Cases - London & South of England Building Society v Stone

Record details

Name

London & South of England Building Society v Stone

Date

[1983]; (1983)

Citation

3 AII ER 105; 267 EG 69, CA

Keywords

Negligence in valuations and surveys

Summary

The defendant valuer, in inspecting a house for mortgage purposes, negligently failed to discover that it was in imminent danger of collapse due to subsidence and was thus effectively worthless. The claimant lenders, having repossessed the property, decided to take no action against the borrowers under the mortgage (a loan of £11,800) and instead sued the valuer for their total loss. The trial judge held that the lenders ought reasonably to have mitigated their loss by pursuing the borrowers for at least some part of the debt; he accordingly reduced the damages payable by £3,000. However, a majority of the Court of Appeal ruled that the lender's decision (based partly on a sense of responsibility towards the borrower and partly on public relations) had been a reasonable one in the circumstances and that there should accordingly be no reduction in the damages awarded.

The Court of Appeal held that, in assessing the total loss suffered by the lender, credit must be given for any repayments made by the borrower before default.