Negligence–Structural survey–House purchased in expensive London area found to be seriously infested by dry rot–Action against surveyors alleging negligence or breach of contract–Conflict of expert evidence–Decision in favour of defendant surveyors–Judge not satisfied that defendants fell short of standard of care properly expected of them
concerned a structural survey carried out by the defendants of a property in
Eaton Place, Belgravia, London SW1–The price paid by the plaintiff, an American
investment banker, was £1.625m–He was out of the country for some months after
receiving the survey report and purchasing the property–There was nothing in
the report, which was lengthy and detailed, to warn the plaintiff of the
serious state of affairs which awaited him on his return from abroad, ‘an
extremely virulent, extensive and concentrated attack of dry rot’–Workmen who
had entered to carry out works of refurbishment and renovation which the
plaintiff had ordered discovered a severe condition of dry rot affecting
particularly the area above the basement and below the kitchen floor–The rot
eventually required the whole of the kitchen area to be stripped out–The
plaintiff was compelled to postpone the sale of his existing house
considered in detail the evidence of the parties and of a number of expert
witnesses, among whom there was considerable conflict–The judge accepted that
the surveyor from the defendants who carried out the survey had seen no sign of
the fruiting body, mycelium, at the time of inspection and had not been aware
of any suspicious smell–There was, however, evidence that dry rot can move very
quickly over an area–The judge rejected various criticisms of the survey–It was
suggested, inter alia, that the surveyor was at fault in not carrying a mirror,
which may sometimes enable conditions to be seen which are not readily visible
even with a torch–It was not, however, the general practice for surveyors to
carry a mirror; it was a matter of individual preference–The judge, in any
case, was not convinced that the surveyor would have seen indications of dry
rot even if he had used a mirror–In the end, after a review of the evidence,
the judge concluded that the plaintiff had not satisfied him that the
defendants had fallen short of the standard of care demanded of the ordinary
skilled surveyor carrying out a structural survey
decided, the question of damages did not arise but, in case the matter went
further, the judge expressed his views on what the quantum of damages would
have been if liability had been proved–There was no dispute that the price paid
by the plaintiff was the proper market price, so that the test of differential
values did not apply–The judge considered that a sum of £50,000 would reflect the
cost of repair, plus £1,500 for general damages
plaintiff’s claim had, however, failed and the action was dismissed with costs
The following cases are referred to in
this report.
Perry v Sidney Phillips & Son
[1982] 1 WLR 1297; [1982] 3 All ER 705; [1982] EGD 412; (1982) 263 EG 888,
[1982] 2 EGLR 135, CA
Philips v Ward [1956] 1 WLR 471; [1956] 1
All ER 874, CA
Steward v Rapley [1989] 1 EGLR 159;
[1989] 15 EG 198
In this case the plaintiff, George
Hacker, sued the defendants, Thomas Deal & Co, chartered surveyors, for
negligence or breach of contract in carrying out a structural survey of 67
Eaton Place, London SW1.
David Tucker (instructed by Wilde Sapte)
appeared on behalf of the plaintiff; Adrian Cooper (instructed by Lloyd Cooper)
represented the defendants.
Giving judgment, JUDGE FAWCUS
said: This case concerns a property known as 67 Eaton Place, which is situated
in that area of London known as Belgravia, for those who can afford it a most
desirable place to live. The plaintiff was one such person who could afford it.
He is an American investment banker who in 1986 was living just around the
corner and wished to move, together with his wife. To that end he had employed
the services of a company known as Property Vision, who are engaged in the business
of seeking out properties for clients; 67 Eaton Place was the property within
the ambit of their instructions from the plaintiff which they thought would
suit him. It did suit him, and in due course Property Vision instructed the
defendant firm to conduct a building survey or structural survey of these
premises. Mr Andrew Hampson-Mason [ARICS] was the employee in the defendant
firm who carried out that inspection and report. Following that report and
indeed other reports the plaintiff decided to purchase. Indeed, the other
reports were not produced until after he had exchanged contracts. He envisaged
at the time carrying out a number of refurbishments and renovations in the
property. The decorations were not to his taste, and he wished to convert the
basement area into a self-contained unit for a housekeeper. It was, therefore,
envisaged that he would not be entering into occupation of the property, he
said, until about July.
