Millions of Moths and a Mansion

Specialist commercial property solicitor Rosanna Clarke and trainee solicitor Jessica Munday take a look into the recent case of Patarkatsishvili and Another v Woodward-Fisher 2025.

This case serves as a stark reminder of the importance of ensuring “replies to enquiries” in a property transaction, are complete true and accurate - and remain so - until completion of the transaction. This is a widely report high-profile and case which has intrigued many.

The Claimants purchased a large house in London for £32.5 million from the Defendants in May 2019. Unbeknownst to the Buyers, the Seller had been having issues with a moth infestation and had sought professional advice on several occasions to try and mitigate the issue. The Seller did not provide any information about this when providing their replies to enquiries.

Within days of purchasing the Property, the Buyers noticed the presence of moths and spent the next three years (and an eye-watering £383,828.89) remedying the moth infestation. In 2021, the Buyers brought a claim for misrepresentation against the Seller, stating that they would not have purchased the Property had they of been aware of the issue.

The Law

A misrepresentation is a false statement of fact, which is made by one party to another which isn’t a term of the contract, but which induces a party to enter into the contract. If a party who enters into the contract relying on the misrepresentation, subsequently suffers a loss, then that party could make a claim.

The Implications

With a view to restoring the Buyers back to their position prior to purchase of the Property, the Court upheld their claim for misrepresentation and ordered that:

1. The sale contract is to be rescinded, resulting in the Buyers returning the moth-infested property to the Seller;
2. To repay the purchase price (less a slight discount) to the Buyers; and
3. To pay the Buyers substantial damages (despite the Seller not having enough assets to cover this sum). This included compensation for the Buyers being unable to use the Property properly since purchasing it.

Although, this particular case concerns residential property, the principles are relevant to any property transaction or indeed any contractual matters requiring the disclosure of information. Standard enquiry forms (CPSE’s) are routinely used when purchasing or financing a commercial property or land asset and care must be taken that replies to the enquiries in this form do not amount to a misrepresentation.

CPSE’s begin with key proceeding statements setting out the duties of both the Buyer and the Seller, with the material ones summarised below:

1. While the Seller is to provide the replies, the Buyer should still make all relevant investigations of their own; and
2. The Seller acknowledges that they are to provide copies of all documents and correspondence relevant to the replies, whether or not specifically requested to do so; and
3. The Seller will, prior to exchange or completion of the transaction, update the Buyer on becoming aware of anything which may cause a reply to the CPSE’s to now be incorrect.

Usually, the purchasing solicitor makes a request for the appropriate CPSE form to be completed by the Seller. In practice, it is common for the Seller’s solicitor to draft partial responses in the first instance, advise the Seller and take instructions on the enquiries before they are sent to the Buyer’s solicitor with supporting documentation. The forms are lengthy and usually need advisory input from a lawyer before they are disclosed to a Buyer. 

It is also important to note that “replies to enquiries” can also include statements (written or oral) made by Seller’s representatives, house style and or bespoke enquiries, replies to which still hold the same weight. The sale agreement should particularise which communications can and can’t be relied on by a Buyer.

Takeaways for Sellers

• Sellers should be honest. “What a seller does have to do is provide honest answers to pre-contract enquiries, if they answer them at all.” - Mr Justice Fancourt. Although a Seller may not want to disclose an issue which could potentially jeopardise the sale, the benefits of disclosing before the buyer proceeds will outweigh the potential repercussions of not doing so, as is demonstrated by this case. It is important to consider replies to enquiries with legal advisors to ensure the replies are appropriately worded and that the existence of any documents or reports relating to that enquiry are disclosed.
• Care must be taken to disclose an issue which could relate to, or potentially relate, to the enquiry raised. The misrepresentations in this case did not need to be specific. The Seller was “reckless as to truth” to an enquiry regarding hidden defects to the Property. Relying on the principles of “buyer beware” was not sufficient to protect the Seller in this case, given the scale of the defect and the knowledge they had of it. 
• Simply disclosing the replies to Buyer’s legal representatives was sufficient to establish reliance for misrepresentation. It did not matter how the Buyer’s lawyer reported on the issue, or whether they did at all, simply that the Buyer had accepted their lawyer’s advice and decided to proceed with the purchase. 
• Moths amount to vermin, and vermin infestations should be disclosed! 

Takeaways for Property Buyer

• Prevention is better than cure. The buyer should still be careful to investigate anything they are uncertain about in the property, replies to enquiries that are unclear, incomplete or, together with all property due diligence, don’t stack up.
• All matters revealed by the Property due diligence should be considered in the round, to make sure the search results, survey, title investigations and replies to enquiries are consistent with each other. A discrepancy could indicate false or inaccurate information. Your legal advisors should identify inconsistencies and bring these to your attention.  

Holmes & Hills Solicitors benefits from Commercial, Land and Development, Dispute Resolution and Residential Teams of property lawyers, all of whom will be able to offer their expertise if you have any queries or concerns regarding a property transaction.