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Cite as: [2009] CSOH 24, [2009] ScotCS CSOH_24

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OUTER HOUSE, COURT OF SESSION

[2009] CSOH 24

CA104/07

OPINION OF LORD HODGE

in the cause

LESLEY BOTHWELL

Pursuer;

against

MESSRS D. M. HALL AND OTHERS

Defenders:

________________

Pursuer: J. Brown, Advocate; HBJ Gateley Wareing (Scotland) LLP

Defenders: Dean of Faculty QC, G. Walker, Advocate; Simpson & Marwick

18 February 2009

[1] In this action the pursuer, who owns and operates a nursery business, seeks damages from the defenders, a firm of chartered surveyors, alleging breach of contract and professional negligence. In particular she alleges that Mr Gordon Porter, a partner of the defenders, when he gave advice to her in relation to the marketing and possible sale of her nursery at 226 Braid Road, Edinburgh failed to exercise the standard of skill and care reasonably to be expected from a competent chartered surveyor who had experience in advising on the marketing of residential development sites. In this hearing parties sought the determination of the court only on liability, leaving the quantification of damages, if the defenders were found liable, to another day.

Factual background

[2] The pursuer owned a house at 226 Braid Road, Edinburgh which she used to carry on business as a children's nursery. The house is located in a substantial wedge-shaped garden at the junction of Comiston Road (Pentland Terrace) and Braid Road. Since the events with which this action is concerned the new owner has expanded the building from which a nursery continues to operate. The site extends to about 0.42 acres, slopes downwards in a northerly direction and is mainly at a level below both Comiston Road and Braid Road. The nursery, known as Buckstone Nursery, was able to accommodate up to thirty-seven children and was one of several nurseries which the pursuer operated in the Edinburgh area. In about April 2003 the pursuer received an unsolicited approach from a developer to purchase the site for £1.15 million. While the pursuer was content to continue her business at the site she wished to explore whether she might receive a significant price for the site if she sold it for redevelopment. Accordingly she contacted the Edinburgh office of the defenders for advice and was put in touch with Mr Gordon Porter, whom she met in that office and who visited the site on 3 June 2003. From this contact arose both the aborted sale of the site and this action.

The attempt to sell the site

[3] The pursuer was and is a successful businesswoman. In 2003 she had considerable experience in making business decisions but had not been involved in property development transactions. She was aware that an attempt to develop the site, if unsuccessful, could damage the nursery business which she carried on at 226 Braid Road as the prospect of future closure of the nursery might cause parents to withdraw their children and staff to seek employment elsewhere. She therefore engaged the services of the defenders to investigate discreetly the prospects of an advantageous sale.

[4] On 17 June 2003 Mr Porter wrote a long letter to the pursuer setting out his advice. In that letter he repeated his earlier advice that the site was physically constrained and that the planning process was slow and bureaucratic. As considerable delay could be foreseen before a planning application would be granted he advised that it would be sensible to give serious consideration to any offer of £1.25 million which did not impose suspensive conditions. Having considered other transactions in Edinburgh on comparable sites, including the proposed development of the Fairmile Inn site nearby, he advised that the site would accommodate a maximum of fourteen residential units. He suggested that in order to get offers of about £1.5 million it would be necessary to have a full marketing campaign and to accept suspensive conditions. He suggested that if the pursuer instructed the defenders to market the site they would prepare draft sales particulars for her approval and conduct a restricted mailshot to professionals and developers in order to maintain confidentiality. He also discussed the possibility of discreet press advertising. He considered that although the site had capacity to accommodate a considerable number of flatted dwelling houses or coach style town houses, it would be difficult to service. He reiterated his advice that fourteen units was the realistic maximum density which could reasonably be achieved, provided there were no ground problems.

[5] On 3 July 2003 the pursuer appointed the defenders as her sole selling agents in an attempt to sell the site for redevelopment at a price of over £1.5 million and instructed them to market the property by mailshot only. On 10 July 2003 Suzanne Lawrie, who led the defenders' business sales team, sent the pursuer draft sales particulars which the pursuer approved. The particulars described the site and opined that there would be high demand for it for residential redevelopment. The document suggested that enquiries in that regard should be made to the City of Edinburgh Council planning department. It invited offers over £1.5 million. In both the particulars and in a covering letter the defenders emphasised that the sale was on a strictly confidential basis.

[6] The defenders attempted to obtain a indication from planning officials of their likely attitude to a planning application to redevelop the site. Telephone calls seeking such advice were not successful. Accordingly on 22 July 2003 Mr Porter sent a fax to the Council's planning department enquiring about the redevelopment prospects of the site. As this enquiry and the Council's reply are at the heart of this action I will quote them in full. The fax message, to which a site plan was attached, was addressed to Ms Helen Martin, a principal planner, and was in these terms:

" Buckstone Nursery: Braid Road ...

