Large v Hart & Anor

In a negligent surveyor claim, damages are normally assessed by diminution in value, comparing the property as represented with its true condition, rather than by repair cost. That conventional measure is not universal. The court must identify the losses falling within the surveyor’s duty, considering the duty overall. The categories of advice and information are not mutually exclusive, and the SAAMCO analysis is a tool rather than a rigid rule. Where the surveyor should have warned that further investigation and a Professional Consultant’s Certificate were essential, and proper advice would have led the purchaser to withdraw, the surveyor may bear loss attributable to latent defects within that protective duty. Losses unrelated to the negligence remain outside recovery. In such an unusual case, damages may compare the value as reported with the value including all actual defects.

The respondents purchased a recently rebuilt property after receiving a HomeBuyer’s Report from the appellant surveyor. The surveyor failed to identify warning signs concerning damp-proofing and failed to advise that further investigations and a Professional Consultant’s Certificate were essential. The trial judge found that, with proper advice, the respondents would not have proceeded with the purchase. He assessed damages at £389,000 using the difference between the value of the property with the defects as reported and its value with all defects that actually existed.

The appeal, from the Technology and Construction Court decision reported at [2020] EWHC 985 (TCC), was limited to the correct measure of loss. The central issue was whether damages had to be confined to defects which the surveyor should have reported, or could include losses resulting from entering a transaction which proper advice would have prevented.

The appeal was dismissed. Coulson LJ gave the leading judgment, with Andrews LJ and Peter Jackson LJ agreeing.

1. The appeal was confined to the measure of loss. The findings that the surveyor was negligent in relation to damp-proofing and the Professional Consultant’s Certificate, and that the respondents would not have bought the property with proper advice, could not be reopened.
2. The ordinary measure in negligent surveyor cases is diminution in value rather than the cost of repair. The relevant comparison is generally between the value as represented and the value in the property’s true condition. That approach was reflected in Philips v Ward [1956] 1 WLR 471, Perry v Sidney Philips & Son [1982] 1 WLR 1297 and Watts v Morrow [1991] 1 WLR 1421. It was not appropriate on these facts because it would not compensate for the surveyor’s failure to advise about risks that could not be assessed without further investigation and a certificate.
3. The court must identify the kind of loss against which the professional was under a duty to protect the client. The analysis in South Australia Asset Management Corporation v York Montague Limited [1997] AC 191 and Hughes-Holland v BPE Solicitors [2017] UK SC 21; [2018] AC 599 is a tool for determining the scope of recoverable loss, not a rigid rule. Advice and information are not mutually exclusive categories. A professional may provide both, and the duty must be assessed overall.
4. On the findings, the surveyor had to advise that the risks were fundamental and that the property should not be purchased without further investigation and a Professional Consultant’s Certificate. The omitted advice caused the respondents to enter a transaction they would otherwise have avoided. The judge was therefore entitled to assess damages by comparing the value of the property as reported with its value including all defects that actually existed, including defects which could not individually have been identified on inspection.
5. The award did not extend to losses unconnected with the negligence, such as funding costs or capital losses from a general fall in property values. The other defendants’ potential liability did not reduce the surveyor’s joint and several liability to the respondents; the allocation of responsibility was a matter for contribution proceedings. A differently formulated valuation method, not advanced or supported by expert evidence at trial, provided no practical alternative.

1. Court of Appeal (Civil Division): dismissed the appeal, which was limited to the measure of loss.
2. High Court of Justice, Technology and Construction Court (QBD): Deputy High Court Judge Roger Ter Haar QC found the surveyor liable for negligence and awarded £389,000, in the judgment reported at [2020] EWHC 985 (TCC).