Pankhania v Hackney London Borough Council [2002] N.P.C. 123
Commercial property – Misrepresentation at sale – Commercial property
Facts
P brought a claim for damages for the misrepresentation at the point of sale by H, of commercial property that was used as a car park by NCP. The land was licenced to NCP in 1988. There was exclusive possession of the property for an agreed term which had the effect of creating a business tenancy agreement as per the Landlord and Tenant Act 1954. The documentation that had been created for sale, at an auction, referred to the land that suggested only a licence agreement was in place on the property, which could be terminated with three months’ notice. P purchased the property and found out this was not the case. P brought an action to claim for the misrepresentation of H.
Issue
H argued that any misrepresentation was a misrepresentation as to law and as per the case of Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, this was not actionable. Therefore, the court had to first consider whether the wording used in the sale documentation could amount to a misrepresentation and if so, whether P could action such a claim.
Decision/Outcome
The court gave a partial judgment to P. The court found that having assessed the representations made in the sale documentation, H had represented the agreement between NCP and themselves as a licence which could be terminated. This was deemed a clear misrepresentation. As for the second issue, the court found that the decision in the previous case of Kleinwort no longer applied and on this basis, P’s claim was actionable.
Updated 20 March 2026
This case summary remains broadly accurate. Pankhania v Hackney London Borough Council [2002] EWHC 2441 (Ch) is correctly described: the court held that the sale documentation misrepresented the NCP arrangement as a licence when it in fact constituted a business tenancy protected under the Landlord and Tenant Act 1954, and confirmed that following Kleinwort Benson Ltd v Lincoln City Council [1999] 2 AC 349, a misrepresentation of law is now actionable in the same way as a misrepresentation of fact. This remains the current legal position. The Misrepresentation Act 1967, which governs the relevant remedies, has not been materially amended in ways that would affect this analysis. One minor point of clarification: the article does not expressly state that the historical bar on claiming for misrepresentation of law was the rule from Beattie v Lord Ebury and related authorities, which Kleinwort Benson abolished in the context of mistake and which Pankhania confirmed applied equally to misrepresentation — but this omission does not render the summary legally inaccurate. The article is suitable for current student use.
