Don't count on it

In the recent Scottish case of Jacqueline Howes vs Alan S Crombie, the claimant was suing an engineer for negligent advice in connection with a house purchase. She did not have a contract with him and was claiming in tort on the basis of Hedley Byrne vs Heller. The claim failed and serves as a useful reminder of the hoops that a claimant has to go through to succeed in a claim in tort for poor advice.

The house was sold to the claimant by a Mr Fennell, described in the judgment as an eccentric character. He had designed and constructed most of the house himself. The claimant was aware of this but she liked it and quickly made an acceptable offer. She then approached a lender, Legal and General, to assist in the purchase. The lender appointed its own surveyors. The claimant received no advice from Legal and General and appointed no surveyors of her own.

The documents presented to the claimant's solicitors included a letter from the defendant engineer to the vendor, dated May 1996 (some seven months earlier), in which he certified that the house was structurally sound and had been constructed using good structural practice. This letter had not been written for the purposes of a sale but in order to assist Mr Fennell in obtaining a completion certificate from the local authority.

The claimant and her solicitors were satisfied with the documents the vendor had produced, but the lender was not. Within a matter of days a new letter was produced, again written by Mr Crombie to Mr Fennell but dated January 1997. This said little if anything more than the earlier letter, confirming in general terms "the integrity of the works and the quality of workmanship and materials throughout".

Following this, the loan was forthcoming and the sale was completed. The claimant took possession of the house and discovered what she alleged to be defects. As a result, she sued Mr Crombie, saying that he was negligent in writing the January letter.

Counsel and the judge were agreed on the tests to be satisfied and these were expressed as follows. First, it had to be reasonably foreseeable to the defendant that, if the advice was negligent, the claimant would suffer damage of the type claimed.

Second, the relationship between the claimant and defendant had to be sufficiently proximate.

When buying property, the golden rule is to appoint your own surveyor or engineer to give advice

Third, the claimant had to have actually relied on the advice. And finally, it had to be fair and reasonable for a duty of care to be imposed on the one party for the benefit of the other.

At first blush, the claimant might appear to have had a reasonable case. However, the judge came up with a number of insuperable problems. The first was the question of reliance. The claimant had not herself placed any material reliance on the terms of the January letter and had been happy to proceed without it. It was the lender and its surveyors who wanted a further document. But even here the judge found no actual reliance on the content of the second letter as it added little or nothing to the first.

A second difficulty was that the unfortunate Mr Crombie was not told by the vendor that a sale was in progress and that his further letter was required to satisfy the purchaser.

He thought the letter was to be put with the title deeds. Without the knowledge that his letter was to be relied on by a potential purchaser, there was no sufficient proximity between defendant and claimant to impose a duty of care.

Finally, the judge held that the claimant was trying, in effect, to treat the January letter as a warranty of quality. However, she had neglected to obtain a survey herself, and Mr Crombie had received no payment for his letter to Mr Fennell. In those circumstances, it was not fair to impose a duty of care.