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A surveyor's
report negligently failed to advise further investigations to ascertain
structural movement. The correct measure of damages was the difference
between the purchase price and the open-market value of the property
in its true condition at the valuation date in light of all the evidence
available to the court at the date of assessment, on the basis that
damages should only be compensatory.
The defendant
surveyor prepared a report for the claimants' mortgage provider in respect
of a property the claimants intended to buy. The report valued the property
at £185,000 and referred to structural movement in the property
as long-standing, unlikely to be progressive and within acceptable tolerances.
The defendant subsequently admitted negligence in relation to the report,
having failed to detect structural defects and to advise further investigations
to ascertain whether the structural movement had ceased or was continuing.
Judgment was entered for the claimants for damages to be assessed. It
was agreed that if it had been established that the property was not
subject to movement at the valuation date its value would have been
£148,000, but that if it had been subject to ongoing movement
its value would have been £92,000. The claimants claimed £93,000,
being the difference between £185,000 and £92,000, on the
ground that at the valuation date it was not established that the property
was not subject to movement and that hindsight evidence that the property
was not subject to continuing movement should not be admitted.
It was
held that damages should be assessed at the valuation date. In deciding
the correct date at which to assess damages the court was entitled to
assume that the property was not subject to continuing movement even
though that could not have been established until after the purchase.
The correct measure of damages was the difference between the purchase
price and the open-market value of the property in its true condition
at the valuation date, in light of all the evidence available to the
court at the date of assessment. The court was able to and should admit
the hindsight evidence in accordance with the underlying principles
that damages were compensatory. The normal rule that in cases of surveyors'
negligence the proper measure of damages was the difference between
the reported condition and the condition that should have been reported,
had to give way to the overriding compensatory principle. The principle
of "avoided loss" was applicable to surveyors' negligence
cases and there was no reason why the subsequent ascertainment of the
true state of affairs at the valuation date should not serve to reduce
the damages payable.
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