Court holds Local Authority liable for inaccurate response to local search question

In the important decision of Chesterton Commercial (Oxon) Limited -v- Oxfordshire County Council, the Court has clarified the obligations on the Council when providing replies to a local search. Chesterton were represented by Alka Kharbanda.

Chesterton is a family run property development company. It purchased properties and land in Bell Street and Bell Lane, Henley-upon-Thames, Oxfordshire on the 14 September 2007. Of importance to Chesterton were some car parking spaces which formed part of the properties on Bell Street. Prior to the purchase, and as is common on any purchase, Chesterton carried out a local search on the 5 June 2007. One of the questions raised was which parts of the highway are maintainable at public expense. The response given by the Council was that, while other land in the locality was highway maintainable at the public expense, the land to the front of 94 to 102 Bell Street was not. This information was crucial to Chesterton who intended to carry out work to 94 and 96 Bell Street and to sell the properties with two car parking spaces each.

Under the Highways Act 1980 Section 36, each County Council must make and keep corrected an up to date list of streets within their area which are highways maintainable at the public expense.

At the time the Council provided their response to the local search in June 2007 there was an ongoing investigation undertaken by the Council into whether the land which formed the car parking spaces was in fact private land or highway. Unbeknown to Chesterton, there had been a challenge by local residents and organisations as to whether the land was highway. In October 2006 the Council wrote a letter to the local occupiers stating that they were investigating whether the land was maintainable at public expense. However, the Council did not mark the land as being “under investigation” until 23 August 2007.

The result of the investigation in 2009 was that it was highway maintainable at public expense. As a result, Chesterton could not sell the car parking spaces with the renovated properties, as had been the intention.

Chesterton took proceedings against the Council for failing to maintain accurate records.

The Judge found that:

1. The Council owed Chesterton a duty of care at common law with respect to the reply to enquiries
2. The result of the local search amounted to a statement by the Council that the car parking spaces were not part of the highway and not maintainable at public expense but were private land
3. The Council had failed to supply an accurate response to Chesterton.

This case is a very important decision for buyers and Councils as it clarifies the Council’s obligations when responding to local search enquiries.

As a result of the Council’s negligence Chesterton were able to recover the difference between the actual price paid on the purchase against the true value without the car parking spaces.

Chesterton Commercial (Oxon) Limited -v- Oxfordshire County Council (2015) EWHC 2020 (Ch)

If you would like to speak to Alka Kharbanda, surrounding any of the matters highlighted in the article, or for any other issues related to Commercial Dispute Resolution. Please contact Alka on or on 01494 738 065.