Negligence — Dismissal of allegations of negligence by purchasers of house against local authority and surveyors instructed by building society to carry out mortgage valuation — Bewildering variety of diverse expert opinions as to structural condition of house — House in question was situated in marshy area on made-up ground where some properties had suffered from settlement — An adjoining house had tie bars on the front and side, evidently put there at some time to control further movement — Plaintiffs were young first-time buyers who purchased the subject house for
of evidence was given at the trial, analysed in detail by the judge — He
identified the major issues of fact which he had to determine, namely, (1)
whether the subject house had in fact suffered major subsidence by the time the
plaintiffs were actively considering a purchase; (2) was there at that time
continuing movement in the adjoining property; (3) was it necessary to
stabilise the latter before carrying out works to the subject property? — The
judge’s answers to all three questions was ‘no’ — ‘The basic fabric of the
house after eighty years remained sound’ — No movement in the adjoining house
between 1982 and 1985 had taken place — There was no evidence that the
adjoining house had caused damage to the subject property — These answers
really disposed of the action, but the judge expressed views obiter as to the
duties of the authority and the surveyors — The authority owed no duty to the
plaintiffs to take reasonable care to prevent damage save to the extent that
they had assumed responsibility in their schedule of repair works; that responsibility
was the narrow one of advising where it was necessary to rectify a settlement
specifically identified in the schedule — The surveyors were under a duty of
care to the mortgagees, as was clear from Smith v Bush, but they had
fulfilled that duty by approaching the matter in the way an experienced and
skilled surveyor should — The judge expressed the view that if they had failed
to exercise reasonable care the disclaimer would have been invalidated by the
Unfair Contract Terms Act 1977, but these opinions were academic in view of the
findings of fact* — Action dismissed
*Editor’s
note: See on this point the decision of the Court of Appeal in Harris v
Wyre Forest District Council at p 132 ante.
The following
cases are referred to in this report.
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
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
This was an
action by the plaintiffs, Mr and Mrs Green, against Ipswich Borough Council and
Spurgeons, chartered surveyors, of Ipswich, alleging breach of duty in respect
of the plaintiffs’ purchase of the property at 49 Gatacre Road, Ipswich.
John Peppitt
QC and Julian Chichester (instructed by Birketts, of Ipswich) appeared on
behalf of the plaintiffs; Michael de Navarro and Martin Porter (instructed by
Prettys, of Ipswich) represented the first defendants, Ipswich Borough Council;
Mark Lomas (instructed by Mills & Reeve Francis) represented the second
defendants, Spurgeons.
Giving
judgment, JUDGE FOX-ANDREWS QC said: On July 21 1982 Mr and Mrs Green
contracted to purchase 49 Gatacre Road, Ipswich, for the sum of £12,000. This was
a terraced house, on the south side of the road, built in 1903. It was a modest
quality house which was likely to make it particularly attractive to young
first-time buyers. Mr and Mrs Green, the plaintiffs in this action, were such
buyers. They had married only shortly before the purchase.
The plaintiffs
entered into the contract to purchase on the basis of an offer of an advance of
£11,484.25 from the Abbey National, who had taken the advice of surveyors
called Spurgeons. The plaintiffs wished to make substantial improvements to the
house. They hoped to obtain a 75% grant from the council towards the cost of
these improvements.
Through no
fault of Mr and Mrs Green, what should have been an exciting venture and
challenge turned into a nightmare. Less than three weeks after they had
contracted to purchase and before they had moved into occupation, they were
advised, on August 10 1982, that, because of cracking observed by Mr King and
Mr Hook, employees of the council, they should obtain the advice of a structural
engineer. The plaintiffs went at once to a Mr Matthews, of Maddocks Lusher
& Matthews, chartered civil and structural engineers of Ipswich. Mr
Matthews is a member of both the principal professional bodies. He advised in
writing in September 1982, sending his report to Mr Green on September 7. His
primary conclusion was that the majority of the cracking in no 49 had been
caused by excessive movement of the gable wall of the adjoining house no 47,
which lay immediately to the east of no 49 and was the end house of that
terrace. The gable wall was therefore the eastern wall of the property. Mr
Matthews’ principal recommendation was that no 47 should be stabilised before
major repairs were undertaken to no 49.
A sustained
attack on Mr Matthews for reaching that conclusion and for making that
recommendation has been made by the council in the course of this trial. The
council’s own borough engineer, a Mr G E Mann, who was not called as a witness,
in an internal report dated January 27 1983, reached and made essentially the
same conclusion and recommendation. His conclusion is not evidence, but the
fact that he reached that conclusion is evidence.
The problems
facing Mr and Mrs Green and indeed the council were exacerbated by the fact
that the occupier of no 47 had died intestate. By October 1983 the council had
obtained a grant of letters of administration. It was hoped that the Abbey
National would be the buyers of no 47. It was then to be improved by an
improvement grant provided by the council. For a short period it was to be used
jointly by the Abbey National and the council as a show house. It was then to
be sold to a particular mortgage applicant of the Abbey National. The council
of course had to take and be seen to be taking all reasonable steps to obtain
the best price, and for this reason no 47 was put on the market.
On January 26
1984, Abbey National wrote a letter to Spurgeons, in which they said:
Unfortunately
due to the instability of the adjoining property at no 47 causing structural
damage to the mortgaged property, our applicants have been unable to occupy it
since the date of purchase. Neither have they yet been able to obtain agreement
to a local authority grant until no 47 has been sold and stabilised by the
purchaser. The latter arrangements are proceeding at the present time.
Spurgeons were
asked to make a report, particularly on whether there had been any
deterioration to no 49. On February 1 1984, Spurgeons replied, saying:
It is our
opinion that no further significant movement has taken place since our original
inspection and whilst further movement cannot be ruled out in view of the state
of the property adjoining, it is our opinion that further movement in the
immediate future is unlikely providing that the adjoining property is dealt
with as required by the local authority.
By the spring
of 1984 funds for improvement grants were drying up
The council became more insistent for a detailed structural engineer’s
investigation of no 47. The Abbey National were by that time looking for a
greater financial contribution from the council in order to reduce their
losses.
On August 20
1984, a Dr Wady, who was not called as a witness, a partner of Mr Matthews,
made a report on no 47.
In September
1984 the plaintiffs instructed the firm O A Chapman & Son, chartered
surveyors and valuers of Norwich and Lowestoft. The partner concerned was Mr
Michael W Chapman FRICS and an associate of the Incorporated Association of
Architects and Surveyors. He inspected in September and October 1984, on one
occasion with Mr Matthews, and took some 38 photographs. He reported on October
16 1984. His finding was that there had been extensive subsidence in and
movement to no 49. He went on:
Whilst
accentuated by the severe movement in 47 Gatacre Road, there can be no doubt
that 49 Gatacre Road and its neighbour at 51 Gatacre Road has subsided of their
own accord.
He criticised
Spurgeons.
In October
1984 the Abbey National reached the decision not to purchase no 47. On November
13 1984 there was a formal letter before action sent to both defendants on
behalf of the plaintiffs. On November 16 1984 Spurgeons wrote to the Abbey
National, saying:
and it is our
opinion in any event and notwithstanding anything that the Society has done,
that Mr Green should have obtained a full structural survey on receiving a copy
of our report.
On the same
day a Mr Hill, a partner of Mr Matthews, set up monitoring points on no 49. The
reason for this was that at that time there was a possibility of no 47 being
demolished and therefore accurate measurements of crack widths might be needed
in evidence.
In November
1984 Mr A N Towell FRICS, associate of the Chartered Institute of Arbitrators,
a chartered building surveyor, was instructed on behalf of the underwriters of
Spurgeons. Before carrying out any inspection of no 49, Mr Towell was
instructed on behalf of AS Construction Services Ltd (AS), who were considering
purchasing this property, to prepare a scheme for the underpinning of no 47. He
concluded that substantial settlement of no 47 could have been caused by
drainage under the foundations, the mechanism of which I shall have to consider
later. He recommended an underpinning scheme, for reasons I shall have to
consider later. As regards no 49 he reached an opinion, which he says he never
altered, that the settlement of no 49 was slight and that the movement of no 47
had virtually no effect, let alone structural effect, on no 49. He took a
number of photographs in December 1984. In reaching his conclusion, he had
considered copies of Mr Matthews’ report of September 1982 and Mr Mann’s report
of January 1983.
On January 21
1985 AS contracted to purchase no 47 for £5,800. On January 24 1985 closing
orders were served by the council in respect of both 47 and 49. Thereafter, AS
speculatively carried out remedial works to no 47, including underpinning of
the gable wall and by the rear of no 47, in order to stabilise the premises.
On October 17
1985 Mr and Mrs Green commenced proceedings against both defendants. In
December 1985, if not earlier, the council were satisfied that all necessary
works to no 47 to ensure structural stability had been carried out. The closing
order on no 47 was lifted.
In December
1985 Mr Thomas Akroyd was instructed by the council. He is a chartered civil
engineer, chartered structural engineer, bachelor of science and technology,
Manchester master of science, researcher in soil mechanism and bachelor of law
(King’s College) London. His assistant, Mr Hooper, carried out an extensive
investigation in December 1985, at which time he took a number of photographs.