In the early part of 1987 he was in any
event away — whether on holiday or business I know not — in the Caribbean. He
returned in the middle of March. He returned to a situation of disaster in
comparative terms, because in early March the builders had gone in to carry out
the works that were required, and there was discovered what has been described
by more than one witness as an extremely, virulent, extensive and concentrated
attack of dry rot, which found itself particularly in the area above the
basement and below the kitchen floor. The extent of that attack was fairly
substantial. It eventually involved, as one sees from the photographs, the
whole of the kitchen area being completely stripped out. One can well imagine
the shock of the plaintiff when, contrary to the advice of his informant, he
went to visit the property. The result was that the plaintiff did not put his
existing house on the market immediately. He delayed it for some time. He did
not move in to 67 Eaton Place until November, some four months later. It was, I
believe, the following year before he completed the sale of his existing house.
He was put, therefore, to considerable aggravation, inconvenience and
disruption.
He claims against the defendant firm on
the basis that the survey carried out by Mr Hampson-Mason together with the
report produced by him following that survey was a negligent one or in breach
of the implied term to take care by virtue of the contract entered into between
a surveyor and Property Vision acting as the plaintiff’s agent. There is, of
course, no difference in the standard of care that is required, whether one is
looking at this from a contractual or a tortious point of view.
I said at the outset of this case that it
looked as though it was largely going to turn on the evidence of experts. So it
does, but not wholly. An important feature of this case and indeed of any case,
where allegations of incompetence are levelled against a professional person,
is the court’s view of that person against whom those allegations are levelled.
It may, of course, not be conclusive of whether he has been careless. So I turn
first of all to the evidence of Mr Hampson-Mason.
He is a comparatively young and
inexperienced surveyor. I say ‘comparatively’ — comparatively when set against
the experience of three other surveyors from whom I have heard in this case. He
is 29 years old. He took a degree at Leicester Polytechnic in the early 1980s.
He had a number of employments between June 1983 and August 1986, until he
joined the defendant firm, where his post was senior building surveyor
answerable to two partners in that field. At the material time he was doing two
to three surveys per week. So it cannot be said that he was without experience.
Before having passed his associate exams (put in his papers and been admitted),
he had been carrying out reports under the aegis of other partners. Since that
time he had prepared his own reports and signed them following surveys.
This survey was carried out on December
19 1986. The report is before me in evidence. It is a lengthy and detailed
report, and it is fair to say that it is accepted by the witnesses from whom I
have heard as in all respects, save that in relation to which the cause of
complaint arises in this case, a thoroughly competent and professional report.
Despite his (as I have said) comparative lack of experience, I found Mr
Hampson-Mason to be an impressive witness with good recall of what he did in
the course of this particular survey. Although the survey was carried out some
time ago, it would not be surprising that he would have a substantially
accurate recall of this particular survey, because it was within a matter of
months that it came to be called in question. Indeed, immediately it was so he
visited the premises and took steps, so far as he could, to take detailed
photographic evidence of the state of the building and took the precaution of
bringing in an independent surveyor to comment on what he had seen and done.
Indeed, both the experts called in this case visited and were able to see the
state of the property within, at the outside, three weeks of the discovery of
this attack of rot.
In so far as Mr Hampson-Mason is dealing
with factual matters I accept his evidence without hesitation as being both
truthful — that goes without saying — and accurate. To quote but one example, I
am entirely satisfied that whatever may have been the position when other
people visited these premises the small plant room of which much mention has
been made in this case was locked and not accessible to him and he took in the
circumstances reasonable steps to gain access to it. I mention that only as an
example of what I accept is the accuracy of his evidence. The fact that he did
not gain access to the plant room, as will appear later in my judgment, I do
not think of particular significance in the context of this case.
It follows that I also accept his
evidence as to the general state in which he found the basement area of this property.
This was the sort of property, both from the type of building it was and the
age of it, in which one might expect to find signs of damp in the basement
area, but they were not excessive. I accept his evidence and indeed the
evidence of Mr John Anderson [FRICS], who carried out a similar type of report
on behalf of another prospective purchaser in September, three months before Mr
Hampson-Mason carried out his inspection, that this was a surprisingly dry
basement. It was light and airy. I also accept his evidence that he looked into
the kitchen cupboard and examined it visually, that it was not necessary in so
doing for him to use a torch to enable him to see thoroughly into the cupboard
and, in particular, the back wall of the cupboard — to enable him to see, in
other words, everything that was to be seen by the eye alone. There was good
lighting, both artificial and natural, in the kitchen, and because he did not
intrude the whole of the top half of his body into the cupboard he was able to
see quite clearly. I accept his evidence, therefore, that at that time there
was no sign of the fruiting body which was to be seen in March. I also accept
his evidence that upon opening that cupboard there was no smell of dry rot
apparent to him, a very distinctive smell, one with which anyone who has come
across it could be readily familiar on coming across it again, once they knew
what it was, and one with which one would expect a surveyor, even of limited
experience, to be familiar.
