Gardner v Marsh and Parsons (a Firm), Dyson: CA 2 Dec 1996

Damages awarded against a surveyor for a negligent survey which had missed certain defects, were not to be reduced for repairs later carried out by the landlord at his own expense. The trial judge decided to award damages reflecting the difference between the value of the property without the defects and its value with them at the date of purchase.
Held: (Peter Gibson LJ dissenting) The damages were calculated assuming a hypothetical sale. The issue of the landlord’s repairs were res inter alios, and were collateral to the surveyors negligence.
Hirst LJ, after reviewing a number of authorities, described the case ‘as a straightforward Philips v Ward type of case’, and as to the argument that the loss had been avoided, he said: ‘having regard to intervening events and to the long interval of time, the repairs executed in 1990 were not part of a continuous transaction of which the purchase of the lease as a result of [the surveyors] negligence was the inception. Furthermore, these repairs undertaken by [the landlords] at the plaintiff’s insistence were res inter alios acta and therefore collateral to [the surveyor’s] negligence.’
Pill LJ agreed as to the facts, concluding that ‘the facts relied upon as affecting the measure of damages are too remote to be taken into consideration . .’
Peter Gibson LJ said: ‘The law does not permit the plaintiff to recover more than is seen to be his actual loss and the rules of mitigation may deprive the plaintiff of all or part of the damages for loss which otherwise he might have recovered.’
if a plaintiff in fact avoids or mitigates his loss he could not recover for the loss thereby avoided even if the steps taken were more than could reasonably be required under the duty to mitigate. He said this at p.508, after reviewing various authorities: ‘Whilst Philips v Ward establishes that the measure of damages is the price paid less the market value of the property at the date of the breach, even though the cost of repairing the property may be greater or smaller than that, it does not follow that the rules of mitigation can never apply to such a case. That would be contrary to the British Westinghouse principle. Indeed as Mustill LJ pointed out in Hussey v Eels [1990] 2 QB 227, 233, any generalisation that where a loss has crystallised in terms of there being a conventional measure of damages at the date of breach, there can be no mitigation as shown by the Pagnan case [1970] 1 WLR 1306 to be unsound. For my part I cannot see why the advantage accruing from the action of the plaintiff in that case to mitigate his loss, viz. the elimination of the risk to the house by the felling of the poplars, should be left out of account in arriving at the award of damages and there is nothing in Philips v Ward [1956] 1 WLR 471 to compel such a result . . ‘
He described Hussey v Eels as ‘an exceptional case turning on its own facts’ and said: ‘The common sense of the situation in the present case is that once the Plaintiffs were aware that they had purchased a structurally defective property of less value than the price they had paid as a result of the Defendants’ negligence, they sensibly and promptly took steps to eliminate their loss by procuring the remedying by the freeholder of the defect. That seems to me plainly an act of mitigation resulting in a benefit to the Plaintiffs which eliminated their loss. I repeat what the Judge said, that they have a rectified property worth the equivalent of what they had paid for it without any extra cost to them. The significant point is that this occurred as a result of the pressure applied to the freeholder by the Plaintiffs. To take an example suggested by Mr. Brunner, if the Plaintiffs had sued both the freeholder under the Defective Premises Act 1972 and the Defendants in negligence in the same action they could not expect to recover damages in full from the freeholder as well as damages in full from the Defendants. Once the property had been put in repair at no cost to the Plaintiffs, in my judgment they cannot be allowed to obtain double recovery by an award of damages against the Defendants. To adapt the words of Salmon L.J. in R. Pagnan and Fratelli v Corbisa Industrial Agropacuria Limitada [1970] 1 WLR 1306, 1316, to allow the plaintiffs’ claim would be contrary to justice, common sense and the British Westinghouse Electric and Manufacturing Co. Ltd v Underground Electric Railways Co. of London Ltd. [1912] A.C. 673 principle.’
Hirst LJ, Pill LJ
Gazette 13-Dec-1996, Times 02-Dec-1996, [1996] EWCA Civ 940, [1997] 1 WLR 489, [1997] PNLR 362
England and Wales
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Updated: 15 April 2021; Ref: scu.80750