Further to our recent communications I confirm that D M Hall have been instructed to act on behalf of the proprietor of the above property which is located on the apex site between the S end of Braid Rd and Comiston Rd. (Pentland Terrace).

The site currently used as a nursery for a Reg. 33 children has been attracting unsolicited approaches for residential development. We are instructed to advise the client and are of the opinion that a tasteful residential development of appropriate density and to a standard compatible with the surroundings can be undertaken with vehicular access using the existing opening on Braid Road, - Pentland Terr. is obviously at a higher level than the solum and would probably encounter objections from Highways on seeking to service the development from that (west) side. The nursery is housed on [sic] a rather "unique" single villa of Dutch barn appearance - which we would presume has no listing nor architectural merits.

Perhaps you can consider the location - the site extends to 0.42 Ac and advise whether within the Dev plan and its policies, a tasteful development can be accommodated - in principle, subject to usual caveats as to formal applications etc. and Highways approvals. The site is not intensively utilised at present.

Perhaps you can advise as to your thoughts on this matter and let me know if we can provide any other info. necessary to allow you to consider this informal request. Your assistance would be appreciated."

[7] By letter dated 5 August 2003 signed by Ms Martin but drafted by her colleague, Eric Dawson, the Council responded to that enquiry. The letter was in the following terms:

"We refer to your fax dated 22 July 2003 regarding the above.

The spatial character is of individual houses set within generous garden grounds. Buildings are set well back from both Braid Road and Comiston Road and any proposed development would need to respect these building lines.

Policy guidance states that the open nature of corner gardens will be protected where they contribute to the character of the area.

Any development proposal for this site should therefore respect the spatial character of the area, the building lines and the corner garden area.

As the tapering corner garden ground largely precludes any development on the southern half of the site, it may be that the site is suitable for at most one additional residential unit which would need to comply with points outlined above. We trust this is helpful at this pre-application stage. Advice is given without prejudice to any future decision by the Planning Development Quality Sub Committee.

If you have any further queries, please telephone Eric Dawson on (0131) 539 3679 (Direct Dial)".

[8] The pursuer in her evidence was adamant that Mr Porter had never disclosed to her the terms of this letter. She stated that if Mr Porter had sent her the letter she would not have proceeded with the sale of the site. She accepted that she had spoken with him on the telephone on several occasions at around this time and that Mr Porter might have mentioned the response but he had not communicated its terms which would have alarmed her. Mr Porter's evidence was that he had communicated the content of the letter to the pursuer in a telephone conversation but that he could not recall the precise words which he used. He gave evidence that he had said that the Council's response was poor and something to the effect that the Council were talking about a single unit and had not grasped the position. He said that he had definitely spoken to the pursuer about the Council having referred to one additional unit, either in a telephone conversation in September or at a meeting on about 28 October 2003. He explained in his evidence that he had been dissatisfied with the Council's response as he had requested advice on the prospects of redevelopment of the whole site, which would involve the demolition of the existing building, and the Council's response addressed a scenario in which that building remained. He had tried to persuade the Council to clarify their response but Ms Martin had stated that the Council had said all that they could. In support of Mr Porter's contention that he had told the pursuer of the terms of the letter, the defenders produced as a late production his terse manuscript note of a telephone conversation dated 15 September 2003. It stated "Spoke with LB - advised poor reply from Council - not willing to discuss or clarify".

[9] Mr Porter wrote to the pursuer again on 18 September 2003. In that letter he referred to their recent telephone conversation and apologised for his oversight in not keeping her abreast of the position. He explained that he and Suzanne Lawrie had each assumed that the other had reported to her. In relation to the Council's letter of 5 August 2003 he said:

"We have had a response (of sorts) from the Local Authority with regard to the planning background for the site and the nature of the response [sic] would reiterate our own view that the property development issues require to be taken further by a hard nosed and very commercial minded developer or experienced operator".

The pursuer gave evidence, which I accept, that she did not receive this letter. I accept, nonetheless, that Mr Porter arranged for the letter to be posted to her and was not aware that she had not received it.

[10] The defenders' confidential marketing of the site generated sufficient interest that on 7 October 2003 Suzanne Lawrie wrote to interested parties to intimate a closing date for their submissions of 24 October and invite them to include in their proposals an indication of the purchase price, site density, unit type, timescale and, if available, plans in order to allow the defenders to make a recommendation. Four developers submitted proposals to the defenders by letters dated 23 or 24 October 2003. Their proposed developments and indicative prices were very different. What all the proposals had in common was an indication that any formal offer would include a suspensive condition requiring the grant of an acceptable planning consent.

[11] Laurie & Company, solicitors, on behalf of Scotia Homes Limited ("Scotia") advised that their clients would offer in the region of £750,000 to £800,000 for the site and their proposal was to build eight apartments. They stated that they envisaged two 2 bedroom apartments, four 2 or 3 bedroom apartments and two larger penthouses. They stated that the planners had indicated that this was the maximum likely permissible development of the site but that if the planning consent allowed additional units the developers would increase their price pro rata in relation to the number of apartments and square footage.

