Negligence — Action against valuer in respect of mortgage valuation — Comprehensive review of authorities — Contrasting judicial approaches in Smith v Eric S Bush and Harris v Wyre Forest District Council (both of which are likely to be considered by the House of Lords) — ‘A plain difference of judicial opinion’ — A fundamental question in regard to the effect of disclaimer and the application of the Unfair Contract Terms Act 1977
present case the defendant valuer, a chartered surveyor but not a building
surveyor, was instructed by a building society to carry out a valuation in
connection with the proposed purchase by the plaintiffs, a husband and wife, of
a bungalow — The proposed purchase had been negotiated at a figure of £26,500
and the plaintiffs sought an advance from the society of £12,000 — The valuer’s
fee, of £45 plus VAT, was paid to the society by the plaintiffs and, according
to the current practice, they received a copy of the report — Apart from the
notice given under section 30 of the Building Societies Act 1962 disclaiming
any warranty that the purchase price was reasonable, the form of application
for the advance and the valuer’s report itself emphasised that the valuation
was for mortgage purposes only; that the report was not a structural survey;
that the purpose was to decide whether the society should make an advance on
the security of the property and on what terms; and that it should not be
assumed that any defects mentioned in the report were the only defects in the
property — The valuer’s report valued the property for mortgage purposes at
£26,500, recommended insurance cover of £36,000 and stated that ‘the purchase
price was very reasonable’ — In answer to a question, the valuer stated that in
his opinion the property was not affected by settlement — Unfortunately, some
cracks in various parts of the bungalow were evident from the start of the
plaintiffs’ occupation and a lump under the carpet in the lounge revealed, on
investigation, an alarmingly large crack in the floor — It appeared that the
concrete floor of the bungalow had been laid directly over burnt colliery shale
which produced a sulphate attack on the concrete, leading to expansion,
displacement of brickwork, and disturbance of internal walls
some conflict of expert evidence at the trial, but the judge preferred the
evidence of the plaintiffs and their witnesses — He came to the conclusion
that, if a duty of care was owed by the defendant, he had been unquestionably
negligent — There had been sufficient visible indications of settlement or
other structural damage to have caused a reasonable valuer to appreciate that
there was a problem — To have ‘passed’ the bungalow and to have described the
price as ‘very reasonable’ showed a lack of due care (if the duty of care
existed) — The main question, therefore, was whether such a duty did exist in
the circumstances of the case — In considering this question the judge
discussed a large number of cases, both those dealing specifically with
mortgage valuations, such as Yianni v Edwin Evans & Sons and the more recent
cases mentioned below, and cases concerned with the general law of negligence,
such as Hedley Byrne & Co Ltd v Heller & Partners Ltd and Anns v Merton London
Borough Council — The judge was satisfied that in the present case the
relationship between the defendant valuer and the plaintiffs was sufficiently
‘proximate’ to create in the circumstances a duty of care, other things being
equal — Recent cases, however, had raised difficult questions as to the effect
of disclaimer and the application of the Unfair Contract Terms Act 1977
Smith v Eric S Bush and Harris v Wyre Forest District Council appeared to
disclose a clear difference of approach — In the Bush case the court, although
accepting that the disclaimer prevented the defendants from owing any duty of
care, nevertheless felt able to decide that the disclaimer did not satisfy the
reasonableness test of the Unfair Contract Terms Act — In the Wyre Forest case
the court held that the Act applied only if a duty of care was established; if
a disclaimer prevented the duty from arising at all, the Act could have no
application — McNeill J preferred the view, which he derived from the Bush
case, that where a duty of care was independently established by the special
relationship between a professional adviser and the recipient of advice the
effect of the disclaimer was perhaps only to impose limitations on the extent
to which the recipient can reasonably rely on the advice — McNeill J considered
that this view was supported by section 13 of the 1977 Act and by the decision
of the Court of Appeal in Phillips Products Ltd v Hyland — In giving the
judgment of the court in that case, Slade LJ said that it would make nonsense
of the 1977 Act if a condition disclaiming liability were itself to defeat the
common law duty of reasonable care — It would mean that the very term which was
pre-eminently suitable for review for reasonableness under the Act would be
removed from its scope — The court, in applying the 1977 Act, should leave out
of account at this stage the term which is relied on by the defence as
defeating the plaintiff’s claim for breach of the relevant obligation or duty
the present case the duty of care was not defeated by disclaimer and that the
defendant had not discharged the onus upon him of satisfying the requirement of
reasonableness under the 1977 Act — The judge rejected a submission that the
plaintiffs should be held guilty of contributory negligence — Judgment
accordingly for plaintiffs, with damages to be assessed
The following
cases are referred to in this report.
Anns v Merton London Borough Council [1978] AC 728; [1977] 2 WLR
1024; [1977] 2 All ER 492; [1977] EGD 604; (1977) 243 EG 523 & 591, HL
Curran v Northern Ireland Co-ownership Housing Association Ltd
[1985] 8 NIJB 22, Carswell J; April 28 1986, CA, NI, unreported; [1987] 2 WLR
1043; [1987] 2 All ER 13, HL
Harris v Wyre Forest District Council [1987] 1 EGLR 231
Hedley
Byrne & Co Ltd v Heller & Partners Ltd
[1964] AC 465; [1963] 3 WLR 101; [1963] 2 All ER 575; [1963] 1 Lloyd’s Rep 485,
HL
Nance v British Columbia Electric Railway Co Ltd [1951] AC 601;
[1951] 2 All ER 448; [1951] 2 TLR 137, PC
Peabody
Donation Fund Governors v Grant (1982) 264
EG 925, CA
Phillips
Products Ltd v Hyland [1987] 1 WLR 659;
[1987] 2 All ER 620, CA
Smith v Eric S Bush (a firm) [1987] 3 WLR 889; [1987] 3 All ER
179; [1987] 1 EGLR 157; (1987) 282 EG 326, CA
Ward v McMaster, Louth CC and Nicholas Hardy & Co Ltd [1985]
IR 29; [1986] ILRM 43
Westlake v Bracknell District Council [1987] 1 EGLR 161; (1987) 282
EG 868
Yianni v Edwin Evans & Sons [1982] QB 438; [1981] 3 WLR 843;
[1981] 3 All ER 592; [1981] EGD 803; (1981) 259 EG 969
Yuen
Kun Yeu v Attorney-General of Hong Kong
[1987] 3 WLR 776; [1987] 2 All ER 705, PC
This was an
action by David Roland Davies and his wife, Joan Davies, against Robert Idris
Parry FRICS, alleging negligence by the defendant in carrying out a valuation
for mortgage, on the instructions of the Britannia Building Society, of a
bungalow at 2 Berwyn Avenue, Chirk, Clwyd, purchased by the plaintiffs.
W R Wood
(instructed by Stevens & Co, of Chirk) appeared on behalf of the
plaintiffs; G W Little (instructed by John C Gittins & Co, of Oswestry)
represented the defendant.
Giving
judgment, McNEILL J said: In 1983 the plaintiffs were minded to move house.
They were already house owners. They saw and liked a bungalow, 2 Berwyn Avenue,
Chirk, in the County of Clwyd, then the property of an elderly lady, Mrs Cater,
who lived there on her own, and advertised for sale by Hall Wateridge &
Owen, of Oswestry. A sale to the plaintiffs subject to contract was on August
30 1983 negotiated at a price of £26,500: the asking price had been £27,500.
The plaintiffs sought mortgage facilities from the Britannia Building Society;
they wanted an advance of £12,000. They proposed to find the balance from their
own resources, presumably from the proceeds of sale of their existing house. On
September 15 1983 the building society sent instructions to the defendant to
value the property. The building society required the plaintiffs to pay to it
the defendant’s fee, £45 plus VAT, which they did. On September 19 or 20 the
defendant visited the premises and inspected them: Mrs Cater was still in
residence. At about this time her son was visiting her and assisting her with
her move and the activities incidental to the sale of her house. The plaintiffs
recall meeting him there after they had applied for the mortgage.
The defendant
made his report (undated) to the building society. As had become the practice
after the decision of Park J in Yianni v Edwin Evans & Sons
[1982] QB 438, the defendant was required to provide three copies of the
society’s form of report, one of which (which omitted reference to the valuer’s
fee) was for the applicants. This copy was sent to the plaintiffs together with
the society’s ‘offer of advance’.
Omitting
matters not directly relevant to the issues between the parties, the society
indicated its willingness to make the advance sought on various conditions. The
document was endorsed with the notice required to be given by section 30 of the
Building Societies Act 1962 (where liability was to be excluded) that making
the advance implied no warranty on the part of the society that the purchase
price of the property was reasonable. The defendant does not by his amended
defence contend that this notice relieves him from any liability, if any, to
the plaintiffs.
In the
society’s form of application for an advance the following notes appear:
1 Applicants are recommended to read the
Society’s mortgage leaflet and rules.
3 A copy of the Valuer’s report will be
supplied to the applicant where a property is being purchased. It is emphasised
that the purpose of the Valuer’s report is to enable the Society to decide
whether or not to make an advance, and if so, on what terms. It is not a
structural survey and there may be defects in the property which could only be
revealed by a detailed survey. It cannot therefore be assumed that the repairs
or defects shown in the report, if any, are the only defects which may be
present in the property. Should the applicant require a comprehensive survey,
he should make arrangements to have an independent inspection undertaken by a
qualified surveyor.