On January 20 1986 Mr Hill took a second set of readings at the monitoring points
on no 49. On his estimation the only significant change appeared to be that the
crack on the front wall had opened up an average approximately 0.8 mm.
By early 1986
the council had approved the plans and specification for structural repairs to
no 49, in accordance with plans submitted by Maddocks Lusher & Matthews. No
underpinning of the existing parts of no 49 was required. The work to no 49 was
then carried out. Mr and Mrs Green were able to get a £7,650 improvement grant,
being 75% of £10,200. In about March 1986 the closing order on no 49 was
lifted. Finally, nearly four years later the unfortunate Mr and Mrs Green were
able to go to live at no 49.
Because of the
divergence of views between Mr Matthews and Mr Mann on the one hand and Mr
Towell on the other, the underwriters of Spurgeons, on Mr Towell’s
recommendation, brought in an engineer, Mr Brian Cowley, of Jenkins &
Potter, who is a chartered engineer FICE, fellow of the Institute of Structural
Engineers, member of the Construction Engineers, associate of the Chartered
Institute of Arbitrators, FRSA, and a partner of that firm. He gave a report in
June 1986, essentially agreeing with Mr Towell. He was not prepared to say that
the movement of the gable wall of no 47 and the other walls attached to it
would have no effect at all on no 49, but such effect as it would have had
would have been insignificant and would in his opinion have in no way affected
the structural stability of no 49. In June 1986 Mr Cowley gave a written report
containing the views already indicated.
In September
1986 Mr Chapman gave a written report containing the views that I have already
indicated. On October 1 1986 Mr Towell likewise gave a written report. On
October 7 1986, Mr Akroyd gave his written report, in which he damned Mr
Matthews’ views in trenchant terms. His view was that the settlement of nos 47
and 49 had ceased years ago, that there had been no continuing movement of
either house and that the underpinning of no 47 had been unnecessary.
The case
against the council as it ultimately emerged is a narrow one. The plaintiffs
allege that on June 17 and July 20 1982 building control officers made
statements and representations which were false, untrue and misleading, which
the council had no or no reasonable grounds for believing to be true. The
statements said to be false were (a) those made on June 17, namely, that no 49
was only suffering from slight settlement and that the only remedial work
required in relation to such settlement was some repointing and mortar filling,
and (b) those made on July 20 that no 49 was only suffering from slight
settlement and that the only additional remedial work to the repointing and
mortar filling would be the provision of steel retaining brackets for the rear
stairwell wall, together with the rebuilding of the brickwork over the doorway
in the wall, including the provision of a new lintel. It is further alleged
that the council were negligent in the carrying out of the inspections on those
two dates.
The case
against Spurgeons is that in a report and mortgage valuation made by them on
June 23 1982 to the Abbey National, Spurgeons made representations which were
false, untrue, inaccurate and misleading and which they had no or no reasonable
grounds for believing to be true. The representations said to be false were
that the settlement suffered by no 49 was slight, that it would be rectified by
such remedial works as were required by the council, that, provided works
listed in the council’s schedule of early June 1982 were carried out and no 49
was redecorated, it would have a value of £12,000 and would represent suitable
security for an advance of £11,400 odd by the Abbey National and would be
readily saleable for £12,000 for the purposes of owner-occupation.
The trial
commenced on April 29 of this year. During the course of the trial on April 30
the parties’ experts, excluding Mr Cowley, carried out distortion surveys of
the party walls of 49/47 and 49/51, together with the plumbing of the front
elevation of 47, 49 and 51 (exhibit 4). On May 12 1987 some of the experts
investigated the position and the nature of the tie bars in no 47 and a
remarkably different state of affairs was established from that previously
believed to be the case.
I have had the
evidence of all the experts already indicated. In addition, I have had the
evidence of Mr B V Spurgeon, Mr and Mrs Green and from four employees of the
council: Mr Hook, Mr King, Mr Best and Mr Eaton.
Against that
background, it is now necessary to examine in detail the evidence. This case
depends to a significant extent on the nature of the construction of nos 47 and
49.
Various plans
and photographs of nos 47 and 49 have been put in evidence. I should identify
the photographs as far as possible in chronological order. Exhibit 1A is a
photograph of the front elevation of no 49, taken in the summer of 1981.
Exhibit 1B is a photograph of no 49, taken in the autumn of 1983. As Appendix D
to Mr Chapman’s September 1986 report are some 35 photographs, taken in
September and October 1984. A description of these photographs is to be found
in section 3.3 of his report. Three additional photographs, taken at the same
time, form exhibit 12. As Appendix D to Mr Towell’s report of October 1 1986
are six photographs taken by him in December 1984. A description is given
against each photograph. These I have numbered. On December 18 1985 Mr Hooper
of Akroyd took the 17 photographs which are annexed to the Akroyd report dated
October 7 1986. Mr Cowley took two photographs in June 1986, but I need not
refer to them. Exhibit 9
no 49 in 1986 after the remedial works so far as that brickwork is concerned
was completed. Exhibit 10 is a photograph taken by Mr Hooper on April 30 1987
after remedial works to the brickwork above the dining-room window at the rear
of no 49 had been completed. The positions of the camera for the photographs in
the reports of Mr Chapman and Mr Akroyd have been helpfully put on a plan,
which has not been given an exhibit number. No 49 was a two-storey house, with
a two-storey back extension and, beyond that, a single-storey extension. For
the purposes of identification I use figure 2 to Mr Akroyd’s report, which
contains the floor plan of no 49. On the ground floor, room no 1, which is the
front room, was also described in the evidence as the sitting-room. Room 2,
which is the back room, was also described as the dining-room. Behind room 2
was the kitchen. Although not shown in this plan, behind the kitchen was a larder,
fuel store and lavatory. On the first floor, room 3, the front bedroom, was
sometimes described as bedroom no 1. Behind room 3 was room 4, also called the
back bedroom or bedroom no 2. Room 5 has been variously described as the
bathroom or bedroom 3.
The house was
built in a marshy area on what was made-up ground. The terrace, in which it was
one of five, was built of solid nine-inch brickwork, with a pitched roof. In
1982 the original roofing of the terrace had been replaced with interlocking
concrete tiles. The party walls of no 49 with nos 47 and 51 were also of
nine-inch brickwork. Access to upstairs was gained by a staircase set in a
stairwell of cross walls, running east-west, between the front and back rooms.
Access to the staircase from the ground floor was via an opening in the front
cross wall of the dining-room at its western end, that is to say close to the
party wall with 51. The staircase debouched between the front and back bedrooms
on the west side. As figure 2 of Mr Chapman’s report shows, there were openings
in both cross walls on the first floor at both the eastern and western ends.
Except for the
reversed positions of the kitchen and bathroom no 47 was of a similar layout to
no 49, as appears from Mr Towell’s exhibit C, sketch 1. But of course, as
already indicated, it had a gable wall to the east, being the end of the
terrace. In 1982 the front of no 47 was already faced with render and the other
walls with pebbledash. Certain tie-bar plates were visible from the outside:
see, for example, Mr Chapman’s photographs 4, 16, 34, 35, exhibit 12 (the
photographs showing the flank walls of both nos 47 and 45) and Akroyd’s figure
4.
The purlins of
the five houses in the terrace ran from east to west. In no 47 they had
originally been embedded in the gable wall. The joists ran from north to south.
The flooring was supported on the joists. The openings for the doors and
windows in the front elevations in nos 47, 49 and 51 can best be seen in the
top elevation drawing of sketch 3 of Mr Towell.
Under the
Housing Act 1974, Part VII as amended by the Housing Rents and Subsidies Act
1975 and the Housing Act 1980, Ipswich Borough Council were empowered to make
certain grants. The reference to sections in this part of the judgment are
references to sections of the 1974 Act.
One such grant
was an improvement grant under section 56(2)(a), being the grant for the
improvement of a dwelling by works which encompassed more than the provision of
standard amenities (section 56(2)(b)). However, the council could not approve
an application for such a grant unless they were satisfied that on completion
of the particular works the dwelling would attain the required standard. The
required standard was defined in section 61(3) as being that the dwelling inter
alia was in good repair, in conformity with such requirements with respect
to construction and physical condition as might for the time being be specified
by the Secretary of State. One such requirement was that the dwelling was in a
stable structural condition and was likely to provide satisfactory housing
accommodation for a period of 30 years. A council was empowered to make an
intermediate grant where the dwelling on the completion of the works would
provide satisfactory housing accommodation for a period of not less than 10
years.
Under section
57(1), no grant can be paid by the council unless the application is made in
accordance with the provisions of Part VII of the Act. By section 57(2), the
application for a grant must contain particulars of the works in respect of
which a grant is sought (the relevant works) and an estimate of their costs.
