Negligence — Claim against building surveyor — Husband and wife wished to purchase a trouble-free country property — Reliance on surveyor’s report that, although there were defects, the house was overall in sound condition and that defects could be dealt with by regular maintenance — In fact there were defects calling for repairs involving substantial expenditure — Finding of negligence — Measure of damages — Cost of repairs or difference in value — Whether additional damages for distress and inconvenience appropriate — Authorities considered — Damages on cost of repair basis plus damages for distress and inconvenience awarded — Breakdown of marriage not allowed under latter head
plaintiffs, who were married at the date of the purchase but were subsequently
divorced, were a professional couple, high earners with a higher potential, but
likely to be overstretched by the cost of the proposed purchase — They were
anxious to ensure that the purchase of the property, a substantial and
attractive house near Blandford, Dorset, with three-quarters of an acre of
garden and three acres of paddock, would not involve them in further expense
beyond normal maintenance — The price offered was £177,500 — The defendant, a
chartered building surveyor, was instructed by the plaintiffs to carry out a
structural survey — The plaintiffs asked for an ‘in-depth report’ and for
comments on value — The fee for the report was £400 plus disbursements and VAT
— The defendant produced a lengthy report which, although it drew attention to
a number of defects, was on the whole reassuring — He advised that the defects
to which attention had been drawn could be treated on an on-going basis and he
was ‘satisfied that a comfortable and largely trouble-free dwelling of
considerable charm can be attained’ — However, a few months after the
plaintiffs took possession a builder, employed partly to remedy certain of the
defects mentioned by the defendant, discovered, among other matters, that the
roof was in a seriously defective condition which would require expensive
building work to put right — The plaintiffs in alarm instructed other surveyors
to carry out a full structural survey, not mentioning that one had already been
carried out — The new survey report showed a very different picture from that
presented by the defendant — There were serious defects calling for substantial
expenditure, including the cost of a major overhaul of the roof and work to
chimneys, main walls, windows and floor timbers — It became clear that the
defendant’s report had been unduly optimistic and reassuring, leading the
plaintiffs to the reasonable but incorrect conclusion that no major repairs
would be required in the immediate future
evidence from experts on both sides and considering authorities, the judge
concluded that the defendant had been not only wrong but negligent — Granted
that a difference of opinion does not necessarily imply negligence, the
defendant had been negligent by falling below the standard of reasonable care
and skill required of the ordinary professional man exercising the same
functions as himself — Further, although a departure from the recommendations
contained in the RICS practice note on ‘Structural Surveys of Residential
Property’ was not in itself an indication of negligence, there had been one
departure by the defendant which was of some materiality — He had dictated his
survey report (not notes for it) directly into a dictating machine as he walked
round the property — Incidentally this meant that he had no notes to disclose
on discovery of documents — This practice led to a report which was ‘strong on
immediate detail but excessively, and I regret to have to say negligently, weak
on reflective thought’ — The judge rejected a suggestion of contributory
negligence on the part of the plaintiffs — He found that the reasonable cost of
repairing the relevant defects was £33,961.35
question was the correct measure of damages — The plaintiffs claimed damages
based on the cost of repairs plus general damages for inconvenience and
distress, with interest under both heads — Alternatively, they claimed damages
calculated on the ‘difference of value’ basis — On this basis the damages were
the difference between the value of the property at the date of purchase,
namely £162,500 (according to unchallenged evidence at the trial) and the price
paid by the plaintiffs in reliance on the defendant’s report, £177,500, a
difference of £15,000 — The judge at the request of the parties set out the
sums under each alternative; £33,961.35 on the repairs basis, £15,000 on the
difference of value basis, plus appropriate interest at 15% in each case — He
also held that on either basis the plaintiffs were entitled in addition to
damages for distress and inconvenience, because a prospective house-buyer
expects to obtain, inter alia, ‘peace of mind and freedom from distress’ — He
assessed this additional amount at £8,000 (£4,000 in respect of each plaintiff)
— As a matter of policy, however, he disregarded the breakdown of the
plaintiffs’ marriage as an allowable head of damage
the judge, following largely his own judgment in the case of Syrett v Carr &
Neave, held that the correct basis in the circumstances of the present case was
the cost of repairs — The result was that the plaintiffs were awarded
£33,961.35 plus £8,000, a total of £41,961.35, plus interest at 15% (from the
appropriate dates) on the £33,961.35 and interest at 2% on the £8,000 from the
date of issue of the writ
The following
cases are referred to in this report.
Bigg v Howard Son & Gooch [1990] 1 EGLR 173; [1990] 12 EG 111
Clark v MacLennan [1983] 1 All ER 416
Hayes v James & Charles Dodd [1990] 2 All ER 815
Hipkins v Jack Cotton Partnership [1989] 2 EGLR 157; [1989] 45 EG 163
Maynard v West Midlands Regional Health Authority [1984] 1 WLR 634;
[1985] 1 All ER 635, HL
Midland
Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979]
Ch 384; [1978] 3 WLR 167; [1978] 3 All ER 571
Philips v Ward [1956] 1 WLR 471; [1956] 1 All ER 874, CA
Perry v Sidney Phillips & Son [1982] 1 WLR 1297; [1982] 3 All
ER 705; [1982] EGD 412; (1982) 263 EG 888, [1982] 2 EGLR 135, CA
Steward v Rapley [1989] 1 EGLR 159; [1989] 15 EG 198
Stewart v HA Brechin & Co 1959 SC 306 (Outer House)
Strover v Harrington [1988] Ch 390; [1988] 2 WLR 572; [1988] 1 All ER
769; [1988] 1 EGLR 173; [1988] 9 EG 61
Syrett v Carr & Neave [1990] 2 EGLR 161; [1990] 48 EG 118
Wilsher
v Essex Area Health Authority [1988] AC
1074; [1988] 2 WLR 557; [1988] 1 ALL ER 871, HL
The plaintiffs
in this case, Ian Roscoe Watts and Lesley Mary Samuel Watts, claimed damages
from the defendant, Ralph Morrow FRICS, a building surveyor, alleging
negligence by the defendant in carrying out a structural survey of a property
purchased by the plaintiffs in Dorset, near Blandford and the River Stour.
Jonathan
Acton-Davis (instructed by Goodman Derrick & Co) appeared on behalf of the
plaintiffs; Iain Hughes (instructed by Pinsent & Co) represented the
defendant.
Giving
judgment, JUDGE PETER BOWSHER QC said: The plaintiffs claim damages for
negligence from the defendant in his capacity as a building surveyor.
The first
plaintiff has degrees in economics from the universities of Warwick and Oxford.
He is employed as a stockbroker by Barclays de Zoete Wedd UK Equities Ltd. The
second plaintiff has a law degree from Cambridge University and is a solicitor
employed as a director of Kleinwort Benson Ltd since 1986. She took her
articles with Slaughter & May and later qualified to practise as a lawyer
in
reading reports.
The plaintiffs
were divorced in April 1990, having separated early in 1989.
In the summer
of 1986, when the plaintiffs were still happily married, they were living in a
house in Cloudesley Road, Islington, London N1, where the second plaintiff
still lives. They both had extremely demanding jobs in the City, and they
decided to look for a country home for use at the weekends and during holidays.
They had no children and intended to have no children. They concentrated their
search upon Dorset.
Since they
both had little leisure time, they both wanted a house which would be, so far
as possible, trouble-free. They wanted to buy a house into which they could
move without undertaking any substantial works of repair. Although each had a
substantial income, their incomes were already stretched and they felt that
though they could buy a new house within a budget of £170,000, they could not
afford to buy a house which required the carrying out of any expensive repairs,
nor did they have the time or the surplus energy to get involved in doing up a
house which required extensive repairs or improvements.
