Hussey v Eels

[1990] 2 QB 227, [1990] 1 All ER 449, [1990] 2 WLR 234, [1990] 1 EGLR 215, [1990] NLJR 53, [1990] 19 EG 77
Court: CA
Judgment Date: 30/11/1989
Catchwords & Digest
DAMAGES - AGGRAVATION AND MITIGATION - MITIGATION - IN TORT - DEFECTIVE
PROPERTY--RESALE AT PROFIT--PLAINTIFFS RELYING ON DEFENDANTS' UNTRUE AND
NEGLIGENT STATEMENT THAT PROPERTY NOT SUBJECT TO SUBSIDENCE--PLAINTIFFS
BRINGING ACTION FOR DAMAGES FOR NEGLIGENT MISREPRESENTATION--PLAINTIFFS
SELLING LAND WITH PLANNING PERMISSION TO DEVELOPER AT INCREASED PRICE BEFORE
TRIAL OF ACTION--WHETHER PURCHASER SUFFERING RECOVERABLE DAMAGE--WHETHER
PLAINTIFFS REQUIRED TO BRING INTO ACCOUNT PROFIT ON RESALE IN ASSESSING LOSS
The defendants owned and lived in a bungalow which was affected by subsidence. In 1983 they agreed to sell the house
to the plaintiffs and in response to an inquiry by the plaintiffs' solicitor before contract they stated that to their
knowledge the property had not been subject to subsidence. That statement was untrue and was made negligently. The
sale was completed in February 1984 at a price of 53,250. Shortly after moving in the plaintiffs discovered that the
house was badly affected by subsidence and that repairs would cost in excess of 17,000. They decided that the best
course would be to demolish the existing house and accordingly applied for planning permission to build two new
bungalows on the property. They also issued a writ against the defendants claiming damages for negligent
misrepresentation. Before trial of the action the plaintiffs were granted planning permission to erect two bungalows on
the property and in 1986 they sold the property with the benefit of the planning permission to a developer for 78,500.
At the trial of the action the plaintiffs claimed the difference between the contract price and the true market value at the
time of the sale, which, measured by the cost of the repairs, was some 17,000. The defendants claimed that any loss
suffered by the plaintiffs had been more than discounted by the profit made on the sale to the developer, which sale
amounted to mitigation of loss by the plaintiffs and was therefore properly to be brought into account in assessing
whether there had been any loss. The judge upheld the defendants' argument and dismissed the action on the ground that
although there had been negligent misrepresentation on the part of the defendants the plaintiffs had not suffered any
recoverable loss. The plaintiffs appealed to the Court of Appeal: Held where the purchase of a defective property had
been induced by a negligent misrepresentation, a profit made on its resale was not to be taken into account when
assessing damages for the negligent misrepresentation if the resale was not part of a continuous transaction commencing
with the original purchase of the property, so that the negligence which caused the damage could not be said to be the
cause of the profit. Since the plaintiffs had purchased the house to live in and had in fact lived in it for a substantial
period it followed that when they unlocked the development value of the land they did so for their own benefit and were
not required to bring it into account in mitigation of damages. The plaintiffs were accordingly entitled to the difference
between the contract price of 53,250 and the value of the property in its unsound condition at the date of the sale. The
appeal would therefore be allowed.
Cases referring to this case
Annotations: All CasesCourt: ALL COURTS
Sort by: Judgment Date (Latest First)
Treatment Case Name Citations Court Date CaseSearch
Page 1
Distinguished Murfin v Campbell
[2011] EWHC 1475 (Ch),
[2011] NLJR 918, [2011]
All ER (D) 190 (Jun)
Ch D 24/06/2011
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Earl's Terrace Properties
Ltd v Nilsson Design Ltd
(Charter Construction
plc, Pt 20 defendant)
[2004] EWHC 136 (TCC),
94 ConLR 118, [2004]
BLR 273, [2004] All ER
(D) 361 (Feb)
Tech &
Constr
Ct
20/02/2004
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Applied
Primavera v Allied Dun-
bar Assurance plc
[2002] EWCA Civ 1327,
[2003] Lloyd's Rep PN 14,
[2002] All ER (D) 54
(Oct)
CA 04/10/2002
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Applied
Needler Financial Ser-
vices v Taber
[2002] 3 All ER 501,
[2002] Lloyd's Rep PN 32,
[2001] 37 LS Gaz R 39,
(2001) Times, 9 August,
[2001] NLJR 1283, 145
Sol Jo LB 219, [2001] All
ER (D) 434 (Jul)
Ch D 31/07/2001
CaseSearch
Entry
Applied
Gardner v Marsh and
Parsons
[1997] 3 All ER 871,
[1997] 1 WLR 489, 75 P
& CR 319, [1996] 46 LS
Gaz R 28, [1997] 15 EG
137, 140 Sol Jo LB 262,
[1997] PNLR 362
CA 13/11/1996
CaseSearch
Entry
Cases considered by this case
Annotations: All CasesCourt: ALL COURTS
Sort by: Judgment Date (Latest First)
Treatment Case Name Citations Court Date CaseSearch
Distinguished
Pagnan and Fratelli v
Corbisa Industrial Agro-
pacuaria Ltda
[1971] 1 All ER 165,
[1970] 1 WLR 1306,
[1970] 2 Lloyd's Rep 14,
114 Sol Jo 568
CA circa 1970
CaseSearch
Entry
Distinguished
British Westinghouse
Electric and Manufactur-
ing Co Ltd v Under-
ground Electric Rlys Co
of London Ltd
[1912] AC 673, 81 LJKB
1132, [1911-13] All ER
Rep 63, 56 Sol Jo 734, 107
LT 325
HL 19/07/1912
CaseSearch
Entry
Document information
Court
Court of Appeal
Judgment date
30/11/1989
Page 2