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Cite as: [1999] UR 41
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15 pages
ROYAL COURT
(Samedi Division)
25th February, 1999
Before:- F.C.Hamon Esq., Deputy Bailiff; and
Jurats Gruchy and Le Brocq.
Between Andrew Edward Scott Plaintiff
And St. Quintin Jersey Limited Defendant
Advocate G. Le V. Fiott for the Plaintiff
Advocate N.M. Santos Costa for the Defendant
JUDGMENT.
THE DEPUTY BAILIFF: The plaintiff in this action, Mr. Andrew Edward Scott, owns a property 32-38 Apsley Road, St. Helier. He has owned that property for some twenty-five years. Mr. Scott has been retired for some eleven years, having run a car rental firm with some success. On 28th September, 1988, Mr. Scott had entered into a lease with a company called Preblico Limited. The lease was guaranteed by the owners of the company, Mr. and Mrs. Roger Preston. The lease was a nine year fully-repairing lease terminating on 31st August 1997. The use of the premises was commercial. Mr. Scott owned no other rental properties. The tenant had been a very good one and the nine year tenure had been untroubled. The rent was always paid on time. The rental which started at £12,000 per annum had risen to £17,447, because there was a rent review every three years based on the Jersey Cost of Living increase. On 20th March 1997, Mr. and Mrs. Preston wrote a letter to Mr. Scott. It starts “Dear Andrew”. It asks if the lease could be renewed and invited a meeting to discuss terms.
Mr. Scott has a family. His wife is a retired medical practitioner. They have three children, - two sons, Charles and Edward and a daughter, Mrs. Emma Paul, who is an English Solicitor with Mourant du Feu & Jeune. She has passed her Jersey Solicitors examinations and is waiting to be admitted. Her husband, Mr. Martin Paul, has qualified as a Jersey Advocate and is waiting to be called.
On receipt of the letter from his tenant, Mr. Scott made enquiries as to a suitable estate agent to advise him on the suitable rental at this time. He was recommended to the firm of St. Quintin, a well known firm of international repute who have a company in Jersey. They are one of a small selection of estate agents in Jersey who specialize in commercial properties. Mr. Scott and his son Charles went into the firm’s offices in Charles Street and were introduced to Mr. Jonathan James Carter, a local director. Mr. Carter has no professional qualifications, but he has eleven years’ experience in the property market and had previously worked in the Income Tax Department.
Mr. Scott and Mr. Charles Scott explained the problem. They felt that the property had an area of about 3,700 square feet and they spoke not only of renewing the lease but also of the hope that they could retain their excellent tenant. Mr. Carter did not know the property but he knew something of current market rentals. He felt that the property could command more than its present rental. Mr. Scott wanted to retain the full repairing lease. The meeting passed off well and Mr. Carter said that he would measure the property and report back.
Mr. Carter made a note in his own handwriting. It essentially records the details of the tenant and the property. It notes that the current rent is £17,447. The lease is fully repairing and insuring. There are 3,000 square feet on the ground floor and approximately 700 square feet on the mezzanine floor. The property is used for light industry with ancillary offices. Mr. Scott’s address and telephone numbers are noted.
On 11th April, Mr. Carter sent his report under cover of a letter. It is headed “rental valuation” and, in Mr. Costa’s own words to us it contains an enormous mistake. The measurements give the total floor area as 5,766 square feet, being 3,839 square feet for the ground floor and 1,196 square feet for the mezzanine level. The mezzanine level has a restricted height of 6 ft. 10 inches.
The area was not 5,766 square feet but was in fact, as later agreed with the tenant’s agents, 3,937 square feet. On the erroneous basis, Mr. Carter reported that:-
“Having taken into account the general market conditions, together with the comparable evidence, we are of the opinion that the revised rental at the lease renewal could be based upon £5.00 per sq. Ft. for the ground floor area which has full height clearance, £3.50 per sq. Ft. for the restricted height area and approximately £10.00 per sq. Ft. for the mezzanine offices which would result in a revised rental of £32,610 (Thirty two thousand, six hundred and ten pounds sterling) per annum”.