Mr Eaton, the
council’s present improvement officer, has satisfied me that a strict
interpretation and application of these provisions could dissuade the very
people who most needed the grants from applying. Once in general terms the
applicant’s works’ proposal was known, a council employee from the council’s
environmental health department (EHO) would be required by the housing
department, who handled grant applications, to visit the premises and make an
inspection record. Based on that record he would then propose a schedule of
improvements and repairs. I am satisfied that there was no statutory obligation
on the council to produce such a document. It was produced as a matter of
convenience both for the council and the applicant. In the absence of such a
schedule, the applicant himself would have had to prepare or cause to be
prepared a specification of the works. This in many cases might require the
services of a surveyor. From the council’s point of view, by producing and
serving a schedule they do not have to check a layman’s list, which could be a
time-consuming business. The council sent a copy of the schedule to the
applicants in early June. It was invariable that the copy of the schedule sent
to the applicant had attached to it advisory notes.
The building
control department was different from that which handled the improvement
applications. In section C of the blue bundle was a very detailed improvement
grant ‘flow chart’. Like the contents of such documents, it differed
significantly from what actually took place. Good sense demanded that whenever
a schedule contained any reference to settlement a copy of the application,
together with a copy of the schedule, should have been sent to the building
control department, who should have opened a file in the matter. Thus when the
applicant communicated with the building control department, as he was required
to do, that department would — or at least in theory should — have had readily
to hand the applicant’s file.
However, I am
satisfied that it did not ultimately work out in that way and certainly did not
work out in that way so far as the plaintiff’s application was concerned. From
that failure to lay down and follow that system, unfortunate consequences could
flow and it will be a matter for consideration in this case as to whether they
did and, if so, what the legal consequences are.
Mr Green was
unfortunately out of work in the spring of 1982. Mrs Green, however, was
working. She had previously been employed by the council and knew or was
acquainted with some of the council employees concerned in this action. At an
early stage in the hearing it seemed likely that Mrs Green’s former position
with the council had caused them to treat her application differently from the
manner in which applications were ordinarily dealt with. However, I am
satisfied that that is not so. The notes of the application form prepared by the
council at Red Bundle 10 appear to contemplate that only persons with an
interest in the property or a statutory right to be there will be applicable,
but question 3 on the previous page appears to contemplate that persons hoping
to acquire an interest but who had not yet done so may also apply.
Mrs Green
approached the Abbey National in early May 1982 in respect of premises in
Harvey Street, Ipswich, in which the plaintiffs were then interested. However,
the plaintiffs did not proceed with those premises because bad cracking was
noted.
By mid-May Mr
and Mrs Green had become interested in 49 Gatacre Road. Mrs Green approached
the Abbey National, who gave her encouragement. She wrote a letter to the
council’s area improvement officer, Mr Best, on or shortly before May 18 (Red
14) and enclosed a two-page document (Red 15 and 16). This had been prepared by
Mrs Green without assistance from others. This document listed matters to be
done or things to be checked. In respect of both the front and back bedrooms, she
had written ‘check on settlement’. In Red Bundle 9 to 11 is the application
form, partly completed by Mrs Green on May 18 1982 and partly completed by Mr
Green in April 1985 when the stabilisation works to no 47 were under
consideration. It is not clear whether the application form in its partially
completed state was passed to the council at the same or a different time from
the letter and the list to which I have just referred. Mr Best says that at
this time he knew that Mrs Green had not bought the property. It is unnecessary
to consider in detail what happened within the council to those documents. I am
satisfied that neither the letter nor the list was received by the building
control officer, at least for a very long time.
The housing
department, which embraced the area improvement officers, informed the EHO of
the application. Because it was possible that an intermediate rather than an
improvement grant might be apposite, two memoranda (Red 17 and 22) were sent by
the director of housing to the EHO. The reason for these
inspection of the property and prepare a schedule of items for improvement and
repair. This was done by a Mr Huffey of the EHO, and his documentation appears
at Red 20, 21 and 21A. On the basis of this inspection he then produced on June
8 the schedule which appears at Red 26-28, which he sent to the director of
housing. It is expressly conceded by the plaintiffs that Mr Huffey did not act
wrongly in preparing that schedule in the manner he did. On receipt of the
schedule the area improvement officer (within the housing department) checked
the schedule for typing errors, added the advisory notes which appear at Red 32
and 33, and sent it, together with a pro forma letter (Red 29) to Mrs Green,
shortly after June 8 1982. It was not sent to the building control officer
(BCO), which came within a department initialled DTS. It is unnecessary to set
out in length the contents of the schedule and the advisory notes, but I should
refer to certain limited passages:
The front and
rear entrance doors and frames are worn and/or ill-fitting and require overhaul
or replacement as necessary to leave in a sound working order (Red 31). All
internal doors are worn and/or ill-fitting and require overhaul or replacement
as necessary to leave in a sound working order on completion. There is evidence
of slight settlement to the front main wall of the property. This matter should
be discussed with a Building Control Officer to establish the extent of the
works required to remedy the defect (Red 32).
SETTLEMENT.
If it is necessary to rectify settlement or implement underpinning please
consult the Building Control Officer for advice. An estimate for carrying out
the works specified, based on his requirements, must be submitted as part of
the Grant Scheme (Red 33).
COMPLETION OF
WORKS. You must complete all the repairs required to make your house fit for
habitation. These repairs are marked in the schedule. Where other grants are
approved the repairs should be completed to a reasonable standard, as listed in
the schedule. In some cases the schedule of repairs may be negotiable, but you
must agree all adjunctions with the improvement officer before starting work
(Red 33).
By the
accompanying letters to the plaintiffs they were told that once they had agreed
with the improvement officer which works they had to do they should get
estimates and submit the estimates to the improvement officer.
The schedule
and its notes appear to be clear and straightforward. Where, as here,
settlement was raised, it was essential that the applicant should contact the
BCO. If, however, the applicant wanted to negotiate repairs to a reasonable
standard, as distinct from work necessary to ensure fitness for habitation,
then she had to go to the area improvement officer. Because of the
unsatisfactory system then in force, when Mrs Green, as she was required to,
spoke on the telephone on June 17 to Mr King, who was then the senior BCO
present, as his superior Mr Hook was on holiday, there was nothing in the
building control office relating to Mrs Green’s application or the inspection
and the EHO’s schedule. The discussion between Mrs Green and Mr King took place
in the morning. Mr King frankly conceded that his recollection of the telephone
call was not good. It would be surprising if it were otherwise. Mr King clearly
had extensive duties to perform. His primary task was to ensure that building
regulations and other building control requirements were complied with. This meant
inspecting numerous buildings in the course of a month. On any particular day
Mr King might have to make a substantial number of inspections. I am satisfied
that he received the telephone call just before he set off to make a number of
such inspections. I am satisfied that he said he had not got a copy of the
schedule. I think it likely that Mrs Green read out the second paragraph at Red
32 that I have just referred to.
A meeting was
arranged for a short time later that day at no 49. I am satisfied that Mr King
never said that it would be an informal visit. I find it likely that in the
course of the telephone conversation Mrs Green told Mr King that she was going
to buy the house. I am satisfied, though, that nothing was said by Mrs Green to
Mr King to indicate that her decision whether or not to purchase was dependent
upon Mr King’s advice. I think it likely that Mrs Green had a copy of the
schedule when Mr King arrived at no 49. The only settlement referred to in the
schedule was that to the front main wall of the property. This was the only
matter that Mrs Green had to refer to the BCO. It was for Mr King to establish
the extent of the works required to remedy that settlement only, so that
through him the council could advise. I am satisfied that primarily Mr King
directed his attention to the front wall of no 49. I find it likely, however,
that he entered no 49, walked through the front and back rooms on the ground
floor and went outside to the rear. I find that it is likely that Mrs Green did
say that in some places the window frames had come away. I am not satisfied Mrs
Green ever mentioned no 47 to Mr King or any worries in relation to that house.
I am satisfied that Mr King said that the settlement to the front main wall was
not serious, that all buildings in that area had some settlement, that it was a
nice little house in a quiet road and that all that was required was the
repointing of the joints. I am satisfied that he expressed no concern. Whether
he was justified in expressing those views is something I shall have to
consider later.
The principal
reason why I am satisfied that this was not an informal meeting is that,
following the visit, Mr King brought a log into existence for no 49, which
commences at Red 311. His entry for this visit on June 17 reads:
Discussed
settlement to front of property. Joints opened up in brickwork between living
room and front bedroom window. Minor movement joints to be repointed.
If this was no
more than an informal visit to be followed up by a formal visit, it is likely
that no log would then have been brought into existence, or some reference to
the fact that a formal visit was to take place would have been recorded in the
log. If the council policy had been followed, Mr King’s task on returning to
his office was to have obtained a copy of the schedule and then to have written
a memorandum to the area improvement officer stating the extent of the works
required to remedy the settlement defect. Unfortunately, by the time he went on
holiday sometime later, he had done nothing. I have had put in evidence as
exhibit 13 a statement Mr King made to the council’s solicitors on November 6
1985. Save in so far as I have made findings that accord with Mr King’s
statement, I am afraid I must reject it. In particular, I do not accept that Mr
King informed the plaintiffs that a further visit might be necessary or that
following his visit of June 17 Mr King contacted the EHO. I shall have to
consider what, if any, reliance was placed on the statement by Mr King to Mr
and Mrs Green.
Mr Green made
a formal mortgage application to the Abbey National on June 19 (Red 38-41).
