Property developer has action against surveyors for negligent home survey dismissed after failing to plead relevant case

About this case:

• Citation:
  [2025] SC EDI 78
• Judgment:
  External link
• Court:
  Sheriff Court
• Judge:
  Sheriff O'Carroll

Comino Properties Ltd sought payments of £70,000 and £74,718 from DHKK Ltd representing repair costs and lost profits incurred as a result of their averred negligence, and on that basis sought damages under Article 3 of the Housing (Scotland) Act 2006 (Consequential Provisions) Order 2008. The defender sought dismissal on the grounds that the pursuer had failed to plead a relevant case.

The case was heard by Sheriff Derek O’Caroll at Edinburgh Sheriff Court, with McEwan, solicitor, appearing for the pursuer and Mitchell, advocate, for the defender.

Usual and normal practice

In 2022, the pursuer purchased a residential property in Edinburgh from a third-party seller. As part of the required home report, the seller instructed the defender to provide a survey report, which it did. It was averred by the pursuer that it discovered structural problems requiring repairs costing £70,000, and that while these repairs were being carried out the pursuer lost around £74,000 in profit. It therefore sought damages based on a right said to have been created by the 2008 Order where a prescribed survey had not been prepared with reasonable skill and care.

The defender sought dismissal on the basis that the pursuer had failed to plead a relevant case against the standards applicable to claims for professional negligence. Further, the pursuer had not produced an expert report to support its case of professional negligence, and the pleadings lacked specification and were irrelevant. Counsel submitted that the standard to be expected was the skill expected of a chartered surveyor, and the fact that the pursuer’s case was based on a statutory order did not enable it to elide the usual common law standard.

For the defender it was further submitted that, while the pursuer averred that a structural engineer had observed the building and seen the defects in its structure, there were no averments relating to the usual and normal practice of chartered surveyors when carrying out a prescribed survey for a home report. The pursuer had also failed to prove the market value of the house on the date of the report in order to support its claim of lost profits.

In reply, the pursuer’s agent submitted that there was no need to prove a duty of care under the 2008 Order. If the impugned actions or inactions of the defender were obviously negligent or involved an oversight or neglect which was not the product of professional judgement, the court would be entitled to find negligence established on ordinary principles, on suitable evidence being advanced, without also requiring evidence from a suitably qualified professional. The various defects were obvious at street level and did not require any special examination.

Not the same profession

In his decision, Sheriff O’Carroll said of the reasons for making the 2008 Order: “The purpose of Article 3 is to provide the legal basis on which a buyer might obtain damages against a surveyor where the survey report, instructed by or on behalf of the seller and obtained from the seller (or the seller’s agent) by the buyer, was improperly prepared causing material loss to the buyer (the 2006 Act being silent on this matter). The provisions of Article 3 ensure that the existence of a duty of care to the purchaser (who will not have instructed the survey) and the standard of care are made plain. The article also specifies requirements a prescribed survey report must satisfy, breach of any of which may open the door to a claim for damages if material loss results from breach.”

He continued: “The meaning of ‘reasonable skill and care’ is not further defined or explained. The parties agree that the expression must be a reference to the common law duties incumbent on such a professional performing the professional’s duties and that therefore the meaning of that expression can only be understood by reference to the ordinary common law principles applicable to such a situation.”

Applying those common law principles to the present matter, Sheriff O’Caroll explained: “It does not assist the pursuer to argue, as was done at debate, that because a civil engineer 8 months later noticed certain defects, said to be obvious from a street view, the chartered surveyor ought to have noticed the same defects and have reported on them. Structural and civil engineering is not the same profession as a chartered surveyor. What a person from one profession would be expected to do in the proper performance of that person’s professional duties, what that professional might be expected to divine from a street level observation, is not necessarily be the same as what a person in the other profession might be expected to do in the same circumstances.”

He concluded: “Furthermore, in my view it is clear from the terms of Article 3 that the pursuer must aver and prove the market value of the house on the date of the prescribed survey (that is the true market value as opposed to the sum actually paid). The pursuer does not do that, therefore has not relevantly averred material loss and so is unable to show the pursuer has a right of damages.”

The sheriff therefore sustained the defender’s first preliminary plea-in-law and dismissed the action.