Perry v Sidney Phillips & Son

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeTHE MASTER OF THE ROLLS,LORD JUSTICE OLIVER,LORD JUSTICE KERR
Judgment Date14 Jul 1982
Judgment citation (vLex)[1982] EWCA Civ J0714-3
Docket Number82/0357

[1982] EWCA Civ J0714-3

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

(MR. PATRICK BENNETT, Q.C., sitting as a Deputy High Court Judge)

Royal Courts of Justice.

Before:

The Master of the Rolls

(Lord Denning)

Lord Justice Oliver

and

Lord Justice Kerr

82/0357

1978 P. No. 207

Ivan H. Perry
(Plaintiff) Respondent
and
Sydney Phillips and Son (a firm)
(Defendants) Appellants

MR. P. LATHAM (instructed by Messrs. Wilkinson & Durham of Kingston-upon-Thames) appeared on behalf of the (Plaintiff) Respondent.

MR. J. HICKS, Q.C. and MR. J. POWELL (instructed by Messrs. Reynolds Porter Chamberlain) appeared on behalf of the (Defendants) Appellants.

1

THE MASTER OF THE ROLLS
2

In 1976 the plaintiff, Mr. Perry, was minded to buy a house. He saw what looked like a very attractive property. It was Kyre Bank Cottage, Kyre, near Tenbury Wells, in Worcestershire. He made an offer of £27,000 subject to survey and contract. He employed a firm of surveyors, Messrs. Sydney Phillips & Son, to carry out the survey. They surveyed the property and prepared a report. Mr. Perry read the report. On the faith of it—although it did disclose some defects in the property—he was satisfied that the cottage was a sound buy. So, on the 2nd July, 1976, he completed the contract of sale for £27,000.

3

Unfortunately, after Mr. Perry took possession, he found many defects. They had not been mentioned in the report. In particular, there were serious defects in the roof and in the septic tank. The surveyors had not noticed them. The roof leaked and the rain came in. The septic tank gave off an offensive odour. Mr. Perry consulted a different firm of surveyors. They made a report showing that there were many defects which had not been mentioned by Messrs. Sydney Phillips & Son in their report. Mr. Perry instructed solicitors. They wrote to Messrs. Sydney Phillips & Son listing the defects. Messrs. Sydney Phillips & Son instructed their own solicitors. The upshot was that the surveyors denied any liability.

4

This placed Mr. Perry in a quandary. He simply did not have the money to undertake major repairs. He carried out what minor repairs he could on a "do-it-yourself" basis. As Messrs. Sydney Phillips & Son were denying liability, he could not risk doing the repairs on borrowed money.

5

On his solicitors' advice, Mr. Perry brought an action against Messrs. Sydney Phillips & Son for damages for their negligence in making their report. The claim was put both in breach of contract and in negligence. In 1981 the case was tried by Mr. Patrick Bennett, Q.C. (sitting as a Deputy High Court Judge). He dealt with liability before considering the quantum of damages. At that stage Mr. Perry and his wife were still living in the cottage.

6

Mr. Bennett, Q.C. found that the surveyors were negligent in making their report. He held that damages should be assessed according to the cost of repairing the defects in 1981 when the action was tried. He also held that Mr. Perry ought to be awarded damages for vexation—that is, the worry, discomfort and distress which he had suffered by reason of the house being in the poor condition. The defendants appeal to this court.

7

But then the unexpected happened. After the trial and pending the appeal, Mr. Perry decided to sell the house. After the trial in April 1981 Mr. Perry found himself in financial difficulties. He had received bills from his solicitors for £4,788 costs, He could not get any assurance as to the date when damages would be assessed. He was faced with the prospect of the appeal and long-drawn-out hearings as to damages. So Mr. Perry put the cottage on the market without doing any of the repairs. He sold it for £43,000.

8

Mr. Perry made an affidavit to explain why he had found it necessary to sell the cottage. In August 1981 he had been offered a job as a clerk with stockjobbers on the London Stock Exchange. It was necessary that he should live nearer to his new place of work. So he sold the cottage and bought a house at Fittleworth in Sussex.

