Figure quoted by estate agents as price likely to be realised on sale of purchaser’s own property held to be a valuation and to have been negligent–Damages of £40,225 awarded purchaser who over-extended himself in reliance on agents’ statements
This was an
action by Mr Patrick Howard Kenney MA FRICS, of Wickham Lodge, Wickham, Hants,
against Hall, Pain & Foster, estate agents, of 48 West Street, Fareham,
Hants, for damages for negligence in and about the valuation of Culverlands
House, Shedfield, Hants, in 1973.
Mr T M Eastham
QC and Mr J Hamilton (instructed by Lickfolds, Wiley & Powles) appeared for
the plaintiff, and Mr W A B Forbes QC and Mr C H L Bathurst (instructed by
Reynolds, Porter, Chamberlain & Co) represented the defendants.
[We print
this week the first portion of Goff J’s lengthy judgment in this important and
interesting case. The remaining portion will appear in our next issue.]
Giving
judgment, GOFF J said: The period 1970 to 1974 saw striking changes in the
residential property market. During 1970 and 1971, the general demand for
housing accommodation escalated in a remarkable way. This was due to a number
of causes. There was a general desire among people to improve the standard of
their accommodation. There was plenty of money available to be borrowed at
acceptable rates. There was a pronounced increase in distrust of the currency;
people felt that by getting out of money into something real, they had a better
chance of maintaining, and possibly of increasing, the value of their assets. As
a result of these factors, and no doubt of others too, there was constant
over-bidding and prices began to rise. High prices brought properties on to the
market which otherwise would not have been there. The rising market continued
throughout 1972. One of the expert witnesses who gave evidence before me
described 1972 as ‘a vicious year’; it was in that year that the phenomenon
which became known as ‘gazumping’ was particularly rife. In 1973, however, the
market changed. Precisely when it changed was a matter of some difference of
opinion among the expert witnesses in this case. It appears that while the
market had been rising very sharply in the latter half of 1972, by the end of
that year the rise was slowing down. Even so, in the first quarter of 1973 the
market was still healthy. In the second quarter, the market was becoming soft;
interest rates were rising, so purchasers were looking more closely at the cost
of borrowing. In June the market was pretty well on a plateau, and this state
of affairs continued into July. At some point of time in the period
July-October the market turned. Precisely when that happened nobody can even
now determine. The market went dead in August, but August is always a quiet
month. In normal years, the market usually picks up again in September, but in
1973 it did not show its normal response. By October, the slide downhill had
definitely begun. The number of buyers available declined; buyers were
beginning to get into a position where they would only buy if they could sell
their own houses. The political events of the autumn and winter of 1973
contributed to the downward slide of the market, and the interim budget of
December 1973 was a marked contributory factor. The fall in the market
continued well into 1974, probably reaching its low point around August, in the
period August 1973-August 1974, remarkable falls in housing prices were seen;
falls of as much as 40 per cent were quite common, and some were even greater.
This is a
generalised picture of the market. But generalisations are particularly
difficult in the housing market, which is unlike many other markets, because
every house is unique. Certainly during the period of the fall in the market in
1973-74, the prices for larger country houses fell more steeply than in the case
of smaller houses. The larger and the more complex the property, the greater
was the difficulty of finding a buyer at all; for smaller and more easily
managed properties, buyers were more easily found. Furthermore, the thumb-nail
sketch which I have painted constitutes a view of the market in retrospect over
a particularly difficult period. It is one thing to look back over two or three
years and assess with the wisdom of hindsight how the market was moving at that
time; it is quite different now to get the feel of the market at that time. It
is particularly difficult, too, to assess when a market is breaking. A
temporary check may or may not develop into a recession; for example, it only
requires a government to decide to escalate out of its problems for an upward
trend to develop once again.
It is against
the background of this unusual market of 1972-74 that the facts of the present
case occurred. The plaintiff is Mr Kenney, a civil servant, who at the material
time was an assistant secretary in charge of a division of the Office of
Population and Census Surveys. The defendants are Hall, Pain & Foster, an
old-established firm of estate agents carrying on business in South Hampshire.
The plaintiff’s claim is for damages for negligence in the valuation of a
property called Culverlands House, which is situated in Shedfield, Hampshire.
Before I go into the detailed facts of the case, however, I will first describe
the parties in rather more detail. The plaintiff is now 48 years old. In 1950,
after his military service, he joined the civil service and entered the
Ministry of Defence. By 1958, he had attained the rank of principal scientific
officer. In 1966 he was posted to NATO as British scientific officer to the
Supreme Commander, being stationed first in Paris and later in Belgium.
Subsequently he was appointed technical director and deputy head of the
automatic data processing division of SHAPE. In the autumn of 1972 he was
ordered home, promoted to the rank of assistant secretary, and placed in charge
of a new division of the Office of Population and Census Surveys. He then had
to find a home in this country, and as I shall describe, he bought Culverlands
House. It is obvious from
he is a Fellow of the Royal Institution of Chartered Surveyors. However, he
only acquired this qualification because in the course of his career he needed
further qualifications in geodesy. In 1956 he took the RICS examination in
geodesy, and became an associate and later a fellow of the institution. He
served on a number of committees of the RICS, but his membership of the
institution, which was based on his specialised knowledge of geodesy, gave him
no specialised knowledge or expertise in the ordinary work of a chartered
surveyor, and still less did it give him any special knowledge of the property
market in this country.
The
defendants, Hall, Pain & Foster, are an old-established firm of estate
agents, having been established for about 135 years. At the relevant period
they had seven offices at various places in south Hampshire; the office with
which this case is particularly concerned is their Fareham office. At the
material time there were eight partners in the firm, each of whom was either a
Fellow or an Associate of the Royal Institution of Chartered Surveyors. The
firm was therefore entitled to, and did, describe itself as chartered
surveyors; it also described itself as chartered auctioneers and estate agents,
valuers and property managers. The senior partner was, and still is, Mr J R
Bannell JP FRICS. He was in charge of their Fareham office, and figures to some
extent in this case. But a much more prominent figure in the case is Mr C F
Bannister, who was employed by the defendants as a property negotiator at their
Fareham office between March and September 1973. Until 1971, Mr Bannister
worked for about 16 years as manager of a company of builders and timber
merchants. In 1971 he went to New Zealand, where he obtained employment in an estate
agent’s office. He returned to this country in 1972, and joined Hall, Pain
& Foster in March 1973. He had no formal qualifications. During his first
six weeks with the defendants, he worked with a Mr Christopher Solen in the
Fareham office; Mr Solen was an experienced property negotiator, and by working
with him Mr Bannister received some training and acquired some experience of
the property market in the Fareham area. Although he only stayed with the
defendants for about six months, he certainly did not leave them under a cloud;
on the contrary, Mr Bannell told me that he gave satisfaction to the firm and
left them with good wishes and with regret. He left to become a manager and
property negotiator with another firm of estate agents, Cubitt & West, by whom
he is still employed.
