Harsten Developments Ltd v Eaken & Ors [2012] EWHC 2704 (Ch)

[2012] EWHC 2704 (Ch)

Case No Case No: OBS30633

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

Venue Bristol Civil Justice Centre

2 Redcliff Street

Venue Bristol BS1 6GR

Date 09/10/2012

Before

MR JUSTICE MORGAN

Between

HARSTEN DEVELOPMENTS LIMITEDClaimant

DEREK WILLIAM BLEAKENDefendants

DAVID WILLIAM BLEAKENDefendant

ORIEL LYNNE BLEAKENDefendant

IN THE BRISTOL COUNTY COURT

CLAIM NO: 8BS02773

Between

JOHN DEVLINClaimant

MARIANNE POWELLClaimant

HARSTEN DEVELOPMENTS LIMITEDDefendant

Mr R K Sahonte (instructed by Wards) for Mr Devlin and Ms Powell

Mr M Warner (instructed by Henriques Griffiths) for Harsten Developments Limited

Mr J Demachkie (instructed by TLT Solicitors) for Bleaken Defendants

Hearing Hearing dates: 26, 27, 28 and 29 June, 2, 3 and 4 July 2012

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

.............................

MR JUSTICE MORGAN

PART I: INTRODUCTION

[1]This litigation concerns two properties, namely, 25 and 27 Wickwar Road, Kingswood, Wotton-under-Edge, Gloucestershire. 25 Wickwar Road is a semi-detached house and 27 Wickwar Road is a bungalow. Wickwar Road runs approximately east-west and numbers 25 and 27 are adjacent properties on the north side of the road. Number 27 is to the west of number 25. Between the bungalow on number 27 and the boundary with number 25, for many years, there was a large vegetable patch.

[2]Number 25 has been owned and occupied by Mr Devlin and Ms Powell since 1993. Number 27 was owned and occupied by members of the Maunder family from 1928 to 2006. In 2006, Mr and Mrs Maunders sold number 27 to Derek Bleaken, his wife Oriel Bleaken and their son David Bleaken (“the Bleakens”). In April 2007, the Bleakens obtained planning permission for an infill-development by building a small house on a building plot, namely, the former vegetable patch between the bungalow on number 27 and number 25.

[3]On 4th October 2007, the Bleakens sold the building plot at auction to Harsten Developments Limited (“Harsten”). Mr Hardy and Mr Stenner incorporated and were directors of Harsten, hence the name of the company. The sale was completed on 1st November 2007. On 7th November 2007, Harsten began to clear the site and in so doing removed part of a hedge (referred to as “the box hedge”) which lay between number 27 and number 25. Mr Devlin and Ms Powell immediately asserted title to all or part of the box hedge. Harsten stopped work on clearing the site. In March 2008, Mr Devlin and Ms Powell sued Harsten in the Bristol County Court; they claimed title to the land occupied by the hedge and indeed to further land to the west of the hedge. In November 2008, Harsten’s solicitors wrote to the Bleakens stating that Harsten wished to rescind the contract for the sale of the plot. Harsten eventually, on 1st July 2010, brought proceedings in the High Court, Bristol District Registry, against the Bleakens claiming rescission and damages. The High Court proceedings overlap with the County Court proceedings in that both proceedings raise issues as to the position of the legal boundary between 25 and 27 Wickwar Road but the High Court proceedings raise other issues also. The County Court proceedings and the High Court proceedings have been heard together. PART II: THE COUNTY COURT PROCEEDINGS The issue

PART II: THE COUNTY COURT PROCEEDINGS

[4]The issue in the County Court proceedings is: where is the boundary between numbers 25 and 27 Wickwar Road?

The physical features on the ground

[5]I first need to refer to the hedge which is on, or possibly near to, the legal boundary. This hedge was partially destroyed in November 2007 when Harsten began to clear the site of the building plot. I will refer to the state of the hedge prior to that date. There is a dispute as to the age of this hedge. This hedge appears to be a traditional field hedge, apparently of some age. It is composed of a number of different species of shrub, including hawthorn. One of the species in the hedge is box although the evidence suggested that box was by no means the principal species in the hedge. Nonetheless, the parties have referred to this hedge as “the box hedge” and I will do the same. There appears to have been a field hedge in, or close to, the position of the box hedge shown on the Ordnance Survey Maps dating from the 19th century.

[6]To the west of the box hedge there was originally an open ditch. There was no evidence as to when the open ditch was dug. Mr Adolphus Maunders became the owner of number 27 in 1928. The ditch certainly existed by the 1940s because at that time, Mr Adolphus Maunders laid a pipe in the open ditch and then filled in the ditch, burying the pipe. The open ditch, initially, and later the buried pipe, served to provide a run-off for water flowing downhill from the field behind, to the north of, 27 Wickwar Road. This water then flowed through the ditch or pipe, as the case may be, to a manhole which was in the ground just to the west of the box hedge and on the edge of the public highway, Wickwar Road. I understand that the water was then able to flow away into a public sewer.

[7]On the east side of the box hedge, there were some lilac trees. These have been described by some of the witnesses as a lilac hedge but it would be more accurate to say that that they were lilac trees planted fairly closely together so that overtime the gaps between them closed up. The evidence is that the lilac trees were planted some years ago by a Mrs Pockett. Between 1926 and 1986, number 25 had been owned by the local authority and at some time Mrs Pockett became a tenant of number 25, holding from the local authority. In 1986, Mrs Pockett exercised the Right to Buy conferred by the Housing Act 1985 and acquired the freehold of number 25. It was not clear when precisely Mrs Pockett planted the lilac trees but it is clear that the house which was built on number 25 did not exist until after 1926 (the date of the conveyance which created the legal boundary between numbers 27 and 25, as I will explain in detail later in this judgment). Therefore, the lilac trees or lilac hedge, whatever it was or is, did not exist at the time that the relevant legal boundary was created.

[8]As I have said, there is an issue as to the age of the box hedge. Mr Devlin and Ms Powell say that the box hedge is the original field hedge which existed before the creation of the legal boundary in 1926. The Bleakens contend that, at some point, the original field hedge which ran between what is today number 27 and number 25 was removed and the lilac trees were planted in the place of the original field hedge. Thus, they say that the line of the lilac trees is the line of the original field hedge. In my judgment, the box hedge is the original field hedge. The various plants which make up the box hedge appear to be the same as the plants which make up the field hedge which runs to the north of the disputed boundary. Further, the box hedge appears to run on a continuous line with the field hedge to the north of the disputed boundary. Further, if the original field hedge between number 27 and number 25 was at some time removed and replaced by the lilac trees, that would mean that at some later point the owners of number 27 must have planted the box hedge, using the same variety of plants as in the field hedge to the north. There is no evidence that this happened and it is not particularly likely that it did. Further, Mrs Maunders was able to give evidence as to what the Maunders family did on number 27 as far back as the 1940s. It was not suggested to her that the Maunders had planted this further hedge at some point after Mrs Pockett had planted the lilac trees. Further, the position of the ditch is more consistent with the box hedge being the original field hedge. If the lilac trees had been planted on the line of the original field hedge then there would have been an appreciable gap between the original field hedge and the ditch. If the box hedge was the original field hedge then the ditch was right alongside the original field hedge.

The rival cases

[9]Mr Devlin and Ms Powell have put forward a number of cases, in the alternative, as to the location of the legal boundary between numbers 27 and 25. The widest claim they make is that they own all of the land occupied by the box hedge and in addition the site of the former open ditch to the west of the box hedge. The position of the Bleakens has not been entirely consistent. In the Bleakens’ pleaded case in the High Court proceedings, brought by Harsten against the Bleakens, they say that the boundary between numbers 27 and 25 is the box hedge (see paragraph 22 of the Amended Defence). However, in paragraphs 30 – 32 of his first witness statement, Mr Derek Bleaken stated that there were two hedges, the box hedge and the lilac hedge and the legal boundary ran between the two hedges; the result of that would be that all of the land occupied by the box hedge would belong to number 27. When cross-examined, Mr Derek Bleaken contended that the boundary was the root line of the box hedge and that he had always thought that to be the case. Harsten has sought to adopt a neutral position in relation to the precise position of the legal boundary between numbers 27 and 25. It is concerned to establish that the Bleakens contracted to sell to Harsten land which the Bleakens did not own as that land was in law owned by Mr Devlin and Ms Powell; Harsten also contends that the Bleakens represented to Harsten that it owned land which was in law owned by Mr Devlin and Ms Powell.

The conveyancing history

[10]The boundary between 25 and 27 Wickwar Road was created by a conveyance dated 16th October 1926 (“the 1926 conveyance”). The original location of the boundary depends upon the true interpretation of that conveyance, construed against the background of the physical features on the ground at that date. Once the original location of the boundary is identified, it will follow that the boundary has remained in the same place ever since unless there has been a subsequent conveyance or boundary agreement which has changed the boundary or unless there has been adverse possession of land adjoining the boundary. As will be seen, no subsequent conveyance has changed the boundary. Further, although the Bleakens and Mr Devlin and Ms Powell discussed a possible re-alignment of the boundary, no one contends that that discussion had the effect of moving the legal boundary. It was asserted by Mr Devlin and Ms Powell, in the alternative to their principal claim based on the true construction of the 1926 conveyance that they had acquired additional land on no. 27’s side of the boundary but, for the reasons given later in this judgment, there is really no evidence to support the claim to adverse possession. Therefore, the outcome of the dispute as to the location of the boundary turns upon the effect of the 1926 conveyance.

[11]Before the 1926 conveyance, the land on both sides of the disputed boundary was in common ownership. The conveyancing history shortly before the 1926 conveyance shows that the land on both sides of the disputed boundary was acquired by a Mr Albert Daniel Alway by a conveyance of 9th March 1920. By that conveyance, he acquired some 84 acres, or thereabouts, of land known as the Trench Farm, Kingswood. The land he acquired included a field with Ordnance Survey number 363a. An abstract of Mr Alway’s title to field no. 363a refers to the Ordnance Map and a plan showing field number 363a was attached to the abstract. That abstract described field no. 363a as being “allotments” extending to over 3 acres.

[12]By the 1926 conveyance, Mr Alway conveyed an area of land extending to 1.5 acres, being part of field number 363a, to Dursley Rural District Council. The parcels clause of the 1926 conveyance referred to the address of the land and its acreage and to the fact that part of it was in the occupation of Mr Alway. It also stated that the land was bounded on the south side by Wickwar Road. It is not suggested that any of that information assists in locating the relevant boundary. The 1926 conveyance also stated that the land was “part of Ordnance Survey Number 363a” and that the land conveyed was “more particularly delineated on the plan hereto annexed and thereon coloured pink”. The plan is a small scale plan and does not contain any measurements. However, it does refer to “363a”, which is the Ordnance Survey field number. The plan annexed to the 1926 conveyance is obviously from the same source as the plan in Mr Alway’s abstract, which shows the entirety of field number 363a. The western boundary of the land conveyed (being the boundary which is now relevant) is sketched so that it is not a completely straight line and this suggests that the boundary follows some natural feature on the ground but the conveyance does not provide any further information as to what that feature might be.

[13]The 1926 conveyance contained a fencing covenant on the part of the purchaser who was to “erect and for ever hereafter maintain a substantial fence on or towards the North and West sides of the property hereby conveyed adjoining the property of the Vendor”. The boundary which is now relevant is along the West side of the property as referred to in that covenant.

[14]Dursley RDC bought the land conveyed by the 1926 conveyance in order to build houses on it. They built the houses which were numbered 11 to 25 Wickwar Road. No 25 was built on the land conveyed by the 1926 conveyance and so that it was built on the westernmost part of that land.

[15]In my judgment, none of the later conveyances of no. 25, nor indeed the conveyances of no. 27, Wickwar Road affect the position of the disputed boundary. When no. 25 Wickwar Road was later conveyed from time to time, on the true construction of the relevant conveyance, the transferor on each occasion conveyed land up to the western boundary created by the 1926 conveyance and did not stop short of that boundary. Such a transferor was, of course, unable to convey more than had been originally conveyed by the 1926 conveyance (leaving aside any question of adverse possession to which I will later refer). As to the various conveyances of no. 27, on the true construction of the relevant conveyance, the transferor thereunder conveyed land up to the boundary with no. 25 which had been created by the 1926 conveyance and did not stop short of that boundary. Such a transferor was, of course, unable to convey more land than had been earlier conveyed to him. However, for the sake of completeness, I will refer briefly to the conveyances of no 25 and no 27 after 1926.

[16]No 25 was owned by the local authority (first Dursley RDC and later Stroud DC) until Stroud DC conveyed it by a conveyance of 6th January 1986 to Mrs Pockett, who bought the house under the Right to Buy conferred by the Housing Act 1985. I was referred to the wording of the conveyance in so far as it referred to the boundary features along the western edge of the land conveyed. That conveyance assumed that the western boundary feature was conveyed to Mrs Pockett. If this conveyance had created the boundary between no. 25 and no. 27, then the wording of that conveyance would have been relevant. But as the relevant boundary had been created by the 1926 conveyance, the terms of this later conveyance are not relevant to the true construction of the 1926 conveyance and are not otherwise relevant unless they show an intention not to convey land up to the boundary created by the 1926 conveyance, but it is not suggested that they did show any such intention.

[17]Mrs Pockett sold no. 25 to Mr Devlin and Ms Powell in 1993 and on 31st March 1993, their title was registered at HM Land Registry under title no. GR78882.

