House purchase — Building society valuation report — Plaintiff purchasers relying on report — Vendor’s refurbishment leaving structure weakened — Whether surveyor failing in duty of care to purchasers — Whether too high standard being set for valuation surveys — First instance finding in favour of purchasers — Decision upheld
In 1985 the plaintiffs, Mr and Mrs S, bought 51 Albert Street, Grantham. Their building society commissioned a survey of the property, which had been modernised with a local authority housing improvement grant. The defendant firm of surveyors were paid a £30 fee. The report was intended to be relatively brief, ie on what could be readily seen on an internal and external inspection and was not intended to take the place of the more detailed report, which building societies also offered, or a full structural survey. The guidelines by the building society recognised that fact and gave examples of matters to be drawn to their attention and that of the purchasers, which would affect the value of the security. It was accepted that many purchasers relied on the mortgage valuation report.
In the present case, the survey was carried out by a partner in the firm who wrote the report on a standard form and gave the structure and condition as “satisfactory”. Of the defects which were subsequently discovered, the most serious was the removal of the kitchen chimney breast without inserting a beam to support the structure. Instead an old door, supported by angle irons, was inserted and then plastered over. The angle irons could be seen by looking up the cooker hood or opening one of the kitchen cupboards. The surveyor noticed that there was a chimney breast in the living room above the kitchen, but none in the kitchen. He checked for distress in the room above and found none. At first instance, the official referee decided that the plaintiffs should have checked further; he found the firm negligent. On appeal, the defendants argued that that was placing too high a duty on a surveyor carrying out a mortgage valuation report and blurred the distinction between that and a house buyers’ report.
Held The appeal was dismissed.
1. While accepting for the sake of argument that there was no such duty, to look up cooker hoods or open kitchen cupboards, it might arise in order to answer a question raised by something one had seen and then to follow a trail so as to have all necessary information.
2. Once the surveyor in the present case had recognised the need to check that the removal of a chimney breast had not caused distress, the absence of movement in the floor above in a relatively recent refurbishment, was not necessarily a safe guide as to the safety of the structure.
3. Although the surveyor knew that the work had been done with an improvement grant, and that it would have been inspected to see compliance with building regulations, very little weight could be placed on that as there was no evidence on the works authorised or how the inspection had been carried out.
4. The court was deciding an extremely narrow question of fact not involving a principle of general practice as to the different requirements of the different surveys offered to house purchasers.
5. There was no slur on the professional competence of the surveyor involved; perfectly competent professionals might take risks without reflecting on their competence. If, however, that risk was one a reasonable surveyor would not have taken, then the onus had to be borne by the firm or its insurers. Damages to be varied so that compensation payable for cost of repairs to be taken out of the computation of damages of diminution in value.
Timothy Elliott QC and Stephen Dennison (instructed by Trumans, of Grantham) appeared for the plaintiffs; Rupert Jackson QC and Michael Patchett-Joyce (instructed by Mills & Reeve, of Norwich) appeared for the firm.
