Estate agent Connells has fought off a negligence claim brought by the former owners of a Hampshire property.
The High Court dismissed a claim by Fleurette and Maurice Reed that the agent had undersold a property by £40,000. In 1996, the site had been purchased for £155,000 by the Highways Agency, but was sold the following year for £225,000.
Holland J held that, on the evidence, Connells had not been negligent in its valuation. Rather, he said, the increase in value was consistent both with an upturn in the market and with improvements to the site’s amenities by local roadworks.
The Reeds sought to sell the property, known as Centaur, in Horton Road, Ashley Heath, Ringwood BH24, after falling behind in their mortgage repayments. In October 1994, they instructed Robin Spence, the manager of Connells’ Ringwood branch, to market the house for £195,000.
However, due to noise and disruption from the Highway Agency’s construction of an underpass on the nearby A31, the property failed to sell.
In mid-1995, the agency agreed to purchase the house on an extra-statutory basis, having regard to “exceptional circumstances and hardship” to the Reeds. On Connells’ advice, the couple accepted an offer of £155,000 in February 1996.
After the site was sold for £225,000, the Reeds sued Connells for alleged negligence and breach of contract on the basis that the pre-road scheme value of the property had been £195,000.
The couple claimed that, in receiving a 1.5% fee, Connells had agreed to exercise all proper skill and care and to endeavour to gain the best price reasonably obtainable. They said that Connells had failed to engage in meaningful negotiation with the district valuer and had not produced satisfactory evidence in support of any alternative valuation.
They sought £70,878.44 for the loss in value of the property and for miscellaneous fees, together with £21,066.01 in accrued interest.
In dismissing the claim, Holland J said that he was “profoundedly dismayed” that the Reeds had chosen to “embark upon litigation that promised to be, and no doubt has been, expensive, stressful and speculative”.
“Their involvement in these inevitably contested proceedings amounted to tragedy that could and should have been avoided,” he said.
Reed and another v Connells Estate Agents Queen’s Bench Division (Holland J) 10 December 2004.
Bartholomew O’Toole (instructed by Elin & Co, of Basingstoke) appeared for the claimants; David Hart QC (instructed by Hill Dickinson) appeared for the defendants.
References: EGi Legal News 13/12/04