Under section 25 of the Building Societies Act 1962 a building society which
made an advance on the security of a freehold or leasehold property had to
obtain a report from an experienced person as to the value of that property and
as to any matters likely to affect its value. Abbey National provided notes for
the guidance of mortgage applicants. I am satisfied that Mrs Green saw a copy.
I should read parts of the notes.
WHAT ARE
INSPECTION FEES FOR?
The Society is
required by law to obtain reports on properties on which mortgage advances are
made. For this purpose Surveyors are empowered to inspect each property and
report to the Board of Management treating the applicant’s business as strictly
confidential. When calling at occupied premises the Surveyor may quote your
name where necessary.
The Society
is able to offer you the choice of two types of report on the property, neither
of which is a structural survey. A copy of a Report and Mortgage Valuation is
available at no extra cost but neither the Society nor the Surveyor or firm of
Surveyors will warrant or give any legal assurance as to the accuracy of
statements made in the report or the validity of conclusions and opinions
expressed or implied therein. As an alternative you are recommended to have a
copy of a more comprehensive Report on Condition and Valuation made
available for a fee of £57.50 including VAT which is additional to the normal
inspection fee payable. This report which is subject to the Conditions of
Engagement (see copy enclosed) will incorporate details of the condition of the
property; comment on the purchase price or fair market value and give a
mortgage valuation.
The inspection
fee for the Report and Mortgage Valuation on a house whose purchase price was
£12,000 was £27.13. Mrs Green opted for the Report and Mortgage Valuation.
I should read
part of the declaration that she signed:
I accept that
the Society will provide me with a copy of the Report and Mortgage Valuation
which the Society will obtain in relation to this application. I 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 understand
that neither the Society nor the Surveyor or firm of Surveyors will warrant,
represent or give any assurance to me 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 his part to me.
On June 21
Spurgeons were instructed by Abbey National to prepare a Report and Mortgage
Valuation. I am satisfied that Spurgeons received the council’s schedule (Red
30-32) but not the advisory notes. Abbey National provided the form which
Spurgeons were required to complete. The form as completed by Spurgeons on June
23 is at Red 43-46. I should read out some of the contents of the completed
form. That part includes both the questions and the answers.
10 GENERAL OBSERVATIONS ON STATE OF BUILDINGS
INCLUDED IN MORTGAGE VALUATION
The property
is situated in area where certainly some settlement has taken place and this
property has suffered slight settlement both to the front and rear elevations.
The property next door ie no 47 has been tied back to the front and side and we
would imagine that the rods were inserted to prevent further movement of that
particular property. We note in the Schedule for the Borough of Ipswich the
settlement mentioned on the front elevation but there is no mention of the rear
movements. Providing the matter is discussed with the Building Control Officer
and the necessary remedial works carried out, we are happy with this situation.
We further refer to the Schedule from the Local Authority and providing these
works are satisfactorily completed as a condition of the granting of the
mortgage, together with the interior and exterior redecoration, consider the
property will represent a suitable security.
11 REPAIRS RECOMMENDED AS A CONDITION OF
MORTGAGE
As per
Schedule received from the Local Authority together with redecoration of
interior and exterior.
13 SUBSIDENCE, SETTLEMENT AND LANDSLIP
Have you
any knowledge of significant Subsidence/Settlement/Landslip/Ground Heave in
other properties in the immediate vicinity?
If so please comment.
Some evidence
of settlement in this property at both front and rear and also to the
adjoining one. This matter is covered, however, in the works required by
the Borough of Ipswich and we are prepared to accept the remedial works they
have advised.
14. GENERAL
(A) IS THE PROPERTY READILY SALEABLE FOR THE
PURPOSE OF OWNER OCCUPATION AND IS IT LIKELY TO REMAIN SO AT OR ABOUT THE
MORTGAGE VALUATION?
Will be when
the works have been satisfactorily completed.
(B) ANY OTHER IMPORTANT FACTORS?
Completion of
necessary works.
In red, in a
box at the foot of the form above Spurgeons’ certificate, appeared these words incorporated
by the Abbey National:
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 document are accurate or valid.
4 The Surveyor(s) has/have made this report
without any acceptance or responsibility on his/their part to you.
Spurgeons
therefore had clear notice that a copy of their report was likely to be
furnished to the mortgage applicants, who were named as Mr and Mrs Green. And
this is what occurred. I should read Abbey National’s letter of July 1 1982 to
Mr and Mrs Green:
To assist the
Society in considering your mortgage application a limited report on the
property has been obtained from a qualified Surveyor. I have pleasure in
enclosing a copy of this report for your personal information and hope that you
will find this helpful.
This report
has been obtained for the information of the Society as mortgagee and as a
prospective purchaser you may well require further and amplified information.
Your
attention is drawn to the important Notice in the report and I recommend that
you seek your own independent professional advice on any points concerning your
purchase over which you wish to be satisfied.
In the report
Spurgeons had given a gross value for mortgage purposes of £12,000.
The only
communication between Spurgeons and the plaintiffs prior to the plaintiffs
binding themselves to purchase the property was this copy of Spurgeon’s report.
I find the report in some respects unsatisfactory. In the course of Mr Spurgeon’s
examination he had observed what he considered to be slight settlement not only
to the front of the house but also in three places on the back. These places
were, firstly, to the soldier arch over the dining-room window, as appears in
Mr Chapman’s photo 5 and in Mr Towell’s appendix D; secondly and thirdly, in
the rear wall of the back extension, as appears in Mr Chapman’s photo 8.
Fractured brickwork below and above the window opening to the bathroom can be
seen. I think that the specific areas of manifestation of slight settlement to
the rear should have been identified. The answers to paras 10 and 11 of the
report should have made specific mention that the works to be done would also
include such additional works as the BCO might require to rectify the slight
settlement at the rear albeit the works were of a minor nature. Save for the
words ‘also to the adjoining one’, Mr Spurgeon did not answer the question
posed in question 13. What is abundantly clear from the report is that there is
not the slightest suggestion that the plaintiffs should obtain a full
structural survey. In these circumstances his comments on November 16 1984 to
Abbey National, earlier referred to, were incorrect.
On July 1
Abbey National sent to Mr and Mrs Green a copy of Spurgeons’ report, a mortgage
offer of £11,484.25, an acceptance and receipt of notices form and a copy of
their general mortgage advance conditions (GMA). The offer was on the terms of
the GMA conditions. The offer document warned that the GMA conditions should be
read carefully.
Para 3 of the
GMA provided:
SURVEY SERVICE
(a) Report and Mortgage Valuation.
This report
is made for mortgage purposes only.
(b) Report on Condition and Valuation.
This report is offered as an alternative
to 3(a) and gives a more comprehensive opinion on condition and marketability.
In neither
case is the Surveyor instructed to carry out a structural survey nor to test
the electricity, gas, water or drainage installations. Applicants who are still
unsure on any points are recommended to obtain independent specialist advice.
In offering a mortgage the Society does not warrant the price to be reasonable
nor accepts responsibility for the condition of the property.
I should read
three of the special conditions contained in the mortgage offer:
8 You are recommended to arrange execution of
the repairs detailed in section 11 of the Report and Mortgage Valuation,
enclosed herewith, but no retention will be made for the advance.
9 Improvement grants to be advised to Society
as soon as possible.
10 Final cost of essential repairs and
improvements to be advised to Society as soon as possible.
Mr and Mrs
Green signed the acceptance note on July 2 1982 (Red 57).
Mrs Green was
questioned about the disclaimer wording appearing in the various documents that
I have referred to in this judgment. Her recollection as to whether or not she
had read the various passages was vague. If it was necessary for me to make a
finding on this I would have held that she had read the various passages. But
the relevant findings appear to me to be that the disclaimers were sufficiently
clearly brought to Mrs Green’s attention or were sufficiently clearly expressed
for Mrs Green to be able to understand them. At the material time she was
acting both on behalf of herself and on behalf of herself and her husband.
Although the
plaintiffs were now moving towards committing themselves to the purchase of no
49, they did not in fact act on the recommendation in clause 10 of Spurgeons’
report and make an approach to the BCO about the necessary works in respect of
the settlement to the rear of the premises.
While the
other matters were going on, the plaintiffs sensibly were having the electrical
installations checked by the Eastern Electricity Board, and the timbers and
damp-proofing checked by Polysyne Ltd. The recommendations of these two
organisations were made on June 25 and 30 respectively (Red 47 and 49).
Builders at some stage were called in to give estimates.
The plaintiffs
instructed solicitors, Birketts, to act for them on the proposed purchase. They
made the usual enquiries before contract. They also employed an architectural
and structural designer, a Mr Hillick, who was not called as a witness. He was
employed for a kitchen extension that the plaintiffs wanted. I do not consider,
however, that his employment has any relevance to this action.
Somewhere
between July 14 and 16, Birketts sent a ‘Report on Contract’ (Red 64) to the
plaintiffs.
I should read
para 3 of that report:
THE CONDITION
OF THE PROPERTY
The Vendors
give no guarantee as to the condition of the property or its services and
equipment so that if defects materialise at a later date (whether or not they
exist now) you will, generally speaking, have no claim against the vendors. You
should therefore take steps by survey or otherwise to check as far as possible
that the building and all services are in good order.
