Sutcliffe v Thackrah

JurisdictionEngland & Wales
CourtHouse of Lords
JudgeLord Reid,Lord Morris of Borth-y-Gest,Lord Hodson,Viscount Dilhorne,Lord Salmon
Judgment Date12 February 1974
Judgment citation (vLex)[1974] UKHL J0212-3
Date12 February 1974

[1974] UKHL J0212-3

House of Lords

Lord Reid

Lord Morris of Borth-y-Gest

Lord Hodson

Viscount Dilhorne

Lord Salmon

Sutcliffe
and
Thackrah and Others

Upon Report from the Appellate Committee, to whom was referred the Cause Sutcliffe against Thackrah and others, that the Committee had heard Counsel as well on Tuesday the 11th, as on Wednesday the 12th and Thursday the 13th days of December last, upon the Petition and Appeal of Joseph Dermod Sutcliffe of "del Sasso", Grove Lane, Badsworth, Pontefract, Yorkshire, praying, That the matter of the Order set forth in the Schedule thereto, namely, an Order of Her Majesty's Court of Appeal of the 13th of April 1973, might be reviewed before Her Majesty the Queen, in Her Court of Parliament, and that the said Order, might be reversed, varied or altered, and that the Petitioner might have the relief prayed for in the Appeal, or such other relief in the premises as to Her Majesty, in Her Court of Parliament, might seem meet; as also upon the Case of Ronald Thackrah, Arthur Simpson, and T. Richard Collick (carrying on business as Chippindale and Edmondson), lodged in answer to the said Appeal; and due consideration had this day of what was offered on either side in this Cause:

It is Ordered and Adjudged, in the name of the House of Lords, by the Lords of Appeal sitting in the House of Lords during the Dissolution of Parliament, by virtue of a Writing dated the 8th day of February 1974 by the Counsellors of State to whom had been delegated certain Royal Functions as specified in Letters Patent dated the 24th day of January 1974, pursuant to the provisions of the Appellate Jurisdiction Act 1876, That the said Order of Her Majesty's Court of Appeal of the 13th day of April 1973, complained of in the said Appeal, be, and the same is hereby, Reversed, and that the Judgment of His Honour Judge William Stabb, Q.C., Official Referee of the 11th day of January 1972, thereby Varied, be, and the same is hereby, Restored subject to the increase (by consent) of the quantum of Damages from £588 to £2,000: And it is further Ordered, That the Respondents do pay, or cause to be paid, to the said Appellant the Costs incurred by him in the Court of Appeal, and also the Costs incurred by him in respect of the said Appeal to this House, the amount of such last-mentioned Costs to be certified by the Clerk of the Parliaments: And it is also further Ordered, That the Cause be, and the same is hereby, remitted back to the Official Referee, to do therein as shall be just and consistent with this Judgment.

Lord Reid

My Lords,

1

The Appellant in 1961 wished to have a high class dwelling house built on a site which he had acquired. He got in touch with the Respondents who are a firm of architects. There were long and detailed discussions. Ultimately in 1963 the architects prepared the necessary documents for the invitation of tenders by contractors. The lowest tender, £22,368, was by a company David Walbank and it was accepted, the R.I.B.A. form of contract being used. There does not appear to have been any formal contract between the Appellant and the architect but it is not disputed that they were aware that the R.I.B.A. form was to be used and that they undertook to carry out the duties of an architect under that form of contract.

2

The house ought to have been completed early in 1964 but progress was slow and the architect had occasion to make a number of complaints to the contractor. A number of interim certificates were issued to the contractors by the architects. The present case arises out of the issue of two certificates, No. 9 on 25th May, 1964, for £2,620 and No. 10 on 1st July, 1964, for £1,837. These sums were duly paid by the Appellant.

3

A short time thereafter it was decided to terminate Walbank's contract. It is not disputed that the Appellant had adequate grounds for taking this step. Then Walbank became insolvent.

