Rowland Philip Bratt v Nigel Lawson Jones

Liability for negligent valuation cannot be determined solely by comparing the court’s valuation with the impugned figure and applying a standard percentage margin. The court must first determine the most likely value at the valuation date and the appropriate bracket for a non-negligent valuation. If the impugned valuation falls outside that bracket, the court must then consider whether the valuer acted in accordance with practices accepted by a respectable body of professional opinion, applying the Bolam principle.

For a development site, the appropriate comparison method is a matter of professional judgment. A plot-based comparison may be preferable to a net-developable-acre comparison where density, affordable housing and development potential materially affect value.

The claimant owned development land subject to an option under which the purchase price was 90% of market value determined by an independent valuer. The defendant valued the Site at £4,075,000 as at 14 June 2013, principally by reference to a comparable development at Bloxham Road. The claimant alleged that the true value was at least £7,800,000 and claimed damages for negligent valuation.

The central issues were the correct market value, the appropriate margin or bracket for a non-negligent valuation, whether the defendant’s methodology was professionally acceptable, and the effect of acknowledged errors concerning development enhancements.

1. The claim was dismissed. The court’s most likely valuation of the Site at the valuation date was £4,746,860.

2. Valuer negligence involves two principles. First, the valuation must fall outside the range permitted to a non-negligent valuer. Secondly, the valuer must have acted otherwise than in accordance with practices accepted by a respectable body of professional opinion. The first issue is not necessarily determinative of the second.

3. The court should form its own view of the most likely value, determine the appropriate margin by reference to the nature and complexity of the valuation, and then assess whether the impugned valuation falls within that bracket. If it falls outside, the court must examine the valuer’s competence and care by reference to Bolam-type considerations.

4. The Site involved a development valuation with numerous judgmental variables. A margin between 10% and 15% was appropriate. The defendant’s valuation was 14.15% below the court’s valuation and therefore fell within the permissible margin.

5. The defendant’s use of a plot-based comparison, distinguishing market and affordable housing, and reliance on Bloxham Road as the principal comparable were professionally acceptable. A net-developable-acre approach would have materially overstated value when cross-checked against the residual valuation.

6. The defendant had applied too high an interest rate to the deferred consideration in the Bloxham Road transaction and had failed adequately to address enhancements. Those matters did not affect the result because the valuation remained within the permissible bracket. If liability had arisen, the pleaded enhancement allegation would have supported damages of approximately £495,000.

First-instance decision. No prior appellate decision is stated in the judgment.