Then came the recommendations. Mr. and Mrs. Scott felt, after discussing the matter, that they could not approach the tenant with such a large increase. Mr. Scott therefore told Mr. Carter to proceed. The relevant section of the report reads:-
“RECOMMENDATIONS
In view of our report I would recommend that should you wish us to proceed with the lease negotiations as opposed to a sale of the property as a development site, then we would recommend seeking a revised rental of £38,000 pr annum with a view to accepting a rental in the order of £32,000 per annum, subject to a change in the rent review clause to bring the lease into modern day terms.
We trust that the report provides you with the information required and we look forward to receiving your further instructions in due course.”
In his report, Mr. Carter also says:-
“We have assumed that the renewed lease would be on identical terms to that of the existing lease subject to an alteration to the rent review clause which would normally be based upon the open marked rental value and you may wish to see this clause incorporated.”
Mr. Scott was as he put it to us pleased and surprised “by the 83% potential increase in rental”. The effect on the tenant must have been equally surprising but not perhaps as pleasing. We set out Mr. Carter’s letter to the tenant in full:
“15th April 1997
R. Preston Esq.,
Channel Blind Company
32/38 Apsley Road,
St. Helier JE2 4LR
Dear Mr. Preston,
Re: 32/38 Apsley Road, St. Helier - Lease Renewal
We have been instructed by your landlord to discuss with you the forthcoming renewal of your lease which is due to expire on the 31st August 1997, unless you are not wishing to renew the lease.
We have as you are probably aware recently carried out an inspection of the property and reported to our client as to the Open Market Rental Value of the premises subject to a new lease.
On behalf of our client we are prepared to offer you a new lease to commence immediately upon expiry of the existing lease subject to the same terms and conditions of the lease that you currently hold with two exceptions.
Firstly our client would wish for the rent review pattern to be changed from an increase in the Jersey Cost of Living increase every three years to the higher of either Open Market Rental Value or the Jersey Cost of Living increase every three years.
Secondly the commencing rental would be increased from the current level of £17,449 per annum to a more realistic and commercial rent of £38,000 per annum subject to the review pattern as mentioned above.
The revised rental of £38,000 is based upon £6.00 per sq. ft. for the ground floor (5035 sq. ft) and £10.50 per sq. ft. for the Mezzanine Office accommodation (735 sq. ft.)
I would be grateful if you could advise me at your earliest opportunity that the above is acceptable and assuming this to be the case then I will formally instruct the lawyers to prepare a revised lease.
If you are not wishing to renew the lease then please could you advise me as soon as possible.
I look forward to hearing from you.
Yours sincerely,
John J. Carter
Director
For & On Behalf of St. Quintin”
The letter increases the floor area from an incorrect 5766 sq. ft. up to 5870 sq. ft. and inflates the price per sq. ft. to achieve the asking price of £38,000.
On the copy letter of 11th April 1997, Mr. Carter has written “spoke to Mr. Scott 14.4.97. Confirmed OK to proceed”. Mr. Scott could not recall the conversation but had no difficulty in saying that he must have spoken to Mr. Carter. We cannot conceive that he did not. Mr. Scott felt that he could not approach the tenant with such a large increase and he hoped for identical terms subject of course to the recommended change in the rent review clause.
We did not hear evidence from the tenants but we have no doubt that it was the increase in rental that led to the tenant instructing an agent, Broadlands Estates, Limited, and their letter of 22nd April was received by Mr. Carter on 25th April. The letter began optimistically: “I confirm I am retained by Channel Blind Company to conclude the negotiations in respect of the lease renewal on the above property”. It then goes on to put in writing Mr. Alistair Sarre’s calculations of the property which are in accordance with the correct areas:-
“Ground floor full height warehouse 2467 sq. ft.
Ground floor restricted height warehouse 735 sq. ft.
Mezzanine office/storage 735 sq. ft.”
The total area (of 3937 sq. ft.) at rates of £5.25 per sq. ft. for the full height warehouse £5 per sq. ft. for the restricted height warehouse and £9 per sq. ft. for the mezzanine office/storage area brought the counter-offer, rounded up, to £23,250.
There was a flurry of correspondence between the agents and there then occurred two evidential matters which have caused this Court much deliberation.
Mr. and Mrs. Scott were leaving Jersey to go to Portugal on 22nd April 1997. They would return on 21st May 1997. Mr. Scott recalls being on the quay with the car at 8.00 a.m. in order to board the ferry at 9.00 a.m. The house was to be looked after by their daughter and son-in-law.
