In Chesterton Commercial (Oxon) Limited v Oxfordshire County Council the court considered whether a local authority was liable to a buyer who had relied on their inaccurate search results which stated that land was not maintainable at public expense.
The claimant buyer issued proceedings against the defendant council for negligent misstatement. It was contended that the defendant was negligent in giving an unequivocal reply that the land in respect to which the enquires were raised was not maintainable at public expense.
The claimant acquired three properties, which included car parking spaces on the land fronting the properties. Prior to the acquisition, the claimant submitted enquiries to the defendant to query the status of the land. Despite already having begun investigations in 2005 and seriously questioning the status of the land, the defendant unambiguously stated that the land was not maintainable at public expense. Section 36 of the Highways Act 1980 requires each county council to make and keep corrected an up to date list of the streets within their area which are highways maintainable at the public expense; had the defendant complied with their statutory obligation, a notice of the investigation should have been noted on their registers. The claimant proceeded with the sale in reliance on the defendant’s inaccurate replies and only became aware of the investigation upon the subsequent sale of the land in 2009. Due to the uncertainties surrounding the status of the land, it was sold at a reduced price.
This case followed Gooden v Northamptonshire County Council (2013) where it was established that a local authority owes a duty of care to a member of the public in tort. In the present case the court concluded that the defendant’s duty at common law was the same as its statutory duty under s36. Although the defendant argued that the search results accurately reflected what was on the highway map, the court stated that had they have complied with their s36 obligations the list would have revealed the existence of an investigation, failing to do so amounted to a breach of their common law duty of care and made them liable for negligent misstatement. The court determined that it was entirely foreseeable that if the search results were inaccurate there would be an increase in the value of the land.
The claimant was awarded damages in respect of the difference between the actual price paid on the purchase against the true value without the car parking spaces, together with its costs and professional fees incurred in trying to mitigate its loss. Notably, no damages were awarded for the loss in developer profits the claimant had suffered, as the defendant was unaware of the claimant’s intention to redevelop the land.
This case is important for buyers and councils as it clarifies the council’s obligations when responding to local search enquiries.
Importantly, when submitting enquiries to the council, buyers should be sure to mention their intentions to redevelop the land as failure to do renders any loss incurred in reliance on inaccurate replies too remote to recover.
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