There is then
provision for the applicant to sign a declaration including the words: ‘I/we
have read and agree with notes 1-8 above’. I have not read notes 2 or 4 to 8
inclusive since they are not relevant to this dispute. The plaintiffs agree that
they signed the declaration. It is not suggested on the defendant’s behalf that
anything here turns on anything in the mortgage leaflet or rules: it is on note
3 of this document that reliance is placed.
The first
plaintiff’s evidence, in cross-examination, was that the building society’s
local manager told him that the purpose of the valuer’s report was to make sure
that the house was worth £26,500. The plaintiff accepted that he was told of
the content of note 3 and the purpose of the report there expressed.
The offer of
advance bears on its face the following wording — apparently impressed and not
part of the printed material on the form:
The
applicant’s attention is drawn to the fact that the inspection made by the
Society’s valuer was for the purpose of assessing the value only. There may be
defects in the property which will only be revealed by a structural survey and
the applicant is advised to have an independent inspection made.
The
defendant’s report, sent to the plaintiffs, contained details of the property,
its area, accommodation and services. In a space numbered 8 the following
appears: ‘In your opinion is the property affected by settlement? If so give details including the extent and
effect on saleability.’ To this the
defendant had answered ‘No’. Then in a space headed ‘General Remarks’ he
recorded the following:
The property
was generally in satisfactory condition but the attention of the applicant
should be drawn to the following: 1. The facings of bricks below the front
steps are damaged. 2. The front gutter was leaking over bedroom window and rain
water was spraying against the brick work. 3. The brick work required replacing
below damp course at the rear corner of the stores. 4. There was slight timber
decay at the bottom of the door frames . . . All the above matters should be
carried out as acts of husbandry and no retention was recommended. The property
was situated on a corner site and the purchase price was very reasonable. The
valuation on the documents for mortgage purposes was £26,500, the recommended
insurance cover £36,000.
Finally on
this document, under the heading ‘Notes for Applicants’, the following appears:
1. This
document is a report from the Society’s valuer to the Society giving the
valuation for mortgage purposes only. It is not a market valuation and should
not be taken as such. It has been obtained from the valuer to comply with the
Building Societies Act 1962. The purpose of the report is to enable the Society
to decide if an advance should be made and upon what terms. 3. It is stressed
that the report is not a structural survey. There may be defects in the
property which could only be revealed by a detailed inspection. You should not
assume that any repairs referred to in the report are the only defects in the property,
or if no repairs are mentioned, that no defects exist. 4. If you are in any
doubt as to the value of the property or the soundness of any part of the
structure you should consult a qualified surveyor to advise. 5. If you are
purchasing the property you will receive a notice that the Society does not
warrant the purchase price as reasonable. 6. The contents of this report are
for your information only and should not be disclosed to anyone other than your
professional advisers.
With reference
to no 4 of those notes, it was not suggested that the plaintiffs were in any
doubt as to the value or soundness of the structure.
The plaintiffs
accepted the building society’s offer of an advance and the property was
conveyed to them on December 12 1983. The mortgage was completed on the same
day.
The evidence
of the first plaintiff, subsequently confirmed in detail by the second
plaintiff, as to what they saw when they visited the house was this:
When we first
looked over the property we were just looking at it as a bungalow. We noticed
some small cracks in the plaster work. We paid a second visit. Mrs Cater and
her son were there. There was a crack horizontally across the chimney breast in
the lounge but he said if he’d been selling the house he’d have decorated it
and then it wouldn’t have been seen. The block floor was raised under the
radiator in the hall but he said that was probably the heat. There were cracks
to be seen in the bedrooms in the positions to be seen in the photographs — A6,
A7, A8, A9 and C8. What we saw put us off a bit but we’d paid for the survey
and the surveyor would tell us if there was a problem or if it was not all
right . . . When we got the report we were quite pleased: there was nothing
about any problem inside so we went ahead and bought it. We were no longer
bothered about the soundness of the bungalow. We were satisfied about it . . .
We had no reason to believe that there was anything unsound structurally about
the property.
The plaintiffs
got the key of the house upon completion and went that very day to it. They had
bought Mrs Cater’s carpets as part of the bargain, but the premises were
otherwise empty of furniture and furnishings. The second plaintiff’s mother
went with them. In the lounge she stumbled or tripped on what they thought at
first was some rucking up of the underlay, a sort of lump under the carpet.
However, when they investigated there was a crack in the floor. ‘We were
astounded by the size of it,’ said the first plaintiff. ‘We were also very
concerned and went to see the solicitors immediately.’
On January 17
1984 the solicitors wrote to the building society in these terms, having
identified themselves:
Our clients
have discovered major problems with the floors in the property and we believe
that this may have been caused by a chemically active material being used under
the concrete flooring with the result that it has expanded and cracked the
floor and walls. Our clients are in the process of obtaining detailed builder’s
estimates as to the total cost of repair, but it is clear even at this stage
that the cost will be very considerable.
That, as I
say, was on January 17 1984 and the letter was acknowledged and then a response
was dated January 24. The writer of the letter said:
First of all
we would like to mention the limitations of our own valuer’s inspection. When
your clients completed the application form on September 10 1983 it was
emphasised that the purpose of our valuer’s report was to enable the Society to
decide whether or not to make an advance, and if so, on
structural survey and that there may well be defects in the property which
would only be revealed on a detailed inspection.
He went on to
say that when the offer of advance was made these remarks were repeated and
advice was given to have an independent inspection. Nevertheless, the matter
was referred to the valuer who was identified as the defendant.
Solicitors for
the plaintiffs then wrote to the defendant on February 2 making the claim
against him and inviting his comments. He replied on February 9 denying
negligence, enclosing a copy of his instructions. That letter was acknowledged
on February 14. The solicitor said:
The cracks to
the walls and floors of the building are readily apparent and it should have
been clear that the property was worth very considerably less than the figure
at which it was valued.
That letter was
acknowledged and noted by the defendant on February 16. He did not agree.
It was
accepted on the plaintiffs’ behalf that the defendant cannot be said to have
been negligent in failing to take up and look under the carpet. Nevertheless,
the fact is that the concrete floor-slab of the bungalow had been laid directly
on to compact burnt colliery shale. That material is notorious for containing
soluble substances which attack concrete. It is unnecessary to go into the
chemistry. Laboratory tests on the shale here indicate its high potential for
attacking concrete. The consequence of attack is that the concrete slab expands
with a powerful outward push against the walls just below damp-proof course
level. Brickwork is displaced and cracks appear until the resistance of the
surrounding soil prevents further lateral displacement. The next stage is for
the slab to burst upwards. Disturbance of the internal walls occurs as a
consequence of horizontal, and perhaps also of vertical, pressures.
The dangers of
sulphate attack on concrete have been well known for over 20 years and laying
concrete floor-slabs directly on burnt shale is contrary to practice and the
standard form of building byelaws. None of this was known to or appreciated by
the plaintiffs.
When he was
cross-examined, the first plaintiff said that he knew that the building society
would require a valuer’s report to assess the value of the security and the
local manager told him that the report was to make sure that the house was
worth £26,500. This plaintiff accepted that para 3 of the notes was drawn to
his attention and he knew that the report was not a structural survey but was a
report on the property. He knew it was not a ‘market valuation’ but was to
enable the society to decide whether or not to make an advance. He said:
I could have
had a structural survey but we weren’t recommended to have one. If the valuer
had seen what was there to be seen, he should at least have recommended us to
have a structural survey. I expected him to pick up what we’d seen and I relied
on him to advise on the property. I relied on what he did and we were satisfied
from his report that he hadn’t picked up any major defects. If he had, £26,500
would not have been a fair price. I suppose I took a risk not having a
structural survey but I didn’t think, having seen his report, that there was
any risk. I relied on him. In particular I relied on his statement that the
purchase price was very reasonable, that the recommended insurance cover was
£36,000 and that he had specifically drawn attention to minor defects.
in the box to
which the attention of the applicants should be drawn.
Moreover, I
did not think that the building society would lend money on a defective house.
The second
plaintiff gave evidence broadly complementary to her husband’s evidence. Both
thought the cracks had got a little worse over the years. She said that if
there had been anything seriously wrong she thought the surveyor would pick it
up and if he had advised a full survey it would have been done. If he had told
us that the cracks were not serious we would just have filled them in and
redecorated. ‘I suppose,’ she said, ‘that if we’d been at all concerned about
the property we would have had an independent surveyor, but we weren’t.’ The property was (as she believed it) only 18
years old. In fact the defendant said he thought it was 12 years old.
A short
statement by Mrs Cater was put in under the Civil Evidence Act. She verified
the existence of a crack across the chimney breast in the lounge and that there
was a crack in the wall above the bathroom door. What she said was this: ‘There
were some cracks in the walls but they did not seem to get any worse while I
was living in the house. The cracks did not worry me because I did not think
that it mattered. I cannot remember if I had a survey done when I bought the
house.’
The plaintiffs
had clearly had some professional advice before the solicitors’ letter of
January 17 1984, but Mr W D Bell FRICS was instructed on April 11 1984 and he
gave evidence before me. Thereafter, in October 1985 the defendant, having seen
Mr Bell’s report reinspected the property. On October 5 1984 and again on April
24 1986 Mr J F W Baines FRICS inspected the property on the defendant’s
solicitors’ instructions and on April 22 1986 Mr C V Knipe BSc C Eng MIME MIMM MIGeol
FGS and chartered engineer inspected the property and dug exploratory pits on
the instructions of the plaintiffs’ solicitors. Both Mr Baines and Mr Knipe, in
addition to Mr Bell, gave evidence before me. There are in the bundle reports
by Mr R L Filde FSVA and Mr D W Hughes of the Industrial Research Laboratories
of the City of Birmingham, but neither of these gentlemen was called to give
evidence. The content of the report of Mr Hughes confirming the sulphate levels
of the burnt shale and the concrete floor-slab was not in dispute.
