Summary

Solicitors who negligently failed to pursue a request for sight of a copy of a building regulation approval were liable for the loss sustained by the claimants on their subsequent acquisition of a defective property.

Facts

Action for damages by the claimants against their former solicitors ('ABJ') for alleged professional negligence, in respect of which the claimants sought to recover the loss sustained by them on their acquisition of a defective property. The claimants alleged that ABJ failed to advise them that the vendors had not obtained building regulation approval from the local authority for some extensive renovations and extensions ('the building works') which were carried out to the property in 1985. ABJ, by its standard-form pre-contract enquiries, asked that a copy of any building regulation consent in relation to the building works be supplied to it. The vendors' response was that they did not have one. In fact, building regulation approval had been twice sought by the vendors and twice refused. The building works were reported on by the valuer acting on behalf of the claimants' lender and by a specialist structural surveyor, both of whom pointed out certain defects. It was common ground that the report by the latter was negligent, and that at the material time the property was suffering from serious structural defects. However, the surveyor was uninsured, and the claimants had opted not to pursue him. They had decided likewise in respect of the vendors, by whom certain material misrepresentations had been made. The claimants contended that if they had been advised by ABJ that there was no building regulation approval, they would not have bought the property. They further contended that, because the property was in fact structurally unsound in material respects, and was worth materially less than they had paid for it, they were entitled to damages measured by reference to that difference in value, which they alleged was represented by the cost of the necessary rectification works and associated costs, in a sum of over £40,000. ABJ put both breach and causation in issue.

Held

(1) The standard enquiry asked for a copy of the building regulation approval, from which it followed that it was considered that sight of the approval was important. That importance did not evaporate simply because the vendors said that they did not have a copy. ABJ should have made other enquiries, or at least should have advised the claimants of the absence of a copy of the approval, and its possible significance, including the possibility that approval had been refused. (2) If ABJ had made further inquiries, it would have become apparent that approval had been twice refused. If that would not of itself have led to the discovery of the structural defects affecting the property, it would have caused the claimants to look again at the structural surveyor's report, which had assumed building regulation approval and compliance with modern practice. (3) ABJ should have advised the claimants that although a notice could not be served under s.36(1) or s.36(2) Building Act 1984, as it was time-barred by s.36(4) of the Act, there still remained a risk of injunction proceedings under s.36(6) of the Act. (4) The claimants were entitled to recover the amount which they had overpaid for the property. However, several of the defects for which they now sought the cost of repair had been pointed out to them prior to their purchase, and as to which they had therefore assumed the risk of repair. Leaving those items out of the reckoning, the claimants were entitled to damages of £8,203.26.

Judgment accordingly.