Dairy farmers win substantial damages for misrepresentation
In the recent case of The Crown Estate Commissioners v Wakley and Wakley the court has awarded £1.75 million in damages to the tenants of a dairy farm for misrepresentations made by their landlord, the Crown Estate.
A misrepresentation is an untrue statement of fact or law made by Party A (or his agent) to Party B, which persuades Party B to enter the contract, and in so doing causes Party B loss.
In this case, Mr and Mrs Wakley moved their business and family from Aberdeen to Somerset in 2007 to take on the tenancy of a dairy farm under a Farm Business Tenancy.
Mr and Mrs Wakley were shown the farm by an agent of the Crown Estate. On viewing the farm, Mr Wakley was told that the milking parlour was ‘right up to date’, the slurry/dirty water storage and disposal system were ‘right up to date’, that the farm had an effective freshwater supply, and that the silage to be purchased was ‘very good’. No written note of the agent’s representations was available in court.
Mr and Mrs Wakley decided to take on the tenancy at the rent advertised by the Crown Estate, which was accepted, and they moved to the farm in 2007, along with their herd of Holstein Friesians.
During the 4 years of occupation, Mr and Mrs Wakley found that none of the statements made by the landlord’s agent were true. The milking parlour did not work properly; the farm was prone to flooding, causing problems for the storage of slurry; and the silage was contaminated with wire, which caused cattle to become ill and die.
The Crown Estate was unwilling to rectify these issues, despite requests from Mr and Mrs Wakley. Instead, the Crown Estate called Mr and Mrs Wakley ‘incompetent farmers’. Mr and Mrs Wakley were unable to pay their rent , and the Crown Estate issued possession proceedings.
The judge concluded that the misrepresentations caused a chain of events which led to Mr and Mrs Wakley entering the tenancy. These misrepresentations and not the incompetence of Mr and Mrs Wakley caused the loss to the business, and the court found in favour of Mr and Mrs Wakley, awarding them £1.75 million in damages.
The key point to take away from this case is the importance of providing accurate information when letting or selling a farm or indeed any freehold or leasehold property. It also highlights the benefit of accurate and sufficiently detailed notes when meeting with prospective buyers or tenants to view a property.
Daniel Fairs is a solicitor in the property department at Barker Gotelee Solicitors.