Mr Richard Large v Mr Chris Hart
| Jurisdiction | England & Wales |
| Judge | Lord Justice Coulson,Lady Justice Andrews,Lord Justice Peter Jackson |
| Judgment Date | 15 January 2021 |
| Neutral Citation | [2021] EWCA Civ 24 |
| Docket Number | Case No: A1/2020/0896(Y) |
| Court | Court of Appeal (Civil Division) |
| Date | 15 January 2021 |
[2021] EWCA Civ 24
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGHT COURT OF JUSTICE TECHNOLOGY AND
CONSTRUCTION COURT (QBD)
Deputy High Court Judge Roger Ter Haar QC
Royal Courts of Justice
Strand, London, WC2A 2LL
Lord Justice Peter Jackson
Lord Justice Coulson
and
Lady Justice Andrews
Case No: A1/2020/0896(Y)
Mr Simon Wilton (instructed on a Direct Access basis) for the Appellant
Mr Jason Evans-Tovey (instructed on a Direct Access basis) for the Respondents
Hearing date: 8th December 2020
Approved Judgment
INTRODUCTION
This appeal raises a single issue: whether, on the particular facts of this surveyor's negligence case, the judge was right to assess the diminution in value in a way which rendered the appellant surveyor, Mr Large, liable for many of the financial consequences of the respondents' (the Harts) decision to purchase the property. As will become apparent below, I consider this to be an unusual case on the facts, and I am confident that this appeal gives rise to no departure from the well-known principles governing the measure of loss in negligent surveyor cases.
Not only is this an unusual case on the facts, but it is also in many ways a sad one. The Harts thought that they were buying their dream home on a cliff in Devon looking out to sea. Instead, their purchase of the property turned into a nightmare when it became apparent that the significant rebuilding works which had been carried out by the previous owners had been so badly done that eventually the only solution was demolition and reconstruction. But the circumstances have also been unfortunate for Mr Large, who provided a HomeBuyer's Report prior to the Harts' purchase of the property for a modest fee, and also provided subsequent advice for which he made no further charge, and who was found liable by the judge for damages in the sum of £389,000.
Nor have the unhappy consequences of these events been limited to the parties to this appeal. As part of these proceedings, claims were also brought against the Harts' conveyancing solicitors, Michelmores LLP (“Michelmores”) and the architects responsible for the significant rebuilding works carried out at the property prior to the Harts' purchase, The Harrison Sutton Partnership (“Harrison Sutton”). The Harts' direct claims against Michelmores and Harrison Sutton were compromised when those defendants paid them a total of £376,000, but they are not yet free of this litigation: Mr Wilton, of behalf of Mr Large, told the court that contribution proceedings between the defendants remain to be concluded.
Although this appeal only goes to an issue as to the appropriate measure of loss, it is necessary to set out some of the factual background, which I do in Section 2 below. In Section 3, I set out the relevant parts of the judgment. In Section 4, I stress the limited scope of this appeal. Then in Section 5, I set out the law and, in Section 6, I set out my answers to the issues raised as to the appropriate measure of loss in this case. There is a short summary of my conclusions at Section 7. The court is very grateful to both counsel for their comprehensive written and oral submissions.
THE FACTUAL BACKGROUND
The property is situated on a cliff above a beach in Devon. The views are magnificent, but the property could not be more exposed to the elements. Between 2009 and 2011, it was extensively rebuilt and extended. The architects were the original 3 rd Defendants, Harrison Sutton.
Shortly after the completion of the rebuilding works at the property, the owners put it on the market. The Harts saw it and were considering whether to buy it. The original 2 nd Defendants, Michelmores, were retained as their conveyancing solicitors. Mr Large was retained to survey the property for the purposes of producing an RICS HomeBuyer's report.
Mr Large visited the property on 2 nd November 2011 and produced the HomeBuyer's Report on the same day. He forwarded it to Mrs Hart by email the following day. Mr Large gave the property a generally clean bill of health, although he valued it at £1.2 million, as opposed to the figure which The Harts had originally offered, of £1.24 million. Although we were shown a number of the original documents relating to the Report it is, with one exception, unnecessary to refer to any of them.
