The daughter of a Georgian billionaire has won her High Court claim against the vendor of a mansion she bought with her husband for £32.5 million which, it was subsequently discovered, had a major moth infestation.

The dispute, which is one of the most unusual in recent property case law, will perplex the many property agents and solicitors who help answer pre-contract enquiries about upmarket properties.

The saga began in 2019 when Iya Patarkatsishvili and her dentist husband Yevhen Hunyak (main picture, inset) bought Horbury Villa (main image) on Ladbroke Road near Notting Hill for £32.5 million from property developer William Woodward-Fisher.

He bought the 1850s-built house in 2012 for £10.4 million and spent a further £10 million hugely extending and refurbishing it.

But the new owners, after moving in, discovered that to contain the infestation they were having to kill some 100 moths a day and that, even after extensive specialist treatment work, it was still 35 moths a day.

During a High Court hearing, the couple’s lawyers argued that Woodward-Fisher had incorrectly answered three pre-contract enquiries, and they sought both the return of the money Patarkatsishvili paid for the property, plus costs and compensation that took the total to £36 million.

Truth and honesty

The summary of the judgement by the court says that “in each case, it was found that the Defendant did not honestly believe the truth of his replies.

“This was because he knew that there was or may have been a serious infestation of moths requiring removal of all the natural insulation in the house, and had received and read at least two reports from a pest control company dated 16 May 2018 and 25 June 2018, which informed his wife of the infestation and the need to remove the infested insulation”.

The judge, Mr Justice Fancourt, has sided with Patarkatsishvili and Hunyak, and Woodward-Fisher must repay the purchase cost as well as ‘substantial’ damages plus the costs of moving incurred by the couple. This includes the £3.75 million Stamp Duty, plus the cost of moth eradication, legal costs plus damage to their expensive clothing collection.

Getting the money from Woodward-Fisher may less clear-cut – the court heard that he is unable repay the £32.5 million as it was used to pay off a large mortgage on the mansion, with the rest being used, mostly, to buy another home in Chelsea.

Expert commentary

Georgina Muskett, Senior Associate, Charles Russell Speechlys

“It is really surprising that the Judge effectively forced the seller to take the property back, especially given the relatively broad nature of the enquiries and the amount of time it took the buyers to seek to terminate the purchase contract.

However, because fraudulent misrepresentation was established, rescission [returning the purchase monies] was the primary remedy.

“Ultimately, the buyers managed to persuade the Judge that they had not delayed and were able to force the property back on the seller and effectively “moth-ball” the sale contract.

Having answered a direct enquiry, the seller’s replies must be honestly given.

“This case underlines the need for sellers to take the utmost care and caution when considering their replies to enquiries. The Judge was clearly drawn to the argument that the infestation of the insulation was a defect in the property, not apparent on inspection, like a moth to a flame. So, having answered a direct enquiry, the seller’s replies must be honestly given.

“Whilst the case turned on its facts, an unintended consequence of this case might well be that some sellers simply choose not respond to certain enquiries at all.  Taking such a stance could put a sale at risk but sellers will have to weigh up that possibility against the relative likelihood of expensive and lengthy litigation with a buyer.”

Read the judgement in full.