I now return
to the plaintiff, Mr Kenney. In the autumn of 1962 he returned to this country
from Belgium, and had to find a house for himself and his family near his new
office, which was near Fareham. He discovered that the owner of Culverlands
House, a Mr Newell, wanted to sell quickly, and at the end of October 1972 he
(the plaintiff) agreed to buy the property for £25,000 subject to contract.
Culverlands House is a large, pleasant, detached house situated to the north of
the village of Wickham. The original house was probably built in about 1850,
but there had been some considerable alterations and additions since it was
built. Mr Newell completely replanned the house, with the result that the
larger part of the house was retained as a private residence, but the eastern
part of the building was converted into four self-contained flats. He spent a
great deal of money on the house, and it was in exceptionally good condition.
It stood in a little over two acres of land, and one particular part of the
land, about half an acre in area, was a potential site for development for two
bungalows. The plaintiff agreed to buy the freehold of the whole property, and
to grant back to the vendor, Mr Newell, leases of the flats; the intention was
that tenants should be found for the flats for terms of years, and that Mr
Newell would receive premiums on the grant of the leases of the flats, the
plaintiff becoming the landlord entitled to a ground rent and with the
reversion on expiry of the tenancies.
The plaintiff
obtained a full survey report and valuation on the property from a local firm
of estate agents, Percy Collett & Son, on December 5 1972. In their report
Percy Collett stated: ‘We note that the intended purchase price of Culverlands
House is £27,000. In our opinion, this figure reflects the true market value of
the property provided it is freehold and with vacant possession.’ Of the flats they reported that from their
inspection, they felt ‘that if these flats were to be sold in the open market
at the present time, prices may be obtained between £7,500 and £10,000, making
an overall value in the region of £35,000.’
In fact, the price which the plaintiff agreed to pay was £25,000,
because there was excluded from the sale a block of garages which had been
included in the valuation of £27,000. Despite Percy Collett’s valuation, and
the price negotiated by the plaintiff on the open market, I strongly suspect
that the plaintiff acquired a bargain in Culverlands House on the market at
that time. Mr Newell had to sell quickly; he left for the Channel Islands, and
there is at least a suspicion that he had to leave quickly for tax reasons. As
for Percy Collett’s valuation, I was told by one expert witness that it would
be a bold valuer who valued an intended purchase at a value higher than his
client had agreed to pay for it.
The plaintiff
and his family moved into Culverlands House in December 1972, just before
Christmas. He moved in with Mr Newell’s consent before contracts were
exchanged, and lived there as a tenant until completion. Contracts were not
exchanged until May 1973, because of legal problems in relation to the four
flats. Completion took place soon after. Even so, the plaintiff seems to have
treated the place very much as his own after he moved in. He spent about £5,000
on it. Most of this sum was spent on double glazing and sound-proofing the
bedrooms; the rest was spent on decoration, carpentry and suchlike. The reason
for the double glazing and sound-proofing was that the plaintiff’s wife was in
poor health when they returned from Belgium; she slept badly at Culverlands
House, being disturbed by traffic on the main road that ran nearby. Despite the
expenditure on double glazing and sound-proofing she still slept badly.
Although there was a proposal for a by-pass which would divert the traffic
about 100 yds away from the house, the Kenneys decided not to wait for this
development but to move as soon as possible. So in June 1973 the plaintiff
started looking for another house. He had read in the papers that the housing
market was rising, and he thought that Culverlands House would be likely to
fetch £35,000 to £40,000. He had a mortgage on the house for £18,750 from the
Halifax Building Society; but that could be transferred to another house. He
had very little spare capital, so he was looking for a house in the same price
bracket as Culverlands House, and in the same area. He saw an advertisement for
a house called Milford Rise; the house was advertised by the defendants, and
offers over £40,000 were invited. He telephoned the defendants and spoke to Mr
Bannister. An appointment was made to visit Milford Rise, and Mr Bannister took
him over the house on June 14. The plaintiff thought the house was quite nice,
but it was too close to the main road and so was rather noisy. Mr Bannister
then said that he had another house on his books called Park Croft, which was
priced at £65,000.
There was a
conflict of evidence concerning the plaintiff’s reaction to this suggestion.
The plaintiff’s evidence was that he then said that it was far beyond what he
thought his own house, Culverlands House, would fetch, but that it sounded
interesting and it was near his home, and so he would go and see it. Mr
Bannister’s evidence was that the plaintiff made no comment about £65,000 being
too expensive. At all events, an appointment was made for the plaintiff to
visit Park Croft the next day, June 15. When he visited Park
attractive property, but would need a lot doing to it. It was divided into two
flats; it would have to be reconverted into a single dwelling, rewired and
redecorated throughout. He thought it would cost about £15,000 to put it in
order; looking back on it, he was sure it would have cost more. Mr Bannister,
listening to the alterations which the plaintiff mentioned as necessary,
thought to himself that they would cost around £20,000. But again there was a
conflict of evidence as to what passed between them. The plaintiff said that he
told Mr Bannister that the total cost was far beyond what he thought
Culverlands House was worth, whereupon Mr Bannister expressed an interest in
coming to see Culverlands House. Mr Bannister’s evidence was that the plaintiff
did not say anything to the effect that the cost was more than his house was
worth. At all events, an appointment was made for Mr Bannister to visit
Culverlands House the following Monday, June 18. On that day, Mr Bannister went
over the whole property very thoroughly, including the house, the flats and the
garden, and he also inspected the potential building plot.
