· A surveyor is not normally liable
for a purchaser’s mere disappointment
· Directing the surveyor to specific
matters may make no difference to this
On 15 January last,
we noted an unreported decision of the Court of Appeal in Farley v Skinner.
This case was very unusual: a two-judge court was unable to agree, and the
parties were consequently forced to undergo a rehearing in front of the normal
three judges. The resulting decision is summarised at [2000] EGCS 52. Almost
inevitably, given the track record of this litigation, the court was split 2-1,
which means that, including the trial judge, each of the parties has convinced
three judges out of six! Clearly a controversial story, and one worth
retelling.
The claimant in Farley
v Skinner wished to purchase a house in rural Sussex. Having found
one that would need considerable refurbishment, the claimant sensibly
commissioned a survey of the property from the defendant, a qualified surveyor.
In addition, because he was troubled by the possibility of aircraft noise from
Gatwick Airport, the claimant specifically asked the defendant to inquire into,
and report on, the amount, if any, of such noise.
The defendant
provided a reassuring report, and the claimant purchased the property, carried
out a modernisation programme and moved in. Unfortunately, however, he soon found
that the ‘stacking’ of aircraft awaiting a landing slot meant that the house
was affected by the kind of aircraft noise that he had been so anxious to
avoid. Keenly aware that the enjoyment of his garden was spoiled, the claimant
sued his surveyor for negligence.
The trial judge
held that the defendant had failed to make the type of inquiries that a
reasonably competent surveyor would have done, and that this constituted both a
breach of his contract with the claimant and negligence. Nevertheless, while it
was accepted that the claimant would not have purchased the house had he known
the true position, the evidence showed that the noise levels were insufficient
to affect the market value of the property. The judge duly awarded damages of
£10,000 for the claimant’s impaired use and enjoyment of the property, an award
that the defendant challenged in the Court of Appeal.
The appeal turned
on two questions: whether what the claimant had suffered amounted to the kind
of ‘physical inconvenience’ for which damages could be awarded; if not, whether
the contract in this case was of the special type, for which damages could be
awarded for mere ‘annoyance’.
At the heart of
this dispute was the decision of the Court of Appeal in Watts v Morrow
[1991] 2 EGLR 152. It was there held that, in the case of an ‘ordinary
surveyor’s contract’, the damages payable to a purchaser-client are based on
‘diminution in value’, that is the effect, if any, that negligently overlooked
defects have on the market value of the property. The court was prepared to add
a modest amount to compensate for any physical inconvenience that might be
suffered (such as having to live for months in a defective and insanitary
property).
However, it was
strongly emphasised that, except in contracts whose very object is to provide
pleasure, damages cannot be awarded for such ‘mental’ consequences of breach as
‘distress, frustration, anxiety, displeasure, vexation, tension or
aggravation’.
The majority of the
Court of Appeal held that the claimant in Farley had not suffered the
necessary physical inconvenience. Stuart-Smith LJ pointed out that, while the
claimant had consistently emphasised his ‘annoyance’ at a level of noise that
he described as a ‘confounded nuisance’, his discomfort could not, in truth, be
regarded as ‘physical’. As his lordship put it:
Nor can I accept
the argument that because the claimant hears the noise through his ears and
therefore experiences it through his senses, this amounts to physical
discomfort…All distress, annoyance, frustration, vexation and so on is a
reaction to things perceived through the senses, usually of sight or hearing.
But that does not make the distress physical.
Nevertheless, this
view did not pass unchallenged. Dissenting, Clarke LJ cited earlier cases, in
which physical inconvenience had been held to encompass having to walk four or
five miles at night or having to live in cramped conditions over a period of
several months. Given this, his lordship had no doubt that noise, affecting as
it does the sense of hearing, was sufficiently physical.
If this particular
inconvenience was not held to be physical, the next question was whether the
contract was an ‘ordinary surveyor’s contract’ or whether the specific
instruction to check on aircraft noise turned it into a ‘contract to provide
pleasure, relaxation or peace of mind’. Again, the Court of Appeal was divided,
and, again, Stuart-Smith LJ was in the majority:
It is not
infrequently the case that the surveyor is asked to have regard to particular
matters such as drains, tree roots affecting foundations, potential development
on adjacent property, potential for extending or altering the house and matters
of that sort. All these matters, as well as structural defects may affect the
purchaser’s enjoyment of the property and are ready fuel for irritation and
annoyance if they are not as the surveyor reports. But that does not in my view
affect the nature of the contract.
Clarke LJ once more
took a different line. In his view, supplying accurate information about the
impact of aircraft noise was not simply part of the general retainer, but,
rather, ‘a specific and distinct obligation’ accepted by the defendant. To that
extent, the contract was to provide ‘peace of mind’ for the client, as far as
reasonable care and skill could achieve it.
However, these
words fell on deaf ears. So, at the end of the day, a surveyor who failed to do
what he specifically undertook to do, namely to make careful inquiry as to a
specific aspect of the property, in circumstances that were held to amount to
negligence, was not liable to compensate the client for the resulting
‘inconvenience’.