On the letter from Broadlands Estates Limited received (it is so date stamped) on 25th April, is written in Mr. Carter’s handwriting the cryptic comment “Floor area incorrect. Spoke to Mr. Scott”.
On 8th May 1997 there is, on the files of St. Quintin, this letter:-
“Our Ref: JJC/ER/355
8th May 1997
A.E.Scott Esq
La Maison Blanche
La Ville De L’Eglise,
St Ouen
JE3 2LR
Dear Mr. Scott
Re_ 32-38 Apsley Road, St. Helier
I refer to our earlier conversations in respect of the above mentioned property and with particular reference to the floor areas which are currently being disputed.
Following receipt of a letter dated 7th May from Broadlands we have carried out a revised measurement of the property and there was clearly an error made during our initial inspections with a dimension being misread.
Having now re-measured the property with my colleague I can advise you that the ground floor full height warehouse totals 2,469 sq. ft., the ground floor restricted height area totals 733 sq. ft. with the mezzanine office area totalling 735 sq. ft.
In view of the reduced floor areas our opinion of the rental value does alter.
We previously reported to you rates per sq. ft. based upon £5.50 per sq. ft. for the ground floor, £3.50 per sq. ft. for the restricted height area and £10 per sq. ft. for the mezzanine which totalled £32,610 per annum.
Due to the recalculation of floor areas our revised opinion of rental value now totals £23,350 per annum.
We would naturally, continue to seek a higher rental than this and would suggest equivalent rates of £6.50, £5.25 and £10.25 per sq. ft. all of which total approximately £27,350 per annum.
I trust that you are in agreement with this and I will continue on this basis unless I hear to the contrary.
Kind regards,
Yours sincerely,
Jon J Carter
Director
For & On Behalf of St Quintin”
The alleged telephone conversation
Mr. Carter said that there had been a very brief conversation on 21st April. He had been embarrassed and disappointed to discover his great mistake. He recalled that he had told Mr. Scott of possible problems with the floor area. St. Quintin were going to re-inspect and re-calculate the area and advise him accordingly. Mr. Carter said that he had told Mr. Scott that his re-measurement could result in a reduced rent if the floor area were incorrect. No figures were mentioned at that stage and Mr. Scott did not mention to him that he was going away the next day. Mr. Carter certainly did not say that the discrepancy was likely to be very great. Mr. Scott’s only response, according to Mr. Carter, was that he would leave it to Mr. Carter to get on with the matter.
That does not seem surprising to us. Mr. Scott is seventy-seven years of age, long retired and he did not, as he told us, take his business on holiday with him. We are certain that the extent of the error of calculation was never put to or understood by Mr. Scott.
Indeed, it took until 13th May before the full extent of the miscalculation was finally agreed between the respective agents.
Mrs. Scott also knew nothing of the conversation which leads us to the conclusion that Mr. Scott had no idea of how enormous the mis-calculation by Mr. Carter had been of a measuring exercise which all the experts agreed was on a scale of difficulty ranging from the lowest of 1 to the highest of 10 at about 2 to 3.
Mr. Carter wrote his letter. Advocate Fiott repeatedly argued that the terms of this letter do not sit comfortably with later correspondence. He repeatedly argued that the letter was constructed at a later date and as a face-saving exercise. Our findings of fact on this matter are:-
1. Mr. Scott received six letters from St. Quintin including the confirmation of instructions letter of 25th March 1997 and the acknowledgement of the removal of that firm’s instructions on 11th September 1997. None of the extensive and important exchanges between St. Quintin and Broadlands were copied to Mr. Scott. He received perhaps two telephone calls.
2. Mr. Carter dictated his letters by dictaphone, handed the tapes to a secretary, who typed the letters and gave them back to him. He signed the top copies, did not initial the filing copies, but filed everything himself. There were two secretaries in the office (we heard from neither). The letter of 8th May was typed by ER - a Miss or Mrs. Ready. She sometimes did her colleague’s typing. Her colleague is SCY (Miss or Mrs. Serena Young). This latter secretary typed all but two of Mr. Carter’s letters on that file.
3. The letter says that “following receipt of a letter from Broadlands dated 7th May”. The first letter from Broadlands which sets out the correct figures is dated 21st April (received on 25th April). We have to consider why no mention was made of that letter and of the conversation that allegedly took place before 22nd April.