[12] Rorke Homes Limited proposed to pay £1.6 million and submitted an indicative proposal which comprised twenty 2 bedroom flats in a four-storey building which was located in the centre of the site.

[13] Abbey Projects Limited ("Abbey") stated that they were prepared to offer £1.825 million on condition that they would receive planning consent for the construction of twenty residential units. Mr Gordon Bennett, Abbey's managing director, stated that Abbey had and were developing 248 units in Glasgow and a further 125 in Sheffield and Liverpool and that they were very keen to get their first Edinburgh development.

[14] Southglen Developments Limited ("Southglen") suggested a price of £1.4 million conditional upon the obtaining of planning consent for the demolition of the existing building and the erection of six townhouses. They enclosed drawings of their scheme. They suggested that twelve months be allowed to obtain planning consent and that a mechanism should be agreed to adjust the land price in the event that a smaller development was approved. Their director, Gary Hay, stated in that letter,

"We appreciate that the price offered is slightly below the asking price but we do believe that the scheme devised by our architect would be less contentious with regard to planning than a higher density scheme. We have considered a higher density scheme of apartments on the site to try to generate a higher land value but our architect advised that such a scheme would undoubtedly face more difficulties with the planning authorities than a scheme for six townhouses. We believe that the scheme enclosed allows us to make a realistic offer for the site which should not be drastically reduced through the planning process".

[15] Having received these proposals the pursuer and Mr Porter met on 28 October 2003 to discuss them and to allow the pursuer to decide whether to proceed with the proposed sale of the site. The pursuer, recognising that it was difficult to obtain planning permission for a substantial residential development, was particularly interested in developers who had experience of achieving significant developments. The pursuer in consultation with Mr Porter decided to arrange meetings with two of the developers who had made proposals, namely Abbey and Southglen. The pursuer, Mr Porter and Ms Lawrie met representatives of Abbey on 30 October 2003 and representatives of Southglen on 3 November 2003. At the meeting on 30 October, Mr Gordon Bennett and Mr Scott Martin of Abbey and Mr Hector Black of Covell Matthews, their architect, represented Abbey's interest. At the meetings the parties discussed the developers' track records, the proposed developments and the developers' assessment of the prospects of obtaining planning permission. Both Abbey and Southglen were confident that they could persuade the Council's planners to support their proposals. Mr Porter did not disclose the Council's letter of 5 August 2003 at either of the meetings or give any indication that he had received any advice from the Council of the prospects of developing the site. In his discussions with the pursuer which followed the presentations Mr Porter advised the pursuer of the difficulties which developers faced in obtaining planning permissions. The pursuer said that she was a businesswoman and was aware of the risks. She and Mr Porter thought that both Abbey and Southglen had proposals which had reasonable prospects of success. In the circumstances the pursuer chose to proceed with the Abbey proposal as it involved the higher price.

[16] Although the pursuer and Mr Porter met Mr Bennett, Mr Martin and Mr Black, the architect who prepared the proposal for Abbey, at the meeting on 30 October 2003 and discussed their proposal, they did not know in advance what discussions Abbey or Mr Black had had with the planning authority. Mr Porter formed the view that different planning officials had given different responses to the parties' pre-application enquiries and saw the comments of Scotia (see paragraph 11 above) as support for that view. Mr Porter said in evidence that the Abbey representatives gave the impression that they had discussed their proposal with planning officials and Mr Black was very positive about his relationship with Council officials and the processes which he had in place to advance the proposal. Mr Gordon Bennett gave evidence that he understood at the time that the Council had been consulted on the proposal and that they were positive or at least "not negative" in their response. This supports Mr Porter's evidence that at the meeting on 30 October Abbey indicated that they had run the proposal past the Council's planning officials and were very positive about the processes they had in place for the proposal. I accept Mr Porter's evidence on this matter. Mr Black's recollection was that Abbey had told the pursuer and Mr Porter that he had not discussed the proposal with planning officials. Having regard to the evidence of Mr Bennett and Mr Porter, I consider that Mr Black's recollection is incorrect.

[17] In fact Abbey and their advisers had not shown their proposal to the Council's planning officials or discussed with them the form of development which they proposed. Mr Black had telephoned the Council's duty planner on 21 October 2003 and had discussed various relevant planning policies. In his telephone record he listed eight topics for discussion and recorded the official's response. But under the entry, "massing and precedent", which would have related to the particular proposal, he recorded no discussion. This supported his evidence that he had not discussed the proposal with officials. But neither the pursuer nor Mr Porter knew that. They accepted Abbey's representation that they had.