Mrs Watts had
in mind a small country cottage with roses round the door, but soon accepted
that there were few such cottages in Dorset. It seems that Mrs Watts was at the
time even more occupied with business than her husband, and as a result he was
more involved in looking for properties than she was. At the time the
plaintiffs were considering buying a country house, Mrs Watts became involved
in several major transactions which absorbed all her attention at weekends and
also took her abroad. It was Mr Watts who found and fell in love with Nutford
Farmhouse, and Mrs Watts visited it only once before they made an offer. Her
view was that it was larger than she had hoped for, ‘but it was very beautiful,
a house with a heart, and difficult to resist’.
The house is
L-shaped and probably built in the 18th and 19th centuries, though described in
the selling agents’ particulars as 17th century. It is a substantial and
attractive house in attractive surroundings, having three quarters of an acre
of garden and a further three acres of paddock. It is set in the countryside
about three quarters of a mile from Blandford and not far from the River Stour
and the vendor was willing to let the purchaser have fishing rights in the
river. The main living accommodation is on the ground and first floors, but
there are four rooms in the attic lit by dormer windows. There was no bathroom
or lavatory in the attic and the roof was not insulated, so the attic rooms
were really useful only for overflow accommodation in the summer. The
plaintiffs wanted at least two bedrooms so that they could invite friends and business
clients to stay, and on the first floor there were three bedrooms, though only
one bathroom.
The asking
price for the house was £175,000, so it was outside the budget on which the
plaintiffs had decided. The selling agents told Mr Watts that there was another
prospective purchaser who was interested in buying at the asking price of
£175,000 and they advised him to make his ‘best offer’. The two plaintiffs
decided that the most they could spend would be £177,500. An offer in that sum
was acceptable to the vendors, but that was certainly more than Mrs Watts
thought they should spend on a second home, and the plaintiffs agreed together
that before proceeding they would get a full and detailed survey to ensure that
there were going to be no unexpected costs. Although they were high earners,
this purchase would overstretch them. Accordingly, Mr Watts asked the vendors’
agents to recommend a local surveyor. They recommended three, and Mr Watts
chose the defendant at random from among the three.
The defendant,
Mr Morrow [FRICS], is in practice on his own, and when Mr Watts rang his office
on August 19 1986 he spoke to the defendant’s wife. I accept Mr Watts’s
unchallenged evidence of his conversation, which was corroborated by a note
taken by Mrs Morrow, who did not give evidence. Mr Watts said that he wanted a
full structural survey of the property and he wanted to be sure that the price
offered of £177,500 was the right one in the current market. Mr Watts explained
that he and his wife lived in London and would not be around to carry out any
investigations into the condition of the house, that they had looked at the
house from the point of view of its attractiveness and amenity value but had
paid no regard to its state of repair. Mrs Morrow’s note was written on a
printed form entitled ‘Structural Survey Request’. In a box headed ‘Special
Instructions’, Mrs Morrow wrote:
In-depth
report required!
Paying
£177,500, and would appreciate your comments on value.
The defendant
said in evidence that he is a chartered building surveyor, not a valuer, and
that as a matter of ordinary practice his wife would explain that he was not a
valuer, but that was not put to Mr Watts, and there is no evidence that either
the defendant or his wife ever said any such thing to Mr Watts.
The defendant
did not confirm the instructions in writing, but on August 26 he wrote to Mr
Watts enclosing a structural report on the property. In the covering letter he
invited Mr Watts to contact him if there were any matters he wanted to discuss
or if he could be of any help ‘in the orchestration of works of renovation and
repair recommended in my report’. The fee charged was £400 plus disbursements
and VAT.
The report was
detailed and lengthy, running to 27 pages. It contained no comment about valuation.
The report mentioned defects and made recommendations for repairs, but both Mr
and Mrs Watts found it reassuring. On the basis of their experience of the cost
of repairs to their London home, and as amateur householders, they estimated
that the cost of the recommended repairs together with the cost of converting a
part of the house into a wine store would be about £3,000. Mr Watts telephoned
Mr Morrow and asked him to recommend a builder who would do the work on the
wine store and also remedy the defects identified in Mr Morrow’s report. Mr
Morrow recommended a Mr Cyril White, who traded under the name Okeford Crafts.
Mr Watts asked the defendant whether the price they had offered was fair and
whether the repairs he had recommended would result in substantial expenditure.
The defendant replied that the valuation was fair and that no repairs would be
substantial in terms of cost.
A short time
later, the plaintiffs would both receive greater cash rewards for their work,
but at that time, though by no means poor, they were over-extended and in Mr
Watts’s words, were ‘strapped’ for cash. It was very important indeed to them
that they would not find themselves involved in unexpected expenditure, and
they relied on the defendant’s advice to avoid paying more than the property
was worth and to guard themselves against repair bills which they could not
afford.
Relying on the
defendant’s written and oral reports, the plaintiffs proceeded with the
purchase of the house. As a result of the vendors’ requests, contracts were not
exchanged until October 15 1986 and completion was delayed until April 10 1987.
So, although they made an offer, which was not binding in law, in August 1986,
the plaintiffs did not get possession until eight months later. Meanwhile, they
received an offer of a mortgage from Kleinwort Benson on ordinary commercial
terms (not on terms showing special favour to an employee). That offer of a
mortgage, which was accepted, was accompanied by a mortgage valuation report by
Fox & Sons dated September 15 1986, valuing the property at £172,000. The
plaintiffs quite reasonably paid little attention to this report because the
defendant had made a full structural survey for them and in their view the Fox
& Sons report was limited to protecting Kleinwort Benson to the extent of
their loan. Indeed, the report itself contained the following note:
IMPORTANT
NOTICE TO THE APPLICANT
1 This report has been obtained solely to
enable Kleinwort Benson Ltd to consider whether the property is suitable
security having regard to the amount of the proposed loan. It is NOT a market
valuation or structural survey and you are strongly advised to engage an
independent survey to protect your own interests.
2 The valuer has made this report without any
liability to you. Kleinwort Benson Ltd, its agents and the valuer are not
responsible to you for the accuracy or opinions in this report.
At the trial,
the evidence (unchallenged in this respect) of Mr Peter Wadey FRICS of Poole,
Dorset, a surveyor and valuer called on behalf of the plaintiffs, was that in
October 1986 the value of the house in its true condition was £162,500 and its
value in the condition as described by the defendant was £172,500. Mr Wadey
considered that there was no significant difference in the valuation between
August and October 1986. On that basis, in reliance on the defendant’s advice,
the plaintiffs paid for the property £5,500 more than the property was worth on
the defendant’s assessment of its condition and £15,000 more than it was worth
on Mr Wadey’s assessment of its condition.
Mr Wadey
became involved in this way. After taking possession in April 1987, the
plaintiffs started working on the garden and soon
solicitors, he asked the defendant to give further advice. That matter was
dealt with and forms no part of this action. In May 1987, Mr Watts contacted Mr
White in accordance with the defendant’s recommendation for a quotation for
work on the wine store and for remedying certain defects identified by the
defendant, namely the roof flashings and defective windows. In June, Mr White
went to the house and then telephoned Mr Watts in London. Mr White said that
the first-floor windows were ‘useless’ and should be replaced but, more important,
commented on the roof (which he had not been asked to look at) by saying that:
‘One decent fall of snow and the whole roof will come down’. By lifting a few
tiles, Mr White had discovered that some laths had been so worn away over the
years that they no longer existed in many places and that the wooden pegs
placed through holes in the handmade tiles to suspend them from the laths had
in many instances rotted away. Mr Watts was very disturbed indeed by those
comments but was sufficiently canny not to take the unsupported word of a
builder that a large amount of expensive building work was required on his
house, so, with advice from his solicitors, Goodman Derrick & Co, he
decided to ask another independent surveyor to prepare another full structural
survey on the premises, without disclosing the fact that this was a check on a
previous surveyor’s report. Mr Watts went to Bernard Thorpe & Partners, who
instructed Mr Wadey who acted as an independent consultant to their firm. Mr
Wadey is a FRICS and has been working as a building surveyor and valuer in
Dorset for the last 22 years. Towards the end of July 1987 Mr Wadey was asked
by Bernard Thorpe & Partners to undertake a full structural survey of
Nutford Farmhouse for the plaintiffs. Mr Wadey was not aware that the
plaintiffs had already bought the property, nor was he aware that a previous
survey had been carried out on their behalf by the defendant. When he later
discovered the true position, he was rather annoyed.