4. Why does Mr. Carter talk familiarly of “Broadlands” when, as though addressing the matter for the first time, he was to write to Mr. Scott on the 22nd May (updating him) in these terms:
“The tenants have employed Broadlands Estates Limited to act on their behalf”.
We find that phraseology distinctly odd in its context but we are unable to go further than to express surprise.
5. The letter is still wrong in one fact. Mr. Carter says:-
“We previously reported to you rates per sq. ft. based upon £5.50 per sq. ft. for the ground floor ...”
That is not so. The price per sq. ft. quoted in the report is £5.00. It is a minor error but surprising.
The letter expresses no regret and no apology. We come to the principal question of fact. Did that letter fail to arrive or was it fabricated at a later stage? The 8th May was the day before Liberation Day. In regard to the allegation that the letter was fabricated we have regard to our Rule 6/8 and to Order 18/7/11 of the Rules of the Supreme Court which read:-
“All material facts - It is essential that a pleading, if it is not to be embarrassing, should state these facts which will put those against whom it is directed on their guard, and tell them what is the case which they will have to meet (per Cotton L.J. in Philipps v. Philipps (1878) 4 QBD 127 p.139. “Material” means necessary for the purpose of formulating a complete cause of action; and if any one material statement is omitted, the statement of claim is bad (per Scott L.J. in Bruce v. Odhams Press Ltd. [1936] 1 All E.R. 287 at 294.) each party must plead all the material facts on which he means to rely at the trial; otherwise he is not entitled to give any evidence of them at the trial. No averment must be omitted which is essential to success. Those facts must be alleged which must, not may, amount to a cause of action (West Rand Co. v. Rex [1905] 2 K.B. 399; see Ayers v. Hanson [1912] W.N. 193). Where the evidence at the trial establishes facts different from those pleaded, e.g. by the plaintiff as constituting negligence, which are not just a variation, modification or development of what has been alleged but which constitute a radical departure from the case as pleaded, the action will be dismissed (Waghorn v. George Wimpey & Co. Ltd. [1969] 1 W.L.R. )
There is no indication in the pleadings that the plaintiff is making the allegation that the letter was fabricated by Mr. Carter at a later stage in order to save his reputation. If that allegation were sustainable we would not have allowed the trial to continue on the pleadings before us. We are satisfied that it is not substantiated although as Advocate Fiott said repeatedly the letter does not sit comfortably with later letters. We find, on the evidence, that the letter was written but failed to arrive. If it had arrived (and it is correctly addressed) it is inconceivable that Mrs. Paul would not have opened such a letter as she opened all her parents’ mail whilst they were on holiday. It is inconceivable that she would not have informed her parents of its content. It is a letter of pivotal importance. Perhaps with the Bank Holiday approaching (the 8th May was a Thursday) whoever was delegated the task of posting the letter failed to do so. St. Quintin do not have a posting book. We have to say that there is an element of the cavalier about the last paragraph:- “I trust that you are in agreement with this and will continue on this basis unless I hear to the contrary”. That attitude is borne out by Mr. Carter’s bold assertion that he had carte blanche from his client.
The final flurry of correspondence between St. Quintin and Broadland Estates Limited is of great importance in the light of our finding on the letter of 8th May.
Mr. Sarre of Broadlands countered with a suggestion of £23,250 on 13th May. Mr. Carter replied with a figure of £26,750 and reminded his opposite number of the “revised terms” that his client was seeking. Neither of these letters was copied to Mr. Scott. On 16th May, Mr. Sarre wrote to Mr. Carter in these terms:-
“I would point out that the rates per square foot that you are hoping to achieve are in my opinion well in excess of open market value and I have relayed these comments on to my client who has actively commenced the search for new premises”.
There were further letters and then on 22nd May came a letter intended to “update” Mr. Scott. Again we find this letter surprising essentially because it makes no mention of the letter of 8th May. Mr. Carter said that he gave no thought to the letter of 8th May. Essentially this updating says that there is a counter offer of £23,250 per annum. It does mention that “there is no immediate urgency, due to the fact that the existing lease does not expire until 31st August.” There is no mention of the fact that the tenant is actively seeking other premises.
