England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		07/10/2010

The Honourable Mr Justice Edwards-Stuart :

Introduction

1. In July 2007 the Claimants ("Mr and Mrs Morgan") agreed to buy a property known as "Three Oaks House" from the Defendants ("Mr and Mrs Pooley") for £1,660,000. Three Oaks House is a substantial period property set in about two acres of land. It is in an area of outstanding natural beauty and to the south lay open fields. Alongside the southern boundary ran an old farm track which was seldom used. Unknown to Mr and Mrs Morgan, prior to the sale the owners of the neighbouring farm had applied for planning permission to turn the track into a new drive to their property.
2. Mr and Mrs Morgan claim damages for misrepresentation and/or breach of contract because they were not told about the existence of the planning application and, since buying the property, the track has been turned into a drive and is now the principal, if not the only, access to the neighbouring farm. Mr and Mrs Morgan say that this has seriously and adversely affected the privacy and seclusion previously enjoyed by Three Oaks House and has in consequence diminished its value.
3. The issues in the action, briefly summarised, are, first, whether Mr and Mrs Pooley were aware of the planning application when they sold the property. Second, if they were, whether their negative answer to a question during the pre-contract enquiries as to whether they had received any letters or notices which affected the neighbouring property in any way, amounted prima facie to a misrepresentation and/or breach of contract. Third, if it did, whether by the terms of the contract Mr and Mrs Morgan are precluded on relying on that answer. Fourth, if Mr and Mrs Morgan are not so precluded what is the appropriate measure of damages. The agreed issues, and my answers to them, are set out in full at the end of this judgment.
4. Submissions were made on the half of Mr and Mrs Pooley to the effect that it was incumbent on Mr and Mrs Morgan's solicitors to make all relevant searches which were or might have been material to the decision to purchase the property. This may or may not be correct, but since the solicitors are not a party to this action and since I consider that this is not a question that I have to decide, I have concluded that it is best to say no more about it.

The facts

5. The track was on land belonging to a neighbouring property, Rock Robin Farm. It ran along the southern boundary of Three Oaks House to the road, Three Oaks Lane. Aerial photographs appear to show that just before the end of the boundary of Three Oaks House the track petered out. The land to the south of Three Oaks House was higher so that the track effectively overlooked the property. However, along the boundary ran a hedgerow which was fairly high and dense at its western end but, as I find, became more ragged, less dense and lower as it went east. The result was that before Mr and Mrs Morgan bought the property the hedgerow provided an effective screen at the western end of the track but not much of a screen towards the east, so that a person standing on the track at a point directly south east of Three Oaks House would have been able to see the first-floor windows and the swimming pool which was situated between the house and the track.
6. In July 2004 Mr and Mrs Pooley put the property on the market with agents Freeman Forman at a price of £1,750,000. In January 2005 they changed agents and placed the property with Hamptons International at the same price (a copy of the sales brochure produced by Hamptons is in the trial bundle). Mr and Mrs Pooley received numerous offers in the region of £1,500,000 but nothing that was acceptably close to the asking price. They were in no hurry to sell. Mr and Mrs Pooley used to spend 4-5 months each year at a second home in Florida, so as a result the property was not continuously on the market. In May 2006 the property was again put on the market but with a reduced asking price of £1,680,000. In February 2007 the asking price was reduced slightly to £1,650,000. Mr and Mrs Morgan viewed the property on 22 March 2007. They liked it and went to look at it again on 26 March 2007. A day or two later their offer of £1,680,000 was accepted. The fact that the offer was £30,000 more than the asking price suggests that the market was rather stronger than it had been during the previous year.
7. As part of the conveyancing process, on 18 May 2007 Mr and Mrs Pooley completed a Seller's Property Information Form (SPIF). Question 3.1 was in these terms:

"Have you either sent or received any letters or notices which affect your property or the neighbouring property in any way (for example, from or to neighbours, the council or a government department)?"

To this question Mr and Mrs Pooley's answer was "No".

8. On 20 July 2007 contracts were exchanged with a purchase price of £1,660,000 (the price had been reduced by £20,000 in the light of the survey report). The contract included of the Standard Conditions of Sale (Fourth Edition) and a set of Special Conditions, two of which were deleted. Completion took place on 2 October 2007.
9. Shortly after Mr and Mrs Morgan moved in they invited some of the neighbours around for a drink, including Mr and Mrs Moore, the owners of Rock Robin Farm. Apart from introducing themselves, their purpose was to explain certain work that they wanted to carry out at Three Oaks House. During the course of the evening Mr and Mrs Morgan heard for the first time that the Moores were proposing to build a new driveway along the line of the track that ran alongside the southern border of Three Oaks House.
10. Mr and Mrs Moore had applied for planning permission to build the new drive along the line of the old track in June 2006. According to the council's records (of which there were copies in the trial bundle) on 18 July 2006 letters were sent to three adjoining owners, including the occupiers of Three Oaks House, notifying them of the planning application. The records also suggest that from about 21 July to 11 August 2006 the council displayed a notice or notices giving details of the application.
11. In April 2008, about six months after Mr and Mrs Morgan moved in, work began on the new drive. They were most upset by this because the peaceful field that had overlooked the property now included an unsightly and fairly busy drive. Vehicles went up and down the drive at intervals during the day and, most irritatingly, Mr and Mrs Moore have (or had) a lodger who is a DJ and used to return in the early hours of the morning. The headlamps from his van would disturb Mr and Mrs Morgan which, quite understandably, they found most disagreeable. They have my sympathy, but I do not consider that this is something that a potential purchaser would have anticipated or have taken into account. He or she would have anticipated the normal level of traffic that could be expected to serve a farm and one other house and, of course, such traffic could include vehicles such as tractors and horseboxes.
12. As I have already indicated, Three Oaks House is built on a sloping site. The field to the south of the house slopes downwards from south to north and this slope continues through the garden of Three Oaks House. The field also slopes downwards from west to east, so that in the vicinity of Three Oaks House the north east corner of the field is its lowest point. Immediately to the north of the new drive the swimming pool is set in a paved terrace with a grass bank to the south which leads up to the line of the new drive. I find that to the southwest and south of the swimming pool this bank was some 6 to 8 feet high, and that at the top of it there is a hedge consisting of assorted bushes some 8 to 10 feet high. In short, the swimming pool was and is very well sheltered from the new drive to the west and south of it. But as the drive runs to the east the land falls and the hedgerow becomes lower and much less dense, so that the house and pool become much more visible from the south east. Since much time at the trial was devoted to exploring the condition of this hedgerow, I will deal with it separately later in this judgment.
13. In March 2009, following the construction of the new drive during the previous spring, Mr and Mrs Morgan decided to remove the more ragged section of the hedgerow between their garden and the new drive - a section some 25-30 metres in length - and to replant it with a new beech hedge. They planted mature beech saplings which were about 6-7 feet high in order to provide the desired level of privacy in the future.

The witnesses

14. I heard evidence from six witnesses of fact, in the following order: Mr Fennimore, Mr Rodgers, Mrs Morgan, Mr Morgan, Mr Pooley and, finally, Mrs Pooley. It will be convenient if I give my impressions of them as witnesses at this stage and mention any aspects of their evidence that are not dealt with in more detail elsewhere in this judgment.

Mr Fennimore

15. He worked as a gardener at Three Oaks House, and had worked for both Mr and Mrs Pooley and Mr and Mrs Morgan. I thought that Mr Fennimore was an honest and straightforward witness. However, his memory of the relevant events was not particularly good. For that reason I did not derive a great deal of assistance from his evidence. Interestingly, he did not know about the new driveway to Rock Robin Farm until the work began so if Mr and Mrs Pooley knew about it, they must have said nothing to him. I did not accept his evidence about the height of the former hedgerow for reasons which I will give in a later section of this judgment.

Mr Rodgers

16. Mr Rodgers was a clear and articulate witness and I have no reason to doubt any of his evidence. He lived at a house known as The Briars, and was Mr and Mrs Pooley's immediate neighbour to the west. However, there appears to have been some long running dispute with Mr and Mrs Pooley about their foul drainage because the septic tank that served The Briars, where Mr Rodgers and his wife lived, was situated on the Pooleys' land and problems had arisen about the hedge under which the drainage pipe ran. Mr Pooley said in evidence that Mr Rodgers had cut down a tree on his land without permission. Mr Rodgers said that he and his wife did not find the Pooleys to be very easy people to deal with and as a result they did not have much to do with them.
17. Mr Rodgers said that in July 2006 he and his wife received a letter from the council about the Moores' application to build the new drive. He said that he asked Mr Moore if he had received any objection from the Pooleys, and was told that he had not. They both found this surprising. Mr Rodgers speculated that this might have been because they were intending to sell Three Oaks House. Mr Rodgers also said that as far as he could remember there was never any agricultural use of the field to the south of Three Oaks House, apart from the occasional grazing of sheep or horses. He and his wife were, of course, very pleased at the proposal to alter the drive to Rock Robin Farm because the existing drive passed immediately alongside their property.

