase the property. It is of note that the Judge found that the Claimants were induced by the misrepresentations even though they had not read the replies to enquiries themselves. The Judge was satisfied that the Claimants' solicitors and agent had read the replies to enquiries, and that the Claimants had relied on consequent advice from their solicitors and their agent in proceeding with the purchase.
Ultimately, the Court ordered recission of the contract, re-payment of the purchase price (less circa £6m for the Claimants' occupation and use of the property) and other damages.
Superficially, this case might cause concern about the implications on a seller's duty to disclose the presence of moths in a property going forwards. However the Judge confirmed in the final paragraphs of his Judgment that this was an extreme case and that there is no duty of disclosure on a seller of real property unless a failure to disclose would make other information given to the buyer misleading or incomplete.
The Judge commented that "If the question is whether the seller is aware of any infestation of vermin, and the seller has experienced no more than a few moths and occasional damage to clothing (the "normal" London experience,…), the honest answer will be "no". However, if the seller knows that they have, or may have, an infestation of moths, the only honest answer would be "yes" or "no, but the property was identified on [date] as having a clothes moth infestation"."
Ultimately, therefore, the case turned on the false nature of the answer and is a straightforward application of longstanding principles of law. Had the replies to enquiries refused to answer the questions posed they would not have constituted misrepresentations. It was the fact that the seller answered them inaccurately that gave rise to the claim. The adage "buyer beware" is therefore alive and well, but sellers should also remember to take care.
