Negligence — Valuation or survey — Action by purchasers of house in Southport against estate agent — Appeal by purchasers from decision of county court judge rejecting their claim — House was purchased in reliance on a report by the estate agent, described as a ‘valuation’, which drew attention to a settlement on the gable, dampness entailing a new damp-proof course, electrical wiring needing overhaul at a future date and plumbing old but seeming to be in reasonable condition — A purchase at £8,650 was recommended and purchasers in fact paid asking price of £8,745 for the house, intended to be their retirement home — Subsequently, owing to husband’s state of health, they wished to sell the house and move to the south of England, but found difficulty in reselling when they put the house on the market (about 3 1/2 years after the purchase) at prices varying in the region of £19,000 reducing to £17,000 — Owing to the differential between house prices between the north and south of England they found themselves unable to move, and they sued the estate agent in contract and tort for breach of duty and negligence — The statement of claim was based on the premise that the estate agent would provide a full survey and it was contended that the report should have contained a warning as to probable difficulty in reselling — The county court judge found that the instructions were to carry out a valuation, not a full survey, the question being ‘was the price right?’ He also found that the estate agent’s report was not misleading; it drew attention to the settlement, which was in fact obvious — As a valuation, the judge found that the report was accurate — Held by the Court of Appeal that the judge was fully entitled on the evidence to find that there had been no breach of contract or of the general duty of care by the estate agent, who had been instructed as a valuer only — He was not instructed as a surveyor to carry out a structural survey, which he was not qualified to do — The court did not consider that there was a duty on a valuer to warn a purchaser as to the difficulties of resale — Appeal by owners dismissed
No cases are
referred to in this report.
This was an
appeal by Harry Sutcliffe and his wife, Margaret Ethel Sutcliffe, from a
decision of Judge Edward Jones at Southport County Court, rejecting their
claims for alleged breach of duty and negligence against J Leslie Sayer, an
estate agent, in respect of a report on a house at 17 Southport Road,
Southport.
Miss Jane
Shipley (instructed by Park Nelson & Doyle Devonshire, agents for Gordons,
of Bradford) appeared on behalf of the appellants; S W Baker (instructed by
Mawdsley Hadfield & Lloyd, of Southport) represented the respondent estate
agent.
Giving the
first judgment at the invitation of Purchas LJ, BUTLERSLOSS J said: This is an
appeal from an order of His Honour Judge Edward Jones made on July 2 1986 when
he found judgment for the defendant together with costs upon scale 3. It is an
appeal by the plaintiffs, who are the appellants in this matter, in respect of
the purchase of a house in July 1979. The short facts are that the plaintiff
appellants had lived in Bradford for many years and had come to the conclusion
that they would like to retire and settle in Southport. They had limited means
and had little knowledge of the area, except that it appeared attractive to
them. They visited in May 1979 a house at 17 Southport Road and decided to buy
it. The price was within their price range. The appellants appreciated that the
house was somewhat lower in price than some others in the area and decided to
buy it subject to its being, according to them, surveyed. They walked along the
road in Southport which is the main shopping street and walked into the
premises of the defendant, who was an estate agent, having seen the notice and
decided that he was a suitable person to advise them on the purchase price of
this house. They did not see the defendant himself; they saw somebody who turns
out to have been his wife. At no time did they see the defendant. However, they
left a message, and in due course there was some telephone call, according to
the appellants, which was not remembered by the defendant. After that a report
was sent to them which was headed ‘Valuation’. The defendant respondent to this
appeal is not qualified, and he put on the outside of his valuation, as no
doubt was on the board outside his premises ‘J Leslie Sayer, MNAEA., Surveyors,
Valuers & Estate Agents’, and it would appear that he had been in the
business of estate agents for many years, and indeed retired, according to his
evidence, rather later that year.
The valuation
set out short particulars of the property and its rateable value, the rates
payable, and the final paragraph on the first page said:
The
property, about 45 years old has settlement on the
gable and there is dampness, which entails a new damp proof course. The
plumbing, although old seems to be in reasonable condition, but we can give no
warranty whatsoever and though the electrical wiring has been improved in part
it will need an overhaul at some future date. Taking into account the
shortcomings we can recommend a purchase.
Then on the
second page of this short report it says:
WE HEREBY
CERTIFY that we have this 30th day of May 1979 inspected and appraised the
value of the aforementioned property to be in our opinion the sum of £8,650 . .
. with vacant possession.
He also
separately sent his fee in the sum of £50. After receipt of that valuation the
appellants went ahead and purchased the house some time in July 1979. It is
clear (and the learned judge so found) that it was bought as a house for their
retirement, with no immediate view in their minds of the prospects of resale.
However, beyond their immediate contemplation they had the misfortune that the
husband suffered an illness, it appears largely from overstraining himself in
the do-it-yourself repairs that he did to the house, and within a comparatively
short time of their settling there he found himself in hospital and thereafter
advised to move to a better climate, and wishing, apart from anything else,
having a heart condition, to live on one floor instead of on two. Again it is
clear from the evidence and the finding of the learned judge that, had he not
had this misfortune, it is unlikely that they would have contemplated leaving
for no doubt most of the period of their retirement life.