Issues of fact
arise as to what was to be seen when the defendant inspected the property on
September 19 or 20 1983. He spent about half an hour to three quarters of an
hour there. The defendant is a Fellow of the Royal Institution of Chartered
Surveyors, a chartered valuation surveyor and additionally qualified as an
agricultural valuer. He has been in practice for 27 years in Oswestry. About
half his practice is in estate agency, the other half in building society and
house purchase reports. He is not a qualified structural surveyor and does not
do structural reports. He is on the panels of valuers of a number of
substantial building societies and banks and in 1983 he did 173 building
society valuations. He said:
Normally building
societies are limited to advancing 80% of the value of the property unless
there was some additional security. My responsibility is to value the property
and I am only addressing my comments to the society so that they can assess
what mortgage advance can be offered. I also have to advise on insurance and
the practice is to take reconstruction cost assessed at a scale figure of £30
per foot square. I look at the interior first, the accommodation, lay out and
general condition, then I look at the exterior. Apart from what is in my
general remarks in my report I saw nothing of significance. I saw no cracking
inside except some hair line cracks of the sort you see in every property. I
saw no cracks in the bedroom; if there had been any I would have seen them. I
believe I saw a crack in the kitchen right above the flue to the central
heating boiler but I took no particular notice of it. It might have been a
reflection from the boiler. There was nothing in the kitchen that I should have
seen and reported on but didn’t. There was nothing wrong with the skirting
board and I wouldn’t take notice of the doors unless there was something very
obvious. Externally there was no bulging of the brick work and no significant
movement of the bricks. There were some minimal cracks in the outside walls but
nothing to affect my opinion of the property. Sometimes you get mortar which is
stronger than the bricks so you get cracked bricks rather than cracked mortar.
The defendant
agreed that he knew now of sulphate action but he had never come across it in
his career. He had inspected one or two other houses in the same estate as this
house and sold one of them in 1984 for £28,000. He agreed that across the board
only some 10% of purchasers have a structural survey: 50% of those not seeking
mortgage facilities do and about 20% of those seeking only a half advance. Such
cracks as he saw, he said, could have been filled in on redecoration. He did
not regard a crack as significant unless it was wedge-shaped, due either to
foundation failure or to pressure from above.
When he was
cross-examined the defendant agreed that he kept himself up to date by reading
his professional journals. He knew of Yianni’s case (Yianni v Edwin
Evans & Sons [1982] QB 438) and was aware of it in 1983. He knew that
that case was of great importance to his work.
I knew one
copy of my report was for the plaintiffs, but it didn’t cross my mind to
consider why they got a copy. But I know from my reading that I had a duty of
care in law to the applicants. In my opinion this property was purchased at a
reasonable price but I would know that there was only a one in four chance that
the plaintiffs would get a structural survey. I was only inspecting and
reporting for valuation purposes and I was expected to look for signs of
settlement. I saw no sign of lipping which I agree might point to trouble,
depending on the degree, but not here as this was a cavity wall. I thought
there was some bad construction.
He looked at
photograph C11 showing a brick cracked through vertically. He said:
If I’d seen
that I should not have noted it as significant. The crack in the bedroom
(photograph A7) was not visible to me; it may have been behind the curtains or
hidden by the bed.
This, I remind
myself, was one of the cracks observed by both plaintiffs on their first visit
to the house; so too, they said, the crack in A8 which the defendant said he
saw on his second visit in October
If I’d seen
that I’d have recommended a mortgage and I would not have recommended a
structural survey. It is a 1mm crack which could be due to plaster drying out
or in the skim finish to a plaster board backing, but you’d expect such a crack
to follow the edges of the board. It is not more likely to be a settlement
crack. I’d still pass it.
The
defendant’s attention was drawn to photograph A4 showing the crack behind the
boiler flue. He said:
I didn’t look
in the lounge on the other side of that wall. There is a crack on the other side
but it is not opposite the crack in the photo. I should have looked on the
other side. I walked through the lounge and I saw nothing. That crack is not
connected with damage to the walls.
Both plaintiffs
said that they had seen the crack in the lounge and there is beyond question a
crack there. Both Mr Baines and Mr Bell agree that that is so, although there
is some difference between them as to its precise position and significance.
Mr Baines has
been in practice doing building society valuations for nearly 40 years. He does
about 300 a year. He also does structural surveys. The building society’s
valuer’s inspection is cursory, he said, compared with a structural survey. He
regarded the defendant’s report as fair for the property, ‘as I saw it’, he said,
based on making a reasonable job of his inspection. He said:
On my first
inspection I saw signs of movement in the external brickwork over eight courses
below the cill of the front window. There were hair cracks below the lounge
window and in the soldier arch but no cracks below the damp proof course. There
was some lipping of the bricks below the damp proof course to a maximum extent
of 3/8ths of an inch displacement. None of this was significant, nothing
indicated settlement. They were minor matters; the building was not
structurally unsound and there was no indication of collapse.
Internally, Mr
Baines found a slight vertical crack below the point where the flue pipe
entered the brickwork to which he attached no significance. It could have been
caused by heat or by some work near to it. He did not agree that the crack went
right through the chimney breast. The crack in the lounge, he said, does not
correspond directly with the crack in the kitchen and there was no lateral
movement of the chimney breast. He agreed that the crack in the bedroom (on
photographs A7 and C8) was not a hair crack but an expansion crack. Even if the
valuer had seen the crack as in C8 he could have passed the property without
being in dereliction of duty at all, but he accepted that the crack in C8 was
caused by some nominal movement in that corner of the house. In C8 the crack
seems considerably larger than in A7. That suggests continuous movement, he
said. ‘Knowing what I know now, that doesn’t surprise me,’ he said. Externally,
he agreed that the crack in the brick in photographs B11, 12 and 13 would admit
the blade of a penknife, though he still called it a hair crack. So far as the
floor in the lounge was concerned, there was a ruptured area some 2 to 3 feet
square, raised some 3/8th of an inch with powdered concrete below, then a
series of 1/8th-inch-wide serious cracks radiated from that. It was not the
worst case of sulphate damage which he had seen.
Mr Baines
accepted that there was a duty of care on the valuer and that if the valuer
were negligent the prospective purchaser might suffer loss. In his view, no
professional man would disclaim liability for negligent advice.
Mr Bell has
been in practice as a chartered surveyor in the area since 1970. He prepares
valuations for building societies as part of his general practice. He said that
‘settlement’ included lateral structural movement and not only downward
movement of a building. This was with reference to question 9 on the valuer’s
report: ‘In your opinion is the property affected by settlement?’ His definition of settlement was not
challenged. Here, said Mr Bell, he found that the brickwork in the vicinity of
the damp-proof course had been pushed laterally outwards. He said:
At the time
of my inspection this defect was readily apparent; it merited further
attention. If I had been the building society valuer here I would have drawn
attention to it myself or advised the building society either to decline the
proposal or to recommend further reports. If the cracks which I found here were
taken singly each on its own would not be serious but if, as here, there was a
lot of cracks, as a surveyor I’d wonder why; so too with the distinct hump in
the hall in the vicinity of the radiator. On visual examination alone I
attributed that to hard core expansion. In the lounge I found severe cracking
to the floor structure. As to the crack in the kitchen (photograph A4) if I’d
been the building society valuer I’d have noted it. I’d have said, that looks
interesting, is there a crack on the other side? and I’d go and look either immediately or
later in my inspection. That isn’t a heating crack or a drying out crack, it’s
bigger than that and it’s gone through the wall paper. I found severe cracking
on the chimney breast in the lounge. If that had been all I found I might have
passed the house but only with a qualification, perhaps to answer question 9
‘Yes’ or to say something in the general remarks, perhaps suggesting that there
might be need for a structural report, but by that stage I would have become
very suspicious.
He went on to
describe finding the cracking in photographs A7 and C8 which is, he said, the
inside of the cracked brick in photograph C11. ‘Finding these would have
reinforced my view,’ he said, ‘that there had been some settlement. In the
valuer’s shoes I would have told the building society that there was a problem
or that they should decline the proposal. The property should not have been
passed,’ were his words. He referred to additional factual information in his
report which I need not set out in detail, and to his supplementary conclusions
at p 15, para 18. Mr Bell would not have valued the bungalow at more than £9,000.
There was no formal challenge to that figure, as the parties were agreed that I
was to try liability only, but it was not in dispute that the bungalow was
worth significantly less than £26,500 and it was not argued that £26,500 was a
reasonable price to pay for it.
Cross-examined
about his experience Mr Bell said that he did some 500 building society
valuations and some 200 structural surveys a year and had done so since 1970
and before that he had acted as assistant on similar work to his late principal.
He accepted that only in some 10% of cases did prospective purchasers get
independent surveys; the remainder relied on the building society’s valuation.
He did not consider that the condition of the property between September 1983
(the defendant’s inspection) and April 1984 when he inspected would have
altered significantly. A building society valuer should look behind and over
and under furniture; even a hair-line crack may be suspicious. He said:
I don’t agree
that it was reasonable for the defendant to report as he did. These defects
were such as would be revealed by a building society valuation. They were
evident and not concealed and in my experience applicants normally rely on the
valuer’s report. The practice is to accept it. If he used the words ‘very
reasonable’ the applicant would think he was getting a bargain.