[18] On 4 November 2003 Abbey (Scotland) Limited made a formal offer to purchase the site for £1.825 million subject to obtaining an acceptable planning consent. Thereafter the missives were negotiated and concluded. Although the initial proposal was made on behalf of Abbey Projects Limited, the missives were entered into in the name of Abbey (Scotland) Limited. I use the term "Abbey" hereafter to refer to either or both companies as the precise corporate manifestation of the Abbey economic interest is not relevant to this action.

[19] Abbey then worked on their proposal and prepared a planning application. At a design team meeting on 22 January 2004 Mr Bennett discussed with Abbey's professional advisers whether to request a pre-application meeting with planning officials to discuss the proposal before submitting the planning application. It was later decided to submit the planning application without such consultation as that would delay the project. Abbey submitted the planning application in the joint names of themselves and the pursuer in April 2004.

[20] Unfortunately the planning officials did not favour the proposal. The urban design team within the planning department criticised the proposal, principally for crowding the site. The landscape department criticised the proposal for seeking to build close to trees which were the subject of a tree preservation order. Mr Eric Dawson, who had given urban design advice, expressed surprise to Mr Black at the scale of the proposed development in the light of the advice which he, through Ms Martin, had given in the letter of 5 August 2003. On 6 July 2004 Mr Black wrote to Mr Bennett of Abbey and reported his discussions with planning officials. He expressed disappointment that he had not known of the letter of 5 August 2003 and expressed the view that the defenders' pre-application enquiry might have prejudiced the planning officials' opinion of Abbey's current application. On 9 July 2004 Ms Lawrie of the defenders sent Mr Black copies of the defenders' pre-application enquiry and the Council's response of 5 August 2003. Mr Black sought to arrange a meeting with Mr Dawson to discuss the application and, by letter dated 13 July 2004, sent the pre-application enquiry and the Council's reply to Mr Bennett. In that letter he stated that he was unclear as to why the defenders had not divulged the Council's letter at the meeting on 30 October 2003 and advised that he had spoken to a planning officer and thought that the Council was not likely to deviate from the position stated in the letter. He went on to say:

"The planners' advice to D M Hall was that the site is suitable for one additional house. This does not preclude the demolition of the existing building and redevelopment of the site for a flatted development of a reduced scale, respecting the building lines."

He expressed the view that a development of twenty flats was unlikely to obtain planning permission but that a reduced development of ten flats had better prospects. Mr Black prepared a smaller scheme for the site which comprised six townhouses. But Mr Bennett decided to persist with the application for twenty flats and not to show the Council the proposal for a smaller development.

[21] Planning officials made clear their view that they were not likely to support the proposed development and that Abbey should consider withdrawing the application in order to prepare a more modest development on the site. Abbey instructed Mr Black to obtain the advice of a planning consultant. On 24 August 2004 Mr Black consulted with Mr Andrew Munnis of Montagu Evans on the twenty flat proposal and Covell Matthews' smaller scheme of six townhouses. In a letter of the same date Mr Black recorded Mr Munnis's advice which included the view that the Council's pre-application response would have prejudiced Abbey's application as the Council would have been more likely to defend their letter than negotiate. Mr Munnis advised Mr Black that the planning application should be withdrawn. On Mr Bennett's instructions it was.

[22] At about the same time Mr Bennett telephoned the pursuer. He angrily criticised her for not informing him of the Council's letter of 5 August 2003 and suggested that if he had known of the letter in the autumn of 2003 he would not have proceeded with his proposal. The pursuer explained to him that she was unaware of the letter. Mr Bennett also criticised Covell Matthews for providing what he alleged was improper advice. That caused Mr Black to respond by letter dated 24 August 2004. In that letter Mr Black refuted the allegation and stated that he had always advised that it would be a challenge to obtain permission for twenty flats on the site but that he had thought that was achievable having regard to the information which he had at the time. He defended the decision to proceed with a fully worked out proposal in the application without pre-application consultation as a valid approach and suggested that the existence of the statement in the Council's letter of 5 August 2003 that the site might be suitable for at most one additional residential unit had severely prejudiced the application. He stated that if that information had been available to him at the time he would have advised differently.

[23] Mr Bennett also wrote to the defenders on 26 August 2004 and copied the letter to the pursuer. He suggested that the asking price of £1.5 million indicated that a considerable amount of development was possible and that the defenders' failure to disclose the Council's "generally negative" letter of 5 August 2003 amounted to a misrepresentation. He asserted that Abbey had incurred considerable expenditure in preparing the scheme and submitting the planning application and that they would not have done so if they had known of the letter. He invited the defenders to re-imburse the abortive expenditure and stated that he was consulting solicitors on the matter.