Mrs Green,
when cross-examined on this paragraph, said:
Overlying all
this was the fact that Mr King had said there was nothing wrong with the
property. It was this that stuck in my mind. All these warnings were from
people who had not seen the property: Mr King had.
By July 16 the
plaintiffs had signed their part of the contract and so far as they were
concerned they considered that they were committed. On that date, Birketts sent
the signed part to the vendor’s solicitors.
I come now to
the events on July 20.
In their
letter of June 30 1982, Polysyne Ltd at para 3 had stated:
It is virtually
certain that some areas of plaster have been contaminated by mineral salts
brought up into the rising damp. Contaminated plaster is hygroscopic and will
remain persistently damp even after the dpc has been installed and the
underlying brickwork has dried out. It is therefore essential that the old
plaster is hacked off the treated walls to a height of 1 ft above the ‘tide
mark’ or to a height of 3 ft where no tide mark is visible, three to five days
after the installation of the dpc.
On or shortly
before July 20, Mr Green began hacking off the plaster of the cross wall facing
into the dining room. He gave as his explanation in chief that he had misread
the letter and thought it had to be done before Polysyne put in the damp-proof
course. Mrs Green, on the other hand, said that they thought they had found a
secret treasure. Mr Green described the matter in this way, in chief:
I moved the
plaster after contracts had been exchanged. This was [on] the dining room front
wall between two doors. It was over the door and the whole wall area. Entire
work was done in half an hour. It was easy to move plaster. Over the top of the
door to stairs was a step crack the size of a pencil. This caused concern. The
bricks were not well bonded.
Somewhat
unsatisfactorily, there is no good photograph showing the brickwork which was
exposed on this occasion.
I reject
entirely Mr Green’s explanation linked to the Polysyne letter. There was no
suggestion of rising damp in the cross walls. Mr Green agreed in
cross-examination by Mr de Navarro that rising damp had not appeared in the
cross walls on the ground floor. Mr Green did not at any time in his evidence
say that he was removing plaster up to the heights indicated by Polysyne. In
the same cross-examination Mr Green conceded that this work had nothing to do
with Polysyne. He gave then as his explanation that he was taking the plaster off
because, on tapping it, it had sounded hollow. It is perhaps significant that
this visit and the alleged representations now relied on only appeared by way
of amendment of the statement of claim on June 17 1986.
I find that
the following was the likely course of events. The only person from the council
who had visited the premises and with whom the plaintiffs had had contact was
Mr King. Mr and Mrs Green wanted to know whether the cost of remedying the
fractured brickwork exposed on removing the plaster was recoverable under the
improvement grant although not mentioned in the schedule. Believing that they
were the owners, naturally they did not want advice as to whether or not they
should go ahead with the purchase, but they did want to be advised whether the
remedial costs were recoverable. The obvious person to go to was Mr King. Para
11A of the reamended statement of claim is inaccurate when it states that the
plaintiffs contacted Mr King by telephone. He was then on holiday. When the
plaintiffs tried to get through it is likely they were put on to Mr Hook. I
think it likely that the telephone call took place on July 19, and I think it
likely that the schedule and other papers had still not come through to the
BCO. Mr Hook obtained copies. He would at once have noted that, although Mr
King had visited the premises, he had failed to make recommendations as to how
the slight settlement at the front should be dealt with. When Mr Hook arrived,
he had his attention drawn also to the defects on the rear elevation discovered
by Mr Spurgeon and to the cracking of the brickwork exposed by the removal of
the plaster. I am satisfied that essentially Mr Hook was saying that the
manifestations of settlement were not matters that gave him cause for concern,
that they represented only minor subsidence and that if certain works specified
by him — which were subsequently set out in a memorandum dated July 20 1982,
which appears under the signature of a Mr Ramsdale in Red 71 — were carried out
the slight subsidence would be effectively remedied.
I find that
these statements were made before contracts were exchanged. There is nothing
surprising in the fact that Mrs Green should have thought that contracts had
been exchanged. I am satisfied on the evidence of both Mr and Mrs Green that
they thought on July 20 that they were the owners of no 49 and the property was
theirs to do what they liked with. I am satisfied that on his visit Mr Hook was
unaware that Mr and Mrs Green were other than the owners. They did not suggest
otherwise. The pulling down of the plaster was an act more consistent with
ownership than otherwise.
But the fact
remains that, had Mr Hook on July 20 expressed concern as to the stability of
no 49, it is likely that Mr and Mrs Green would have at once contacted their
solicitor. By good chance the transaction would have been avoided. In these
circumstances it appears to me that if these statements were false they may be
material.
The only
subsequent events not earlier dealt with in this judgment that appear material
are the following. On July 23 1982 Mrs Green received an estimate in the sum of
£5,426 plus VAT from A E Blasby & Son Ltd on a pricing of a number of
paragraphs of the schedule. I am satisfied that it is likely that they were
asked to do this shortly before July 19. In their letter they said:
We have not
included in the above estimate for Item 3.8 as the work involved to rectify the
settlement has not been specified. Day work carried out against this item will
be charged at our current daywork rate.
Prior to August
10 no letter from the area improvement officer was sent to Mr and Mrs Green
setting out the works that were required to remedy the settlement in the
various areas seen by Mr Hook on July 20. By August 10 1982 when Mr Hook and Mr
King together visited the premises and advised the plaintiffs to instruct a
structural engineer, substantial further plaster had been removed than had been
the position when Mr Hook visited on July 20. Subsequently the remainder of the
plaster was taken off. The removal of the plaster revealed various cracks and
misalignment.
Three primary
issues of fact I have to determine are:
(1) Had no 49 suffered major subsidence by
June/July 1982?
(2) In June/July 1982 was there continuing
movement in no 47?
(3) Was it necessary to stabilise no 47 before
carrying out works to make no 49 fit for human habitation?
As to the
first issue, only Mr Chapman gives as his opinion that this was so. This is not
of course a head-counting exercise. But if the evidence was otherwise in
balance, the fact that all those with engineering qualifications were lined up
against him would obviously tip the scales. This issue is best approached by a
consideration of the cracking and other manifestations of settlement at its
worst at any time between June and July 1982 and the time of trial. If, for
example, such was the condition of cracking and misalignment and the like of no
49 in December 1985 that by that time a proper assessment was that it had
suffered severe subsidence, it will then be necessary to ascertain whether that
condition also obtained in June/July 1982.
FRONT
ELEVATION
(1) Front wall in area between western end of
cill of upper window and western lintel of lower window (Chapman photo 3;
Akroyd photo 14). Although described as a crack, it is in fact an opening-up.
The opening-up has been repointed in cement mortar at some stage. Parts of the
repointing had come out. There has been a movement of 49 to the east. I shall
have to consider later whether this was due to a settlement of the 47/49 party
wall or movement of the gable wall of 47. Across the face of 49 there had been
by December 1985 a fall of 18mm. This was significant movement.
(2) Gaps between western end of lintel of
upper window and brickwork (Akroyd photo 15). This I find only to be minor
movement.
(3) Gap between eastern end of lintel of upper
window and brickwork (Akroyd photo 15). This I find only to be minor
movement.
REAR
ELEVATION
(4) Soldier arch over dining-room window (Chapman
photo 5; Towell photo 4; Akroyd photo 4). The difference between these three
photographs is that the prop holding part of the arch up in the earlier
photograph is absent in the later ones. When looking at Mr Chapman’s
photograph, Mr Green said that before the prop was put up four bricks were in
danger of falling out. I cannot accept that. When the prop was removed the only
effect was to allow two bricks to fall very slightly. I accept the defendants’
evidence that the cost of remedying this defect would have been very small. I
think it likely that this defect was due to the design.
(5) Brickwork to arch above kitchen window
opening (Chapman photo 6). Such movement as took place here was of a
minimal nature.
(6) Brickwork over back door opening (Chapman
photo 7). Such vertical misalignment as there is was of a very minimal nature.
(7) Brickwork above and below window opening
to bathroom (Chapman photo 8). There is indication of some settlement here.
(8) Room No 1 Front Room (Front walls
and/or party walls) (Chapman photos 11, 12 and 13). Despite my earlier belief
that these photographs indicated that poor quality bricks had been used, I am
satisfied that that was not the case. They were soft bricks, and lime mortar —
not cement mortar — was used.
junction between the window frames and the brickwork and between the transom
light over the front-door opening. I am satisfied that when the plaster was
taken off substantial lime mortar will have been removed at the same time. Its
effect will have been more marked in other places than the front and party
walls of this front room. In appendix E to his report, Mr Towell showed as
regards the window frame and door opening of this room the movement that
existed in November 1985. The majority of movement was towards no 47 but at the
bottom of the door opening the movement was towards no 51. On the distortion
survey carried out on April 30 1987, the degree to which racking of the door
opening and window frame had taken place is shown in exhibit 4 DS6. The
movement was all towards no 47 and downwards and accordingly was worse than in
December 1985. This possibly shows the danger of too much reliance being placed
on figures such as these when it is recalled that during the whole of this
period no 47 had been underpinned. No other cause of further significant
subsidence to no 49 has been advanced other than the settlement of no 47.