When they came
to sell they discovered that the house was extremely difficult to sell. It
became clear that it was situated on substrata of peat and there was settlement
which had not moved, it appears, since 1979. But this sort of house with these
defects has
There was evidence before the learned judge as to the difficulties of resale
and the views of three experts based upon the building society’s view of
mortgages on this type of properties and the limited appreciation in value of
this property compared with other properties without the defects of settlement.
The
appellants, having the desire to move from Southport to the south of England
and having placed the house upon the market at a price which was considerably
above that which would have been advised by any of those who gave evidence as
experts in the case, found themselves unable to purchase the property that they
would like to purchase in the south of England in the climate in which they
have now been hoping to live. In these circumstances they bring an action
against the defendant respondent based upon breach of the contract between them
and him and in tort for the giving of negligent advice. I should have said that
the price which was recommended by the respondent to this appeal, of £8,650,
was in fact exceeded in that the appellants paid the price which was asked by
the vendor, that is to say, £8,745.
The points of
complaint in the statement of claim are based upon the premise that the
respondent would provide a full survey of the property to be bought, that it
was an implied term of that survey that it would be carried out with skill and
care, as was reasonable to expect from a surveyor, valuer and estate agent, and
that he was in breach of such duty of care for a number of reasons.
The respondent
in his defence set out that he was instructed to provide a valuation and not a
survey. I am very much indebted to the helpful and comprehensive submissions of
counsel. The notice of appeal can conveniently be summarised in that the first
two grounds relate to the implied terms as to breach of contract, and the third
ground relates to the giving of negligent advice. But all of those points
really can be summarised into three matters which arise in both claims, that is
to say: (1) what was the defendant instructed to do; (2) were the plaintiffs
misinformed; and (3) was the valuation accurate?
The learned
judge made a number of findings of fact, and, in relation to the first one —
what was the defendant instructed to do — he found that he was instructed to
prepare a valuation rather than to prepare a full survey, and that the
questions that were uppermost in the minds of these appellants were: ‘Was the
price right?’ and ‘What defects, if any,
would affect the price that was being asked for this property?’. He says at p
53 of his judgment:
The
plaintiffs claim they asked for, and indeed contracted for, a full survey.
Plaintiffs’ counsel accepts [that] this would not have included a structural
survey. His real contention is — and this is in fact the point of the case —
that however limited the survey is to be construed, it would include warning a
prospective purchaser that the house would be difficult, indeed for people with
the financial resources of the plaintiffs, impossible, to sell.
He said at p
56:
The
plaintiffs wanted at the time to know if the price was right for the property.
They wished to have their attention drawn to any defects which affected that
valuation. They got just that.
At p 57 he
said:
I find the
defendant was no more than an unqualified estate agent, but with a knowledge of
property values at the material time in this particular area. He provided a
report about which no criticism can be levelled as to the qualities of the
house.
The judge,
upon facts that were available to him, found as a fact that the instructions of
the plaintiff appellants were as to a valuation and not as to a full survey,
and he was entitled to come to that view.
The second
point was: Were these appellants misinformed?
As I have already read out, there were certain defects which were
referred to on the valuation: ‘The property, about 45 years old, has
settlement on the gable’, and then various other matters. There was therefore
an indication to the purchasers of settlement. Much criticism is made by
counsel for the appellants that the report provided a partial, misleading and
inaccurate view of the very real defects that there were of a house which was
standing upon peat and where there was settlement already obvious, as indeed it
would be obvious to anybody, as I understand it, walking along the road.
Counsel on
behalf of the respondent points out that the settlement was obvious and that,
if there was settlement to the gable (and there was only one gable in this
house), it was clear it would be to the wall, and, if there were settlement to
that, there would bound to be settlement and movement of other parts of the
house.
The learned
judge had the evidence before him of a number of experts and he took the view
(at p 55):
As I
mentioned earlier, the plaintiffs believed they were going to have a full
survey. As far as the physical condition of the property is concerned, they
have not been misinformed. All the defects, actual or possible, are mentioned
in the report. The point at issue here is referred to in the words ‘about 45
years old, has settlement on the gable’.
That again is
a finding upon which the learned judge was entitled to come.
Was the
valuation accurate? At p 56 he said:
I do not
accept that the property, at the time of the sale, was indeed overpriced. There
seems no reason to believe that the defendant, despite his lack of professional
qualification, was out of touch with the level of house prices at the time he
wrote his report. His valuation was £8,650. The plaintiffs, indeed, paid £8,745
for it.
Then at p 57
he said:
His valuation
was, within limits, completely accurate.