Mrs Morgan

18. Mrs Morgan's evidence was relatively confined, but I found her to be an honest witness who was reliable on all aspects of her evidence, save for the height of the removed section of hedgerow. She said that for part of the length of the boundary adjacent to the track the height of the hedgerow was about 3'6", which meant that they could enjoy the view over the field. She said that she was not concerned about being overlooked because no one used the field. For reasons that I will give later in this judgment, I consider that Mrs Morgan underestimated the height of the section of hedgerow that was subsequently removed, but I do not think that she was deliberately trying to mislead the court: I am quite satisfied that this is what she now believes to have been the case.
19. She said that if you looked south east from the swimming pool when they bought Three Oaks House you could see across the field, but she still felt that the pool was secluded "because there was nothing there". She said that she read through the SPIF with her husband but there was nothing in it that caused them any concern. On this basis they were happy to proceed with the purchase.

Mr Morgan

20. I thought that Mr Morgan was an honest witness who was seeking to give the court an accurate account of events. However, I formed the clear view that he was very upset about the construction of this drive alongside his property and that he had allowed it to become something of an obsession. His evidence about the height of the removed section of hedgerow was to the same effect as that of his wife: in his witness statement he described it as "low lying", but in evidence he said that it was about 3'6" high. As with his wife, I do not think that he was trying to mislead the court: rather I think that this is the belief that he now genuinely holds.
21. He agreed with Mr Fennimore that the hedgerow consisted mainly of brambles mixed in with some hawthorn and dog roses and that it was not particularly attractive. He was strongly pressed in cross-examination about his decision to remove that section of the hedgerow and to leave that section of the boundary relatively open until the newly planted beech hedge was able to provide a reasonable screen. It was suggested, in effect, that if they suffered from any lack of privacy it was the result of their own decision to remove the old hedgerow. It was also suggested that they could have erected a wooden fence to provide a screen in the meantime, but Mr Morgan said that would have been abhorrent. He said that the terrace was a very nice area where they would sit and entertain their friends and that he wasn't prepared to have a wooden fence for five years whilst the beech hedge established itself. Effectively, he said that putting in the beech hedge to provide privacy in the longer term was the lesser of the evils. He said also that to put some form of plastic film to act as a reflecting screen on the bedroom windows would have been unacceptable: it was a very attractive house, and for aesthetic reasons he did not want to put a plastic film on lead panelled windows.
22. I should say at once that I reject the suggestion that Mr and Mrs Morgan were the authors of any lack of privacy that they suffered as a result of the removal of the hedgerow and the planting of the beech hedge in its place. The problem was not of Mr and Mrs Morgan's own making, but they had to deal with it. Mr Morgan said that as soon as he heard about the proposal to construct the new drive he tried to persuade Mr and Mrs Moore to sell him some of the field that bordered the house, with a view to preventing the construction of the new drive or, at least I suppose, getting it moved further away. After it became clear that Mr and Mrs Moore would not agree to this (and went on to build the new drive), he decided to remove the lower section of hedgerow and replace it with a beech hedge. He said that the first opportunity to do this after the construction of the new drive was in the spring of 2009.
23. I accept this evidence, and I consider that the steps taken by Mr and Mrs Morgan were reasonable in the circumstances, given the predicament in which they found themselves. For the reasons given later in this judgment, I find that if they had left the old hedgerow in position, they would not have had any effective protection from being overlooked by passing vehicles. In order to achieve an appropriate level of protection the alternatives were either to erect a solid fence or to plant a suitable hedge, or both. Whilst others might reasonably have erected a fence to provide temporary cover until a new hedge was established, I am not prepared to find that Mr and Mrs Morgan's unwillingness to do this was unreasonable.
24. Mr Morgan said that when he and his wife received a copy of the completed SPIF from their solicitors they read it and were happy with its contents. He said that they relied on it "in agreeing to purchase [the property] for the price we paid". He said in evidence that the information in the form gave them total comfort. Mrs Morgan gave evidence to similar effect. I find that in their own minds they relied on the information contained in the form and, in particular, on the answer to question 3.1. Whether or not this reliance is relevant as a matter of law is a separate question that I will answer later in this judgment.
25. Mr Morgan confirmed that between October 2007, when they moved into the property, and the spring of 2010 they had spent about £435,000 on various improvements and modifications to the property. These included a hot tub beside the swimming pool, new pool equipment and a circular cast-iron staircase to provide a link between the swimming pool and the terrace immediately below it (to the north). He said very candidly that they made full use of the swimming pool in spite of their concerns at being overlooked by the new drive. There was no question of him and his wife having decided to make less frequent use of the pool because of the reduction in their privacy and seclusion.

Mr Pooley

26. I did not find Mr Pooley to be an entirely satisfactory witness. In his witness statement he described the ownership of the two neighbouring properties, The Briars and Rock Robin Farm, and the field. Although this statement contained the usual qualification that the matters stated in it were within his own knowledge save where otherwise stated, it emerged in evidence that at the time of the relevant events he had had no idea who owned the field or Rock Robin Farm, or even that the latter had changed hands in 2004 (the documents show that this was supported by the information that he gave to his solicitors in 2007). He said that he had had no contact with Mr and Mrs Moore, or with the Morton brothers who used to own the field. He said that he had found out all this information after he received the letter of claim from S J Berwin in May 2008. He said that he had met Mr Rodgers twice, but he said in his witness statement that Mr and Mrs Rodgers had bought The Briars in February 2002, when in fact they had been there since 1996. He was unable to explain this error.
27. Whilst Mr Pooley struck me as a methodical man, there were times in his evidence when he appeared very reluctant to depart from anything that he had said previously. A good example of this was provided by the question of the address by which Three Oaks House was usually known. Although, as explained later in this judgment, he was confronted with examples of three letters (in window envelopes), each addressed to "Three Oaks" - one from Airmiles, another from John Lewis and the third from Tesco - that were delivered to Three Oaks House after Mr and Mrs Morgan moved in, he insisted that each company would have been given the address "Three Oaks House" even though he must have realised that it was inherently unlikely that each company would have made exactly the same mistake.
28. Although, as I have said, I have some reservations about the reliability of Mr Pooley's evidence, I did not get the impression that he was being deliberately untruthful. It is clear from the evidence as a whole that Mr and Mrs Pooley made little effort to integrate themselves into the local community, and I can well believe that they may have remained in ignorance of matters of local interest that were common knowledge to the rest of the community. I will deal with his and his wife's evidence about the hedgerow in a separate part of this judgment.

Mrs Pooley

29. Her witness statement did little more than confirm the contents of the statement made by her husband, but she was cross-examined at some length. Her recollection about seeing notices in 2005 and 2006 was fairly vague, but she said that she remembered seeing one notice that are related to the application in respect of the Granny Annex which she thought was fixed to a gate. She thought that there had been another notice which had been fixed to a telegraph pole. She said that when she first saw the notice fixed to the gate no building work had started. She was not able to remember when the building works actually began, except that it was at some time whilst they were there during the summer of 2006.
30. She said that she never saw any letter about the planning application for the drive, and said that it was simply not possible that they would have ignored it if they had seen it. As she put it, her husband would have been round at the planning office the next day.
31. She said that she read the SPIF, although she couldn't say whether or not this was before her husband completed the boxes. She said that they had not overlooked the 2006 planning application in respect of the drive (because they did not know about it). As far as she was concerned, their answer to question 3.1 of the form was neither misleading nor inaccurate.