Apparently (and we will take Mr. Carter’s word for it) he spoke to Mr. Scott on either 27, 29th, 30th May or 2nd June, and was told that the offer was not accepted.
Mr. Carter was relaxed. The threat to find other premises was a normal ploy, he felt, by an outgoing tenant who had no security of tenure to look forward to.
In fact the tenant was not crying wolf. It was to move to Unit 6 Landes du Marche for 9 years at half the rental and half the area of Apsley Road. Mr. Scott arranged to see Mr. Carter. He went in to his office. He was seen by Mr. Bill Sarre (not the Mr. Sarre of Broadlands). Mr. Carter came in from time to time. He did not speak to Mr. Scott. He seemed distracted. Mr. Sarre was in Mr. Scott’s words “flustered and uncomfortable”. He was perspiring although it was not a hot day. Mr. Scott went in a second time with his wife. Mr. Carter was “pushing files around”. Mr. Carter went on to place the property on the market. He circulated many agents. He was asking £30,000. This caused some consternation to Broadlands. On 4th July, they wrote in these terms
“I refer to your letter of 3rd July 1997 enclosing details (of the property) and note the proposed rental is now increased to £30,000!”
The exclamation mark expresses surprise.
Mr. Bill Sarre returned the original lease to Mr. Carter. No tenant had been found. There had been a desultory offer of £20,000 from the tenants; there had also been an offer to purchase from Huelin Estates Limited.
Mr. Scott’s patience ran out. He wrote a letter to St. Quintin withdrawing his instructions. That letter was formally acknowledged by Mr. Carter.
When on 2nd January 1998 a letter was written by Advocate Fiott to Mr. Carter, it was referred to Advocate Costa’s firm. The letter from Mr. Costa in reply contains three statements that epitomize the thought process of the defendant.
We cite from three passages of that letter:-
.....“On the 13th May 1997 Broadlands Estates Limited wrote on behalf of the tenant and stated that the sum of £23,250 per annum “fairly reflects the market value of the property when one considers the difficult vehicular assess, no parking and age of the property”
“My client company took instructions from your client and it was made clear that your client was not prepared to accept that figure and therefore my client company wrote on the 14th May 1997 asking for a rental of £26,750.00 per annum.”...
“At all stages of the negotiations your client was aware that a fair rental for the premises was approximately £23,500 and that was the rent that was offered and the rent that your client rejected”....
In our view everything that Mr. Scott, Mrs. Scott and Mrs. Paul have told us makes evidential sense. Mr. Scott never received the letter of 8th May. His only knowledge was that the property had a rental value of £32,610. St. Quintin would pitch their negotiations at £38,000 with a view to accepting £32,000 with a change in the rent review clause.
Had Mr. Scott known (from the letter of 8th May) that the rental was in fact recommended at £23,500 (but with a negotiating figure of £27,350) the counter offer from the tenant of £23,250 would have allowed Mr. Scott (we have no doubt) to deal with his tenant directly.
We accept that Mr. and Mrs. Scott only learned of the true rental value of their property from de Quetteville Estates Ltd. a firm of estate agents who took over from St. Quintin.
The Law
The plaintiff in his pleading claims that the defendant was negligent and/or acted in breach of its duty of care/and or acted in breach of contract for the following reasons:-
“a) it failed to measure the property correctly
b) it failed to advise the plaintiff as to the correct rental
c) it was negligent in not recommending the plaintiff to accept Preblico’s offer of £23,250 per annum and
d) it failed in its negotiations with Broadlands Estates Limited acting for
Preblico to negotiate a new lease and the rental which Preblico was offering.
Advocate Costa argues that on (a) alone, the critical question is one of causation. The principle of law that he sets down is that in order for an action to succeed the negligence must have caused the loss complained of. That is trite law. He submits that the original miscalculation of the floor area did not result in any loss whatsoever.
He calls in support of his contention the case of Banque Bruxelles Lambert SA v. Eagle Star Insurance Co. Ltd. and others (1995) 2 All ER 769 and cites this passage at 842:-
“In the present appeals the argument on causation is limited. It is not said that V’s negligent overvaluation did not cause L to advance money to B. It is accepted that it did. The argument is that it did not cause that part of L’s loss which is attributable to the fall in the property market. That makes it apposite to recognise the point neatly made by Cooke P in McElroy Milne v. Commercial Electronics Ltd. [1993] 1 NZLR 39 at 41:
“...the ultimate question as to compensatory damages is whether the particular damage claimed is sufficiently linked to the breach of the particular duty to merit recovery in all the circumstances.’