There was an
important difference between the conditions of Mr Wadey’s survey and the
conditions of the defendant’s survey. One of the important features, as it
turns out, was the floor of the landing on the first floor. When the defendant
inspected the floor of the first-floor landing, it was covered by a fitted
carpet. The defendant lifted a corner of the carpet, but Mr Wadey had the
advantage of seeing under the floor, because he was asked to lift carpets and
floorboards, particularly on the landing on the first floor, and in the
bathroom, and did so with the help of a handyman employed by the plaintiffs. If
I were to accept Mr White’s evidence in its totality, I would also find that Mr
Wadey had the benefit of Mr White drawing his attention to certain defects. But
I accept Mr Wadey’s evidence of his inspection that Mr White was not on site at
the time. Mr White must have confused another visit to the site in his memory.
Another important difference was that, unlike the defendant, Mr Wadey felt that
the survey was sufficiently difficult to require him to return on a second day
to complete his inspection, which took place on July 29 and 30 1989.
The reports of
Mr Wadey and Mr Morrow were very different both in form and content. Mr Wadey
reported that there were a number of defects which would involve current
expenditure or future liability. In particular, he said, the roof was due for a
major overhaul of the coverings including stripping tiles, repairing/replacing
the roof structure as required, rebuilding the top courses of brickwork,
specialist woodworm treatment, felting, rebattening and retiling. The chimneys
and facing bricks to the main walls required repointing in places, and some
bricks in the chimneys required cutting out and renewing, and lead flashings
needed to be installed. The window casements and frames generally needed to be
upgraded and replaced. The first-floor timbers needed specialist woodworm
treatment and refixing of firring pieces and extensive renewal of floor
boardings. Mr Wadey also referred to other matters not the subject of this
action.
The defendant
in his report pointed out many defects and made many recommendations for
repair. It is accepted on behalf of the plaintiffs that many of those
recommendations were sound. But the general criticism made is that, as a
recurring theme in the report, the defendant pointed out a defect and then gave
a reassurance that the defect could be dealt with as part of ordinary ongoing
maintenance and repair. While criticisms have been made of the adequacy of the
last two paragraphs headed ‘Conclusion’, the conclusion does go far to
summarise the tone of the report, though not all its detail. The conclusion in
full is as follows:
Despite
earlier minor settlement I found the overall dwelling-house to be sound, stable
and in good condition. Attention is particularly required to the sometime
eradication of wood borer in roofing timbers, and to minor works of eradicating
continued dampness in ground-floor walls. Ideally some insulation would be
introduced to upper ceiling areas, but in general, the defects referred to
within this report can normally be identified as being associated with regular maintenance
required of a building of this age and type.
The foul
drainage arrangements, while apparently adequate, and [sic] not ideal,
and some further rationalisation and improvement of this may be required in the
sometime future, but with attention given to the various aspects referred to
within this report, which could well be attended to on an ongoing basis, I am
satisfied that a comfortable and largely trouble-free dwelling of considerable
charm can be attained.
In citing that
conclusion, I do not forget that the defendant has more than once stated, quite
properly, that his report should be read as a whole. Indeed it should, and it
must be stressed that the defendant has taken great care to mention many
matters, about many of which there is no complaint. But nowhere in the report
is there any warning that it would be necessary or desirable to undertake an
immediate and heavy expenditure on the property. The defendant contends that
his report is not only not negligent but is also correct in its statements of
fact and opinion, and that Mr Wadey (supported by Mr White) was wrong to
recommend the substantial immediate works which have been undertaken. It is
also pleaded on his behalf that if the plaintiffs suffered the damage claimed,
their damage was caused or contributed to by their own negligence in failing to
read or pay sufficient attention to the body of the defendant’s report.
Having
received the defendant’s report, both plaintiffs read it. I have no hesitation
in accepting their evidence that they read the whole of the report and read it
with care. They very reasonably concluded that there was nothing to suggest
that any major repairs would be required in the foreseeable future and that
nothing was required which could not wait until the two plaintiffs between them
had the funds to spare for such work. I also accept the evidence of the
plaintiffs that it was in reliance on the report of the defendants that they
bought the house. I accept the evidence of Mrs Watts that if she had known of
the defects as set out in Mr Wadey’s report she would not have gone ahead with
the purchase, and I accept the evidence of Mr Watts that if he had known of the
defects as set out in Mr Wadey’s report he would not have gone ahead with the
purchase or would have done so only if he had been able to negotiate a
substantial reduction in the price. Mr Watts said that if he had received Mr
Wadey’s report before the purchase, he would have got quotations for the work
recommended on the roof and to the floors and windows and would have sought to
negotiate a reduction in price, and if unsuccessful in that attempt he ‘would
have walked away’.
I have no
hesitation whatsoever in rejecting the plea of contributory negligence made
against the plaintiffs.
It is
necessary to consider whether the defendant was not only wrong in giving his
report but also negligent. Everyone makes mistakes, and before making a finding
that a professional man has not only made a mistake but also been negligent in
making it, one looks with care at the evidence.
On behalf of
the plaintiffs there were called two experts. Mr Wadey had previously given
evidence as an expert valuer, but he does not confine his expertise to
valuation. Unlike the defendant, he is not a chartered building surveyor, but
he has sat and passed those papers in the RICS examination which are concerned
with building surveying and he has considerable experience in practice of
surveying buildings. He had the considerable advantage of being asked to make
an ordinary structural survey of the property before it was put into a
different state.
Also called on
behalf of the plaintiffs was Mr John Lloyd, a FRICS who is now a partner in
Hurley Lloyd Thorpe, a partnership formed as a result of the decision of his
former firm, Bernard Thorpe & Partners, to cease handling residential
property. Mr Lloyd does not himself do surveys, but he has long experience in
advising purchasers and vendors on the sale and purchase of properties on the
basis of surveys undertaken by employees responsible to him. He did not see the
building in its unaltered state. He was not trained as a building surveyor, but
as a part of his training as a chartered surveyor he had to take papers in
building construction. He in fact qualified as a surveyor in land agency and
agriculture and for many years acted as adviser to many large estates including
Sandringham. But Mr Lloyd does have the expertise required to assess reports of
surveys of
careful and competent surveyors to reach different opinions. But, after reading
the two reports of Mr Wadey and Mr Morrow, he was firmly of the opinion (which
I accept) that it was not possible for two careful and competent surveyors to
reach opinions so far apart as Mr Wadey and the defendant on the subject of the
roof, the bulging of the walls, the first-floor flooring, and the windows.
