Expert evidence — Property valuations — Whether expert evidence on valuation be limited to one witness for each side — Whether court should appoint its own expert under RSC Ord 40 — First instance orders of official referee appealed against by defendant valuers — Appeal dismissed
The plaintiffs were mortgagees, who advanced mortgages on house purchases in reliance on valuations made by the appellant valuation surveyors. The plaintiffs alleged negligent overvaluation; and submitted that they would not have entered into the transactions but for the overvaluation. The first defendant, Key Surveyors, had provided professional valuations but was now insolvent. The second to ninth defendants in the action before the official referee were individual surveyors who had made the valuations upon which the lenders had relied. The ninth defendant had never been served.
The official referee made orders that: (1) a court valuation expert be appointed under RSC Ord 40; and (2) expert evidence on valuation be limited to one witness for each side: see [1995] 40 EG 130. The claim related to allegedly negligent valuations of 29 houses nationwide. Since those orders had been made other actions were consolidated; the plaintiffs were to all intents and purposes the same; the first named defendant was the same; but additional individual surveyors had been added as personal defendants so that there were presently 11.
They appealed against the official referee’s orders arguing that there was no jurisdiction to have made them. Four main submissions were advanced: (1) RSC Ord 40 only applied to scientific or technical questions; (2) it was not appropriate to appoint an expert to give an opinion on the major issue before the court; (3) a court appointed expert would not be an “expert” as he would necessarily lack personal knowledge of the values in many of the areas upon which he had to report; and (4) the court appointed expert was being invited to give an opinion in answer to questions of alleged negligent valuations of 51 properties so that the parties were each entitled to call a witness on each of those 51 questions.
Held The appeals were dismissed.
1. There was nothing in the language of RSC Ord 40 which restricted its use to cases where a court appointed expert was to resolve scientific or subsidiary questions.
2. The court did not accept that any valuation expert was confined to giving evidence based on comparables of which he had direct first-hand knowledge.
3. A valuation surveyor, having made all the necessary careful inquiries, was fully entitled to rely on what reasonably appeared to him to be reliable information. So was an expert, who would be equally concerned to establish that an allegedly comparable transaction had taken place and was a true comparable.
4. Even a locally based valuer who had to give an opinion on the appropriate range of prices for a given property some years before would be most unlikely to have the information at his fingertips. He would have to consult records and refresh his memory. That was not very different from the task which a valuer who was not locally based would have to undertake.
John Leighton Williams QC (instructed by Davies Arnold Cooper) appeared for the appellants; Christopher Gibson QC (instructed by Pettman Smith) appeared for the respondent.