(9) Front room north facing staircase wall and
party wall 47/49 at junction of party wall and in staircase wall above lintel
over opening on west side. (Chapman photos 9 and 10; Towell photo 5; Akroyd
photos 5 and 6). (Reverse side of staircase wall at junction with party wall
47/49: Chapman photo 19). So far as the crack at the party wall junction is
concerned, the wall had moved apart more at the top than at the bottom. But I
am satisfied by Mr Towell’s evidence that the maximum entry of the cross wall
(that is to say, the staircase wall into the party wall) was 1in, ie 25mm. Mr
Akroyd deals with these cracks at para 3.03 of his report. I am not satisfied
that there was any deterioration in either of these cracks between
September/October 1984 and December 1985. I am satisfied that even in December
1985 these cracks were all of a minor nature.
DINING ROOM
(10) Lintel over opening in south facing
staircase wall on western side. Plate out of horizontal alignment. (Chapman
photo 17; Akroyd photo 7). I find these were of a very minimal nature.
(11) Eastern end of southern wall vertical
fractures to the left and right-hand side of window. (Southern wall eastern
end. Chapman photos 15 and 16). This is the other side of the wall considered
under rear elevation (4) above. I am satisfied that these were of a relatively
minor nature.
(12) Stairwell to first floor. Vertical fracture
at junction of partition and 47/49 party wall. (Chapman photo 20). This was
relatively minor.
FRONT
BEDROOM
(13) Front wall and party wall. Vertical
fractures in front wall, stepped fracture in brickwork above window opening,
stepped fracture to 47/49 party wall. (Chapman photos 21, 22, 23 and 24;
Towell photo 6; Akroyd photos 8 and 9). Towell photo 6 and Akroyd photo 9,
taken 14 months apart, show no deterioration. The fracture in the party wall
was relatively minor. The fractures to the front wall were significant. Mr
Towell in his appendix E showed slight movement of the window frame towards no
47. Again exhibit 4 DS6, produced in April 1987, shows the general distortion.
(14) North facing staircase wall and party walls
47/49 and 49/51. Door head between front bedroom and stairwell out of
horizontal alignment, stepped fracture in brickwork above the door head, bow to
plate supporting ceiling joints. (Chapman photos 25, 26, 27; Akroyd photos 10
and 11). I do not find that any of these was significant.
BACK
BEDROOM
(15) South facing stairwell. Plaster above
both openings supporting ceiling joints bowed. Stepped fracture in brickwork
over eastern door opening. Crack in party wall. (Chapman photos 29 and 30;
Akroyd photo 12). The bowing was of a minor nature. Although the stepped
fracture at first sight appears fairly serious, I am satisfied that it was not.
The remedial work required was the taking down of five courses of brickwork
over the opening, the installation of a steel lintel and the rebuilding of the
brickwork. Mr Akroyd dealt with the crack in the party wall 47/49 in para 3.07
of his report. I am satisfied that this was minor.
(16) Rear wall. Vertical and stepped fracturing
in brickwork to three sides of window opening. (Chapman photo 28; Akroyd
photo 13). A number of the bricks were loose. This was an inherently weak area.
There was little to keep these bricks together. The bond had gone. This was of
moderate significance.
(17) Bathroom. Stepped and general fractures in
brickwork above window opening. (Chapman photos 31 and 32). These were
relatively minor.
I have
considered under these 17 heads the primary areas of subsidence manifestation.
In appendix E Mr Towell showed various misalignments in doorway opening, as
well as the front door. A plumbing survey of party walls 47/49 and 49/51 was
carried out on April 30 1987 and appears as part of exhibit 4. I shall have to
consider this survey in greater depth when I turn to issues (2) and (3), but as
regards the findings in relation to the effect of subsidence in 49 I consider
them to be relatively unimportant. A small number of other manifestations were
considered in evidence, but they also, I find, were of no importance.
Reliance was
placed on the fact that before removal the plaster was hollow in a number of
places and that that was an indication of major subsidence. I reject that
contention. Houses of this age and quality may well have hollow plaster without
any subsidence having taken place. I have indicated that some of the
manifestations were significant, particularly in the front wall of no 49. But
overall I find this evidence falls far short of that required to establish that
there has been major subsidence of no 49, even in its very worst state. The
basic fabric of the house after 80 years remained sound. The answer to this
issue is therefore ‘No’.
I turn,
therefore, to consider the second and third issues of fact. These require a
consideration in particular of no 47 and to a much lesser extent of no 45. No
47, it will be recalled, lies at the eastern end of the terrace of five houses.
Then there is a passageway and no 45 is at the western end of the next terrace
of five houses. The eastern wall of no 47 is a gable or flank wall. The
photographs of the front of no 47 consist of Chapman photos 1, 33 and an
additional one taken by him at the same time in September/October 1984, which
forms part of exhibit 12; in addition, there are Akroyd photo 3 and Towell
photo 1. The flank wall can be seen in Chapman photo 34 in part of exhibit 12.
The flank wall, as can be seen, has been finished off in pebbledash. The front
wall has been rendered. Superficially it appears that at first-floor level tie
bars had been inserted east/west and north/south. The tie bar plates or washers
on the front wall had been rendered over after installation.
It will be
recalled that at the time of Spurgeons’ inspection no 47 was unoccupied and
boarded up.
The first
suggestion that no 47 had to be stabilised before effective work could be done
to 49 came from Mr Matthews in his report, as I have indicated. He reached the
conclusion that the majority of cracking in no 49 had been caused by the
excessive movement of the gable wall of no 47, which appeared to him to have
undergone settlement relative to the party wall. Issues (2) and (3) and the
question whether that belief was well justified depend very much on the
evidence of the expert engineering witnesses whom I have had before me. I
should start with Mr Akroyd. I consider him a very impressive witness. He has
an unusually wide range of qualifications. His expertise I find to be
considerable. By the end of his evidence, however, I felt bound to treat some
of his statements with reserve. It appeared that he was inclined to see
everything in stark terms.
Let me
illustrate that. It is axiomatic that, if there are manifestations of
subsidence, it is difficult to determine whether subsidence is continuing
unless and until monitoring over a substantial period has taken place. Mr
Akroyd was highly critical of Mr Matthews for having formed the view in
September 1982 that the gable wall of no 47 had potential for further movement.
An attack on Mr Matthews’ competence was vigorously pursued. But it often
happens that time simply is not available for the necessary monitoring and
engineers do have to reach conclusions on limited evidence as to whether
subsidence is continuing. Such an engineer may reach a wrong conclusion, but
that does not necessarily mean he is incompetent. Without monitoring, it is
equally difficult to reach a conclusion that subsidence which has taken place
is not continuing. Yet Mr Akroyd in December 1985 reached a very positive
conclusion that subsidence had ceased, without any monitoring evidence to
support such an opinion. Mr Akroyd essentially dismissed no 47, however
unstable, as being a cause or potential cause of any damage to no 49. As I
shall indicate, that view is unrealistic.
I did not find
Mr Matthews a persuasive witness in many respects. Basically the views he
expressed lacked an adequate reasoned basis. I did not at any time consider
that he was consciously seeking to mislead the court. I thought he was a
practical engineer but given often to an enthusiastic rather than a reasoned
approach. The criticisms made against Mr Matthews for reaching the conclusion
that he did in September 1982 were various, such as failure to dig a trial pit
along the flank wall, failure to monitor movement, failure to investigate the
true position of the tie bars in no 47, failure to inspect the interior of no
47, failure to plumb the party wall. I am not satisfied that these impugn his
competence, but the failure to carry out at least some of these matters
necessarily makes the judgment which led to his conclusion somewhat suspect. By
the end of his evidence he was largely basing his opinion that 47 potentially
would damage 49 on the presence of the tie bars, although this emphasis had not
appeared in his report.
The last
engineering expert was Mr Cowley. I found him an exceptionally reliable
witness. He gave reasoned answers to all questions. His reasons stood up to the
most searching cross-examination. They accorded with commonsense. They fitted
in entirely with the factual evidence such as it was.
I do not refer
to the evidence of Mr Chapman or Mr Spurgeon on this issue, because not
surprisingly they were unable to make a useful contribution.
The actual
evidence relating to no 47 is relatively slight. The inference in Mr Matthews’
report of September 1982 was that movement in no 47 would continue. But except
that reference was made to actual settlement that had taken place, the report
was silent. The amount of rotation of the gable wall was 65mm at eaves level.
Mr Mann, the council’s engineer, gave a written report on January 27 1983. So
far as the report contains factual matters, it is agreed that I should accept
those findings, save to the extent that other evidence satisfied me otherwise.
There was no such other evidence. I need not read all the facts into this
judgment but this judgment relies upon them. The principal findings — apart
from the fact that the gable wall leaned over — were:
(i) the north-east corner of the front wall had
settled significantly;
(ii) a vertical crack in the pebbledash under the
ground-floor window cill;
(iii) a tapered vertical crack on the gable wall at
the junction of the rear single-storey extension with the two-storey extension;
(iv) radial cracking in the pebbledash in the rear
wall emanating from the rearmost place on the gable wall.
