Court's firm stance refusing to extend valuer's duty of care in tort beyond his contractual duty

28 October 2014

In the case of Freemont (Denbigh) Ltd v Knight Frank LLP [2014] EWHC 3347 (Ch), a landowner instructed a valuer to prepare a valuation report for a plot of land.

The landowner was seeking finance for the development of the land and required the valuation to provide to his bank.

The purpose of the report – namely, to provide to the bank to support the loan application - was made known to the valuer. The landowner subsequently relied on the valuation, however, as the minimum price he should accept when selling the land. Consequently, the landlord declined a number of offers to purchase the land because they fell short of the valuation. In the meantime, as a result of the delay in selling the land, it fell into disrepair and lost significant value.

The landlord sued the valuer for the alleged negligent overvaluation of the land. The High Court held that the duty of care, owed by the valuer to the landowner, extended only to producing the valuation for the bank's consideration. There was no contractual basis for allowing the landowner to rely on the report for any other purpose, and the duty of care in tort was held to extend no further than the duty imposed by the contract.

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