Again there
was a conflict of evidence as to what was said, concerning on this occasion a
crucial point in the case. The plaintiff’s evidence was as follows. Before Mr Bannister
was leaving, the plaintiff said to him: ‘What is your opinion regarding its
worth?’ Mr Bannister said: ‘Oh,
£100,000.’ The plaintiff said: ‘For my
holding?’ Mr Bannister replied: ‘Yes,
£100,000.’ The plaintiff said: ‘What
about the flats?’ Mr Bannister said:
‘About £50,000 for the flats, particularly if they are sold in conjunction with
the house.’ The plaintiff asked why the
property was so valuable. Mr Bannister said he only had to look at Park Croft,
marked on his books at £65,000, to know that Culverlands House was worth
£150,000. Mr Bannister went on to say that if the plaintiff asked £100,000 he
was likely to get £95,000, certainly not less than £90,000; if he asked
£105,000, he might manage to get the full £100,000. The plaintiff, with the
possible purchase of Park Croft in mind, wanted to be quite sure that he had
the informed opinion of a professional firm regarding the value of his own
house. He made it quite clear to Mr Bannister that he could not afford to
purchase Park Croft unless he could realise the sort of value that Mr Bannister
was advising Culverlands House was worth. The plaintiff asked for a written
opinion, and Mr Bannister replied, ‘Certainly.’
Mr Bannister’s account of the conversation was very different. His
evidence was as follows. The plaintiff asked: ‘What do you think would be a
good asking price for the property?’ Mr
Bannister replied: ‘We could ask around £80,000 to £100,000, and see what
interest that could arouse; people could well take an interest at £100,000.’ The plaintiff showed no emotion when Mr
Bannister expressed this opinion. Nothing was said about what the property was
worth, or would realise. The value of the flats was not mentioned. If Mr
Bannister was asked, he would never say what a property would fetch; he would
simply say, it will fetch what it will fetch. The plaintiff asked him to put it
in writing that it was better to sell the house and flats together.
On June 20,
the plaintiff paid another visit to Park Croft with his wife. A few days later,
he told Mr Bannister that he was extremely interested in Park Croft. Mr
Bannister said in his evidence that he was surprised at the time to hear this,
because he thought that all the alterations the plaintiff needed were too much
for him. Meanwhile on June 22 Mr Bannister visited Culverlands House again, to
take a photograph and to check on the particulars. On Saturday June 23 the
plaintiff, having received no written opinion, visited the defendants’ Fareham
office and saw Mr Bannister. He reminded him about the written opinion, and
suggested a form of wording. On the following Wednesday, June 27, the plaintiff
received the following letter from the defendants, dated June 26 and signed by
Mr Bannister above the firm’s name:
Further to
our discussions concerning the sale of Culverlands, we think that a reasonable
asking price of the freehold vacant possession of the whole property would be
£150,000. The house and grounds on their own would be about £100,000 and the
leases on the four flats £50,000. In our opinion, the latter figure is a
reasonable asking price if the flat leases are sold in conjunction with the
house etc. They might not obtain £50,000 if sold separately.
The plaintiff
could not remember if this letter was in accordance with the form of wording he
had suggested the previous Saturday. On the same day, June 27, the plaintiff
wrote to Mr Bannister as follows:
Thank you for
your letter, reference CFB/AW, of June 26 in which you advise me regarding
reasonable asking prices for Culverlands. I would be grateful if you would
proceed with the sale of Culverlands House and the freehold of the whole
property at £100,000, and I understand that the leaseholder of the flats would
be pleased for you to sell them in conjunction with my property for £50,000. I will,
however, confirm the leaseholder’s agreement to this as soon as I hear from
him.
It is the
plaintiff’s case that the defendants, through Mr Bannister, were negligent in
the advice given to him as to the value of Culverlands House, both when Mr
Bannister visited the house on June 18 and in the letter of June 26. In view of
the serious conflict of evidence as to what passed on June 18, it is necessary
that I should make findings of fact as to the advice given on that occasion. I
am satisfied that the plaintiff’s account of what passed between him and Mr
Bannister is correct, and I reject Mr Bannister’s version. In so deciding, I am
influenced principally by the impression made by these two witnesses in the
witness-box; I found the plaintiff to be a careful and credible witness,
whereas Mr Bannister was a most unimpressive witness. If Mr Bannister’s account
of the interview was correct, the plaintiff’s description of the interview must
have been pure invention; I am satisfied that this was certainly not the case.
The plaintiff’s account of the interview at Park Croft on June 15 provides a
sensible explanation for Mr Bannister’s visit to Culverlands House on June 18.
Furthermore, it is clear that the plaintiff was at first looking for a house in
the £35,000-£40,000 price bracket, and that he did not begin seriously to
consider a more expensive house until after Mr Bannister’s advice on June 18.
In these circumstances, it is inconceivable that he would have limited his
inquiry of Mr Bannister on June 18 to the asking price, and not have asked
advice as to what his house was likely to fetch. It is true that the letter of
June 26 was substantially limited to the question of the asking price, and that
this letter may, to some extent at least, have been based on the plaintiff’s
own form of words. But the letter is not entirely limited to the asking price,
because the last sentence is concerned with what the flats might fetch; and in
any event I have no doubt that by then the asking price had become so closely
related to Mr Bannister’s advice as to what the property might fetch, that
confirmation of his advice as to the asking price was sufficient for the
plaintiff’s purpose. My conclusion is that I prefer the plaintiff’s evidence to
that of Mr Bannister as to what passed between them, not only at Culverlands
House on June 18, but also at the two previous interviews at Milford Rise and
Park Croft.
In early July
there occurred a new development. Large notice boards appeared outside Wickham
Lodge, a pretty Georgian house not far from Culverlands House, stating that it
would be auctioned on a date to be announced. Wickham Lodge appealed very much
to the plaintiff, although it needed quite a lot doing to it. He thought it a
very attractive property, and it was quiet, away from the main road. He greatly
preferred it to Park Croft. On July 4 the plaintiff spoke on the telephone to
Mr Hobbs of Whiteheads, the estate agents
follows: ‘Further to our telephone conversation of yesterday, I write to
confirm that I would be interested in purchasing Wickham Lodge at a price of
about £54,000 or £55,000 providing, firstly, that a structural survey reveals
no great defect other than those we have already discussed, and secondly, that
I can sell Culverlands House for a satisfactory price.’ It is clear that at that time the plaintiff
was not prepared to buy another house for that sort of price before he had sold
his own house. Meanwhile, the plaintiff was considering the possibility of
forming a company which would acquire the whole of Culverlands House, and which
would be financed by the issue of shares; the money so acquired by the company
would be used to pay the plaintiff for his interest in Culverlands House and he
would then use the money to pay off a bank bridging loan by which he would have
bought his new home. The plaintiff’s purpose was to retain indirectly some
interest in Culverlands House, in order to take advantage of the further
capital gain which he anticipated. Subsequently, after taking advice, he
dropped the scheme, but the incident demonstrates that the plaintiff was not
wholly unacquainted with some of the financial aspects of property ownership.