Mr Knipe, who
did not inspect the bungalow until June 1986, broadly confirmed Mr Bell’s
findings of fact and described certain additional features, in particular
cracking in the mortar joints below the lounge window and around the window
head, with displacement of the brickwork below the damp-proof course there and
on the side wall, and stepping on the damp-proof course along the rear half of
the left side wall. I need not repeat the whole of the details in his report,
particularly as he is dealing with a time about three years after the
defendant’s inspection. Mr Knipe was in the main confirming the sulphate attack
and advising on remedial measures.
From his
experience, Mr Knipe said the damage from sulphate attack in unprotected
circumstances, as here, normally becomes visible in 5 to 10 years and it was so
improbable as to be untenable that it was not there to be seen in September
1983 when the defendant made his inspection. The problems caused by colliery
shale were well known before 1966 and you would expect that a surveyor familiar
with his area would know that it was recognised as a suspect material. He
identified the crack in the lounge chimney breast area as a ‘matching crack’ to
the crack in the kitchen. It indicated movement of fairly severe magnitude and
it would indicate structural damage to any reasonable surveyor. A single crack
might be passed but not a series of cracks, particularly in the brickwork — a
reasonable surveyor could not disregard them. You would expect some note on the
surveyor’s report even if he did not identify sulphate attack; at least he
should suggest a further report, but he should not pass it.
In
cross-examination Mr Knipe said that there was clear movement of the brickwork
below the damp-proof course; a valuer in half an hour should note the outward
displacement of brickwork and would be alerted to something. The defendant
indicated in his report that he had looked at brickwork but does not mention
this displacement. ‘What was to be seen in 1983,’ he said, ‘applying my
experience, was not consistent with minor shrinkage cracking.’
Having had the
opportunity of reviewing and reconsidering the whole of the evidence, I have
concluded that I prefer and accept the evidence of Mr Knipe and Mr Bell and of
the plaintiffs themselves to that of the defendant and Mr Baines. It follows
that I find that there were in fact on September 19-20 1983 when the defendant
inspected the premises cracks in the walls and brickwork and displacement of
the brickwork visible to the naked eye of a size and to an extent that, at the
very least, a reasonable surveyor carrying out a building society
they indicated the real possibility of settlement or other structural damage:
that, in Mr Bell’s words, there was a problem. In those circumstances to ‘pass’
the house for mortgage purposes or to describe the price payable as ‘very
reasonable’ was, on the assumption that the defendant owed a duty of care to
the plaintiffs, unquestionably negligent. Mr Little, in his careful and
comprehensive submissions on the defendant’s behalf, while inviting me to
consider, as I have done, the possibility that the plaintiffs’ expert witnesses
might have been applying a higher test than was required of the defendant as a
building society valuer, did not dispute on the facts which I have found them
to be (rejecting as I do Mr Little’s submissions upon the facts which I have
rejected) negligence would be established.
The main
question here, negligence being established, as Mr Little contended, was
whether or not on the facts the defendant owed any duty of care in law to the
plaintiffs.
That a duty of
care can exist in similar circumstances is illustrated by the decision of Park
J in Yianni v Edwin Evans & Sons [1982] QB 438. The question
there in broad terms, as the learned judge described it, was whether surveyors
who in a valuation report on a dwelling-house for a building society negligently
misrepresented its value are liable to purchasers who in reliance upon the
statement as to its value purchase the house and in consequence suffer damage.
The defendants, the surveyors there, admitted negligence but contended that
they owed no duty of care to the plaintiff. Park J, relying on Hedley Byrne
& Co Ltd v Heller & Partners Ltd [1964] AC 465 and Anns v
Merton London Borough Council [1978] AC 728 (particularly the latter),
concluded that the duty of care would arise if on the evidence he was satisfied,
as he was, that the defendants knew that their valuation of the house in so far
as it stated that the property provided adequate security for an advance of
£12,000 would be passed on to the plaintiffs who, notwithstanding the society’s
literature and the service of the notice under section 30 of the Building
Societies Act 1962, in the defendant’s reasonable contemplation would place
reliance on its correctness in making their decision to buy the house and
mortgage it to the building society. He applied and adopted the words of Lord
Wilberforce in Anns at p 751H:
There was a
sufficient relationship of proximity such that, in the reasonable contemplation
of the defendants, carelessness on their part might be likely to cause damage
to the plaintiffs.
Park J went on
to consider what has been called ‘the second stage’ of Lord Wilberforce’s
formulation of principle: whether or not there were considerations which ought
to negative or to reduce or limit the scope of the duty of the class of persons
to whom it is owed or the damages to which a breach of it may give rise and
determined that there were not. I note at once that there was no suggestion in Yianni’s
case of anything of the nature of a disclaimer of liability except to the
extent that the building society’s notice under section 30 of the 1962 Act
excluded any warranty that the purchase price was reasonable. It is to be
remembered that in the Hedley Byrne case in fact there was an effective
disclaimer of responsibility.
The speech of
Lord Wilberforce in Anns has been subjected to more recent analysis: see
eg Lord Keith of Kinkel in Governors of the Peabody Donation Fund v
Sir Lindsay Parkinson & Co Ltd [1985] AC 210 at p 240:
There has
been a tendency in some recent cases to treat these passages as being
themselves of a definitive character. This is a temptation which should be
resisted. The true question in each case is whether the particular defendant
owed to the particular plaintiff a duty of care having the scope which is
contended for, and whether he was in breach of that duty with consequent loss
to the plaintiff. A relationship of proximity in Lord Atkin’s sense must exist
before any duty of care can arise but the scope of the duty must depend on all
the circumstances of the case.
Most recently,
in Yuen Kun Yeu v Attorney-General of Hong Kong [1987] 3 WLR 776,
Lord Keith of Kinkel, giving the judgment of the Judicial Committee of the
Privy Council, reasserted that foreseeability does not of itself and
automatically lead to a duty of care: ‘Foreseeability of harm is a necessary
ingredient of such a relationship’ ie one apt to give rise to a duty of care
‘but not the only one’ — at p 783D.
In the same
context, reference should be made to the speech of Lord Bridge of Harwich in Curran
v Northern Ireland Co-Ownership Housing Association Ltd [1987] 2 WLR
1043 at p 1049 and to the speech of Lord Brandon in Leigh & Sillavan Ltd
v Aliakmon Shipping Co Ltd [1986] AC 785 at p 815.
Some criticism
of the decision in Yianni, based upon these most recently cited cases,
is to be detected in the decision of the Court of Appeal in Harris v Wyre
Forest District Council, reported in the New Law Journal for January
22 1988 at p 15 and in The Times newspaper*. I have had sight of a
transcript of the judgment. I should interpolate that since this judgment was
written the case has been reported in [1988] 1 All ER 691. In that case the
court, although minded to do so, was not prepared to overrule Yianni,
which, as Nourse LJ put it, had been followed at first instance in Westlake
v Bracknell District Council (1987) 282 EG 868 and in Ireland by
Costello J in Ward v McMaster [1985] IR 29, had been treated as
correctly decided but distinguishable on the facts in the Northern Irish Court
of Appeal by the late Gibson LJ in Curran v Northern Ireland
Co-Ownership Housing Association Ltd and had been accepted as good law
(though not mentioned by name) by and before the Court of Appeal in Smith v
Eric S Bush [1987] 3 All ER 179†. The point does not seem to have been
argued in the House of Lords in Curran [1987] 2 WLR 1043.
*Editor’s
note: Reported at p 132 ante.
†Editor’s
note: Also reported at [1987] 1 EGLR 157; (1987) 282 EG 326.
Mr Little
recognised that the defendant here knew that his report would be disclosed to
the prospective purchaser, who was an identifiable person. Since Yianni
the evidence was that the practice has grown up, and was followed in this case,
that building society valuation surveyors provide three copies of the report,
one being expressly for the prospective purchaser, who actually pays for it and
is known to pay for it. Nevertheless, the valuer is not contractually bound to
the prospective purchaser; nor indeed, save for providing the report, does he
have any contact with the prospective purchaser. The relationship is not one of
choice, he said; it results solely from the obligation imposed on every
director of a building society to satisfy himself that satisfactory
arrangements are made for assessing the value of the security on which the
society is to lend money: section 25 of the Building Societies Act 1962. I
cannot accept this: the surveyor is not obliged to accept instructions, but if
he does he accepts the consequential responsibilities, whatever they may be. Mr
Little did not contend that the mere existence of the statutory duty excluded
liability: indeed, section 30 makes it clear that liability on the part of the
society is not excluded unless the statutory notice is given.
There is no
doubt in my mind but that a sufficiently proximate relationship existed here in
so far as the defendant well knew that his report would be made available to
the plaintiffs. He said: He knew that his report would be seen by the
prospective purchasers. He knew that he had a duty of care towards the
applicants. He knew that there was only a 1 in 4 chance that the plaintiffs
would get a structural survey. He didn’t go to the property to check on its condition
only on its value. He was expected to look for signs of settlement. He saw no
signs of lipping of the brickwork: if there was lipping and depending on the
degree it would point to trouble. He thought it was badly constructed. I repeat
that passage from his evidence which I have already included in the recital of
the facts.
Mr Baines told
me that he thought the defendant made a reasonable job of his inspection and
that his report was fair to the property. A valuation survey is, and again I
repeat, cursory compared with a structural survey. In cross-examination he
agreed that a valuer in these circumstances has a duty of care to an applicant
for a mortgage and that if the valuer is negligent the applicant may suffer
loss.
The thrust of
the defendant’s case, in addition to the dispute as to the condition of the
house with which I have dealt, was that, despite what I have just recorded, no
duty of care arose in the circumstances. In Mr Little’s words: ‘The
circumstances in which the valuation report came to be made (and, I add, to be
provided to the plaintiffs) were such taken as a whole as to negative the
coming into existence of a duty of care.’