As I have said, the vast majority of his
report on his inspection is unexceptionable. It is suggested that when dealing
with the basement area and this particular part of the kitchen area it was
unfortunately a case, as it was put, I think, of Homer nodding. I rather think
that Homer, when he nodded, was a little older than Mr Hampson-Mason, but the
analogy is no doubt appropriate. The most conscientious and competent of
professional people can and do unfortunately from time to time make errors,
overlook something that at other times they would see right away.
It was suggested that an explanation as
to why this might have happened in Mr Hampson-Mason’s case was that he had
other work to do that afternoon and he was in a hurry to get away. I say that
afternoon, because his evidence was that he commenced his inspection, I think
he said, about nine o’clock in the morning and went on until about half past
one or two. He said it would be most unusual for him to carry out more than one
survey in a day. Indeed, if that was the sort of length that he took over
carrying out a survey — this, of course, was a very large property with
something like 5,500 sq ft of floorspace — one can readily understand why he
would not have been involved in any other survey. He was not able to be
categoric about it, but he was pretty sure that he was not carrying out another
survey. He said that he would have been anxious to dictate as much of his
report as he could and that his normal practice was to try to complete the
report the same day or in all events the next day. This particular day was a
Friday, and he would not have expected to work on a Saturday. The report was
sent out on December 24. The only urgency which lay upon him, in my judgment,
was getting his report done. I do not think that that is an acceptable
explanation as to why any corners might have been cut or any obvious signs
missed, if such were.
One then has to ask oneself on the
evidence what did Mr Hampson-Mason not see or do which a competent surveyor
should have seen and done. It is very easy to fall into the trap that because
there was found a substantial infestation of dry rot after the event, therefore
there must have been negligence in failing to see it. That may or may not be
the case. The duty of a surveyor has been set out on many occasions in reports,
and I have been referred in particular to the way in which Ian Kennedy J put it
in a recent case*. It was described by one of the witnesses, Mr Anderson, the
surveyor who carried out the September survey, as being a diagnostic
interpretation of a visual inspection. This is one of those rare cases in which
a lawyer has managed to put that into simpler words, and he is to be
congratulated. It is ‘judging what you cannot see by what you can see’. It
seems to me that that is as good a way of describing it in summary form — of
course, it does not cover the whole ambit — as one could have.
*Editor’s note: This refers to Roberts
v J Hampson & Co [1988] 2 EGLR 181.
Bearing in mind that there is a difference
between the various types of reports which are produced upon the sale and
purchase of houses and, in particular, that this was not just a valuation
report but a building survey (and the distinction was recognised by all the
surveyors who gave evidence before me in this case) which involves a detailed
and thorough examination of the property to be inspected, it obviously involves
seeing what there is to be seen through the eyes not of the layman but of the
expert. If something is missed, then that is clearly negligent. It goes further
than that, because the expert is to be taken to be able to recognise the signs
which could give rise to the suspicion of hidden defects. If a surveyor in this
situation fails to recognise those signs or fails to give the appropriate
warning, having recognised them, then he has fallen short of his duty.
To that end I had the assistance of the
two witnesses to whom I have referred, who were called as experts — on behalf
of the plaintiff, Mr Ian Melville [FRICS], and on behalf of the defendants, Mr
Barrie Brooke [FRICS]. Both of these have similar experience. They have both
been for a similar time in the profession. They are both quite obviously
distinguished in their different ways in their profession. I have no doubt that
both of them are highly competent. One might as a layman ask oneself how it
could be that, given the same information and the same set of facts, they can
come to diametrically opposite viewpoints as to what is the proper course to be
pursued by a surveyor in these circumstances. I suppose the answer to that is
that if they had not, we would not all be here. It then becomes the invidious
task of the judge who is not an expert, although not perhaps without some
knowledge of these matters, to have to decide whose evidence is to be
preferred.
I have to say that I did not find Mr
Melville an impressive witness. He changed his tack both before he came to
court and during the course of his evidence to an extent. He had based some of
his conclusions upon false premises. I find as a witness Mr Brooke very much
more convincing. That, of course, is not conclusive of the result in this case,
but Mr Cooper in his closing submissions identified, as he submitted, the
various shortcomings in Mr Melville’s evidence. He said first of all that Mr
Melville sought in the course of his evidence, as he put it, to drive a wedge
between Mr Anderson and Mr Hampson-
of report as Mr Hampson-Mason. It was not a serious report and because of what
was put in the last paragraph, in particular, the suggestion was that he was,
as it were, pulling his punches. I do not accept that at all. Mr Anderson was
carrying out precisely the same type of inspection and report as was Mr
Hampson-Mason. I do not think that that is a serious criticism of Mr Melville’s
evidence. It was something on which he was asked to comment.