In a letter to
the plaintiff dated July 25, Mr Bannister referred to ‘the many inquiries of
Culverlands House,’ but in point of fact little or no interest was being shown
in the property. Furthermore, in a letter to the plaintiff dated July 27 Mr
Fuller, the owner of Park Croft, who was also by profession an estate agent,
informed the plaintiff that he felt that the asking price of £150,000 for
Culverlands House was going to prove a big handicap, unless the plaintiff had
obtained outline planning permission for the two building plots in the grounds.
By early August nobody had come to see the house, and the plaintiff had begun
to suspect that the asking price for Culverlands House was too high. Then in
the first few days of August a dramatic change took place regarding Wickham
Lodge. Mr K W S Walker, the second senior partner in Whiteheads, the agents
handling that property, who was obviously an extremely astute estate agent, had
sensed that a change was taking place in the market; he was probably one of the
first to do so. He advised the vendor to withdraw the house from auction and
attempt to obtain a quick sale by asking only £47,500 for it, as against an
original estimate of £55,000 to £60,000. This was done, and an offer of £46,000
was immediately made by another prospective purchaser. The plaintiff then found
himself in a tantalising situation. He obviously liked Wickham Lodge very much,
and he needed to move quickly because of his wife’s health. He decided to make
an offer of the full asking price of £47,500, which was accepted. This meant
that he abandoned his previous policy of first finding a buyer for Culverlands
House before committing himself to the purchase of another property.
On August 6,
therefore, he wrote to his bank, Barclays Bank, asking for a bridging loan of
£65,000 to cover payment of a deposit of £5,000 in August, the balance of the
purchase price (for which he allowed £45,000) in August/September, and £15,000
for renovations in November/December. He told the bank that his own house was
valued for sale at £100,000, which he suspected was rather high; however,
assuming that his purchase of Wickham Lodge went ahead, he was planning to drop
the asking price to £85,000, and could afford to go lower if a reasonable offer
was made. In fact, on August 8 he instructed Mr Bannister to reduce the asking
price for his interest in Culverlands House to £75,000. On August 14 Percy
Collett provided the plaintiff with a report and valuation on Wickham Lodge.
They valued the property at ‘a figure in the region of £40,000,’ but they
recognised that so individual a property could well go for a higher price. On
August 16 the bank advised the plaintiff that a bridging loan of £65,000 would
be made available to him for a period of six months. Over the telephone the
plaintiff’s bank manager, Mr Craddock, advised him off the record that the bank
had valued his interest in Culverlands House at £75,000 and the flats at
£25,000. In fact this was probably not the correct figure for the valuation,
because a Mr Michael Walker (not to be confused with Mr Walker of Whitehead’s),
one of the two persons who carried out the valuation for the bank, insisted in
his evidence that the valuation he made was £75,000 for the whole property
including the flats–in which event, his written report to the bank, which was
more consistent with what Mr Craddock retailed to the plaintiff, was somewhat
misleading. At all events, with the bridging loan available, the plaintiff went
ahead with the purchase of Wickham Lodge. Contracts were exchanged on September
11, and completion took place on October 15.
The plaintiff
therefore committed himself legally to buy Wickham Lodge on September 11. By
that time no prospective purchaser had yet visited Culverlands House, despite
the substantial drop in the asking price. Furthermore, shortly afterwards, on
September 21, a meeting took place between the plaintiff and Mr Bannell, the
senior partner in the defendant firm. This meeting occurred because the
plaintiff had written to Mr Bannister asking whether it was advisable for him
to buy the four flats at Culverlands from Mr Newell, in case a sale of one of
the flats by Mr Newell might prevent the sale of the property as a whole.
However, by then Mr Bannister had left the defendants; Mr Bannell dealt with
the inquiry himself, and visited the plaintiff at Culverlands House on
September 21. He advised the plaintiff not to buy the flats, and they went on
to discuss various steps which were agreed to be taken to promote the sale of
the property. There was a conflict of evidence between the plaintiff and Mr Bannell
about one episode at the meeting. Some reference was made to the letter of June
26. Mr Bannell had the file with him, and looked up the letter (he had been
away from the office at the time when the letter was written). His evidence was
that he then said to the plaintiff, ‘You do realise that this is not a
valuation, only an advice as to asking price,’ and that the plaintiff made no
riposte, but just went a little red in the face. The plaintiff’s account of the
meeting did not include any such statement by Mr Bannell, and Mr Bannell said
that he considered that the plaintiff had been rather unfair in omitting this
from his evidence. Mr Bannell is obviously a completely honourable man, and I
think it probable that he did say something to this effect to the plaintiff on
this occasion, but I doubt if the plaintiff attached such importance to it at
that time, since he had already reduced his asking price by 25 per cent, and in
any event he had been relying very much on Mr Bannister’s oral advice on June
18, for which the letter of June 26, although concerned mainly with the asking
price, provided some confirmation.
Completion
having taken place on October 15, the plaintiff committed himself to further
expenditure in connection with Wickham Lodge. On October 29 he committed
himself to the purchase of a neighbouring cottage, Wickham Lodge Cottage, and
some additional land, from a Mr Stringer for £16,000 freehold, the sum to be
paid (less deposit at the time of contract) on April 3 1974 or when the cottage
was vacated, whichever was the later. The plaintiff felt that this was a safe
investment, and in fact it proved to be so. On November 19 the plaintiff
accepted an estimate from a building firm, Croads, for work at Wickham Lodge.