The notices in relation to the application for the new drive

32. The evidence showed that there were at least two such notices - one posted at each of the two entrances to Rock Robin Farm from Three Oaks Lane: the entrance that was currently used, which was about 10-15 m to the west of the entrance to Three Oaks House, and the entrance that gave on to the disused track which was to the east of Three Oaks House. In the case of the existing entrance, the notice was tied to the ornamental metal gates. The council's records suggested that the notices were put up on around 21 July 2006.
33. Mr and Mrs Pooley said emphatically that they did not see either of these notices about the new drive. By contrast, their former neighbour, Mr Rodgers, said that he saw both notices in relation to the application for the new drive. In relation to the notice that was fixed to the gate of the current entrance to Rock Robin Farm he said that if the gate was shut "you would struggle to miss it". In his witness statement, Mr Rodgers said that he remembered seeing the notices when walking the dog down Three Oaks Lane with his wife. However, in evidence he said that he saw them when driving home. Whilst I accept that Mr Rodgers may also have seen the notices from his car, I prefer the account given in his witness statement to the effect that he first saw the notices whilst walking in the lane as he said.
34. In his evidence in chief, Mr Rodgers was asked about a passage in Mr Pooley's witness statement where he referred to the fact that large builders rubble sacks were left alongside the existing entrance to Rock Robin Farm whilst work was being carried out. He said that they never had any issues with rubbish sacks and that the Moores were always very respectful (which implied that they were there, but were not a source of any nuisance to him). As far as he recalled, their gates were usually closed. He suggested in cross examination that this might have been because the Moores kept horses in a field to the west of the old drive, but I have to say that this seems rather implausible: one would expect that horses on the property would be prevented from escaping by being kept in a field that was suitably fenced, rather than relying on the main gate being kept closed.
35. Mr Lawrence Fennimore said that he remembered seeing a yellow planning application notice in the vicinity of Three Oaks House in 2006 although he could not remember exactly where it was. He used to come and go by car and said that he saw the notice when driving to or from the house, but he did not bother to go and read it.
36. On the basis of this evidence, which was not really disputed, I find that planning application notices were posted, probably for some three weeks (on the basis of the council's records), at the entrance to the existing drive and the proposed new entrance to Rock Robin Farm. In relation to the notice at the existing drive, I find that it would have been clearly visible when the gates were shut. It would also have been noticeable, but less clearly visible (depending on one's direction of travel along Three Oaks Lane) when the relevant gate to which it was attached was open. I should explain that the gates to Rock Robin Farm opened outwards (ie. towards Three Oaks Lane).

The previous planning applications by Mr and Mrs Moore

37. Documents obtained from the local authority show that in July 2005 Mr and Mrs Moore applied for permission to carry out a partial conversion of a garage to a "Granny Annex". The consultation expiry date was stated to be 1 September 2005 and the application was refused on 19 September 2005.
38. The following year Mr and Mrs Moore submitted a further application on 22 May 2006 for the refurbishment and extension of a chalet/bungalow. The consultation expiry date was stated to be 21 June 2006 and the application was approved on 7 July 2006.
39. These last dates are of some importance because, since the consultation period expired on 21 June 2006, it is likely that the required notice or notices in respect of the chalet/bungalow application would have been displayed during the first three weeks of June 2006. If the Moores obtained planning permission on 7 July 2006, they would have been able to start work soon afterwards. It was accepted by Mr Pooley that the reference in his witness statement to builder's rubble sacks being left at the entrance to Rock Robin Farm was to a period in July/August 2006. It seems likely, therefore, that the Moores did indeed start work on the chalet/bungalow fairly soon after obtaining the planning permission.
40. Mr Pooley said in evidence that he was aware of the first two applications by Mr and Mrs Moore because he saw the notices relating to them. He said that the notices were either on a telegraph pole or on the gate to Rock Robin Farm. He remembered seeing one notice about the Granny Annex and one about the conversion of the chalet/bungalow. He said, both in his witness statement and in evidence, that he remembered seeing a builder's notice board and rubbish sacks at the entrance to the drive. In evidence he said that he assumed that the planning application had been successful. He thought it was the application relating to the Granny Annex, but he accepted that it must have been the application in relation to the chalet/bungalow. He agreed that the notices for the first two applications were reasonably clearly visible and, when pressed, he was prepared to agree with Mr Rodger's view that, when the gates were closed, "you would struggle to miss them". However, Mr Pooley said that when he and his wife went out they invariably went in the direction of Tunbridge Wells (and so not past the gate giving access to the track).
41. Mrs Pooley said in evidence that she saw a notice that was fixed to the gate and that the gates were closed when she saw it. She said that the gates were not often shut during the week, they were usually shut only at week ends. She said that she couldn't remember whether she saw the notice in 2005 or 2006 but, as I have mentioned, she said that the notice that she saw was the one about the Granny Annex. She said that she vaguely remembered there being another notice at a different time fixed to a telegraph pole. She said that when she saw the notice on the gate no building work had started. But she remembered that in the summer of 2006 refuse sacks were placed at the end of the drive in such a way that they were in front of the opened gates (the gates opened outwards).
42. In relation to the notices about the application in respect of the proposed drive, Mr Rodgers said this:

"The Council also placed notices of the planning application on Three Oaks Lane: one on the gate of the old driveway next to our house; and one on the gate of the field where the proposed new driveway would be. I remember seeing them when walking the dog down Three Oaks Lane with my wife. We read the notices and talked about the work that would be carried out. The notices contained the same sort of information as the letter we had received.

I am surprised that the Pooleys say they did not see the notices put up by the Council. When you live in the countryside, in an area of Outstanding Natural Beauty, and you see a notice close to your property, you go and see what it is about."

The letter to which Mr Rodgers was referring was the formal notification from the Council about the application by the Moores in relation to the proposed driveway.

43. I readily accept the evidence of Mr Rodgers about the tendency of country people to be inquisitive about notices. However, what I find curious is that Mr Rodgers makes no mention of having seen any notice in relation to the chalet/bungalow in the summer of 2006, since Mr Pooley said that there was a notice about it displayed either on a telegraph pole opposite the existing entrance to Rock Robin Farm or on the gate. This is what one would expect because there was no evidence of any other means of access to Rock Robin Farm (and the plan did not show one), so the existing entrance to Rock Robin Farm would be an obvious place to put a notice about a planning application relating to that property.
44. Whilst I would not necessarily have expected Mr Rodgers to mention previous planning applications in relation to Rock Robin Farm in his witness statement, the fact that Mr and Mrs Moore made two applications in quick succession during the summer of 2006 was, I would have thought, something out of the ordinary and therefore worthy of note.
45. A point that occurred to me, and which I raised during the course of the hearing (but not until after Mr and Mrs Pooley had given evidence), is the possibility that Mr and Mrs Pooley may have seen the notices in respect of both applications made by the Moores in the summer of 2006 but had not appreciated that the second one was in fact a different notice. Whilst in theory there would have been a gap of about three weeks between the first notice being taken down and the second one being put up, that assumes that the council was as diligent about taking notices down as it was about putting them up. In any event, even with an interval of some three weeks, it seems to me possible that a passer by might not have noticed, at least not consciously, that one notice had in fact been taken down and a similar looking notice put up in its place 2-3 weeks later.
46. Unless Mr and Mrs Pooley are not telling the truth about the notice (or notices) in relation to the application for the drive, an issue that I will have to decide, it seems to me that the only other explanation for their failure to see the second notice that was posted on the gate to Rock Robin Farm in June/July 2006 is that they never appreciated that they were in fact two different notices. It may be, that having seen and read the notice about the chalet/bungalow, they did not pay any particular attention to any other notice that may have been fixed on the gate. However, this is speculation.
47. Mr Morgan said that he and his wife first met Mr and Mrs Pooley on their second visit to the property. He said that he remembered vividly a conversation that he and his wife had with Mr and Mrs Pooley in the kitchen at Three Oaks House. He said that as they entered the property they noticed a contractor's billboard advertising their services at the existing entrance to Rock Robin Farm. Mr Morgan said that he asked Mr and Mrs Pooley exactly what building works were being carried out at the farm. He said that Mr Pooley replied with words to the effect that they were having a Granny Annex built. Nothing was said about a proposal to construct a new drive alongside Three Oaks House. It was after that conversation that Mr and Mrs Morgan made their offer.
48. Mr Pooley did not contradict Mr Morgan's evidence about being told that the neighbouring works involved the building of a Granny Annex and he said that he didn't mention the extension of the chalet/bungalow because he didn't think of it. He then said that he assumed that the work was in relation to the Granny Annex because that was the first planning application that had been put in for Rock Robin Farm. I have to say that I find this explanation a little implausible, but perhaps the more important point is that Mr Pooley did not dispute Mr Morgan's account of the conversation.