Although he did not say so, and it would have been inadmissible for him to have
done so, it follows from Mr Lloyd’s views that whichever of Mr Wadey and Mr
Morrow was wrong was also negligent. Mr Lloyd preferred Mr Wadey’s report
because of the amount of money that was spent on the property and because Mr
Wadey was supported by the evidence of Mr White. The fact that much money was
spent on the house dealing with the matters to which I have referred is not of
itself evidence that Mr Wadey was right: it was submitted on behalf of the
defendant that the reason for the money being spent was that Mr White made
excessive criticisms of the building in order to get work for himself, and that
for reasons of self interest he was unwilling to undertake small works of
repair like replacing one or two tiles, instead insisting that the whole roof
had to be replaced. I do not accept that criticism of Mr White. He was, after
all, recommended to the plaintiffs by the defendant. Moreover, although he
tended to express himself both in and out of court in language more vivid than
would be chosen by a professional man, he seemed to me to be an honest and
careful builder who could be trusted to do good work and not to make work for
himself by giving excessively pessimistic views. Over a fairly long period of
time, he gained and kept the trust and confidence of the plaintiffs, who are
not people to be easily taken in. The value of the work — the subject of the
complaint in this action — is only about 20% of the total value of the work
which Mr White has done on the property. Even if he had been inclined to
deceive the plaintiffs with bad advice (and I do not believe that he was so
inclined) it was not in his interest to do so. Contrary to the expectations of
the plaintiffs, their financial situation improved much more quickly than they
had expected, and quite apart from the matters the subject of the complaint in
this action, about £150,000 has been spent on repairs and improvements to the
property. If Mr White had lost the confidence of the plaintiffs he would have
lost a great deal of work. I should add that Mr Watts still owns the property
and uses it as a second home. Quite apart from the evidence of Mr White, I wish
to stress that the evidence of Mr Wadey was given in restrained and wholly
convincing terms.
Called on
behalf of the defendant was Mr Simon Gregory, who is a Bachelor of Science in
Building Surveying and is also a FRICS, building surveying division. He is a
chartered building surveyor who does building surveys continually. He
volunteered certain criticisms of the defendant’s report and accepted further
criticisms in cross-examination.
Since I am
asked to take the serious step of condemning a professional man as having been
negligent in his profession, it is important that I should remind myself of the
legal issues involved.
The standard
of care required of the defendant is the same as that required of any other
surveyor or other professional man. The standard required is that of the
ordinary skilled man exercising the same skill as himself. He must ‘display and
apply reasonable care and a reasonable standard of professional competence in
doing the work [he was] employed to do’: Stewart v H A Brechin &
Co 1959 SC 306 per Lord Cameron. Moreover, a difference of view
between the defendant and other professional men does not of itself and without
more ado establish negligence on the part of the defendant.
The standard
of reasonable care and skill allows for a margin of differing opinion and even
a degree of error. It is not enough to prove that the surveyor gave the wrong
advice or that where there is room for two views he took the wrong view: Jackson
and Powell, Professional Negligence, 2nd ed, p 136.
Lord Scarman
expressed a similar view in a medical negligence case, Maynard v West
Midlands Regional Health Authority [1984] 1 WLR 634 at p 638:
Differences
of opinion and practice exist, and will always exist, in the medical as in
other professions. There is seldom any one answer exclusive of all others to
problems of professional judgment. A court may prefer one body of opinion to
another: but that is no basis for a conclusion of negligence:
Counsel for
the defendant has criticised the nature of the evidence called on behalf of the
plaintiffs to prove negligence. It is necessary to consider the nature of the
evidence required in cases such as this. Counsel for the plaintiffs cited a
passage from the judgment of Oliver J in Midland Bank Trust Co Ltd v Hett,
Stubbs & Kemp [1979] Ch 384 at p 402:
This new plea
does raise an issue of law not apparent upon the original pleadings, namely,
what is the scope of a solicitor’s duty when he is consulted about a particular
aspect of a problem — is he entitled to confine himself to the particular
matters for which he is retained to advise or must he consider all the
circumstances affecting the underlying data including hypothetical
circumstances or risks to which his attention is not directed and upon which
his advice is not specifically sought?
As to this I
have heard the evidence of a number of practising solicitors . . . I must say
that I doubt the value, or even the admissibility, of this sort of evidence,
which seems to be becoming customary in cases of this type. The extent of the
legal duty in any given situation must, I think, be a question of law for the
court. Clearly, if there is some practice in a particular profession, some
accepted standard of conduct which is laid down by a professional institute or
sanctioned by common usage, evidence of that can and ought to be received. But
evidence which really amounts to no more than an expression of opinion by a
particular practitioner of what he thinks that he would have done had he been placed,
hypothetically and without the benefit of hindsight, in the position of the
defendants, is of little assistance to the court; whilst evidence of the
witnesses’ view of what, as a matter of law, the solicitor’s duty was in the
particular circumstances of the case is, I should have thought, inadmissible,
for that is the very question which it is the court’s function to decide.
It is to be
noted that Lord Oliver was considering the scope of the duty owed by a
solicitor in a particular circumstance; he was not considering the standard of
care to be adopted with regard to matters within that duty. Even so, he plainly
considered it proper to adduce evidence of accepted practice within the
profession or of standards laid down by a professional body and there are some
cases where the absence of such evidence will be fatal to the plaintiff’s
claim. One such case was Strover v Harrington [1988] Ch 390*. In
that case negligence was alleged against a surveyor who had reported that a
house was served by main drainage through another property when in fact the
drains went into a cesspool. The surveyor made that report relying on what he
was told by the vendors. There was no evidence that it was negligent for a
surveyor to rely on what he was told by the vendors about the drains, it being
necessary to make a special test to check the information, and it was alleged
that the surveyor was negligent in stating without qualification that there was
main drainage. Sir Nicolas Browne-Wilkinson V-C expressed the view that it would
be imposing too high a duty on a surveyor to hold him liable for not qualifying
his report in this respect and added:
That would be
my view of the matter if it were for me to decide; but in my judgment it is not
for me to apply my yardstick of what is or is not negligent. As a professional
man, Mr Butler can only be held liable for negligence in the conduct of his
profession if he acted in a way which no surveyor of ordinary skill would be
guilty of, if acting with ordinary care. No expert evidence was led as to the
practice of careful surveyors, and the burden is on the purchasers [the
plaintiffs] to prove negligence. Therefore, in my judgment, there is no
evidence on which I could hold Mr Butler to have been negligent, even if,
contrary to my own inclinations, I thought he had been.
*Editor’s
note: Also reported at [1988] 1 EGLR 173.
I do not find
that statement of the Vice-Chancellor to be inconsistent with the earlier
statement of Lord Oliver, since Lord Oliver was considering the legal question
of the existence of a duty and the Vice-Chancellor was considering the standard
of care once the duty is established, and both regarded the leading of evidence
as to professional practice as relevant. In the latter case, where the standard
of care was under consideration, such evidence was not only relevant but also
necessary.
So far as
professional practice is concerned, the plaintiffs led evidence of a practice
note of the Royal Institution of Chartered Surveyors headed ‘Structural Surveys
of Residential Property’. The defendant at first said that he was unaware of
that note and then qualified his evidence by saying that he had read it not as
a separate document but in a book. The defendant certainly departed from that
practice note in many respects. Despite those departures, he could have come to
the right answer in the end, but his departures from (and, I have to say,
ignorance of) the guidance given by his professional body made it more
difficult for him to come to the right answer and contributed to his failure to
come to the right answer.
The most
extraordinary practice adopted by the defendant was not specifically
disapproved by the institution, but the absence of disapproval was, I suspect,
due to their failure to realise that some members might adopt the course taken
by the defendant. It is the practice of the defendant to dictate his survey as
he walks around the property during his inspection. He does not dictate notes
into a
site. When he returns to the office, he gives the tapes to his secretary, who
types them up and the report is then amended and sent to the client. That was
the practice adopted by the defendant on this occasion, so that he had no notes
to disclose on discovery of documents. It also led to his report being lengthy
and diffuse and to its conclusion being inadequate. That practice is
inconsistent with the spirit of the practice note, which contains the following
recommendation:
Site Notes
It is
recommended that all details of the property be recorded in writing, together
with the date of inspection, the names of individuals present at the time,
weather conditions affecting the inspection, sources of information and any
other relevant matters. These notes, both typed and handwritten, should be
retained for as long as practicable . . .