Looking at the reports, what seemed to be
two features that are important when considering the reliability and
acceptability of his expert opinion are first of all a false premise, which he
worked upon in relation to the basement, that there was no ventilation. That
was something he adhered to even in the face of the photographic evidence of
the pipes, which quite clearly were related to a ventilating system. He was
driven to suggest that they cannot have been properly connected. I totally fail
to understand how he did or could have come to that conclusion. I accept that
there was the usual and proper ventilation that one would expect to find in the
lavatory and shower area shown on the plan, and that, within that confined
area, and on occasions when the door opened, that would have given rise to a
fairly regular change of air.
Quite apart from that particular area it
is evident, from not only an examination of the plan but also from photographs,
that on the right of the plunge pool area, as one looks at the plan, there is
on the other side of what appear to be double glass doors and sash windows an
open area — that is, open to the outside air. Of course, if the windows and
doors are kept closed, that air does not get in. But it is highly unlikely that
they would have been closed the whole time. So Mr Melville worked, in my
judgment, from a false premise when coming to his conclusion about what Mr
Hampson-Mason should have diagnosed when he was in the basement.
A second feature which I find does not
add to his acceptability is the way in which this case came to be pleaded. It
is sometimes, but not always, instructive to look at the pleadings in a case.
They are the way in which the case is presented at the outset. I would be very
far from advocating that cases should be tried upon the pleadings. They should
be tried on the evidence. Indeed, I admitted evidence in order to assist doing
that in this case. But the statement of claim, which, of course, in so far as
it alleges negligence, is based on Mr Melville’s report, sets out under para
11(4) the circumstances in which it is said that Mr Hampson-Mason fell short,
‘failing to heed the facts which ought to have alerted the inspector [that is,
Mr Hampson-Mason] to the particular risk of the presence of rot and the need
for careful inspection’.
And he listed then three matters. The
first is ‘(a) the age and character of the building’. I can deal with that
straightaway. It is quite obvious that the age and character of the building
were readily apparent to Mr Hampson-Mason. One has only got to read through the
other part of his report. He knew precisely with what sort of building he was
dealing. The second is ‘(b) the existence of a sauna compartment underneath the
area where the outbreak was found’. I will turn to that in a moment. The third
is ‘(c) the traces of damp noted in their report’. By that I take it is meant
the damp found in the basement of which there were two areas which Mr
Hampson-Mason found and a third which was apparent to others, the third, to
which he did not have access, being in the plant room.
The claim then came to be amended — in
particular under that paragraph — and there was added to the significance of
the existence of the sauna the plunge pool and jacuzzi area. There was also
added a fourth heading, ‘inherent dampness of the basement’. That is a phrase
extracted from Mr Anderson’s September report. A fifth heading, ‘the likelihood
of condensation in the area around the sauna, plunge pool and jacuzzi area’.
Those no doubt came to be added as a result of further reports which were
exchanged. That does not mean to say, however, that if Mr Melville thought they
had any significance at all that would not have been apparent to him at the
time of his first visit and his first report. It is an example of ex post
facto rationalisation of a conclusion to which he has already come. If he
did think that the plunge pool and jacuzzi area and the likelihood of
condensation were significant, one asks oneself why he did not mention it in
the first place.
So far as the sauna area is concerned —
that was the third area in which Mr Cooper sought to criticise Mr Melville —
that depends upon what view I take of the various arguments advanced. Mr
Melville based his evidence and his conclusions really on the idea that rather
like the saying, ‘If it moves, shoot it’, anything that is opened should be
opened. I do not think that that is a suggestion that was seriously disagreed
with either by Mr Hampson-Mason himself or by Mr Brooke. One is a detective in
these circumstances, and if one is able without disrupting the fabrics and
fittings of the premises to look behind and look into parts of the building
which are not accessible to the naked eye, then one should do so. What Mr
Melville said, and he was perfectly entitled to say it on the basis of
information that he heard subsequently — that was the evidence of the
Huckfields [the builders employed by the plaintiffs, who discovered the rot] —
was that this was a sauna where the roof was free-fitting, albeit quite a large
room in two segments, and it was a roof which had a vent of some type in it.