The dispute about the receipt of the letter

49. Mr and Mrs Pooley said emphatically that they never received a letter giving notice of the application. There was some dispute in the course of the evidence about the correct name of the property. Mr Pooley was adamant that he always gave the address as: Three Oaks House, Three Oaks Lane, Wadhurst, East Sussex TN5 6PX. However, the documents included many examples of the property being referred to simply as "Three Oaks", rather than "Three Oaks House". Such documents included letters that arrived at Three Oaks House after Mr and Mrs Morgan moved in. Since I have reached a very clear conclusion about this, it is probably helpful if I express my views now.
50. It is clear from documents, such as the conveyance dated 10 February 1981, that the property used to be known as "Three Oaks". This was the name generally used by the council. However, Mr and Mrs Pooley preferred to call it "Three Oaks House" and I find that this is what they did at some stage after they moved in. In addition, Mr Pooley said that the property was described in the Electoral Register as "Three Oaks Farmhouse" but that they had decided to drop the "Farm". The sale particulars prepared by Hamptons on the instructions of Mr and Mrs Pooley in about January 2005 described the property as "Three Oaks House". I am sure that the reason why certain documents, such as the statements from Airmiles, John Lewis and Tesco, showed the address as "Three Oaks" is that Mr or Mrs Pooley had held those accounts for a long time and that the companies had been given a change of address when Mr and Mrs Pooley moved into the property. That address would probably have been the address shown on the existing documents of title.
51. There was a faint suggestion, if only by implication, in Mr Pooley's witness statement that the council's use of "Three Oaks", instead of "Three Oaks House", might have been the reason why he and his wife did not receive the letter about the planning application by the Moores in relation to the drive. However, there was absolutely no evidence that any mail went astray as a result of the use of the address of "Three Oaks", rather than "Three Oaks House". I am quite satisfied that any letter from the council addressed to "The Occupier, Three Oaks" would not have failed to arrive simply as a result of the use of that address.
52. The evidence from Mr and Mrs Pooley was that the mail was picked up in the morning by Mrs Pooley, who took off the elastic band which was usually around it and then removed any letters that were addressed to her personally. She then left the rest of the mail for her husband to see. Mr Pooley said that he opened every letter that they received, irrespective of whether or not it appeared to be junk mail. He said that they had a junk mail filter but it was not always 100% effective. It was also their practice to shred any document that had their name and address on it. They would put the relevant pieces of paper into a bag to be shredded which they would do every so often.
53. Mr Pooley said in cross examination that any proposal for a new drive alongside their property would have affected them and so he would have looked into it. Mrs Pooley said that if her husband had received the letter which was supposedly sent by the council on 18 July 2006, he would have been round at the planning office the next day. I thought that this answer had a ring of truth about it.
54. It was suggested, both in the evidence and by way of submission, that Mr and Mrs Pooley would have had every reason to keep quiet about any proposed planning application that might adversely affect Three Oaks House so that there would be no paper trail to show that they had received any such application. In this way it would be difficult for any purchaser to prove that Mr and Mrs Pooley had ever had notice of the planning application in relation to the drive.
55. This suggestion needs to be examined against the situation regarding the progress of the sale of the property at the time. As I have already said, whilst the property was on the market in 2005 and 2006 Mr and Mrs Pooley received numerous offers in the region of £1,500,000 which they refused. Mr Pooley said that, since they were in no hurry to sell it, they wanted to hold out for the asking price if they could get it. Even when the asking price was reduced, in May 2006, the property was unsuccessfully marketed at this price during that summer until October, when Mr and Mrs Pooley instructed Hamptons to suspend marketing whilst they were away for the winter. The property was then put back on the market in the spring of 2007.
56. There is no evidence that during the summer of 2006 there was any serious prospective purchaser who was prepared to make an offer that was close to the asking price. If Mr and Mrs Pooley had heard about the planning application for the proposed drive, they would have had to decide whether to oppose it or just do nothing. It is probably true that if Mr and Mrs Pooley wished to create a situation of future "deniability", the best course would have been to do nothing. But set against that was the prospect of the grant of an application for planning permission that would have an adverse effect on the price at which they could sell the property. It seems to me that, as a matter of probability, Mr and Mrs Pooley would have decided to explore the possibility of actively opposing the application, rather than doing nothing. Had they done so, they would probably have discovered that the application was being strongly opposed by Wadhurst Parish Council (as is shown by the documents obtained from Wealden District Council), in which case they might well have decided to do the same themselves.
57. I can well understand that if Mr and Mrs Pooley had received notification of the same planning application one year later, on 19 July 2007, they could have been very tempted to say nothing since they were then on the point of exchanging contracts: disclosure to Mr and Mrs Morgan of any such planning application would almost certainly derail the sale, at least at the agreed price. But, as I have already indicated, no such situation prevailed in July 2006.
58. In the course of their evidence both Mr and Mrs Pooley stressed that they read every letter that came to the house, even if it was only addressed to "The Occupier". If they had come to court having invented a story about not having received any letter about the planning application in relation to the drive, they might have been expected to say that they often discarded such letters unread in order to account for the possibility that a court might conclude that a letter addressed to "The Occupier, Three Oaks" giving notice of the planning application had been received at Three Oaks House and to provide an explanation as to why they did not see it. Mr Fred Hobson, who appeared for Mr and Mrs Morgan, suggested that they would have been unlikely to do this because it would afford no defence to a claim for misrepresentation since Mr and Mrs Pooley would not be able to establish that they had any reasonable ground for their belief that they had not received the letter. Whilst in theory, this is possible, Mr and Mrs Pooley are not lawyers and I would have thought it most unlikely that they would have foreseen this pitfall (if, indeed, it exists).

The dispute about the nature of the hedgerow

59. As I have already said, this concerns a stretch of about 25 m or so to the east of a point almost due south of the swimming pool. I was told, by Mr Fennimore and others, that this stretch contained a lot of brambles, some dog roses and hawthorn. I find that to have been the case. Mr Fennimore and Mr and Mrs Morgan all thought that it was rather unsightly and did not provide very much cover. They said that along this stretch it was about 3 to 4 feet high as well as being rather sparse in winter. This was the stretch that was replaced with the new beech saplings. Unfortunately, no one thought to take any photographs of the existing hedgerow before Mr and Mrs Morgan had it grubbed out.
60. Mr and Mrs Morgan's description of the state and height of the hedgerow was strongly disputed by Mr and Mrs Pooley, who said that in mid 2007 the hedgerow provided good cover right the way along its length where it bordered the track (subsequently the new drive), although Mr Pooley said that there was at least one point where there was a gap of about 2 metres where deer had once forced their way through into the garden. Mr Pooley said that even at this point the hedgerow was 6 to 8 feet high. Mr David Parry, who appeared for Mr and Mrs Pooley, relied strongly on a Google Earth aerial photograph, probably taken in about 2005, which showed a distinct shadow cast by the hedgerow when the sun was fairly high, even at its eastern end. This suggested, he submitted, that the hedgerow must have been more substantial and rather higher than Mr and Mrs Morgan and Mr Fennimore were suggesting.
61. Very few photographs of the property taken before mid 2007 were in evidence and they provide little or no assistance as to the nature and height of the hedgerow along the 25 m stretch. Mr and Mrs Pooley relied on two photographs which showed each of them standing on the lower lawn (to the East of the house), probably taken 5-10 years ago, which were said to demonstrate the height and thickness of the removed section of hedgerow. I derived no assistance from these two photographs and I find that they provide no support for Mr and Mrs Pooley's evidence about the state of the hedgerow. Essentially, the photographs showed different foliage that was on a bank immediately above the lower lawn. However, a series of photographs was taken in March 2009 by Mr Highwood, the expert valuer instructed on behalf of Mr and Mrs Morgan, which showed the line of the old hedgerow shortly after it had been removed but before the beech saplings have been planted. From these one could see, as stated by Mr Fennimore, that some of the old dog roses had been left in situ. Although it is difficult to be certain from the photographs, by reference to the nearby fence posts the main stems of the dog roses appear to be about 5 to 6 feet high. There are smaller shoots growing above the main stems which have been turned back down, presumably to form the basis of the future hedge. The dog roses are at the eastern end of the 25 m stretch of removed hedgerow. The height of the dog roses (as indicated by the photographs) suggests to me that the section of the hedgerow that had been removed was probably about 5 to 6 feet high with suckers and young branches growing above that height. Accordingly, I find that the old hedgerow was rather higher than Mr and Mrs Morgan suggested but not as high as claimed by Mr and Mrs Pooley. I suspect that it was an adequate if not very dense screen which for most of its length provided substantial protection from view for the swimming pool. However, I consider that a person of reasonable height standing on the old track at one or two points towards the eastern end of the section from which the hedgerow was subsequently removed would probably have been able to look over the hedge and see the swimming pool and, if he was actually standing in the gap described by Mr Pooley, he would certainly have been able to do so. But from Mr and Mrs Morgan's point of view none of this was of any great significance since there would seldom have been anyone in the field.

The expert evidence

62. Mr Andrew Highwood, a Director of Savills, gave evidence on the valuation issues on behalf of Mr and Mrs Morgan. He joined the profession in 1977 and spent 10 years with Cluttons. He then joined Hobbs Parker in 1986 as a partner. Since 2002 he has been a Director of Savills. He has extensive experience in property disputes and valuation issues and compulsory purchase and compensation. He acts as an expert witness. He was obviously very well qualified to give evidence on the valuation issues in this case, and I thought that his evidence was consistent and candid.
63. Mr Nicholas Watson, and Associate Partner in Strutt & Parker, gave evidence on behalf of Mr and Mrs Pooley. Mr Watson joined Strutt and Parker in 1991, was appointed and Associate Partner in 1998 and Head of Land Management in 2007. He has particular experience in rural property management, residential and agricultural valuations and compulsory purchase and compensation. He has experience of acting as an expert witness. He too was clearly well qualified to give evidence in relation to valuation in this case, and I thought that he gave his evidence authoritatively.

