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Lewin (Trading Standards Officer) v. Barrett Homes Ltd (1999) EGCS 139
This is one of the very few reported cases brought under the Property Misdescriptions Act 1991. Although a full report of the case is not available it is nevertheless worthy of note as the facts of the case are likely to be familiar to many readers.
In 1997, as many people do, two perspective purchasers visited a development site of the defendants with a view to purchasing a new home which was due to be built later the same year. They spoke to the site negotiator and were shown a large picture of a detached house and a further picture of the same one on a sheet of A4 paper. A small sticker under the framed picture stated that the details of the property had been amended and details should be obtained from the site negotiator. A further framed document stated that there might be a difference between the accommodation in the picture and that on offer in the particular development. The purchasers visited a show home on the site, agreed to purchase, and paid 10 per cent of the purchase price on exchange of contracts.
In November 1997 when the houses were complete the purchasers visited them and found substantial differences from the houses in the pictures and the show house.
In January 1999 action was brought against Barretts under S1(1) of the Property Misdescriptions Act 1991. The justices held:
that false or misleading descriptions about the physical or structural characteristics of the houses had been made which had not been effectively disclaimed by any contrary statement.
that no statutory defence within S2 of the Act had been made out.
However, despite these findings, the justices dismissed the charges on the basis that the statements were merely promises as to the future not statements of existing facts and this could not have been false or misleading within the scope of S1(1). The appellant appealed by way of case stated.
Simon Brown LJ and Newman J held that the justice's conclusions were contradictory. On the one hand they had held that Barretts had made false and misleading statements yet on the other hand they had concluded that they were merely promises. As they pointed out, a promise or prediction as to the future cannot be false or misleading as it can never be said to have been true or false at the time it was made. In other words, only time will tell whether it will turn out to be true (See R v. Sunair Holidays Ltd (1973) 2 LLER 1233).
However, Barretts had known all along that they could not build the houses to the design in the picture and the show house, but by showing them they were stating that this was how they intended to build them, i.e. this was their present intention and as far as they knew there was no impediment to this. Therefore the pictures and the show house amounted to statements of fact that were misleading at the time. The magistrates were therefore wrong to conclude they were merely promises as to the future and the matter was remitted with a direction to convict.