Apart from
what was in the report, the defendant had no notes either written or typed.
Moreover, he was unable to give evidence of his first impressions because his
first drafts were not retained and were destroyed. While he did not say so in
as many words, Mr Gregory, giving evidence for the defendant, clearly did not
approve of this practice.
Many of the
departures from the recommended practice adopted by the defendant may not have
produced important errors, but this departure, in my judgment, was serious. It
led to a report which was strong on immediate detail but excessively, and I
regretfully have to say negligently, weak on reflective thought.
As to the
effect of a departure from general practice, counsel for the plaintiffs relied
on the decision of Peter Pain J in Clark v MacLennan [1983] 1 All
ER 416. Counsel expressly disclaimed any reliance on the suggestion in that decision
that the burden of proof shifts where a departure from normal practice has been
shown, but none the less relied on other parts of the decision. In the light of
the disapproval of that decision by the House of Lords in Wilsher v Essex
Area Health Authority [1988] AC 1074, I think it would be unsafe to rely on
any part of that decision.
As regards the
roof, the defendant devoted four pages to the roof covering and three pages to
the roof construction. Any summary of those pages is likely to lead to the
criticism that I have failed to give adequate attention to the text as a whole.
But I have to say that my overall impression is one of reassurance being given
to the plaintiffs. For example, it was said in relation to the northern pitch
of the roof that there were some failures of the battens supporting the tiles,
but that observation was qualified with the comment (which I find to be
unjustified in its reassurance) that ‘while this is not seen to be particularly
important at present, it all combines to indicate that a degree of ongoing
maintenance and repair is required to maintain this roof in sound and
serviceable condition’. Turning to other parts of the roof, the defendant used
such terms as ‘sound and satisfactory’ and ‘satisfactory for the time being’.
In relation to the roof as a whole he said: ‘a degree of ongoing maintenance
and repair will be required to replace occasional tiles becoming damaged,
particularly by frost’. Two pages later on he stated: ‘Clay tiles are affixed
to very slender battens, which as stated elsewhere have failed in minor
pockets, and occasional repair will be required as part of ongoing maintenance,
but in general the overall covering of the roof is in my opinion sound, and
should remain adequately so for a period of, say, 25 years before major
reroofing may have to be contemplated.’
Two pages later, when referring to the construction of the roof, the
defendant referred again to the 25-year life of the roof. He wrote:
Thereafter,
no direct inspection of rafters was possible, except by lifting occasional
tiles on the roof covering, and this indicates that timbers throughout the roof
are subject to widespread attack by wood borer, to a point where a fair degree
of brittleness exists, and where tiling battens are also suffering. It is
therefore recommended that, as a minimum, access be gained to the apex of
the roof void, and that treatment be applied as far as is possible to arrest
such attack. I would accept that the likelihood of further significant damage
being caused within the suggested twenty-five year life of this roof would be
minimal, and as such therefore treatment could be deferred if so required until
the roof covering has been removed and full access is available to timbers
throughout . . . For the same reasons that no access is available to timbers
throughout . . . For the same reasons that no access is available to the roof
void, there is no insulation available across ceilings to the upper floor but,
given the fact that these areas are apparently only used as occasional
overspill areas, this may not be particularly important, with the main space
acting as insulation to the ground and first floor areas of accommodation.
However, if it is intended that the attic floors be brought into full use,
serious consideration should perhaps be given to undertaking all required
repairs and re-roofing of the main covering, in order to provide opportunity to
both treat timbers and to introduce insulation as necessary. As stated however,
it would be my view that all of this could well be deferred.
The plaintiffs
had no intention of bringing the attic floors into use (apart from occasional
use in the summer) and so they saw no reason at all why any extensive work
(other than annual replacement of a few tiles) would be required on the roof
for 25 years. On the evidence before me, I am in no doubt that the impression
so given to the plaintiffs in that regard was quite wrong and negligent. On the
other hand, having later been persuaded by Mr White and Mr Wadey that the roof
had to be generally overhauled, the plaintiffs have put in hand all those works
which went with the general overhaul of the roof which would go to make the
attic a normally habitable part of the house. It emerged during the trial that
the first plaintiff has gone even further. Prompted by an application for
listed building planning consent put in by a neighbour, Mr Watts has applied
for consent for the addition of further dormer windows to the house. He does
not have any intention at present to put in those extra dormer windows, but he
thinks that this is a good moment to make the application in case he should in
the future decide that he wants to enlarge and improve the usable area of the
attic.
The outward
bulging of the walls was another problem with the property. By careful and
detailed reference to parts of his report, the defendant was able to show that
he was aware of the problem, but nowhere did he meet it head-on and make plain
and unambiguous recommendations in respect of the problem. Instead, he made one
of his inappropriately reassuring comments: ‘The overall wall is sound, stable
and in good condition’ — a comment which he repeated more than once in
differing terms.
The defendant
paid attention to the floors both in the attic and on the first floor.
Attention at the trial was concentrated mainly on the floor of the first-floor
level. The defendant referred to certain defects but again gave reassurance. It
is again difficult to select quotations from long passages, but the flavour of
the report is sufficiently given by the following:
There is
again evidence that the floor deck has been repaired (though not renewed) in
relatively recent times, which would again be seen to be an integral part of
providing access to apply treatment to timbers to eradicate wood borer. There
is a fair degree of creaking in floorboards, where fixings are obviously a
little loose, both as part of those repairs and overhaul and as part of the
installation of services. Detailed examination of timbers throughout the floor
construction was of course impossible by virtue of fully fitted coverings and
furnishings, but all evidence is that the floor has been comprehensively
repaired and treated in recent times to provide a sound and secure arrangement.
As before, any guarantee in respect of treatment should be identified. In the
absence of any guarantees being available, it should perhaps be accepted that
further treatment of timbers may prove to be required in the future but I would
not expect this to be necessary within the foreseeable future.
Here, as
elsewhere, the defendant made plain the limitation on his inspection because of
the fitted carpets and furnishings. But instead of saying that he was unable to
express a firm view, he gave reassurance. He should not have given even a
qualified assurance, because even without lifting carpets there was evidence
which should have made it plain that there was need for further investigation.
There were loose floorboards and defective floorboards and the floor was on a
slope. The defendant qualified his reassurance by questioning whether a
guarantee was in existence in relation to the floor and the treatment of the
timbers but, having raised the query, he then gave further reassurance by
saying that, in effect, even if there was no guarantee, further treatment of
the timbers ‘may prove to be required in the future but I would not expect this
to be necessary within the foreseeable future’. There are many more words to
this section of the report than I have quoted, but I have to say that my
impression from the whole of the section is that the general structure of the
floor was reported as sound and satisfactory (despite the limited nature of the
inspection), and that whether there is a guarantee in existence as to the
treatment of the floor, treatment of the timbers was not expected to be
necessary within the foreseeable future. To express such a view was, in the
light of the limited nature of the inspection, negligent. If the defendant had
said that because of the limited nature of the inspection he could not express
any view about the floor, he could not have been criticised, though he might
have been asked to go back and make a more detailed inspection. On the
inspection he did make, he could not reasonably express the views which he did
express.
The other subject
of the report criticised by the plaintiffs at the trial was the report on the
windows. There was a substantial amount of rot
without using the word ‘rot’. Although some defects were pointed out, repeated
reassurances were given: ‘adequately sound for the time being . . . at present
existing windows are in my opinion acceptable for a property of this type . . .
generally adequate . . . adequately sound for the foreseeable future . . .’.
