England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
DIVISIONAL COURT

		Royal Courts of Justice Strand London WC2A 2LL
		7 November 2007

1. LORD JUSTICE MOSES: There is before the court an appeal by way of case stated against a decision of District Judge Ward in the Accrington Magistrates' Court. The issue is whether a trading standards officer, duly authorised on behalf of Lancashire County Council (the Council), had reasonable grounds for suspecting that the respondent, as an estate agent, had made a misleading statement in selling a property as to the ability of the vendor to convey good title to that property.
2. The issue arises in this way: the respondent, Mr Buchanan, is an estate agent and also a solicitor. He offered a property in Nelson for sale, through particulars of sale for which he was responsible, which described the property as being a substantial end garden terraced property. The description included a description of a garden described as being excellent, good sized and well fenced, incorporating a lawn and other features at the side of the property. The potential purchaser, a Mr Waddington, complained to the trading standards officer of Lancashire County Council in March 2005, that although he had been interested in purchasing the property he had learned from the vendor that the vendor did not have what Mr Waddington described as "possessory title", but he had been told that it was going to be sorted out by the vendor's solicitor.
3. The complaint arose because by February 2005 the issue had not been resolved and thus Mr Waddington, in his disappointment, withdrew from continuing the purchase and made the complaint. He gave a statement to the trading standards officer responsible for the complaint, a Miss Wilcock, in May 2005.
4. His was not the only statement. At the same time the trading standards officer obtained a further statement from a vendor, a purchaser of the same property, who had heard about it from Mr Waddington. That purchaser, a Mr Harris, said he had heard about the issue of the side garden. He reported in his statement to the trading standards officer that by April 2005 he could not be confident as whether he would be able to purchase the garden, or not, once the sale was complete.
5. It appears that that purchaser did not himself make a complaint and, as far as we are aware, has bought the property in the hopes that he will also acquire the garden. History does not relate to whether there has been any continuing problem in relation to that. However, so far as the issue that the District Judge and we have to determine, that does not matter.
6. In the case statement the actions taken by Miss Wilcock, on receipt of those statements, is recorded by the District Judge. She wrote to Mr Buchanan on 19 October 2005, and speedily Mr Buchanan replied on 24 October 2005. The letter made it clear that there was a side garden to the property, which, it was asserted, was in the control of the owner. Importantly it enclosed a number of statements from those familiar with the street in which the garden and house were to be found. Those statements were from residents who had been in the road dating back to 1944. As the District Judge recorded, it showed that for approximately 30 years the side garden in the street in question had been fenced in and used as a garden. This was confirmed not only by other residents but by Mr Haythornthwaite, who himself had bought the property and had fenced in the area which constitutes the side garden.
7. Mr Watson, the vendor, also gave a statement that was sent by Mr Buchanan to the trading standards officer in which he himself said that he had purchased the property and had been using the garden for over 12 years. He had, he said, put a fence around it and, indeed, erected some retaining walls. He said:

"Throughout my occupation of the garden plot I was in continuous possession and enjoyment of it to the exclusion of all others, without giving any acknowledgment of the title of any other person to it or part of it, and without any consent of such person and without any claim adverse to my title to the garden plot."

8. The letter continued by enclosing not only all those statements from six people in all, who had either been, or were, living in that street, but also an email from one councillor to another dating back to 2004 asking about the land, and containing a response from one councillor as follows:

"We think it would be sensible to let both this land and an adjacent section go to this person, it has no particularly high value to this Council and really represents a liability. One of my staff are on with it (sic) now."

9. Notwithstanding that exchange of emails, Mr Buchanan very fairly informed the Trading Standards Department that Pendle Council was disputing registration of possessory title to this land.
10. Having received all that information, Miss Wilcock wrote to Mr Buchanan saying that she still suspected that a criminal offence had been committed under the Property Misdescriptions Act, and sought a tape-recorded interview. Mr Buchanan demurred saying that he was satisfied that no criminal offence had been committed, and pointing out that it was not an estate agent's job to check title deeds and documents. He did not propose to attend for interview.
11. But Miss Wilcock attended a few days later at his office and asked to see a file relating to the sale. She was accompanied by a senior trading standards officer. Mr Buchanan said it was not possible as it was subject to legal professional privilege. It is clear that relations, perhaps not surprisingly, were not particularly good between Mr Buchanan and the Trading Standards Department as a result of this unannounced visit.
12. There was a further letter written by Miss Wilcock asking for his full name, address, date of birth and insurance number. Mr Buchanan replied that he wished to know what her reasonable grounds were for suspecting that an offence had been committed.
13. On 18 November 2005, Miss Wilcock replied. She said:

"1. A statement has been made about a prescribed matter - that there is a private side garden included with the property 283 Southfield Street.

