Ashfords recently acted for The Range in securing a landmark judgment against its Landlord of distribution premises in Barnsley, First Tower Trustees Limited and Intertrust Trustees Limited (both being Guernsey based trustee companies).
The case related to a significant amount of asbestos found in the property which then had to be removed by specialist contractors employed by The Range.
The claim was hotly contested and in February 2017 we successfully obtained Judgment for The Range. One of the main reasons why the case succeeded was because we managed to identify what really did become a true "smoking gun" within the extensive documentation provide by the Landlords' solicitors. What we found proved that the Landlords knew, before completion took place, that asbestos had been found at the property but that they had failed to disclose this to The Range.
As a result the Court found that there had been a misrepresentation by the Landlord in the replies to pre-contract enquiries raised by The Range, and so ordered the Landlord to pay £1.4 million in damages plus interest and significant costs.
The Landlord then appealed to the Court of Appeal and the hearing took place in May 2018. Upholding the original Judgment, the Court of Appeal found unanimously that:
- The Landlord could not exclude liability for misrepresentation because the clauses relied upon were subject to the reasonableness test set out in s3 of the Misrepresentation Act, where the Court of Appeal found those clauses to be unreasonable; and
- The Landlord could not limit their non-contractual liability for misrepresentation to the extent of the assets in the trust fund itself, which they suggested was insolvent, and so were personally liable for the damages, interest and costs (this has now been referred to as the Trustee Limitation Point).
The Landlord has now in fact requested permission to appeal from the Supreme Court in relation to the Trustee Limitation point and a decision is awaited.
The Judgment from the Court of Appeal makes it clear that landlords who attempt to avoid liability for pre-contract misrepresentations will find it very difficult, if not impossible, to achieve this without very specific and clearing wording. The Judgment will also be of significant interest to those entering into contracts with trustees and in particular the basis upon which the trustees might seek to now avoid personal liability for these types of scenarios.