Hart and another v Large and others

Professional negligence – Surveyor – Damages – Claimant purchasers claiming damages against defendant surveyor arising out of alleged negligence in surveying and valuing residential property – Whether defendant negligent in failing to recommend building survey, draw attention to defects and advise on need for professional consultant’s certificate – Claim allowed In November 2011, the claimants purchased a residential property in a hill-top location in Devon for £1.2m. The property had been recently reconstructed and extended and the vendors had engaged a firm of architects to carry out architectural services in respect of the renovation and extension of the property. Before they purchased the property, the claimants engaged the defendant surveyor who carried out a homebuyer report which was based on a thorough visual inspection of the property. At the heart of the homebuyer report concept was the traffic light/condition rating system. Condition rating 3, with a red light, highlighted defects that were serious and/or needed to be repaired, replaced or investigated urgently. The only “red” item in the defendant’s report was a problem with drainage. It failed to identify more serious problems which led to extensive damp and water ingress rendering parts of the house unusable for many months. The claimants subsequently issued proceedings against the defendant claiming damages for alleged negligence in surveying and valuing the property. Issues arose, amongst other things: whether the defendant had been negligent: (i) in failing to recommend a building survey, rather than a homebuyer report; (ii) in failing to draw attention to defects in the property in his report; and (iii) in respect of advice as to the need for a professional consultant’s certificate (PCC). Held: The claim was allowed. (1) The benchmark as to whether reasonable skill and care had been exercised was what the reasonably competent practitioner would have done having regard to the standards normally adopted in his profession. Where there was scope for individual variation in the way a task was competently performed or in the judgment which might competently be arrived at, a breach of a professional’s duty to exercise reasonable skill and care would only be established if he or she acted in such a way that no reasonably competent professional person could have done (the Bolam test). The concession by the claimant’s expert surveyor, that it was a choice for the defendant whether to carry out a homebuyer report or a building survey and that it was not necessarily wrong for him to have opted for the former (although the expert himself would not have done so), was fatal to the case that the defendant should have advised that a building survey should be carried out. That was an issue on which surveyors could legitimately differ and, applying the Bolam test, the allegation of negligence on that ground failed. (2) The claimants were buying a newly reconstructed property and had no contractual rights against the rebuild contractors or professional advisers engaged by the vendors, unless such rights were conferred during the course of the negotiations for the purchase. The only ways in which the surveyor could protect the prospective purchaser were by spelling out the limitation on the advice given, being particularly alert to any signs of inadequate design or faulty workmanship and draw attention in appropriate terms to protections available to the purchaser, including (in the present case) a PCC. Of the defects found in the building, the most significant problems were with aspects of the damp proofing, although there was no evidence of actual damp at the time of the survey. Given the difficulties which faced the defendant in reporting upon a newly redeveloped house, he should have been alert to some of the signs of sloppy workmanship which were there to be seen and to which he should have drawn attention, or given greater emphasis. On the evidence, there were defects which should have merited some mention or more emphatic mention in the defendant’s report. The RICS Practice Note referred to the category “Not Inspected” which would have been the appropriate categorisation in respect of the damp proofing where the defendant was unable to inspect. (3) The experts agreed that the defendant should have advised in his report that the claimants should seek a PCC. Insofar as the defendant provided further evidence about the PCC outside the strict confines of the report, he should reasonably have emphasised that obtaining the PCC was essential prior to committing to a purchase, especially given the defendant’s reliance on the involvement of architects, when reaching conclusions about the state of the property. The defendant had been negligent in failing to recommend in his report that a professional PCC should be sought and in failing to advise in terms that, like the completion certificate from building control, it was essential that a PCC should be sought.  (4) The defendant had argued that it was the responsibility of the claimants’ solicitors at the time to advise and it was their failure to explain the need for a PCC or the implications of proceeding without one that had caused the claimants’ loss. However, any negligence on their part would not break the chain of causation so as to prevent the claimants recovering damages from the defendant.   Had the defendant not been in breach of his duty of care, the claimants would have been determined to obtain the relevant certificate and, in the absence of such a certificate, would have withdrawn from the transaction. If the defendant had raised the issue in his report and/or been more emphatic in his subsequent email, it was difficult to believe that the solicitors would have acted as they did. Further, if the architects had been asked in clear terms to provide a PCC, it would not have been forthcoming. It was unlikely that the architects would have wanted to expose themselves and their professional indemnity insurers by issuing a certificate and the claimants would not have proceeded with the purchase without the benefit of a PCC. Had the defendant given the advice which he should have given, the claimants would not have purchased the property. (5) It was agreed that damages should be assessed upon the basis of diminution in value. The starting point was to establish the nature of the claimants’ cause of action against the defendant. Whilst there were relatively minor defects to which the defendant should have drawn attention, the major findings of breach of duty of care related to a failure initially to recommend, and a later failure to recommend with sufficient emphasis, that obtaining a PCC was an essential precaution. The purpose of obtaining such a certificate was precisely to obtain some form of protection against the presence of defects which a competent surveyor could not identify in a newly rebuilt house. The proper approach was to assess damages by calculating the difference in value between the property with the defects as reported in the defendant’s report and its value with all the defects which in fact existed: South Australia Asset Management Corp v York Montague Ltd [1996] 2 EGLR 93 applied. Watts v Morrow [1991] 2 EGLR 152 distinguished. Hughes-Holland v BPE Solicitors [2017] EGLR 23 considered. (6) The claimants were entitled to damages in the sum of £374,000 to cover the cost of rebuilding, together with £15,000 for distress and inconvenience, credit being given for sums already received from other parties by a settlement totalling £376,000. Helena White (instructed by Wright Hassell LLP) appeared for the claimants; Simon Wilton (instructed by Kennedys LLP) appeared for the defendant. Eileen O’Grady, barrister Click here to read a transcript of Hart and another v Large and others