4

Later it was discovered that these interim certificates covered much defective work. The cost of remedying the defects could not be recovered from Walbank, so in 1968 the Appellant sued the architects for the loss caused to him by negligence of the architects in issuing these certificates. After prolonged proceedings the Official Referee held in 1972 that the architects had been guilty of negligence and awarded damages to the Appellant. What appears to have happened was that one of the architects was well aware of these defects before the certificates were made up but that he failed to pass this information to the quantity surveyor who assumed that all the work was satisfactory.

5

The case for the Respondents (the architects) is that there is a rule of law which absolves architects from liability for negligence in issuing certificates. It is said that the architect's duty is only to act honestly, and it is not disputed that the Respondents did act honestly. But it is said that in issuing certificates, an architect owes no duty to his client to exercise care or professional skill. There is authority for this rather startling proposition and the Court of Appeal with obvious reluctance felt bound to follow it. But your Lordships are free to reconsider the whole matter. If it is held that the architects did owe a duty to their client to exercise care and skill then it is not now disputed that the Respondents failed in that duty and it is agreed that damages should be assessed at £2,000.

6

The argument for the Respondents starts from the undoubted rule, based on public policy, that a judge is not liable in damages for negligence in performing his judicial duties. The next step is that those employed to perform duties of a judicial character are not liable to their employers for negligence. This rule has been applied to arbitrators for a very long time. It is firmly established and could not now be questioned by your Lordships. It must be founded on public policy but I am not aware of any authoritative statement of the reason for it. I think it is right but it is hardly self-evident. There is a general rule that a person employed to perform duties of a professional character is liable in damages if he causes loss to his employer by failure to take due care or to exercise reasonable professional skill in carrying out his duties. So why should he not be liable if the duties which he is employed to perform are of a judicial character?

7

The reason must, I think, be derived at least in part from the peculiar nature of duties of a judicial character. In this country judicial duties do not involve investigation. They do not arise until there is a dispute. The parties to a dispute agree to submit the dispute for decision. Each party to it submits his evidence and contention in one form or another. It is then the function of the arbitrator to form a judgment and reach a decision.

8

In other forms of professional activity the professional man is generally left to make his own investigation. In the end he must make a decision but it is a different kind of decision. He is not determining a dispute: he is deciding what to do in all the circumstances. He may go wrong because he has at some stage failed to take due care and that may not be difficult to prove. But coming to a wrong but honest decision on material submitted for adjudication is rarely due to negligence or lack of care, and it is seldom due to such gross failure to exercise professional skill as would amount to negligence. It is in the vast majority of cases due to error of judgment and there is so much room for differences of opinion in reaching a decision of a judicial character that even the most skilled and experienced arbitrator or other person acting in a judicial capacity may not infrequently reach a decision which others think is plainly wrong.

9

But a party against whom a decision has been given that is generally thought to be wrong may often think that it has been given negligently, and I think that the immunity of arbitrators from liability for negligence must be based on the belief—probably well-founded—that without such immunity arbitrators would be harassed by actions which would have very little chance of success. And it may also have been thought that an arbitrator might be influenced by the thought that he was more likely to be sued if his decision went one way than if it went the other way, or that in some way the immunity put him in a more independent position to reach the decision which he thought right.

10

But whatever be the grounds of public policy which have given rise to this immunity of persons acting in a judicial capacity, I do not think that they have anything like the same force when applied to professional men when they are not fulfilling a judicial function.

11

The point can perhaps be most clearly illustrated by considering the case of a skilled man engaged to value some property or object. The circumstances may vary very much. The owner may wish to sell or insure the property and want to know its market value. No one doubts that in that case the valuer may be sued for negligence if his negligent valuation has caused loss to the owner. Or the owner may have reason to believe that a particular person A would buy the property from him and would accept a valuation by a skilled man. Or he may have agreed with A to sell at a price to be fixed by a skilled valuer, or by this particular valuer. And he may or may not have told the valuer about this when engaging him.

12

There is modern authority to the effect that if the valuer knows that his valuation will affect or bind another person besides his client the owner, then he can claim an arbitrator's immunity. But why should that be? The valuer is in each case engaged by only one party and he has exactly the same task to perform in all these cases. He must, to the best of his ability, estimate the market price of the property. I do not believe that a professional...

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