[18]The conveyancing history in relation to no. 27 is as follows. As already stated, the common owner of the land on each side of the boundary in 1920 was Mr Alway. On 7th March 1928, he conveyed the land on which no. 27 was later built to Mr Talboys. On 7th September 1928, Mr Talboys conveyed no. 27, together with the bungalow recently erected upon it, to Mr Adolphus Maunders. Following the latter’s death, by an assent dated 26th November 1969, no. 27 passed to his widow, Mrs Amy Maunders. On 16th April 1980, Mrs Amy Maunders gave no. 27 to her son and daughter-in-law, Mr Harold Edward Maunders and Mrs Rosalie Maunders. (Mrs Rosalie Maunders gave evidence at the trial and her husband’s witness statement was admitted under the Civil Evidence Act 1995.) On 21st November 2006, Mr and Mrs Maunders conveyed no 27 to the Bleakens and, on 2nd January 2007, their title was registered at HM Land Registry under title number GR300899. On 1st November 2007, the Bleakens executed a transfer of part of their registered title to Harsten which, on 22nd November 2007, became registered at HM Land Registry in relation to the title so transferred under title number GR314039.

The construction of the 1926 conveyance

[19]I have referred earlier to the various ways in which the land conveyed is described in the 1926 conveyance. The most significant matter in that respect is that the land is said to be part of a field with Ordnance Survey number 363a. It is also clear from the plan attached to the abstract of Mr Alway’s title, which showed the full extent of field number 363a, that the land conveyed in 1926 was “a part” of that field as a result of the northern part of the field being excluded from the 1926 conveyance. So far as the western boundary of the land conveyed in 1926 is concerned, the land conveyed went up to the western boundary of field number 363a.

[20]I was also shown extracts from the Ordnance Survey which predated the 1920 conveyance to Mr Alway and the 1921 Ordnance Survey. The physical feature which represented the western boundary of field number 363a is the same on both these Ordnance Surveys and is shown in the same way on the plan to Mr Alway’s abstract and to the 1926 conveyance.

[21]It is not possible to tell from the documents alone what was the physical feature on the ground which formed the western boundary to field number 363a. However, evidence is admissible to assist in establishing what that physical feature was.

[22]I have referred to the evidence as to the box hedge, the lilac trees or lilac hedge and the ditch which was filled in in the 1940s. There was also evidence that a light fence was erected on the eastern side of the box hedge. That fence was erected by Mr Devlin and Ms Powell who only moved to number 25 in 1993.

The legal principles

[23]There was no dispute about the law to be applied as to the interpretation of the 1926 conveyance. Although I was referred to a number of authorities as to the circumstances in which the court may admit evidence as to the physical features on the ground at the time of the relevant conveyance and the interrelationship of that evidence with the language of the conveyance, it is not necessary to refer to those authorities as the principles were not in dispute. It is necessary to understand the relevance of the land being described by reference to the Ordnance Survey map and I also need to consider the hedge and ditch presumption, which was relied upon by Mr Devlin and Ms Powell.

[24]In Fisher v Winch

[1939] 1 KB 666

, the relevant conveyance described the land conveyed by reference to the Ordnance Survey map and a plan which was copied from that map. Along the disputed boundary, there lay a hedge on a bank with a ditch to one side of the hedge. The trial judge held that the matter was governed by the hedge and ditch presumption. His decision was reversed by the Court of Appeal who held that there was no room for the application of that presumption where the conveyance which created the boundary was available and could be construed so as to show where the legal boundary was. There was evidence in that case as to the way in which the Ordnance Survey map was compiled. The evidence showed that where there was a hedge or a fence running along a parcel of land, then the hedge or the fence was the physical feature which was shown on the map. The Court of Appeal held that where the conveyance which created the legal boundary referred to the physical boundary shown on the Ordnance Survey map, then the legal boundary followed the physical boundary so shown. In that case, the physical feature was a hedge and it was held that the legal boundary ran along the middle line of that hedge.

[25]Fisher v Winch was applied by the Court of Appeal in Davey v Harrow Corporation

[1958] 1 QB 60

. The Court of Appeal, but not the trial judge, heard evidence from an official from the Ordnance Survey office to the effect that when an Ordnance Survey map has a line which is intended to represent a physical feature on the ground and that physical feature is a hedge, the Ordnance Survey line is along the middle of the hedge. The court stated that following Fisher v Winch and Davey v Harrow Corporation, courts in future could take notice of this practice of the Ordnance Survey as at least prima facie evidence of what a line on the map indicates.

[26]The hedge and ditch presumption was considered by the House of Lords in Alan Wibberley Building Ltd v Insley

[1999] 1 WLR 894

. The presumption is that if a person owns land up to a legal boundary and wishes to create a ditch and plant a hedge, he will dig the ditch along the boundary, staying on his side of the boundary, he will throw the soil from the ditch back onto his own land, creating a bank, and he will plant his hedge on the bank. Thus, where the presumption applies, the area taken up by the ditch and the hedge belongs to the person who owns the land on the other side of the hedge. What is important for present purposes is that this presumption does not apply where the physical feature of a hedge alongside a ditch existed before the legal boundary was created by a conveyance: see per Lord Hoffmann at 897E-F. Lord Hoffmann also confirmed that when the Ordnance Survey map shows a hedge as the boundary feature, the line on the map is the middle line of the hedge: see at 897B-C. Lord Hoffmann’s discussion of Fisher v Winch explains that the hedge and ditch in that case were created while the land on either side of the hedge and ditch were in common ownership so that there was no room for the hedge and ditch presumption to operate: see at 900E-H; see also per Lord Hope of Craighead at 902C.

Discussion and conclusion

[27]With the assistance of these authorities, in my judgment, the answer in the present case is clear. There is no room here for the operation of the hedge and ditch presumption. The hedge long pre-dated the 1926 conveyance. The line on the Ordnance Survey map which was referred to in the 1926 conveyance was a line which marked the middle line of the hedge. The 1926 conveyance conveyed land by reference to the Ordnance Survey map and therefore the middle line of the hedge became the legal boundary created by that conveyance.

[28]In the course of argument, various points were made as to the possible inconvenience of a legal boundary running along the middle line of a hedge. Questions were raised as to the consequences of one owner cutting back the hedge up to the middle line. It was suggested that there might be constraints on an owner behaving that way. It is not necessary to discuss the suggested constraints. The courts have not found any legal difficulty in the past in holding that a legal boundary runs along the middle line of a hedge. Applying the principles established by the above cases to the facts of this case, it is clear that the legal boundary in this case runs along the middle line of the hedge.

[29]I will refer later in this judgment to a discussion which took place between Mr Devlin and the Bleakens in July 2007 about the possibility of Mr Devlin erecting a fence, to the west of the box hedge, towards the front of the Bleakens’ land. Mr Devlin in due course did erect such a fence which enclosed a small triangle of land between the fence and the box hedge. Neither Mr Devlin and Ms Powell on the one hand nor the Bleakens on the other contended that this discussion had any legal effect, in particular, no legal effect as regards the position of the boundary between their properties.

[30]Mr Devlin and Ms Powell pleaded in their Particulars of Claim, in the alternative to their primary case based on the true construction of the 1926 conveyance, that they had acquired, by adverse possession, an area of land to the west of the middle line of the hedge. This further area of land may have included the land covered by the western half of the width of the hedge and may have extended to the ditch to the west of the hedge. I can deal with this suggestion briefly. There was no evidence of anything done by Mr Devlin and Ms Powell, or any predecessor in title, which could be regarded as acts of possession of any land to the west of the middle line of the hedge so as to give them title to that land by reason of adverse possession.

[31]Accordingly, the legal boundary in this case at all times remained governed by the terms of the 1926 conveyance. On the true construction of that conveyance, the legal boundary was along the middle line of the box hedge. PART III: THE HIGH COURT PROCEEDINGS The claim

PART III: THE HIGH COURT PROCEEDINGS

[32]In the High Court proceedings, Harsten seeks rescission of a contract of sale dated 4th October 2007 whereby the Bleakens agreed to sell and Harsten agreed to buy an area of land between the bungalow on number 27 and number 25. Harsten’s case is based on the contention that it was induced to enter into that contract by a large number of misrepresentations made by the Bleakens to Harsten. The Bleakens deny that they made any misrepresentation and they also contend that Harsten affirmed the contract before it brought these proceedings seeking rescission. In order to consider the many issues which arise in the High Court proceedings, it is necessary to set out the facts in some detail.

The facts

[33]In 2006, Mr and Mrs Maunders wished to sell 27 Wickwar Road. They completed a document called Sellers Property Questionnaire in which they asked themselves, and then answered, a number of questions about the property. Question 1 related to the boundaries of the property. They stated that the boundary “on the right”, i.e with 25 Wickwar Road, was owned by the owners of 25 Wickwar Road. Question 13 related to interests and rights affecting the property. The question asked them to state if they were aware of any rights or interests affecting the property and they were asked to provide information if they believed that any of the rights and interests affected the property. Question 13 then referred to services such as pipes, wires or drains that crossed the property and were for the benefit of, or were shared with, neighbouring properties. Mr and Mrs Maunder left this part of the form blank and so they did not refer to the possibility that there was a right of drainage through the buried drain which ran along the boundary with number 25, which might have been for the benefit of the owner of the field to the north of number 27.

[34]Mr and Mrs Maunders agreed terms to sell number 27 to Derek Bleaken and his son, David Bleaken. It may be at that time that Oriel Bleaken was not an intending purchaser although the property was in the event transferred to all three Bleakens. Nothing turns on that detail and I will refer to the intending purchaser as “the Bleakens”.

[35]Derek Bleaken and David Bleaken came to see number 27 and were shown around by Mr and Mrs Maunders. Mrs Maunders told me that the Bleakens seemed more interested in the area of the vegetable patch rather than the bungalow. When Derek and David Bleaken were shown around the vegetable patch, Mr Maunders told them that there was a pipe in a filled-in ditch running along the box hedge and the pipe ran from the field at the back of number 27 to the manhole at the front. This evidence is contained in Mr Maunder’s witness statement which was admitted under the Civil Evidence Act 1995. Mrs Maunders was present at this inspection of the vegetable patch and in her oral evidence she confirmed her husband’s statement in this particular respect, as well as confirming his statement generally. Mr Derek Bleaken denied that Mr and Mrs Maunders had mentioned the pipe to him. He says that the first time he became aware that there was a pipe in the land was in 2008 after the dispute had arisen. Mr David Bleaken also said that Mr and Mrs Maunders had not mentioned the pipe at this inspection, or at any time.

[36]I prefer the evidence of Mr and Mrs Maunders on this point. I did not have the advantage of seeing Mr Maunders give his evidence but Mrs Maunders did come to court and was cross-examined. It was suggested that it was possible that Mr and Mrs Maunders would have wanted to say that they had told the Bleakens about the pipe in case the Bleakens would bring a claim against them for non-disclosure of the pipe. Having seen Mrs Maunders give her evidence, I think it is very unlikely that she would have made up this evidence or that she was influenced in any way by the possibility of a claim from the Bleakens. I also do not think that Mr and Mrs Maunders are misremembering what happened and what was said. Mrs Maunders gave her evidence very clearly. I also think, having seen Mrs Maunders, that the probabilities are that Mr and Mrs Maunders would have been entirely open about the pipe when they were showing the Bleakens over their garden. Further, given the presence of a manhole in the corner of the garden, it would have been very natural for Mr and Mrs Maunders to have explained what the manhole was doing there and that would have led to a reference to the pipe in the ground. In addition, I have a general concern about some of the evidence which Derek Bleaken and David Bleaken gave me. Derek Bleaken said that when the Bleakens bought number 27 they did not intend to develop the garden. He said that idea only came later. That evidence was wrong, as the date of Mr Fowler’s first drawings reveals. Further, Derek Bleaken’s evidence about what he believed about the boundary with number 25 was inconsistent and he changed his position on that matter more than once. David Bleaken’s evidence about the timing of events after the auction is also out of line with the evidence of Mr Hardy and Mr Stenner of Harsten and I feel sure that the latter two witnesses were right in their account and Mr David Bleaken was wrong.

[37]The Sellers Property Questionnaire was provided to the Bleakens. On 26th September 2006, the solicitors for the Bleakens asked some additional enquiries before contract. One such enquiry stated that the Bleakens had noted a ditch to the rear of the property which, they said, might be prone to flooding; they asked to be told what arrangements were in place to keep this ditch clear. On 4th October 2006, the solicitors for Mr and Mrs Maunders replied to this enquiry. They stated that their clients occasionally cleared out the ditch, gaining the consent of the owner and added that they had had no problems with flooding during their ownership of the property. It is not entirely clear what ditch was being referred to in this enquiry and the answer to it. The enquiry referred to the rear of the property so that it is probably to be understood as referring to something other than the buried pipe running along the boundary with number 25. Further, the reply refers to Mr and Mrs Maunders gaining the consent of the owner and this suggests the ditch is not on their property. Behind number 27, as I understand it, there was a ditch which ran from east to west along the northern boundary of number 27.

[38]On 2nd November 2006, Mr and Mrs Maunders transferred number 27 to the Bleakens and, on 2nd January 2007, their title to that property was registered at HM Land Registry under title number GR300899.

[39]Before 26th November 2006, the Bleakens (Derek Bleaken in particular) had asked Mr Fowler, of Ken Fowler Building Design Services, to draw up plans for the erection of a new dwelling on the land between the bungalow on number 27 and the boundary with number 25. Mr Fowler prepared his first drawing or drawings on 26th November 2006. Derek Bleaken and David Bleaken gave evidence that when they bought number 27 from Mr and Mrs Maunders they did not intend to develop the land between the bungalow on number 27 and number 25 and that they only later formed such an intention. That evidence does not fit with the evidence of Mrs Maunders nor the date of the drawings prepared by Mr Fowler. I do not accept their evidence on this point. It is clear to me that they bought number 27 with a view to creating a building plot between the bungalow on number 27 and the boundary with number 25 and with a view to building a new house on that plot or selling the building plot. Further, the unreliability of their evidence on this point causes me to be cautious about other evidence which they gave.

