Buyer beware

 

MY FAVOURITE CASE James McDermott, barrister and UCD law lecturerIn a case where a vendor didn't tell the buyer her home was haunted, the judge got into the spirit with ghostly puns

What is your favourite case?

My favourite case is Stambovsky v Ackley, which concerns a ghost estate with a difference.

In 1990 Helen Ackley put her old Victorian mansion in Nyack, New York, up for sale. Jeffery Stambovsky agreed to buy the house for $650,000 making an immediate down payment of $32,500.

However, unbeknownst to its proud new owner, the property was possessed by poltergeists.

As well as performing the usual tasks involved in haunting a house, the phantoms took it upon themselves to wake Ackley every morning by shaking her bed. This haunting was well known in the locality, with the property described in one newspaper article as “a riverfront Victorian (with ghost)”.

It had also been the subject of an article in the Reader’s Digest, which according to one legal commentator constituted “Perhaps the ultimate accolade for any socially ambitious haunted house.”

When she was selling the house, Ackley failed to reveal the fact that it was haunted to Stambovsky who, being from out of town, was unaware of the local folklore surrounding the property.

Stambovsky had expected to take vacant possession of the property and had not been warned about any ghosts who, one imagines, would not be susceptible in the ordinary way to eviction orders.

Concerned that the haunting would reduce the value of his new home, Stambovsky instituted legal proceedings seeking both rescission of the contract of sale and damages for fraudulent misrepresentation. Stambovsky appealed to Appellate Division of the New York Supreme Court after the original trial court dismissed his action.

By a narrow 3-2 majority the Appellate Court decided in favour of Stambovsky and allowed him to rescind the contract.

No divination was required to conclude that having deliberately promoted the presence of the ghost via the national press to the public at large, with whom she had no legal relationship, Ackley was prevented from denying its existence to the purchaser of her property.

This led the court to reach the unique conclusion that “As a matter of law, the house is haunted.”

Ordinarily the principle of “caveat emptor” (buyer beware) would apply, meaning that the vendor would have no duty to disclose defects in their property to a prospective purchaser.

However, the fact that a house was haunted was not something that would become apparent to the prospective buyer however meticulous their inspection of the property, and it was too much to envisage “a psychic or medium routinely accompanying the structural engineer on an inspection of every home subject to a contract of sale”.

The dissent was led by Justice Smith, who in a terse judgment concluded: “If the doctrine of caveat emptor is to be discarded, it should be for a reason more substantive than a poltergeist.”

Why is this your favourite case?

One of the frustrations of teaching law is that court judgments are frequently written in technical language that is not particularly accessible to a lay person. This is one of those rare cases whose memorable facts and colourfully written judgment combine to ensure that it is rarely forgotten by students.

Particularly noteworthy is the judgment of Justice Rubin, who squeezes as many ghostly puns as is humanly possible into his short judgment.

We are told that although, “the plaintiff hasn’t a ghost of a chance, I am nevertheless moved by the spirit of equity”, and reassured that the idea that a buyer should inspect the property for ghosts is “a hobgoblin which should be exorcised from the body of legal precedent and laid quietly to rest”.

In support of his decision, Rubin quotes everyone from the ghost of Hamlet’s father (“Pity me not but lend thy serious hearing to what I shall unfold”) to Hollywood movies, since when it comes to investigating paranormal activities the judge felt compelled to inquire, “Who you gonna call?” as the title song to the movie Ghostbusters asks.

Luckily for Stambovsky, the judge chose not to instead rely upon the other great catchphrase of that movie “I ain’t ’fraid of no ghosts.”

Is the case still relevant today?

It remains one of the leading cases on the boundaries of the “caveat emptor” principle.

It is also unique in that it is possibly the only decision ever in which a court concluded that, as a matter of law, a house was haunted. Perhaps best of all, it is one of those rare cases where things worked out well for both parties.

Even though Ackley lost the case, the publicity generated by it was so great that she was subsequently inundated with offers to buy her property – but, ironically, only if she could prove that the property was haunted.

But what of the poltergeists whose existence was established as a matter of law? Perhaps they were the only real losers in all of this litigation. Years later, paranormal explorers claimed to have successfully contacted the ghosts, who told them that it was not as much fun haunting the house without Ackley.