South-east firm Mundays LLP has been ordered to pay £800,000 after it failed to tell a client – who thought he was buying a whole shop – that part of his new property had been retained by the seller.

In Maloney v Mundays LLP, claimant Vincent Maloney bought a Budgens store in 2006 for £2.14m, to be apportioned as to £1,642,700 to the property and £497,299 to the fixtures and fittings, after instructing Mundays LLP. When he tried to sell the store over a decade later, he discovered that he had not purchased all of the land. He then had to buy the retained land for £800,000 so the sale could go ahead.

It also emerged that Mundays had submitted a Stamp Duty Land Tax (SDLT1) form to HMRC which incorrectly recorded the purchase price of the property as £642,700, rather than £1,642,700. As a result, the stamp duty paid at the time was £40,000 less than it should have been. The underpayment plus interest of £18,440 was eventually paid to HMRC in January 2019.

A few days before the trial began this year, Mundays admitted liability for both the retained land breach and the SDLT breach. However, the firm argued that the court should find that there was no loss.

In her judgment, Elizabeth Jones QC, sitting as a Deputy Judge of the High Court, ruled that £800,000 ‘is an appropriate figure for the diminution in the value of what had been purchased arising from the retained land breach’. She found that the claimaint would have insisted that the retained land be included in the original sale had it been brought to his attention.

The judge also rejected the argument that there was no loss in relation to the stamp duty error, calculating that the loss caused by the breach was £6,570.