Cases - Platform Funding Ltd v Bank of Scotland Plc

Record details

Name

Platform Funding Ltd v Bank of Scotland Plc

Date

[2008]

Citation

EWCA Civ 930

Keywords

Negligence in valuations and surveys

Summary

The claimant mortgage lender 'P' had engaged the defendant surveyors 'B' to value the property over which it intended to secure the charge. B provided a valuation but when the purchaser/borrower failed to maintain the mortgage payments and the property was repossessed it transpired that the valuation had been given in respect of the wrong property. The borrower had deliberately misled the surveyor into valuing the wrong property on his arrival. In B's report it had certified that 'the property offered as security has been inspected'. P sued B for breach of contract. P argued that there was an absolute duty to locate and inspect the correct property and a failure to do so was a breach of contract irrespective of fault. B argued that a surveyor/valuer ordinarily undertook only to exercise reasonable care and skill in the provision of its services, which included locating the correct property. The trial judge found for the claimant.

The Court of Appeal upheld the trial judge by a majority. It held that, in the absence of an express undertaking in the contract, surveyor's liability would be limited to exercising reasonable care and skill. In order to assume greater responsibilities, such as absolute or unqualified duties, special facts or specific wording in the instructions or correspondence would be required in order to show that such responsibility was assumed. Ordinarily professionals do not undertake to achieve a particular result or to warrant than information supplied is accurate. On the facts, however, such clear words were present. B had accepted in clear and unqualified terms to inspect the property which was intended to be subject to the charge and failing to do so was a breach of the contract notwithstanding the evident care B had taken when performing the valuation. Sir Anthony Clark, MR dissented stating that the words in the contract were not to be read in such a strict manner so as to impose an absolute obligation. The service being offered by B was to be viewed as a whole and the duty of care in respect of it limited to exercising reasonable care and skill, including locating the correct property.

In the absence of express limitation or qualification it appears likely that surveyors will be under an absolute duty to locate the correct property when conducting valuations.

In theory this decision is restricted to the facts of the particular case, but it is likely to be read generally as imposing an absolute duty on surveyors to identify the correct asset when conducting valuations (or indeed any other type of work). Instructions are unlikely to describe the duty in respect of the relevant asset in anything other than absolute terms. Surveyors must take particular care in this respect.