Thames Water Utilities Limited v Karen Imber
| Court | High Court of Justice, King's Bench Division |
| Judge | Deputy Master Marzec |
| Judgment | 23 October 2026 |
| Hearing | 1 October 2026 |
| Jurisdiction | England and Wales |
| Claimant | Thames Water Utilities Limited |
| Defendant | Mrs Karen Imber |
| Case reference | KB-2025-003355 |
| Outcome | Summary judgment for the claimant; settlement agreement rescinded and the settlement sum to be repaid; any damages claim to be assessed |
Summary
Mrs Imber's second sewage flooding claim against Thames Water rested mainly on diminution in value. Her mediation statement said the house was unsaleable, so the loss was its whole value of £817,000. She had already agreed to sell it for £780,000, and the sale completed on 3 August 2023. Without telling Thames Water, she then settled for £225,000 under a deed of 6 September 2023.
Thames Water sued in fraudulent misrepresentation and obtained summary judgment. Calling the house unsaleable carried implied statements of fact: no sale had taken place and none was in prospect. Those implied statements became false on completion and had to be corrected before settlement. Even on her own account she had no real prospect of resisting a finding of dishonesty. The deed was rescinded and the £225,000 is to be repaid.
Background and facts
The house flooded in 2006 and 2007, and those proceedings settled in 2013 for £500,000. A further flood in 2014 led to the second claim, which Thames Water denied. Her expert valued the house at £817,000 on the assumption that it had never flooded. Diminution in value was by far the largest head; the others came to about £144,000.
Her statement of 11 July 2023 said she was trapped in the house. The mediation on 20 July 2023 did not settle. Her solicitor offered £250,000 plus costs on 1 August, which was refused. Contracts were exchanged the next day and completion followed. On 19 August she accepted £180,000 plus £45,000 costs.
Her account, disputed but assumed true for the application, was that she had told the mediator of the offer while saying she did not expect it to complete, and told her solicitor of the sale only after the deed was signed.
The issue
Thames Water relied only on her failure to correct the mediation statement after completion. It said the statement carried continuing implied representations that she was bound to correct, and that inducement did not require it to believe them, citing the Supreme Court in Hayward v Zurich Insurance Co plc [2016] UKSC 48. Its fallback was conditional permission to defend on payment into court of £225,000.
Mrs Imber said the statement was an honest opinion and that misrepresentation was a question for trial. Under Ivey v Genting Casinos [2018] AC 391, her belief about whether she had to disclose the sale went to her state of mind, and she had never been advised to say more. She relied on King v Stiefel [2021] EWHC 1045 (Comm) for the caution the court shows before deciding fraud summarily.
The decision
The principles were common ground. A statement true when made which becomes untrue before the contract is agreed will normally be a misrepresentation if not corrected; Thames Water relied on Inter Export LLC v Townley [2018] EWCA Civ 2068 for continuing representations in negotiations. Unsaleable may have been opinion, but it implied no sale and no prospect of one. Those statements were unarguably false from 3 August 2023.
Inducement was clear. Thames Water's own view that the house could be sold did not matter: a completed sale changed the basis of the largest part of the claim, and the same deal could not have been struck had it been disclosed. On dishonesty, the earlier mention of an offer did not help her.
An agreement to sell which may or may not proceed is one thing; a completed sale is another.Deputy Master Marzec, paragraph 50
Her solicitor could not advise disclosure of a sale he did not know about, and telling him after the deed came too late and went to the wrong person. The court did not need to find that she deliberately concealed the sale or knew she ought to disclose it.
In my judgment, ordinary decent people would plainly regard it as dishonest to continue to pursue and to settle a legal claim based on the contention that a property was unsaleable after the property had in fact been sold, without informing the opposing party of that fact.Deputy Master Marzec, paragraph 51
Her account of not mentioning the sale to her solicitor was inherently improbable, but even if true, and allowing for the caution needed, she had no realistic prospect of resisting a finding of dishonesty. Summary judgment was entered, the settlement rescinded and repayment ordered, with directions for any damages to be assessed.
Practical implications
On this decision, facts implied by a mediation position paper can be treated as continuing until the deal is signed, and a party who knows they have become false must tell the other side. Mentioning an uncertain offer to the mediator did not cover a completed sale. A settlement reached without that correction can be rescinded and the money recovered, here three years after payment.
This is a first instance ruling on summary judgment, taking the defendant's account at its highest. The outcome elsewhere will depend on what was said and what changed.
Practice points
- Before signing any settlement, check each factual assertion in your position paper and correspondence against the client's current position, and correct anything that has changed in writing to the other side.
- Ask the client directly whether anything has happened to the asset, the loss or the claim since the mediation, and record the answer.
- Where a loss turns on a fact that may change, such as a sale, a reletting or a repair, build a warranty on it into the settlement deed.
- If you are paying under a settlement, keep the position papers and offer letters: they are the representations you may later need to rely on.
- Do not assume that a disclosure made to the mediator in private session has reached the other party.