What was recommended was ‘ongoing maintenance and repair’ and ‘maintenance and
making good is required in the short term, with longer term repairs becoming
necessary’. Again, that was far too optimistic. Many windows were no longer
weathertight, and some sections were decayed by wet rot.
For all these
reasons, I find that the defendant is liable to the plaintiffs in the respects
advanced at the trial (which were not all of the criticisms advanced in the
statement of claim in its original form).
Although the
reasonableness of the cost of repairs has been contested, I find that the
reasonable cost of the repairs of the defects in respect of which this claim
has been limited was £33,961.35.
The plaintiffs
claim damages in the amount of those repairs plus interest plus general damages
for inconvenience and distress and interest at 2% from the date of the issue of
the writ on the latter amount of damages. In the alternative to the cost of
repairs, the plaintiffs claim damages calculated by reference to the ‘loss of
value’.
I have been
asked to assess the damages for each of the alternative bases and, since an
appeal is not unlikely whatever may be my decision, I gladly do so.
If the
appropriate measure of damages is the cost of repairs, the damages are
£33,961.35. The plaintiffs ask for 15% interest on those damages, being the
Judgment Act Rate. The defendant submits that the appropriate rate should be
the Special Account Rate, which at all material times was less than 15%. In the
circumstances of this case it seems to me that the plaintiffs should be awarded
15% on the damages for repairs as from each date on which money was paid for
repairs.
If the
appropriate measure of damages is the ‘difference in value’, I assess the
damages at the difference between the value of the property at the date of
contract, £162,500, and the sum which the plaintiffs paid in reliance on the
defendant’s statement as to its value, namely £177,500, a difference of
£15,000. On that basis the plaintiffs should have interest at the rate of 15%
from the date of the payment of the price.
The
defendant’s counsel quite properly submits that the plaintiffs have never
pleaded any retainer to carry out a valuation. But the evidence has been given
of the request for an opinion as to the price to be paid and of the fact that
the defendant approved that price. That evidence is, in my view, relevant to
the amount of the damages claimed.
In either
event the plaintiffs are further entitled to damages for distress and
inconvenience, and they claim under this head the cost of a holiday. On behalf
of the defendant it was submitted that damages for distress and inconvenience
are not recoverable at all in this class of case. Reliance was based upon the
decision of the Court of Appeal in Hayes v James & Charles Dodd [1990]
2 All ER 815. In that case Hirst J awarded to each of two plaintiffs the sum of
£1,500 for anguish and vexation. The action was a solicitors’ negligence action
in which it was found that a solicitor had been negligent in wrongly advising
that there was an important right of way over some land leading to property
which was bought for a motor repair business and maisonette. The Court of
Appeal held that no damages were to be awarded for anguish and vexation. In the
light of Perry v Sidney Phillips & Son [1982] 1 WLR 1297* and
a long line of cases decided by official referees, the decision of Hayes v
Dodd cannot have been intended to rule that in no case of a negligent
house survey can damages be awarded for distress and inconvenience. For the
reasons given by the Court of Appeal in Hayes v Dodd there was
inadequate discussion in that case of the authorities on this point. But while
damages for inconvenience and distress can plainly be awarded in appropriate
cases against negligent surveyors instructed to survey residential houses, Hayes
v Dodd helpfully illustrates features for which damages of that sort
should not be awarded in the present state of the law. To give an example, it
is plain that a surveyor instructed to advise on a purely commercial point such
as the condition and value of a shipment of new Egyptian potatoes would not be
liable for damages for distress and inconvenience if he gave negligent advice
even if he added to the effects of that breach of duty by perversely denying
liability and thereby putting the plaintiffs into a lengthy and physically
debilitating fear of impending financial failure.
*Editor’s
note: Also reported at (1982) 263 EG 888, [1982] 2 EGLR 135.
Staughton LJ
said, at p 823G:
In Perry v
Sidney Phillips & Son . . . damages were awarded for the distress,
worry, inconvenience and trouble which the plaintiff had suffered while living
in the house he bought, owing to the defects which his surveyor had overlooked.
Lord Denning MR considered these consequences were reasonably foreseeable. Kerr
LJ stated a narrower test:
‘So far as the question of damages for
vexation and inconvenience is concerned, it should be noted that the deputy
judge awarded these not for the tension or frustration of a person who is
involved in a legal dispute in which the other party refuses to meet its
liabilities. If he had done so, it would have been wrong, because such
aggravation is experienced by almost all litigants. He awarded these damages
because of the physical consequences of the breach, which were all foreseeable
at the time. The fact that in such cases damages under this head may be
recoverable, if they have been suffered but not otherwise, is supported by the
decision of this court in Hutchinson v Harris (1978) 10 Build LR 19.’
I would emphasise
the reference to physical consequences of the breach. I am not convinced that
it is enough to ask whether mental distress was reasonably foreseeable as a
consequence, or even whether it should reasonably have been contemplated as not
unlikely to result from a breach of contract. It seems to me that damages for
mental distress in contract are, as a matter of policy, limited to certain
classes of case. I would broadly follow the classification provided by Dillon
LJ in Bliss v South East Thames Regional Health Authority [1987]
ICR 700 at 718:
‘. . . where
the contract which has been broken was itself a contract to provide peace of
mind or freedom from distress . . .’
It may be
that the class is somewhat wider than that. But it should not, in my judgment,
include any case where the object of the contract was not comfort or pleasure,
or the relief of discomfort, but simply carrying on a commercial activity with
a view to profit. So I would disallow the item of damages for anguish and
vexation.
Sir George
Waller (at p 818) and Purchas LJ agreed with Staughton LJ and Purchas LJ added
at p 826:
I would
approach this special and restricted head of damage rather in the same way as
the courts approach the question of pecuniary loss dissociated from physical
damage caused by negligence. Damages of that nature are recoverable only when
the special relationship between the parties involved demonstrates that the one
has in mind liability to pay pecuniary loss and the other relies on that
assumption of responsibility. It is a very far cry from a submission that
damages can be recovered by a litigant who is involved in the frustration and
hassle inevitably arising out of a breach of contract or tort of this sort,
including that involved in seeking his remedies at court.
Very limited
argument was directed at the trial to this point beyond the citation of Hayes
v Dodd and Perry v Sidney Phillips. It seems to me on the
authorities to be clear that in appropriate circumstances a negligent surveyor
of a residential property which he has undertaken to survey for a prospective
purchaser of the property who intends to live there may be liable to his client
in damages to compensate him or her for inconvenience and distress arising out
of living in the property, not out of litigation about it. That seems to me to
be the case whether the position be rationalised by reference to ‘special
relationship’ or ‘a contract to provide peace of mind or freedom from
distress’. A prospective buyer of a house goes to a surveyor not just to be
advised on the financial advisability of one of the most important transactions
of his life but also to receive reassurance that when he buys the house he will
have ‘peace of mind and freedom from distress’. In fact, most prospective
purchasers have the higher aspirations of positive happiness and enjoyment
rather than the mere absence of their opposites.
As to the
amount of damages to be awarded under this head, I have been reminded of my
decision in Syrett v Carr & Neave, July 31, 1990,
unreported*. In that case I said:
The plaintiff
claims damages for inconvenience and distress. She plainly is entitled to such
damages on a scale which is not excessive but modest: see per Lord
Denning MR in Perry v Sidney Phillips [1982] 1 WLR 129 at pp
1302, 1303. A most helpful article by Miss Kim Franklin in (1988) Construction
Law Journal at p 264 makes interesting comparisons between the misery
caused by people being in an unsatisfactory home with the distress caused by
ruined holidays and minor personal injuries. The plaintiff has been restrained
in describing her distress and inconvenience, but it has been real,
substantial, and prolonged, lasting from about October 1988 until early next
year. It has been much more serious than a spoilt fortnight in Mallorca though
not as bad as the experiences of some householders. I assess those damages on a
moderate scale in the sum of £8,000.