[40]It is not always possible to be entirely certain as to the date of Mr Fowler’s various drawings. His first drawing or drawings are dated 26th November 2006. When he revised his first drawing or drawings, the date of the revision is not always clear. I will refer to the drawing which was later used for the contract between the Bleakens and Harsten. This may have been the first drawing, or at any rate an early drawing, prepared by Mr Fowler. It is dated 26th November 2006 and is said to be drawing number 2162/2/06. It is said to be to a scale of 1:100 and the drawing has a scale showing distances in metres. As against that, the following is marked on the drawing:

“This drawing must not be scaled all dimensions and particulars to be checked on site before work commences”

. The site area is given as 400 square metres and the floor area of the house shown on the drawing is given as 84 square metres. The drawing shows a house on the intended building plot. The drawing contains some information about the western and the eastern boundaries of the plot. The western boundary is a straight line from the front to the back of the plot. There was no physical feature marking that boundary at the date of the drawing. If one were to scale from this drawing, the boundary would be approximately ½ metre from the eastern gable wall of the bungalow on number 27. On the eastern boundary of the plot there are two lines which diverge and then converge. There is no description of what these lines represent. To someone who knew the physical features which existed on the ground, it might be thought that the two lines marked the vegetation between the building plot and number 25. Towards the front of the plot, the two lines come together and form a single line running to the front edge of the plot. That line does not appear to relate to any physical feature on the ground at that date but seems to show an early intention on the Bleakens’ part to alter the physical boundary with number 25 and indeed, later, a fence was erected in that approximate position which had the effect of excluding a sliver of land owned by the Bleakens from the intended building plot.

[41]On 24th January 2007, Mr Fowler on behalf of the Bleakens (in particular Mr Derek Bleaken) applied to Stroud District Council for full planning permission for the construction of a house on the plot. The District Council treated this application as having been made on 25th January 2007. The planning application referred to a proposed 2 bedroom house. The application stated that no removal of trees shrubs or hedges was involved. The application appears to have been accompanied by three plans. One plan was a site plan and another was said to show the dwelling house, although these appear to be essentially the same plans; they appear to be the same as the plan I described at paragraph 40 above. A third plan showed elevations and plans for a 2 bedroom house. On 8th February 2007, the Bleakens provided to the District Council a Design Access Statement for a 2 bedroomed house.

[42]On 14th March 2007, the highway authority, Gloucester County Council, wrote to the District Council stating that it had no highway objection to the planning application save that it proposed two planning conditions to be imposed by the District Council. The first proposed condition stated that prior to occupation of the house the car parking and manoeuvring facilities should be completed in accordance with the submitted details. As will be seen, the District Council in due course imposed the two conditions required by the highway authority.

[43]On 24th April 2007, the District Council granted full planning permission “for the development described below in accordance with the submitted application and accompanying plan(s)”. The development was described as “Erection of 1 dwelling”. One of the conditions attached to the planning permission required that two windows in the existing bungalow on number 27, which faced the proposed development, were to be permanently blocked up before any works on site were commenced and those windows were to be maintained blocked up thereafter. This was to ensure that the existing dwelling was not adversely affected by the proposed development. Another condition stated that prior to occupation of the proposed dwelling, the car parking and manoeuvring facilities should be completed in all respects in accordance with the submitted details and similarly maintained thereafter. There is no clear evidence as to what details of car parking had been submitted. If the condition referred to the details shown on the plan to which I referred earlier, then that plan showed minimal details of parking. The plan shows a boundary of the plot ½ metre (if one uses the scale on the plan) from the eastern gable of the bungalow on number 27, a car parked to the east of that boundary, an entrance from the highway onto the plot and the words “Parking & Turning” in front of the proposed house. The reason for this condition was stated to be:

“To enable vehicles to enter and leave the highway in forwards gear in the interest of highway safety and to accord with Policy GE5 of the adopted Stroud District Local Plan November 2005”

. I was not shown, nor given any evidence about, the terms of Policy GE5. A further condition referred to the need to obtain approval to a scheme of hard and soft landscaping; the reason was said to be in the interests of the visual amenities of the area.

[44]In July 2007, Mr Derek Bleaken had a discussion with Mr Devlin. Mr Devlin gave evidence that Derek Bleaken proposed to him that the Bleakens would transfer to him a relatively small triangular piece of land on the plot and near to the road at the front of the plot. This would allow Mr Devlin to erect a fence along the new boundary and in return, the Bleakens would cut back the box hedge to allow them to erect a fence up against the box hedge. The Bleakens’ new fence would not extend along the whole length of the boundary with number 25 but only for about 12 metres. Derek Bleaken’s evidence was to much the same effect. On 7th July 2007, Mr Devlin wrote a short note to the Bleakens stating that he had arranged for a contractor to erect a fence on 19th July 2007. He referred to the earlier discussion with Derek Bleaken. It seems likely that Mr Devlin’s contractor did not erect this fence at that time. Mr Devlin gave evidence that he had two further conversations with Mr Derek Bleaken. In the first of these further conversations, Mr Derek Bleaken said that the arrangement was “off” because of some difficulty with the planners and then, later, Mr Devlin was told that the arrangement was back “on” again. Mr Devlin believes that he caused the fence to be erected on or about 18th September 2009, in accordance with an invoice of that date. That fence has since remained in position without any dissent from the Bleakens. When the Bleakens subsequently offered to sell the plot at auction and entered into a contract of sale with Harsten and transferred the plot to Harsten, the sliver of land (as it was described at the trial) on Mr Devlin’s and Ms Powell’s side of the newly erected fence was not included. Notwithstanding all of this, it was agreed by all parties at the trial that legal and beneficial ownership of the sliver of land remained with the Bleakens and Mr Devlin and Ms Powell have not acquired any interest in the same.

[45]Also in July 2007, there was some flooding on, or in the vicinity of, the plot. This was at a time of very heavy rainfall in Gloucestershire, which was widely reported on the national television news. There was some dispute as to the propensity of the buried drain pipe to cause flooding in the south east corner of the plot. The evidence given by Mr Devlin and Ms Powell, taken overall, suggested that any problem with flooding in this area was fairly minor. Mrs Maunders also appeared to agree that there was not a serious problem with flooding in this area although she also referred to occasions when water would lie in that corner. In any event, there was a serious flood in July 2007. The Bleakens were not at number 27 at the time and they did not themselves see the flood in July 2007. Mr David Bleaken who lived in the bungalow on number 27 was away on holiday. Mr Devlin told him about the flooding when he returned shortly afterwards. Although Mr Devlin thinks that he did mention the pipe to David Bleaken during that conversation, his evidence was not clear as to exactly what he said. Mr David Bleaken said that Mr Devlin did not mention a pipe running through number 27. Because Mr Devlin knew of the pipe and because I find that Mr David Bleaken also knew about the pipe (because he had been told about it by Mr and Mrs Maunders in the Autumn of 2006), I think it is quite possible that the conversation between Mr Devlin and David Bleaken did refer to the pipe. David Bleaken told his father of what Mr Devlin had said about the flooding but there was no specific evidence as to what precisely David Bleaken said to his father on that subject. There was no clear evidence that the water coming down the buried pipe made any significant contribution to the flood.

[46]In the summer of 2007, Mr Derek Bleaken was concerned about the effect on the bungalow on number 27 of condition 2 in the planning permission of 24th April 2007. He went to see the planning department at the District Council and he then instructed Mr Fowler in connection with securing a change to condition 2.

[47]On 30th July 2007, Mr Fowler wrote to the District Council in connection with the planning permission which had been granted on 24th April 2007. His letter referred to meetings or discussions which he had with the District Council on 3rd and 27th July 2007. Under cover of his letter of 30th July 2007, Mr Fowler submitted a new planning application which he said was “to address Condition 2” of the earlier permission. Condition 2 had required two windows in the existing bungalow on number 27 to be permanently blocked up. Mr Fowler explained in his letter of 30th July 2007 why the Bleakens preferred an alternative solution to that required by condition 2. The new planning application was not in evidence but a later planning permission granted by the District Council on 10th October 2007 shows that on 30th July 2007, Mr Fowler sent to the District Council a copy of drawing 2161/2/2006 Rev D. I was shown a copy of a drawing with this number said to be Rev D although it is dated 1st December 2006. This date cannot be the date of Rev D as the drawing has the title “Elevations & Plans Addressing Condition 2” and condition 2 was not imposed until 24th April 2007. So far as relevant for present purposes, this shows a boundary fence between the bungalow on number 27 and the building plot. As before, the drawing states that it is not to be scaled but it also includes details of the scale to which it was drawn. If one uses that scale, the boundary fence is about 0.65 metres from the eastern gable wall of the bungalow. Mr Fowler’s letter of 30th July 2007 stated that he had “reconfigured” this boundary fence.

[48]I was also shown a further drawing numbered 2162/2A/06 “A” with the title “Site Plan Addressing Condition 2”. This has been stamped as received by the District Council on 30th July 2007 so it seems that this plan also was provided to the District Council by Mr Fowler on that date. This plan states that the site area is 396 square metres (whereas the earlier plan stated the area was 400 square metres). This plan shows a new boundary, presumably a fence, separating the bungalow on number 27 from the plot. However, the boundary is not a straight line. It starts nearer to the eastern gable wall of the bungalow but as the fence passes the two windows in that gable wall, the fence moves further away from the gable. The drawing shows a measurement of 1 metre at this point although the drawing elsewhere states that the drawing must not be scaled. This drawing appears to have been superseded in two respects: the fence between the bungalow and the plot was not erected in the position shown on this drawing and the later revised planning permission does not refer to this drawing but to a later revision of it.

[49]In early September 2007, Mr Derek Bleaken instructed a firm of surveyors and auctioneers, David James & Partners, to offer the building plot for sale at auction. It was arranged that the plot would be offered at an auction due to take place on 4th October 2007. The auctioneers prepared auction particulars which were approved by the Bleakens. The auction particulars referred to the property as:

“Building Plot of Approx. 390 m 2 with Full Consent for the Erection of Single Detached Dwelling”

. The particulars included a small plan with the property coloured in red. The land coloured red excluded a triangle of land in the general area which had been discussed by Mr Derek Bleaken and Mr Devlin in July 2007 and which was fenced off by Mr Devlin on or about 18th September 2007. The particulars suggested a guide price of in excess of £160,000 - £180,000.

[50]The auction particulars referred to the planning permission of 24th April 2007 and stated that it was subject to seven conditions. It was also stated that a further application to vary Condition 2 of that planning permission was under consideration. The planning reference for the further application was provided. It was also stated that a full Building Regulation approval submission had been made and was awaiting determination.

[51]The auction particulars further described the property as:

“An attractively situated Building Plot (shown shaded red) with full planning permission for the erection of a detached dwelling house …”

. The plot was said to have approximately 16 metres road frontage with a depth of approximately 33 metres “adequately accommodating the Dwelling plus front and rear Garden/Car Parking to be designated.” It was stated that the original plans for the new dwelling showed an indicative layout and that reworked plans had been submitted for Building Regulation approval. It was said that the reworked plans showed a layout which included 3 bedrooms.

[52]Under the heading “Boundaries”, the auction particulars stated:

“The plot is marked on site. The Vendor undertakes to erect a suitable boundary along the pegged and taped division with no. 27 Wickwar Road and will be responsible thereafter for the maintenance. The box hedge to the rear and east will be owned by the plot and it is assumed that these will be removed to provide the above quoted dimensions.”

[53]Under the heading “Wayleaves, Rights of Way, Easements Etc”, the auction particulars stated:

“The property is sold subject to all rights including rights of way whether public or private, light, support, drainage, water and electricity supplies and other rights, covenants, agreements and all existing and proposed wayleaves, masts, pylons, stays, cables, drains and water, gas or other pipes whether referred to in these particulars or not and to the provisions of any planning scheme of the County or Local Authorities.”

The particulars then referred to two specific wayleave agreements in connection with electricity.

[54]Under the heading “Plans and Particulars”, in smaller type, the particulars stated:

“Both plan and particulars are believed to be correct but they do not constitute any part of any offer or contract and any intending purchaser must satisfy himself by inspection or otherwise, as to the correctness of each of the statements contained in these particulars as all such statements are made without responsibility on the part of David James & Partners or the vendor or his solicitor. The sale plan has been prepared from the OS Map with the sanction of HMSO and has been amended as necessary for the purpose of this sale.”

[55]Under the heading “Important Notice to be read by all Bidders”, the particulars stated:

“1. Unless otherwise announced at the time of the auction each Lot is sold subject to the Conditions of Sale (Third Edition) and to the Special Conditions of Sale of each Lot along with the conditions contained in this Notice numbered 1 -1 2 inclusive. 2. Prospective purchasers shall be deemed to have inspected the relevant property and made all usual and necessary searches and enquiries, with all relevant authorities and other bodies. 3. … 4. … 5. Prospective purchasers are strongly advised to check these particulars as to measurements, areas and all other matters to which the properties are expressed to be subject to or have the benefit of and in respect of any contents, fixtures or fittings expressed to be included in the sale by making inspection of the property and all necessary enquiries to David James & Partners, the Vendor, the Vendor’s appropriate advisers and all other appropriate authorities. All measurements and areas referred to in these particulars are approximate only. 6. All location plans published in the Particulars of Sale are to enable prospective purchasers to locate the property only. The plans are photographically reproduced and therefore not to scale and are not intended to depict the interest to be sold and are expressly excluded from any contract. … Purchasers are advised to view the precise interest to be conveyed. 7. ….”

