Rescission and Damages for Fraudulent Misrepresentation : Iya Patarkatsishvili and Yevhen Hunyak v. William Woodward-Fisher ([2025] EWHC 265 (Ch)

The High Court judgment in Iya Patarkatsishvili and Yevhen Hunyak v. William Woodward-Fisher ([2025] EWHC 265 (Ch)) provides vital insights into cases involving fraudulent misrepresentation, rescission, and damages. Handed down by Mr Justice Fancourt on 10 February 2025, the case centers around the purchase of a high-value property and explores the impact of false representations during pre-contractual exchanges. Below, we unpack the key facts, legal issues, findings, and broader implications of this decision.

Key Facts

The claimants, Iya Patarkatsishvili and Yevhen Hunyak, purchased a substantial property valued at £32.5 million in May 2019 from the defendant, William Woodward-Fisher (WWF). The claimants alleged that the defendant made fraudulent misrepresentations in his responses to pre-contract enquiries. These responses pertained to the condition of the property, specifically the presence of pest infestations and issues with insulation.

The discrepancies became glaringly apparent post-purchase, as the claimants discovered the presence of a serious moth infestation. Reports from a pest control company engaged by the claimants contradicted WWF’s prior claim that the moth problem had been resolved by July 2018. Furthermore, evidence revealed that WWF had engaged in significant correspondence with pest control services and his builder concerning these issues and had even considered litigation against his service providers to enforce further treatments.

The claimants sought rescission of the purchase agreement and damages, asserting that WWF’s false representations induced them into the purchase.

Legal Issues

The claim centered on five primary questions:

Were the defendant's three replies to pre-contract enquiries misrepresentations?

Did the claimants rely on these representations in making the purchase?

Did WWF know or suspect his replies were untrue?

Were the claimants entitled to rescission of the contract?

Were the damages claimed for deceit justifiable, and if so, to what extent?

Findings of the Court

1. Fraudulent Misrepresentation

The court determined that the defendant’s pre-contract replies were indeed misrepresentations. Mr Justice Fancourt observed that WWF had knowledge of the recurring pest issues but deliberately minimised their significance in his responses. The evidence demonstrated that WWF suspected his representations were untrue, particularly given his continued correspondence with pest control experts and builders in the period leading up to the sale.

2. Reliance on Misrepresentation

The court found that the claimants had relied upon WWF's representations when deciding to purchase the property. They had no reason to suspect that the defendant’s replies were inaccurate, which ultimately influenced their purchase decision.

3. Entitlement to Rescission and Damages

The judgment recognised the claimants’ right to rescind the contract and recover damages. This decision was rooted in the principle that a contract entered into under fraudulent misrepresentation is voidable at the option of the wronged party. The court rejected WWF’s arguments against rescission, emphasizing that immediate repayment of the purchase price would not cause him financial ruin, particularly as the property would be returned subject to an equitable lien.

The court also applied common law principles, including those from the Imperial Ottoman Bank case, to hold that counter-restitution, coupled with an equitable lien, ensured fairness. The equitable lien safeguarded the claimants, enabling rescission while placing the risk of property-related works on WWF.

4. Damages Awarded

The claimants sought damages for deceit, including recovery for stamp duty, legal costs, pest control expenses, removal costs, and compensation for distress and loss of enjoyment. Key determinations included:

Loss of Enjoyment: The court awarded damages for the claimants’ diminished enjoyment of the property, considering the severe impact of the moth infestation.

Pest Control and Remedial Costs: Substantial damages were awarded for the costs incurred addressing the infestation and works performed to rectify the issues.

Clothing Damage: The court reduced the claim for damaged clothes to £15,000, limiting the sum to what was supported by evidence.

Interest: The claim for compound interest was rejected, with the court concluding that simple interest sufficed.

However, stamp duty and other associated transactional costs were not fully recoverable, as the court found they fell outside the ambit of losses directly attributable to deceit.

Concluding Thoughts

The case of Patarkatsishvili v. Woodward-Fisher articulates a clear stance on fraudulent misrepresentation in property law. 

The judgment reflects the courts' robust protection of parties misled into contracts by deceit. 

Through its precise application of legal principles, the ruling strengthens the precedent for equitable relief and fair restitution in similar disputes. 

Legal practitioners and stakeholders in the property market would do well to heed the lessons from this important case.