Cases - Realstone Ltd v J&E Shepherd
Record details
- Name
- Realstone Ltd v J&E Shepherd
- Date
- [2008]
- Citation
- CSOH 31
- Legislation
- Keywords
- Negligence in valuations and surveys
- Summary
-
The claimant property developer 'R' wanted to sell part of a large plot of land that it owned. It instructed an architect to prepare a plan of the proposed site to be sold. The architect instructed the defendant firm of surveyors 'S' to inspect the land and draw up the plans. R then sold the site on the basis of S's plan. S's plan turned out to be inaccurate and part of the larger plot earmarked for a road was accidentally sold as part of the site. R was forced to buy back that part of the site earmarked for use as a road, but at an inflated price. R sought the difference in price as damages from S. S attempted to strike the claim out alleging that it only owed a duty of care to the architects who had instructed it, and not to R directly.
The court noted that the lack of direct contractual relationship between R and S did not necessarily mean that there was no duty of care between the parties. It was important to closely analyse the factual context in order to establish whether there was sufficient proximity between the parties, whether the defendant had assumed responsibility directly towards the claimant or merely to his principal and whether there had been reliance by the claimant. It was also necessary to stand back and assess where the risk ought to lie as between the parties and whether it was fair, just and reasonable to impose a duty of care. On the facts further disclosure was needed in order to ascertain whether S had assumed responsibility for the plan directly to R or merely to his principal.
The case demonstrates the dual application of the assumption of responsibility test and threefold test (of foreseeability, proximity and fairness) for establishing a duty of care in tort generally. It also shows the additional hurdles when there is a third party intermediary (see also Yazhou Travel Investment Co Ltd v Bateson Starr [2005] PNLR 31).
Surveyors should bear this test in mind when engaging in any project that, while being instructed as a subconsultant or through an intermediary, nonetheless involves working closely with the principal client.