My attention
was invited to two decisions of the Court of Appeal, one or both of which are,
I understand, to be considered in the House of Lords.
In Smith v
Eric S Bush [1987] 3 WLR 889† the plaintiff applied to a building society
for a mortgage to assist her in buying a house. Certain aspects of the facts
there, taken from the judgment of Dillon LJ, are material here, and I read from
p 892E:
It has always
been the case that applicants for mortgages are required by the building
society to pay the fees for the valuation reports which the societies are by
the statute required to get. It used for many years to be the practice that the
building societies refused to disclose the reports to the applicants, on the
footing that they were only obtained for the building societies’ own purposes.
But this practice gave rise to widespread discontent in that applicants could
not see why they should not have copies of reports for which they had paid.
Before October 1980, therefore, the building societies had adopted instead a
new practice of making copies of the reports available to the applicants for
mortgages, but with extensive disclaimers of liability.
†Editor’s
note: Also reported at [1987] 1 EGLR 157; (1987) 282 EG 326.
In accordance
with this new practice, there was included in a somewhat lengthy set of
declarations just above the place where the plaintiff signed the mortgage
application form, the following:
‘I/We have read the notes for the
guidance of mortgage applicants and accept that if the loan is approved the
mortgage guarantee policy premium will be added to the loan. I/We accept that
the society will provide me/us with a copy of the report and mortgage valuation
which the society will obtain in relation to this application. I/We understand
that the society is not the agent of the surveyor or firm of surveyors and that
I am making no agreement with the surveyor or firm of surveyors. I/We
understand that neither the society nor the surveyor or the firm of surveyors
will warrant, represent or give any assurance to me/us that the statements,
conclusions and opinions expressed or implied in the report and mortgage
valuation will be accurate or valid and the surveyor(s) report will be supplied
without any acceptance of responsibility on their part to me/us.’
Just below
the plaintiff’s signature it is recorded that she had paid the inspection fee
which was £36.89. There is a somewhat similarly worded disclaimer of liability
in printed ‘Notes for the Guidance of Mortgage Applicants’ which it was the
practice of Abbey National to supply to all mortgage applicants, but I need not
refer to those notes because the disclaimer there adds nothing to what appears
in the mortgage application form, as above set out, and in the copy of the
defendants’ report which was supplied to the plaintiff as mentioned below.
The terms of
what was described in that case as ‘the disclaimer’ were as follows:
TO THE
MORTGAGE APPLICANT(S): IMPORTANT
1. THIS
DOCUMENT IS NOT A MARKET VALUATION, IT IS NOT AND SHOULD NOT BE TAKEN AS A
STRUCTURAL SURVEY. It has been obtained by the society from a qualified
surveyor or firm of surveyors to comply with section 25 of the Building
Societies Act 1962.
2. If you are
purchasing the property, you will receive a notice that the society does not
warrant that the purchase price is reasonable.
3. This is a
report to the society by its surveyor(s) and neither the society nor the
surveyor(s) give any warranty, representation or assurance to you that the
statements, conclusions and opinions expressed or implied in the documents are
accurate or valid.
4. The
surveyor(s) has/have made this report without any acceptance of responsibility
on his/their part to you.
Dillon LJ
recorded that the plaintiff admitted that she had read that and the word
‘disclaimer’ was used, as I read that report, in the context of the notice of
appeal. Again reading from the report, the matter came before the Court of
Appeal as follows:
By a notice
of appeal dated May 14 1986 the defendants appealed on the grounds, inter
alia, that (1) the recorder had erred in law and/or in fact in appearing to
hold that the disclaimers contained in the mortgage application form and/or the
valuation report were not to be construed as sufficient to exclude the
defendants’ liability to the plaintiff for negligence; (2) the recorder had
erred in law in appearing to hold that the disclaimers were subject to an
implied condition that there should have been a complete visual inspection of
all parts in the fabric, and in holding that the defendants had been in breach
of that condition, and had thereby rendered the disclaimers ineffective in
excluding the defendants’ liability in negligence; (3) the recorder had erred
in law in appearing to hold that the disclaimers did not prevent a duty of care
to the plaintiff arising; (4) the recorder had erred in law in failing to find
that the provisions of the Unfair Contract Terms Act 1977 were inapplicable to
the disclaimers; and (5) the recorder had erred in law and/or in fact in
appearing to find that it was not fair and reasonable for the defendants to
rely on the disclaimers, and in particular had failed to give sufficient weight
to certain evidence.
The
conclusions of Dillon LJ on this aspect of the case are set out at p 895C and
following:
Reference was
made in a general way in the course of argument to the well known line of
authorities, stemming from Alderslade v Hendon Laundry Ltd [1945]
KB 189, in which the courts have considered the principles which are applicable
to clauses which purport to exempt one party to a contract from liability to
the other party for the consequences of the first party’s own negligence.
Assuming, however, that those are the principles which ought to be applied to
the construction of these disclaimers, I find it impossible to conclude that
the disclaimers do not cover tortious liability of the defendants for
negligence. The final words in the notice on the copy of the report supplied to
the plaintiff, ‘The surveyor(s) has/have made this report without any
acceptance of responsibility on his/their part to you’, and the corresponding
words at the end of the declaration in the form of mortgage application are
really meaningless if they do not extend to responsibility or liability in
negligence. If authority is required, it is to be found in the speeches of Lord
Upjohn and Lord Pearson in Spalding v Tarmac Civil Engineering Ltd
[1967] 1 WLR 1508, 1526, 1529.
At common law,
as is recognised in Hedley Byrne & Co Ltd v Heller & Partners
Ltd [1964] AC 465 where there is no contract the assumption of a duty of
care can by appropriate words be avoided, eg where a reference is given
‘without responsibility’, and where a report is supplied subject to
stipulations disclaiming responsibility the recipient cannot accept the report
and ignore the stipulations: see per Lord Reid at p 492, and per Lord
Morris of Borth-y-Gest at p 504. Apart, therefore, from the Act of 1977, the
disclaimers relied on would, in my judgment, have provided an effective defence
for the defendants against the plaintiff’s claim.
I turn,
therefore, to consider issue (2), the effect of the Unfair Contract Terms Act
1977. Section 2 of the Act provides:
‘(1) A person cannot by reference to any contract
term or to a notice given to persons generally or to particular persons exclude
or restrict his liability for death or personal injury resulting from
negligence. (2) In the case of other loss or damage, a person cannot so exclude
or restrict his liability for negligence except in so far as the term or notice
satisfies the requirement of reasonableness . . .’
Section 11(3)
provides:
‘In relation
to a notice (not being a notice having contractual effect) the requirement of
reasonableness under this Act is that it should be fair and reasonable to allow
reliance on it, having regard to all the circumstances obtaining when the
liability arose or (but for the notice) would have arisen.’ Under section 11(5) the onus is on those
claiming that a contract term or notice satisfies the requirement of reasonableness
to show that it does.
He continued:
Whether in any
particular case it is fair and reasonable in all the circumstances to allow
reliance on a notice excluding liability for negligence must, of course, depend
on the circumstances of the particular case. In that sense no case is a
precedent for any other case. But the circumstances of the present case are
very ordinary, and we are told that there were many other cases waiting the
outcome of this appeal. That is not surprising considering the number of
building society surveys that are carried out. It appears that it is the
practice of very many, if not all, building societies to include as a matter of
course in their printed forms disclaimers, to protect the society itself and
its surveyors from all liability, in substantially the same terms as the
disclaimers in the present case.
It is common
ground that it was not part of [the surveyor’s] duty to carry out a full
structural survey of the house, and this was understood by the plaintiff. She
knew that she was taking a chance on there being no hidden defects in the house
which would not have been apparent on a reasonably careful visual inspection of
the house. To hold that the surveyor in such a case as the present cannot rely
on the disclaimers does not involve extending the surveyor’s obligations so as
to make it incumbent on him to detect such hidden defects. His obligation is
still merely to carry out a reasonably careful visual inspection.
But where he
is dealing with a property at the lower end of the market and he knows that the
purchaser is likely to rely on his report, and not instruct his or her own
surveyor, I find it very difficult to see why it should be fair and reasonable
to allow him to rely on an automatic blanket exclusion of all liability for
negligence if his visual inspection of a property turns out not to have been
reasonably careful.
Glidewell LJ
summarised as the two issues: (1) On their face, did the words of the
disclaimer suffice to prevent any duty of care being owed by the defendants to
the plaintiff; (2) If so, did the disclaimer satisfy the requirement of
reasonableness under sections 2(2) and 11(3) of the 1977 Act?
At p 898E he
said:
In my view,
the wording of the disclaimer set out in the notice on the defendants’ report
and valuation did suffice to prevent the defendants owing any duty of care to
the plaintiff. In other words, it was so worded as to relieve them of all
liability in negligence.
He then went on
to consider whether the notice satisfied the condition of reasonableness and
held that it did not: accordingly it was ineffective as a disclaimer.
Sir Edward
Eveleigh regarded the words in red on the notice as not merely a disclaimer of
liability but also a warning that the report is of limited value as a survey
report. He continued, at p 899H:
If the
plaintiff had relied on the report to an extent which would be unreasonable,
bearing in mind the warning, there would be no liability on the defendants and
no need to consider the efficacy of a notice excluding liability.
Here there
seems to be an echo of Lord Wilberforce’s ‘second stage’.
