Background
Twenty-eight claimants brought two consolidated actions concerning off-plan rooms or units in luxury residential care homes promoted by One Touch Solution Limited on behalf of companies in the Care Home Group, also known as the Carlauren Group. Between 2017 and 2019, the claimants—many of whom used retirement savings, inheritances, or other personal funds—paid approximately £2.8 million for the investments. The developments subsequently failed, and the group companies entered administration or other insolvency proceedings.
The claimants alleged that One Touch presented itself as an experienced property-investment intermediary, described purchasers as its clients, recommended the investments, and represented that it had conducted due diligence. The alleged statements concerned matters including fixed or guaranteed income, buyback arrangements, operational status, occupancy, insolvency protection, and the investments’ supposedly straightforward nature. One Touch maintained that it was merely the developer’s marketing agent, denied owing contractual or tortious duties to the purchasers, and raised additional defenses including limitation, res judicata, and lack of responsibility for statements made by its Israeli sub-agent.
The Court’s Holding
In this split trial on liability, Deputy High Court Judge Recorder Bignell KC held that each claimant had established One Touch’s liability, with two substantive exceptions: Hoffelder Holdings GmbH did not establish liability, and Mr and Mrs Heneghan did not establish liability concerning their separate investment in an Aronex Developments hotel room. The judgment did not determine insurance coverage or quantum, which were reserved for a later trial.
The court rejected One Touch’s attempt to characterize its role as confined to passing along the developer’s marketing material. In the circumstances of the individual transactions, One Touch’s conduct and representations supported liability for its mis-selling of the care-home investments. The successful findings extended to purchasers dealing through One Touch’s Israeli sub-agent where applicable.
The court nevertheless held that the claims brought by Stephen Durnford and by Sumithradevi Suganathan, as executor of Jeyaruban Uruthiran’s estate, were barred by res judicata. Their earlier acceptance of final awards from The Property Ombudsman produced binding decisions covering the same underlying matters, even though the ombudsman had decided the complaints under applicable codes rather than formally determining negligence claims.
Key Takeaways
- A property marketer may incur liability to purchasers where its conduct goes beyond a bare introduction and it makes or adopts investment representations on which purchasers rely.
- The court found One Touch liable to the claimants generally, but excluded Hoffelder Holdings and the Heneghans’ separately pleaded Aronex investment.
- Accepting a binding ombudsman award can preclude later court proceedings arising from the same underlying complaints, even when the judicial claim is framed as negligent misstatement.
Why It Matters
The decision illustrates the potential liability of intermediaries that market unregulated, off-plan property products while presenting themselves as experienced professionals who recommend investments or perform due diligence. A business cannot necessarily avoid responsibility merely by describing itself after the event as the developer’s sales agent.
It also highlights a procedural risk for investors using ombudsman schemes: accepting an award stated to be in full and final settlement may foreclose a later damages action. The amount recoverable, and Hiscox’s liability under One Touch’s professional-indemnity policy, remained unresolved after this liability judgment.