Cases - K/S Lincoln v CB Richard Ellis Hotels Ltd

Record details

Name
K/S Lincoln v CB Richard Ellis Hotels Ltd
Date
[2010]
Citation
EWHC 1156
Legislation
Keywords
Negligence in valuations and surveys
Summary

The claimant ‘C’ intended to invest in several hotels in the UK and sought valuations from the defendant property valuer ‘D’. D produced a valuation but as part of its reasoning included details of what it considered to be the projected investment yield. On the basis of the report C made the investment. C alleged that both aspects of the report were inaccurate and that as a result it had invested in assets worth substantially less than it thought. D argued that it owed no duty of care with respect to the rental yield predictions as they merely formed part of the reasoning in reaching the valuations and that the valuation overall was a reasonable one.

The court held that the valuers owed the usual duty of care in respect of the valuation but also in respect of the projected yield. It would be artificial to find that the valuer owed a duty of care in respect of the core aspects of the valuation but not with respect to other statements volunteered in the report and intended to be relied upon. Where relevant and significant statements are made and relied upon a duty of care will arise as to their accuracy. However, C had not relied on the projected investment yield data when deciding whether to invest in the hotel chain, but merely the overall valuation. Its loss therefore could not be causally related to any inaccuracy of those findings. Restating the rule set out in Merivale Moore Plc v Strutt & Parker (and as applied in Dennard v PricewaterhouseCoopers LLP) it followed that D would only be liable if the valuation fell outside the permissible bracket of reasonable valuations. On the facts it did not.