Car parking – Lease – First defendant surveyor negotiating lease of land for car parking – Lease failing to include rent reflecting car-park turnover – Claimant landowners claiming first defendant in breach of duty of care – Claimants seeking damages – Whether defendant in breach of duty to exercise reasonable skill and care – Whether damages assessable as at date of breach – Claim allowed
The claimant landowners brought an action for negligence against the first defendant surveyor, which had negotiated four leases of the claimants’ land for airport car parking. The claimants alleged that a surveyor (A) employed by the first defendant had been negligent and in breach of his duty to exercise skill and care in relation to three of those leases for the years 2000, 2002, and 2003. The leases were due to run until August 2026 and the evidence was that earnings from the car parks for the years 2005 and 2006 would be £845,000 and £1.804m respectively. The main allegation against the first defendant was that A should have negotiated the leases with rents that reflected the earnings of the car park and provided for the claimants to receive 80% of those earnings. The second defendant solicitor and one of its partners (F), the claimants’ solicitor, were joined on the basis that if A was in breach of his duty, F must also have failed in his duty.
The claimants sought to recover the difference between the rents that they would receive under the leases as negotiated and the rents that they would have received had A performed his duty. The defendants argued that the correct approach was to value the reversions that the claimants had and those that they might have had if A had performed his duty.
The questions were, inter alia: (i) whether the defendants were in breach of duty; (ii) if so, whether the claimants had lost a significant chance of obtaining a rent with a turnover element; (iii) the value of that chance; and (iv) the date from which damages should be assessed.
Held: The claim was allowed.
On the evidence, A, on behalf of the first defendant, had failed in his duty to the claimants in negotiating the 2002 and 2003 leases but not in respect of the 2000 lease. No contributory negligence arose on the part of the claimants. F was not in breach of his duty to the claimants and the claims against him and the second defendant failed.
The claimants were entitled to damages on the basis of what A was most likely to have obtained in negotiations had he done no more or less than was required to fulfil his duty. Considering the relative strengths and weaknesses of the negotiating positions of the parties, the claimants had lost the chance of a turnover rent as a result of the breach of duty: Stokes v Cambridge Corporation (1961) 180 EG 839 and J Murphy & Sons Ltd v Railtrack plc [2002] EWCA Civ 679; [2002] 2 EGLR 48; [2002] 31 EG 99 distinguished.
Where property was acquired as a result of negligent advice, whether the advice came from a surveyor, solicitor or other professional, the usual measure of loss was the difference in value between the purchase price paid and the value as properly described at the date of purchase. The grant or acquisition of a lease was of an interest in land and, where the complaint was of negligent advice to a tenant as to rent, the court was bound to hold that damages were to be assessed on the basis of the values at the transaction date, unless particular circumstances made that inappropriate in that such an approach would not accurately reflect the overriding compensatory rule. There were no special circumstances to show that a valuation basis should not be applied: County Personnel (Employment Agency) Ltd v Adam R Pulver & Co [1986] 2 EGLR 246 and Inter-Leisure Ltd v Lamberts [1997] PLSCS 94 applied; Cemp Properties (UK) Ltd v Dentsply Research & Development Corporation (No 2) [1991] 2 EGLR 197; [1991] 34 EG 62, Knight v Lawrence [1991] 1 EGLR 143; [1991] 01 EG 105 and CIL Securities Ltd v Briant Champion Long [1993] 42 EG 281; [1993] 2 EGLR 164 considered.
There was no justification for assessing the value at dates later than the transaction dates. Nothing had happened that required the taking of a later date to satisfy the overriding rule that the measure of damages should put the injured party in the same position as it would have been in had it not sustained the wrong.
Anthony Speaight QC and Kevin Farrelly (instructed by Stockler Brunton) appeared for the claimants; Timothy Lamb QC, Edwin Johnson QC and John Gallagher (instructed by Williams Holden Cooklin Gibbons LLP) appeared for the first defendant; Michael Douglas QC (instructed by Simmons & Simmons) appeared for the second defendant/first third party and the second third party.
Eileen O’Grady, barrister