The estimate totalled £17,263.73, and the work was put in hand. I shall have to
return later in this judgment to the nature of the work undertaken by the
plaintiff at Wickham Lodge, but it involved a comprehensive modernisation,
repair and redecoration of the property. On November 22 the bank agreed to
increase the bridging loan to £90,000 on the terms that a substantial part of
the facility must be repaid by the expiry date, February 16 1974. By November
23, despite
of any purchaser for Culverlands House, only two people having been to visit
the property, and on that date the plaintiff wrote to Mr Bannell suggesting
that the defendants should buy his interest in the property on a ‘no
commission’ basis at a net price of £72,500. Although it did not say so
expressly, the letter implied that the defendants’ original valuation of the
property was at fault, an implication which Mr Bannell was not slow to
perceive. He replied declining the offer. Efforts to sell Culverlands House
continued without any success. On January 21 and March 7 the plaintiff accepted
further estimates from Croads for work at Wickham Lodge in the respective sums
of £957.64 and £290.02. The first of these estimates related to external
paving, and removing a shed and two greenhouses from Culverlands House to
Wickham Lodge; the second related to shelving in cupboards. On March 8 he
accepted a further estimate of £1,032.83 for the external painting of the
house. In January and April 1974 he also accepted estimates totalling £1,245.50
for work on Wickham Lodge Cottage. All these estimates were affected by
variations, both additions and omissions, and ultimately the total cost of the
work on Wickham Lodge (including VAT) carried out by Croads was £23,525.96, and
on the cottage £1,668.70. In addition, the plaintiff spent £3,095.43 on
curtains and carpets for Wickham Lodge; and a substantial payment to Rentokil,
with a number of other minor items, brought the plaintiff’s total expenditure
on the property he purchased to over £30,000.
The rest of
the story can be briefly told. The building work at Wickham Lodge was carried
out during the winter and spring of 1973/74, and the plaintiff and his family
then moved in. Still there was no sign of a buyer for Culverlands House. During
January there was talk of a forced sale at £50,000, but the bank agreed that it
would be better to hang on to March or April in the hope that the market would
improve. But the spring came, and still there was no buyer. On May 9 1974 the
plaintiff wrote to the defendants setting out the details of the valuation that
he had received from Mr Bannister in June 1973, and informing them that he had
now been advised that this valuation was seriously in error; he concluded by
saying that he held them liable in negligence. On May 25, in a letter drafted
by their solicitors, the defendants denied any allegation of negligence, and
advised the plaintiff that they could no longer act for him. Finally, on July
24 1974, no buyer having been found, Culverlands House was put up for auction;
this led to the sale of the house to the Hampshire Probation Service. The total
price paid for the whole property was £60,000, of which £24,000 went to Mr
Newell for the flats. The price for the plaintiff’s interest was only £36,000.
Wickham House Cottage was later sold separately for £14,000, but part of the
land bought with the cottage was retained by the plaintiff. These figures tell
their own story. The plaintiff had been caught in the falling market of
1973/1974. At the end of the day, he is the owner of Wickham Lodge, a charming
house which has been completely done up, but, with the fall in the market, that
property is now only worth £57,000, including £7,000 for the plot which formed
part of the land bought with Wickham Lodge Cottage. Today, the plaintiff’s
total debt to his bank for capital and interest is over £85,000, and he still
owes Croads over £9,000. He has little or no capital of his own, apart from his
house; he has already had to surrender an insurance policy to pay off part of
his indebtedness to his bank. To all intents and purposes he is bankrupt.
Continuing his
judgment, GOFF J said: Having outlined the history of the case, I now turn to
the plaintiff’s claim. He claims that the defendants, through Mr Bannister,
were negligent in advising him, orally on June 18 and in writing on June 26
1973, that the value of Culverlands House was about £100,000; and that he, the
plaintiff, relied upon such advice, and thereby suffered damage. The first
element which the plaintiff has to establish is that the defendants owed him a
duty of care in relation to the advice given to him by Mr Bannister. This
however is not in dispute, and there can be no doubt that the defendants are
right to concede that they owe such a duty of care to the plaintiff. It makes
no difference whether or not they intended to charge a fee for their services.
In point of law they could have done so, because whenever a professional man
renders services to another at his request he is, in the absence of a contrary
intention, entitled to charge for those services. So when an estate agent is
asked to place a value on property with a view to sale he will, in the absence
of a contrary intention, be entitled to charge for such valuation; though if he
is instructed thereafter to act as agent for the vendor on the sale of the
property, the valuation will ordinarily be treated as part of the services
rendered towards the earning of the commission in the event of a successful
sale, in which event a separate fee for the valuation will be waived. Such was
the position in the present case. It follows that the valuations given to the
plaintiff on June 18 and 26 constituted services rendered to him pursuant to a
contract, which was subject to the usual implied terms contained in every
contract for professional services, namely that the professional man would
exercise reasonable care and skill in and about the services so rendered.
The second
element which the plaintiff has to establish is negligence. In the present case,
this involves in its turn two elements: first, that the valuation was
erroneous, and secondly that Mr Bannister was negligent in providing such an
erroneous valuation. The plaintiff therefore immediately runs up against the
problem that in the property market a valuation is essentially a matter of
opinion. It is a judgment made in the light of experience and knowledge of the
relevant local market. In theory, a valuation can only be proved to be wrong by
a sale of the relevant property, made at arm’s length between willing vendor
and willing purchaser at or very close to the time of the valuation. Even such
a market transaction would not necessarily show the valuation to be wrong,
because it might be subject to some special element which affected the price
one way or the other–a common phenomenon in the property market, where special
purchasers are what every agent looks for and financially exposed vendors can
easily provide bargains for buyers. Moreover, since every valuation is a
question of opinion, it in an axiom in the profession that if you take the
opinions of 10 valuers on one property, you will get 10 different valuations.
The present case is no exception. I had the assistance of no fewer than seven
expert witnesses, and of these, five expressed opinions as to the value of the
plaintiff’s interest in Culverlands House in June 1973. Their opinions ranged
from £40,000 to £98,000. This extraordinary range of opinion to some extent
reflected three special factors. First, on any view of the matter Culverlands
House was a property with unusual features, having regard in particular to the
presence of the flats and to the element of development potential in the land;
it was therefore a property which could attract a special class of purchaser,
and for that reason the price it might fetch was the more unpredictable.
Second, the expert witnesses were being asked to place a valuation on the
property at a time when the market was either approaching a change or in the
process of changing; and the exact state of the market at that point of time is
even now difficult to assess. Third, the experts were being asked to project
their minds back in time to June 1973 and to rid themselves of the knowledge
and understanding which they had since acquired of the market at that time, and
it was generally accepted among them that it was difficult, if not impossible,
to discard altogether the benefit of hindsight.
