UK: Measuring Damages For Misrepresentation – Some Arguments Fail To Measure Up...

Last Updated: 23 January 2017
Article by Edward Cooper

Quilter v Hodson Developments Ltd [2016] EWCA Civ 1125


The Court of Appeal has provided helpful guidance on the correct measure of damages that will apply when a seller misrepresents facts concerning land being sold.

In most circumstances, the buyer's losses will be assessed at the date of the sale, based on the difference between the price paid and the price that should have been paid, if the issue in question had not been misrepresented. There may be cases where this principle can be disapplied, such as where losses are clearly mitigated or if the sale leads to a connected transaction creating a profit for the buyer.

However, in this case, a subsequent sale for a profit did not affect the measure of damages, as the sale was unconnected to the original purchase. In addition, the sale took place some years after the initial sale and the profit was derived from price rises in the general property market.

The facts

This case concerned a newly developed flat in Chobham Lakes, Surrey (the "Flat"). In January 2012, the developer of the Flat, Hodson Developments Limited (the "Developer"), sold the Flat to Alison Quilter (the "Buyer") for £240,000. The Buyer sold the Flat two years later for £275,000.

Prior to her acquisition of the Flat, the Buyer sent standard pre-contract enquiries to the Developer, which included a request for the Developer to confirm if it was aware of any dispute relating to the Flat, or any circumstances which might lead to a dispute. In its replies, the Developer failed to admit that a dispute had arisen in respect of a communal hot water and central heating system, which had malfunctioned repeatedly.

The County Court Decision

After acquiring the Flat and discovering the malfunctioning system, the Buyer sued the Developer to recover her losses. When the matter proceeded to trial, the County Court Judge agreed that the Developer had misrepresented the true position, so the Court needed to assess the proper level of damages to be awarded.

When assessing damages in a misrepresentation claim of this nature, it is well-established law that the "normal measure" of damages is "the difference between the actual value of what was acquired and the price which was paid".

In this case, the trial Judge accepted expert evidence that the purchase price of £240,000 constituted the market value of the Flat, "as it was represented to be". However, after taking account of the defects, the Flat would have been valued at £225,000. Damages were therefore awarded to the Buyer in the sum of £15,000. The trial Judge also concluded that the fact that the Flat had been sold for an apparent profit did not alter the assessment.

The Developer's Appeal

The Developer appealed against almost all aspects of the County Court decision, including whether there was any evidence of a misrepresentation and the applicable measure of damages. The Court of Appeal roundly rejected the Developer's arguments concerning the evidence, so the key legal argument centred on the measure of damages.

The Developer submitted that the Buyer made a profit of £35,000 when she sold the Flat. It therefore argued that the "normal measure" of damages should not apply, as this would "not accord with the overarching principle of compensation". However, unlike the Seller, the Buyer had fully disclosed the issues when selling the Flat, and she was able to say that the National House Building Council was dealing with the issue, pursuant to a building guarantee. The Developer claimed that this meant she had suffered no eventual loss.

The decision

The Court of Appeal dismissed the Developer's arguments and upheld the award of damages made by the County Court Judge. In coming to this conclusion, the Court distinguished two types of scenario reviewed in previous case law. In summary:

  1. Where a buyer was induced to buy land owing to a misrepresentation by the seller, but quickly sold the land for a profit that was "all part and parcel" of the same transaction that gave rise to the misrepresentation, the Court could discount any damages by the profit made.
  2. However, where a buyer was induced to buy land owing to a misrepresentation by the seller, but subsequently owned the land for a significant period of time, any profit arising from movement in the property market could not be said to have arisen through a connected transaction. The Court cited such a case where a profit had been made after the buyer obtained planning permission to unlock development value in the land. The success of the buyer's planning application was held to be unconnected to the original transaction.

In the recent case of Bacciottini v Gotelee and Goldsmith, also decided by the Court of Appeal this year, the negligence of a solicitor who failed to report a restriction that applied to a planning permission, could have resulted in a substantial loss of value to a buyer. However, although damages would normally be measured on the date of the acquisition, the buyer subsequently had the planning restriction lifted at a cost of £250. This mitigated the loss suffered, as the buyer's application to lift the restriction was a direct consequence of the negligence.

In the present case, the Buyer had no duty to sell the Flat to mitigate her losses. She needed a place to live and when she did eventually move, the decision arose "in the ordinary course of her domestic life". Therefore she should be entitled to damages from the wrongdoer. Although her losses were mitigated by the building guarantee, this was in the nature of a policy of insurance, and it is well established law that an insurance policy pay-out will not be brought into account when assessing damages.

Our comment

The normal measure of damages will apply in most cases but there will be circumstances where this principle can be disapplied. In any event, it will be important for to adopt a fair and realistic approach to an assessment of damages when considering a claim. Although those who suffer wrongdoing have a duty to mitigate their losses as soon as they become aware of the issues, this duty will only go so far as is reasonable. In this case, that did not extend to forcing the Buyer to sell the Flat.

Finally, sellers should ensure that they provide honest answers to pre-contract enquiries, which are drafted with utmost care. In some cases it may not be necessary to provide full details, a full answer to a question, but an omission of facts may have serious consequences, as it did for the Developer in this case.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.