V argues that on the assumed facts that test is not satisfied. He had no duty to advice on future movements of the market, or to protect L against the risk of a fall. He did not, Prospero-like, cause the fall in the market. L’s loss was caused by market forces, not the negligence of V and cannot therefore be laid at V’s door.
To this contention L gives two answers, one short, one longer. The short answer is this. Once it is accepted, as it is, that V’s negligence caused L to enter into a transaction he would not otherwise have entertained and from which he cannot escape at will, V is liable for all the loss which l suffered as a result unless it is too remote or the result of a new intervening cause or of a failure by L to take reasonable steps to mitigate his own loss. There is here no question of remoteness or failure to mitigate. The fall in the market, being readily foreseeable, was not a new intervening cause; if the extent of the fall was a surprise the fact of a fall was not.”
Again, we have this passage from Duquemin v. Reynolds (1987-88) JLR 259 at 282 where the Royal Court said this:-
“Causation
Mr. Valpy, citing JEB Fasteners Ltd. v. Marks, Bloom & Co. argued that the defendant’s negligence in preparing the report (which was of course denied) was not a cause of any loss suffered by the plaintiffs as a result of purchasing the property. But Woolf, J., dealing with the causation issue, said ([1981} 3 All E.R. at 304): “Where a representation is made and it is relied on, there is a strong inference, in the absence of evidence to the contrary, that the results which follow were brought about by the representation.” That case related to company accounts prepared by the defendants. The plaintiffs had purchased the company. On the reliance issue, Woolf, J. found in favour of the plaintiffs. He said (ibid., at 301): “I do not think that the accounts .... were of critical importance to the plaintiffs, but this does not mean that they did not rely on them.” However, on the causation issue, he found in favour of the defendants and concluded that the negligence of the defendants was not causative of any loss which the plaintiffs may have suffered as a result of taking over the company. He continued (ibid., at 305):
“At first sight my conclusion on causation may seem inconsistent with my finding that the plaintiffs relied on the accounts. The distinction, as I see it, is that you can be influenced by something even though if you had not been influenced you would have acted in the same way. The plaintiffs relied on the accounts in deciding to take over BG Fasteners Ltd. but they would have acted no differently even if they had known the true position as to the accounts. I therefore reject Mr. Bufton’s evidence on this issue. In doing so, I do not suggest that he deliberately lied. On the contrary, he gave evidence as to the position as he now believes it to be. His recollection is, however, tainted by how badly things went after the take-over”.
Mr. Costa says that it is a false standpoint for the plaintiff to say that the erroneous report caused the loss. He submits that once Mr. Carter had realised the enormous mistake he had made and regularised it everything got on to a proper footing. We heard from Mr. Alistair Sarre of Broadlands Estates Limited and he, of course, agreed immediately that St. Quintin re-opened negotiations with him on 14th May at £26,750, he having tentatively offered £23,250 on the day previous. What the defendant has failed to grasp is that no one in the Scott household was remotely aware of that fact and throughout the period of “carte-blanche” negotiations (which was, of course, Mr. Carter’s understanding) Mr. Scott continued to believe that the lowest figure he should receive was £32,000. He was never told differently. That is what caused what otherwise might be considered to be a blinkered attitude. Any idea of compromise, any contact between landlord and tenant had been stymied by the the effect of the original valuation.
It is precisely the same argument that flows from (b) of the reasons set out above. Mr. Carter did not make the true rental value clear to his client.
The “update” letter of 22nd May, as we have said of course states that the tenant was offered a revised annual rental of £23,250 but there is no mention of the huge discrepancy nor of the proper rental recommended by the agent in the light of the rectification of the area. It would have been so easy to have recalled the letter of 8th May to Mr. Scott’s mind, even by enclosing a photocopy of it. Mr. Carter freely admitted that it was not in the forefront of this mind. In our view it should have been.
