Hardy v Griffiths

 

The Message

Buy in haste and you have to pay the price.

The Case

Experienced lawyers found liable for breaching contract to purchase their dream house Mr and Mrs Griffiths, a Queens Counsel and a former head of a law firm, entered into a contract on 1 April 2011 to buy Laughton Manor in East Sussex from Mr and Mrs Hardy. The price was £3.6 million and an initial deposit of £150,000 was paid on exchange with the balance of the 10% deposit, £210,000, becoming payable on service of a notice to complete the purchase.

Extraordinarily, despite the house being built in the mid 19th century and being a substantial country residence, the Griffiths proceeded without obtaining any survey. They relied on their own visits to the house and, so they claimed, what they were told by the vendors. The vendors had bought the house in 2006 without a survey and had substantially renovated it, including dealing with areas of damp.

In answer to the Enquiries before Contract relating to damp, the vendors stated they were not aware of any issues but pointed out that this was an old house and they could give no warranty as to its condition.

The Griffiths were in some difficulty in completing on time and agreed to pay a further £35,000 for additional time to complete but they never did complete. On 30 April 2012, the vendors served notice to complete but, relying on their surveyor’s inspection of the house on 3 May 2012, the Griffiths sought to pull out. Their surveyor had noted rising and penetrating dampness and local wet and dry rot.

The Griffiths alleged misrepresentation by the vendors but not only was the Court satisfied there had been none but it could find no evidence that the Griffiths had ever seen the Replies to Enquiries or relied upon what the vendors had said. The Court was satisfied that the dampness seen by the Griffiths’ surveyor over a year after exchange of contracts was either new or would not have been evident to the vendors at the time of exchange of contracts.

The Court held that the Griffiths, like any other purchaser, were subject to the rule of caveat emptor (buyer beware). It was for them to satisfy themselves as to the state of the property and, like any purchaser, they should have obtained a survey before committing themselves to the purchase, not afterwards.

The Court also held that the Griffiths could not seek to rely upon what they claimed the vendors had told them verbally about the damp and about some additional land being included in the sale. The Contract limited any reliance to just representations made by or through their solicitors. Anyway, the Court was satisfied that the Griffiths were not misled in any way.

Finally, the Court confirmed that both a deposit paid up front, and a balance payable at a later date, stand to be forfeited or paid if the purchaser wrongly fails to complete. And there was nothing exceptional in this case to relieve the Griffiths from losing their deposits even though the vendors had re-sold the property a year later for the same price, £3.6 million.

Accordingly, including the additional £35,000 payable for the time extension, the Griffiths lost £395,000 on this purchase and, of course, have to pay the costs of the Court proceedings.

Jonathan Ross
Forsters LLP