Mr Highwood's evidence

64. Mr Highwood visited the property in March 2009 and produced his report in June 2009. During his visit to the property he took a number of helpful photographs, many of which were explored in some detail during the evidence. He considered that the price of £1,660,000 paid by Mr and Mrs Morgan for the property represented its open market value in July 2007. This was subsequently agreed by Mr Watson. Mr Highwood's view was that the existence of planning permission to construct the drive along the route of the existing track diminished the market value of the property by £200,000.
65. Mr Highwood summarised in his report on the work of improvements and modification that had been carried out by Mr and Mrs Morgan during the 21 months since they bought the property. These included the installation of a hot tub on the swimming pool terrace at a cost of £10,000, new pool equipment at a cost of £5,000 and a spiral staircase to the pool costing £3,500. In all, Mr and Mrs Morgan had spent a little under £450,000 on improving and modifying the property. It was Mr Highwood's view that all of this work would have added about £350,000 to the value of the property.
66. Mr Highwood arrived at his figure for the diminution in value in two ways, which he described under the following headings. The first heading was "Loss of privacy leads to loss of swimming pool". The second heading was "loss of privacy impacts on market value as that July 2007". Mr Highwood's first approach involved the assumption that the loss of privacy resulting from the creation of the new drive would discourage the owners from making frequent use of the pool, with the result that the amount of use would not justify the cost of maintaining the pool and so it would simply be taken out of use. This, he said, diminished the value of the property by £200,000.
67. For his second approach Mr Highwood said that the loss of privacy not only impacted on the pool but meant that the master bedroom, its en-suite bathroom and dressing room were in direct view of those using the new drive, particularly at either end of the day when lights inside the house would give anyone outside a clear view into those rooms. He noted that in July 2007 the demand for properties like Three Oaks House in the area greatly exceeded the supply: in short, for properties of this type it was a seller's market. Mr Watson expressed a similar view so this was not in dispute. Mr Highwood then said this:

"The loss of privacy when considered in the competitive market that existed in July 2007 would be enough for many to reconsider whether to proceed but with little alternatives available the Property would still sell but at a discount of say 10% or £200,000 in this case (see paragraph 16.6 above). This equates to a discount of 12% on the sale price of £1,660,000.

The effect on value today is quite different and this property would find the competition of other available properties difficult and so a larger percentage discount would result at starting from a lower market value."

68. Mr Highwood's reference to £200,000 as the diminution in value was based on a notional value of £2 million, which represented the market price in July 2007 plus the added value of the works of improvement subsequently carried out by Mr and Mrs Morgan but on the assumption that they had been done by July 2007. This approach was strongly criticised by Mr Parry, for Mr and Mrs Morgan, but at the end of the day I do not consider that anything turns on it. Mr Highwood explained that his justification for doing this exercise was that with a property of this type any prospective purchaser would have in mind the potential for improving it, being as he put it in evidence, improvements that would "unlock" the property. He regarded the improvements carried out by Mr and Mrs Morgan as a good example of this. A purchaser would therefore look at this property as an investment that was potentially worth, say, £2 million rather than the £1.66 million that he was proposing to pay. It was to that notional value, therefore, to which he applied his 10% discount. However, as he explained in evidence, he considered that the appropriate discount was in the range of 10-15% and he regarded 12% as the appropriate discount on the actual purchase price.

Mr Watson's evidence

69. Mr Watson adopted a different approach. He took an altogether more robust view about the effect of the new drive in terms of loss of privacy. As he put it:

"It is my view that unless the track was used by a particularly high tractor or lorry, careful replanting of shrubs and bushes of a height of six to eight feet would prevent users of the track from looking into the garden or first floor windows of Three Oaks House."

70. Like Mr Highwood, Mr Watson did not know of any comparable property where a similar valuation problem had arisen. However, he considered that some assistance could be gained from assessments of compensation in Land Compensation claims. He accepted that when assessing compensation under the Land Compensation Act 1973 only physical factors caused by public works were taken into account. These are matters such as noise, light, dust, smell, etc. Loss of amenity, such as the loss of a view or the erection of an eyesore, or the loss of seclusion or privacy are not matters that are taken into account.
71. Mr Watson therefore readily accepted that the amount of compensation that would be awarded in a comparable Land Compensation case would only be a floor, and not a ceiling, as against the amount of diminution in value that would be assessed in a claim for damages at common law or for breach of contract.
72. Mr Watson had considered a few Land Compensation claims that he thought were relevant because they involved reduction in value to properties caused by the construction of new and improved roads on adjacent property. The range of the assessed reduction in value of these properties was from nil to 6.9%. A further factor which Mr Watson had in mind was that Three Oaks House already suffered from a level of disturbance from traffic passing up and down Three Oaks Lane. In this context, he noted also that some of the traffic that would pass along the new drive would in any event have passed down Three Oaks Lane to the old drive if going to or coming from the east.
73. Three Oaks House lies roughly midway between Three Oaks Lane and the new drive, possibly a little closer to the drive. However, Mr Watson did not take into account specifically the fact that the master bedroom in Three Oaks House overlooks the new drive and not Three Oaks Lane. It seems to me that this is an important factor, because as Mr Watson accepted, it has to be coupled with the fact that there is a substantial barrier between Three Oaks House and the Lane in the form of mature trees and thick undergrowth.
74. Mr Watson also emphasised that, in the nature of things, the owners of Three Oaks House could not exercise any control over the use of the adjoining land, although he accepted that extreme forms of agriculture, such as intensive pig farming, were not likely to happen in this part of England. However, he did give the example of the possibility that calves being weaned could be put in the field, and that would be a source of significant disturbance. He said that this was a risk that any potential purchaser had to take.
75. Basing himself in part on the assessments in the Land Compensation claims that he considered Mr Watson concluded that the diminution in value attributable to the grant of planning permission for the new drive was no more than 1%, or £16,600.