*Editor’s
note: Reported at [1990] 2 EGLR 161.
In the present
case, the plaintiffs have both described the distress
The statement of Mr Watts, supported by his former wife, was in the following
terms:
The quality of
our life was very seriously affected. We had bought the house on the basis of
the assurances of the defendant that apart from regular maintenance, the
property would not require attention. In the event, for eight months we spent
almost every weekend staying in a building site. The conditions were quite deplorable.
At various times there was scaffolding around the entirety of the house, the
first-floor floorboards and the first-floor windows were removed in sequence.
There was constant dirt and dust permeating the air. Moving our possessions
from room to room in accordance with the builder’s requirements was a recurrent
nightmare and our possessions and furniture became dirty. From time to time
there was no internal sanitation and we could not bathe. Lesley and I were
forced to spend extended periods out of our first-floor bedroom, living and
sleeping in the unheated, undecorated attic rooms. We were most reluctant to
entertain our friends and were completely unable to entertain clients.
Throughout
the period of building works Lesley and I continued to spend weekends at the
house. As there was no supervising architect or surveyor employed the only
supervision was that provided by me. I believed it to be essential that I spent
as much time as possible with the builders to provide them with an incentive to
get on with it, to ensure that the work was done to the requisite standard and
to provide guidance with the numerous minor problems which arose. I met the
builder at the property virtually every weekend.
Our summer
holiday in 1988, which we had planned to spend in the house, was spent in a
hotel in the Western Isles at an unplanned cost of £880. Both Lesley and I were
employed in extremely stressful occupations in the City of London. Weekend
relaxation was essential to us both in terms of our physical well-being and our
capacity to perform our jobs to the requisite standard. The denial of that
relaxation by virtue of the building works caused us both great distress. I
believe that it was, at the very least, a contributory cause to the unfortunate
breakdown of our marriage, which culminated in our separation late in 1989.
The plaintiffs
were criticised during the trial for not having appointed an architect or
surveyor to supervise the works. It may be that such a professional might have
negotiated some reduction in the building costs (though I am not persuaded by
any evidence that that would have been so), but it is certain that the costs of
such a professional would have added to the amount of the claim against the
defendant, and the plaintiffs would still have had the anxiety of supervising
the professional man.
The cost of
the holiday was, I thought, abandoned by the plaintiffs during the opening of
the case, but it was brought back in later. As one would expect, there was a
degree of imprecision in the evidence of the plaintiffs about their intentions
to spend their annual holidays in the country home. I conjecture that they
would probably, if all had gone well, have spent their holidays in early years
in Dorset and in some, but not all, later years elsewhere. I do not think it
right to award damages for the cost of the holiday in 1988 as special damages,
but I do think that the holiday should be taken into account in assessing
general damages for distress and inconvenience. On the evidence, they probably
could have so organised the work that nothing was being done at the house
during their holiday period, but again, at that time they really needed to get
away and try to forget the unhappiness caused to them by the works at Nutford
Farmhouse.
The point has
been made that the plaintiffs have voluntarily undertaken works going far
beyond the works the subject of this action and therefore their alleged
distress and inconvenience should be discounted. The answer of the first
plaintiff seems to me to be sensible and well founded. Once it became necessary
to do certain works, other works naturally followed. For example, once the
floor had to come up, it was only natural and sensible that the wiring and
underfloor plumbing also should be dealt with, even though those matters would
not normally have been considered for some years.
The evidence
about the effect on the plaintiffs’ marriage raises a question of important
principle which was not argued at all in this case. I have no difficulty in
accepting the evidence of both plaintiffs that their unhappiness arising out of
the problems in relation to Nutford Farmhouse contributed to the breakdown of
their marriage. But quite apart from more general questions of policy, there
are two specific difficulties about assessing damages in relation to such a
matter. First, some marriages are strengthened by a shared coping with
adversity and others are weakened. Second, if it were to be accepted that
damages should be assessed for the contribution made to the breakdown of a
marriage caused by a negligent report by a surveyor it would be necessary to
conduct something like an old-style ‘fault’ divorce action within a
professional negligence action to determine the proportion of blame to be
attached to the negligent report as opposed to other causes of stress between
the parties. Happily, counsel have not sought to embark on any such inquiry.
However, in the light of the authorities to which I have already referred, it
seems to me that as a matter of policy this is a head of damage which should be
disregarded and I do disregard the breakdown of the plaintiffs’ marriage in
assessing damages.
As to the
amount of distress, it seems to me that this case is very similar to the case
of Syrett v Carr & Neave. The totality of the distress and
inconvenience seems to me to be assessable on a modest scale in a totality of
£8,000 for the plaintiffs jointly, or £4,000 each.
It remains for
me to decide whether the main head of the plaintiffs’ damages should be
assessed as the cost of the repairs or the difference in value.
On this topic
also I have been reminded of my judgment in Syrett v Carr & Neave,
and in particular of the following passage:
The major item
of the plaintiffs’ costs is the cost of repairs. I have to decide whether those
costs should be recoverable as a simple head of damages or whether I should
award damages on the basis of diminution in value, which in this case is
heavily influenced by the cost of repairs.
In a
solicitor’s negligence action, County Personnel (Employment Agency) Ltd v
Alan R Pulver & Co [1987] 1 WLR 916 at p 925, Bingham LJ stated
eight principles to be applied in assessing damages. The first four of those
are of particular relevance in this case and are as follows:
‘(1) The overriding rule was stated by Lord
Blackburn in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25
at p 39, and has been repeated on countless occasions since: the measure of
damages is ‘that sum of money which will put the party who has been injured, or
who has suffered, in the same position as he would have been if he had not
sustained the wrong for which he is now getting his compensation or
reparation’.
‘As Megaw LJ
added in Dodd Properties (Kent) Ltd v Canterbury City Council [1980]
1 WLR 433 at p 451: ‘In any case of doubt, it is desirable that the judge,
having decided provisionally as to the amount of damages, should, before
finally deciding, consider whether the amount conforms with the requirement of
Lord Blackburn’s fundamental principle. If it appears not to conform, the judge
should examine the question again to see whether the particular case falls
within one of the exceptions of which Lord Blackburn gave examples, or whether
he is obliged by some binding authority to arrive at a result which is
inconsistent with fundamental principle.’
‘(2) On the authorities as they stand the
diminution in value rule appears almost always, if not always, to be
appropriate where property is acquired following negligent advice by surveyors.
Such cases as Philips v Ward [1956] 1 WLR 471; Pilkington v
Wood [1953] Ch 770; Ford v White & Co [1964] 1 WLR 885
and Perry v Sidney Phillips & Son [1982] 1 WLR 1297, lay down
that rule and illustrate its application in cases involving both surveyors and
solicitors.
‘(3) That is not, however, an invariable approach,
at least in claims against solicitors, and should not be mechanistically
applied in cases where it may appear inappropriate. In Simple Simon Catering
Ltd v J E Binstock Miller & Co (1973) 228 EG 527 the Court of
Appeal favoured a more general assessment taking account of the ‘general
expectation of loss’. In other cases the cost of repair or reinstatement may
provide the appropriate measure: the Dodd Properties case [1980] 1 WLR 433,
456, per Donaldson LJ. In other cases the measure of damage may properly
include the cost of making good the error of a negligent adviser: examples are
found in Braid v W L Highway & Sons (1964) 191 EG 433, and G
& K Ladenbau (UK) Ltd v Crawley & de Reya [1978] 1 WLR 266.