On August 20
1984 Dr Wady, who is, as I indicated, Mr Matthews’ partner, made a report on no
47. In so far as it contains factual matters, they are agreed. I should read
one extract from it:
. . . the
gable wall . . . appears to have settled by at least 25mm relative to the front
and rear elevations and has moved significantly out of plumb. The settlement
has caused the front door and window lintels to slope and induced a crack over
the first floor window to eaves level. The out of plumb readings (outwards at
the top) varied from about 50mm near the front of the gable wall to 75mm near
the back. The front and rear walls appear to be approximately plumb. An
approximately vertical crack varying from 10mm at roof level to 3mm near ground
level in the flank wall indicates that the rear single storey part of the house
has settled significantly further than the main part of the flank wall.
In so far as
reliance can be placed on distortion surveys, it would appear that little or no
additional rotation had occurred since September 1982.
Although from
paras 5.3 and 5.4 of Mr Towell’s report it appeared that he was accepting that
movement of no 47 was taking place requiring no 47 to be underpinned, it became
clear in his evidence that in fact his conclusion was that no evidence had been
put before the court which suggested to him that there was any continuing
movement in no 47 at any time since 1982.
The position
was the same with Mr Cowley. In his report on p 8, Mr Cowley clearly had been
influenced by the conclusions reached by Mr Mann in his report of January 27
1983, which, as I have indicated, are conclusions which are not in evidence
before me. Mr Cowley did not criticise the underpinning of no 47 but was
unaware of any evidence that there had in fact been continued movement in no
47.
Mr Akroyd in
trenchant terms indicated that underpinning of no 47 had been entirely
unnecessary because there was no evidence of movement.
There was put
before me as exhibit 24 an agreed summary of relevant information in the
council’s file relating to no 45. I have considered that summary, but I do not
find it affords me any assistance.
Mr Matthews in
his evidence, in support of his proposition that until underpinning no 47 had
continued to move, suggested that some evidence of this was continued movement in
the front wall and in the soldier arch at the rear of no 49.
On November 24
1984 Mr Matthews’ partner, Mr Hill, selected a number of monitoring points on
no 49, as appears from sheet III. Readings were taken at that time. The only
other reading was on January 20 1986, shortly before remedial works were
undertaken at no 49 and after 47 had been underpinned. This showed an average
increase of movement of 0.8mm. Mr Matthews sought particularly to derive
support from the readings on the front elevation. A comparison of all of the
two sets of readings fails to provide any reliable overall pattern. All the
experts, apart from Mr Matthews, regard this particular exercise as fruitless,
since in fact only one subsequent reading had taken place. I consider that criticism
is justified. Seasonal and thermal changes are such that only if frequent
readings are taken can a pattern be relied on. I have reached the conclusion
that on the evidence before me no movement at no 47 between June 1982 and the
end of 1985 had taken place.
I turn
therefore to consider issue (3). Earlier in this judgment I dealt with the form
of construction of the buildings, including the joists and purlins. I am
satisfied that the structure that has to be considered is the terrace of five
houses. Loads which are imposed at one point may be transmitted through the
whole structure. The evidence satisfies me that, before the gable wall of no 47
began to settle and lean outwards, the wind load on no 47 would have been
approximately 2.7 tonnes. That load would have been transmitted westwards in a
number of ways. Primarily the loads would have been transmitted through the
9-in brickwork of the front and rear walls of no 47, through to no 49 and then
in ever diminishing form through the whole structure. To a much more limited
extent, loads would have been transmitted westwards through the cross walls of
no 47 into the party wall of 47/49 and onwards. These internal walls were weak.
They were only of 4 1/2-in brickwork, and I am satisfied that the bonding in of
these walls into the party wall was very weak. A more satisfactory conveyance
of the loads would have been the floor structure. Although it is likely that
there was a gap between the westward joists in no 47 and the 47/49 party wall,
the rigidity of the floor structure would have been likely to operate as a good
transmitter of loads. Finally, the roof construction would have transmitted
loads to some extent through the structure. Each party wall would have been
capable of providing considerable resistance to any loads transmitted to them.
The party wall appears to have been well bonded into the front and back walls.
While the party wall did not gain much strength from the cross walls, chimney
breasts in the party wall on each side of the cross walls would have helped to
provide a very strong structure. It seems likely that at some time settlement
of the gable wall particularly became substantial. It is unnecessary to
speculate more than briefly as to how this occurred. It could have been
differential movement due to differing subsoils. A more likely explanation is
that the foundations were affected when a drain was laid north-south in the
passageway between nos 45 and 47 and partly under 47’s foundations.
As the gable
wall subsided so the load on that wall increased. As it increased it seems
likely that the integrity of the fabric of no 47 became affected to some extent
so that loads could not be transmitted as previously. I am satisfied, however,
that a situation was never reached similar to that at the back of no 37 Boston
Road, shown in the photograph in appendix 9 to Mr Towell’s report. I think it
likely that it was at this time that ties were introduced to no 47. Until the
trial had been proceeding for some time all experts were under a false belief
as to the true nature of these ties. The true position emerged on May 12 1987
and appears in the six Jenkins & Potter drawings forming exhibit 15. There
were four east/west ties, all at first-floor level, that is to say about 8 ft
above the ground. The first and third ran on the inside faces of the front and
rear walls. Some distance short of the party wall they were anchored by a bolt
through the brickwork in the manner shown in details A and B. From there, each
continued to the party wall as a strap; at the angle there being a bent plate.
It was anchored to the westernmost joist of no 47 by coachscrews. The
investigation on May 12 established that no crushing of brickwork at the wall
connections had taken place. There was no damage to the anchor plate bolt or nut
or the strap, bent plate or coachscrews.
The second tie
was bolted to the northern side of the starcase wall,
plate and attachment to the joists. One coachscrew appeared to be missing, but
as there was no damage as such visible at all I am satisfied that this absent
coachscrew is irrelevant. This tie bar was found to be cut at its eastern end.
I consider that it was still intact when Dr Wady made his inspection in August
1984; otherwise he was likely to have commented about it. The probabilities
point, therefore, to its having been cut when works were done in 1985.
The fourth tie
bar at the back of the premises is irrelevant.
At the time
the tie bars were installed the front and interior walls would have been
restored to their former load-transmitting potential. Consideration was given
in the later stages of the trial to the loading additional to that of wind
which would have been imposed by the eccentricity of the gable wall. Mr
Akroyd’s calculation shows that approximately 0.3 tonne would be added, making
a total of 3 tonnes. In broad terms Mr Cowley agreed with this. It is to be
appreciated that, even if the eccentric loading were doubled, it would only
increase the overall loading on the gable wall by 10%.
Before turning
to consider Mr Matthews’ theory, I propose to consider the reasoning of Mr
Cowley as to why no adverse effect on 49 could occur from loading on the gable
wall of no 47. With a 3-tonne loading on the gable wall, then theoretically
each tie connection could have had a 1-tonne load imposed upon it. But of
course in the real world the load will be transmitted in a number of ways other
than through the anchorage points, and so the load on each connection will be less
and probably substantially less. In any event Mr Cowley was of the view that at
about half-a-tonne loading the connection would be overloaded, causing damage,
which we know does not exist. He accepts that loadings for the gable wall would
have been transmitted to 49 and indeed on through the structure, but he simply
cannot see the mechanism whereby the loadings would be such as to cause
significant damage to 49.
In so far as
loads were transmitted to the tie-bar connections, they would in part have been
transmitted elsewhere, eg to the walls, but triangular forces would have
transmitted much of the load back to the gable wall, as he sketched in exhibit
21. All the known physical manifestations militated against loading on the
gable wall ever being a cause of cracking to 49. The cracking in no 47 that
would be caused by such loading was likely to be diagonal. Yet, as the evidence
showed, much of the cracking in fact was vertical. The whole pattern of
cracking in 49 and the position of its party walls, says Mr Cowley, is strong
evidence that no 49 has not been significantly affected by 47. In his two-sheet
exhibit 7 he plotted the information obtained on April 30 1987, as shown in
exhibit 4. What he regards as so significant is that the maximum distortion shown
on the 47/49 party wall is at the front, whereas all agree that it is the rear
of no 47 which has suffered the greatest lean and therefore has the greatest
load imposed upon it. So a precisely opposite picture is presented to that
necessary to support Mr Matthews’ theory.
I entirely
accept Mr Cowley. It seems immediately to eliminate no 47 as being in any way
causative of the damage to the soldier arch or to the bathroom. The
measurements taken on April 30 were of course taken for plastered brickwork. Even
if the brickwork had been laid completely in plumb, the plastering could well
result in distortion. I am not satisfied that the party wall was out of plumb
at any point along its length in 1987 to be significant. I am satisfied that
the damage noted in no 49 was due to settlement in 49 typical of settlement in
many other houses in this street and nearby streets. A substantial cause of
some of the cracks in no 49 was a significant settlement of the 47/49 party
wall, which settlement was calculated to cause the subsidence seen and was
wholly unrelated to the subsidence of the gable wall.
