Webb Resolutions Limited vs E Surv Limited-Overvaluations - Assignment Example

Insert Insert of supervisor Insert of Insert assignment is due Webb Resolutions Limited vs. E. Surv Limited-Overvaluations Webb Resolutions Limited the (claimant) verses E. Surv Limited, the (defendant): was a case that presented before The Honorable Mr. Justice Coulson in the year 2012. As of the years 2006 and 2007, GMAC RFC was among one of the largest lenders with regard to mortgages in the UK. E. Surv was one of the largest surveyors in the residential market (Underhill 455). The association between them was that E. Surv was hired by GMAC to conduct mortgage valuations on all properties that were residential. In the claim presented, GMAC alleged that between the years 2006 and 2007, E. Surv conducted surveys in a manner that was negligent and in violation of their contract of service (Spiers 365). GMAC forwarded their claims to the Webb Resolutions Limited. The proceedings initially involved a total of four valuations. Two were solved and two remained in question. The discrepancy arose due to the difference in the E. Surv valuation and the right price valuation. The damage claim in both instances was a total of $ 46,445 plus interest (Sloan 453). When it comes to the discharge of the value’s duty of care, the supplier agreement dated 22nd September in the year 2004 between E. Surv and GMAC, had not been expressed by E. Surv to the surveys. However, was not clear that those terms governed their conduct (Salmond 228). To establish a loss, the defender must have had the responsibility of the duty of care to the lender. This has to be clearly expressed to both parties. In a tort, the duty of care will always be owed to the lender to the surveyor (Osborne 398). Such circumstances should be accompanied by a contract of the engagement under which the surveyor will have a code of conduct under which he can carry out his services. Such a contract should have the expression of the fact that the work is to be carried out with sufficient care and skill (North 234). If the valuation is done in a negligent manner, it will constitute a violation of the contract. If such an event takes place, then the court will have the responsibility of stepping in to establish if such clauses are enforceable or reasonable (Mcdeen 338). With regard to the margin of error test, there is a raging debate as to whether attention needs to be paid to the methodology of the surveyor while conducting a valuation or if the focus ought to be on the output of the valuation (Macod 227). The logic behind this argument is that the end justified the means. If an era was made in the methods and procedures used, it is overlooked if the results of the valuation are correct (Jango 298). In the case of Webb Resolutions Limited verses E. Surv Limited, Coulson J made the recommended that what is of essence is to focus on the results although the surveyor’s performance ought to be taken into consideration (Harper 222). Some of the lessons learnt are inclusive of the fact that the surveyors may not be subject to liability if their valuations fall in certain margins that have been approved by the relevant authorities (Harper, 129). In K/S Lincoln and Others v CB Richard Ellis Hotels Limited [2010] EWHC 1156 (TCC), the court approved some of the allowable margins follows,: if the property is of residential standard, the allowable margin of error ranges from + or -5 percent. The property has been classified as exceptional or one off, the allowable margin of error ranges from +or -10%. If the proper has exceptional features then the margin of error ranges from + or -15 percent (Goldberg, 224). Attention should be on the tools of reference that are used by the surveyor and if they offer a justified valuation. In the presence of expert witnesses, the court should be able to evaluate the future of the property and the essential standards before being able to establish the correct value and the margin to be applied (Fleming, 338). When it comes to the quality of expert evidence and what makes a good expert, In the process of conducting a valuation, the surveyor is anticipated to have the potential to carry out a standard valuation which can be equated to that of an ordinary individual (Borgo 243). The factors involved here are: the matter of fact in addition to the knowledge that is at the disposal of the valuer, at the time of the valuation and may be deemed as relevant (Borgo 554). For this reason, expert evidence is deemed necessary. According to paragraph 10-056 of Jackson and Powell on Professional Liability (7th edition, 2012), without the presence of express terms, with regard to professionalism, one of the standard requirements of a surveyor is an ordinary skilled person. This is an average, reasonably skilled, competent and efficient surveyor. This basic duty can be extended or modified according to the terms of contract between the lender and the valuer (Blackstone 226) As for mitigation and loss, the property market is an area that involves significant losses in a majority of instances. With the enforcement of security being on the wide spared, in addition to the fact that the value of property is skyrocketing (Blackstone, 192). Because of these reasons, there is a constant pursuit of claims from lenders against the surveyors. The main claims for the complaints are often over-valuations which are based on the damages that come about because of enforcement action. Surveyors ought to be aware of the fact that valuers are often told the price of property and they end up arriving at the same values (Barnes 229). When it comes to the Contributory negligence of the lender, there is a tendency for surveyors to present allegations of contributory negligence. The manner of conducting the valuations may come into play in such an instance (Bailis 189). The court may be required to conduct a balancing exercise that will establish the positioning of blame among the parties that are involved. In instances where contributory negligence is established on the side of the lender, there is a reduction in the damages being claimed by the lender (Macod, 222). The burden shifts to the defender (the surveyor) as an illustration of the fact that the lender did not sufficiently protect their own interests and that due to this negligence; they caused the loss for which they are seeking compensation (Fleming 226). It is an established fact of law that the lender must be judged in comparison to a reasonably competent merchant bank at that point in time. Once again, this brings in the question of fact (Harper 178). In the case of Webb Resolutions Limited verses E. Surv Limited, the lender damages were reduced by 50% because of the financial position that Mr. Bradley was in. The purpose of the borrowing was to secure financial deficits in situations where there were critical defaults. With regard to the Ali loan, no reductions had been made. Some of the general lessons that ought to be learnt are inclusive of the fact that lenders should carefully take into consideration the terms and conditions. In certain instances, aside from the express conditions, the surveyors and the lender should go further than agreeing on further terms of conduct. To add to this, another important aspect is the fact that lenders should consider very seriously the financial circumstances and the background of the borrower. As for the lessons of the surveyor, despite the fact that there is a case law that dictates that the failure to adhere to guidance noted, does not constitute negligence. 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