[24] As Abbey had incurred such expense, Mr Bennett was annoyed at the failure of the project and was keen to avoid paying money for a project which would not proceed. In my opinion his complaint to Covell Matthews should be seen in that context as the architects had requested that he pay an agreed fee for their work. I consider that his complaint against the defenders falls to be viewed in a similar light. Nonetheless, his stance may have had a considerable influence on the pursuer's perception of events. The anger which he expressed in his telephone call to her and the views which he expressed in correspondence which he copied to her appear to have caused her to view the Council's letter as determining the development potential of the site.

[25] There was other evidence on the significance of the Council's letter of 5 August 2003. Mr Hector Black said in evidence that he considered the letter to be very significant as it was in conflict with Abbey's proposal. He would have wished to have seen the letter at the outset of the project so that he could have discussed it with planning officials to ascertain whether they were serious in their stance. Mr David McFarlane, who was the planning officer responsible for processing Abbey's application, explained that his initial view of the application was that it involved overdevelopment of the site. Having seen on the case file the Council's letter of 5 August 2003 he was surprised by the scale of the proposed development as there was a big difference between what the letter envisaged and twenty flats. But he stated that the Council's letter was simply the view of a planning official and was not a material consideration in the determination of the planning application. He accepted that individual planning officials might have given differing views in response to

pre-application enquiries. In this case his consideration of the relevant planning policies and the responses of consulted planning officials confirmed his initial view that the Abbey proposal involved overdevelopment of the site.

[26] The pursuer raised this action as she attributed the decline of her nursery business at the Buckstone Nursery to the attempted sale of the site. As Abbey and the pursuer had to notify neighbours of the planning application, the pursuer was aware that parents living in the locality and her staff would learn of the development proposals. In April 2004 the pursuer therefore advised both parents and staff of the application, explaining that the nursery would continue to trade if planning permission were not obtained, that the process would take time and that she would keep them informed of developments. Thereafter parents withdrew their children and staff sought employment elsewhere. This caused the decline of the nursery business and she sold the part of the site on which the nursery is situated in November 2006.

The allegations of breach of contract and negligence: expert evidence

[27] The pursuer averred that the defenders were in breach of an implied term of their contract that they, and in particular Mr Porter, would attend to her business with the degree of skill and care to be expected of an ordinarily competent chartered surveyor experienced in advising on the marketing of residential sites. She also averred that parallel duties arose in delict. Her case was that such a surveyor would know of the risk of damage to the nursery business if parents and staff learned of the planning application and that she had an interest in proceeding with the sale of the site only if it had a reasonable prospect of being completed. The Council's letter of 5 August 2003 made it highly improbable that planning permission would be granted to Abbey's development. Her case, accordingly, was that Mr Porter failed in his duty in three respects. First, he should have sent her a copy of the Council's letter as soon as he received it. Secondly, he should have given her detailed advice on the import of the letter and informed her that the Council, having committed itself to a position on the further development of the site, was unlikely to permit more extensive development. Thirdly, he should have informed the prospective developers, whom he and the pursuer met, of the letter and asked them whether they still believed that they would obtain permission for their schemes.

[28] The pursuer led the evidence of Mr Peter Lyell, an experienced chartered surveyor, who gave his evidence in a thoughtful and dispassionate way. He impressed me as a careful witness. He expressed the view that the Council's letter of 5 August 2003 was "an event", a significant development in the sales process which he would have drawn to his client's attention. He would either have sent the client the letter or reported fully on its terms. He considered that the Council's response contained information which was very different from the advice which the defenders had given their client. If he had advised his client that a development of fourteen units might receive planning permission, this letter would have stopped him in his tracks. He would have expected the defenders to have reported this immediately, either by copying the letter or at the very least by discussing its contents with the client. The defenders' letter of 18 September 2003 was inadequate as it did not convey the gist of the Council's advice. He could not think of a good reason why a surveyor would not send a copy of the Council's letter to his client. He opined that the defenders by failing to disclose the terms of the Council's letter to the pursuer fell below the standard of the competent and ordinarily skilled chartered surveyor.

[29] In so far as the letter did not answer the question which the defenders had posed, Mr Lyell would have sought clarification from the planning official or have sought the advice of an architect or planning consultant. The prospects of obtaining planning permission were important to the client's decision whether to sell the property. He recognised that the Council's comments were not a final decision but thought that they had the potential to prejudice an application for a bigger development. This was because if the expressed view was not challenged at the time it would become the planner's "default setting" in their approach to the development of the site, namely that there was little prospect of larger scale development being permitted. He was not surprised by Mr Bennett's reaction when he saw the letter. Mr Lyell thought that he might have discussed the Council's letter with the prospective purchasers with whom the pursuer had meetings but he emphasised that he would need the client's permission to do so. He ultimately did not suggest that it was negligent not to do so in the light of the information which the various offerors themselves appeared to have obtained from other planning officials.