Mr Akroyd
essentially not only agreed with Mr Cowley but went further. He considered that
the connections could accept a loading of about 1.32 tonnes. But I accept Mr
Cowley’s figure, although, in the absence of any damage, it matters not which
figure is correct. He went further than Mr Cowley, in that he was adamant that
no load for 47 could be transmitted to 49. This I find to be incorrect. Given
the nature of the structure as a whole, it would be extraordinary if some loads
were not transmitted. Although I am unable to accept that part of his evidence,
I consider that his reasoning why no 49 would not be adversely affected by any
movement in no 47 was very persuasive. Except in the respects specifically
indicated in this judgment I have no hesitation in accepting his evidence. For
Mr Matthews’ theory that loads would not only be transmitted to no 49 but would
be of such a nature as to damage the fabric of no 49, loads much in excess of
those calculated by Mr Cowley and Mr Akroyd would be necessary. Somewhat late
in the day Mr Matthews advanced an ingenious theory as to how such loads could
have been created. I trust that Mr Matthews will not regard it as a discourtesy
on my part if I do not deal extensively with his theory. In brief, it requires
the leaking away under the leading — that is to say the eastern end of the
gable wall foundations, causing the point of support to move westwards towards
49, coming as far possibly as the western end of the gable wall foundations.
All the visual evidence contradicts this theory. It was based on the merest
supposition, which I find to be contrary to all the probabilities. Had loads of
the kind necessary been transmitted, I am sure that, as in 37 Boston Road,
there would have been on the front and back walls of no 47 major breaches in
the brickwork. Further, as the point of support moved westward, the downward
loading would almost certainly have caused significant vertical subsidence of the
gable wall. I am left in no doubt on the evidence that Mr Cowley’s views are
correct and therefore, on this third issue, I find that no 47 never caused
damage to no 49 from June/July ownards, nor did it have any potential effect
for causing such damage.
My findings of
fact essentially dispose of all the issues in the action, but I should deal
with certain matters. Special damages were agreed at £7,500, subject to
liability. Had the plaintiffs succeeded in establishing negligence, I would
have awarded each of them £500 for the physical consequences of the breach.
Such consequences would not of course have included for any distress and the
like arising from the legal proceedings.
As to the duty
of the council, I am satisfied that the council owed no duty to the plaintiffs
to take reasonable care to prevent their suffering damage, save to the extent
that they assumed that responsibility in their schedule. Had they not offered
to give advice, they would have owed no relevant duty to the plaintiffs. If,
for example, Mr Huffey had failed to list in his record or his schedule defects
which seriously affected the stability of 49, that would have afforded no cause
of action to the plaintiffs against the council. The responsibility that the
council assumed was a narrow one, namely, to advise where it was necessary to
rectify a settlement specifically identified in the schedule.
The words of
Lord Morris of Borth-y-Gest in Hedley Byrne & Co Ltd v Heller
& Partners Ltd [1964] AC 465 at p 502 are apposite:
I consider
that it follows and that it should now be regarded as settled that if someone
possessed of a special skill undertakes, quite irrespective of contract, to
apply that skill for the assistance of another person who relies upon such
skill, a duty of care will arise. The fact that the service is to be given by
means of or by the instrumentality of words can make no difference. Furthermore
if in a sphere in which a person is so placed that others could reasonably rely
upon his judgment or his skill or upon his ability to make careful inquiry, a
person takes it upon himself to give information or advice to, or allows his
information or advice to be passed on to, another person who, as he knows or
should know, will place reliance upon it, then a duty of care will arise.
I am satisfied
that on June 17 1982 Mr King attended at no 49 with the intention of giving and
in fact gave advice. But the only advice that he was required to give and the
only advice that in fact he gave was in respect of the slight settlement at the
front. I am satisfied that, if Mr King’s advice had been that the condition of
the front wall was such that either Mr or Mrs Green should instruct a
structural engineer or that substantial works were required, the plaintiffs
would not have proceeded further. To the extent therefore that Mr King stated
that only repointing and the like were required, Mr and Mrs Green relied upon
Mr King, even though they subsequently failed to get Blasbys to price item 3.8
on that basis.
The visit of
Mr Hook is somewhat anomalous. I am satisfied that Mr Hook attended on July 20
with the purpose of advising how the settlement at the front and the back and
the cracking in the cross wall should be rectified. But I do not consider that
that was the advice that Mr Green was seeking or was intending to rely on. What
he wanted to know was whether the improvement grant would extend to settlement
and cracks, apart from that already listed in item 3.8. If, however, Mr Hook
had advised that major subsidence had taken place, I am sure that the result
would have been that the deal would have been off. It follows therefore that
indirectly the plaintiffs did rely on the council’s advice. But in the light of
my findings all this is academic.
I turn,
therefore, to consider the position of Spurgeons. It assists to consider the
state of the law if I had been satisfied on the evidence (1) that Mr and Mrs
Green were induced by this report to commit themselves to the purchase and (2)
that Spurgeons failed to exercise
Abbey National had been the first to break away from a long-established
practice of not allowing an applicant to see the surveyor’s report obtained by
the society. In Smith v Eric S Bush [1987] 3 WLR 889 the Court of
Appeal considered a case which had a number of features similar to the present.
The plaintiff there had sued a firm of surveyors who had provided the Abbey
National with a report and mortgage valuation. This contained an apparently
identically worded notice. The mortgage application form signed by the
plaintiff had contained essentially the same wording as applied in the present
application form. The report and mortgage valuation completed by the surveyor
contained a disclaimer notice identical to that in the report completed by
Spurgeons. The Court of Appeal held that the surveyor was required to make a
reasonably careful visual inspection of the property and complete the society’s
form. The surveyor’s report showed nothing seriously wrong with the property,
but, as was found, the house was in truth a dangerous structure and unfit for
habitation until adequate support for the flues had been provided. It was not
in issue in that case that the surveyor owed a duty of care to the plaintiff
apart from the disclaimer, and the plaintiff relied on the report and that the
surveyor was negligent. The issue in the Court of Appeal was whether the
surveyor was protected from liability by the disclaimer. The court held that
apart from the Unfair Contract Terms Act 1977 the disclaimer did exempt the
surveyor from liability for the consequences of his negligence. In that case it
was conceded by the surveyor that the words ‘all the circumstances’ in section
2 of the 1977 Act were not limited to considering merely the question whether
the notice referred to in the section was sufficiently clearly brought to the
attention of the person concerned or was sufficiently clearly expressed to that
person to be able to understand them. All three judges held that the disclaimer
did not satisfy the requirement of reasonableness. I might just read part of
the judgment of Dillon LJ at p 897:
I cannot see
that it is fair or reasonable that a professional surveyor making a mortgage
report at the lower end of the property market, when he knows that the
would-be-purchaser who is applying for a mortgage on the property has paid the
fee for the report, will be supplied with a copy of the report and is likely to
rely on the report and so is not likely to instruct any other surveyor, should
be able to rely on any general disclaimers, such as those in the present case,
unrelated to any special factors affecting the particular property, to exempt
him from liability to the purchaser for negligence if it should so happen that
he, the surveyor, carries out his visual inspection of the property without due
care.
From the
wording of the disclaimer notice in the report and valuation Spurgeons knew
that a copy of the report was likely to come into the hands of the applicants
before they contracted to purchase the property. I find that there were no
special factors regarding either the property or the applicants which satisfied
the requirement as to reasonableness. Therefore, on the assumptions above made,
Spurgeons would be liable in damages.
But I must now
turn away from assumptions to my findings of fact. Although I have criticised
Mr Spurgeon for the manner in which he completed the Abbey National form I do
not find anything to justify the criticism as to his competence. I find that he
approached the matter in the way that an able and experienced surveyor should.
He not only ascertained the existence of subsidence at the back but also
commented on the position of no 47. He reached proper conclusions as to the
state of the property in all respects. I find it would have been strange if he
had recommended that a structural engineer should be instructed and equally
surprising if he had raised doubt about the stability of no 49 or no 47. The
evidence leaves me in no doubt that Mr Spurgeon behaved in a way that a skilled
surveyor should.
It is
contended that, even if he was negligent, in any event the Greens have failed
to establish they were induced to contract to purchase 49 on the strength of Mr
Spurgeon’s report. It is unnecessary in this judgment on my finding of the
facts to consider interesting questions as to whether it would have been a
combination of the council or Spurgeons’ statement or one or other of them
which induced Mr and Mrs Green to purchase.
But I should
deal with a further matter. Much reliance is placed upon the fact that,
although Mr Spurgeon advised the Abbey National that the works set out in the
council’s schedule should be satisfactorily completed before they granted a
mortgage, the Abbey National in fact did not impose such a condition. Mr
Spurgeon contemplated that, if his advice had been followed, Mr and Mrs Green
would have obtained a bridging loan which later would have been replaced. But
Mr and Mrs Green would still have had to purchase the property before they
carried out the works. The only difference would have been that the original
source of money for the purchase would have been the bank and not the building
society. I do not regard that as a significant difference.
On my findings
of fact, the regretful result is that the unfortunate plaintiffs are left to
bear their considerable losses.
Judgment was
given for the defendants with costs, not to be levied without leave of the
court; legal aid taxation of plaintiffs’ costs.