9

We now have to consider how the damages are to be assessed. The cases show up many differences. I need only draw attention to these:

10

First—Where there is a contract to build a wall or a house, or to do repairs to it, then if the contractor does not do the work or does it badly—the employer is entitled, by way of damages, to recover the reasonable cost of doing such work as is reasonable to make good the breach. The cost is to be assessed at the time when it would be reasonable for the employer to do it—having regard to all the circumstances of the case, including therein any delay due to a denial of liability by the contractor or the financial situation of the employer. The work may not have been done even up to the date of trial. If the cost has increased in the meantime since the breach—owing to inflation—then the increased cost is recoverable, but no interest is to be allowed for the intervening period, see Radford v. de Froberville (1977) 1 Weekly Law Reports 1262; William Cory & Son Ltd. v. Wingate Investments Ltd. (1981) 17 Building Law Reports 109: likewise if a wrongdoer damages his neighbour's house by nuisance or negligence, and the neighbour is put to expense in the repairing of it, see. Dodd Properties (Kent) Ltd. v. Canterbury City Council (1980) 1 Weekly Law Reports 433.

11

Second—Where there is a contract by a prospective buyer with a surveyor under which the surveyor agrees to survey a house and make a report on it—and he makes it negligently—and the client buys the house on the faith of the report—then the damages are to be assessed at the time of the breach—according to the difference in price which the buyer would have given if the report had been carefully made from that which he in fact gave owing to the negligence of the surveyor. The surveyor gives no warranty that there are no defects other than those in his report. There is no question of specific performance. The contract has already been performed, albeit negligently. The buyer is not entitled to remedy the defects and charge the cost to the surveyor. He is only entitled to damages for the breach of contract or for negligence. It was so decided by this court in Philips v. Ward (1956) 1 Weekly Law Reports 471, followed in Simple Simon Catering Ltd. v. Binstock Miller & Co. (1973) Estates Gazette 901.

12

Those cases were both concerned with breach of contract by surveyors. It is their duty to use reasonable care and skill in making a proper report on the house. In our present case Messrs. Sydney Phillips & Son failed in that duty in 1976 when they made the negligent report. Mr. Perry acted on the report in 1976 when he bought the house in July 1976. The general rule of law is that you assess the damages at the date of the breach: so as to put the plaintiff in the same position as he would have been in if the contract had been properly performed. Even if the claim be laid in tort against the surveyor, the damages should be on the same basis.

13

So you have to take the difference in valuation. You have to take the difference between what a man would pay for the house in the condition in which it was reported to be and what he would pay if the report had been properly made showing the defects as they were. In other words, how much more did he pay for the house by reason of the negligent report than he would have paid had it been a good report? That being the position, the difference in valuation should be taken at the date of the breach in 1976. We were given some approximate figures of the difference in the valuation. The plaintiff's figure was £6,000. The defendants' figure was £2,250.

14

I would go on to say—and this is important—that although the date for the assessment of damages is 1976, there is some compensation for inflation because those damages carry interest. Probably 9%, 10% or even 11% would be awarded nowadays from 1976 until the date when the damages are paid: or, at least, up until judgment is given and then afterwards at the judgment rate.

15

The second point is as to the distress, worry, inconvenience and all the trouble to which Mr. Perry was put during the time when he was in the house. Mr. Hicks sought to say before us that damages ought not to be recoverable under this head at all. He referred to the case of The Liesbosch (1933) Appeal Cases 449. In that case Lord Wright said that the loss due to the impecuniosity of the plaintiffs was not recoverable. I think that that statement must be restricted to the facts of The Liesbosch. It is not of general application. It is analysed and commented upon in this court in Dodd Properties (Kent) Ltd. v. Canterbury City Council (1980) 1 Weekly Law Reports 433. It is not applicable here. It seems to me that Mr. Perry is entitled to damages for all the vexation, distress and worry which he has been caused by reason of the negligence of the surveyor. If a man buys a house—for his own occupation—on the surveyor's advice that it is sound—and then finds out that it is in a deplorable condition, it is reasonably foreseeable that he will be most upset. He may, as here, not have the money to repair it and this will upset him all the more. That too is reasonably foreseeable. All this anxiety, worry and distress may nowadays be the subject of compensation. Not excessive, but modest compensation. That appears from such cases as Jarvis v. Swan Tours Ltd. (1973) Queen's Bench 233; Jackson v. Horizon Holidays Ltd. (1975) 1 Weekly Law Reports 1468; Heywood v. Wellers (1976) 1 Queen's Bench 446; and Hutchinson v. Harris (1978) 10 Building Law Reports 24. In our present case, the judge said:

16

"I think it...

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