Platform Funding Ltd v Bank of Scotland Plc (Formerly Halifax Plc)

A professional ordinarily undertakes to exercise the reasonable skill and care expected of a competent practitioner. That principle does not govern every aspect of the retainer. Clear language, special facts or the inherent nature of an instruction may impose an unqualified obligation.

A surveyor retained to inspect and value a particular property ordinarily undertakes an inherent obligation to inspect that property. Inspecting and valuing a completely different property is a breach of contract regardless of the care exercised. A certificate stating that the property offered as security has been inspected is an unqualified statement of fact. It is distinct from a statement of professional opinion that a valuation is a fair indication of market value.

A mortgage lender advanced money on the security of 1 Bakers Yard after receiving a surveyor's report certifying that the property had been inspected and valued. The borrower had deceived the surveyor into inspecting another house nearby. Following default and repossession, the lender suffered a shortfall and claimed damages for breach of contract without alleging negligence.

His Honour Judge Collins CBE in the Central London County Court held that the surveyor had undertaken an unqualified obligation to inspect the instructed property and gave judgment for the lender, with damages to be assessed.

The surveyor appealed. The central questions were whether the retainer imposed an obligation stricter than reasonable professional care and whether the certificate constituted an unqualified contractual warranty that the correct property had been inspected.

1. Appeal dismissed by a majority. Moore-Bick LJ and Rix LJ held that the surveyor was contractually liable for inspecting and valuing the wrong property. Sir Anthony Clarke MR dissented and would have allowed the appeal.

2. Per Moore-Bick LJ, a professional person's ordinary obligation is to exercise the skill and care expected of a reasonably competent practitioner. That presumption applies to matters calling for professional skill and expertise. It does not establish that every aspect of a professional retainer is qualified by reasonable care. The terms and context of the engagement may impose an unqualified obligation concerning a particular aspect of the work: see Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners [1975] 1 W.L.R. 1095 and Zwebner v The Mortgage Corporation Ltd [1998] P.N.L.R. 769.

3. The relevant question is whether, having regard to the matters known to both parties when the instructions were accepted, the professional assumed an unqualified obligation. Courts should be cautious about finding such an obligation without clear words, but must give effect to clear contractual language. The nature of the obligation may itself indicate whether it was intended to be qualified.

4. The ordinary retainer of a surveyor to inspect and value a specified property contains an inherent obligation to inspect and value that property. Identification of residential property will ordinarily present no significant professional difficulty. The surveyor is better placed than the lender to verify the property and may seek clearer instructions if uncertainty arises. Inspecting and valuing a completely different property therefore constitutes a breach of contract independently of negligence.

5. The certificate also imposed an unqualified obligation. Its statement that the property offered as security had been inspected was a statement of fact. It was distinct from the professional opinion that the stated valuation was a fair indication of open market value. The surveyor certified that 1 Bakers Yard had been inspected when it had not.

6. The court declined to permit revival of an agency and estoppel argument which had been expressly abandoned at trial and on which the judge had made no findings. The order giving judgment for the lender, with damages to be assessed, therefore stood.

7. Sir Anthony Clarke MR dissented. He considered identification of the property part of the professional task and would have held, in the absence of special facts or clear language, that both the retainer and certificate required only reasonable skill and care.

1. Court of Appeal (Civil Division): By a majority, dismissed the surveyor's appeal and upheld the finding of contractual liability.
2. Central London County Court: His Honour Judge Collins CBE gave judgment for the claimant on 2 November 2007, with damages to be assessed, holding that the surveyor had undertaken an unqualified obligation to inspect the instructed property.