At p 900 Sir
Edward said this:
The report did
not reveal what a valuation report would have revealed if properly prepared,
albeit for its limited purpose. On the contrary, it asserted that the property
was readily saleable for the purpose of owner occupation. The plaintiff relied
on it in this respect but the report did not merit even that degree of
confidence. The warning, in my opinion, was not such as to make it unreasonable
for the plaintiff to rely on the report as she did. Therefore, the
defendants will be liable to the plaintiff unless the notice is effective to
exclude liability.
In this court
counsel has not sought to argue that the defendants would not have been liable
in the absence of a notice of disclaimer. None the less, I have analysed the
position because I think it is important to bear in mind the basis of the
defendants’ liability when considering whether or not it would be fair and
reasonable to allow reliance on the notice, having regard to all the
circumstances obtaining when the liability arose.
A relevant
part of the circumstances obtaining when liability arose was the fact that the
report stated that the house was readily saleable for the purpose of owner
occupation and was likely to remain so. There was no warning that this
assertion was unreliable. It would have been perfectly simple to discover the
dangerous state of the premises. No structural survey was needed for that. The
least attention to the task that the plaintiff was entitled to expect from the
defendants would have revealed the fault. The defendants’ fault can hardly be
regarded as a mere accidental error or omission.
I therefore
am of the opinion that it would not be fair and reasonable to allow reliance on
a disclaimer which might, I know not, be effective in other circumstances.
It has been
necessary to set out extracts from those judgments at some length because of
the observations upon the case in the Court of Appeal in Harris v
Wyre Forest District Council.
Before turning
to that case, however, I must first refer to the judgment of the late Mr John
Wilmers QC, sitting as a deputy judge of this court, in Stevenson v Nationwide
Building Society (1984) 272 EG 663. In that case, the prospective purchaser
negotiated a loan on the basis of an application form which he signed, which
included a clause stating, inter alia, that the inspection carried out
by the society’s valuer (who was in fact a staff valuer and an employee of the society)
was not a structural survey and might not reveal defects which such a survey
would reveal, inviting consideration of a structural survey, and concluding:
I/We
understand that the report and valuation on the property by the society’s
valuer is confidential and is intended solely for the consideration of the
society in determining what advance (if any) may be made on the security and
that no responsibility is implied or accepted by the Society or its valuer for
either the value or condition of the property by reason of such inspection and
report.
The deputy
judge decided that although the valuer was called on to do a building society
valuation and not a structural survey he had not, on the facts, exercised
reasonable skill or care and that if he were liable the society would be
vicariously liable for his negligence. The question which remained, and leading
counsel for the plaintiff expressly accepted it, was whether the words which I
have set out constituted a valid disclaimer. If so, ‘unless something else
operated to displace the effect of those words’, said the deputy judge, ‘the
defendants are entitled to rely on them’. Counsel for the defendants invited
attention expressly to the speeches in Hedley Byrne and the deputy judge
accepted as apposite and adopted the words of Lord Morris of Borth-y-Gest at p
504:
The society
in the present case by the words which they employed effectively disclaimed any
assumption of a duty of care. They stated that they only supplied the report on
the basis that it was without responsibility. If the applicant chose to receive
it and act upon it he cannot disregard the definite terms upon which it was
given.
The deputy
judge found nothing to displace the effect of those words and so went on to
consider whether or not section 2(2) of the 1977 Act applied. Counsel for the
defendant contended that the disclaimer was a warning to the plaintiff that he
should not rely on the words used in the report; a statement dissuading the
recipient of a report from relying on it negatived any duty of care and so
excluded or restricted liability. On that basis, counsel appears to have argued
that section 2(2)(iii) would catch the disclaimer so that the effect would be
the same. The deputy judge then turned to section 11(3) and concluded that the
disclaimer passed the test of reasonableness. The plaintiff accordingly for
that reason alone failed in his claim.
Some account
of the facts in Harris is necessary. The plaintiffs were looking for a
house at under £10,000. They sought the assistance of the defendant council,
which operated a policy of making loans on older residential properties on the
security of which banks and building societies were in general unwilling to
lend. They provided standard mortgage application forms, one of which the plaintiffs
obtained from the vendor’s selling agent. The form which they signed read, so
far as material:
. . . the
valuation is confidential and is intended solely for the information of Wyre
Forest District Council in determining what advance, if any, may be made on the
security and that no responsibility whatsoever is implied or accepted by the
Council for the value or condition of the property by reason of such inspection
and report. (You are advised for your own protection to instruct your own
Surveyor/Architect to inspect the property) I/We agree that the Valuation
Report is the property of the Council and that I/We cannot require its
production.
Certain
factual differences between Harris and the instant case are to be noted:
1 The claim there was brought against the
lender as well as against the surveyor.
2 The surveyor was an employee of the
lender.
3 The loan was (presumably) sought and made
under some statutory power of the local authority, and
4 The surveyor’s report was expressed to be
and accepted as confidential to his employers.
Nourse LJ,
giving the leading judgment, posed the question whether a duty was owed. He
referred to the speech of Lord Pearce in Hedley Byrne at p 539 and went
on to say:
I would
therefore frame the essential question which we have to decide in these terms:
were the circumstances such that the defendants ought reasonably to have
recognised both the importance which would be attached to the valuation by the
plaintiffs and their own answerability to them in making it? By now it will be obvious that that question
cannot be answered without considering the terms and effect of the disclaimer
contained in the mortgage application form.
For reasons
which I have already set out, I am satisfied that in the present case the
defendant knew or, at best for him, would, if he had applied himself to the
matter (assuming he did not), have known that the plaintiff would attach
importance to his report in respect both of his valuation of the house and his
statements as to its condition (including in this omissions of defects which in
the context of the report should not have been omitted). Equally there can be
no question but that he as a professional man would recognise his answerability
for his report save only to the extent that he can shelter behind the
disclaimer.
Three points
must be made clear.
1 This defendant was not the servant of the
building society.
2 This defendant personally gave no
disclaimer, nor was he, as I have said, in a contractual relationship with the
plaintiff.
3 Mr Baines said in evidence, as I have
already recorded, that no professional man would disclaim liability for
professional advice. One can see the force of that, for what is the advice
worth if it is in effect said to be worthless.
The Court of
Appeal in the Harris case concluded that the existence of the disclaimer
prevented the creation of a duty of care. Nourse LJ put it like this:
For these
reasons I am of the opinion that the defendants never came under a duty of care
to the plaintiffs. While others might frame the essential question in different
terms, I do not see that they could answer it in a different sense. Moreover,
the disclaimer was as effective in the case of Mr Lee as an individual
defendant as it was in the case of the council themselves. He at all times
acted as a servant of the council, who could only reasonably have been expected
to act through their servants. The references to the council therefore included
Mr Lee as an individual.
That Kerr LJ
came to a similar conclusion, based on the ‘commercial purposes’ of the lender
(the surveyor being a servant and not an independent professional adviser)
appears from this passage from his judgment:
I agree with
Nourse LJ that in view of the superstructure of decided cases and changes in
practice which have followed Yianni it would not be appropriate for this
court to consider, on the very different facts of this case, whether that
decision can stand. But its inherent jurisprudential weakness in any ordinary
situation is clear. Suppose that A approaches B with a request for a loan to be
secured on a property or chattel — such as a painting — which A is proposing to
acquire. A knows that for the purpose of considering whether or not to make the
requested loan, and of its amount, B is bound to make some assessment of the
value of the security which is offered, possibly on the basis of some expert
inspection and formal valuation. Then assume that B knows that in all
probability A will not have had any independent advice or valuation and is also
unlikely to commission anything of the kind as a check on B’s valuation. B also
knows, of course, that any figure which he may then put forward to A by way of
a proposed loan on the basis of the offered security will necessarily be seen
to reflect B’s estimate of the minimum value of the offered security. Suppose
that A then accepts B’s offer and acquires the property or chattel with the
assistance of B’s loan and in reliance — at least in part — on B’s willingness
to advance the amount of the loan as an indication of the value of the property
or chattel. Given those facts and no more, I do not think that B can properly
be regarded as having assumed, or as being subjected to, any duty of care
towards A in his valuation of the security. Even in the absence of any disclaimer
of responsibility I do not think that the principles stated in Hedley Byrne
& Co Ltd v Heller & Partners Ltd [1964] AC 465 support the
contrary conclusion. B has not been asked for advice or information but merely
for a loan. His valuation was carried out for his own commercial purposes. If
it was done carelessly, with the result that the valuation and loan were
excessive, I do not think that A can have any ground for complaint. And if B
made a small service charge for investigating A’s request for a loan, I doubt
whether the position would be different; certainly not if he were also to add a
disclaimer of responsibility and a warning that A should carry out his own
valuation.
It may be,
but I agree that we should not decide this general question on the present
appeal, that the particular circumstances of purchasers of houses with the
assistance of loans from building societies or local authorities are capable of
leading to a different analysis and conclusion. But be that as it may. A
crucial distinction between Yianni and the present case is that in Yianni
there were no express disclaimers of responsibility and warning to
potential purchasers to carry out their own inspection as there were here. In
my view such disclaimers and warnings must be of the utmost relevance in
answering the primary question whether or not a duty of care can properly be
held to exist. Or, more accurately in contexts such as the present, whether or
not such a duty had been assumed.
The learned
lord justice then went on to deal with the disclaimer which he referred to as
the exemption clause. He set out the terms of the disclaimer in that case to
which I have already referred and continued as follows:
The judge
expressed the view that the terms of this provision were not effective to afford
any protection to either of the defendants in negligence, and that it did not
empower the council to make any loan which, but for this disclaimer, would be
statutorily prohibited. The latter is obviously right, and since Smith v
Eric S Bush [1987] 3 WLR 889 will evidently be considered by the House of
Lords in the near future I express no view on the first part of this statement.
