Damages Claims by disgruntled home buyers for damages for distress and inconvenience are generally difficult to win. William Cursham explains the exceptions
As the property market continues to recover and sales increase, so too will the number of disgruntled purchasers. This is particularly the case with home buyers, for whom the purchase is the biggest transaction of their lives. Not only have they invested financially, but emotionally too. Perhaps inevitably then, when something goes wrong with the transaction they will want to be compensated for hurt feelings as well as financial loss.
Distress and inconvenience
In legal terms, the former is known as a claim for distress and inconvenience. Although it is a common claim, it is actually a very difficult one for a buyer to succeed on. This is because it is very difficult to assess distress and inconvenience in monetary terms, and therefore courts are reluctant to make awards for it. Even when they do make such an award, it is usually modest.
However, as with any rule of law, there are exceptions. These are:
1. Where the object of a contract is to provide pleasure, relaxation, peace of mind or freedom from molestation. This is known as the “exceptional category”, and here damages will be awarded if the object is not provided. A good example of this is a contract for the provision of a holiday; and
2. In cases that do not fall into the exceptional category, damages can be awarded for physical inconvenience and discomfort caused by the breach. They can also be awarded for mental suffering, as long as it is directly connected to the inconvenience and discomfort.
What this means is that if a case falls into the exceptional category, a buyer may be awarded damages for mental distress (anxiety, vexation or disappointment). On the other hand, if the case does not fall within the exceptional category, the buyer will only be awarded damages if he or she can show substantial physical inconvenience and discomfort.
Three high-profile cases illustrate the court’s approach to distress and inconvenience in property transactions.
Watts and another v Morrow
In this case ([1991] 2 EGLR 152) the claimants, Mr and Mrs Watts, instructed the defendant, a surveyor, to produce a report on the state of a property they wished to purchase as a country retreat. In his report, the defendant concluded that the property was sound, stable and in a good condition, only needing minor repairs. However, soon after the claimants moved in, they discovered that there were serious defects with the house.
The claimants therefore pursued a claim against the defendant, which included £8,000 for distress and inconvenience. The case went to the Court of Appeal, which decided that this was not a case that should fall into the exceptional category. However, it did decide that the claimants had suffered considerable physical inconvenience during the repair works, which had lasted over eight months, and as such they were entitled to damages, but only in a modest amount (£750).
Farley v Skinner
This case ([2001] UKHL 49; [2001] 3 EGLR 58) also concerned a buyer’s claim against a surveyor, but here the House of Lords decided that the claim did fall within the exceptional category. The reason for this was that the claimant had specifically instructed the defendant surveyor to investigate aircraft noise (the property was less than 15 miles away from Gatwick), because he wanted a tranquil home to retire to. This was enough to bring the case into the exceptional category, because one of the main objects of the claimant’s contract with the defendant was to assure him that the property would be tranquil, when in fact it was not. The House of Lords upheld the lower court’s award of £10,000.
Watts and Farley are good illustrations of how differently courts approach awarding damages for distress and inconvenience. Clearly, a claimant is much more likely to recover more substantial damages if he or she can show that the case comes within the exceptional category. Yet it is also clear that Farley was an unusual case, which fell into the exceptional category because the claimant had specifically instructed the surveyor to investigate aircraft noise. Indeed, property transactions will not usually fall within the exceptional category, as is confirmed by the more recent decision in Harrison v Shepherd Homes Ltd and others [2011] EWHC 1811 (TCC).
Harrison
In Harrison, the claimants pursued a claim against the defendant house builder for the defective piling of their houses. As well as making large claims for financial losses, each claimant also sought damages for distress and inconvenience. However, the High Court refused to see the contracts for sale of the houses as contracts whose main object was to provide pleasure, relaxation, peace of mind or freedom from molestation. The only way in which they could be seen as such would be if the contracts contained express terms to that effect, which they did not.
The case therefore did not fall into the exceptional category, but the court did find that the claimants had suffered physical inconvenience and distress. The award was, however, very modest, being only £150 per claimant per year.
An unusual case
It is clear that Farley was an unusual case, and that generally speaking property transactions will not fall within the exceptional category. This means that it will be difficult for disgruntled purchasers to claim damages for distress and inconvenience and, even if they are successful, the chances are that the amounts awarded will be modest.
William Cursham is an associate at Gateley LLP
