Local authority liable for incorrect search result
The High Court has held that a local authority (LA) was liable after providing a buyer incorrect information in a local authority search, which was subsequently relied upon in the purchasing of the property.
In Chesterton Commercial (Oxon) Ltd v Oxfordshire County Council  the LA failed to disclose an investigation into whether part of the property was a highway maintainable at public expense. The LA expressly stated in response to a standard enquiry that the property was not a highway maintainable at public expense.
The buyer – a developer – wanted to know whether parking spaces were private land or land maintainable at public expense. The entire title was stated to be private land. The LA also failed to disclose that they had been investigating, since 2005, whether part of the property was such a highway.
The buyer completed the purchase in September 2007. Then in 2010 the LA determined that part of the property was, and always had been, highway maintainable at public expense.
The purchaser then brought a claim against the LA arguing that since the car parking spaces were highway rather than private land the difference between the price paid and the value without the car parking spaces was a foreseeable loss.
The Court held that having regard to its statutory duty, the County Council failed to make correct and updated information available to the claimant’s solicitors when they were conducting searches. Under Section 36 of the Highways Act 1980 (HA 1980), they had a duty to accurately answer the enquiries but failed to do so. If they had provided the buyer with an accurate response the developer might not have proceeded with the purchase and unquestionably not at the same price.
Also within the HA 1980, the LA was required by law to keep the list of streets that were highways maintainable at the public expense up to date. If it had been up to date, the list would have shown that there was an ongoing investigation. They were therefore liable in tort as they had a duty of care to keep this list up to date but failed to do so. The case, therefore, sets an interesting precedent that local authorities must ensure that their records relating to highways are comprehensively up to date when providing search results.
The judge also found liability for negligent misstatement in this case as it was clear the Council were aware that a purchaser of the land would inevitably want to know if the land comprised within the title was private land or public highway.
Do you believe this judgement was the correct one? Have you ever had a case where you’ve been left frustrated by a local authority’s search result?
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