Court holds Council liable for inaccurate reply to local search question
Still, after all this time, it is not always the case that a council will be held liable for inaccurate information that local authorities give out in reply to an official search and enquiry of their records; it remains necessary to prove that it was negligent in its answer. The balance has however recently been tipped slightly further in favour of the buyer following a case involving a question as to whether or not an area in front of a building and contained within its registered legal title was or was not a public highway.
Legally, where they still exist, county councils are responsible for public highways and they have a statutory duty to keep the highways maps up to date so that the local authorities, who deal with local authority searches, give out correct information. This nuance added a layer of complexity to the case as the local authority answered the question on the basis of the county council's information and so could not be faulted. The buyer had to take action against the county council itself.
When the prospective buyer in the case carried out a search in June 2007, the local authority replied unequivocally that the area in front of the building was not public highway, an answer that was important to the buyer as it intended to convert the building into mixed commercial/residential accommodation and mark out and sell the area in question as precious town centre car parking spaces.
In fact, some time before the search, a local conservation group had written to the county council suggesting that the area was still public highway. For centuries, it had formed part of the Reading to Marlow road, but fell into disuse when the road was reconfigured at the beginning of the 19th Century. The conservation group argued that the established legal maxim "once a highway, always a highway" applied and that the only way that a highway could cease to be a highway was by a formal stopping up order. It could not come about by abandonment or lack of use.
The county council initially rejected this argument and maintained that the area was not public highway but, by the time of the buyer's search, it had been investigating the position for over a year and had already received advice from a highways expert that the area was almost certainly still a public highway, advice that had been confirmed by a separately obtained counsel's opinion. It had even written to the occupants, but not the owners, of the affected properties to warn them that the area's status was in doubt, correspondence that was not passed on to the buyer.
The court ruled that, pending final resolution, the county council should have made a note of the uncertainty on the relevant highways map to alert searchers of the position, and that it was negligent not to have done so.
The council tried to argue that it did not owe the searcher a duty of care, but the court rejected this on the ground that all councils know why searchers search and that they had to accept that reality, following the decision established many years ago in the landmark case of Hedley Byrne vs. Heller.
As a result of the council's negligence, the buyer recovered the difference between the price that it had paid for the property believing the area to be private and available for use as car parking spaces, and its value as land subject to the rights of the public to cross it. It could not, however, recover its lost development profit, as the council could not have known what the buyer intended to do with the property after its acquisition, and so this aspect of the claim was unforeseeable and too remote.
The case still represents a victory for buyers, and offers welcome clarification of a council's obligations when compiling the information required to answer local search enquiries accurately.
Chesterton Commercial (Oxon) Ltd. vs. Oxfordshire County Council 2015 EWHC 2020 (Ch)