Patarkatsishvili and another v Woodward-Fisher [2025] EWHC 265 (Ch)
Patarkatsishvili and another v Woodward-Fisher [2025] EWHC 265 (Ch)
The case involves a claim for rescission and damages for fraudulent misrepresentation in the sale of a house, Horbury Villa, Ladbroke Road, London W.11. The Claimants, Iya Patarkatsishvili and Yevhen Hunyak, alleged that the Defendant, William Woodward-Fisher, falsely answered three pre-contract enquiries, concealing a serious clothes moth infestation in the house’s insulation.
Summary of Facts
The Claimants sought repayment of the purchase price with interest and damages for losses incurred in buying the house and attempting to remedy the infestation. The Defendant disputed the allegations, arguing that the Claimants were unaware of or did not rely on the replies to the pre-contract enquiries. He also claimed that the Claimants had delayed excessively in bringing their claim and had waived their right to rescind. However, the court found that the Defendant’s replies were false and that he did not honestly believe their truth. The Claimants’ lawyers knew of the relevant replies, and the Claimants relied on them in purchasing the house.
Particular Misrepresentations
The specific alleged misrepresentations made by the Defendant during the conveyancing transaction were as follows:
Vermin Infestation:
The Defendant falsely answered the pre-contract enquiry about vermin infestation, stating that he was not aware of any such matters affecting the property. However, he knew that there was a serious clothes moth infestation in the house’s insulation. This was a misrepresentation because the Defendant had received and read reports from pest control companies (Rentokil and Environ) that identified the infestation and recommended removing the woollen insulation.
Reports on Vermin Infestation:
The Defendant falsely claimed that there were no reports concerning vermin infestation or the fabric of the property, other than what had already been disclosed. In reality, he had received reports from Environ dated 16 May 2018 and 25 June 2018, which informed him of the infestation and the need to remove the infested insulation. These reports were not disclosed to the Claimants.
Hidden Defects:
The Defendant falsely stated that he was not aware of any hidden defects in the property. He knew that the insulation was infested with moths and that this was a serious defect that was not apparent on inspection. The Defendant did not honestly believe the truth of his replies, as he was aware of the infestation and its implications for the property’s condition.
Defences Raised by the Defendant
Delay:
The Defendant argued that the Claimants delayed excessively in bringing their claim for rescission. They contended that the Claimants knew from June 2020 that they had a claim for misrepresentation but did not elect to rescind until May 2021. The Defendant suggested that this delay was evidence that the Claimants had decided to affirm the contract and continue with the purchase.
Affirmation:
The Defendant claimed that the Claimants had affirmed the contract by continuing to live in the house after they knew of their right to rescind. They argued that the Claimants’ continued occupation of the house, without communicating their intention to rescind to the Defendant, amounted to an election to affirm the contract.
Impossibility of Restitutio in Integrum:
The Defendant contended that restitutio in integrum (restoration to the original position) was impossible for two main reasons:
Financial Inability: The Defendant argued that he was financially unable to repay the purchase price of £32.5 million plus interest, as his total assets were between £15 and £20 million.
Changes to the Property: The Defendant claimed that the Claimants had carried out substantial works of alteration to the house and allowed it to deteriorate, making it impossible to restore the property to its original condition.
Practical Justice:
The Defendant also argued that granting rescission would be practically unjust. They contended that the court should refuse rescission on the grounds that it would create a different relationship between the parties, with the Defendant becoming a debtor subject to enforcement and uncertainty.
These defences were ultimately rejected by the court, which found that the Claimants were entitled to rescission and substantial damages.
Legal Analysis
The court examined several issues, including whether the replies were misrepresentations, whether the Claimants knew of and relied on the replies, and whether the Defendant knew or suspected that the replies were untrue. The court found that the replies were false, the Defendant knew or suspected their untruth, and the Claimants relied on them. The court granted rescission and awarded damages, considering practical justice and adjustments for counter restitution.
Findings and Decision
The court granted rescission of the contract and awarded substantial damages to the Claimants. The Claimants’ right to repayment will be protected by an equitable lien on the house, and there will be an allowance against the sum repayable by the Defendant for the value of the benefit to the Claimants of use of the house since May 2019. The exact terms of the relief to be granted, the amount of the damages, and other consequential matters will be determined at a short hearing to be held later this month.