Property Matters November 2008

Be clear on your retainer

The case featured in this edition of Property Matters serves as reminder that whatever your profession obtaining clear, solid and accurate instructions is vital, and especially if you want to avoid covering the cost of legal fees! A surveyor recently found out the hard way that despite exercising reasonable skill and care during the course of his professional responsibilities, he was still liable to his client for more than £30,000 when things went wrong. This was the result of the Court of Appeal Decision in Platform Funding Limited –v- Bank of Scotland plc (formerly Halifax plc) 2008

Facts of Platform Funding
The surveyor was instructed to value a property which Platform Funding Limited (PF) was to take as security for a loan to a Mr Hewes. The surveyor was told that the property was 1 Bakers Yard and that Mr Hewes would allow access to the property. The surveyor contacted Mr Hewes, met him on site ,inspected the property and reported to the prospective mortgagee. Unfortunately Mr Hewes showed the surveyor around 5 Bakers Yard on which there was an almost completed detached house. At 1 Bakers Yard there was a substantial detached house still in the course of construction. Consequently the surveyor visited and reported on the wrong house. PF took a charge on 1 Bakers Yard and ended up selling it as mortgagee, but leaving a shortfall on the mortgage account in excess of £30,000. PF sued the surveyor although they did not claim that the surveyor had been negligent, just that he had neither inspected nor reported on the correct property.

The surveyor's responsibility
Two of the judges, in respect of the responsibility of a professional, concluded that the current law was:

• The default obligation is one limited to the taking and exercise of reasonable care.
• It requires special facts or clear language to impose an obligation stricter than that of reasonable care.
• A professional man will not readily be supposed to undertake to achieve a guaranteed result.
• If he is undertaking with care that which he was retained or instructed to do he will not readily be found nevertheless to have warranted to be responsible for a misfortune caused by the fraud of another.