Moore v National Westminster Bank  2018 EHWC, TCC
Mr and Mrs Moore wished to buy a flat in Bideford at an asking price of £135,000 and their mortgage lender National Westminster Bank produced a survey report confirming this valuation. Unfortunately after acquiring the property they discovered it was in a terrible state of repair and needed £115,000 of remedial works.
They sued for this amount.
The normal measure of damages on a negligent survey is diminution in value between the price valued by the negligent surveyor and the actual market value at the time of the sale. The bank denied liability but in the alternative said that the diminution in market value was really only £15,000 and that was all they could be liable for.
- Although the normal and standard approach to a negligent survey is to apply the diminution in value between the valued sum and the actual market value at the time, this did not always apply.
- In particular the rule did not apply here because the bank’s expert witness was clearly unrealistic and in the circumstances his evidence could not be relied upon by the Court. The Court could only turn to the Claimant’s expert, but his expert opinion was that it was impossible to give a market value given the condition of the flat at the time it was on the market. Realistically, according to him, the only way to get a handle on the loss to the purchasers was to look at the sums reasonably spent by them in remediation works. The Court accepted this approach as being a practical necessity given the nature of the expert evidence.
- More cases than are realised are won or lost by expert evidence. The Judge remarked in passing that if the Defendant’s expert had taken a more realistic and credible approach by perhaps suggesting a loss of £50,000, then the outcome of the case might have been very different.
- The take away from this case however is that the fundamental principle of diminution in market value, asserted by the Court of Appeal in Watts v Morrow remains the prevailing rule, but where circumstances make it impractical then the Court will adopt the cost of repairs in the alternative.
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