[30] Before discussing the expert evidence led by the defenders it is appropriate to summarise Mr Porter's explanation of his actions. He made the enquiry to the Council as he had wanted to see if there were any "show-stoppers" which would prevent the successful marketing of the site. He sought guidance on the permissible density of a redevelopment of the whole site. Having failed to get a response on the telephone, he deliberately wrote a short and informal communication both to get a prompt response and also to discourage too formal a response from which planning officials might be reluctant to depart. When he received the letter of 5 August 2003 from the Council he thought that it did not answer the question which he had posed. It assumed that the existing building would be retained while his question addressed the redevelopment of the whole site. He telephoned the Council to seek clarification but was informed eventually that the Council would neither clarify the letter nor discuss the matter further. He did not consider that the letter was a "show-stopper" as it acknowledged that there was scope for development. As a result of an oversight he did not telephone the pursuer to speak about the Council's response until 15 September 2003. See paragraph 8 above.

[31] In his experience developers who bid for a development site almost without exception made their own enquiries of the planning department to obtain a view on the potential of the site, as the sales particulars had suggested that they should have done in this case. The different offers received suggested that planning officials had given materially different advice in response to separate enquiries. Scotia's offer confirmed this view. One of the purposes of the discussions with Abbey and Southglen had been to explore whether they had made adequate enquiries of the planning authority in relation to their proposals. Abbey's representatives said that they had used their contacts to run their proposals past the planners. Their architect expressed very positive views about his relations with the planning officials and the processes which he had put in place for the proposal. See paragraph 16 above. Mr Porter thought that it would not have been appropriate to tell Abbey's representatives of the letter of 5 August 2003 as the advice in it was only questionably relevant and might have affected adversely the price which they would offer. By the time he and the pursuer met Abbey and Southglen, the various developers had made further enquiries about the site to inform their proposals. He advised the pursuer that, if Abbey applied for permission for twenty units, the size of their development might be reduced during the planning process. He advised the pursuer that both the Abbey and Southglen proposals were good quality schemes which were worthy of consideration. The pursuer decided to proceed with the Abbey proposal, which offered the higher price, in the knowledge of the planning risk.

[32] Mr Porter was not surprised by Mr Bennett's reaction but suggested that he as a developer would seek to blame others. While Mr Black treated the letter as being more significant than he had, he considered that to be a question of professional judgement.

[33] The defenders led the evidence of Mr John Brown, who also was an experienced chartered surveyor and was a senior director in the land and development team in DTZ, with responsibility for residential sales and development opportunities. He explained that there was always uncertainty in residential planning applications and observed that the defenders had warned the pursuer of this in their initial letter of advice dated 17 June 2003. He expressed the opinion that Mr Porter had not acted negligently in not sending Ms Bothwell the letter of 5 August 2003. Mr Brown did not consider the Council's letter of 5 August 2003 to be helpful as it envisaged the retention of the existing building and gave no indication of the possible size of the additional unit. It did not address the possible scale of a development which could be accommodated if the existing building were demolished and the whole site redeveloped. He suggested that it was not possible to make a judgement on the prospects of Abbey's proposed development until one had negotiated with the planning authority and tested the proposal in the planning process. The identity of case officers within the Council could change and the contributions of other officials could alter an initial opinion. As a result it was not prudent to rely on an initial response to a general pre-application enquiry. He expected that developers who discussed particular proposals with planning officials would get more useful guidance at the pre-application stage. Once developers had come up with their own development schemes, he considered that the Council's letter of 5 August 2003 ceased to be relevant to the planning prospects of those schemes. What was important was the obtaining of the views of planning officials on a particular scheme. It was not uncommon for a determined developer to overcome the initial resistance of planning officials to his proposals, if necessary by appealing to the Scottish Ministers.

[34] In Mr Brown's opinion the weight to be attached to the Council's letter of 5 August 2003 was a matter of professional experience and judgement. He did not accept the proposition that the Council's letter made it unlikely that planning permission would be granted for more than one additional house on the site or that it made it very unlikely that Abbey's proposal would receive planning permission. His view was that the letter was of little relevance to the prospects of developing the whole site. It did not comment on density of design. Nonetheless, a chartered surveyor who decided not to pass on such information to his client would be bold. He would have passed on the information but would have told the client that the answer did not address the questions asked. He would have told his client that the letter was disappointing; it suggested that there was development potential but there were also constraints. He would have said that more detail was required and that one should be cautious of relying on initial planning discussions. What Mr Porter had told his client in his letter of 18 September 2003 was sufficient as the defenders had previously warned the pursuer of the uncertainties associated with planning applications. He did not consider that Mr Porter had been negligent. Mr Brown also stated that he would not have revealed the Council's letter when one came to meet with prospective developers as matters had moved on by then, particularly as the developers represented that they had discussed their proposals with the planning authority.

[35] Mr Brown pointed out that after he had seen the Council's letter Mr Black considered that his reduced scheme was feasible. He stated that, although Southglen's offer had shown the value of a proposal similar to Mr Black's, the planning potential of the site had never been tested by pursuing an application to a decision of the planning committee.