My conclusions in relation to the expert evidence

76. In my view, the difficulty with Mr Highwood's first approach lies in the assumption that he made about the likely loss of use of the pool as a result of the loss of privacy. The evidence given by Mr Morgan, very candidly, was that the construction of the drive had not prevented him and his family from making full use of the pool. Mr Highwood said that when he wrote his report he had not been aware of this fact. However, he said it did not really affect his view because he was considering the position from the point of view of the hypothetical potential purchaser. Such a purchaser, thought Mr Highwood, would be likely to consider that the existence of a drive alongside the southern boundary of the property would mean that he would not be willing or able to make more than limited use of the pool because it would be overlooked by people using the drive.
77. In my judgment, this is not a tenable view. If, when he looked at the property, a potential purchaser thought that the existing hedgerow, or at least part of it, might not provide a sufficient barrier to prevent the pool being overlooked by people using the future drive, his likely reaction - assuming that he still wanted to buy the property - would be to resolve to do something to improve the barrier rather than simply accepting the prospect of not being able to make normal use of the swimming pool. Mr Highwood said, and I accept, that a swimming pool enhances the value of a property such as this one. Accordingly, I find it very difficult to accept that someone contemplating the purchase of a property of this type would consider buying it whilst accepting that he would be able to have little or no use of the pool: it just seems to me to be inherently unlikely. If a purchaser is content not to have the use of a pool, I would have thought that he would look for a property that did not have one, rather than buy a property with a facility that he foresees that he will not really be able to use.
78. Mr Highwood's second approach referred to the loss of privacy impacting on the pool as being one of the two aspects of loss of privacy resulting from the construction of the drive. The other aspect was the ability of users of the new drive to be able to see into the upper floors of the house. But, whilst this approach was not (either expressly or by inference) based on his conclusions in relation to the swimming pool adopted in the first approach, he did not say what assumption he was making in respect of the impact on the use of the swimming pool. In the absence of any explanation of the extent of the impact on the swimming pool that was being adopted for the second approach, it is difficult to understand the basis on which Mr Highwood reached his conclusion about the diminution in value. In these circumstances, I do not consider that Mr Highwood's second approach constitutes a viable alternative to his first approach.
79. Since I reject the basis underlying Mr Highwood's first approach, I cannot accept his figure for diminution in value of £200,000. In my view, it is clearly too high.
80. In the light of the evidence as a whole, I consider that Mr Watson's view that the loss of privacy that was likely to result from the construction of the new drive could be substantially diminished by suitable replanting along the boundary so as to produce a hedge of some 6 feet or so in height is a reasonable and sound conclusion. It must be remembered that the drive is not, and was never likely to be, used by pedestrian traffic. There is no likelihood of Mr and Mrs Morgan and their family or guests being stared at by curious passers by. Apart from the occasional person on horseback, the traffic along the drive would be expected to consist of cars and the occasional tractor or horsebox. Whilst the possibility of the driver of a passing tractor or horsebox being able to get a brief view of the pool as he passed along the drive might deter this owners of the property from swimming or sunbathing without any clothes on (or at least from doing so without taking suitable precautions against being seen), I cannot see that it would discourage them from making any other use of the pool. Mr and Mrs Morgan, perhaps understandably, did not raise this aspect, but nevertheless it seems unrealistic not to take it into account when considering the question of privacy in the mind of a potential hypothetical purchaser. This was a property that would appeal particularly to those seeking a high degree of privacy and seclusion, and any diminution in of that privacy is bound to have some adverse effect on the price.
81. For these reasons, as a matter of principle, I accept Mr Watson's approach in preference to the approach of Mr Highwood. However, I do not accept Mr Watson's conclusions in relation to the amount of the diminution in value.
82. In arriving at his figure for the diminution in value resulting from the grant of planning permission for the drive I consider that Mr Watson was too heavily influenced by the assessments of compensation in the Land Compensation claims. He was rather dismissive of suggestions that a substantial hedge would destroy or impair the view, because he did not think much of the view in any event. Somewhat revealingly, he said that he lived in a house that had beautiful views and that he was not very impressed by the claims that Three Oaks House enjoyed any special views. To a large extent he was correct, because on three sides the property is enclosed by substantial trees that restrict any long views over surrounding countryside although of course the gardens themselves are very attractive. It is only the south aspect that has any longer view, and that is of a field rising to a crest. It is not, for example, a long view over a beautiful valley. To this extent, I accept in part Mr Watson's scepticism about the quality of the view from the rooms on the south side of the house, but I do not think that it can be dismissed quite so readily as Mr Watson is prepared to do.
83. In addition, I consider that Mr Watson understated the impact of the new drive on those occupying the master bedroom suite in Three Oaks House. One cannot alter the internal layout of a house such as this and simply expect the occupiers to use another bedroom. I was not given any estimate of the number of vehicle movements up and down the new drive, but given that it serves a farm and one other house, a prospective purchaser would probably anticipate 1-2 vehicle movements per hour during normal working hours. I consider that a prospective purchaser would regard that as disagreeable, but not intolerable. If a hedge was planted so that the drivers of cars could not see into the first floor windows, a potential purchaser would probably consider that as an acceptable solution to the problem (whilst, of course, wishing that the problem did not exist in the first place).
84. Taking all these factors into account, I consider that the diminution in value consequent upon the grant of planning permission for the new drive is closer to Mr Watson's figure than Mr Highwood's figure. I regard 1% as too low and 12% as much too high. Doing the best I can, I consider that the likely diminution in value in July 2007 was of the order of 3%, which in the case of this property is about £50,000.
85. Further, I consider that a willing seller in the position of Mr and Mrs Pooley would have been prepared to accept a reduction of £50,000 in the asking price of £1,680,000 if both they and a potential purchaser became aware of the grant of planning permission for the drive. Having said this, Three Oaks House remains an exceptionally nice property and, when the beech hedge has thickened out, it will still enjoy much of its former seclusion.

My conclusions on the misrepresentation issue

86. If the documents obtained from the council in relation to the sending or publication of letters and notices about the Moores' planning application for the drive stood alone, I would have been prepared to hold on the balance of probability that Mr and Mrs Pooley received the letter from the council notifying them of the application.
87. However, those documents do not stand alone. Against them must be set the firm denial by Mr and Mrs Pooley that they never received the relevant letter. No one has been called on behalf of the council to speak to their procedures and who could be asked in cross-examination as to how often complaints were received about non-delivery of letters such as the one that was said to have been sent to Mr and Mrs Pooley.
88. Whilst I was reminded, correctly, by Mr Hobson that Mr and Mrs Morgan only need to prove their case on the balance of probability, it is an unavoidable conclusion in my view that there is not much room in this case for honest mistake. I consider that it is highly improbable that Mr and Mrs Pooley knew in July 2006 about the planning application by Mr and Mrs Moore for the new drive but had forgotten about it when they came to complete the SPIF less than 12 months later. It was something that would have had an undoubted impact on the sale of Three Oaks House and it is simply inconceivable in my view that Mr and Mrs Pooley could have overlooked it. It is true that it is not necessary for Mr and Mrs Morgan to make allegations of dishonesty, and they do not do so, although Mr Hobson realistically accepted that on the basis of the evidence as it stands that is likely to be the real issue. So it seems to me I must decide whether Mr and Mrs Pooley are telling the truth, or whether they are not. It is well settled that where the court is faced with making a finding as to whether or not someone has been dishonest, that finding must be supported by appropriately cogent evidence even though it is still a finding made on the balance of probabilities: see Phipson on Evidence, 17^th Edn, at paragraph 6-55.
89. In these circumstances, I do not think that it would be right to dismiss the evidence given by Mr and Mrs Pooley simply on the basis of inferences drawn from two or three documents disclosed by the council. Further, I consider that it would not have been in their interests in July 2006 to ignore any notification about a proposed planning application in relation to the new drive. There was no sale in prospect in 2006 and I consider that Mr and Mrs Pooley would have concluded at the time that their best interests would be served by investigating the application and, possibly, actively opposing it. Far from having a motive to do nothing, I consider that they had more to gain by taking an active interest and engaging with the problem. In addition, they could have had no means of knowing when Mr and Mrs Moore might start to build the new drive if they did obtain planning permission: it might even be before the property went back on the market the following year.
90. For these reasons I find that Mr and Mrs Pooley did not receive any letter from the council in July 2006 about the application by Mr and Mrs Moore to construct a new drive to Rock Robin Farm.
91. For much the same reasons I find that Mr and Mrs Pooley were unaware of the notice about the planning application that was fixed to the gate (or gates) to Rock Robin Farm. However, I suspect that they may have seen it. But I find that they did not read it. I make this finding because I am not prepared to disbelieve the evidence given by Mr and Mrs Pooley simply on the basis that the notice was there to be seen. There are other explanations as to why they may not have seen the notice or, if they did see it, why they did not appreciate that the notice was a different notice.
92. First, it was not disputed that Mr and Mrs Moore started work on the bungalow/chalet extension during the summer of 2006, having obtained planning consent on 7 July 2006. It is entirely possible that such work had started before the notice in relation to the application for the new drive was fixed to the gate of Rock Robin Farm, which the council's records indicated was on about 21 July 2006. In these circumstances it is possible, as Mrs Pooley suggested, that the gates were usually open during the relevant period in late July/early August 2006 with rubbish sacks or a refuse bin in front of them, so that any fresh notice would not have been readily visible by someone passing by in a car if the gates were open at the time.
93. Second, it is possible that Mr and Mrs Pooley, who had seen the notice about the application in relation to the chalet/bungalow, which was probably posted during the first three weeks of June 2006, did see the second notice (that probably appeared about three weeks later) but failed to appreciate that it was a different notice. Some weak support for this possibility can be derived from the fact that Mr Rodgers never mentioned that there were two separate notices relating to Rock Robin Farm during June and July 2006.
94. If, as I have found, Mr and Mrs Pooley did not receive the letter or read the notice about the application in relation to the new drive, I consider that it is most unlikely that they would have heard about it on the local grapevine. It is quite clear from the evidence as a whole that Mr and Mrs Pooley had little, if any, contact with their neighbours and it is therefore unlikely that they would have heard about the application in the course of conversation or as a matter of local gossip.
95. For these reasons I find that Mr and Mrs Pooley did not misrepresent the position when they answered question 3.1 of the SPIF as they did. On the same basis, I find that even if there was an implied representation or a term of the contract that they had reasonable grounds for believing that their answer to question 3.1 was correct, there was no misrepresentation or breach of the term. In other words, I decide each of the first three agreed issues against Mr and Mrs Morgan.
96. In the light of these conclusions, this claim must fail. Whilst I have great sympathy for Mr and Mrs Morgan, I find that their allegations against Mr and Mrs Pooley have not been made out.
97. Mr Hobson also made a submission that if Mr and Mrs Pooley had seen the notice this would have amounted to receipt of a notice within the meaning of question 3.1. Since I have found that they did not see it (and there is no suggestion that it was on their property), the point does not arise. But it is a submission that I would have had no hesitation in rejecting. The receipt of information about the contents of a notice is not the same as receiving the notice. If the question was to be directed at the former, it could very easily have asked: "Are you aware of any notice which affects your property?", but it did not do so.
98. This makes it unnecessary to deal with the difficult and interesting points that have been raised and argued in relation to misrepresentation and the terms of the contract and the question of the diminution in value. As to the latter, I have already expressed my view about the likely diminution in value and that is the finding that I would have made if I had had to decide the question of damages.
99. In relation to misrepresentation and the terms of the contract, I will set out my views briefly should this case go further.