The respondent
to this appeal said at p 30 in his valuation: ‘Taking into account the
shortcoming we can recommend a purchase’, and it is said by counsel for the
appellants that that was recommending a purchase and providing advice and that
should have taken into account advice as to the prospects of resale. I for my
part take the view that this was a recommendation for the purchase of this
property at the price which on the following page is put forward, that is to
say, £8,650; and that there was no greater duty of care upon this respondent
than to provide a valuation, which was a valuation within acceptable limits,
taking into account various matters which would have an effect upon the valuation,
that is to say, that there were defects and shortcomings. There was no means
for this respondent to know how long these appellants were proposing to live at
the house. He may or may not have known that they were buying it for retirement
purposes; he never met them. He was not asked to advise on it as an investment;
nor indeed was that the purpose of the purchase of the house. On the evidence
before the learned judge and before this court, there was nothing to suggest
that in 1979 the property that was on the market and sold to these appellants
could not have been resold.
Undoubtedly
the resale factor is a consideration, and it is a consideration which has an
effect upon the price of the property to be bought. There was before the
learned judge some conflicting evidence as to whether or not a building society
would have given a mortgage in 1979 and whether or not this was a property that
was peculiarly difficult to sell rather than rather more than usually difficult
to sell.
The learned
judge put his mind to that at p 57 and said:
I am not
satisfied the house had at that time, or in the foreseeable future, from that
time, a blight upon it. To find the last matter would entail the whole area
suspect,
and I for my
part cannot shut my eyes to the fact that this is a very experienced judge who
has sat in this area for many years and was listening to experts in this area
and would have considerable ability to sift the evidence that was provided on
houses in an area with which he was particularly well acquainted. As it
happens, this house, when put up for purchase, has been put on the market, as I
have already said, at a price considerably in excess of that which any of the
experts would have recommended.
I do not
consider that there is any duty upon a valuer to warn a purchaser as to the
difficulties of resale. The plaintiffs appellants in this case cannot have it
both ways. The complaint is that the defendant respondent should have given to
the appellants many more details as to the defects and the consequences of such
defects, in particular the consequences as to the difficulties of resale. But
it is worthy of comment that the details which the appellants were given were
at no time investigated by the appellants; they neither requested the
respondent to explain what he meant by ‘settlement of the gable’ nor asked what
were the consequences of that settlement; nor indeed did they ask whether they
should get a structural survey or consider further what other information it
might be necessary to have upon which they might judge whether they should in
fact buy this property.
The learned
judge rightly found, in my view, that the purpose of the valuation to these
appellants was to know if the price was right. The price appears to have been
reasonably accurate. The appellants were not misled. There was no breach, in my
judgment, of any implied condition in the contract. I can find no breach of the
general duty of care to take proper steps to do the best that he can as a
valuer and not as a qualified surveyor, and I for my part would dismiss this
appeal.
Agreeing,
PURCHAS LJ said: I of course have sympathy for the plaintiffs, who have had
their plans for retirement dashed by an unfortunate heart attack sustained by
Mr Sutcliffe in April 1982, with the result that instead of remaining at 17
Southport Road in their retirement, which was their plan, they now seek to move
elsewhere as a result of Mr Sutcliffe’s change in health. They put 17 Southport
Road on the market on December 15 1982 at prices varying in the region of
£19,000 reducing to £17,000, but they had been unable to find a buyer at this
price. They cannot move without selling the house first because of the
differential in house prices between Southport and the area to which they hope
to move.
The learned
judge, as has been said in the judgment just delivered, applied his mind to the
material issue in the case. Understandably looking back with hindsight now, Mr
and Mrs Sutcliffe contend that they expected much more from the defendant than
they received, but the learned judge, having considered their evidence, the
evidence of a number of experts as to value and property, and, as he was
entitled to do, taking into account his own experience in the area in which he
sits, came to conclusions which were adverse to the appellants in this case. I
read only one passage to which my Lady has already referred: ‘As I mentioned
earlier, the plaintiffs believed they were going to have a full survey.’ The learned judge’s finding as to their
attitude at the time was this:
The plaintiffs
wanted at the time to know if the price was right for the property. They wished
to have their attention drawn to any defects which affected that valuation.
They got just that. I am not satisfied that [at] any time a mortgage would not
have been obtainable.
On the
question of evidence as to the value, the learned judge found in these terms:
I do not
accept that the property, at the time of the sale, was indeed overpriced. There
seems no reason to believe that the defendant, despite his lack of professional
qualification, was out of touch with the level of house prices at the time he
wrote his report. His valuation was £8,650. The plaintiffs, indeed, paid £8,745
for it.
The case made
for the appellants was that, if they had been properly warned about settlement
and the difficulties that might attend a resale, they then might have taken
other steps or made other decisions in relation to the purchase of the
property. I find no evidence or finding by the learned judge to support such a
contention. In my judgment the learned judge properly applied his attention to
the issue in this case and reached conclusions which he was fully entitled to
reach on the evidence before him.
For those
reasons and for the reasons that have already fallen from my Lady, I agree that
this appeal must fail.
The appeal
was dismissed with costs, not to be enforced against appellants without leave
of the court. Legal aid taxation of appellants’ costs ordered.