Factors of
this kind demonstrate all too clearly how difficult it is for any plaintiff to
prove that a valuation is
however come to the conclusion that this is one of those rare cases. In my
judgment, Mr Bannister’s valuation was so wide of the mark that it can properly
be described as erroneous. A distinction has to be drawn between a reasonable
asking price and a valuation in the sense of an estimated realisation value. Mr
Bannister’s advice as to the former was £100,000, and as to the latter at least
£90,000. No witness who was called could justify such a valuation. Three
witnesses gave estimated realisation values of between £40,000 and £50,000 in
June 1973–about half of Mr Bannister’s valuation. It is true that one witness,
Mr F J Seaward, gave a valuation of £98,000, but that was on the basis (which
no other witness propounded) that most of the land, namely 1 1/2 acres, had
development potential, and that was not the basis on which Mr Bannister valued
the property or offered it for sale. The fifth expert witness who expressed an
opinion on value, Mr Nicholas, thought that an asking price of £80,000 to
£85,000 would have been reasonable in June 1973 but that a margin of 15 per
cent to 20 per cent would have had to be allowed between the asking price and
the likely realisation value. Efforts were made to justify Mr Bannister’s
valuation by making projections backwards from valuations subsequently given
for the property, on the basis of an estimated percentage change in the market.
I did not find these exercises at all convincing. Mr Forbes was constrained to
admit, on behalf of the defendants, that a valuation of £100,000 in June 1973
would have been erroneous; so also, in my judgment, was the valuation given by
Mr Bannister in this case.
Next, was this
valuation negligent? I am satisfied that
it was. In considering this question, it is important to bear in mind Mr
Bannister’s very limited experience of the property market. In June 1973, when
he gave the valuation, he had had six months’ previous experience in New
Zealand, but only about three months’ experience with the defendants of the
property market in the south of Hampshire. It is clear that valuation is a
matter of judgment based on experience and knowledge of the local market, and
more than one expert witness stressed to me that knowledge of the market in one
area did not qualify a valuer to express an opinion on the market in another
area. Mr Bannister’s knowledge and experience were relatively slight when he
expressed his opinion on June 18. Indeed, he admitted in evidence that during his
time with the defendants, the highest value he had placed on a property before
he valued Culverlands House was £33,000. Furthermore, Mr Bannell stated in
evidence that Mr Bannister’s instructions were that if he were asked to give an
opinion on value, he was to refer it back to the office; if asked to give a
firm opinion as to asking price, and he ever felt out of his depth, he was also
to come back to the office. This was because, on account of his limited
experience, he was not regarded as competent to deal with such matters on his
own.
It is true
that Mr Bannister said in his evidence that before going out to Culverlands
House on Monday June 18 he had made inquiries of Mr Solen and Mr Barker, the
latter being the office manager of the defendants’ Fareham office, and that
they had expressed the opinion that a reasonable asking price was near to the
£80,000 mark. He also said that the letter of June 26 was shown to Mr Barker
before it was despatched. But neither Mr Solen nor Mr Barker was called as a witness;
and I am satisfied that neither of these gentlemen made a fully informed
assessment of the value of Culverlands House, and that the valuation given by
Mr Bannister to the plaintiff on June 18 was given by him essentially on his
own judgment, as was the letter of June 26. In my judgment, at the material
time Mr Bannister lacked the skill, which could reasonably have been expected
of a person in his position, to give the valuation which he gave to the
plaintiff on June 18. Furthermore, in failing to refer the matter properly back
to the office for their opinion, he had failed to exercise reasonable care in
making the valuation. Lastly, having regard to the nature of the plaintiff’s
request for a written opinion, he was entitled to assume that the valuation
contained in the letter of June 26 had been the subject of full and informed
consideration by a partner or responsible employee of the defendants, and I am
satisfied that it was not. I therefore conclude that the valuation of June 18
and the letter of June 26 were both negligent.
It follows
that a breach of duty has been established in this case. I come next to the
question of reliance. It is clear that the plaintiff relied on Mr Bannister’s
negligent valuation by placing the property on the market at an asking price of
£100,000 early in July 1973. I do not consider, however, that this act of
reliance is material in the present case. This is because, on the expert
evidence I have heard, I am satisfied that Culverlands House, with its very
special features, was a property which was unlikely in any event to attract a
private purchaser, especially in the difficult market which was beginning to
develop in July 1973; an institution or an investor was a more likely buyer for
a property of this type, and the former are notoriously slow-moving, while the
latter type of purchaser was unlikely to have been on the market in July and
August 1973. Accordingly, I do not consider the plaintiff is likely to have
suffered any loss by offering the property at too high a price during July and
early August, before he reduced the price to £75,000. But the plaintiff claims
that he relied on Mr Bannister’s advice in a different respect. He claims that
when the price for Wickham Lodge was dramatically reduced to £47,500 he felt safe,
in the light of Mr Bannister’s advice as to the value of his property, in
changing his policy and committing himself to the purchase of Wickham Lodge
before he had found a purchaser for Culverlands House. I am satisfied that the
plaintiff did indeed rely on Mr Bannister’s valuation in this way. I have no
doubt that he was also motivated by the attractions of Wickham Lodge, and by
the need to move soon from Culverlands House because of his wife’s state of
health; but I do not consider that he would ever have taken the risk of
committing himself to another property of this kind before selling Culverlands
House, if it had not been for Mr Bannister’s advice. His state of mind is amply
demonstrated by his letter to his bank manager dated August 6 1973 asking for a
bridging loan, which shows that even allowing for the fact that Mr Bannister’s
valuation was probably too high, he (the plaintiff) felt that in the light of
that advice he could achieve a quick sale of Culverlands House by dropping the
asking price to £85,000, or even less, and still have an ample margin to cover
the cost of Wickham Lodge and its renovation. I have no doubt that, had not Mr
Bannister’s advice lifted the plaintiff’s expectations to altogether
unjustifiable heights, he would never have thought in terms of the figures
given in this letter, and would not have taken the risk of committing himself
to the purchase of Wickham Lodge before selling Culverlands House. In doing so,
in my judgment, he acted in reliance upon Mr Bannister’s negligent advice.
Furthermore, I am satisfied that when Mr Bannister gave his advice on June 18
and 26, he knew that the plaintiff was looking for another house, and he also
knew that before his advice was given, the plaintiff thought that £65,000 was
far beyond what his own house, Culverlands House, would fetch. It must
therefore have been within the reasonable contemplation of Mr Bannister that
the effect of his advice on the plaintiff would be to encourage him to purchase
a house considerably more expensive than the type of house he had been
considering when he first got in touch with the defendants about Milford Rise.
A number of
contrary arguments have been advanced by Mr Forbes on behalf of the defendants.
First he argued
Lodge before he had found a purchaser for Culverlands House was an unreasonable
action which amounted to a novus actus interveniens, and that he could
not, therefore, hold the defendants liable for the consequences of his action.