The issues of law in relation to misrepresentation

The contract and the history of the negotiations

100. The contract exchanged by the parties on 20 July 2007 consisted of three documents. The first is a summary sheet headed "Contract", which showed the names of the parties, the property, the price (and deposit) and the date for completion. The second is a two-page document headed "Special Conditions" which consists of 11 printed conditions with the names and addresses of the sellers' and buyers' conveyancers at the end. The document has the Law Society's copyright at its foot. The third document was the Standard Conditions of Sale (Fourth Edition). The Standard Conditions were referred to in both the preceding two documents.
101. Reverting to the Special Conditions, it is quite clear that not all the clauses are in standard form because clause 11, which was in fact struck through, referred to certain works that were to be done on the insistence of the local council and which were specific to this transaction (I assume that it was struck through because by the time the document came to be signed, the work had been done). What became clause 11 was in fact drafted by Max Barford & Co and submitted to Warners for their approval in a letter dated 28 June 2007. A further point of note is that, whilst the first five clauses were in normal type, the remaining clauses were in italics - of these, clause 8 was struck through. Neither party adduced any evidence as to how this document was put together or as to the extent that the clauses were in standard form for transactions of this type. The relevant clauses for present purposes are clauses 4 and 6, which are in the following terms:

"4. In the light of the decision in William Sindall plc -v- Cambridge County Council (1994) 3 All ER 932, it is agreed and declared that that the reply to any enquiry or information supplied in any property information form is given to the best knowledge, information and belief of the Seller, and that neither the Seller nor his legal representative has made any further enquiries into such matters (such as, but without limitation - conducting a site inspection or making specific enquiries of statutory authorities or utilities), and the replies are therefore given on that basis.

6. The Buyer acknowledges that this Contract has not been entered into by the Buyer in reliance upon any representations made by or on behalf of the Seller except those made in writing by the Seller's conveyancers prior to the date hereof as being representations upon which reliance is placed and such as were not capable of independent verification by the Buyer."

102. So far as clause 4 is concerned, which I will call the William Sindall clause, it was made clear in the first letter dated 16 May 2007 from Warners, the solicitors who acted for Mr and Mrs Pooley, to Max Barford & Co, who acted for Mr and Mrs Morgan (for the purposes of the sale only, they have not been acting for Mr and Mrs Morgan in this litigation), that the clause was to apply to this contract. It was set out in full in the letter. In their reply, dated 17 May 2007, Max Barford & Co acknowledged the letter from Warners but made no comment about the William Sindall clause. So far as I am aware, the clause was never the subject of any discussion in the correspondence between the parties' solicitors.
103. So far as clause 6 is concerned, I suspect that this was first included in the draft contract that was sent by Warners to Max Barford & Co on 22 May 2007. In any event, it must certainly have been included in the approved contract that was returned to Warners by Max Barford & Co under cover of a letter dated 28 June 2007. In that letter Max Barford & Co raised a variety of points, but none of them concerned the terms of clauses 4 or 6.
104. On the basis of this history, I have no doubt whatever that Mr and Mrs Morgan agreed to enter into the transaction on the basis of the William Sindall clause. It could not have been made clearer by Mr and Mrs Pooley's solicitors that that was to be the basis on which any replies to enquiries were being given. However it was submitted on behalf of Mr and Mrs Morgan that there was an implied representation that Mr and Mrs Pooley held reasonable grounds for believing that they had not received any letter or notice of the type referred to in question 3.1 of the SPIF.
105. Whilst I accept that the implied term for which Mr and Mrs Morgan contended is not in precisely the same terms as the William Sindall clause, it seems to me that to imply such a term would go some way towards undermining that clause and it is well settled that a term will not be implied that is inconsistent with an express term of the contract. In spite of Mr Hobson's able and cogent argument to the contrary, by parity of reasoning I reject the submission that there was an implied representation in the terms contended for.
106. A more difficult question is whether Mr and Mrs Morgan, either themselves or through their solicitors, are to be taken as having acknowledged that they did not enter into the contract in reliance upon any representations made by or on behalf of Mr and Mrs Pooley in accordance with Special Condition 6.
107. Unless there is authority which compels a contrary conclusion, I would hold that Mr and Mrs Morgan are to be taken to have made this acknowledgement. That is not to say, as Mr Hobson submitted, that the whole process of answering enquiries before contract is a useless exercise so far as the purchaser is concerned: the seller will not necessarily know that the purchaser will be prevented from relying on his answers (and will not therefore feel that he is free to give whatever answers he likes) and if an answer is given that reveals something that is not to the purchaser's liking, he can pull out or renegotiate the price.

William Sindall plc v Cambridgeshire CC

108. Mr Hobson relied heavily on this case and, in particular, certain observations by Hoffman LJ (as he then was), and so I will set out the relevant passages in full. The case concerned the purchase of some development land in Cambridge. Special Condition 17(e) provided that the purchaser was deemed to purchase with full notice and subject to "all easements ... rights and privileges (whether of a public or private nature) now affecting the property but without any obligation on the part of the vendor to define the same". The vendor replied to enquiries before contract on a standard form stating that so far as it was aware there were no rights of easement or public rights affecting the property other than those disclosed in the contract. After completion and the obtaining of planning permission to develop the land a private foul sewer built in 1970 was found under the site. The purchaser purported to rescind the contract on the grounds of misrepresentation and common fundamental mistake.
109. This case provides the origin of the William Sindall clause, and the reason for it is to be found in the following passage in the judgment of Hoffman LJ at page 1025:

"It is well established that a statement that a vendor is not aware of a defect in title carries with it an implied representation that he has taken reasonable steps to ascertain whether any exists (compare Brown v. Raphael [1958] Ch. 636). This may require him, in the first instance, to examine his title deeds and other records, inspect the property, and obtain legal advice. If there is anything to put him on inquiry as to the existence of a defect, he may have to pursue the matter further by questioning others, or examining their documents."

The purpose of Special Condition 4 was to displace this implied representation which, for the reasons that I have given, I consider it did.

110. In relation to misrepresentation, Hoffmann LJ said this, at page 1022:

"Undisclosed defects in title such as easements are a common hazard in conveyancing and the transaction traditionally provides in some detail for what is to happen if they appear. In the absence of contrary provision, the obligation of a vendor under a contract for the sale of land is to deduce a good title. Until this has been done, the purchaser cannot be required to take a conveyance and pay the price. It is customary, however, for a vendor, by means of standard and special conditions, to restrict his obligation to having to show only such title as he is confident he will be able to deduce. Such conditions require the purchaser to accept the risk that the title for which he has contracted will turn out to be in some other respect defective. This risk is mitigated by law and custom in various ways. One is that the vendor is under a duty to disclose any defects of title of which he knows or has the means of knowledge. Another is that a purchaser can search in the Land Registry and Register of Local Land Charges for registrable encumbrances and make enquiries of the local authority about others of a public nature. He will commonly also submit Enquires before Contract to the vendor, asking specific questions about possible encumbrances. The vendor's answers will constitute representations on which the purchaser will ordinarily rely when entering into the contract. If they turn out to be wrong he will have the normal remedies for misrepresentation.

At completion the purchaser accepts the title offered by the vendor and the latter's contractual obligations to deduce title are discharged. They are replaced by qualified covenants for title expressed or implied in the conveyance or transfer. Until the Misrepresentation Act 1967 the purchaser's remedy for misrepresentation was (in the absence of fraud) also extinguished by completion, and he was left with no remedy except the covenants for title. But Section 1 of the Act provides that completion shall not be a bar to rescission for innocent misrepresentation."

(My emphasis)

111. I regard this passage as a statement of the general position. I do not consider that Hoffman LJ, in the passage that I have emphasised, was intending to say that a representation that proves to be incorrect would always give rise to a remedy in misrepresentation. That, I think, is made clear by his use of the word "ordinarily".
112. My attention was also drawn to another passage in Hoffman LJ's judgment, although this time it was in relation to the claim based on mistake. Nevertheless I consider that his comments on allocation of risk are relevant to the issues in this case. It is the following passage, which is at page 1035:

"When the learned judge speaks of the contract allocating risk "by express or implied condition precedent or otherwise" I think he includes rules of general law applicable to the contract and which, for example, provide that, in the absence of express warranty the law is caveat emptor. This would, in my view, allocate the risk of an unknown defect in goods to the buyer, even though it is not mentioned in the contract. Similarly, the rule in Hill v. Harris, [1965] 2 QB 601, that a lessor or vendor does not impliedly warrant that the premises are fit for any particular purpose means that the contract allocates the risk of the premises being unfit for such a purpose. I should say that neither in Grist v. Bailey, [1967] Ch. 532, nor in Laurence v. Lexcourt Holdings Ltd. [1978] 1 WLR 1128 did the judges who decided those cases at first instance advert to the question of contractual allocation of risk. I am not sure that the decisions would have been the same if they had.

