Smith v Drumm and others

Purchaser buying property – Completion before answering of pre-contractual inquiries – Gas remaining unconnected – Electricity being disconnected due to illegal fuse box – Whether vendor had made misrepresentations in respect of gas and electricity – Whether property fit for habitation – Whether solicitor negligent for failure to advise.The plaintiffs received the particulars of sale of a recently converted flat being sold by the first defendant, the vendor. On inspection of the flat the plaintiffs noticed that the central heating boiler had not been connected. The plaintiffs made an offer and instructed the second defendant, a firm of solicitors, to act on their behalf. The second defendant sent enquiries before contract in the standard form to the vendor. The plaintiffs obtained a mortgage and contracts were exchanged and completed before the enquiries were answered. The second defendant moved into the flat but after two days moved out because the central heating was not connected. The electricity board disconnected the electricity because the fuse box was illegal. Subsequently the vendor arranged and paid for gas and electricity to be available to the flat. However it was not connected because the plaintiffs did not make access to the flat available. The plaintiffs made no repayments under their mortgage. The building society obtained an order for possession and duly sold the flat. The plaintiffs issued proceedings and claimed, inter alia, that the vendor or his agents had misrepresented that on completion the flat would be connected to the gas and electricity supplies and that the property had not been fit for habitation at the date of completion in breach of section 1(1) of the Defective Premises Act 1972. The plaintiffs also claimed that the second defendant had failed in its duty to advise. Held Judgment for the plaintiffs in part. 1. Although the particulars of sale had stated that the flat had "full gas central heating" the plaintiffs knew that the boiler had not been connected and therefore they had not relied upon the particulars of sale. In any event there were words at the foot of the particulars which were sufficient to avoid responsibility for any misrepresentation that there might have been; see Collins v Howell-Jones (1981) 2 EGLR 108. 2. The vendor was in breach of the 1972 Act because without the supply of gas or electricity the flat had not been fit for habitation. Although he had employed others to connect the gas and electricity he had taken on the work within the meaning of section 1(1) of the 1972 Act and the section did not only apply to work completed but also to work omitted. 3. The second defendant had failed to advise the plaintiffs as to the potential consequences of exchanging contracts in the absence of a reply to pre-contract enquiries. However the answers to the enquiry would not have stopped the plaintiffs from entering into the contract and therefore the breach had not caused the plaintiffs any loss. 4. The debt due to the building society was not the appropriate measure of damages because the defendants could not reasonably have expected that the plaintiffs would not make payments under the mortgage because of the lack of gas and electricity. The appropriate measure of damages was the difference in value between the value of the property as it was represented and its value in its true condition. However the plaintiffs had suffered no loss because the vendor had paid for gas and electricity to be made available. Accordingly the first plaintiff was only entitled to damages of £250 for discomfort endured; see Watts v Morrow [1991] 2 EGLR 152. Alexander Ryan (instructed by Ziades) appeared for plaintiff.;Jonathan Russen (instructed by Bennett Welch & Co) appeared for first defendant; Jalil Asif (instructed by Pinsent Curtis) appeared for second defendant.