Therefore, he said, that roof should have been lifted, that vent should have
been opened and looked through and, although he did not say it, it really
follows (and it was part of Mr Tucker’s submissions), smelled through. What is
said is that even if one could not see anything above, if one had opened it up
by pushing up the roof or opening the vent, it is almost certain that the smell
of dry rot would have been apparent. As to the question of what one might have
seen, I think that is largely speculative.
I found that the evidence in relation to
what lay above the roof of the sauna not very clear. I do not blame Mr
Huckfield about that. He was called back to give his evidence about it. At one
stage it seemed that half the area above the sauna was blocked off by a
suspended ceiling and the other half open on the basis that it had been opened
up where new floor boards had been put in the areas shown in the photographs.
More latterly he inclined to the view that there was not anything there at all.
There quite clearly had been a suspended ceiling in that area, because one can
see the traces of it on the joists. What one does not know, of course, is
precisely when it was removed. The Huckfields had no recollection of moving
anything other than the ceiling of the sauna.
It was Mr Brooke’s evidence that even if
one had looked through the little trap with a torch one would not have seen
anything. He said he has tried that sort of exercise many times, and it is
virtually impossible, given an aperture of that size (some 4in to 5in) to see
anything in the void beyond. He was not asked whether that applied if he had
used a mirror as well as a torch. One does not know what his answer would have
been. It is quite clear on the photographic evidence available that the
fruiting body shown in the photographs was to the lefthand side of the sauna,
and if Mr Huckfield’s recollection is accurate (a) that there was a trap in the
roof, and I have no reason to suppose that it was not accurate, but (b) it was
situated on the righthand side, that might have made it very difficult to see.
Of course, if it had been open, it may very well have been smelled.
So one comes to the question: should Mr
Hampson-Mason have seen this little trap and, if he had seen it, should he have
opened it on the basis that Mr Melville said. I have not found this an easy
question to answer, but I have come to the firm conclusion that he is not to be
criticised for not seeing it. It may be that if he had seen it, it would have
been advisable for him to open it just to see what lay beyond, but I say that
in that way because I accept what Mr Brooke has said, which is that although
one is acting as a detective one does not start going into all the little
crevices in the hopes of finding something unless there is some tell-tale sign
which indicates that it would be advisable to do so. But this was a
prefabricated sauna. The purpose of a sauna is that once the occupant is inside
and the door is shut, it is a self-contained unit intended to keep in the dry
heat that is brought about by the coals. Neither Mr Hampson-Mason nor Mr Brooke
nor indeed Mr Melville would have expected to find this sort of trap in the
roof.
I do not think, therefore, that Mr
Hampson-Mason is to be criticised for not seeing it, and I accept his evidence
that he was quite unaware that there was such a trap in the roof. The only
purpose of going into the sauna was to have a general look at it to see if
there were any tell-tale signs on the timber inside which would or might
indicate that dampness had got to it. All the evidence shows that this sauna
had no such marks on it at all. Indeed, it had probably been very little used.
The history of the refurbishment of this house lends support to that. So I do
not think he is to be criticised on that score.
So far as the question of lifting up the
roof is concerned, I just do not accept Mr Melville’s evidence about that. I
accept what Mr Brooke and Mr Anderson said, that it would never have occurred
to them to do that, and I do not think that it should have occurred to them. I
think that Mr Melville has given that evidence really on the basis that he has
discovered since that the roof could have been lifted off, as indeed it was by
Mr Huckfield who, it has to be remembered, was lifting it off for the purpose
of dismantling it.
Accordingly, I find that the one matter
on which Mr Melville laid particular stress in giving rise to his conclusions
as to Mr Hampson-Mason’s shortcomings in his report has no validity.
So far as the plunge-pool and jacuzzi
area is concerned I have already said what the position was in relation to
ventilation. I think it is highly unlikely that this area, if it were a
plunge-pool area, would have generated the sort of steam heat that one gets in
a bathroom such as would have given rise to any significant risk of causing damp,
which would be the setting for an attack of dry rot such as we here have to
deal with. As I say, Mr Melville, I think, put that in his second report as an
afterthought.
The ‘inherent dampness’ of the basement,
as I have already found, does not exist except in the sense that Mr Anderson
used it. This was the sort of building where one might expect to find damp. He
did find traces of rising damp, he says, as he would have expected, but on all
his tests that he carried out down there there was nothing to indicate that
that damp had gone any higher than he would have expected it — perhaps up to
about 3ft. He thought that that was consistent with the damp which he found in
the plant room, and he thought that it was consistent with the damp which he
found on the rear wall. That, incidentally, was found upon an internal and not
an external inspection, because access could not be gained to the outside.
