Platform Funding Ltd v Bank of Scotland PLC (formerly Halifax PLC) (2008)
The appellant firm of surveyors and valuers (X) appealed against a decision giving judgment for the respondent mortgage lender (P) on its claim for breach of contract. P had been approached by a borrower for a loan to be secured by a mortgage on a property. X purportedly provided P with a valuation of the property, and P advanced a sum of money to the borrower based on that valuation. The valuer's report contained a certificate stating that the property had been inspected by the valuer, and the valuation given was a fair indication of the current open market valuation. When the borrower failed to maintain the payments due under the loan agreement, the property was repossessed. It emerged that the valuer had been misled by the borrower into inspecting the wrong property. When the property was sold it left a shortfall of around £30,000. X argued that the valuer's duty was simply to exercise that degree of skill and care in and about the performance of his instructions as was to be expected of a reasonably competent surveyor and valuer; where the property was identified in his instructions solely by its address or some other description, that applied equally to locating the property to be inspected. X argued that the certificate could not be construed as giving an unqualified assurance that the valuer had inspected the property to which the report related.
In the normal retainer of a surveyor to inspect and value a property, there was an inherent obligation to inspect and value the right property, such that inspection and valuation of a completely different property was a breach of contract, notwithstanding the surveyor's care and skill.
(Sir Anthony Clarke M.R. dissenting) (1) There was a presumption that when a person was instructed to act in a professional capacity, he assumed an obligation to exercise that degree of skill and care which was to be expected of a reasonably competent member of the profession. However, there was nothing to prevent him from assuming an unqualified obligation in relation to particular aspects of his work. It required special facts or clear language to impose an obligation stricter than that of reasonable care. A professional man would not readily be supposed to undertake to achieve a guaranteed result. If a professional man was undertaking with care that which he was retained or instructed to do, he would not readily be found to have nevertheless warranted to be responsible for a misfortune caused by the fraud of another. It was not possible to support a blanket approach whereby, even in the absence of an express warranty, a professional's responsibility was nevertheless always limited to the taking of reasonable care, Greaves & Co (Contractors) Ltd v Baynham Meikle & Partners (1975) 1 WLR 1095 CA (Civ Div), Barclays Bank Plc v Weeks Legg & Dean (1999) QB 309 CA (Civ Div), Zwebner v Mortgage Corp Plc (1998) PNLR 769 CA (Civ Div) and Midland Bank Plc v Cox McQueen (A Firm) (1999) Lloyd's Rep Bank 78 CA (Civ Div) considered. (2) In the normal retainer of a surveyor to inspect and value a property, there was an inherent obligation to inspect and value the right property, such that inspection and valuation of a completely different property was a breach of contract, notwithstanding the surveyor's care. X's instructions were couched in clear and unqualified terms. The contract could not be properly construed as providing that X were to do no more than exercise reasonable skill and care to identify and inspect the property. By accepting instructions to inspect and value the property, they undertook an unqualified obligation to inspect that particular property and were in breach of contract in failing to do so. (3) X had certified that they had inspected the property, but they had not done so. There was a straightforward breach of the contractual warranty. (4) (Per Sir Anthony Clarke M.R.) It seemed to make no sense, in the absence of a clear term, to hold that it was agreed that the valuer assumed an absolute obligation to locate the property but only a qualified obligation to exercise skill and care in the inspection and valuation of it. The valuer was acting in a professional capacity throughout. The contractual obligation was not absolute. The certificate should be construed as certifying that X had exercised all reasonable skill and care in the inspection of the property, including the location of the property.
View all cases