The exception is the RICS HomeBuyer Practice Note. Two paragraphs should be noted:
(a) Paragraph 2.4, which provides:
“The inspection is not exhaustive, and no tests are undertaken. There is, therefore, a risk that certain defects may not be found that would have been uncovered if testing and/or a more substantial inspection had been undertaken. This is a risk that the client must accept. However, where there is ‘a trail of suspicion’ the surveyor must take ‘reasonable steps to follow the trail’. These reasonable steps may include recommending further investigation.”
(b) At Paragraph 4.7, which deals with the surveyor's overall opinion, sample summaries are set out in which that opinion might be conveyed. One option was described as “Price OK but common defects”; another was headed “Unwise to proceed at any price”; and another was “Opinion not possible”.
During November 2011, there were numerous exchanges between the Harts, Harrison Sutton, Michelmores, and Mr Large. These exchanges demonstrated a certain unease about the prospective purchase on the part of the Harts. In evidence, it appears that, although he did not advertise it at the time, some of that unease was shared by Mr Large. One major concern related to the general quality of the rebuilding works.
In connection with a possible mortgage, Michelmores' conveyancing documentation identified the possibility of obtaining a Professional Consultancy Certificate (“PCC”) in respect of the property. A PCC is appropriate where the property being purchased has not been constructed with the benefit of an NHBC scheme, but has been built under the supervision of an architect or other construction professional. That was directly relevant in this case: the extensive rebuilding works at the property were not covered by the NHBC, and the Harts, as the prospective purchaser, would have had no contractual claim against the contractors or Harrison Sutton if those works turned out to be defective. Thus the PCC was the best (perhaps the only) ‘insurance’ which the Harts could obtain in relation to the standard and quality of the extensive rebuilding works.
The blank copy of a PCC in the bundle made plain its scope and effect. It contained a number of declarations by the professional relating to periodic inspections of the work and conformity with drawings and instructions, and an express statement that the professional was aware that the certificate was being relied on by the first purchaser (ie the first purchaser of the property following the completion of the works). As we shall see, the experts in this case were agreed in their evidence that Mr Large should have advised that a PCC was obtained before the Harts purchased the property.
Michelmores failed to advise the Harts about the need for a PCC. Mr Large made no reference to a PCC in his report. However, the Harts raised the issue with him subsequently, endeavouring to work out if it was something that they needed before they purchased the property. On 17 November, in an email, Mr Large responded:
“It is not necessarily essential that a (PCC) is provided, but with a project of this size, stated as being managed by an architectural firm, it would not be unreasonable to ask for this. If such a certificate is not available, there may be little practical recourse if it were found that unseen deficiencies exist. You should seek advice from your legal adviser.”
Following these and other exchanges, on 23 November 2011, the Harts completed the purchase of the property in the sum of £1.2 million. However, when they arrived to take possession, they found a builder's van on the driveway and the front door of the property removed. The builders told the Harts that they had been instructed to attend by Harrison Sutton, and that they were trying to fix the leaking front door. Unhappily, this was the precursor of months and years of worry and strain for the Harts, almost all damp-related. In the end, the advice was that, so badly had the rebuilding works been done, the property would have to be demolished and reconstructed.
Proceedings were issued shortly before the expiry of the limitation period, on 1 November 2017. For a period during the currency of the litigation, the Harts represented themselves. By the time of the trial they had instructed solicitors, Wright Hassell LLP. For the appeal, Mr Evans-Tovey (who did not appear below) appeared on their behalf on a Direct Access basis. Mr Wilton has acted for Mr Large throughout, originally through Kennedys LLP and, since September 2020, on a Direct Access basis.
THE JUDGMENT
The trial was heard in the TCC in February 2020 by Roger Ter Haar QC, sitting as a Deputy High Court Judge (“the judge”). The judgment was dated 22 May 2020. The Neutral Citation Number is [2020] EWHC 985 (TCC).
The judgment dealt in detail with the factual background and the various witnesses. There were numerous disputes between the parties which the judge had to resolve in the first 137 paragraphs of his judgment but which do not arise for further consideration on this appeal.
Starting at [138], under the...
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