[56]During the course of September 2007, the solicitors acting for the Bleakens prepared an auction pack which was to be made available to any prospective purchaser who wished to have it. The auction pack was not in the trial bundle in the form in which it was provided to a potential purchaser. I asked to be given the auction pack in the form in which it was so provided. The auction pack, in the form it was then provided to me, contained the following documents:(1) draft agreement for sale (this was signed by the Bleakens on or before 1st October 2007); the draft agreement was in the form of the final agreement signed by Harsten on 4th October 2007;

(2) a Sellers Property Information Form (“SPIF”) signed by the Bleakens on 9th September 2007;

(3) a copy of the planning permission of 24th April 2007 and the planning application of 24th or 25th January 2007 with three plans (showing a 2 bedroom house), being apparently the plans submitted with the application, and the Design Access Statement;

(4) an official copy of the Bleakens’ registered title;

(5) a lengthy report dated 19th September 2006 dealing with environmental matters;

(6) the letter dated 14th March 2007 from Gloucester County Council (referred to earlier in this judgment) requiring two planning conditions;

(7) the local land charges search;

(8) the replies to local authority enquiries. I note that the trial bundle contains a list of the contents of the auction pack and that list refers to other documents such as conveyances of number 27 and land to the west of number 27.

[57]The SPIF was a standard form which was to be completed by the seller. The first page of the form emphasised certain matters for the attention of the seller completing the form. It was stated that the answers given by the seller were important, that the buyer was entitled to rely on them and that incorrect or incomplete information given by the seller to the buyer might mean that the buyer could claim compensation or even refuse to complete the purchase. Question 1 in the SPIF concerned boundaries. The Bleakens stated that as regards the boundary with number 25, this was either owned by number 25 or number 25 accepted responsibility for it. It was also stated that the Bleakens did not know of any boundary having been moved in the past 20 years.

[58]Question 2 in the SPIF concerned disputes and complaints. Question 2.1 was:

“Do you know of any disputes or anything which might lead to a dispute about this or any neighbouring property?”

Question 2.2 was:

“Have you received any complaints about anything you have, or have not, done as owner?”

Question 2.3 was:

“Have you made any such complaints to any neighboiur about what the neighbour has or has not done?”

The Bleakens answered “No” to each of these questions.

[59]Question 3 in the SPIF concerned notices. Question3.1 asked whether the Bleakens had sent or received any letters or notices which affected the property or the neighbouring property in any way. Question

3.2 asked:

“Have you had any negotiations or discussions with any neighbour or any local or other authority which affect the property in any way?”

The Bleakens answered “No” to each of these questions.

[60]Question 5 in the SPIF concerned services and referred to gas, electrical and water supplies, sewerage disposal and telephone cables. Question 5.4 asked:

“Do any drains, pipes or wires for these cross any Neighbour’s property?”

The Bleakens answered this question: “No”. Question 5.5 asked: “Do any drains, pipes or wires leading to any Neighbour’s property cross your property?” The Bleakens answered this question: “Yes” and then added a reference to an electric cable serving a street light. Question 5.6 asked: “Are you aware of any agreement or arrangement about any of these services?” The Bleakens’ reply was “Not Known”.

[61]Question 6 in the SPIF concerned certain shared services. Question 6.1 asked “Are you aware of any responsibility to contribute to the cost of anything used jointly, such as the repair of a shared drive, boundary or drain?” Question 6.7 asked:

“Do any of the neighbours need to come onto your land to repair or decorate their building or maintain their boundaries or any drains, pipes or wires?”

The Bleakens answered “No” to each of these questions.

[62]Question 7 in the SPIF concerned other arrangements and rights. Question 7.4 asked:

“Are there any formal or informal arrangements which someone elase has over your property?”

The Bleakens answered “No”.

[63]Question 9 in the SPIF concerned changes to the property.

(a) asked:

“Have any of the following taken place to the whole or any Part of the property (including the garden) and if so when? (a) Building works including loft conversion”

. The Bleakens answered “No”.

[64]As I have already described, on or about 18th September 2007, Mr Devlin erected a fence cutting off a triangle of land from the building plot, in accordance with his discussion with Derek Bleaken in July 2007.

[65]On or about 24th September 2007, the Bleakens erected a fence to separate the bungalow on number 27 from the building plot. The fence was erected in a straight line from the front to the back of the building plot and the fence was erected about 1 metre from the eastern gable end of the bungalow. The Bleakens said that they pegged out the site of the proposed house in accordance with the planning permission. I was shown a drawing on which someone (probably David Bleaken) had written certain dimensions in pencil. Derek Bleaken and David Bleaken told me that they had pegged out the outline of the proposed house in accordance with these dimensions. Derek Bleaken said that when they inserted the peg to represent the north-eastern corner of the house, the peg was just under the box hedge. Mr Hardy and Mr Stenner said that they never saw these pegs and it was suggested that the Bleakens never had pegged out the outline of the house. It is very difficult to know what to make of the Bleakens’ evidence about pegging out the outline of the house. Derek Bleaken said that the pegs were in the ground before the auction and that they were removed on the night of the auction following the sale of the property. If that were right, then the only opportunity which Mr Hardy had to see the pegs was during his visit in the afternoon of 4th October 2007. I consider that it is possible that Mr Hardy might not have seen the pegs even if they were there. Further, it is quite likely that the Bleakens would have wanted to peg out the house and it would not have been difficult for them to do so. As against that, David Bleaken said that he removed the pegs at the weekend following the auction. If that were true then the pegs were still there on Friday 5th October 2007 when Mr Hardy and Mr Stenner came to the site and they say they did not see the pegs. In the end, I do not think that I have to make any finding as to whether the Bleakens pegged out the outline of the house and, if they did so, how long the pegs remained in the ground.

[66]Mr Hardy of Harsten was aware of the David James & Partners’ auction scheduled for 4th October 2007. He looked at the relevant website for details of the properties on offer at the auction. He printed out a number of sets of particulars relating to some, at least, of these properties. In particular, he printed the auction particulars for the building plot in Wickwar Road. In the afternoon of 4th October 2007, he drove to Wickwar Road and he looked at the plot from the road. He did not enter the plot. He also looked at some of the houses in the area to get an idea of the locality. The fence separating the bungalow from the plot had been erected by the time of this visit. Mr Hardy did not think that the site of the proposed house had been pegged out on the ground.

[67]Mr Hardy then went to the auction. He arrived at about 5.30 pm. The auction was scheduled to begin at 6.30 pm. He collected an auction pack for the Wickwar Road building plot from a table at the front of the room. He then went to one side and looked at the auction pack in detail. He had a scale ruler with him. He took out Mr Fowler’s A1 plan and scaled off some measurements. He considered that the plot was at least 16 metres by 33 metres as stated in the auction particulars. When the plot was auctioned, there were two bidders for it and Mr Hardy (on behalf of Harsten) was the successful bidder at a price of £154,000. He signed the agreement for sale in accordance with the draft in the auction pack and he gave the auctioneer a cheque for £15,400 as a 10% deposit. The agreement stated that it incorporated the Standard Conditions of Sale (4th Edition). The property to be sold was described as land adjoining 27 Wickwar Road, which “for the purpose of identification only” was edged red on the plan annexed to the agreement. The sale was expressed to be with full title guarantee. The agreed completion date was 1st November 2007.

[68]The plan referred to in the agreement for sale was essentially the same plan as I described at paragraph 40 above, save that the property to be sold was outlined by a thick red line and the plan was a reduced version of the plan I earlier described. The plan as annexed to the agreement stated that on A3 paper it was at a scale of 1:200. It included the wording:

“This drawing must not be scaled all dimensions and particulars to be checked on site before work commences”

. It stated the site area was 400 m 2 and the floor area of the house drawn on the plan was 84m 2. The red line was drawn along a boundary with the land retained by the Bleakens and along a boundary with number 25. The western boundary of the plot was a straight line from front to back. Although the drawing said that it was not to be scaled, I was told that if one scaled the drawing it showed that the western boundary was about ½ metre from the eastern gable of the bungalow. The eastern boundary of the plot, with number 25) was shown as the further east of two black lines. The drawing did not say what these black lines represented. If one was familiar with the planting on this part of the land, the two black lines might suggest the left and the right side of that planting. The red line on the plan was along the right hand black line, i.e nearer to number 25.

[69]The agreement was subject to a number of Special Conditions (“SC”s). SC1(a) stated that the agreement incorporated the Standard Conditions of Sale (4th Edition) but where there was a conflict between the agreement and the Standard Conditions, the agreement was to prevail. SC1(b) stated that where the context admitted, terms used or defined in the agreement had the same meaning when used in the SCs. SC2 stated that the property was sold subject to “the Incumbrances” on the property. The front page of the agreement had a space in which “the Incumbrances” could be listed and that space was left blank. The SCs provided that the sale was with vacant possession on completion and with full title guarantee. SC11 referred to the buyer re-routing an existing water pipe which ran through the property being sold and which served the property at number 27, retained by the Bleakens.

[70]The agreement for sale was subject to the Standard Conditions of Sale (Fourth Edition). Standard Condition 3 is in these terms:

“3.1 Freedom from incumbrances 3.1.1 The seller is selling the property free from incumbrances, other than those mentioned in condition 3.1.2. 3.1.2 The incumbrances subject to which the property is sold are: (a) those specified in the contract (b) those discoverable by inspection of the property before the contract (c) those the seller does not and could not reasonably known about (d) entries made before the date of the contract in any public register except those maintained by the Land Registry or its Land Charges Department or by Companies House (e) public requirements.”

[71]Standard Condition 7.1 provided:

“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 or inaccurate due to an error or omission, the remedies available are as follows. 7.1.2 When there is a material difference between the description or value of the property, or of any of the chattels included in the contract, as represented and as it is, the buyer is entitled to damages. 7.1.3 An error or omission only entitles the buyer to rescind the contract: (a) where it results from fraud or recklessness, or (b) where he would be obliged, to his prejudice, to accept property differing substantially (in quantity, quality or tenure) from what the error or omission led him to expect.”

[72]On or about 5th October 2007, Mr Fowler sent to the District Council a further plan number 2162/2A/06 Rev E. This appears from the fact that when the District Council granted a revised planning permission on 10th October 2007 they referred to the fact that they had received a plan bearing this number on 5th October 2007. I was provided with a copy of a large plan with this number. However, I was also provided with a small copy of a different plan bearing the same number; this small plan was date stamped 5th October 2007 and I understand that the date stamp is the stamp of the District Council. The small plan is difficult to read in some respects but I believe it states that it deals with rooflights and a fence. The fence between the bungalow on number 27 and the plot is essentially the same as Rev D referred to earlier. The fence starts nearer to the eastern gable wall of the bungalow and then moves away from the gable wall, at which point the width of 1 metre is marked on the plan. The copy of the large plan bearing number 2162/2A/06 “E” is different from the small copy plan and is therefore not the plan provided to the District Council and therefore not the plan with that number referred to in the revised planning permission of 10th October 2007. The original plan bearing this number shows that the fence between the bungalow and the plot has been moved so as to form a continuous line about 1 metre from the eastern gable wall of the bungalow. The plan which was sent to the District Council on 5th October 2007 showed a fence in a different position from the fence which the Bleakens had already erected on or about 24th September 2007, 1 metre away from the eastern gable wall of the bungalow.

[73]On 5th October 2007, Mr Hardy and Mr Stenner went to the site. They met David Bleaken who lived in the bungalow at number 27. They discussed the eastern boundary of the site. David Bleaken pointed to a wire fence on number 25’s side of the box hedge and said that the wire fence was on the boundary line. Mr Hardy then telephoned Mr Fowler and arranged to meet him on site on 8th October 2007.

[74]On 8th October 2007, Mr Hardy and Mr Stenner met Mr Fowler on site as arranged. They showed Mr Fowler the contract plan. Mr Fowler said that the contract plan was not the right drawing as he had submitted a different drawing for planning permission. Indeed, it was on 5th October 2007 that Mr Fowler had submitted a revised drawing to the District Council, as described above.

[75]On 10th October 2007, the District Council granted planning permission in terms which described the development as the removal of condition 2 from the earlier planning permission; it stated in the description of the development that a revised plan had been received on 5th October 2007. On the material before me, this revised plan was plan number 2162/2A/06 Rev E in accordance with the small copy plan provided to me and bearing that number. Condition 2 to the revised planning permission stated that:

“Prior to commencing any works on the side, the proposed boundary fence as shown on plan number 2161/2/2006 received in this office n 30th July 2007 and plan number 2162/2A/06 Rev E received in this office on 5th October 2007 shall be erected and maintained as such thereafter”

. Condition 3 of the revised planning permission stated that:

“Prior to the occupation of the proposed dwelling the car parking and manoeuvring facilities shall be completed in all respects in accordance with the submitted details and shall be similarly maintained thereafter for that purpose”

. The reason stated for this condition repeated the reason for the parking condition in the original planning permission of 24th April 2007, which referred to Policy GE5 of the Stroud District Local Plan.

[76]On 16th October 2007, Harsten’s solicitors sent to the Bleakens’ solicitors requisitions on title and a draft transfer. On 19th October 2007, Harsten’s solicitors wrote to the Bleakens’ solicitors stating that Harsten had now instructed its solicitors that the boundary fence (separating the bungalow from the plot) was 1 metre from the bungalow but it ought to be ½ metre from the bungalow in accordance with the contract plan. They asked the Bleakens’ solicitors to ask the Bleakens to move the fence. On 24th October 2007, the Bleakens’ solicitors replied stating that the fence was in the correct position and the plan was inaccurate; the fence needed to be 1 metre from the bungalow to allow the bungalow windows to be opened. There was no further correspondence between the parties as to the position of the fence before completion on 1st November 2007.

[77]On 1st November 2007, the Bleakens transferred to Harsten part of the land in the Bleakens’ registered title number GR300899. The transfer stated that the property transferred was “defined on the attached plan and shown edged red”. The attached plan was the same plan as the plan annexed to the agreement for sale. On execution of the transfer, Harsten paid the Bleakens the balance of the purchase price of £154,000.

