The Plaintiff had relied on a negligent survey to purchase a substantial Elizabethan property and land. The report did not mention that the timbers of the house were badly affected by death watch beetle and worm so that the only course left to him was to replace the roof and to rebuild the timbers etc. The market value was andpound;21,000. After moving in further work was found to be required at andpound;1,000 to put the property into the condition in which it had been described in the report. The plaintiff claimed, inter alia, the cost of repairs ruling at the date of trial. The Official Referee awarded andpound;4,000, namely the difference between the value of the property as it should have been described and its value as described.
Held: The proper measure of damages was the difference in money between the value of the property in the condition described and its value as it should have been described, namely andpound;4,000.
Denning LJ said: ‘I take it to be clear law that the proper measure of damage is the amount of money which will put Mr. Philips into as good a position as if the surveying contract had been properly fulfilled: see British Westinghouse Electric and Manufacturing Co. Ltd. v. Underground Electric Railways Co.  A.C. 673, 689, per Lord Haldane L.C. Now if [the surveyor] had carried out his contract, he would have reported the bad state of the timbers. On receiving that report, Mr. Philips would either have refused to have anything to do with the house – in which case he would have suffered no damage – or he would have bought it for a sum which represented its fair value in its bad condition – in which case he would pay so much less on that account. The proper measure of damages is therefore the difference between the value in its assumed good condition and the value in the bad condition which should have been reported to the client.
We were referred to the cases where a house is damaged or destroyed by the fault of a tortfeasor. These cases are, I think, different. If the injured person reasonably goes to the expense of repairing the house, the tortfeasor may well be bound to pay the cost of repair, less an allowance because new work takes the place of old: see Lukin v. Godsall (1795) Peake Add.Cas. 15 and Hide v. Thornborough (1846) 2 Car. and Kir. 250. In other cases, the tortfeasor may only have to pay the value of the house: see Moss v. Christchurch Rural District Council  2 K.B. 750. It all depends on the circumstances of the case: see Murphy v. The County Council of Wexford  2 Ir.R. 230. The general rule is that the injured person is to be fairly compensated for the damage he has sustained, neither more nor less.’ and
‘So also in this action, if Mr. Philips were to recover from the surveyor the sum of andpound;7,000, it would mean that Mr. Philips would get for andpound;18,000 (andpound;25,000 paid less andpound;7,000 received) a house and land which were worth andpound;21,000. That cannot be right. The proper amount for him to recover is andpound;4,000.’ and
‘The general principle of English law is that damages must be assessed as at the date when the damage occurs, which is usually the same day as the cause of action arises.
A fall thereafter in the value of money does not in law affect the figure, for the simple reason that sterling is taken to be constant in value’.
Morris LJ said: ‘In my judgment, the damages to be assessed were such as could fairly and reasonably be considered as resulting naturally from the failure of the defendant to report as he should have done. … It is said … that [the Official Referee] was not warranted in proceeding on the basis … of the difference between the value of the property as it was described in the defendant’s report and its value as it should have been described. In my view, however, that was the correct basis on the facts of this case.’
Romer LJ: ‘It may well be that if, on learning of the real condition of the house, he had decided to leave and resell, he would have been entitled to recover from the defendant, in addition to the andpound;4,000, his costs and expenses of moving in and moving out and of the resale. As, however, he elected to stay, after all the facts had become known to him, this point does not arise.’
Denning, Morris and Romer LJJ
 1 WLR 471,  1 All ER 874
England and Wales
Cited – Lukin v Godsall 1795
Where the person injured at the fault of the defendant reasonably goes to the expense of repairing his house, the tortfeasor may well be bound to pay the cost of repair less an allowance because new work takes the place of old. . .
Cited – Hide v Thornborough 1846
Cited – British Westinghouse Electric and Manufacturing Company Limited v Braulik CA 1910
Between 1904 and 1906 British Westinghouse supplied 8 steam turbines. They were defective in design and used excessive quantities of steam. The railway company did not reject them but reserved its claim to damages for breach of contract. In 1907 the . .
Cited – Murphy v The County Council of Wexford 1921
(Eire) . .
Cited – Moss v Christchurch Rural District Council 1925
Damage caused to a house may result in an award of the diminution of the value of the house only. . .
Cited – Smith and Another v South Gloucestershire Council CA 31-Jul-2002
The claimants purchased land. The local search did not reveal a planning permission which affected the value of the property by applying an occupancy condition. He claimed compensation. Compensation was eventually agreed to be payable, but the . .
Cited – McKinnon and another v E Survey Ltd (formerly known as GA Valuation and Survey Ltd) ChD 14-Jan-2003
The claimants purchased a house relying upon a survey by the defendants. Although the defendants reported long standing movement of the property, the defendants failed to report that to be saleable, a long investigation would be required, reducing . .
Cited – Dodd Properties (Kent) Ltd v Canterbury City Council CA 21-Dec-1979
The defendants had, in the course of building operations, caused nuisance and damage to the plaintiff’s building. The dispute was very lengthy, the costs of repair increased accordingly, and the parties now disputed the date at which damages fell to . .
Cited – Watts and Co v Morrow CA 30-Jul-1991
The plaintiff had bought a house on the faith of the defendant’s report that there were only limited defects requiring repair. In fact the defects were much more extensive. The defendant surveyor appealed against an award of damages after his . .
Cited – Bacciottini and Another v Gotelee and Goldsmith (A Firm) CA 18-Mar-2016
A property subject to a planning condition was purchased by the appellant under the advice of the respondent, who failed to notify him of the existence of a planning condition. The judge had awarded the claimant pounds 250 being the cost of the . .
Lists of cited by and citing cases may be incomplete.
Updated: 17 June 2022; Ref: scu.182175