Appeal against an order giving summary judgment for the respondent, De Villiers Surveyors Ltd, on one issue relating to the claim by the appellant, Tiuta International Ltd, for damages for professional negligence.
Held: The appeal succeeded (McCombe LJ dissenting). Moore-Bick LJ said that the deputy judgehad failed to take into account the fact that the second facility was structured as a refinancing so that the advance was used to pay off the pre-existing debt, thereby releasing the valuers from ‘any potential liability in respect of the first valuation.’ From this, he concluded that the advance under the second facility ‘stands apart from the first and the basic comparison for ascertaining the appellant’s loss is between the amount of that second loan and the value of the security.’ He explained: ‘The appellant entered into the second transaction in reliance on the respondent’s valuation. If the valuation had not been negligent, the appellant would not have entered into the second transaction, and would have suffered no loss on that transaction as a result. It would have been left with the first loan and the security for it, together with any claim it might have had against the valuer. However, that is of no relevance to the respondent in its capacity as valuer for the purposes of the second loan. The loss which the appellant sustained as a result of entering into the second transaction was the advance of the second loan, less the developer’s covenant and the true value of the security. If the value of the property was negligently overstated, the respondent will be liable to the extent that the appellant’s loss was caused by its over-valuation.’ His conclusion would have been the same even if a different valuer had prepared the original valuation on which the first facility was based. This was because the valuer ‘valued the property itself in the expectation that the appellant would advance funds up to its full reported value in reliance on its valuation. There is nothing unfair in holding the respondent liable in accordance with its own valuation for the purposes of the second transaction.’
Judges:
Moore-Bick VP CA, McCombe, King LJJ
Citations:
[2016] EWCA Civ 661
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (No 2) HL 27-Nov-1997
A surveyor’s negligent valuation had led to the plaintiff obtaining what turned out to be inadequate security for his loan. A cause of action against a valuer for his negligent valuation arises when a relevant and measurable loss is first recorded. . .
Cited by:
Appeal from – Tiuta International Ltd (In Liquidation) v De Villiers Surveyors Ltd SC 29-Nov-2017
Allegation of professional negligence. The claimant sought damages against the defendant surveyors for negligently valuing a partially completed residential development over which it proposed to take a charge to secure a loan. On an initial . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence
Updated: 25 November 2022; Ref: scu.566669