[78]On 7th November 2007, contractors instructed by Harsten went to the site to clear it, ready for development. In particular, the contractors removed part of the box hedge and indeed some lilac trees. When Ms Powell came home from work that day the contractors were still on site and she asked them to stop work as she said that the box hedge belonged with number 25 and not with the building plot. There were a number of communications between solicitors acting for Mr Devlin and Ms Powell and Harsten and Harsten did stop the work of clearing the site. Indeed, no further work was carried out on the site since that date.

[79]Following the transfer of the property to Harsten, its solicitors wrote on 7th November 2007 to the Bleakens’ solicitors. Harsten’s solicitors again stated that the fence between the bungalow and the plot had been erected in the wrong place. They required the Bleakens to re-position the fence within 14 days. On 9th November 2007, the Bleakens’ solicitors replied stating that the fence was in the correct position.

[80]On 14th November 2007, the solicitors for Mr Devlin and Ms Powell wrote to the solicitors for Harsten. They attached a letter dated 10th November 2007 from Mr Maunders to Mr Devlin. The letter of 10th November 2007 stated that there had originally been a ditch running along the west side of the box hedge and that Mr Maunders’ father, as the then owner of 27 Wickwar Road, had piped-in the ditch.

[81]On 27th November 2007, Harsten’s solicitors wrote to Mr Fowler seeking certain information from him. They stated that the Bleakens had sold land which they did not own and had wrongly represented that they did own that land; that must be a reference to the boundary dispute with Mr Devlin and Ms Powell. I was not shown any reply from Mr Fowler.

[82]On 3rd December 2007, Harsten’s solicitors had a telephone conversation with Mr Derek Bleaken; it appears from those solicitors’ letter to the Bleakens of the next day that Mr Derek Bleaken had suggested a meeting on site between Harsten, the Bleakens and Mr Devlin and Ms Powell. On 4th December 2007, Harsten’s solicitors wrote to the Bleakens direct. The solicitors stated that the Bleakens were in breach of the covenants for title in that they purported to transfer land which they did not own; the land in question was the area occupied by the box hedge. The solicitors proposed a tripartite meeting to establish precisely what the Bleakens owned and to identify an agreed resolution of the issues raised. That letter was sent to the Bleakens at the address of 27 Wickwar Road on 6th December 2007. On 19th December 2007, the solicitors then acting for the Bleakens replied to Harsten’s solicitors. The suggestion that the Bleakens were in breach of the covenants for title was rejected. It was suggested that a meeting with lawyers present would simply result in large legal bills. However, Mr Derek Bleaken was prepared to meet Harsten on site as a gesture of goodwill. On 21st December 2007, Harsten’s solicitors replied disagreeing with had been written on behalf of the Bleakens. Further letters in January 2008 from Harsten’s solicitors to the solicitors for the Bleakens went unanswered and the matter does not appear to have been pursued between Harsten and the Bleakens at that stage.

[83]On 4th February 2008, Harsten applied to the District Council for planning permission for a 4 bedroom detached house on the building plot. The total area of the site was said to be 0.04 hectares (which is 400 square metres). The floor area of the proposed dwelling was 114 square metres. The application referred to the development accommodating 2 car spaces.

[84]Gloucester County Council as the highway authority were consulted on this application. On 13th March 2008, they wrote to the District Council raising no highway objection to the application provided that the vehicular access conformed to certain requirements which they specified. Those requirements referred to the submitted plan, to the intended position of entrance gates and specified that the width of the access drive was to be not less than 3 metres and the area in advance of the gate position/splay lines should be kept free from obstruction. They stated that the reason for these requirements was to ensure a satisfactory means of access. They also stipulated that car parking and manoeuvring facilities should be completed in accordance with the submitted plans; the stated reason was to ensure adequate on-site car parking was available and that sufficient turning space was available to enable vehicles to enter and leave the highway in forward gear in the interests of highway safety. The submitted plans showed a driveway between the existing bungalow on number 27 and the proposed new house on the building plot. There was a parking space or turning area in front of the proposed new house. The driveway continued to the rear of the site where there was to be a garage and a further turning area.

[85]In February and March 2008, there was correspondence between the solicitors for Harsten and the solicitors for Mr Devlin and Ms Powell. Harsten had obtained a report from a Mr Davis which they said supported its claim to be entitled to the land transferred to it by the Bleakens. A copy of that report was sent to the solicitors for Mr Devlin and Mr Powell. For some reason, that report was not in evidence at the trial. Harsten threatened to proceed with their work of clearing the site, in accordance with their then case as to where the boundary with number 25 was situated. The solicitors for Mr Devlin and Ms Powell asserted that if at one time the legal boundary had been where Mr Davis said it had been, they they had acquired title to some land by way of adverse possession. They threatened to seek an injunction to prevent Harsten proceeding with its stated intentions. Eventually, at the same time as Mr Devlin and Ms Powell started the proceedings to which I will next refer, Harsten agreed not to proceed until the boundary dispute with Mr Devlin and Ms Powell was resolved.

[86]On 20th March 2008, Mr Devlin and Ms Powell brought the county court proceedings against Harsten. In those proceedings, Mr Devlin and Ms Powell put their claim to ownership and the extent of their ownership in various ways. The widest claim they made was to own all of the hedge and all of the former open ditch (which was later filled in) on the west side of the hedge.

[87]On 4th April 2008, the District Council granted planning permission for the development of a four bedroom house on the building plot. The District Council imposed as conditions the two requirements identified by Gloucester County Council. The reasons stated for both conditions referred to the need to comply with Policy GE5 of the Stroud District Local Plan.

[88]On 13th November 2008, Harsten’s solicitors wrote directly to the Bleakens. The solicitors stated that Harsten proposed to bring proceedings seeking rescission of the contract dated 4th October 2007. The letter referred to statements made by the Bleakens in the SPIF and in the auction particulars. The letter then complained, first, of the dispute with the owners of 25 Wickwar Road. It was said that without the land which was in dispute with the owners of number 25 being included in the plot, the house for which the Bleakens had obtained planning permission could not be built. The letter further complained of the fact that there was a pipe running under the plot which was prone to flooding. It was said that Harsten could not build over this pipe. The Bleakens did not reply to this letter until their solicitors replied on 19th December 2008; they rejected Harsten’s claim and asked a number of questions. There appears to have been a letter from Harsten’s solicitors answering those questions but I was not shown it. Eventually, directions were given in the county court proceedings on 10th June 2010 requiring Harsten to serve a Defence. Before serving that Defence, on or about 1st July 2010, Harsten started the High Court proceedings against the Bleakens claiming rescission of the contract and damages. On 13th September 2010, Harsten served a Defence and Counterclaim in the county court proceedings. Harsten pleaded in that Defence that the real dispute was between Mr Devlin and Ms Powell on the one hand and the Bleakens on the other and Harsten put Mr Devlin and Ms Powell to proof of their claim.

The expert evidence

[89]I was provided with reports from three expert witnesses, Mr Rocks for Mr Devlin and Ms Powell, Mr Miles for Harsten and Mr King for the Bleakens. Much of the contents of those reports was not admissible in evidence for various reasons. However, a limited amount of the evidence given by the experts is admissible in relation to a question which I may have to consider. When I have determined what land was the subject of the contract of 4th October 2007 and/or the transfer of 1st November 2007, it may be necessary to consider whether it would have been possible to construct a house on that land and, in particular, whether it would have been possible to construct on that land the house which was permitted by the planning permissions of 24th April 2007 and 10th October 2007. I will therefore refer to any expert evidence which goes to that issue before discussing the matters which arise and making my findings.

[90]Mr Rocks was called by Mr Devlin and Ms Powell. He was not asked to consider in his report what the owner of the land sold in October/November 2007 could build on that land. He was cross-examined by counsel for Harsten by reference to a document called Design Bulletin 32, apparently published by Gloucester County Council. It was put to Mr Rocks that this Bulletin showed the standards which the County Council would adopt in relation to parking and manoeuvring of vehicles at a new private house. Mr Rocks stated in response that the standards amounted to guidelines which could be relaxed by the County Council where site conditions did not allow full compliance.

[91]Mr Miles was called by Harsten. He had been asked to report on whether the disputed boundaries had an adverse effect on the development potential of the site and whether existing planning permissions could be implemented. Mr Miles referred to four possible problems for Harsten wishing to develop the site, as follows:(1) if Harsten had been entitled to land with a boundary ½ metre from the bungalow eastern gable and the land transferred had a boundary 1 metre from that gable, then Harsten was losing about 15.5 m 2 of area;

(2) if Harsten had been entitled to land with a boundary on the eastern edge of the box hedge and if the land transferred excluded all of the box hedge, then Harsten was losing about 46 m 2 of area;

(3) if the land transferred excluded all of the ditch (with an assumed width of 1 metre), then Harsten was losing another 34 m 2 of area;

(4) if Harsten was not entitled to the area taken up by the former ditch, then it would need to re-site the house and that would result in considerable cost and delay. Mr Miles then stated that in all instances, except the first, Harsten would have to apply for a fresh planning permission; although this statement was not explored in evidence, Mr Miles appeared to accept that if the land transferred had a boundary 1 metre from the bungalow gable wall, then it would not be necessary to apply for a fresh planning permission. He suggested that the need to make a fresh application would result in uncertainty as to the outcome and an application might even be refused if the proposed house was too near to the bungalow. He went on to say that if the area transferred to Harsten excluded all of the land referred to in (1), (2) and (3) above (“a worst case scenario”), then he had grave doubts as to the ability to obtain planning permission for a house on that reduced site. He then stated that Harsten intended when it bought the plot to seek an improved planning permission for a larger house. Mr Miles did not refer in his report to any relevant requirements of Gloucester County Council as to the parking and manoeuvring of vehicles. Mr Miles was cross-examined by counsel for the Bleakens. Mr Miles was asked if it would be possible to move the footprint of the proposed house further to the west if it turned out that the eastern boundary was the western face of the box hedge. Mr Miles replied that if the distance moved to the west was “significant” that might lead to an objection from the owner of the bungalow on number 27. He was also asked if the footprint of the house could be moved nearer to the road. It was pointed out that Harsten’s planning permission for a 4 bedroom house related to a house nearer to the road than the house permitted by the Bleakens’ planning permissions. It was put to Mr Miles that there were various possible ways of dealing with the drain when building a house on the site. Mr Miles stated that he had not considered any technical matters in that respect. When re-examined, Mr Miles was asked whether it would be possible to bring the footprint of the house forward and yet achieve the turning circle referred to in the County Council’s guidelines. Mr Miles replied that he could not say.

[92]Mr King was called by the Bleakens. Mr King stated in his report that it was possible to build on the site either a 3 bedroom house in accordance with the Bleakens’ planning permission or a 4 bedroom house in accordance with Harsten’s planning permission. For this purpose, Mr King used a plan showing the western boundary of the site as 1 metre from the bungalow gable and the eastern boundary of the site as the root line of what he called the lilac hedge. Mr King separately considered the implications of the drain running along the box hedge. He referred to the possibility of building over the drain but in a way which allowed access to the drain or the possibility of laying a new drain, clear of the new building. He preferred the second option and estimated its cost at between £1,000 and £1,500. He produced a plan showing a minor variation of the line of the drain and the construction of two new manholes. There was some inconclusive cross-examination of Mr King in relation to the ability to move the drain so that it did not interfere with the construction of the house the subject of the Bleakens’ planning permissions. In his report, Mr King had said that an alternative to moving the drain was to move the house but that that would require a new planning permission.

[93]Mr King was cross-examined as to the ability to re-design the house so that it would not be built over the drain. The suggested difficulty in the way of re-designing the house was based on Design Bulletin 32 prepared by the County Council in relation to parking and manoeuvring of vehicles. That document was put to Mr King. He was familiar with it. It was suggested that the requirements of the Design Bulletin would prevent a re-design of the house. Mr King said that the Design Bulletin was not a statutory requirement. It was then put to Mr King, that if one re-positioned the proposed house to the west, that would narrow the driveway which was intended to be built between the new house and the western boundary fence and that would not comply with the Design Bulletin. It was also put to Mr King that if one re-positioned the new house towards the front of the site, that would encroach on an intended turning circle and the result would not comply with the Design Bulletin.

[94]Counsel for Harsten submitted to me in closing submissions that Mr King had accepted that it was not possible to “move the house” without infringing the requirements of the Design Bulletin and therefore Mr King had accepted that it was not possible to “move the house”. It was further submitted that this meant that it was impossible to build any house on the site because any house would be situated over the drain and it was not legally possible to build over the drain.

[95]I was provided with a transcript of Mr King’s cross-examination and I have read and re-read the relevant passages. Mr King accepted that if one re-positioned the house by moving it to the west, without more, then it would narrow the area available for a driveway on the western side. Further, if one re-positioned the house nearer to the road it would encroach on the turning circle as originally designed. However, I consider that that evidence goes nowhere near establishing that it was not possible to re-position a house on the site and avoid building over the drain. There are a number of reasons for that. The first is that the suggested difficulty in moving the house was a suggested failure to comply with Design Bulletin 32. Harsten called no evidence as to the status of that document. It had not been referred to by the County Council as highway authority when it was consulted on the two planning applications made by the Bleakens nor, indeed, when it was consulted on the planning application made by Harsten. Mr Rocks said that the Bulletin consisted of a set of guidelines which could be relaxed. Mr King said that the Bulletin did not impose a statutory requirement. Therefore, at the highest, Harsten was seeking to show that a modest movement of the house would not comply with the guidelines and would need a relaxation. There was no evidence as to the attitude which the relevant planning or highway authority would adopt to a request for a relaxation. Further, it was not shown that it was impossible to re-position the house in a way which would comply with the guidelines or at least where the failure to comply would not be any worse than that which was already permitted by the Bleakens’ permissions. Mr King himself suggested removing a chimney stack leading to more space being available for the drive. Further, it is not obvious to me why one could not move the turning space nearer to the front of the site, slightly altering the entrance, and thereby allowing the house itself to be brought nearer to the front of the site. As Mr King said, a re-positioning of the house would require planning permission and an application for planning permission would involve some delay and would introduce some element of uncertainty. But that is different from saying that it was impossible to build any house on the site.

