Neighbour and another v Barker and another

Misrepresentation — Plaintiffs buying bungalow — Vendor’s replies to inquiries misstating condition of property — Solicitors advising survey before exchange of contracts — No survey carried out — Serious defects discovered before completion — Solicitors advising completion — Plaintiffs contending advice was negligent — Plaintiffs suing for damages — Claim against vendor successful on misrepresentation issue — Claim against solicitors dismissed at first instance and on appealThe plaintiffs, Mr and Mrs N, were an elderly couple who sought a bungalow for themselves to purchase in conjunction with their son. Suitable premises were found at 27 Glebe Way, Burnham-on-Crouch. The first defendant, B, was the vendor of the bungalow. The second defendants, David Charnley & Co, of Romford, were the solicitors instructed by Mr and Mrs N to act in the purchase. The solicitors advised the plaintiffs to have a survey of the property carried out, particularly in view of the fact that it was a cash purchase and there would be no building society survey. The plaintiffs, however, proceeded without a survey at that stage. Inquiries were raised before the exchange of contracts and the plaintiffs claimed that in reliance on the answers to the inquiries they continued with the purchase without commissioning a survey. Contracts were exchanged but when the plaintiffs visited the bungalow after the vendor’s furniture had been removed, they noticed for the first time a number of cracks and bulges in the structure which greatly alarmed them. They instructed surveyors and told the second defendants that they did not wish to complete until they had received the report. The solicitors, both orally and by letter, told the plaintiffs that they would be charged interest, would lose their deposit, would receive a notice to complete and would probably be sued successfully for breach of contract. Thus, proceeding with completion would probably, or almost certainly, be the cheapest course of action was the advice given. The surveyors found no less than 60 defects and stated that the property would need extensive repair work and underpinning. The plaintiffs felt constrained by the solicitors’ advice to complete but sought damages of £22,000 representing the difference between the value of the premises and the purchase price of £45,000. The judge at first instance, Mr Recorder Grove Hull QC, sitting as an official referee, found that the vendor had known of the structural defects and his replies to inquiries amounted to misrepresentation. He awarded £22,000 damages to the plaintiffs as against the vendor. However, he dismissed the claim against the solicitors. The vendor was unable to satisfy the judgment and the plaintiffs appealed on the dismissal of their claim against the second defendants. Held The appeal was dismissed. 1. Whether someone was negligent depended on what was known at the time. The solicitors had urged a survey upon their clients when they were first instructed. Further, there was no reason for the solicitors to have suspected, in answer to their inquiries, that the vendor was misrepresenting the facts. 2. Moreover, by the time the survey was made, the solicitors could see no way out but that the purchase should be completed. Therefore, it was not negligent to advise accordingly. 3. This was not a case in which a professional legal adviser was bound to have warned his client of risks apparent to him but not to the lay person: cf County Personnel (Employment Agency) Ltd v Pulver (Alan R) & Co [1986] 2 EGLR 246. Augustus Ullstein (instructed by Cohen & Naicker) appeared for the appellant purchasers; Michael Gadd (instructed by Ince & Co) appeared for the respondent solicitors.