2. Clifford Smith and Buchanan are acting as an Estate Agent Business.

3. Two independent witnesses have claimed that the statement re the side garden is incorrect."

14. Mr Buchanan explained again, in a further letter, that the land registration was what he described as an ongoing matter and asked for copies of the independent statements. Towards the end of December there was a further unannounced visit from the two trading standards officers and Mr Buchanan refused to speak to them. Words were exchanged.
15. The case came before the District Judge on the basis of the refusal of Mr Buchanan to furnish the documents, which the trading standards officers wished to see. The trading standards officers gave evidence. A considerable amount of evidence was given in a case that lasted for two days. That that amount of time should be taken should cause no surprise, since there was apparently considerable debate and controversy as to whether the documents were the subject of privilege against self-incrimination. That was not a dispute that the District Judge needed, at the end of the day, to resolve.
16. During the course of that evidence Miss Wilcock did give further evidence which is of significance. She told the District Judge, as he recorded, that she had no reason to disbelieve the contents of the copied draft declaration supplied to her. Those were the statements, to which I have already referred, of the inhabitants of the street in question as to the use of the garden over, as I have said, some 30 years. In other words, Miss Wilcock did not dispute that that was the position in relation to that garden. She further said that she was not aware of any proceedings between the local authority, that is Pendle District Council, and Mr Harris, that is the new purchaser, or Mr Watson, the vendor. She further accepted that there was no legal obligation on an estate agent to check the deeds.
17. Before dealing with the conclusion of the District Judge, I should identify the relevant statutory scheme. Section 1 of the Property Misdescriptions Act provides:

"(1)Where a false or misleading statement about a prescribed matter is made in the course of an estate agency business ... otherwise than in providing conveyancing services, the person by whom the business is carried on shall be guilty of an offence under this section."

Section 1(5) defines false as meaning: "false to a material degree" and continues, section 1(5)(b):

"a statement is misleading if (though not false) what a reasonable person may be expected to infer from it, or from any omission from it, is false"

Section 2 provides for a defence of due diligence. Schedule 3 provides, at paragraph 3:

"(1) If a duly authorised officer of an enforcement authority has reasonable grounds for suspecting that an offence under section 1 of this Act has been committed, he may-

(a) require a person carrying on or employed in a business to produce any book or document relating to the business, and take copies of it or any entry in it..."

By paragraph 5(1) of Schedule 3:

"(1)A person who-

(a) intentionally obstructs an officer of an enforcement authority acting in pursuance of this Schedule,

(b) without reasonable excuse fails to comply with a requirement made of him by such an officer under paragraph 3(1)(a) ...[that is a duly authorised officer], or

shall be guilty of an offence."

18. The respondent was charged with a breach of paragraph 5(1)(a) and with an offence under paragraph 5(1)(b). The question for the District Judge was whether a reasonable man with knowledge of the law, and with the information in fact possessed by the trading standards officer, would have suspected that the statement was misleading: see Hussain v Chong Fook Cam [1970] AC 948 and Dallison v Caffrey [1965] 1 QB 348 at 371.
19. The conclusions of the District Judge are set out in the case he has stated. He concluded that the particulars of sale described the property as having a side garden and that the property did have a side garden:

"The vendor did not have title deeds or a registered title to the garden but he did have evidence that he and his predecessors had been in continuous full, free and undisturbed possession and enjoyment of the garden without giving any acknowledgment of the title of any other person to it and without the consent of any other person and without any claim adverse to his title to the garden."