‘(4) While the general rule undoubtedly is that
damages for tort or breach of contract are assessed as at the date of breach
(see for example, Miliangos v George Frank (Textiles) Ltd [1976]
AC 443, 468, per Lord Wilberforce), this rule also should not be
mechanistically applied in circumstances where assessment at another date may
more accurately reflect the overriding compensatory rule. The Dodd
Properties case both affirms this principle and illustrates its
application.’
Following the
guideline set out by Megaw LJ in Dodd Properties (Kent) Ltd v Canterbury
City Council [1980] 1 WLR 433 it seems to me that the appropriate measure
of damages to put the plaintiff in the same position as she would have been in
if she had not sustained the wrong is the cost of repairs plus the costs
ancillary to those repairs plus compensation for the blight on her happiness
since October 1988. If she had received a careful rather than a negligent
report, she would not have bought this property and she would have bought a
property which would have been worth what she paid for it and would not have
required large expenditure in repairs and would have given her much enjoyment
already. It does not seem to me that this approach falls within one of the
exceptions mentioned by Lord Blackburn and I therefore turn to consider whether
there is some binding authority which obliges me to arrive at some different
result.
The two
principal binding authorities which I have to consider are Philips v Ward
[1956] 1 WLR 471 and Perry v Sidney Phillips & Son [1982]
1 WLR 1297. In Philips v Ward, the Court of Appeal held that on
the facts of that case (see Morris LJ at p 476, line 5) the appropriate
measure of damages was the difference in value between the value of the
property as it was described in the defendants’ report and the value as it
should have been described. In that case, the difference in value was £4,000
and the cost of repairs at the time of
trial, and the Court of Appeal held on the facts of that case that it was not
reasonable to have delayed doing the repair (per Morris LJ at p 475).
Both of those facts differ from the facts of the present case. The date when
the infestation by death-watch beetle was discovered in Phillips v Ward
is not clear from the report. In the statement of facts on p 471 it is
stated that the plaintiff bought in June, 1952 and moved in and ‘it was then
found that the timbers of the house were badly affected by death-watch beetle’.
The only reason for postponing the doing of the works put forward by the
plaintiff appears to have been that the plaintiff wanted the property to be
available for inspection at the date of the hearing. That reason was, not
surprisingly, rejected by Morris LJ (p 475 first paragraph). I infer that the purchaser
in Phillips v Ward discovered the death-watch beetle soon after
moving into the property and he had a choice between selling the property again
at its true value, making a loss which was less than the then cost of repairs,
or doing the repairs. In those circumstances, to award as damages the cost of
doing the repairs would have given him a benefit to which he was not entitled
in the absence of a warranty from the surveyor as to the state of the property.
That is not the case here where instant resale of the property would not have
left the purchaser with a loss less than the cost of repairs and, more
important, the purchaser had no reason to make an instant sale of the property
because she did not know of the defect until two years after moving in and by
then she was so heavily involved with the property that it was reasonable for
her to keep it and repair it. It seems to me to be wholly artificial to tell a
plaintiff that her damage is to be measured in relation to a loss which she
could have taken by making a sale two years before she learned that there was a
loss to be realised. That does not seem to me to be what the Court of Appeal
was saying in Phillips v Ward on the facts of that case.
In Perry v
Sidney Phillips also the defects unreported in the negligent report seem
likely to have been discovered very soon after the plaintiff moved into the
property. The defects were a leaking roof and a septic tank giving off an
offensive smell (see p 1300H). Again, the plaintiff had a choice of either
cutting his loss by reselling or undertaking the necessary repairs. He chose
not to resell until after the trial, and he did not have the means to undertake
repairs. Oliver LJ in that case (at p 1304G) rejected a submission based on Dodd
Properties that the loss should ‘be assessed on the basis of some
hypothetical value at the date of trial because the plaintiff has chosen — as
he did in this case — to retain the property and not to cut his loss by
reselling it’. In the same case, at p 1302, Lord Denning said:
‘The general
rule of law is that you assess the damages at the date of the breach so as to
put the plaintiff in the same position as he would have been in if the contract
had been properly performed. Even if the claim be laid in tort against the
surveyor, the damages should be on the same basis.’
If the
plaintiff is unaware of the breach until two years after the breach took place
there may be many reasons for not applying that general rule and, in my
judgment, there are cogent reasons for not applying that general rule in this
case. Those cogent reasons are that the plaintiff did not have an opportunity
of cutting her losses at or about the date of purchase and that she has acted
reasonably throughout and that all the expenses which I find she has suffered or
is likely to suffer are natural and probable results of the negligent survey.
The plaintiff did have an opportunity of cutting her losses two years after
purchase of the property in October 1988, but in her circumstances at the time
it seems to me to have been reasonable for her to decide not to do so, and in
any event there is no evidence before me as to what would have been the
financial results of her selling at that time.
Accordingly,
to return to the words of Megaw LJ in Dodd Properties, I do not feel that
I am ‘obliged by some binding authority to arrive at a result which is
inconsistent with the fundamental principle’.
I therefore
hold that the plaintiff is entitled to damages comprising the cost of repairs
together with the ancillary costs associated with those repairs and damages for
distress and inconvenience together with return of the fee paid for the report.
I should add
that in coming to that decision my attention was invited to the decision of
Scott Baker J in Hipkins v Jack Cotton Partnership [1989] 2 EGLR
157.
In the present
case, I have also been asked to consider the decision of the Court of Appeal in
Steward v Rapley [1989] 15 EG 198, [1989] 1 EGLR 159* and the
decision of Judge Hicks in Bigg v Howard Son & Gooch [1990]
12 EG 111† . I regret to say that in the circumstances of this case I do not
derive any assistance from those two cases. As Purchas LJ said in the former
case, it raised no new point of law.
*Editor’s
note: Also reported at [1989] 1 EGLR 159.
† Editor’s note : Also reported at [1990] 1
EGLR 173.
I would only
add, further to that citation from my previous decision, a reference to a
passage from Jackson and Powell on Professional Negligence, at p 176, to
the effect that Phillips v Ward [1956] 1 WLR 471 and Perry v
Sidney Phillips
are only
binding authorities for the proposition that the plaintiff is not to be put in
the position which he would have occupied if the negligent surveyor’s report
were true. He is only to be put in the position which he would have occupied if
he had been given a competent report.
The
circumstances of the present case are remarkably similar to the facts of the
case in Syrett v Carr & Neave. The plaintiffs received the
report of the defendant in late August 1986. Through no fault of the
plaintiffs, exchange of contracts did not take place until October 1986, and
completion did not take place until April 1987. The plaintiffs did not delay
after that time, but it was not until August 3 1987 that Mr Wadey gave his
report on the property. If the plaintiffs had then sought to cut their losses
by reselling, they would have incurred very considerable costs in reselling (in
the shape of agents’ and solicitors’ fees and stamp duty) and in finding a new
property if that had been their chosen course of action.
In addition,
they might have incurred a very substantial loss on the resale in very
different market conditions and when they were selling what would have become a
suspect house, and they would have had to devote much time to the sale of the
house. In the very difficult position in which they found themselves, I find
that they acted entirely reasonably in deciding to repair the premises rather
than resell.
In the
circumstances, I take the view that for the reasons given in Syrett v Carr
& Neave the plaintiffs should be awarded damages assessed as the cost
of repair of the premises in the relevant respects, namely £33,961.35.
I therefore
find that the plaintiffs are entitled to damages from the defendants in the
sums of £33,961.35 and £8,000, totalling £41,961.35. In addition the plaintiffs
should receive interest at the rate of 15% on the various sums making up the
total of £33,961.35 calculated from the dates on which those sums were paid by
the plaintiffs, together with interest at the rate of 2% on £8,000 from the
date of the issue of the writ.
