A Mayfair firm of chartered surveyors which had claimed an early victory in a negligence claim brought against it must now face a full trial of the action.
The Court of Appeal has overturned a summary judgment ruling in favour of De Villiers Chartered Surveyors, in a dispute with a bridging loan lender over an allegedly negligent valuation.
Tiuta International blames all of its losses of a £3m-plus loan on an allegedly negligent valuation by De Villiers, but in the High Court, Timothy Fancourt QC ruled that Tiuta’s claim failed the “but for” test as it had already loaned £2.5m before the valuation was carried out.
Tiuta had claimed that it had redeemed the original loan, and entered into the new £3,088,252 loan in reliance on the valuation. But the judge ruled that Tiuta’s losses were attributable to existing indebtedness and were not caused by any alleged negligence in the November 2011 valuation. He granted summary judgment in favour of De Villiers.
Now though, by a two to one majority, the Court of Appeal has allowed Tiuta’s appeal. Lord Justice Moore Bick ruled that, based on certain assumptions made during the appeal, correct application of the “but for” test would mean that De Villiers was liable.
However, final determination of that question will await a full trial. Moore Bick LJ said: “If in the fullness of time the court decides that the defendant did not negligently over-value the property or that the second transaction did not result in the repayment of the first loan, the application and appeal may both prove to have been a waste of time and money.”
The case centres on a loan for £3,088,252 that Tiuta gave to a client in 2011 in respect of a property in Sunningdale called Drummond House. The client defaulted on the loan, leaving Tiuta out of pocket.
Lawyers for Tiuta allege that De Villiers negligently over-valued the property. They say that if De Villiers had correctly valued the property Tiuta would not have agreed the loan, and therefore would not have made a subsequent loss.
However, De Villiers argues that, as Tiuta had already lent the client around £2.5m prior to the valuation, the alleged negligent valuation in November 2011 made no difference to the lion’s share of the amount loaned.
