Pankhania v Hackney London Borough Council [2002] EWHC 2441 (Ch)

Pankhania bought commercial property from Hackney council. Part of the site was occupied by a car-park operator, and the sale information described that arrangement as a licence capable of termination. The purchaser later contended that the occupier instead enjoyed a protected business tenancy, affecting the ability to obtain possession. Separate allegations concerned planning information. The claim required the court to classify the occupation, assess the representations and determine whether their legal character prevented relief. The dispute therefore involved both the substantive land-law position and its description during the sale process.

Was the inaccurate description of the car-park occupation as a licence an actionable misrepresentation of law inducing the purchase, and did the separate planning allegations also succeed?

The High Court held the car-park representation actionable. The occupier's arrangement was a protected business tenancy rather than the easily terminable licence described in the sale material. The court rejected a rigid rule that a misrepresentation of law could never support relief, drawing on the removal of the corresponding fact-law distinction in restitution. The purchaser had been induced by the inaccurate description of the existing legal position. The separate planning representations did not succeed on the same basis. The decision was not a finding that every prediction about future planning action is a guarantee, nor did it establish deliberate fraud merely because the legal description was wrong.

An inaccurate representation of law can be actionable, including a misleading statement about the legal status of an occupier. The claimant must still establish the relevant elements of misrepresentation. A statement about existing legal rights must be distinguished from a prediction of future administrative decisions.

Pankhania connects contract and land law by showing how the tenancy-versus-licence distinction can affect a purchaser's decision. Its broader doctrinal value is the rejection of an automatic fact-law barrier to misrepresentation. That does not remove the need to establish what was represented, falsity and inducement. Keep the successful car-park allegation distinct from the unsuccessful planning allegations, and avoid relabelling the claim as fraudulent without the separate evidence that dishonesty requires.