In the recent case of Chesterton Commercial (Oxon) Ltd v Oxfordshire County Council, the High Court held that a local authority (LA) was liable to a buyer (B) for an incorrect reply in a local authority search result which B relied upon in purchasing a property.
B was purchasing three properties in the same road, with land fronting the properties, part of which comprised parking spaces. The results of the local search showed that the parking spaces did not form part of the public highway. This was important to B because there was a shortage of car parking in the town and the inclusion of the car parking spaces increased the price of the properties. B had intended to sell the parking spaces for private parking.
B completed the purchase. Three years later the LA determined that part of the property was, and always had been, highway maintained at public expense because there had once been a turnpike road which ran along the frontage of the properties and, although the road had been diverted in the early 1800s, the old highway had never been legally stopped up. In fact, the LA had been investigating the status of the land for some time and even though there was strong evidence that the frontage to the properties might form part of the public highway, the LA made no mention of this in the replies to the local search. So B was prevented from selling the parking spaces for private parking with the result that it claimed damages for £400,000 to reflect the reduction in the value of the land and a further £150,000 on account of its costs in an unsuccessful attempt to obtain a stopping up order.
The court held that:
- the LA owed B a duty of care to answer the local search enquiries accurately. The reply to the search amounted to a statement by the LA that the property in question was not a highway maintainable at public expense but was private land.
- the LA was under a statutory duty to keep an up to date list of the streets within its area that are maintainable at public expense and should have ensured that its list recorded the fact that there was an investigation going on. It was not sufficient that the search result showed accurately what was on the highway map.
- B had relied on the search result as an express representation that no part of the property was highway maintainable at public expense and the LA owed B a duty of care in tort.
- the LA was liable for ‘negligent misstatement’. It was foreseeable that a buyer might pay a higher price for the property in the belief that the whole if the property was private land.
For developers and other property purchasers this case is welcome clarification of a council’s obligation to give accurate information when compiling the replies to local search enquiries. It remains to be seen whether local authorities may seek to qualify their replies in the light of this case.