The true construction of the agreement as to the boundaries

[96]I will now seek to identify the land which was the subject of the agreement for sale of 4th October 2007 and of the transfer of 1st November 2007. I will first discuss the agreement and then separately the transfer. In each case, I will first discuss the western boundary and then the eastern boundary.

[97]As regards the agreement for sale, the material which is of principal relevance consists of the words of the agreement, the plan and the physical layout at the date of the agreement. The agreement referred to the property as “land adjoining 27 Wickwar Road”. That land was shown edged red on the plan annexed “for the purpose of identification only”. The land was said to be part of title number GR30089; that statement does not help with the position of the western boundary which was to be a new boundary not shown in any way on the existing registered title.

[98]The plan was an A3 plan. The plan was drawn to a scale of 1:200 but the plan stated that it was not to be scaled and that all particulars and dimensions must be checked on site before work commenced. The boundary between the bungalow and the plot was shown as a straight red line. There was a clear gap between the bungalow and the red line. There was no dimension on the plan as to the width of this gap. If one scaled off the plan, the width of the gap would be about ½ metre. However, the plan stated that the plan was not to be scaled. One might have thought that the principal reason for that statement was to guard against the risk that the plan had been photocopied and the scale might have become distorted in the copying. Nonetheless, the plan expressly stated that it was not to be scaled and the risk from photocopying was not identified as the reason for this statement. That statement was made more emphatic by the additional statement that dimensions were to be checked on site. In the course of the evidence, references were made to the fact that a skilled reader of the plan could tell by eye, without using a scale ruler, that the gap was about ½ metre and in any case was less than 1 metre. That seems to me to involve scaling even though a scale ruler is not being used; the scaling is being done by eye and in an approximate way but it is still using the scale of the plan to arrive at an unstated dimension. The plan also states that the site area is 400 m 2. There was no real attempt in the evidence to measure the area of the land in a way which would help me to identify either of the disputed boundaries.

[99]The next relevant matter in relation to the western boundary is the physical position at the date of the agreement. Here the position was very clear. There was a newly erected fence separating the bungalow from the plot. That fence would convey to any purchaser that the vendor intended the fence to be the boundary. If one had measured or assessed how far the fence was from the gable of the bungalow, the answer would be about 1 metre.

[100]If one combines the various pieces of information derived from the agreement, the plan and the fence, I consider that a purchaser of the plot who went to the land with the agreement and the plan in his hand would conclude that the western boundary of the land being sold was the line of the fence. There could be no other explanation as to why the fence was there. There was intended to be a new legal boundary and there was a new fence. The purchaser would be likely to look at the plan and the position of the fence and think to himself that the fence was further from the gable of the bungalow than the plan would suggest. However, the purchaser would see that the plan was for identification only, that the plan did not give a dimension for the gap and that the plan was not to be scaled. He would therefore conclude that the boundary was indeed the line of the fence.

[101]If it were material to take account of the auction particulars, I do not think that the purchaser’s reading of the auction particulars would result in a different conclusion. The particulars refer to a frontage of 16 metres but there was no real attempt in the evidence to identify the boundaries by reference to that measurement. The auction particulars stated that the plot was marked on site and the vendor would erect a suitable boundary; the purchaser would see at the date of the agreement that the vendor had done so. The auction particulars also stress that the plot should be physically inspected. The particulars also refer to the planning permission of 24th April 2007. If it were permissible to have regard to that planning permission and the drawing submitted as part of the application for that planning permission, then one would see that the relevant drawing was a larger version of the plan annexed to the agreement. That itself would not take matters much further. In addition, the auction particulars referred to a new planning application and if it were permissible to have regard to the plan submitted with the new application, that plan was different from the original planning drawing and different from the plan annexed to the agreement. If it were permissible to refer to the contents of the auction pack, then there was nothing further there in addition to the matters to which I have now referred.

[102]I conclude that on the true construction of the agreement for sale, the western boundary of the plot was the line of the fence.

[103]I next consider what the agreement provided as to the eastern boundary of the plot. Here the position is not so clear cut. I have already referred to the words of the agreement. In addition to the matters I specifically considered earlier, it is also to be noted that the land being sold was part of an existing registered title. It would seem likely that the western boundary was to be the same as in the registered title, save where there was an apparent departure from the registered boundary. There was, in fact, one apparent departure from the registered title as regards the line to the front of the plot created by the new fence erected (by Mr Devlin) at that point. However, the registered plan did not show a precise boundary; it was only a general boundary in accordance with the usual position with registered titles.

[104]The plan annexed to the agreement shows two black lines along or near to the eastern boundary. It is the further east of these two lines which is edged red as the boundary line. If the purchaser went to the plot with the plan in his hand, he would see that along the eastern boundary there was a box hedge and some lilac trees and a light wire fence. He would be likely to conclude that the two black lines on the plan were meant to represent the left and right side of something, probably the box hedge. In my judgment, he would not conclude from the plan that the boundary was the middle of the box hedge but he would conclude that the boundary was probably along the right hand side of that hedge.

[105]If it is permissible to take account of the auction particulars as an aid to the interpretation of the agreement, they contain a clear statement that the box hedge will be owned by the plot and it was assumed would be removed to provide the quoted dimensions.

[106]I conclude that a purchaser who went to the plot with the agreement and the plan in his hand would conclude that the eastern boundary was somewhere to the east of the middle line of the box hedge and probably the right hand side of the box hedge.

The true construction of the transfer as to the boundaries

[107]The transfer stated that the land being transferred was land adjoining 27 Wickwar Road and that the property was “defined” on the attached plan and thereon shown edged red. In relation to the land being transferred, the plan annexed to the transfer was the same as the plan annexed to the agreement for sale. The plan also showed, edged in green, the land to be retained by the vendor. Although the land was said to be defined on the plan, in my judgment, it is still appropriate to construe the transfer by reference to the physical position at the date of the transfer. The physical position at 1st November 2007 was the same as the position at the date of the agreement for sale, which I have described above.

[108]In my judgment, for the same reasons which I set out when construing the agreement for sale, I conclude that the western boundary of the land transferred was the line of the fence and the eastern boundary was somewhere to the east of the middle line of the hedge.

The alleged misrepresentations

[109]Harsten claims rescission of the agreement for sale and of the transfer. If Harsten were entitled to rescission of the agreement for sale and if the taking of the transfer did not amount to affirmation of the agreement (and in the absence of any other affirmation), then the transfer of the land to Harsten did not bar its entitlement to rescission and the corollary appears to be that Harsten is entitled to rescission of both the agreement for sale and the transfer.

[110]The claim to rescission is based on alleged misrepresentations by the Bleakens. The subjects of the alleged misrepresentations can be grouped into four categories, as follows:(1) the western boundary;

(2) the eastern boundary;

(3) the drain; and

(4) the description of the land as a building plot together with the references to the planning permission and the planning application. I will take these alleged misrepresentations in turn.

[111]As to the western boundary, I have held that the land which was the subject of the agreement for sale and the transfer had a western boundary along the line of the fence. Harsten alleges that the Bleakens represented that the land which would be sold to it would have a boundary ½ metre from the gable of the bungalow. Harsten relies upon the indications in the various documents which were provided by the Bleakens to Harsten which so indicated. In particular, Harsten points to the plan attached to the draft agreement and later the executed agreement, being the same plan as was submitted to the District Council leading to the grant of planning permission on 24th April 2007. If one took this plan on its own, then it might be possible to say that it contained a representation in the way asserted by Harsten. Harsten would still have the difficulty that the plan did not give a dimension for the distance between the fence and the gable wall and it stated that the plan was not to be scaled and particulars were to be checked on site. However, apart from those considerations, there seems to me to be a more fundamental point in the way of Harsten’s claim. The question is: what representation did the Bleakens make? The Bleakens presented to Harsten a number of indications as to where the western boundary would be. When I construed the agreement for sale as to what it provided as to the western boundary, I referred to the terms of the agreement for sale (which were the same as the draft agreement for sale presented to Harsten in the auction pack), the plan, the auction particulars, the auction pack and the fence erected on the site. The representation made by the Bleakens to Harsten consisted of the combined effect of these indications. All of them, including the presence of the fence on the site, were known to Harsten. When I construed the agreement, both with and without the benefit of the auction particulars and the auction pack, I concluded that objectively speaking the agreement provided for a boundary along the line of the fence. In my judgment, the overall effect of the information conveyed to Harsten by the documents supplied to Harsten is that Harsten was being told that the western boundary was along the line of the fence. Accordingly, the Bleakens represented to Harsten that the western boundary would be along the line of the fence. On that basis, there was not a misrepresentation as to the western boundary.

[112]As to the eastern boundary, I have construed the agreement for sale and the transfer as providing for Harsten to acquire land up to an eastern boundary which was further east than the middle line of the box hedge. There was a clear representation, apart from the terms of the agreement for sale and the transfer, in that the auction particulars stated:

“The box hedge to the rear and east will be owned by the plot and it is assumed that these will be removed to provide the above quoted dimensions”

. This statement contained a representation that the Bleakens had title to all of the box hedge and that the purchaser would acquire all of the box hedge. Counsel for the Bleakens did not contend that this could not be an actionable misrepresentation on the ground, for example, that it was a representation of law. He seemed to me to accept that this representation could be a representation of fact as to the private ownership of the relevant land. In the event, that representation was wrong; it was a misrepresentation. The auction particulars stated that they did not constitute any offer or contract; however, this does not prevent the particulars being a representation of fact. Further, although the auction particulars stated, more than once, that an intending purchaser should inspect the plot before purchasing, an inspection of the plot would not have revealed that the representation was wrong. Although the particulars state that they are without responsibility on the part of the vendor, that statement was not relied upon by the Bleakens. It does not prevent the reference to the box hedge having the character of a representation.

[113]I next consider the alleged misrepresentation in relation to the drain running along the box hedge. The first point which needs attention in relation to the drain is to determine whether any third party had any right to use the drain. It is not suggested that the drain was a public drain. A right of drainage through a pipe can be an easement. It is suggested that the owner of the field to the north of the plot had acquired an easement of drainage through the pipe which had been in position and had been continuously used since the 1940s.

[114]In my judgment, on the evidence in this case, the owner of the field to the north of the plot had acquired an easement of drainage through the pipe. The pipe had been used for drainage for a substantial period of time. There was no permission granted by the owner of the plot; instead the owner of the plot acquiesced in the use of the pipe. The use of the pipe was not secret as Mr Adolphus Maunders himself installed the pipe in the 1940s and the pipe was used to his knowledge and the knowledge of his successors in title (his son and daughter-in-law) until 2006. Accordingly, an easement of drainage was acquired by prescription. It is not necessary for the purposes of this case to define the extent of the land which constituted the dominant tenement.

[115]In the light of my finding that there was an easement of drainage through the pipe, I can now consider the case as to misrepresentation in relation to the drain. The case as to misrepresentation focussed on the fact that there was an easement of drainage through the pipe but also relied on the presence of the pipe and the potential for flooding allegedly thereby created. Neither the existence of the easement of drainage nor of the pipe was disclosed by the Bleakens to Harsten. Harsten’s case as to misrepresentation relies principally on the answers given in the SPIF. I will take the answers relied upon in turn.

[116]I do not consider that answer 2.1 was a misrepresentation; there was no dispute about the drain and I am not able to hold on the evidence that the existence of the pipe might lead to a dispute with a neighbour. Although Harsten alleged that the presence of the pipe led to flooding (because the pipe was inadequate), Harsten did not establish that the pipe caused flooding. In particular, it did not establish the flooding in July 2007 was attributable to the presence of the pipe. Further, in case it is necessary to deal with this point, the flood in July 2007 did not result in a dispute with Mr Devlin and Ms Powell.

[117]Answer 5.5 was a misrepresentation. The question was whether a drain leading to a neighbour’s property crossed the property being sold. The answer was “yes” but the details provided referred only to an electric cable. The drain was not mentioned. The answer therefore meant that no drain leading to a neighbour’s property crossed the land being sold. That was incorrect.

[118]Answer 5.6 was not a misrepresentation. The question referred to any agreement or arrangement. There was no agreement or arrangement as to the use of the drain. The owner of the land to the north had acquired a right of drainage by prescription. Counsel for Harsten submitted that one way that right had been acquired was pursuant to the doctrine of lost modern grant and so there was a legal fiction that there had been a grant. However, that legal fiction does not mean that there had in fact been a grant. In any case, I do not consider that question 5.6 when it refers to an agreement or an arrangement can be construed as referring to a fictional agreement or arrangement.

[119]Answer 6.5 was not a misrepresentation.

[120]Answer 6.7 was a misrepresentation. The owner of the land to the north of the plot had a right ancillary to the easement of drainage to come onto the plot to repair the drain. When the question asked if a third party had “a need” to come onto the plot, it is to be understood as asking whether a person who wanted to repair the drain, when it needed repair, would need to come onto the plot to carry out that repair.

[121]Answer 7.4 was not a misrepresentation. For the reasons given in relation to answer 5.6, there was no relevant formal or informal arrangement.

[122]Answer 9.1 was not a misrepresentation. It was suggested that the work of filling in the ditch in the 1940s amounted to “building works”. I do not agree. In the context of the SPIF, that work did not amount to “building works”.

[123]The auction particulars stated that the land was sold subject to all rights including rights of drainage whether or not referred to in the particulars. This statement does not prevent the answers given in the SPIF being representations. Indeed, if it was the case that the agreement for sale provided for the sale to be subject to rights of drainage, whether or not referred to in the contract, the answers in the SPIF became even more important to the potential purchaser.