Discussion

[36] Parties were agreed on the law to be applied to the facts when skilled witnesses with relevant expertise disagreed on whether the actions of a professional man accorded with acceptable professional practice. Mr Brown, advocate, on behalf of the pursuer submitted that the cases pleaded in contract and delict did not differ. There had been a failure of a duty of care to avoid foreseeable economic loss. He accepted that the appropriate test was that of Lord Clyde in Hunter v Hanley 1955 SC 200, namely (in this context) that the pursuer had to prove that the chartered surveyor who is said to be negligent had been guilty of such failure as no chartered surveyor of ordinary skill would have been guilty of if acting with ordinary care.

[37] Mr Brown referred to my decision in Honisz v Lothian Health Board 2008 SC 235 as an adequate summary of the relevant law where there was a conflict between the evidence on that issue between the skilled witnesses led by each party, and the Dean of Faculty did not demur to that. In Honisz, which concerned medical practice, I summarised the law in five propositions as follows:

"First, as a general rule, where there are two opposing schools of thought among the relevant group of responsible medical practitioners as to the appropriateness of a particular practice, it is not the function of the court to prefer one school over the other (Maynard v West Midlands Regional Health Authority, Lord Scarman at p.639F-G). Secondly, however, the court does not defer to the opinion of the relevant professionals to the extent that, if a defender lead evidence that other responsible professionals among the relevant group of medical practitioners would have done what the impugned medical practitioner did, the judge must in all cases conclude that there has been no negligence. This is because, thirdly, in exceptional cases the court may conclude that a practice which responsible medical practitioners have perpetuated does not stand up to rational analysis (Bolitho v City and Hackney Health Authority, Lord Browne-Wilkinson at pp.241G-242F, 243A-E). Where the judge is satisfied that the body of professional opinion, on which a defender relies, is not reasonable or responsible he may find the medical practitioner guilty of negligence, despite that body of opinion sanctioning his conduct. This will rarely occur as the assessment and balancing of risks and benefits are matters of clinical judgment. Thus it will normally require compelling expert evidence to demonstrate that an opinion by another medical expert is one which that other expert could not have held if he had taken care to analyse the basis of the practice. Where experts have applied their minds to the comparative risks and benefits of a course of action and have reached a defensible conclusion, the court will have no basis for rejecting their view and concluding that the pursuer has proved negligence in terms of the Hunter v Hanley test (paragraph [36] above). As Lord Browne-Wilkinson said in Bolitho (at p.243D-E), 'it is only where the judge can be satisfied that the body of expert opinion cannot logically be supported at all that such opinion will not provide the benchmark by which the defendant's conduct falls to be assessed.'"

[38] In this case Mr Brown conceded that the pursuer had not established on the evidence that Mr Porter should have advised her that in the light of the letter of 5 August 2003 it was unlikely that the Council would have granted planning permission for more than one additional unit. He also accepted that the defenders were not under a duty to tell the pursuer of the letter immediately and that Mr Porter was entitled to attempt to get the relevant planning officials to clarify its terms. He submitted that he had established breaches of duty by Mr Porter, which were a development of his pleaded case, namely (a) the failure to inform the pursuer of the material part of the letter of 5 August 2003 by the time she had to decide whether or not to proceed with the proposed sale and (b) the failure to inform prospective purchasers of that letter, having first obtained the pursuer's permission to do so.

[39] He submitted that in relation to those two cases he did not need to show that the expert evidence led on behalf of the defenders did not stand up to rational analysis because there was a substantial degree of convergence between the evidence of the two experts on those issues. I do not accept that that was so. Mr Porter's actions were supported by Mr John Brown in so far as he opined that (a) if Mr Porter did not inform the pursuer of the content of the Council's letter beyond what was said in the letter of 18 September 2003, that would not have been negligent but simply a question of professional judgement and (b) that there had been no need to inform prospective developers of the letter in October 2003.

[40] In relation to the first case, the answer on which the pursuer principally founded in Mr John Brown's evidence occurred at the end of his cross-examination when he agreed with the proposition that if the pursuer had had no knowledge of the letter of 5 August 2003 she would not have been in a position to assess the risk of proceeding with the sale. He said that it would have been wrong if she had not known because the letter was a communication from the planning authority and was part of the process which would lead to her making the decision. In my opinion that answer must be seen as a response to the hypothesis put in the question and in the context of Mr John Brown's evidence as a whole. In giving his opinion that Mr Porter was not negligent, Mr John Brown was aware of the reference to the Council's response in the letter of 18 September 2003. He also described the Counsel's letter of 5 August 2003 as a response to a very preliminary general inquiry as distinct from a commentary on a particular proposal. He advised that he considered that the letter was in large measure rendered irrelevant by the information which the prospective developers had provided, or purported to provide, about their own enquiries of planning officials in relation to their specific proposals in October 2003.

