The one about the Moths, the Mansion, and Misrepresentation - Iva Patarkatsishvili & Yevhen Hunyak v William Woodward-Fisher [2025] EWHC 265 (Ch)

Judgment has now been handed down by the High Court in the above case: Judiciary.uk

Aside from representing a unique opportunity for Lepidoptera-based puns (although probably best to moth-ball those for now), this case involved a claim for rescission and damages for fraudulent misrepresentation. Specifically, the Claimants asserted that: 

• they were persuaded, as a result of misrepresentations made by the Defendant in replies to pre-contract enquiries, to buy a significant property for £32,500,000 in May 2019;
• they would not have bought the house if the misrepresentations had not been made; and
• the Defendant (allegedly) knew that his replies to three enquiries were untrue and that there was evidence to support this – the replies included a statement that the Defendant was not aware of any vermin infestation and that no reports were available regarding any infestation. He also stated that he was not aware of latent defects at the property.

The Claimants proceeded to formally rescind the contract and the transfer of the house to them – they wanted the sale to be set aside and to be restored to their former position. In the proceedings, the Claimants sought repayment of the purchase price, interest, and damages for the losses connected to the untruthful replies.  If rescission was unavailable or refused, the Claimants sought additional damages reflecting the difference between the value of the house (with the unwelcome visitors) and the price paid for it. 

The Court ordered recission of the contract, re-payment of the purchase price and other damages.  In allowing the claim for rescission, the Court upheld what most conveyancers will have learned in their initial training is best for their clients to avoid – namely, knowingly giving dishonest/inaccurate replies to the enquiries – we return to this point at the end of this briefing.  The case adopted a wide interpretation of "vermin" to include insects. Conveyancers and clients should therefore account for this in formulating their replies to pre-contract enquiries. The infestation (of the insulation) was also considered to be a latent defect in the property. The case raises a number of interesting issues, some of which are highlighted below.

The Claimants’ reliance on the ‘dodgy’ replies was able to be established even though they had not read the replies to enquiries themselves. The replies had instead been read by their solicitors, and they in turn were taking instructions from the Claimant’s advisor – that party had read the replies and had told the Claimants that the replies were not such as should prevent them from proceeding with the purchase!

The Defendant employed a number of defences, including that of the ‘impossibility of restitution’ on account of the fact that the registered title to the property was in the name of the Claimants. The Defendant contended that his financial position was such that he was unable to buy the asset back, and therefore justice could not be achieved and rescission should not be permitted. The Court disagreed, and instead allowed for a mechanism (advanced by the Claimants) to be employed where the Claimants are to return the title to the property to the Defendant, subject to “a lien or equitable charge in favour of the Claimants. The result would be, as with a legal mortgage, that the net proceeds of sale by [the Defendant] in due course would be paid to the Claimants, in partial discharge of their liability to repay the price”.

Other key defences were those of ‘delay’ and ‘affirmation’.  In terms of delay, the Claimants had known about and then ‘sat on’ their claim for misrepresentation from at least June 2020, and possibly earlier still, and it was only in May 2021 that they rescinded the contract. The Defendant said that it was also relevant that the Claimants had carried out major works to the property (including removal of the infested insulation) and had continued to reside in it – this, so it was alleged, meant that the Claimants had ‘affirmed’ the contract in a way which meant that they could not subsequently rescind it.  Judge Fancourt acknowledged that the election by the Claimants to rescind the sale contract was not speedy, but he did not conclude that there had been “culpably excessive delay”, nor that the Defendant had benefitted from the delay, and conversely that the Defendant had suffered any prejudice as a result of the delay. The Judge indicated that, given the property was the family home, it was understandable that the Claimants had been reflecting on matters carefully before taking formal action.

In the judgment, citing ‘convenience but meaning no disrespect’, Mr Justice Fancourt  generally refers to the Defendant as ‘WWF’ – one can only guess at his moth-ivation (sorry reader) for adopting this abbreviation.  Whilst we are considering endangered species however, the case raises the principle of ‘buyer beware’ (or ‘caveat emptor’).  Reassuringly, the Judge concluded in favour of that legal doctrine, adopting robust terms as follows:

“The final point is that [the Defendant] argued at the outset and repeated in closing submissions that it cannot be right that the presence of some moths had to be disclosed by WWF, otherwise every seller of a property will have to disclose the presence of moths, or otherwise be at risk of a claim for damages or rescission. That of course is not the position. There is no duty of disclosure on a seller of real property (caveat emptor), except to the extent that a failure to disclose would make information otherwise given to a buyer misleading or incomplete.

What a seller does have to do is provide honest answers to pre-contract enquiries, if they answer them at all. So, if a question is asked whether within a specified period the sellers have seen a clothes moth in the property, or suffered moth damage to clothing, and the truthful answer is “yes”, the seller must either decline to answer, if they consider that the enquiry is inappropriate, or say “yes”, with or without further particulars. If the question is whether the seller is aware of any infestation of vermin, and the seller has experienced no more than a few moths and occasional damage to clothing (the “normal” London experience……), the honest answer will be “no”. However, if the seller knows that they have, or may have, an infestation of moths, the only honest answer would be “yes” or “no, but the property was identified on [date] as having a clothes moth infestation”. 

The suggestion that a conclusion of misrepresentation in this extreme case will cause a general conveyancing problem is simply wrong.”  

If you have any queries or need advice about the matters raised in this case, and how they might impact on your ongoing transactions, please get in touch with Ben Halsey (Knowledge Development Lawyer), Stavrina Tofallis, Partner or your usual Devonshires contact.