[124]Lastly in relation to the alleged misrepresentation, I will consider the allegations in relation to the description of the land as a building plot and the various references made to planning permission. The auction particulars used a number of descriptions of the land being sold. It was prominently described as a “building plot with full consent for the erection of single detached dwelling”. Details of the planning permission and the pending planning application were given. It was then described again as a building plot with full planning permission. The site was said to be of a size “adequately accommodating the proposed Dwelling plus front and rear Garden/Car Parking to be designated”. The particulars explained that the drawings submitted for planning permission showed two double bedrooms with individual en-suite bathrooms but that the drawings submitted for Building Regulation approval showed an alternative layout of 3 bedrooms and bathroom. The auction pack included the planning application, the plans submitted with the application and the permission of 24th April 2007.

[125]Counsel for Harsten submitted that the auction particulars involved a misrepresentation in that the plot was not “a building plot” because no house could be built upon it. I am not able to accept that submission. There were two problems with the land transferred to Harsten. The first was that the land which was transferred on 1st November 2007 was smaller than the land which the Bleakens represented to Harsten would be transferred. This was due to the fact that the Bleakens (and thereafter Harsten) only had title up to the middle line of the box hedge. There has been no application for planning permission in relation to the land actually transferred to Harsten. The second problem was that there was an easement of drainage through a drain running just to the west of the box hedge. I did not hear any evidence from a planning consultant as to the prospects of obtaining planning permission for a modest dwelling house on the reduced size of the plot, subject to the drainage easement. Counsel for Harsten relied heavily on the parking and manoeuvring Design Bulletin apparently issued by Gloucester County Council as highway authority. The evidence was that this Bulletin consisted of guidelines which could be relaxed. Harsten did not establish, whether by reason of the questions they put to Mr King or otherwise, that it was not possible to design a modest house which would fully comply with these guidelines. Further, even if it were not possible to comply with the guidelines, Harsten did not establish that there was no prospect of the guidelines being relaxed. Accordingly, it simply does not follow, from the existence of these guidelines, that it is impossible to design a house which could be built upon the plot and which would attract planning permission. I do not consider that the description of the land as a “building plot” involved a misrepresentation.

[126]Harsten then submitted that the Bleakens misrepresented the position when they stated that the land being sold had the benefit of the planning permission of 24th April 2007. Harsten submitted that this statement involved the representation that this planning permission was reasonably capable of being implemented on the land transferred to Harsten. Harsten then submitted that this was a misrepresentation because the planning permission was not reasonably capable of being implemented on the land transferred to Harsten. I will first consider whether the alleged representation was made and then, if it had been, whether it was a misrepresentation.

[127]I consider that the various statements made in the auction particulars did amount to a representation that the planning permission of 24th April 2007 was reasonably capable of being implemented. I acknowledge that the contrary is arguable. It could be said that all that was represented was that the planning permission existed. However, I conclude that on a fair reading of the auction particulars, the alleged representation was indeed being made. I therefore next need to consider whether that amounted to a misrepresentation.

[128]Before considering the way in which Harsten put its case as to this alleged misrepresentation, I wish to refer to matters that were not relied upon by Harsten. There are two such matters. The first arises from the possibility that condition 2 of the planning permission of 24th April 2007 could not be complied with by a purchaser of the land transferred. The second arises from the fact that the planning permission related to a particular area of land, which might be regarded in planning law as the planning unit, and not all of that land was transferred to Harsten.

[129]As to the first of these points, even if all of the land which was the subject of the planning permission of 24th April 2007 had been transferred to Harsten, there might have been a difficulty for a purchaser of that land to comply with that planning permission. Condition 2 of that planning permission required two windows to be blocked up and kept blocked up thereafter. Unless something was specifically agreed between the owner of the bungalow and the purchaser of the plot, compliance with that condition would have been outside the control of the purchaser. Therefore, that planning permission might not have been capable of implementation by a purchaser of the plot, unless there was a satisfactory term in the transfer obliging the vendor who retained the bungalow to ensure compliance with condition 2 at all times. The draft agreement did not provide for such a term, no doubt because the Bleakens hoped that condition 2 would be dealt with in another way, i.e. pursuant to a satisfactory outcome to the planning application of 30th July 2007.

[130]In the events which actually happened, condition 2 of the planning permission of 10th October 2007 required a boundary fence as shown on two plans to be erected and maintained thereafter. Where the boundary fence shown on those plans passed the two windows of the bungalow in question, the fence was 1 metre away from the windows. So was the fence actually erected marking the western boundary of the land actually transferred on 1st November 2007. However, the fence actually erected did not conform to the two drawings referred to in condition 2 of the planning permission of 10th October 2007. The purchaser of the land actually transferred had no entitlement to insist on the Bleakens erecting a fence which conformed to the two plans referred to in the condition. Thus, it might have been said that Harsten could not implement the planning permissions of 24th April 2007 and 10th October 2007. It may be however that this difficulty could have been overcome by asking the planners to approve the fence which was actually erected. After all, the fence actually erected was 1 metre away from the 2 windows in the bungalow and that is apparently what the District Council was concerned about.

[131]The second possible difficulty about implementing the planning permissions of 24th April 2007 and 10th October 2007 was that the planning unit shown on the approved plans was not in the ownership of Harsten. If Harsten attempted to build the house so permitted, it would be building that house on a smaller planning unit.

[132]Although I have identified these two possible arguments, it would not be right for me to come to firm conclusions in relation to them and, in particular, it would not be right to decide the case against the Bleakens on such a basis. These points were not made by Harsten and it would not be fair to the Bleakens to come to a view adverse to them on these matters, without the matter being tested in argument. I will therefore pass on to the way in which Harsten did put its case in relation to its ability to implement the planning permission of 24th April 2007 and/or of 10th October 2007.

[133]Harsten referred to the fact that the land transferred did not include as much land as the Bleakens represented would be transferred. As I have held that the Bleakens did not make a misrepresentation as to the position of the western boundary of the land transferred, the relevant misrepresentation in this respect relates to the eastern boundary. The second difficulty which Harsten stressed, as preventing it implementing the planning permissions of 24th April 2007 and 10th October 2007, was that the house permitted by those permissions was built over a drain, which was the subject of an easement of drainage. I will take these two matters in turn.

[134]I will first consider any difficulty in the way of implementing the planning permission of 24th April 2007 by reason of the misrepresentation as to the position of the eastern boundary. I was provided with a plan prepared by the three experts. That plan showed the centre line of the box hedge and superimposed on the plan was the outline of a dwelling house built in the position permitted by the planning permission of 24th April 2007. The north-eastern corner is very close indeed to the centre line of the box hedge but, on the basis that the eastern boundary of the land transferred was the centre line of the box hedge, the superimposed house is just within the land transferred.

[135]As to the difficulty caused by the fact that the land transferred was subject to an easement of drainage, it was submitted that a servient owner could not lawfully build over a drain which was the subject of an easement of drainage as the dominant owner could obtain an injunction restraining building works over the drain and could even ask the court to order the servient owner to demolish the building once erected. Reference was made to Goodhart v Hyett

(1883) 25 Ch D 182

, Abingdon Corporation v James

[1940] Ch 287

and Rickmansworth Water Co v JW Ward & Sons Ltd [1990] EGCS 91. I consider that the presence of a drain subject to an easement of drainage is, or may be, an inhibition on the servient owner’s ability to build on his land. In some circumstances, he may be wholly unable to build above the drain without infringing the rights of the dominant owner. In other circumstances, he may be able to build above the drain, without infringing the rights of the dominant owner, but only if he preserves the dominant owner’s ability to have access to the drain for the purpose of its maintenance and repair. In other circumstances, it may be necessary for the dominant owner to divert the drain so that it is not underneath the new building. In the present case, there was inconclusive evidence as to the ease or difficulty with which access to the drain could be preserved if a house were built over it or as to the ease or difficulty with which the drain could be diverted. I am not satisfied on the evidence given that it would have been possible to build over the drain in a way which would be reasonable for Harsten to adopt and which would have preserved the dominant owner’s access to the drain. The somewhat inconclusive evidence on this point was that it ought to be possible to divert the drain for a comparatively modest sum, perhaps only a few thousand pounds. However, the position of the house permitted by the planning permission of 24th April 2007 is so close to the centre line of the box hedge, i.e. the boundary of the land transferred, that I think it would probably not have been possible to build a house in the exact position permitted by that planning permission and also divert the drain in the gap between the house and the boundary. There would probably not be enough room for this to be done. Conversely, I consider that it ought to be possible to do a modest re-design of the house so as to re-position it away from the line of the drain, permitting future access to the drain. However, Mr King the expert called by the Bleakens was absolutely clear in his evidence that a re-design of the house in this way would require a further planning application. If there had to be a further application, such an application would take some time before the planning authority determined it and the outcome would necessarily involve some element of uncertainty.

[136]Given the poor quality of the evidence on this point, I am somewhat hesitant about coming to a conclusion as to whether there was a misrepresentation that the planning permission of 24th April 2007 was reasonably capable of being implemented on the land transferred. It is not strictly necessary for me to come to a conclusion on this point in view of my earlier findings that the Bleakens misrepresented the extent of their title along the eastern boundary and misrepresented the position in relation to any drain. However, in case the dispute goes further and a decision on this further point is necessary, I will express the following conclusion. On the balance of probabilities, the house permitted by the planning permission of 24th April 2007 was not reasonably capable of being built on the land transferred. Therefore, there was a further misrepresentation in this respect. I add that I also find that it would have been possible to re-design the house to be built on the land transferred so that it was not built above the drain but such a re-design would require Harsten to make a fresh planning application. On the evidence before me, it was not shown that there was any significant reason why Harsten would not have been able to obtain a further planning permission but beyond that finding, I make no specific finding as to Harsten’s prospect of obtaining any particular planning permission.

[137]Still on the subject of alleged misrepresentations, Harsten also pleaded other matters against the Bleakens. I can deal with those allegations more shortly. I do not accept that Harsten has established that the land could not be used as a building plot because of its liability to be flooded. There was no misrepresentation as a result of the auction particulars saying that the planning application of 30th July 2007 was “under consideration”. That statement was accurate even though the Bleakens were confident of a successful outcome.

The effect of the Special and Standard Conditions

[138]Having decided that the Bleakens did misrepresent the position in the respects identified above, the next question is whether the position is affected by the terms of the auction particulars or the special conditions or the Standard Conditions of sale. I need not discuss the auction particulars further in this respect; I referred to any relevant provisions in the auction particulars in the earlier discussion. The special conditions stated that the property was sold subject to “the Incumbrances” but no incumbrances were identified.

[139]Standard Condition 3 dealt with matters affecting the sale. I have already set out its terms. The first point to make is that Standard Condition 3 is about the matters to which the contract was subject. It is not dealing with whether a pre-contract statement amounted to a representation. For example, if I were to hold that the contract provided that the property was sold subject to any (unidentified) easement of drainage there might be, then that would not prevent the purchaser relying upon an earlier statement by the vendor that there was no easement of drainage as a relevant representation. In any event, I will consider how Standard Condition 3 applies to the facts of this case.

[140]In my judgment, the effect of Standard Condition 3.1.1. was that the sale was free from incumbrances and free from an easement of drainage because the easement of drainage through the pipe did not come within any of the paragraphs of Standard Condition 3.1.2. As to (a), no incumbrances were specified in the contract. As to (b), the drain was not discoverable by inspection “of the property” before the contract. The manhole into which the drain ran might have led to a person becoming aware of the drain but the manhole was not on “the property” and there was nothing else to reveal the existence of the drain. Paragraph (c) does not apply for the following reasons. I have held that the Bleakens did know about the drain, because they were told about it by the Maunders. Similarly they knew that the drain served the field to the north of the property. It might be said that a drain pipe is not an incumbrance although an easement of drainage is. Did the Bleakens know or could they reasonably have known of an easement of drainage? I do not think that I have the material which would allow me to decide that they knew there was an easement of drainage but I do hold that they could reasonably have known, by asking an obvious question of the solicitors acting for them, whether the owner of the field behind the property who had used the drain for many years had acquired an easement of drainage. Paragraph (d) of Standard Condition 3 is not material.

[141]The parties also referred to Standard Condition 7. I have held that the Bleakens did make misrepresentations in the ways identified in detail earlier. By Standard Condition 7.1.3, Harsten is only entitled to rescission of the contract if the error or omission complained of resulted from fraud or recklessness or where Harsten would be obliged, to its prejudice, to accept property differing substantially (in quantity, quality or tenure) from what the error or omission had led him to expect. In my judgment, the misrepresentations about the Bleakens’ title along the eastern boundary and the existence of a drainage easement did result in the property transferred differing substantially in terms of quantity and quality from that which Harsten were led to expect. I have referred above to the difficulties and inhibitions created by the reduction in the area on the eastern boundary and the existence of the drainage easement. In my assessment, the building plot, the subject of the planning permission of 24th April 2007 was always tight for the erection of even a modest house. With the loss of land on the eastern boundary and the problems caused by the existence of the drainage easement, the relevant differences were substantial. This finding means that I do not have to discuss whether the Bleakens were reckless as to the misrepresentations as to the eastern boundary and the drain. I have made my findings as to what they knew and what they did and said. Those findings will suffice if this matter goes further and my conclusion on Standard Condition 7.1.3(b) were for some reason reversed. If the contract is not rescinded and it is necessary to consider Standard Condition 7.1.2, dealing with Harsten’s right to damages, I would hold that Harsten would not be prevented from claiming damages by reason of Standard Condition 7.1.2; essentially for the same reasons as I gave when considering Standard Condition 7.1.3; there was a material difference between what was transferred to Harsten and what the land was represented to be.

