Mr Hoadley is a retired civil engineer, but when he spotted the house for sale in 1994, he was wise enough to engage a charted surveyor to tell him what the true extent and cost of repairs would be. He paid the surveyor, Mr Douglas Edwards, £750. His report included 21 paragraphs listing items that required "attention, replacement or repair". The sale went ahead, but once installed, Mr Hoadley spotted more and more other items requiring "attention, replacement and repair". Eventually, he spotted a whopper of a problem. It was an alleged design flaw where the masonry part of the building joined up with the oak-framed part.
By now Mr Hoadley was fed-up. He didn't get much change out of the surveyor and so sued for six non-structural complaints and the one whopper of structural one. For good measure, he sued for return of the £750 survey fees and for £10,000 damages for inconvenience, discomfort and mental suffering.
Shortly before the trial (Anthony David Hoadley and Lois Jane Hoadley vs Douglas J P Edwards [28 March 2001] Chancery), the surveyor conceded that he had boobed in not reporting on the six non-structural faults and had therefore breached the survey contract. He had missed the work that was needed to some electrics and plumbing; failed to note missing fixings, distorted lead pane windows, and the likelihood that sea air might have corroded the wall ties. The judge reckoned this lot amounted to about £12,000. Goodness knows how much all that cost to litigate, but I bet the figure is horrifying: the case included seven expert witnesses.
When a surveyor fails to disclose defects, the court tries to put the buyer in the position it would have been in if the contract had been fulfilled
As for the alleged structural flaw, the surveyor should have realised that the feet of the oak posts in the frame had been softened by wet rot, and had suffered settlement. His survey ought to have recommended a specialist investigation, but didn't, and he conceded that error. The repair in cutting out the wet rot would have come to a mere £6800. Instead, the house progressively settled at one end. At best, a £125,000 expense was now anticipated; at worst, demolition. The trial was all about the question of whether there was an inherent weakness in the famous architect's design. So, even if the oak posts were repaired, was the natural seasonal movement in oak, when combined with brickwork, likely to produce continuing and unacceptable cracking?
The experts were at odds in the trial. Eventually the judge accepted that no great design flaw existed. The oak posts and beam structure were fit for their purpose until movement was caused by deterioration in the wet feet of the posts. So, all in all, the items missed by the surveyor came to £20,000 or so.
How does the law deal with such facts? When a surveyor, in breach of his professional services contract, fails to disclose defects in a property to be purchased, the court seeks to put the buyer in the financial position it would have been in if the contract for the survey had been properly fulfilled. The court will listen to argument about the inconvenience of doing the works, the stigma that will hinder resale, continuing maintenance and deformity as a result of past movement. The judge thought that the price of the house would have been likely to have been negotiated down by £20,000 for repairs and a further £20,000 for the past structural problems. In other words, the true value of the house was £40,000 less than paid. In a sense, the Hoadleys were denied the chance of bargaining the price down. The surveyor caused them to lose that chance. The judge also gave back the fees paid for the wrong survey and awarded distress and inconvenience of £5000.
Tony Bingham is a barrister and arbitrator specialising in construction. You can write to him at 3 Paper Buildings, Temple, London EC4 7EY, or email him on firstname.lastname@example.org.