Tiuta International Ltd v De Villiers Surveyors Ltd [2016] EWCA Civ 661 (01 July 2016)

Tiuta International Ltd v De Villiers Surveyors Ltd [2016] EWCA Civ 661 (01 July 2016)

Where a lender enters into a new loan facility, supported by a fresh valuation, and uses part of the new loan to repay an earlier loan, the valuer is liable for the full loss on the new loan if the valuation is negligent, as the second transaction is factually and legally distinct from the first. The 'but for' test, when correctly applied, leads to liability for the whole loss flowing from the second negligent valuation.

Citation
[2016] EWCA Civ 661
Parties
Claimant/appellant: Tiuta International Ltd (in liquidation); Defendant/respondent: De Villiers Surveyors Ltd
Jurisdiction
England and Wales
Judgment Date
01 July 2016
Procedural Posture
Appeal (civil) / Appeal From Summary Judgment in the High Court (chancery Division)
Outcome
Appeal allowed (by majority)
Legal Topics
Surveyor's Liability, Negligent Valuation, Causation in Tort, Measure of Damages, Refinancing Transactions
Professional Negligence Banking and Finance Law Surveyor's Liability Negligent Valuation Causation in Tort Measure of Damages Refinancing Transactions

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Parties

Tiuta International Ltd (in liquidation)

Claimant/appellant

De Villiers Surveyors Ltd

Defendant/respondent

Procedural Posture

Appeal (civil) / Appeal From Summary Judgment in the High Court (chancery Division)

Legal Issues

  1. 1 Whether a negligent valuation in support of a refinancing transaction renders the valuer liable for the entire loss on the new loan, including sums used to repay an earlier loan.
  2. 2 Whether the 'but for' test of causation limits the valuer's liability to only the additional lending beyond the original loan.

Ratio Decidendi

Where a lender enters into a new loan facility, supported by a fresh valuation, and uses part of the new loan to repay an earlier loan, the valuer is liable for the full loss on the new loan if the valuation is negligent, as the second transaction is factually and legally distinct from the first. The 'but for' test, when correctly applied, leads to liability for the whole loss flowing from the second negligent valuation.

Court Disposition

Appeal allowed (by majority)

Orders

  • Summary judgment for the respondent set aside.
  • Matter to proceed to trial for determination of negligence and causation on full facts.