03 May 2021
Hart v Large,  EWCA Civ 24,  All ER (D) 51 (Jan)
Liabilities on Surveyor for Home Buyers’ Survey
Facts: Mr and Mrs Hart bought a property in Devon which had been completely rebuilt just beforehand by the vendor. They relied upon a homebuyer’s survey costing £600 from Mr Large and paid a purchase price of £1,200,000. In addition to the few defects Mr Large had detected, there proved to be so many more so that the entire property needed to be demolished and rebuilt. Mr and Mrs Hart sued Mr Large for diminution of value on the basis that there were a number of other defects he should have reported on; he should have recommended that a Professional Consultant’s Certificate be sought and obtained; and that he should have recommended a building survey They further maintained that if they had been properly advised, they would not have proceeded with the purchase.
Held: (1) the allegation that Mr Large should have recommended a building survey report was rejected as he had given them a clear choice between paying for a homebuyer’s report or for a building survey; (2) Mr Large had missed other defects; but more importantly as this was a recently rebuilt structure (and there was no NHBC Warranty) he should have advised them to obtain a Professional Consultant’s Certificate which would have given them protection in case the rebuilding works turned out to have been carried out negligently; (3) Mr and Mrs Hart would not gone ahead with the purchase if he had given them this advice; (4) accordingly Mr Large was liable for damages assessed by reference to diminution in value.
Comment: This case is a precedent for a rather strict approach to the normal Homebuyer’s Survey report, imposing a broad view of the profession duty to advise the client not just defects but on other circumstances, such as the implications of the structure being extensively rebuilt, without a conventional Warranty for the rebuilding works. Where property is acquired in reliance upon a defective survey, the normal measure of damages is not by reference to the cost of making good but rather a reference to the diminution in the value of the property between the purchase price and the realistic price if all defects had been known.
The court applied that approach, but the defence cleverly argued that the reduction should be based on identifying all the defects which Mr Large ought reasonably to have detected. This would have produced a much smaller figure than the amount calculated by reference to a need to demolish and rebuild. The judge rejected that approach. Fortunately, Mr Mrs Hart had previously settled claims against their architect and solicitors which reduced the damages ordered against Mr Large to £374,000, plus damages for inconvenience and distress of £15,000 each.
Ironically, had Mr Large advised that a PPC be obtained then either the matter would not have gone ahead, or he would have got fee for doing a PPC and avoided this court case!