The recent and widely publicised case of Iva Patarkatsishvili & Yevhen Hunyak v William Woodward-Fisher [2025] EWHC 265 (Ch) concerns misrepresentation and rescission and considers what the effect of delay might be on a claim for misrepresentation.
Background
The case concerns a severe moth infestation which was not disclosed by the vendor (Mr Woodward-Fisher) to the purchasers (Ms Patarkatsishvili and Dr Hunyak) in the vendor’s replies to pre-contract enquiries. With no obvious cause for concern, the purchasers proceeded to complete the purchase of a large house in west London for £32.5million in May 2019.
Shortly after moving in, the purchasers noticed an abnormally high number of moths in their new home. They engaged pest control contractors to investigate, and after a protracted series of investigations by multiple pest control companies, found that there was a severe moth infestation in the woollen insulation of the house. Millions of moths were likely to have hatched in the insulation, causing a daily inconvenience to the purchasers as well as damage to their personal belongings.
In 2020, the purchasers discovered that a local pest control company had carried out moth treatment work for the vendor in 2018. This was not disclosed by the vendor in his replies to pre-contract enquiries or at any other time prior to completion of the sale contract. The purchasers subsequently took legal advice and sent a letter of claim to the vendor in May 2021, alleging fraudulent misrepresentation and electing to rescind the sale contract. The purchasers issued their claim in December 2021, and the trial was eventually listed to take place over the course of 12 days in November and December 2024.
Delay
One of the main pillars of the vendor’s defence was delay. The vendor alleged that the purchasers knew from June 2020 (or earlier) that they had a claim for misrepresentation but did not elect to rescind the contract until May 2021: an excessive and unreasonably long delay which they said should deny the purchasers of this remedy. The vendor further argued that the purchasers had chosen to affirm the contract by carrying out major works to remove the infested insulation amongst other renovations and by continuing to live in the property.
Although Judge Fancourt accepted that the purchasers had taken longer than might have been expected to elect to rescind the sale contract, he did not find that there had been “culpably excessive delay”, that the purchasers had obtained a particular benefit in delay, or that there was any prejudice to the vendor as a result of the delay. Judge Fancourt found that the delay had no particular consequences, and that it was understandable that the purchasers were considering their legal position carefully before electing to rescind and bring a claim for fraudulent misrepresentation – it was, after all, their family home.
On 10 February 2025, almost 6 years after contracts were exchanged, judgment was handed down by Judge Fancourt confirming that the vendor’s replies to the three relevant pre-contract enquiries were false misrepresentations. The purchasers had proven their case in fraudulent misrepresentation, and accordingly they were entitled to rescission of the sale contract, amongst other remedies, including damages for the loss of enjoyment of the property.
Points to note for new build properties or resale properties
It is important to note that misrepresentation may remain possible years after completion, and that defences such as delay or affirmation (whether express or implied) do not automatically prevent a vendor from successfully rescinding a contract even if it has been, as in this case, several years since the misrepresentation. The effect of any delay on the ability to rescind will depend on the impact of delay on the vendor and the extent to which the buyer had sufficient information to understand that they might have a claim to rescind. This could in certain circumstances, lead to a right to rescind being available quite some time after completion. It is possible that where a vendor is still selling properties within a development, delay might be said to have less of an impact on a developer vendor.
Vendors should also take care with the information they disclose and make sure that information is not misleading. This is especially important for vendors undertaking resales where they are aware of issues. If you are unsure if something should be disclosed, consider the context and seek legal advice.