Cases - Singer & Friedlander Ltd v John D Wood & Co

Record details

Name

Singer & Friedlander Ltd v John D Wood & Co

Date

[1977]

Citation

2 EGLR

Keywords

Negligence in valuations and surveys

Summary

The defendants were held liable for negligence in their valuation, for mortgage lending purposes, of a large residential development site in a rural location. In the course of analysing the defendants' conduct, the court described valuation as a 4-stage process:

• collecting relevant information about the property;
• analysing the information, so as to be able to accept facts and make assumptions;
• checking the findings by an appropriate alternative valuation method; and
• reporting to the client.

On the facts, the defendants had failed to make sufficient efforts to collect the necessary information (the judgment includes a detailed list of what would be relevant for this purpose).

The judge also turned his attention to the claimants' evidence that the resulting valuation was itself inaccurate. In so doing, the court (relying upon evidence put forward by expert witnesses) explicitly recognised for the first time the idea of a 'margin of error' or 'bracket' around the true value of the subject property. The judge stated:

'There is, as I have said, the permissible margin of error, the "bracket" as I have called it. What can properly be expected from a competent valuer using reasonable skill and care is that his valuation falls within this bracket.'

The effect, in the judge's opinion, was that 'any valuation falling outside ... the bracket brings into question the competence of the valuer and the sort of care he gave to the task of valuation'.