In support of this argument, Mr Forbes relied on the speech of Lord Reid in McKew
v Holland, Hannan & Cubitts [1969] 3 All ER 1621 at 1623. I am not,
however, prepared to hold that the plaintiff’s action was unreasonable in the
circumstances of this case. It may well be that since the change in the
residential property market in late 1973 and early 1974, purchasers are now
more cautious in committing themselves to new houses before selling their old
ones: but I am satisfied that in the summer and early autumn of 1973 there were
many purchasers who were prepared so to commit themselves, and that this was
well known to people in the business of estate agents, including Mr Bannister.
It has to be remembered that for any person without substantial capital, the
decision whether to buy before selling, or to sell before buying, is not an
easy one. There are risks either way, depending upon how the market moves, and
I am not prepared to hold that in August and September 1973 it was unreasonable
for a family man in the plaintiff’s position to commit himself as he did, in
the light of the advice that he had received from Mr Bannister.
Secondly, it
was argued that by the time he decided to commit himself to Wickham Lodge, the
plaintiff was no longer acting in reliance on Mr Bannister’s advice. He had
already been warned by Mr Fuller that the asking price was a big handicap; he
suspected that the defendants’ valuation of Culverlands House was too high; and
he had decided to reduce the asking price to £85,000 or lower. By August 6,
therefore, when he made his offer of £47,500 for Wickham Lodge, the plaintiff,
it was argued, had ceased to rely on Mr Bannister’s advice, and was really
acting on his own assessment of the situation. In my judgment, however, that is
too superficial a view of the plaintiff’s position. Certainly by August 6 he
had come to suspect that Mr Bannister’s valuation was rather high; he was also
exercising his own judgment, in the light of all the factors known to him, but
one of those factors remained Mr Bannister’s advice, and I am satisfied that
the plaintiff was still relying substantially on that advice, in the sense
that, even allowing for the fact that he suspected Mr Bannister’s figure to
have been rather high, still the valuation made him feel that he could safely
commit himself to spending £65,000 on Wickham Lodge and cover his commitments
by achieving a quick sale of Culverlands House by a dramatic reduction of 25
per cent in the asking price. He felt that, in the light of the advice that he
had received from Mr Bannister, even allowing that his valuation might have
been rather high, this was a risk that he could safely take.
Thirdly, Mr
Forbes argued that at least after Mr Craddock had informed the plaintiff off
the record shortly before August 16 that the bank had valued his interest in
Culverlands House at £75,000, the causative effect of Mr Bannister’s valuation
really ceased and thereafter the plaintiff must have been relying exclusively
on the bank’s valuation. The way it was put was that the plaintiff must
thereafter have placed all his trust on the bank, in the knowledge that banks
are conservative and that Mr Bannister’s valuation was too high. No doubt the
information given by Mr Craddock provided some confirmation for the plaintiff
in his assessment of the situation, but in my judgment he was still acting in
substantial reliance on Mr Bannister’s valuation. It was this that had set him
on his course: it was still operating on his mind when he made his offer for
Wickham Lodge, and when he thought that he could achieve a quick sale of
Culverlands House by reducing the asking price to £75,000; the defendants were
the people with the local knowledge, and they were the true experts rather than
the bank. In my judgment, the information from Mr Craddock did not operate to
displace the causative effect of Mr Bannister’s valuation. There is, I
recognise, some irony in the situation. Owing to the plaintiff’s present
financial circumstances, he is bringing the present action very largely for the
benefit of the bank, and on the evidence of Mr Michael Walker, it appears that
he and his colleagues in fact assessed the plaintiff’s interest in Culverlands
House at only £50,000, but prepared a report in a form which misled Mr Craddock
into thinking that the valuation was £75,000, the figure which he communicated
to the plaintiff. If this is right, the figure so communicated to the plaintiff
was erroneous, and for this some criticism must be levelled at the bank. But
that cannot alter the fact that, in my judgment, the plaintiff was still
substantially relying on Mr Bannister’s advice.
Such reliance
continued, in my judgment, right up to the time when, by exchanging contracts
on September 11 1973, the plaintiff became committed in law to the purchase of Wickham
Lodge. Once the plaintiff was legally committed to the purchase of Wickham
Lodge, he was caught with two properties on a falling market; and as the autumn
passed by it must have become increasingly clear that the market was falling
rapidly, and that Culverlands House was proving a very difficult house to sell.
Even so, I do not consider that any criticism can justifiably be made, and I
did not understand that any criticism was made, of the plaintiff’s decision to
persist in the attempt to sell Culverlands House and to press on with his
intention to put Wickham Lodge in order with a view to moving house. Obviously,
Wickham Lodge suited him better than Culverlands House: I have no doubt that he
liked it very much more, but more especially it was quieter and so more
suitable for his wife. But in August he had been advised by Percy Collett that
the value of Wickham Lodge was £40,000, and throughout the autumn and winter of
1973 the defendants, who were still acting as his agents, did not advise him to
drop the price of Culverlands House below £75,000. It was therefore reasonable
for him to proceed with the completion of the purchase of Wickham Lodge, and
with putting it in order for his family to live there, while persisting in his
plan to sell Culverlands House. But as I have said, he was in fact caught in
the trap of a falling market. The full extent to which he was caught in that
trap was not revealed until the following summer, when, after every possible
effort had been made to dispose of the property in the preceding months, his
interest in Culverlands House was finally sold for £36,000.
I therefore
hold that the defendants are liable to the plaintiff in damages. It is accepted
on both sides that if the defendants are so liable, the measure of the plaintiff’s
damages is to be assessed on the principle stated by Lord Denning MR in Esso
Petroleum Co Ltd v Mardon [1976] 2 All ER 5 at 16, when he said:
‘You should look into the future so as to forecast what would have been likely
to happen if he had never entered into this contract; and contrast it with his
position as it is now as a result of entering into it.’ In that case, it was recognised that
assessment of damages on this principle presents great practical problems; and
that would certainly have been true of the present case, but for the fact that
the parties have very sensibly agreed that on this basis the plaintiff’s
damages are, subject to two points reserved for my decision, to be assessed at
a figure of £48,125, as pleaded in paragraph 8 of the re-re-amended statement
of claim, which is in the following terms:
By reason of
the matters complained of the plaintiff has suffered loss and damage.
