Cases - Raja v Austin Gray

Record details

Name

Raja v Austin Gray

Date

[2002]; [2003]

Citation

EWCA Civ 1965; 1 EGLR 91

Keywords

Estate agency - negligence in valuations and surveys

Summary

Raja mortgaged properties to Development Finance Ltd (DF). DF, in turn, borrowed money from the Midland Bank, secured by a debenture. DF became insolvent and Midland Bank appointed receivers to realise DF's assets (acting as DF's agents). DF had become entitled to exercise a power of sale over Raja's properties, so the receivers instructed the defendant valuers to value Raja's properties. The properties were valued and sold for £245,000. Raja claimed that the properties had been undervalued. After he was tragically murdered, his wife brought an action in negligence against the valuers.

The Court of Appeal held that Raja could claim against the mortgagee (DF) and against the receivers in equity for the negligence of the agent. It was no defence for the mortgagee or receivers to say that they had entrusted the sale to apparently competent professionals. It was, therefore, unnecessary to impose a duty of care upon the valuers as well. There was no sufficient relationship of proximity. The borrower is not an advisee and did not act on advice given by the valuer, so although the foreseeability test had been satisfied, there was no relevant assumption of responsibility.