Disposal and purchase of leasehold property — Allegations of failure of property agents to negotiate lowest obtainable rent for premises — High Court holding that plaintiffs had failed to show that defendants were in any breach of duty owed to them
The defendants (“WRM”) were surveyors and valuers in South Kensington. An American company (“Candle”) and its English associated company (“CSL”) claimed that the defendants failed to use the reasonable skill and care required of them in discharging their professional duties. The claims were brought in respect of two transactions: first, the disposal of leasehold office premises at Swan Gardens, Piccadilly, London W1, occupied by CSL; and, second, the taking of a lease of an office building at Bridge House, Guildford, which CSL moved to on their departure from Swan Gardens. WRM acted as agents for CSL in both transactions.
The plaintiffs complained in respect of Swan Gardens that WRM forecast an unjustifiably high rent on the rent review which was due to be negotiated in January 1992. Further, it was alleged that WRM failed to warn either CSL or Candle that there was an appreciable risk that they might not be able to dispose of the Swan Gardens offices on favourable terms once they had vacated them. The defendants counterclaimed for loss of fees.
Held The claim and counterclaim were dismissed.
1. The obligation upon the defendants was to exercise the standard of care and skill possessed by a competent valuer and property agent operating in the relevant field: see Bolam v Friern Hospital Management Committee [1957] 1 WLR 582.
2. Property valuation was a difficult skill; and where, as here, the advice that a property agent was called upon to give formed part of a general assessment of the commercial good sense of a strategy which was being contemplated by his clients, and involved peering into the future to form a view of what might happen to a property market, then any reasonable client had to accept that such an exercise in prophecy, even if it was not expressly so qualified, was subject to any unexpected rises and falls in that market.
3. A property agent, who might be required to make forecasts of likely future property values as part of his strategic advice to his clients, should not be held negligent in the event that his prophecies turned out to be wrong, unless he had plainly failed to take into account some event that was or should have been within his knowledge, and should have been taken into account. Further, such matters had to be of a kind that would lead any competent surveyor and valuer to conclude that changes in market values were likely to follow from such an event coming into existence.
4. It was not enough to show that there was a body of competent professional opinion which considered that there was a wrong decision, if there also existed a body of professional opinion, equally competent, which supported the decision as reasonable in the circumstances: see Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634; Singer & Friedlander Ltd v John D Wood & Co (1977) 243 EG 212.
Michael de Navarro QC and Marie Louise Kinsler (instructed by Williams Davies Meltzer) appeared for the plaintiffs; Justin Fenwick QC and Fiona Sinclair (instructed by Reynolds Porter Chamberlain) appeared for the first defendants; Nicholas Davidson QC and Michael Pooles (instructed by Wansbroughs Willey and Hargrave) appeared for the second defendant.