According to Mr Hampson-Mason, he found a
damp patch in the area of the stand-pipe. He mentioned it in his report. He
mentioned what he thought might have given rise to it, and he advised the
taking of certain steps, not opening up with a view to possible rot but finding
out what steps had been taken in that area to see if a clearer picture of what
had caused that particular damp could be obtained — looking for guarantees in
respect of work done in the past. The other piece of dampness was found at the
other end of the basement on the front wall of the front bedroom in the area of
the steps. At the time when Mr Brooke came to test it it was virtually dry.
There obviously had been an ingress at some stage there. There were some signs
of staining. But that can have had nothing to do with this particular
infestation.
I come, then, finally to consider whether
Mr Hampson-Mason saw or did not see everything he should have done to the
kitchen. It is to be remembered that he went to the kitchen before he went to
the basement, because his procedure was to work from the top of the house
downwards. The kitchen was a newly refurbished and very well fitted-out
kitchen, as one would expect in a property of this type. He went to the kitchen
cupboard, because that is a place where every surveyor goes to have a look.
There are pipes: where there are pipes with water going through them that is an
obvious source of possible damp and, therefore, of possible danger to wood.
Now, I said it is instructive to look at
the pleadings, and indeed Mr Tucker invited me to consider the defence in this
case. It was expressly pleaded in the defence that there were backboards to the
kitchen-sink unit. Under para 10(1) it is said that the defendants inspected
under the ground-floor kitchen sink. The kitchen units were fitted with
baseboards — there is no dispute about that — and backboards which concealed
the wall and floor finishes behind them. Mr Tucker invites me to say, quite
reasonably, that the evidence is all one way about that now and that that
indicates unreliability in relation to Mr Hampson-Mason’s evidence, that he was
saying one thing at first and then changing his tack about it.
That is a perfectly proper allegation to
make, but I do not accept it in relation to Mr Hampson-Mason. I think the
explanation of that is, as he said in evidence, that this is the type of unit
that he would expect to have backboards on it, and he assumed at the time when
these proceedings were commenced that it must have had a backboard on it. The
important factor is that on looking in the cupboard he saw nothing to give rise
to any cause for suspicion — looking at the back of the unit, whether it had a
backboard or whether it was a plastered wall. So although that might in certain
circumstances be a significant change, I accept his evidence when he says that
is what he thought the position would have been, because that was the normal
position, but now he has heard what the evidence of the Huckfields and Miss
Georgina Hoare [the plaintiffs’ interior designer] was, he is in no position to
dispute it, a perfectly proper and reasonable attitude to take.
I have already said that I accept his
evidence that there was no obvious sign of dry-rot fungus to be seen. The next
question, therefore, is: there being a small gap at the back, should he have
examined further by the use of a torch and mirror? Here again there is a complete conflict
between Mr Brooke and Mr Melville. Mr Melville says that he always carries a
mirror and that he always uses it if he finds a gap where he cannot see with
the assistance of his eyes or a torch. He may well do that. Mr Brooke, on the
other hand, says that he would not have used a mirror in those circumstances
unless there had been something in the cupboard which would have put him on
guard — either a smell or the sight of a fruiting body, although that, I suppose,
would immediately have told him all he needed to know.
Mr Hampson-Mason did not carry a mirror.
He is criticised for that by Mr Tucker, because that is one of the pieces of
equipment which it is suggested in the literature put out by the Royal
Institution of Chartered Surveyors that every surveyor should consider carrying
— should consider carrying. But the passage that was read out says that
this will depend upon the preferences of the individual surveyor.
Mr Anderson spoke about this as well.
When he looked in September, he did not use a mirror. He said that he did not
use it, because it is extremely rare to use a mirror. He says: ‘I know I did
not use a mirror on that occasion.’ He
was asked if he could really remember what happened in that September, and he
is not in the same position as Mr Hampson-Mason, because it came as some
considerable surprise to him that he was ever asked to consider his report —
he, as he said, thinking that it had died with his unfortunate client.
Going back to what I said at the outset
about a surveyor’s duty, it has to be remembered that a surveyor does not
guarantee his results. The level of care that is to be expected of him is not
as a guarantor but as a reasonably competent surveyor. While it may well be
that Mr Melville would use a mirror whether or not he saw some sign that gave
rise to suspicion, I do not think on all the evidence that I have heard that it
would be right to criticise Mr Hampson-Mason to the extent of saying that he
was negligent in failing to use a mirror just because there was a gap there,
unless he had been put upon inquiry either by something he saw in the cupboard
or by something that he subsequently saw in the basement. For the reasons that
I have already given, there was nothing, in my judgment, to put him upon
inquiry from what he subsequently saw in the basement nor was there in the
cupboard.