He continued by pointing out that Miss Wilcock had apparently ignored the information that she had been given with the letter from Mr Buchanan of 24 October, from the residents of that street and the previous owner, as well as the present vendor. He continued that in the light of that information:

"I was of the opinion that by that time a reasonable person assumed to know the law and possessed of the information which she had could not still have believed that there were reasonable grounds for suspecting that an offence under section 1 of the Act had been committed even if she had had grounds for believing that earlier. The house did have a side garden which had been occupied with the house for about thirty years and it was hard to imagine any circumstances in which any person could now assert a better title to the garden than Mr Watson[the vendor]."

Discussion

20. The District Judge did not dwell upon what a reasonable person might be expected to infer from the particulars of sale which was furnished, but, as I have pointed out, he did say that the particulars of sale described the property as having a side garden and stated that the property did have a side garden. In my view the particulars described the property which the vendor, Mr Watson, was offering to sell. The particulars did not make any representation about the nature or quality of the vendor's title. There is no dispute but that a reasonable person might be expected to infer that the side garden was being sold by the vendor with the house.
21. However, it is important to identify the limits of such an inference. In advertising a property for sale the estate agent is making no representation as to title. No reasonable person reading the particulars of the house and garden offered for sale could infer that any representation as to title was being made, still less as to the nature of the title. After all, these particulars, as is the almost invariable practice of such advertisements, were headed "subject to contract." A reasonable person would have appreciated that issues as to title would be dealt with during the process of conveyance. It is of note that the estate agency business, to which section 1 of the Property Misdescriptions Act refers, excludes any part of that business which provides conveyancing services.
22. Both the trading standards officer and her colleague gave evidence that they did not expect an estate agent to check the deeds. That is not to say that there could never be a case of providing false, or misleading, particulars within the meaning of the section as to that which it is within the power of the vendor to convey. A misdescription of the extent of the property put up for sale may arise from the inability of the vendor to convey good title. However, this is not the case to attempt to identify, with any precision, a description in relation to what the vendor is offering for sale, which would be caught by section 1 and by Article 2 of the Property Misdescriptions (Specified Matters) Order 1992.
23. It is sufficient, for the purposes of this appeal, to consider what information the trading standards officer, Miss Wilcock, had. She knew that the vendor intended to sell both house and side garden and that he believed that it was within his power to do so. She knew that the side garden had been fenced in years ago and that Mr Haythornthwaite had been in possession of the garden for 30 years until he had conveyed the property to Mr Watson, who had continued to use the garden, re-fencing it and constructing two retaining walls. It is important to recall that Miss Wilcock specifically stated that she had no reason to disbelieve that information. What basis did she then have for suspecting that a reasonable person would conclude that the statement was misleading? She made no inquiries of any lawyer. She knew nothing of the law of adverse possession. She was not aware of any proceedings between the new or the old purchaser and the local authority, Pendle District Council. All that she knew was what she had been told by Mr Buchanan, that Pendle District Council was disputing Mr Watson's possessory title to the garden. She was aware, from what Mr Harris and Mr Waddington had told her, that the issue had not been resolved, but she made no attempt to identify the nature of this dispute.
24. We have learned, in fact, that Pendle was not worried about the garden but rather about some adjoining pavement. That was not a matter in evidence before the District Judge and we ignore it. However, it does sound a note of caution as to whether Trading Standards Departments should deploy such force and so many officers in a matter about which they could so easily have satisfied themselves.
25. Miss Wilcock made no attempt whatever to identify the nature of the dispute. In our judgment the mere fact that she knew that Pendle District Council was disputing registration was not enough to afford a basis for a reasonable person to suspect that the information given in the particulars of sale was misleading. A reasonable person would not have regarded the information she received about Pendle's attitude as a ground for suspicion without making at least some inquiry of someone, Pendle, or someone else, as to what the problem was, and setting that against the information she already had of possession for a period of some 30 years.
26. The reasonable person would not have merely made an assumption that Mr Watson may not be able to convey the garden, still less, as was recorded in her letter setting out her grounds for suspicion, that the independent witness's claim concerning the garden is incorrect. Neither of those two independent witnesses said as much. They merely said they were having difficulty in acquiring good title to that garden.
