Clothes moth: Infestation leads to rescission
The High Court has rejected the argument that its decision to order recission of a £32.5m house sale because of the presence of clothes moths will cause conveyancers problems.
Mr Justice Fancourt said it was “simply wrong” for the losing defendant’s counsel to suggest that an “extreme case” like this could upend existing rules on disclosure.
William Woodward-Fisher (WWF) bought the house in Notting Hill, West London, in 2012 and undertook an extensive renovation over the next year.
The moths became apparent in 2018 and two reports by pest control company Environ blamed the natural wool insulation installed as part of the renovation. It said that the problem would not go away unless it was replaced with synthetic insulation.
This was not done and the house sold the following year to the claimants. Fancourt J held that WWF had been reckless when he said, in his replies to pre-contract enquiries, that he was not aware if the property had suffered “vermin infestation”.
The judge said WWF “did recognise the possibility that moths were vermin” but did not tell his solicitor what the pest controllers had reported.
In response to the request to supply a copy of any report concerning any matter referred to in the previous question, WWF said there were none, and further declared that he was not aware of any defects in the property which were not apparent on inspection.
Fancourt J held that WWF “did not honestly believe” these two answers.
“What motive did WWF have for failing honestly to disclose the serious infestation and the Environ reports?” the judge asked. “I do not find that he was consciously trying to deceive the claimants. He simply wanted to sell the house and move on.”
But all three replies were misrepresentations and, he went on to rule, the claimants relied on them in buying the home – they would not have bought it had they been provided with the Environ reports.
The buyers soon discovered the moths problem and in 2020 spent £270,000 on extensive works to tackle the problem. Though this greatly improved the situation, “the claimants were not satisfied”, the judge recorded.
Then, as a result of making enquiries to local pest control companies, the claimants came across Environ, which provided copies of its 2018 reports. In 2021, the claimants began proceedings to rescind the contract with WWF.
Fancourt J held that he was able to order rescission and did not accept that any of WWF’s defences acted as a bar to doing so.
WWF’s counsel, Jonathan Seitler KC, argued that it could not be right that he had to disclose the presence of some moths, otherwise every seller of a property would have to disclose the presence of moths, or otherwise be at risk of a claim for damages or rescission.
Fancourt J gave this short shrift: “That of course is not the position. There is no duty of disclosure on a seller of real property (caveat emptor), except to the extent that a failure to disclose would make information otherwise given to a buyer misleading or incomplete.”
A seller had to provide honest answers to pre-contract enquiries, “if they answer them at all”.
“So, if a question is asked whether within a specified period the sellers have seen a clothes moth in the property, or suffered moth damage to clothing, and the truthful answer is ‘yes’, the seller must either decline to answer, if they consider that the enquiry is inappropriate, or say ‘yes’, with or without further particulars.
“If the question is whether the seller is aware of any infestation of vermin, and the seller has experienced no more than a few moths and occasional damage to clothing (the ‘normal’ London experience, as Mr Seitler called it), the honest answer will be ‘no’.
“However, if the seller knows that they have, or may have, an infestation of moths, the only honest answer would be ‘yes’ or ‘no, but the property was identified on [date] as having a clothes moth infestation’.
“The suggestion that a conclusion of misrepresentation in this extreme case will cause a general conveyancing problem is simply wrong.”
The judge said that, to pay the claimants the purchase price, plus interest and other costs incurred – less £1.1m a year for the benefits they had from living in the house – WWF would have to undertake works to finally remove the moth infestations and then sell it. The claimants’ rights would be protected by a lien over the house.
“There is no reason to think that, if appropriate works are done, documented and audited by professionals, there will be any significant, lasting impact on the value of the house, though a sale at full value may take longer than usual to achieve.
“[The defendant] will have to liquidate other assets to pay any balance outstanding, and the damages for which judgment will be entered.”
Photo: Olaf Leillinger, CC BY-SA 2.5, via Wikimedia Commons
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