If I am wrong about that, one then has to
ask the question: whether he would, in fact, have seen anything that would have
put him upon inquiry if he had used the mirror. There is no doubt that when Mr
Roberts, the expert rot and timber infestation surveyor with 22 years’
experience, was called in on March 11, 13 and 17, he saw the fruiting body
which, it was agreed, was a young one (when they are young they are yellow and
when they are old they are black). He said he got his torch and mirror out to
look in some areas: ‘I saw reflected in the mirror mycelium had spread under
the sink unit and the units around it.’
Mr Tucker has laid great stress on this
and the speed with which mycelium can move. Everyone says that dry rot can move
very quickly. It is unpredictable. How quickly, of course, is a question of
degree. One is talking of movements of millimetres and inches over a period of
days or weeks. That may well be quick in the context of the spread of a fungus.
Mr Roberts, who was not called as an expert but merely as a witness to what he
saw, ventured the suggestion that dry rot has been known to move an inch in 24
hours in ideal conditions. It was suggested to him that that was an
exaggeration. That suggestion was put on the basis of research papers that were
put to Mr Brooke in the course of cross-examination which suggested something
very much less than that, varying between 0.5in to 2in per week.
Mr Tucker carried out some mathematical
calculations that over the period of 82 days between the date of Mr
Hampson-Mason’s inspection and the date of Mr Roberts’ inspection one would be
looking at a difference at the bottom end of 0.32in and at the top end about 7.75ins.
The difficulty with that is, although in the context of what was found in March
that is not a great distance, one just does not know from Mr Roberts in what
direction or from where this mycelium was spreading. One does not know how far
it had got. I am by no means convinced that he would necessarily have seen the
evidence, even if he had used the mirror. That was the view at which Mr Brooke
arrived. He said the probability is, and one has to bear in mind that I can
decide this case only on the balance of probabilities, that it was not there in
December, because of the then absence of smell and the young fruiting body.
That was the way he put it, and he repeated that in the course of
cross-examination.
Accordingly, I am not satisfied that the
plaintiff has made out a case against the defendants, that they, through Mr
Hampson-
of this case. In one sense I regret having to come to that conclusion, because
the plaintiff has suffered a significant financial loss as a result of the
incursion of dry rot that incurred — through no fault of his own. He took what
steps he could to get himself properly advised. While I regret, therefore, not
being able to assist him in recouping that loss, the other side of the coin is
that Mr Hampson-Mason is not to be stigmatised with having fallen short in his
professional duty. That, no doubt, is a relief to him.
That leaves the question of damages.
Strictly speaking, I do not really need to address myself to damages, but in
deference to the arguments that have been put forward and in case it is decided
that this matter should be considered elsewhere, I deal very quickly with that
aspect of the matter. The basis upon which an assessment should be made is, in
my judgment, quite clear from the authorities starting with Philips v Ward
and going through Perry v Sidney Phillips & Son* and finally
the principle established most recently in the Court of Appeal at any rate in
the case of Steward v Rapley† . It is the difference between the
price paid and the market value of the property in the condition in which it
was on the basis of a proper and competent survey with the ensuing
investigations.
*Editor’s note: Philips v Ward
[1956] 1 WLR 471; Perry v Sidney Phillips & Son (1982) 263 EG
888, [1982] 2 EGLR 135.
† Editor’s note: Reported at [1989] 1
EGLR 159.
There is no dispute that the proper
market price of this property was the price, in fact, paid by the plaintiff. It
is pleaded in the statement of claim in the alternative that the loss is to be
seen in a reduction that would have been negotiated for this particular
property in this area and in these circumstances which was supported in
evidence by an experienced valuer, Mr David McLean Watt [FRICS], at £100,000.
The alternative way of putting it was that it was to be measured by reference
to the cost of remedial works, which in the pleadings was put at £48,000, but
which was agreed at a figure as having been expended of something over £40,000,
although the defendants asserted that it could have been done for some £15,000
less than that. Mr McLean Watt’s evidence came to this, that this was a one-off
property, that although this was a buoyant market, it was not buoyant in
relation to this property, which had been for sale in comparative terms for a
long time.