PARTICULARS
The plaintiff
seeks to calculate the damages by comparing what he would have done had he been
given proper advice with
he would have sold Culverlands by autumn 1973 at a price of £50,000 and
purchased another property at £50,000 (call it ‘Whiteacre’) which would now be
worth £40,000. In fact the plaintiff committed himself to the purchase of
Wickham Lodge and expenditure thereon, incurred interest on a bridging loan,
incurred the costs of buying and selling Wickham Lodge Cottage, and incurred
extra costs by selling Culverlands through auction. The plaintiff will give
credit for the present value of Wickham Lodge and the value of a building plot
contained therein. The effect of the foregoing is as follows:
|
Total outlay on Wickham |
£93,855.28 |
|
Deduct |
50,000.00 |
|
£43,855.28 |
|
|
Add extra costs of auction |
360.00 |
|
Add costs of buying and selling Wickham Lodge Cottage |
600.00 |
|
£44,815.28 |
|
|
Add interest on bridging loan to finance £44,815.28 |
£18,360.00 |
|
£63,175.00 |
|
|
Add interest |
1,950.00 |
|
£65,125.00 |
|
|
Deduct value of building plot |
7,000.00 |
|
£58,125.00 |
|
|
Deduct present value of Wickham Lodge |
50,000.00 |
|
8,125.00 |
|
|
Add in present value of ‘Whiteacre’ |
£40,000.00 |
|
Total required to compensate: |
£48,125.00 |
I turn now to consider the two outstanding points in dispute. The
first point is as follows. Mr Forbes accepted that in assessing the plaintiff’s
damages it was reasonable to take into account some expenditure on Wickham
Lodge, but he submitted that the expenditure in fact went far beyond what was
reasonable in the circumstances, and indeed he described it as profligate. He
accordingly submitted that the figure of £48,125 should be reduced by an amount
which would reflect the excessive expenditure which he submitted had taken
place. In considering this submission, I have to bear in mind that the
plaintiff was moving from Culverlands House, which was in an excellent state of
repair, and that it must have been within the contemplation of the defendants
that the plaintiff, if he committed himself to the purchase of another house in
reliance upon their advice, would be likely to put his new house into
reasonably good order. It is also a commonplace that those who carry out
repairs to old houses frequently find that reasonable estimates for what is
necessary are proved to be too low in the event, partly because new items are
discovered which need to be repaired, and partly because building is nearly
always more expensive than is expected. Even allowing for these considerations,
however, it is a striking fact that the amount spent by the plaintiff in
putting Wickham Lodge in order was nearly double the higher of the two
estimates which he made in August 1973, when he decided to buy the house, and
when he estimated the necessary repairs to be between £10,000 and £15,000. I
have studied the accounts for the building work carried out on the property,
and having regard also to the plaintiff’s evidence concerning the work which
was done, I am satisfied that the result of the work was to put the house in
excellent structural and decorative order throughout, including a modern
kitchen, central heating, rewiring, a complete overhaul of the roof, treatment
for damp, and complete redecoration. I do not think the result could properly
be described as luxurious, and, so far as the plaintiff’s expenditure is
concerned, I reject Mr Forbes’ adjective ‘profligate’; but the work done was certainly
extremely thorough and comprehensive, and, as I have said, I have no doubt that
Wickham Lodge became as a result an extremely attractive house in excellent
structural and decorative order. In the sense that it is reasonable to put a
house in such order, the plaintiff’s expenditure was reasonable and was not
extravagant. But having regard to the extreme contrast of the plaintiff’s
original estimate when he agreed to buy the house, I conclude that a part of
his expenditure was incurred not by reason of his reliance on the defendant’s
valuation, but by reason of his own under-estimate of the cost of repair and
renovation.
If, as appears
to have been the case, over £28,000 was spent on the work to Wickham Lodge,
excluding the cottage, it follows that the plaintiff’s total expenditure on
that house exceeded the sum of £75,000 which in August 1973 he hoped to get
from Culverlands House and intended to cover the cost of Wickham Lodge,
including renovation, allowing for an ample margin. I do not consider that it
was within the reasonable contemplation of the defendants that the plaintiff
would commit himself to expenditure on this scale before finding a purchaser
for Culverlands House, or, if he did commit himself to another house before
selling Culverlands House, that he would, on discovering the full cost of the
repairs, go ahead regardless and carry out all those repairs without
substantial economies. It must happen from time to time that an ordinary person
buys an old house and finds it is going to cost more than he expected to put it
in order; if so, the ordinary person makes economies, often economies that he
would prefer not to make, and postpones some items–often important items–until
he can afford to do them. The same considerations apply, I consider, to the
plaintiff in this case, and having regard to them, it would be wrong, in my
judgment, to make the defendants pay, in effect, the whole cost of putting
Wickham Lodge in perfect order. I cannot specify any particular items which in
my judgment should have been the subject of such economy, but having regard to
the original estimate of £10,000 to £15,000, and treating the total cost of the
work on Wickham Lodge (excluding the cottage) as exceeding £28,000, I consider
that £5,000 would be a reasonable sum to allow for economies which, in my
judgment, the plaintiff should reasonably have made. I accordingly hold that
the plaintiff’s damages should be reduced in that amount.
I turn to the
second point which I have to consider concerning damages. The defendants submit
that whatever house the plaintiff bought, he would have incurred some
expenditure on it on items such as curtains, carpets, cupboards and so on. It
was submitted that a sum should be deducted from his damages to allow for such
items, because the plaintiff was claiming the best of both worlds by putting on
the plus side of the equation of his damages the cost which he in fact incurred
for such items, while failing to put a comparable sum on the minus side in
respect of comparable expenditure on the less expensive house which he would
have bought if he had not been negligently advised by the defendants. In my
judgment, this submission is well founded. The plaintiff, when the point was
put to him, suggested that the less expensive house would not necessarily have
been bought without curtains and carpets; but it is far more likely that it
would have been bought without them, and anyway the plaintiff is clearly a man
of taste and discrimination who would in all probability have chosen his own
curtains and carpets for his new home. It is agreed that if the defendants are
right on this point a sum of £3,000 should be deducted from the damages, which
therefore will
are £48,125, less the foregoing sums of £5,000 and £3,000, making a total of
£40,125. There will be judgment for the plaintiff in that sum.
Judgment was
in fact entered for the plaintiff for £40,225, to include an agreed interest
element. His Lordship awarded the plaintiff costs, and gave the defendants a
stay of execution pending consideration of an appeal.