What matters, and where I part company with the judge’s reasoning in any event,
is in the following sentence:
‘In those circumstances
I propose to ignore the exemption clause when considering whether or not
liability attaches to either defendant.’
With respect,
I think that this involves a confusion of thought. In order to decide the
primary question whether or not the defendant owes any duty of care to the
plaintiff it is not relevant to determine the precise legal effect of the terms
of any disclaimer or other warning, on their true construction, let alone by
the application of the Unfair Contract Terms Act 1977. Consideration of the
legal effect of any such provisions only arise if and when the existence of a
duty of care has been established. However, in determining whether or not the
circumstances warrant the inference that any such duty of care was owed by the
defendant to the plaintiff, any disclaimer of responsibility and warning
addressed by the defendant to the plaintiff may be of the greatest importance.
The correctness of this proposition is borne out by all the citations from Hedley
Byrne which Caulfield J has set out in his judgment and which I therefore
do not repeat.
Of course,
disclaimers of responsibility and warnings will be ineffective to the point of
irrelevance in situations where the existence of a duty of care is not open to
doubt.
Then Kerr LJ
gave what he described as an ‘absurd illustration’ — the driver of a motor car
displaying a sign on the top of his car — ‘No liability accepted for any
collision — keep out of the way.’
Kerr LJ
continued:
But in regard
to statements, ie words as opposed to deeds, the position is inevitably more
complex. In such cases the entirety of the statements made must be considered
in order to determine whether or not the maker should be held to have assumed,
or for some reason to be subjected to, a duty of care to the person addressed.
A disclaimer of responsibility for the accuracy of the statement, or a warning
that its reliability should be checked independently, must then be of the
greatest relevance.
In Smith v
Eric S Bush (supra) this aspect appears to have been disregarded in
the defendant’s submissions, whatever may have been the reason. The existence
of a duty of care was conceded or assumed, and the court was merely asked to
decide the effect of the Unfair Contract Terms Act 1977. In the present case,
on the other hand, the position was different, but Schiemann J nevertheless
disregarded the disclaimer and advice altogether, as shown by the passage
quoted above. In my view, this was an erroneous approach to the question
whether or not the defendants were under a duty of care to the plaintiffs. For
that purpose the council’s disclaimer of responsibility and advice to have an
independent inspection must be considered together with the council’s statement
that it was willing to advance £8,505 on the property subject to a number of
essential repairs. When these statements are considered as a whole, as they
should be, then it is in my view not open to conclude that the council assumed
any responsibility for the reliability of the valuation, nor that it can for
some other reason be held to have been subject to a duty of care to the
plaintiffs.
The
contemplation of an intervening inspection qualifies the principle of Donoghue
v Stevenson [1932] AC 562 as Mr Ashworth QC [counsel for the
appellant defendants] rightly reminded us. And I would not accept that the
charge of £22 paid by the plaintiffs can by itself create a duty of care in the
face of the disclaimer and warning.
Kerr LJ went
on to conclude that the Unfair Contract Terms Act 1977 had no relevance in that
case. That issue never arose, since it arises only if the existence of a duty
of care and a breach of it have first been established.
Caulfield J
agreed and added this reason:
In my
judgment it is implicit from these quotations
that is to
say the quotations from Hedley Byrne,
that a
potential tortfeasor can avoid the incidence of a duty of care and in my
judgment, as my Lord has explained, no duty was assumed by the first defendant.
So far I am only introducing my reason for concluding here that the second
defendant would not on these facts have assumed a duty because I think it is
implicit in Hedley Byrne that the speaker or writer of the statement
should have the opportunity to make clear whether he is assuming any duty, as
the first defendant did in this case. The second defendant by virtue of his
position as a servant of the first defendant is not given any opportunity at
all to decide whether or not he wishes to assume a duty of care towards the
plaintiff; so in my judgment he is well remote from assuming a duty of care towards
the plaintiff. The most natural requirement mentioned by Lord Reid cannot
possibly exist as regards the second defendant. Accordingly, in my judgment,
the second defendant owed no duty, because he never assumed the duty expressly
or by implication towards the plaintiff.
Nourse LJ
considered expressly the effect of the Unfair Contract Terms Act 1977 in this
context. Having set out the words of sections 1(1), 2(1) and 11(3) he
continued:
The governing
provision in this case, being one where there is no liability for death or
personal injury resulting from negligence, is section 2(2). When adapted to the
present case, and with the definition of negligence in section 1(1)(b) read
into it, the subsection provides that a person cannot by reference to a notice
given to particular persons exclude his liability for the breach of any common
law duty to take reasonable care, except in so far as the notice satisfies the
requirement of reasonableness. Mr Ashworth submits that when section 2(2) is
spelt out in this way it would seem to apply only where a duty of care already
exists. A notice which has prevented it from coming into existence is not one
upon which the subsection bites. Mr Johnson [counsel for the respondent
plaintiffs] submits that the wording applies as naturally to the latter case as
it does to the former. He also relies on the words of section 11(3) ‘having
regard to all the circumstances obtaining when the liability arose or (but for
the notice) would have arisen’, as showing that the Act expressly contemplates
the inclusion of a case where a notice has prevented the duty from coming into
existence. This is a short question of statutory construction . . . . Only two
views are possible. Either the 1977 Act applies to all cases of negligent
misstatement where a disclaimer has prevented a duty of care from coming into
existence or it applies to none. I find this question to be both difficult and
uncomfortable: difficult because either construction of section 2(2) appears to
be tenable; uncomfortable because Mr Ashworth’s argument could have been
advanced, but evidently was not, by either of the experienced counsel who
represented the defendants in Stevenson v Nationwide Building Society
and Smith v Eric S Bush (a firm). Giving it the best
consideration I can, I have come to the conclusion that the argument of Mr
Ashworth represents on balance the more natural reading of section 2(2). The
contrary argument seems to require reading the words ‘liability for the breach
of any common law duty to take reasonable care’ as including ‘liability for the
breach of what without the notice would have been a common law duty to take
reasonable care’. Moreover, the words in section 11(3) on which Mr Johnson
relies are found in a provision defining the requirement of reasonableness and,
as such, are peripheral to the governing provisions of section 2(2). I would
therefore hold that the 1977 Act has no application to this case.
Respectfully,
I am not sure that either Mr Moxon-Browne in Stevenson or Mr Hague QC in
Smith v Bush did not advance the argument obviously advanced by
Mr Ashworth in Harris, that the 1977 Act applied to none of the cases of
negligent misstatement where a disclaimer prevented a duty of care coming into
existence. In Stevenson, in passages of the report which I have already
read, Mr Moxon-Browne appears to have done so. In Smith v Bush,
apart from the reference in the grounds of appeal to which I have already
referred, the argument for counsel for the defendant is summarised at p 894 in
the judgment of Dillon LJ, firstly at p 894F:
On this
appeal two points only are raised to which I shall come. The defendants do not
dispute the recorder’s findings that . . . in preparing his report Mr Cannell
owed a duty of care to the plaintiff, apart from the disclaimers which I have
mentioned
and at H
the
defendants submit, however, that the disclaimers, ie the provisions set out
above in the form of mortgage application signed by the plaintiff and in the
notice in red on the copy of Mr Cannell’s report which was supplied to the
plaintiff, have the effect of absolving the defendants from all liability for
negligence which would otherwise have fallen on them.
Glidewell LJ,
in the passage which I have already read, described the first issue as this:
‘On their face, did the words of the disclaimer suffice to prevent any duty of
care being owed by the defendants to
the passage to which I have already referred, put the matter somewhat
differently at p 899H.
If the
plaintiff had relied on the report to an extent which would be unreasonable
bearing in mind the warning, there would be no liability on the defendants and
no need to consider the efficacy of a notice excluding liability. However, in
so far as the words constitute a warning, they do not, in my opinion, warn a
person to place no reliance at all on the report. They do not say that it is
dangerous to rely on the report for what it purports to be or for what it says.
The report did not reveal what a valuation report would have revealed if
properly prepared, albeit for its limited purpose. On the contrary, it asserted
that the property was readily saleable for the purpose of owner occupation. The
plaintiff relied on it in this respect but the report did not merit even that
degree of confidence. The warning, in my opinion, was not such as to make it
unreasonable for the plaintiff to rely on the report as she did. Therefore, the
defendants would be liable to the plaintiff unless the notice is effective to
exclude liability.
There is, as I
see it, a plain difference of judicial opinion demonstrated in the two cases in
the Court of Appeal, perhaps less eloquently expressed in this way: on the one
hand (in Harris), the disclaimer being part of the material from which a
duty of care is to be deduced prevents that duty ever being established: on the
other hand (Smith v Bush), where a special relationship of
professional adviser and recipient of that advice is established so as to
impose on the former a duty of care, a disclaimer only operates either as a
notice within section 2 of the 1977 Act or, perhaps, to limit the ambit of the
duty by imposing on the latter limitations on the extent to which he can
reasonably rely on the advice.
For a number
of reasons, I have come to the conclusion for the purposes of this case that
the second of these alternatives is that which I should follow.