[41] In relation to the second case he stated on re-examination that if, as Abbey's representatives represented at the meeting on 30 October 2003, the prospective developers had obtained more up to date information which was relevant to their proposals he would not have shown them the letter of 5 August 2003. See paragraph 34 above. In so far as there was convergence between his evidence and that of Mr Lyell on this issue it was that there had been no failure in duty in not telling the prospective developers of the letter. See paragraph 29 above.

[42] I therefore do not accept that Mr John Brown's evidence supported the revised cases which counsel advanced on behalf of the pursuer. I am also satisfied that there is a rational basis for Mr John Brown's view. First, the defenders' fax was a general enquiry and the Council's letter of 5 August 2003 did not answer the question about the potential for the redevelopment of the whole site. Nor did it comment on a particular proposal. Secondly, it appears to me that the constraints on the redevelopment of the whole site which it identified were (i) the spatial character of the surrounding houses and gardens, (ii) the building lines and (iii) the policy guidance on protecting corner gardens.

[43] Thirdly, as Mr Brown conceded in his submission, the letter did not make it unlikely that the Council would grant planning permission for more than one additional unit. The letter did not address the redevelopment of the whole site and it appears that individual planning officials may have given different views on the potential of the site to different enquirers. Both Scotia (paragraph 11) and Mr Hector Black (paragraph 20) considered that there was scope for significant development on the site, albeit not as extensive development as Abbey had proposed, after they had consulted planning officials on their proposals. Southglen's proposal (paragraph 14) which, like Mr Black's, was for six townhouses, attributed considerable value to the site.

[44] Fourthly, while the letter was, in Mr Lyell's words, "an event" as it was a communication from the planning authority in response to a general enquiry, it would in large measure have been superseded by the information which prospective developers had obtained or purported to have obtained from planning officials in relation to their own proposals for the site and which was reported to the pursuer and the defenders in the offer letters and in the meetings with prospective developers. See paragraphs 11, 15 and 16 above. I am not persuaded that the defenders are to be criticised for not challenging the representations made by the developers.

[45] Fifthly, it was a matter of agreement between the skilled witnesses that most planning applications for significant residential development in Edinburgh involve uncertainty. The defenders had warned the pursuer of this at the outset. They also warned the pursuer that in the light of the Council's response the pursuit of a planning permission would require a determined and forceful developer. See paragraph 9 above.

[46] Finally, while it is possible that the planning officials who had to recommend to the planning committee whether to grant an application would be influenced at least unconsciously by the views expressed by another planning official on the potential of a site in a pre-application letter, those views would not be a relevant consideration in a planning decision. As it appears that different planning officials may give different views in response to general pre-application enquiries, such views would amount at most to what Mr Lyell referred to as a "default setting" and it is the examination of planning policies and consultation responses which should determine a planning official's recommendations to the planning committee. This is consistent with Mr McFarlane's description of his approach to Abbey's application.

[47] In those circumstances, while I recognise that Mr Lyell's view of good practice was shared by Mr John Brown as he also would have informed his client of the gist of the letter of 5 August 2003 and while I see no disadvantage arising from doing so, I see no basis for rejecting Mr John Brown's view that the significance of the letter was a matter of professional judgement and that if all that the defenders told the pursuer of the letter was what was stated in the letter of 18 September 2003 (paragraph 9 above), that was not a failure to show the required standard of professional skill and care, particularly when assessed in the context of the information apparently available to the pursuer when she decided to proceed with the sale in early November 2003.

[48] In any event, I am persuaded that, in either the telephone conversation of 15 September 2003 or at the meeting once the offers had been received, Mr Porter mentioned to the pursuer the fact that the Council had referred to only one additional unit and that they had not addressed the redevelopment of the whole site. The contemporary telephone note of 15 September 2003 which refers to the Council's refusal to clarify suggests that he told her the gist of the Council's response in that telephone call, as I would have expected the pursuer, who is an alert and practical businesswoman, otherwise to have asked what it was that they would not clarify. Nonetheless, I consider it likely that Mr Porter would not have emphasised the reference to one additional unit because he held the view that the response did not answer the question which he had posed and I am not surprised that the pursuer has no recollection of any reference to that phrase. It appears to me that the importance which the pursuer has attached to the phrase in her written pleadings and in her evidence is the product of hindsight and has been prompted in large measure by what Mr Bennett said to her when he decided to withdraw his application and sought to blame others for Abbey's wasted expenditure. In my opinion the principal constraints on the redevelopment of the whole site were those listed in paragraph 42 above.

Conclusion

[49] As I have concluded that the pursuer has not proved that the defenders broke their contract or were negligent in their advice to her, I sustain the second and third pleas in law for the defenders and assoilzie them from the conclusions of the summons.