“A house and grounds are put on the market. A prospective buyer looks them over and decides to buy. Before contracts are exchanged, the vendor removes valuable fixtures without telling the purchaser. The purchaser exchanges and completes in the reasonable belief that he is buying the property he was shown. Common sense and common decency both suggest that, if there is no good reason to do otherwise, the law ought to give the purchaser what he was led to think he was getting.”
These are the opening words from Lord Justice Sedley’s judgment in Taylor –v- Hamer, a matter that came before the Court of Appeal and in which Wilmots Litigation represented the successful Appellant, Mr Taylor.
The dispute concerned the sale of the Property known as The Eastington Hall Estate to Mr Taylor for £3.15m. Prior to completing the contract, Mr Taylor had viewed the property, which had included numerous ‘landscaped gardens’, one of which was paved with valuable antique flagstones.
After Mr Taylor had viewed the property, the flagstones were removed by the vendor’s husband to another property. Grass was laid by him in their place to hide their removal.
At first instance, the trial judge found in Mr Taylor’s favour on the basis of deceit, but did not allow his claim in contract. The trial judge determined that the contract for sale stipulated that “the buyer is deemed to have inspected the property whether or not the buyer has in fact done so” and that this deemed inspection must be deemed to have occurred immediately prior to the exchange of contracts – Mr Taylor had no claim in contract since he was deemed to be taken as knowing that the flagstones had been removed by the date of the contract. They were not included in the sale.
The result of this was that Mr Taylor was only awarded damages to compensate him for the value of the paving stones, owing to the vendor’s above deceit. He was not awarded damages to cover the cost of relaying the stones nor was he entitled to recover the actual stones themselves.
Wilmots Litigation appealed this decision on behalf of Mr Taylor, arguing that the flagstones were included in the sale of the Property and there had been a breach of contract - Mr Taylor was entitled to recover the stones themselves and entitled to damages to cover the cost of relaying them.
The Court of Appeal determined that since the flagstones were present when Mr Taylor viewed the property, they formed part of the ‘landscaped gardens’ included in the sale. Had they not been removed surreptitiously, they would have passed to Mr Taylor under the contract. When the vendor was directly asked whether the stacked flagstones had been taken from the property, he lied and said they had not. Mr Taylor was reasonable in assuming that the flagstones he had seen in the landscaped garden remained and were going to pass to him.
The Court of Appeal reversed the decision of the trial judge and found that there had been a breach of contract (with Arden LJ dissenting). Mr Taylor was entitled to recover the flagstones themselves and entitled to damages to cover the cost of relaying them. The Court of Appeal decided that since the vendor had been deceitful, he could not rely on the ‘deemed inspection’ clause. The flagstones did indeed form part of the property that was conveyed to Mr Taylor.
The decision of the court is unusual as it placed emphasis on what was ‘just’ and ‘moral’. For example, Lord Justice Ledley ruled that “simple morality says that he cannot remove them without telling the buyer [and] … not to put too fine a point on it, it was cheating.”
Although the judges stressed that their decision was based on the facts in the case, they were keen to stress that their decision was consistent with general principles and had wider bearing. The court confirmed that:
- The principle ‘buyer beware’ does not apply where a vendor acts fraudulently
- Clauses for ‘deemed inspection’ do not fix the purchaser with imputed knowledge of everything and anything that has happened to the property up to the moment of the contract – such clauses do not allow a vendor to materially but silently alter the property after inviting a prospective purchaser to view it with an intention to make an offer.
- In everyday house purchases people are entitled to be confident that, unless some different agreement is reached and recorded, the property which is to pass includes its fixtures.
There are several practical steps that can be followed in light of this case:
- If selling a house, ensure that you specifically exclude any fixtures that you do not want to pass with the property. If any fixtures are removed from a property after a prospective purchaser has viewed the property and made an offer, inform the purchaser that such fixtures have been removed.
- When purchasing a property, ensure that you inspect it. If there are any fixtures that you assume will pass with the property, confirm this with the vendor. If possible carry out another inspection before you complete. If the property is extensive, with statuary, flagstones, stone troughs, staddlestones etc, commission an aerial photo after an agreement to buy, or take photographs yourself.