I found that Mr McLean Watt’s evidence
was a little contradictory. He agreed that the property had been vastly
overpriced when it was first on the market. It was priced at £2m. In the view
of everyone who has commented on this, that was a vast overprice. It was then
reduced to £1.75m, at which level it received an offer. It is still considered
that that was a high price, but that was the price at which a Mr Henry Ford was
prepared to go into this property. That fell through, not for the reasons for
which property negotiations of this sort normally fall through (there being a
variety of reasons) but because unfortunately, Mr Ford died. The property was
then put back on the market in October. It was therefore not off the market for
all that long, and I tend to prefer the approach made by Mr Marks [the
defendant’s valuation expert] in relation to that. I do not think that two
offers obtained in that space of time are that bad, bearing in mind again Mr
McLean Watt’s evidence that this is a special property in a special area with
very limited appeal. It is not the sort of property that every purchaser is
rushing to buy or able to rush to buy.
Nevertheless, one can take account of the
history of this property. It had been refurbished as a turn-key project — that
is to say, it had been taken over as a development project and refurbished to
first-class standard (though, as I say, the particular interior finishing was
not to the plaintiff’s taste) with the expectation that the purchaser should be
able to turn the key and walk straight in. What often happens in a buoyant
market, and this was one of the more buoyant markets that there has been from a
seller’s point of view for a very long time, is that sellers tend to get a
little greedy and they put the price too high. There is nothing wrong in that
if they think they can find someone who is prepared to come along and pay that
price. Very often if it is a one-off property, a price will be paid which is
above the general level, even in that more rarefied market. It sometimes
produces the opposite effect, that because it is put on too high it stays on
the market a long time and then purchasers become wary of it and they wonder
why it has been on the market so long and infer that it has been for perhaps
other reasons simply than being overpriced.
But in this case the owner at the
material time was a fellow American [Mr Hyndman] not known to the plaintiff at
all who was living in America at the time and who was seeking to divest himself
of this property on the basis that I have said. He had got very near to doing a
deal with Mr Ford. That fell through. He then got another offer, albeit at a
lower figure which was eventually agreed, a purchase price of £1.625m with Mr
Hacker. If Mr Hacker had gone back to negotiate through his advisers a lower
figure he would, I am satisfied, have been in a much stronger bargaining
position than was Mr Hyndman. It is always difficult, of course: one knows
nothing about Mr Hyndman or what would have motivated him. One can only look at
the factors that are known. It may very well be that Mr Hyndman would have
said: ‘I am sticking. This is a buoyant market. I am going to wait. I am not in
any hurry.’ On the other hand, that runs
rather counter to the idea of producing a turn-key project.
I have come to the conclusion that that
should be taken into account in arriving at what the difference is between the
price paid and the market value. I think that Mr McLean Watt was far too
optimistic in thinking that a reduction of £100,000 would have been achieved. I
also think that Mr Marks was far too pessimistic in his approach. I do not
accept his evidence, which was put first on the basis that in the context of
the price paid and the other works that Mr Hacker was having carried out to
this property, it was de minimis and would not have affected the price
and the vendor would simply have said: ‘I am not budging.’ I do not accept that. Although this is a very
small figure compared with the overall purchase price, it cannot be said, even
to someone of the plaintiff’s evident means, that it was entirely
insignificant. I think that it is some sort of guide.
I would prefer the higher figure that was
agreed between the parties as properly representing the cost of repairs. The
difficulty that I have here is that neither set of figures was analysed or
attacked as to its reasonableness. The plaintiff’s figures were accepted as
figures on the basis that that is what was spent. The defendant’s figures were
on the basis of a costing in a department of Mr Brooke’s firm, and they were
not exact. Bearing in mind that the plaintiff had builders in doing the work, I
accept Mr Tucker’s submission on that aspect of it. That was the figure of
£40,000. I think, taking into account the negotiating advantage that Mr Hacker
might have had in the circumstances, that a proper figure on that aspect would
have been around £50,000.
The other claim, for general damages, I
need not say very much about at all, except that it is accepted that this is a
modest amount. The figures that I have been shown in the article are not of any
particular assistance here. I take into account, as Mr McLean Watt said, that
something of this nature to a man like the plaintiff or anyone in this sort of
price range has a higher irritation factor. He did have a house in which to
live. He had the irritation of delaying its being put on the market and the
delay in moving into the house on which he and his wife had set their hearts. I
would have arrived at a figure of £1,500 under that head.
But for the reasons that I have already
given, regrettably the plaintiff’s claim fails.
Judgment was given for the defendants
with costs.