Reliance

[142]I find that the misrepresentations in this case, as detailed above, were material, essentially for the reasons which I gave when considering Standard Condition 7.1.3. I also find that Harsten relied upon those representations when entering into the agreement for sale.

Affirmation

[143]The next topic which needs attention is that of affirmation. The Bleakens contend that even if Harsten initially had an entitlement to rescind the contract for misrepresentation, it lost that right when it affirmed the contract. The only act of affirmation which is pleaded is that Harsten applied for planning permission for a 4 bedroom house on 31st January 2008 and that application was supported by a certificate completed by Harsten’s agent which stated:

“on the 21 days before the date of the accompanying application, nobody except the applicant was the owner of any part of the land to which the application relates.”

The Bleakens’ pleaded case continues by stating that in or around February 2008 correspondence from builders and building supply companies began to arrive at 27 Wickwar Road. Derek Bleaken went to the District Council to ascertain why this correspondence was being sent and he was informed that Harsten had made its application for planning permission giving 27 Wickwar Road as the address of the subject property. Although the Bleakens pleaded the correspondence from builders and building supply companies and Derek Bleaken’s visit to the District Council, they did not call any evidence of those matters.

[144]It is not in dispute that Harsten did apply for planning permission for the land on 31st January 2008, that its application did contain the certificate as to ownership which was pleaded by the Bleakens, that Harsten’s application was received by the District Council on 4th February 2008 and that planning permission was granted on 4th April 2008.

[145]The first matter that needs to be considered in relation to the suggested affirmation is when Harsten knew that it had a right in fact and in law to rescind the contract. The misrepresentations which I have found to have been made related to the eastern boundary and the existence of an easement of drainage and the combined effect of those matters on Harsten’s ability to implement the planning permission of 24th April 2007. Harsten was aware that Mr Devlin and Ms Powell were asserting ownership of the box hedge on and after 7th November 2007. It is clear from this judgment that Mr Devlin and Ms Powell were partly right and partly wrong. They did not own the whole of the hedge but they did own the eastern half of it and Harsten wished to remove a part of the hedge which, it is now clear, belonged to Mr Devlin and Ms Powell. When the claim was initially made and perhaps at all times since, Harsten did not know if Mr Devlin and Ms Powell would establish their right to all or part of the hedge or whether the Bleakens would show that they had title to the box hedge and so there was no misrepresentation. It appears that in the period February and March 2008, Harsten commissioned a report from a Mr Davis which appeared to support the claim that Mr Devlin and Ms Powell did not have title to the box hedge. I say “appears” because, for some unexplained reason, the relevant report was not in evidence. The contents of this report seemed to have allowed Harsten to contend that it was right about its title and, accordingly, there was no misrepresentation by the Bleakens in this respect. Conversely, Harsten did know that there was a dispute about its entitlement to all of the box hedge and the dispute was sufficiently serious to prevent Harsten from continuing with its work of clearing the site until the dispute was resolved.

[146]As to Harsten’s knowledge of its right in fact and in law to rescind the agreement by reason of the existence of a drainage easement, the earliest communication to Harsten which referred to a ditch or drain appears to have been in the letter dated 14th November 2007 from the solicitors for Mr Devlin and Ms Powell, which enclosed a letter from Mr Maunders. The solicitors’ letter drew attention to what Mr Maunders said about the box hedge. However, in his letter, Mr Maunders referred to the original ditch and to the fact that his father had piped-in this ditch. There is no evidence that Harsten appreciated at this stage what the potential significance might be of there being a drain in the land and, in particular, that there was an easement of drainage across the land transferred.

[147]As to the conduct of Harsten vis a vis the Bleakens, I have referred earlier in this judgment to all of the communications between them which are in evidence. In summary, Harsten originally complained about the position of the fence on the western boundary and asked for it to be removed. The Bleakens refused. Harsten completed the transfer knowing of that refusal. In early December 2007, Harsten’s solicitors wrote to the Bleakens proposing a meeting to explore the issues which had arisen and to establish an agreed way forward to resolve those issues. No meeting took place. Harsten then appears to have been in communication with Mr Devlin and Ms Powell (through their respective solicitors) with a view to resolving the dispute about the eastern boundary. That dispute was not resolved and proceedings were brought against Harsten alone. A considerable period of time went by and then on 13th November 2008, Harsten’s solicitors wrote to the Bleakens a pre-action letter referring to a proposed claim for rescission.

[148]Those being the rather limited facts which are in evidence, my conclusions are as follows;(1) the Bleakens have not proved that Harsten was aware on 31st January 2008 that there had been a misrepresentation as to the position of the eastern boundary;

(2) the Bleakens have not proved that Harsten was aware on 31st January 2008 that there had been a misrepresentation as to an easement of drainage;

(3) Harsten did not have, prior to the single alleged act of affirmation on 31st January 2008, sufficient knowledge of its right in fact and in law to rescind the agreement on account of the misrepresentation relating to the eastern boundary or the easement of drainage or the effect of those matters on its ability to implement the planning permission of 24th April 2007.

[149]In these circumstances, it is not necessary to decide whether Harsten’s application for planning permission was a sufficiently unequivocal act in all the circumstances to amount to an act of affirmation; the argument that it was not sufficiently unequivocal is that the application was simply keeping Harsten’s options open and was not communicated to the Bleakens. It is also not necessary to discuss whether an act of affirmation must be communicated to, or have an impact on, the other party to the contract. Finally, it is not necessary to address the fact that the Bleakens called no evidence to establish the indirect manner of communication of Harsten’s planning application which is pleaded.

[150]I conclude that the Bleakens have not established that Harsten affirmed the contract and thereby lost its right to rescind for misrepresentation.

Rescission

[151]The next question is whether the court should exercise its jurisdiction under section 2(2) of the Misrepresentation Act 1967 to deny to Harsten the remedy of rescission and to leave it to its claim in damages against the Bleakens. Section 2(2) allows the court to declare the contract subsisting and thereby override Harsten’s right to rescind. The court may take this course where it is of the opinion that it would be equitable to do so and the subsection directs the court to have regard to three matters in particular. These are:(1) the nature of the misrepresentation;

(2) the loss to Harsten if the contract were upheld and

(3) the loss to the Bleakens resulting from rescission. Counsel for the Bleakens referred me to the approach of the Court of Appeal to section 2(2) in Wm Sindall plc v Cambridgeshire CC

[1994] 1 WLR 1016

and invited me to deny Harsten the remedy of rescission. The facts in that case are not on all fours with the facts of the present case. I have made my findings as to the nature of the misrepresentations in this case; in my judgment, the misrepresentations meant that the property transferred was substantially different in terms of quantity and quality from what Harsten had been led to expect. As to the adverse consequences to Harsten and to the Bleakens caused by a decision to refuse or to allow rescission, it is clear that neither side wishes to own the land in question. Although there was only limited evidence on this point, it appeared that Harsten had bought the land at the top of the market and that the market value of the land had since fallen by some amount. If I were to refuse rescission, the result would be that Harsten would retain the land but would be entitled to damages from the Bleakens, the damages being calculated in accordance with section 2(3) of the 1967 Act. If I were to allow rescission, then Harsten would retransfer the land to the Bleakens who would have to repay the purchase price plus interest plus any damages under section 2(1) of the Act. I am not persuaded that it would be equitable to deny Harsten the remedy of rescission. That remedy is the ordinary remedy for misrepresentation. The misrepresentations in the present case were significant ones. In the end, there was no particular reason put forward on behalf of the Bleakens why the court should not permit rescission. Although this point was not made on behalf of the Bleakens, I have considered whether the length of the period from late 2007 to the present should militate against rescission. It is true that Harsten took a considerable time before it mentioned rescission to the Bleakens and even longer before it brought these proceedings. In other circumstances, the passage of time might be material when considering the operation of section 2(2). However, in this case, no point was made on behalf of the Bleakens about any adverse effect on them of the passage of time between late 2007 and the present.

[152]Further, it was not suggested that there was any equitable bar based on the passage of time or any other matter which would justify the court in refusing the remedy of rescission of the contract or in some other way determining that Harsten is not entitled to rescind the contract.

[153]Accordingly, I determine that Harsten is entitled to rescind the agreement for sale dated 4th October 2007 and the transfer dated 1st November 2007. Rescission will be given effect by Harsten retransferring the land to the Bleakens and the Bleakens repaying the purchase price to Harsten together with interest at a rate to be determined.

Damages

[154]Harsten is also entitled to claim damages under section 2(1) of the Misrepresentation Act 1967. It may be open to me to include in such damages a sum to compensate Harsten for interest charges, and other finance costs, in relation to the monies it borrowed to purchase the building plot from the Bleakens. At the hearing, I suggested that interest, whether as part of restitutio in integrum or as damages, should be at the commercial rate usually chosen by the court when awarding interest on damages and I did not hear full argument as to whether that was the right approach. However, now that I have reached my conclusions on the other points in dispute, I consider that I should allow the parties to address me as to the right approach to interest (and if appropriate any other costs of Harsten obtaining finance). If the parties are unable to agree on the right approach to the award of interest, I will invite the parties to make submissions on these matters following the handing down of this judgment.

[155]Harsten is entitled to be paid by the Bleakens its conveyancing expenses after the date of the contract; it seems that it did not have any conveyancing expenses prior to the contract being entered into at the auction. As I understand it, Harsten paid its conveyancing solicitors £822.51 in fees plus disbursements of £415.78. Insofar as Harsten will incur further conveyancing expenses in retransferring the land to the Bleakens, then those expenses are to be borne by the Bleakens.

[156]Harsten paid stamp duty of £1,540.00 on its purchase of the land. If Harsten is not able to recover that stamp duty in view of the fact that the contract and transfer are being rescinded, then such irrecoverable stamp duty will be payable as damages by the Bleakens to Harsten.

[157]Harsten claimed compensation for the cost it incurred when it began, but did not finish, the work of clearing the site. Harsten alleged that it had spent £10,000 on this work. It produced two invoices, for £5,000 each, one from Capstan Contractors Ltd and one from Bristol Building Service. I regard these figures as highly suspect. The amount of work done was limited and a reasonable sum for such work should not have been anything like £10,000. When cross-examined, Mr Hardy said that some of the monies paid went to his own company; I understand that to be a reference to Capstan Contractors Ltd. He also said that he was not obliged to make a payment to Bristol Building Services. I consider that the two invoices were created in order to inflate the claim against the Bleakens. If it had not been for this misguided attempt to inflate the claim, I might have been prepared to do “the best I can” and award a modest round figure for compensation for the wasted costs of partially clearing the site. However, in view of the attempt to inflate the claim and thereby mislead the court, I consider that Harsten should take the consequences of its deliberate decision not to give the court reliable evidence on which it could act. The result is that I have no reliable evidence in this respect and I award no compensation for this head of claim.

[158]Harsten has claimed compensation for the loss of management time. Mr Hardy gave evidence that he and Mr Stenner had spent 1000 hours “on this matter”. It seems clear that Mr Hardy was including in this very round figure the time spent in connection with this litigation. Indeed, it seems to me to be likely that very nearly all of the time being referred to was in relation to the litigation rather than in relation to other matters where a claim for compensation for loss of management time might properly be made: see McGregor on Damages 18th ed., para. 2-051 and the cases cited in footnote 220 and in the Second Supplement at page [11]. There was no attempt to separate out management time spent on matters where a claim for compensation would be appropriate from management time spent on the litigation. In these circumstances, Harsten has not provided evidence on which I am able to act and I accordingly make no award of compensation for the alleged loss of management time.

[159]Harsten also claimed a total of £10,965.63 for miscellaneous items of expenditure. I disallow the claims for administration costs and bookkeeping; these items even if Harsten incurred them, were not costs which were incurred as a result of the misrepresentations. Harsten also claimed costs in relation to the formation of, and the running of, Harsten Limited. This second company was formed because of the financial difficulties which Harsten (i.e. Harsten Developments Ltd) found itself in as a result of the purchase of the land and the ensuing litigation; these costs are not recoverable as they were not caused by the misrepresentation and/or they were too remote. Harsten also claimed the costs of applying for planning permission for the plot in 2008. These costs are not recoverable as they are too remote. Finally, in the figure of £10,965.63 are certain costs said to be valuation fees. If those fees were incurred in connection with arranging finance for the purchase of the land, then I will consider them when I consider any submissions I might receive as to Harsten’s entitlement to damages in relation to the costs it incurred by way of the costs of finance and interest charges, a topic to which I earlier referred.

[160]In the course of the trial, Harsten applied to amend or re-amend its claim to claim a further head of damages represented by the costs it has incurred in the proceedings brought against it by Mr Devlin and Ms Powell and indeed, if it were to be the case, any sums which it is ordered to pay Mr Devlin and Ms Powell. The Bleakens opposed this late amendment but that opposition was withdrawn on the basis that if the amendment were allowed, this claim would be addressed, if it then still arose, following judgment. On that basis, I granted Harsten permission to amend. Accordingly, following judgment, this issue will need to be addressed.

The overall result

[161]The overall result is that Harsten was, and is, entitled to rescission of the agreement for sale dated 4th October 2007 and the transfer dated 1st November 2007, on the terms identified above, and Harsten is entitled to an award of damages in accordance with the conclusions set out above.

Harsten Developments Ltd v Eaken & Ors [2012] EWHC 2704 (Ch)

PART I: INTRODUCTION

PART II: THE COUNTY COURT PROCEEDINGS

The physical features on the ground

The rival cases

The conveyancing history

The construction of the 1926 conveyance

The legal principles

Discussion and conclusion

PART III: THE HIGH COURT PROCEEDINGS

The facts

(a) asked:

The expert evidence

The true construction of the agreement as to the boundaries

The true construction of the transfer as to the boundaries

The alleged misrepresentations

The effect of the Special and Standard Conditions

Reliance

Affirmation

Rescission

Damages

The overall result

Cited in 2 later judgments