Sale of development land with planning permission — Assignment of expert geo-technical report — Part 20 claim against expert — Whether assignment valid — Extent of expert’s duty of care
The claimants were the owners of properties damaged by a landslip, which was alleged to have been caused by excavations carried out on the first defendant’s land by the second defendant contractor. The first defendant had purchased the development site with the benefit of planning permission and had been assigned a geo-technical report obtained by the vendor from a firm of specialist soil consultants, T Ltd. The first defendant had relied upon that report to fulfil a condition of the planning permission for the development. The assignment of the report expressly included the right to sue in respect of breaches by T Ltd of its duties and obligations. In return for the assignment, the defendant agreed to pay the vendor one-half of any net moneys received from T Ltd as a result of proceedings arising from any assigned cause of action.
The claimants brought proceedings against the defendants in respect of the damage to their properties, and the first defendant commenced a Part 20 claim against T Ltd.
On the Part 20 claim, preliminary issues were tried as to whether the first defendant was able to recover any part of its losses from T Ltd by virtue of the assignment, and whether T Ltd owed a duty of care to the claimants or the first defendant. T Ltd argued that the assignment was invalid, being so remote from the transfer of the land from the vendor to the first defendant that it could not be considered to form part of that transaction. T Ltd further claimed that the arrangement was in any event champertous, in that a separate consideration of one-half of the net proceeds recoverable from T Ltd had been agreed. It also relied upon the principle that an assignee could not recover more than an assignor, contending that the assignor in the instant case had suffered no loss, since it had sold the land at full value and the landslip had not occurred until several years later.
Held: 1. The assignment was valid. The report was a vital part of the planning permission being sold with the land, and, in the circumstances, the first defendant had a genuine commercial interest in the enforcement of any claim against the soil consultant and in the recovery of at least an agreed portion of the damages: Trendtex Trading Corporation v Credit Suisse [1982] AC 679 applied. Applying the principle that an assignee was entitled to recover only what the assignor could have recovered had there been no assignment, there was no cause of action in tort capable of being assigned by the vendor, since damage was an essential ingredient of tort and the damage had occurred only after the transfer: Linden Gardens Trust Ltd v Lenesta Sludge Disposal Ltd 57 BLR 57 considered. However, the first defendant could recover under the vendor’s contractual claim against T Ltd because that cause of action had accrued at the time of the alleged breach of the covenant of retainer. The measure of damages for that breach would not be nominal, and the actual cost of repair and stabilisation of the site by the first defendant would be relevant to what was recoverable, as would the cost of reasonable repair to the neighbouring properties.
2. T Ltd owed no duty of care to the first defendant in respect of its economic loss. The transaction giving rise to the report had been between the vendor and T Ltd, and it could not have been in the reasonable contemplation of T Ltd that its report would be recycled in years to come to satisfy further planning permission conditions by a developer of which it had no knowledge and that had proceeded without undertaking any further investigation: Caparo Industries plc v Dickman [1990] 2 AC 605 considered.
3. T Ltd owed a duty of care to the claimants in respect of the damage caused to their properties: Bellefield Computer Services Ltd v E Turner & Sons Ltd [2000] BLR 97 considered; Midland Bank plc v Bardgrove Property Services Ltd [1991] 2 EGLR 283 distinguished. In so far as that damage was the same damage for which the first defendant was liable, albeit recoverable through separate and different causes of action, T Ltd would be liable to pay an indemnity for contribution to the first defendant.
Christopher Thomas QC and Gaynor Chambers (instructed by Warners, of Sevenoaks) appeared for the defendants/Part 20 claimant; Mark Pelling QC (instructed by Squire & Co) appeared for the Part 20 defendant; the claimants did not appear and were not represented.
Sally Dobson, barrister
