Pankhania v Hackney Borough Council [2002]

Pankhania v Hackney Borough Council [2002]

Pankhania v Hackney Borough Council [2002] EWHC 2441 (Ch) is an English contract law case that addressed the issue of whether false statements of law could be actionable for misrepresentation.

The Hackney Borough Council, the vendor of a car park, making a statement to the buyer, Pankhania, that the occupier of the car park being sold was a contractual licensee when, in reality, they were protected business tenants. Upon discovering the misrepresentation, Pankhania sought damages.

The Hackney Borough Council argued that the misrepresentation was not actionable because it related to law and not a matter of fact. However, Pankhania contended that, following the House of Lords decision in Kleinwort Benson Ltd v Lincoln City Council [1996], the rule precluding recovery of money paid under a mistake of law could no longer be maintained, and the same principle should apply to misrepresentations of law.

The High Court held that the statement that the occupier was a licensee was, indeed, an actionable misrepresentation. Damages under Section 2(1) of the Misrepresentation Act 1967 were awarded to Pankhania. The judgment, delivered by Rex Tedd QC, stated that the rule that misrepresentations of law could not be actionable did not survive the decision in Kleinwort Benson Ltd v Lincoln City Council [1996].

Rex Tedd QC emphasised that the statement regarding the occupier being a licensee implied a representation that the Hackney Borough Council knew of facts justifying the use of that term. The court concluded that false statements of law could be actionable for misrepresentation, overturning the traditional view that misrepresentations of law were not actionable. This decision aligned with the broader legal shift marked by the Kleinwort Benson case, which challenged the old rule precluding recovery for mistakes of law and extended its application to misrepresentations of law as well.
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