The defendant referred us to passages from a case reported in the Estates Gazette Law Reports: Singer v. Fredlander Ltd. v. John D. Wood & Co. (QBD 3rd June 1977). There are two passages:-
1. “The way in which a valuer should conduct himself so as to fulfil his duty to a merchant bank, or any other body or person, varies according to the complexity or otherwise of the task which confronts him. In some instances the necessary inquiries and other investigations preceding a valuation need only be on a modest scale. In others a study of the problem needs to be in greater depth, involving much detailed and painstaking inquiries at many sources of information. In every case the valuer, having gathered all the vital information, is expected to be sufficiently skilful so as to enable himself to interpret the facts, to make indispensable assumptions and to employ a well-practised professional method of reaching a conclusion; and it may be to check that conclusion with another reached as the result of the use of a second well-practised method. In every case the valuer must not only be versed in the value of land throughout the country in a general way, but he must inform himself adequately of the market trends and be very sensitive to them with particular regard for the locality in which the land he values lies. Whatever conclusion is reached, it must be without consideration for the purpose for which it is required. By this I mean that a valuation must reflect the honest opinion of the valuer of the true market value of the land at the relevant time, no matter why or by whom it is required, be it by merchant bank, land developer or prospective builder.”
2. “In the case of Sutcliffe v. Thackrah and others [1974] AC 727 Lord Salmon at p 760 stated:
My Lords, I desire to make it plain that all I am discussing is whether an action for negligence will lie on the assumption that negligence can be established. Everyone knows that there is no topic about which greater differences of informed opinion may sometimes exist than the value of shares in a private company unless it be the authenticity and value of certain pictures. It by no means follows that a professional valuation or opinion was negligently given because it turns out to have been wholly wrong. Nor does the fact that an architect’s certificate was given for the wrong amount of itself prove negligence against the architect. Whether or not there has been negligence is, of course, a pure question of fact depending upon the particular circumstances of each case.”
Had we not found as we have on the letter of 8th May then of course the whole scenario would have been different. Both counsel accepted that at the opening of the trial.
When we look at 1 and 2 above the very same criteria, in our view, apply. The fact that the initial valuation was wrong is not the proof of negligence.
We cannot improve on a passage in the well-known case of Dawson v. Rothwell (1971) JJ 1703 at 1704 where Sir Robert Le Masurier defined a professional duty in this way:-
“We believe it to be the law that the public profession of an art or skilled employment is a representation and an undertaking to all the world that the professor or workman possess the requisite skill and ability to prosecute the employment which he has undertaken to a successful termination. Consequently in the case of any contract for work there is an implied engagement on the part of the person undertaking to do the work that it will be performed with due care, diligence and skill according to the orders given and assented to.”
It may be said that Mr. Carter, and through him St. Quintin, were in good faith because he believed that the letter of 8th May had been sent, and, a fortiori, had been seen by the plaintiff. It was a false premise but the later actions of Mr. Carter, and particularly his apparent inability to keep contact with a client who was a new client and of a certain age, were in our judgment fatal. The duty of care was a continuing one while the estate agent was employed by Mr. Scott.
In our judgment, the defendant failed in its duty. It is in our view extraordinary that Mr. and Mrs. Scott were away for a month and Mr. Carter remained unaware of that fact. The fact that offer and counter offer were made on a correct basis are not of any benefit to the agent who negligently failed to ensure that once the initial mistake had been rectified his principal was made aware of the fact.
In our judgment, and for the reasons we have given, the defendant is liable to pay damages to the plaintiff for the loss that he has suffered by its negligence. Accordingly, we give judgment for the plaintiff on the issue of liability.
Authorities
Royal Court Rules 1992: Rule 6/8.
RSC(1999 Ed’n): 0.18/7/11.
Banque Bruxelles Lambert SA v Eagle Star Insurance Co Ltd (1995) 2 All ER 769.
S.L. Duquemin and S.M. Duquemin (née McLean) v Reynolds (1987-88) JLR 259.
Zubaida v Hargreaves (1995) 1 EGLR 127 C.A.
Singer & Friedlander Ltd v John D Wood & Co. (3rd June, 1977) Estates Gazette Law Reports: Vol 243: p. 212.
Jackson on Professional Negligence: Chapter 3: Surveyors: p. 250-259; 280-3; 290-299; 328-337; 376-377.
Dawson v Rothwell (1971) JJ 1703.
Caparo Industries PLC v Dickman & Others (1990) 2A.C. 605.
Keppel v Wheeler & Another (1927) K.B. 577