Claimants instructing surveyor to examine property prior to purchase – Claimants discovering defect in property after purchase – Surveyor admitting negligence – Whether loss caused – Quantification of damages – Damages awarded on diminution in value basis
The claimants wished to purchase a property known as “Little Orchard”, Bears Den, Kingswood, Surrey, and entered into an undated contract with the vendors. The contract contained a provision for a structural survey report to be provided by the second defendant, an employee of the first defendant. The report was provided on 16 March 1994 and received by the claimant the following day, together with a copy of the short valuation form, filled in by the second defendant, for the proposed mortgagees of the property. The purchase went ahead and on 23 June 1994 the claimants were registered as proprietors of the property with title absolute.
The claimants subsequently discovered that the garage on the property had serious structural defects. They issued proceedings against the defendants alleging that they had acted in breach of contract and negligently. It was claimed that the roof structure of the garage was not capable of sustaining its own weight and that any further increase in load, such as snow, could cause it to collapse without warning. The claimants claimed damages on the basis of diminution in value and sought £40,000 damages contending that the property had not been worth the price that they paid of £370,000, but had in fact been worth £330,000.
The defendants agreed that they had failed to exercise reasonable skill and care and that they should have recommended the instruction of a structural engineer. However, it was contended that the second defendant’s valuation figure, which was set out in his report, was one that was in the range of valuations that a reasonably competent valuer could properly arrive at. It was further contended, relying on Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602, that because the defendants had failed to instruct an engineer to make recommendations about the defects, the court was left without evidence as to what course the vendors would have taken had they known about the defects of the garage.
Held: The claimants’ claim was allowed.
1. The defendants’ argument that the proper way for the claimants to put their case was to rely on the loss of the chance to renegotiate, was misconceived. The court was bound by authority to conclude that overpayment or the excess paid for the property, namely diminution in value, as a result of any negligence or breach of contract, was the appropriate measure of damages: see Philips v Ward [1956] 1 WLR 471, Perry v Sidney Phillips & Son [1982] 2 EGLR 135 and Watts v Morrow [1991] 2 EGLR 152. That was affirmed by Jackson and Powell on Professional Negligence see pages 335 to 337.
2. Taking into account the evidence of the parties’ experts that the garage had to be regarded as a main building rather than an outhouse, and the value of comparable properties, it could be concluded on the balance of probabilities that the diminution of the property at March 1994 was £33,000. Accordingly, the claimants were to be awarded that sum with an additional £1,996.17 in respect of hiring storage space until the completion of the remedial works.
Barbara Kaplan (instructed by Downs, of Dorking) appeared for the claimants; Andrew Nicol (instructed by Bond Pearce, of Southampton) appeared for the defendants.
Thomas Elliott, barrister
