Defendant bank financing claimant’s purchase of property on basis of three valuations produced by third party — Local authority purchasing property under compulsory purchase order — Claimant assigning right to sue on one valuation to defendant on condition that claimant receive one-third of net settlement — Whether claimant entitled to receive one-third of net settlement on overall claim or on one valuation — Cross-appeal allowed
The defendant bank financed the claimant’s purchase and redevelopment of a property on the basis of three surveys prepared by a third party, each of which gave a different valuation. The first and third reports were sent directly to the defendant, but the second report was sent solely to the claimant.
The local authority made a compulsory purchase order in respect of the property, and, on the basis of the valuations, the defendant advanced further moneys to the claimant in order to contest the order. However, the challenge failed and the local authority acquired the property for a figure substantially below the third party’s valuations.
The claimant assigned to the defendant its right to sue the third party in respect of the second report on the condition, inter alia, that he would receive 30% of the net recoveries if the claim were to succeed.
The defendant and the third party settled their action, and the claimant sought 30% of the total settlement figure. At first instance, the master had held that the defendant was liable to the claimant in respect of 30% of the sum attributable to the second report only, such sum to be determined by inquiry. The claimant appealed, and the court agreed that the claimant was entitled to 30% of one-third of the total settlement. The defendant subsequently appealed and the claimant cross-appealed.
Held: The cross-appeal was allowed*.
The claimant was entitled to recover 30% of the total net settlement. The settlement had been reached on the basis of all three valuations. The assignment of the claimant’s rights in respect of the second valuation had enabled the defendant to sue on an enhanced claim, which meant that the claimant’s right to sue formed one-third of the overall claim.
Robert Hantusch (instructed by Teacher Stern Selby) appeared for the claimant; Vernon Flynn (instructed by Reed Smith Warner Cranston) appeared for the defendant.
* Editor’s note: This hearing concerned only the cross-appeal.
Vivienne Lane, barrister