27. Further, in the light of the information, which it accepted that she had, Mr Haythornthwaite, the previous owner of the property, had had possession of the garden for over 20 years. There was no basis for anyone suspecting that the benefit of that possession had not been conveyed to Mr Watson. There was no basis whatever for assuming that Mr Watson's solicitors, many years before, had failed, on his behalf, to ensure that the benefit of Mr Haythornthwaite's adverse possession was not conveyed to their client. In short, the difficulties that Pendle District Council appeared to be creating could not possibly have formed the basis of any reasonable suspicion, that a purchaser would not acquire good title without at least some inquiry as to the nature of the problem.
28. The conclusion of the District Judge was attacked by Mr Clark, on behalf of the Council, on the basis that it was open to the trading standards officer to suspect not only that Mr Watson had not acquired good title, but that he had not done so because the Human Rights Act had operated so as to defeat his claim five days before he could successfully claim the land constituting the garden on the basis of 12 years' adverse possession. If one studies the dates one will see that the Act came into force just before the end of the 12 years' adverse possession.
29. This is a surprising submission, despite the erudition with which it was advanced. It is surprising because it was never deployed before the District Judge. The argument before us was based on a paragraph in a judgment of Mr Nicholas Strauss QC in a case called Beaulane Properties Limited v Palmer [2005] EWHC 817, [2006] Ch 79. At paragraph 213 the judge took the view that in order to be compliant with section 3 of the Human Rights Act, adverse possession meant not what the House of Lords had said in Pye (Oxford) Ltd and another v United Kingdom [2003] 1 AC 419, but required the adverse possession be inconsistent with the use, or intended use, of the owner in the instant appeal of Pendle District Council. Since Pendle District Council had not used, and did not intend to use, the land, no adverse possession could be claimed.
30. I pause again to recall that none of this even entered Miss Wilcock's mind, or anybody else in the Trading Standards Department's mind, at the time, since none of them appear to have taken legal advice. I am even prepared to overlook that that view of the law is inconsistent with the law, as it is now declared to be, in Pye (Oxford) Ltd and another v United Kingdom and the decision of the Grand Chamber in the European Court of Human Rights [2007] All ER (D) 177, in which the court found that there was no inconsistency between the views of the House of Lords as to what adverse possession meant and the Human Rights Act.
31. I am prepared to overlook that fact because that argument assumes that the possession was not inconsistent with Pendle's intended use of the land, in the context that there was no evidence whatever available about the attitude, or actions, of Pendle, since no one had ever bothered to make any enquiries. The theoretical possibilities of how a claim to adverse possession of the land might fail need not concern us as they did not concern the District Judge.
32. As I have said, one does not even arrive at that position unless it is fair to assume that Mr Haythornthwaite failed to convey his beneficial interest in the garden to Mr Watson. Miss Wilcock did not make that assumption and no reasonable person could have done so. She merely suggested that she suspected that the statements were incorrect.
33. There was no basis for that suspicion on the material before her. No reasonable person would have inferred any representation as to the nature or quality of the title to be conveyed. No reasonable person would have suspected that Mr Watson could not convey good title to the garden to the purchaser. The District Judge was correct in concluding that there were no reasonable grounds for suspicion and that accordingly the respondent was not guilty. I would dismiss this appeal.
34. MR JUSTICE JACKSON: I agree.
35. MR BARTON: My Lord, can I deal with the question of costs? I have to apologise and say that I do not have a detailed schedule of costs today. Unfortunately I was notified of this hearing last week. My instructing solicitor was shortly to go on a prearranged holiday.
36. LORD JUSTICE MOSES: That is disastrous. That means we have no power to assess, or could we by consent? Would it be cheaper for the taxpayers in Lancashire if we do assess today? Had we better hear what the sum is?
37. MR CLARK: I do not know if that information is with my learned friend.
38. LORD JUSTICE MOSES: Do you know what it is?
39. MR BARTON: I do not, I am afraid. In the meantime I have tried to contact his secretary who is not working today.
40. LORD JUSTICE MOSES: I do not think we can assess today. What we will do is, subject to the submissions of Mr Clark, urge you both to agree a figure and award you those costs. What do you want to say, Mr Clark, about costs?
41. MR CLARK: The only thing I would bring to your Lordship's attention, given your Lordship's decision, is that you have power to award costs out of Central Funds, as opposed to my client authority.
42. LORD JUSTICE MOSES: I am afraid the Council ought to pay. We make the order against the Council.
43. MR BARTON: I have nothing to add.
44. LORD JUSTICE MOSES: Thank you both very much, indeed.