A homeowner who claimed her house was unsellable due to repeated sewage floods has been ordered by a court to repay £225,000 in compensation after it was revealed she had sold the property for £780,000 a month prior to agreeing to the settlement.
Karen Imber, 68, sued Thames Water after her home in Woodford Green, Essex, was flooded with sewage on three occasions between 2006 and 2014. She initially received £500,000 in compensation for earlier floods in 2006 and 2007.
Following a further flood in 2014, Imber launched a second claim. Her experts assessed the property's value at £817,000 if unaffected by flooding, but stated there would be "no willing buyer" given its history, suggesting its value had been eliminated. During mediation in 2023, Imber claimed she was "trapped" in the property because it was "unsaleable" and sought compensation for the total value of the house, along with other sums for increased insurance premiums and distress.
She agreed to a settlement of £225,000 on September 6, 2023, which was paid a week later. However, Thames Water discovered that Imber had exchanged contracts to sell the property for £780,000 on August 2, 2023, and completed the sale on August 3, 2023, a month before the settlement agreement was concluded.
In a ruling at the High Court, Deputy Master Alexandra Marzec found that Imber had "no prospect of defending a 'fraud' claim" and ordered her to repay the £225,000. The judge stated that ordinary people would consider it dishonest to pocket a payout based on an allegedly unsellable house that had in fact been sold.
Thames Water argued that Imber's statement that the property was unsaleable, while an opinion, implied that it had not been sold and that no sale was likely. The company's barrister contended that this was a continuing representation during negotiations, and Imber had a duty to inform Thames Water once it became untrue. The judge agreed, stating that Imber knew by August 3, 2023, that the property had been sold for £780,000 and she was moving out. This fundamentally changed the factual basis of her claim.
Imber had claimed in her mediation statement that she was "trapped" and the property was "unsaleable," seeking damages for a diminished market value. By the time settlement negotiations resumed, she was aware that she was no longer trapped and the property had been sold, rendering the central premise of her claim untrue.
The Deputy Master also paved the way for Thames Water to pursue Imber for further damages related to her "fraudulent misrepresentation" in addition to the £225,000 repayment.