Mortgage Express has won a key ruling at the Court of Appeal, in an ongoing claim in which it alleges that Countrywide Surveyors was “deceitfully” at fault over more than 40 valuations.
The court overturned a ruling that would have allowed Countrywide to rely on a limitation defence. As a result, the deceit claims will now proceed to trial.
Simon LJ said that the appeal turned on a short point of construction of a November 2010 written agreement, referred to as the “standstill agreement”, which provided that time would be suspended for the purposes of any limitation defence in relation to claims made by Mortgage Express (“ME”).
The mortgage lender has issued proceedings against the valuer, claiming that Countrywide was at fault in relation to 46 valuations of property, and deceitfully so in relation to 41 of them.
The judge said: “The allegation is directed against two particular surveyors employed by the respondent and is denied.”
While it was common ground that the standstill agreement covered claims in negligence, the preliminary issue arose whether it also suspended time in relation to claims for deceit.
Simon LJ said: “The first claimant contends that it does. The defendant submits that it does not. If the first claimant is right, all of its claims in deceit will proceed to trial; if it is wrong, the first claimant will not have a contractual answer to the defendant’s limitation defence in relation to most of its claims in deceit, although it may have other answers.”
In March, at the High Court, Judge Raeside QC concluded that the standstill agreement did not have the effect of suspending time in relation to the claims in deceit. However, now Simon Lj has overturned that decision.
He said that the proper construction of the standstill agreement is that, if the claims arise “indirectly” from matters referred to a Background Preamble to the agreement (those matters essentially being that the surveyors were instructed on various dates to act on behalf of ME in relation to the production of a valuation report on a number of properties for mortgage purposes), or if they are in some way connected to those matters, they “fall within the suspension provisions”.
He said: “The claims based on dishonesty fall within this very broad category of claims since they were at least in some way connected with the factual matters set out in paragraphs 1 and 2 of the background preamble and with the specific allegations described in paragraph 3.”
Paragraph 3 states that it is alleged that the valuations of the properties produced by the surveyors were “outside the parameters of what would be regarded as reasonable” in that each valuation was “negligent”.
Mortgage Express (an unlimited company) v Countrywide Surveyors Limited Court of Appeal (Arden, Gloster and Simon LJJ) 29 October 2015
Paul Lowenstein QC and Mr William Edwards (instructed by Walker Morris LLP) for the Appellant
Patrick Lawrence QC (instructed by Clyde & Co LLP) for the Respondent
