Lloyds TSB Bank Plc v Edward Symmons (2003)
A case of professional negligence against a valuer could not be established where he had attributed no value to theoretically lettable space as this had been his reasonably held opinion based on local market conditions. The valuation did not fall outside the appropriate range of permissible non-negligent valuations.
Action by the claimant ('Lloyds') for damages arising out of an allegedly negligent valuation provided to it by the defendant valuers ('Symmons') in September 1998. At that time Lloyds held a first legal charge over commercial premises ('the property') in Gosport. Lloyds was negotiating an assignment of the benefit of its charge to a third party and instructed Symmons to advise as to the open market value ('OMV') of the property. The property comprised a former factory which had been converted into a large number of individual business units. One of the property's major tenants ('H') had recently gone into receivership and had ceased trading. At the time of the valuation, it was expected that the unit occupied by H, which comprised a substantial proportion of the available letting space within the property, would shortly become vacant. Symmons advised that the OMV of the property was #525,000. Lloyds claimed to have relied upon that valuation in subsequently assigning the benefit of its charge for that sum. Lloyds now contended that at the material time the true OMV of the property was #1,100,000, and that it had consequently suffered a loss. The main valuation principle upon which the parties differed was as to whether Symmons had been right to attribute no value to a significant part of the letting space vacated by H on the basis that there was, in Symmons' opinion, no realistic prospect that that space would in fact ever be lettable.
(1) In order to make out a case of professional negligence against a valuer it was first necessary to demonstrate that the valuation fell outside the appropriate range of permissible non-negligent valuations. Where no reasonable explanation for a valuation outside that range could be offered by the valuer, a prima facie case of negligence was likely to have been made out. (2) It was not wrong in principle for a valuer to attribute no value to theoretically lettable space where it was his reasonably held opinion that local market conditions meant that the space would not in fact ever be lettable. (3) The evidence as to the state of the market in Gosport amply justified Symmons' opinion to that effect. (4) It had not been demonstrated that the valuation fell outside the permissible range of non-negligent valuations. (5) In any event, Lloyds had failed to establish that it had suffered any loss. There was simply no evidence that Lloyds would have been able to assign the benefit of its charge for anything more than #525,000.