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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Scullion v Bank of Scotland Plc (t/a Colleys) [2010] EWHC 2253 (Ch) (08 October 2010) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2010/2253.html Cite as: [2010] EWHC 2253 (Ch), [2011] PNLR 5 |
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CHANCERY DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
(sitting as a Deputy Judge of the High Court)
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EMMET THOMAS SCULLION |
Claimant |
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- and - |
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BANK OF SCOTLAND PLC (trading as Colleys) |
Defendant |
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Tom Leech QC (instructed by Walker Morris) for the Defendant
Hearing dates: 25 May 2010 and 6 September 2010
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Crown Copyright ©
RICHARD SNOWDEN QC :
Introduction
The Facts in Outline
Mr. Scullion's Claims
Scope of duty and recoverable losses
"'Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.
I can illustrate the difference between the ordinary principle and that adopted by the Court of Appeal by an example. A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.
On the Court of Appeal's principle, the doctor is responsible for the injury suffered by the mountaineer because it is damage which would not have occurred if he had been given correct infonnation about his knee. He would not have gone on the expedition and would have suffered no injury. On what I have suggested is the more usual principle, the doctor is not liable. The injury has not been caused by the doctor's bad advice because it would have occurred even if the advice had been correct."
"I think that one can to some extent generalise the principle upon which this response depends. It is that a person under a duty to take reasonable care to provide information on which someone else will decide upon a course of action is. if negligent, not generally regarded as responsible for all the consequences of that course of action. He is responsible only for the consequences of the information being wrong. A duty of care which imposes upon the informant responsibility for losses which would have occurred even if the information which he gave had been correct is not in my view fair and reasonable as between the parties. It is therefore inappropriate either as an implied term of a contract or as a tortious duty arising from the relationship between them.
The principle thus stated distinguishes between a duty to provide information for the purpose of enabling someone else to decide upon a course of action and a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the adviser must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to supply information, he must take reasonable care to ensure that the information is correct and. if he is negligent, will be responsible for all the foreseeable consequences of the information being wrong. "
"...a defendant valuer is not liable for all the consequences which flow from the lender entering into the transaction. He is not even liable for all the foreseeable consequences. He is not liable for consequences which would have arisen even if the advice had been correct. He is not liable because they are the consequences of risks the lender would have taken upon himself if the valuation advice had been sound. As such they are not within the scope of the duty owed to the lender by the valuer.
For what, then, is the valuer liable? The valuer is liable for all the adverse consequences, flowing from entering into the transaction, which are attributable to the deficiency in the valuation."
"... although it was generally foreseeable that Mr. Scullion would rely upon the Valuation Report in deciding whether to purchase Flat 17, Colleys should not be liable for consequences which do not have a sufficient causal connection with the subject matter of their duty. It was not within the scope of their duty to protect Mr. Scullion against the risk that he might be a victim of fraud and the fact that Flat 17 and their Valuation Report was used by Mr. Garvin and Kings to perpetrate the fraud should not make them liable for the loss."
Losses attributable to the open market valuation
Losses attributable to the overstatement of the attainable rental
October 2002 - December 2002
2003
2004
2005
2006
Total recoverable losses for 2002 - 2006
Legal Fees imposed by Mortgages plc
Application of damages
"The Claimant confirms that he does not dispute the validity of the mortgage granted to Mortgages plc or his liability for the principal sum and interest which remain due to Mortgages plc or that he was or is liable to Mortgages plc for all of the sums referred to in paragraphs 50 to 64 [above] with the exception of the sums referred to in paragraph 57 and the penultimate sentence of paragraph 59 [above]."
Contributory negligence
Interest
Costs
"(i) In commercial litigation where each party has claims and asserts that a balance is owing in its own favour, the party which ends up receiving payment should generally be characterised as the overall winner of the entire action.
(ii) In considering how to exercise its discretion the court should take as its starting point the general rule that the successful party is entitled to an order for costs.
(iii) The judge must then consider what departures are required from that starting point, having regard to all the circumstances of the case.
(iv) Where the circumstances of the case require an issue- based costs order, that is what the judge should make. However, the judge should hesitate before doing so, because of the practical difficulties which this causes and because of the steer given by Rule 44.3(7).
(v) In many cases the judge can and should reflect the relative success of the parties on different issues by making a proportionate costs order.
(vi) In considering the circumstances of the case the judge will have regard not only to any Part 36 offers made but also to each party's approach to negotiations (insofar as admissible) and general conduct of the litigation.
(vii) If (a) one party makes an order offer under Part 36 or an admissible offer within Rule 44.3(4)(c) which is nearly but not quite sufficient, and (b) the other party rejects that offer outright without any attempt to negotiate, then it might be appropriate to penalise the second party in costs.
(viii) In assessing a proportionate costs order the judge should consider what costs are referable to each issue and what costs are common to several issues. It will often be reasonable for the overall winner to recover not only the costs specific to the issues which he has won but also the common costs.''
Permission to appeal
Conclusion