First, there
are substantial and significant differences between the facts of the present
case and the facts of Harris: the facts here approximate more closely to
those in Smith v Bush. Here there is an independent surveyor, not
an ‘in house’ employee; the report, far from being confidential, is intended to
be seen by and is known to be likely to be relied on by the plaintiffs. The
surveyor himself does not purport to limit his liability and makes no
disclaimer. To deny the existence of settlement and to describe the price as
very reasonable are two of the very things that the defendant knew or must have
known would be relied on by the prospective purchaser and would make the
prospect of his having a structural survey even more remote than usual, and
that itself no more than a 1 in 4 chance.
Second, my
attention was invited to section 13 of the 1977 Act; this does not seem to have
been cited in any of the cases to which I have already referred, nor was the
decision of the Court of Appeal in Phillips Products Ltd v Hyland [1987]
1 WLR 659 (though this case was decided on December 14 1984).
Section 13(1)
of the 1977 Act reads:
To the extent
that this Part of this Act prevents the exclusion of any liability it also
prevents — (a) making the liability or its enforcement subject to
restrictive or onerous conditions; (b) excluding or restricting any
right or remedy in respect of the liability, or subjecting a person to any prejudice
in consequence of his pursuing any such right or remedy; (c) excluding
or restricting rules of evidence or procedure; and (to that extent) sections 2
and 5 to 7 also prevent excluding or restricting liability by reference to
terms and notices which exclude or restrict the relevant obligation or duty.
The facts in Phillips’
case can be summarised. The plaintiffs hired a JCB excavator from the second
defendants. It was a term of the contract of hire (condition 8) that the
excavator driver (Mr Hyland, the first defendant) should be, for all purposes
connected with the working of the plant, regarded as the servant or agent of
the plaintiffs, who alone should be responsible for all claims arising in
connection with the operation of the plant by the driver. The first defendant
so negligently drove the excavator that it collided with and did considerable
damage to the plaintiff’s buildings.
The material
issues were defined as follows by Slade LJ, giving the judgment of the court
(the second defendant’s name is Hamstead):
These three
issues are: (i) On the admitted facts of the present case, was there on the
part of Hamstead ‘negligence’ within the definition of that word contained in
section 1(1) of the Act? (ii) If the
answer to (i) is ‘Yes’, is clause 8 a contract term which, apart from the
effect of the Act, can properly be said to ‘exclude or restrict’ Hamstead’s
liability for negligence within the meaning of these words in section 2(2) of
the Act? In considering this issue, it
is necessary to bear in mind the concluding words of section 13(1) which bring
within the ambit of section 2(2) terms ‘which exclude or restrict the relevant
obligation or duty’. (iii) If the answers to (i) and (ii) are both ‘Yes’, does
clause 8 satisfy the requirement of reasonableness, within the meaning of that
phrase as used in the Act?
Slade LJ
continued:
As to (i), the
argument for Hamstead is simple, and runs on these lines. If a claim is based
on contract, ‘negligence’ within the definition of section (1)(a) can
have occurred only if there has been a breach of ‘any obligation, arising from
the express or implied terms of a contract, to take reasonable care or exercise
reasonable skill in the performance of the contract’. So, it is said, if in the
case of such a claim the contract has by its express terms excluded liability
for negligence, there can ex hypothesi have been no breach of any obligation of
the nature referred to in section 1(1)(a). The claim in the present
case, as it happens, is of the nature referred to in section 1(1)(b):
the breach of a common law duty to take reasonable care is alleged. Here again
a similar argument is advanced. It is suggested that there can be no breach of
a common law duty to take reasonable care, within the meaning of section 1(1)(b),
by a party to a contract which contains a condition which purports to absolve
him from liability for negligence.
These
arguments, though superficially attractive, are in our judgment fallacious. If
correct, they would make nonsense of the Act. They would mean that the very
contractual term which pre-eminently is suitable to be subject to review for
reasonableness under the Act would be taken out of its scope. The Act, however,
is not nonsensical. Its purpose is not defeated by the wording of its first
section. In our judgment, in considering whether there has been a breach of any
obligation of the nature referred to in para (a) or of any duty of the
nature referred to in para (b) or (c), the court has to leave out
of account, at this stage, the contract term which is relied on by the defence
as defeating the plaintiffs’ claim for breach of such obligation or such duty,
and section 1(1) should be construed accordingly.
If any
support were necessary for this construction of section 1(1), it is to be found
in the concluding words of section 13(1) of the Act. For these words make it
clear that section 2 is capable of negativing the effect of contract terms
which purport to exclude or restrict ‘the relevant obligation or duty’.
Even if the
words ‘or of any duty of the nature referred to in para (b) or (c)’
are obiter they are of strong persuasive authority.
Slade LJ
continued:
Accordingly,
though the validity of clause 8 still remains to be considered, on the admitted
facts of this case there was ‘negligence’ on the part of Hamstead falling
within section 1(1)(b) of the Act. This took the form of a breach
(subject to the effect, if any, of clause 8) of Hamstead’s common law duty to
take reasonable care, by reason of the fact that Mr Hyland who, subject to
clause 8, was Hamstead’s servant, had caused the loss to Phillips by his
negligence in the performance of his duties as such servant. Issue (i)
therefore has to be answered ‘Yes’.
That the words
to which I have referred were not or may not have been obiter appears from Slade
LJ’s consideration of issue (ii). I read a short passage:
On the
particular facts of this case the effect of clause 8, if valid, is to negative
a common law liability in tort which would otherwise admittedly fall on the
plant owner. The effect of clause 8 making ‘the hirer alone responsible for all
claims’ necessarily connotes that by the clause the plant owner’s
responsibility is excluded. In applying section 2(2) it is not relevant to
consider whether the form of a condition is such that it can aptly be given the
label of an ‘exclusion’ or ‘restriction’ clause. There is no mystique about
‘exclusion’ or ‘restriction’ clauses. To decide whether a person ‘excludes’
liability by reference to a contract term, you look at the effect of the term.
You look at its substance. The effect here is beyond doubt. Hamstead does most
certainly purport to exclude their liability for negligence by reference to
clause 8. Furthermore, clause 8 purports to ‘exclude or restrict the relevant
obligation or duty’ within the provisions of section 13(1) of the Act. Issue
(ii) must be answered ‘Yes’.
Finally, the
court went on to consider the third issue and concluded that the term was a
fair and reasonable one.
Looking now at
section 2, the words used are ‘contract term’ and ‘notice’; notice must refer
to some extra-contractual ‘disclaimer’ or exclusion or restriction of
liability. I cannot find, and the court in Phillips did not suggest, any
different approach to the exclusion or restriction of liability where the
‘disclaimer’ was a notice and not a term. Moreover, the use in section 13(1)
with specific reference to section 2 of the words ‘prevent excluding or
restricting liability by reference to terms and notices which exclude or
restrict the relevant obligation or duty’. I have underlined
forensically the words ‘notices’ and ‘duty’. Excluding a duty postulates the
existence of a duty in respect of which a defendant seeks by notice to exclude
or restrict liability; in those circumstances the Act seems to me to say
plainly that such a notice falls to be considered under the provisions of the
Act.
For these
reasons I have concluded that in the present case, on the facts, the disclaimer
to be effective to relieve the defendant of liability must satisfy, if it can,
the requirement of reasonableness: section 2(2). It is common ground that the
onus of establishing reasonableness is on the defendant.
Mr Little
relied on four facts:
(1) the number and prominence of the warnings;
(2) that the warnings were read by the
prospective purchasers;
(3) the obligation to report arises from section
25 of the Building Societies Act 1962 and not from any personal relationship to
the prospective purchaser: see also section 11(3);
(4) the report in any event could only be of
limited coverage and was made at low cost.
He accepted
that the onus was on him and contended that there was nothing wrong in
principle (though contrary to practice) in a professional adviser limiting his
responsibility for the contents of his report, which could still be of some
assistance even if no reliance could be placed upon it.
However, Mr
Little accepted that the 1977 Act could properly be regarded as being in the
field of consumer protection so that ‘reasonableness’ was to be considered in
that context; further, that on very similar facts — on this point — Dillon LJ
in Smith v Bush at p 896E regarded the circumstances of that case
— as, in my view, this — as ‘very ordinary’ and continued:
But where he
the surveyor
is dealing
with a property at the lower end of the market and he knows that the purchaser
is likely to rely on his report, and not instruct his or her own surveyor, I
find it very difficult to see why it should be fair and reasonable to allow him
to rely on an automatic blanket exclusion of all liability for negligence if
his visual inspection of a property turns out not to have been reasonably
careful.
I respectfully
agree and on the facts of this case am of the same opinion. The defendant has
not discharged the onus upon him of satisfying the requirement of reasonableness.
Mr Little
further contended that the plaintiffs should be held contributorily negligent.
They were, he said, at fault in failing to take proper care to preserve the
value of their property: see Nance v British Columbia Electric
Railway Co Ltd [1951] AC 601. In a sense, as Mr Little conceded, the only
thing the plaintiffs could and should have done was to commission a structural
survey, but as one of the limbs on which the defendant’s negligence was
established was the defendant’s knowledge that the plaintiffs would not, or
were highly unlikely to, commission such a survey the point is not a valid one.
Either the defendant was to blame or the plaintiffs were wholly responsible.
There is, in my view, no middle way such as a division of fault would imply, and
I can find no basis at all on the facts here for holding the plaintiffs at
fault or guilty of contributory negligence and I reject this argument.
In the result,
therefore, there will be judgment for the plaintiffs for damages to be
assessed.
It was ordered
that the damages, if not agreed, be assessed by the circuit judge taking
official referee’s business at Shrewsbury or such other venue as may be agreed
between the parties. The plaintiffs were awarded their costs of the issue of
liability against the defendant and there was an order for taxation of the
plaintiffs’ costs under the provisions of the legal aid scheme.