In this case the contract says in express terms that it is subject to all easements other than those of which the vendor knows or has the means of knowledge. This allocates the risk of such incumbrances to the buyer and leaves no room for rescission on the grounds of mistake."

The authorities on non-reliance clauses

113. There are conflicting authorities on the effect of non-reliance clauses. There are cases, such as Watford Electronics Ltd v Sanderson CFL [2001] BLR 143, E A Grimstead & Son v McGarrigan (CA) (unreported, 27 October 1999, BAILII: [1999] EWCA Civ 3029 ), where the Court has been prepared to give effect to a non-reliance clause in a contract. The alternative approach was discussed by Moore-Bick J in Peekay v Australia and New Zealand Banking Group [2006] 2 Lloyd's Rep 511, at 522, where he said:

"It is common to include in certain kinds of contracts an express acknowledgement by each of the parties that they have not been induced to enter the contract by any representations other than those contained in the contract itself. The effectiveness of a clause of that kind may be challenged on the grounds that the contract as a whole, including the clause in question, can be avoided if in fact one or other party was induced to enter into it by misrepresentation. However, I can see no reason in principle why it should not be possible for parties to reach an agreement to give up any right to assert that they were induced to enter into it by misrepresentation, provided that they make their intentions clear, or why a clause of that kind, if properly drafted, should not give rise to a contractual estoppel of the kind recognised in Colchester Borough Council v Smith. However, that particular question does not arise in this case. A clause of that kind may (depending on its terms) also be capable of giving rise to an estoppel by representation if the necessary elements can be established: see E A Grimstead & Son v McGarrigan (CA) 27 October 1999, unreported."

114. In my view, there is a difference between two types of situation. The first is where the non-reliance clause is one of many clauses in a long contract prepared by lawyers which the parties to it may have had limited opportunity to read in detail beforehand. In that situation it might well be argued successfully that the party relying on the clause should not be allowed to do so because the clause falls with the contract when it is avoided for misrepresentation. The second type of situation is like the one here. As I have already explained, the Special Conditions were known to Mr and Mrs Morgan, or at least to their solicitors, well before they entered into the contract but probably after they had seen the SPIF. It was a short document and the conditions were printed in large type and were easily readable. This, taken together with the early notice that the sellers were entering into the transaction on the basis of the William Sindall clause, leads to the conclusion that in the circumstances of this case the non-reliance clause should be given effect.

Misrepresentation

115. This leads on to the question of whether the clause satisfies the test of reasonableness by virtue of section 3 of the Misrepresentation Act 1967. I would hold that in these circumstances of this case it does so. Mr and Mrs Morgan, or at least their solicitors, knew of the clause and had every opportunity to challenge it if they had thought fit to do so. Had that been done, Mr and Mrs Pooley might well have been advised to stand firm with the result that Mr and Mrs Morgan would not have pressed the point. It is difficult to say. But Mr and Mrs Morgan were obviously very keen on the property and on balance I consider that they would probably have accepted the non-reliance clause if it had been a sticking point. In those circumstances it seems to me that the term is fair. What would not be fair would be to allow a purchaser to keep silent at the stage when he is presented with a draft contract containing the relevant term in a fairly prominent form, with plenty of time in which to consider it, and then to permit him to assert later that he should not be bound by the term.
116. Mr Hobson relied on a decision of Dillon J (as he then was) in Walker v Boyle [1982] 1 All ER 634. This was a case where a property was sold subject to the National Conditions of Sale (19th edition). Condition 17(1) of the conditions provided that "no error, the statement or omission in any preliminary answer concerning the property ... shall annul the sale". There had been a pre-existing boundary dispute with a neighbour which was not disclosed in the course of the preliminary enquiries before contract. Dillon J decided that the vendor was not entitled in equity to rely on this condition, but he also considered the position under section 3 of the Misrepresentation Act 1967. Having set out the relevant statutory provision in relation to the requirement of reasonableness, Dillon J said, at page 644:

"I do not regard condition 17 as satisfying that requirement in the circumstances of this case. Another way of putting it is that Mrs Boyle has not shown that it does satisfy that requirement."

117. It seems to me that the decision in that case turned essentially on its facts. There is, in my view, a significant difference between a term that is very clearly set out in a set of special conditions that are communicated to the purchaser well before the contract is signed, and a provision that is tucked away in one clause in the National Conditions of Sale. Whilst I have considered the decision carefully, it does not alter my preliminary conclusions in relation to Special Condition 6.
118. I must emphasise that I reach these conclusions on the basis of the pleaded case. If fraud had been pleaded and proved, then different considerations would apply. But since Mr and Mrs Morgan have never alleged fraud or dishonesty by Mr and Mrs Pooley, I consider that the non-reliance clause must be considered against that background.

The issues of law in relation to breach of contract

119. Mr and Mrs Morgan have a separate and alternative claim for breach of contract. They rely on clauses 7.1.1 and 7.1.2 of the Standard Conditions of Sale.
120. Clause 7.1 is in the following terms:

"7.1 Errors and omissions

7.1.1 If any plan or statement in the contract, or in the negotiations leading to it, is or was misleading and inaccurate due to an error or omission, the remedies available are as follows.

7.2.2 When there is a material difference between the description or value of the property ... as represented and as it is, the buyer is entitled to damages."

121. It is to be noted that in this clause there is no reference to any reliance by the purchaser. If it is the case that an incorrect statement was made during the negotiations leading to the contract due to an error or omission then, if there is a material difference between the description or the value of the property as represented and as it is, the buyer is entitled to damages.
122. In my view, the fact that this clause can have effect even where the purchaser has not relied on the statement requires the clause to be given a narrow rather than a wide construction. I therefore consider that the statement must amount to some form of description of the property or statement as to its value, because there has to be a material difference between the property as described and the property as it is or, alternatively, a material difference between the value as described and the value as it is. As to description of the property, the statement might have been, for example, that the property has never suffered from dry rot or subsidence. But in my view a statement that the vendor has never received a letter affecting the neighbouring property is not a statement that is a description of the property, any more than a statement that the neighbours never cause any trouble.
123. What is less clear is what amounts to a statement as to value. One example might be a statement that a comparable house was sold recently for £X, implying that the property is also worth £X, when in fact the comparable property was sold for £X-Y. Another might be a statement that a potential purchaser had recently offered £X but the sale fell through because he was unable to sell his own property, when in fact there was no such purchaser. By contrast, I cannot see how a statement that the vendor has never received a letter affecting a neighbouring property is a statement as to the value of the property being sold.

Conclusion

124. For the reasons I have given this claim fails and must be dismissed. I will hear counsel on the question of costs if not agreed.

MY ANSWERS TO THE AGREED ISSUES

Misrepresentation issues

125. Did the First and/or Second Defendants receive a letter or notice relating to Rock Robin Farm's application for planning permission in relation to the driveway by the time that they completed the SPIF on 18 May 2007?

No.

126. Did the Defendants impliedly represent that they held reasonable grounds for their alleged belief and understanding that they had not received any letter or notice pertaining to the planning application?

No.

127. If so, did the First and/or Second Defendants have reasonable grounds for their alleged belief and understanding during the period from 18 May 2007 to 1 October 2007.

Does not arise.

128. Were the Claimants entitled to rely upon the Defendants' representations and if so did they?

As a matter of law, No. However, they were influenced by the answers in the SPIF when deciding to buy the property.

129. Did the First and/or Second Defendant make a misrepresentation in answering (and/or not subsequently correcting) question 3.1 of the SPIF?

No.

130. If so, did any correspondence from the Defendants' solicitors or terms of the agreement as pleaded in the Amended Defence negative or affect liability for the misrepresentation?

If this issue had arisen, the answer would be Yes.

131. Are the Claimants entitled to recover damages for misrepresentation?

No.

132. If so, what loss is recoverable?

If the answer had been Yes, the recoverable damages would have been £50,000.

Contract issues

133. Are the Defendants liable to pay the Claimants compensation in accordance with clause 7.1.1 and 7.1.2 of the Standard Conditions?

No.

134. If so, what compensation is due to the Claimants?

Does not arise (but see the answer to issue 8 above).

135. Are the Claimants entitled to any further consequential loss?

Does not arise.