Surveyor Liable over Aircraft Noise

The Times Law Report

October 15th 2001 law

HOUSE OF LORDS

Farley v Skinner

Before Lord Steyn, Lord Browne-Wilkinson, Lord Clyde, Lord Hutton and Lord Scott of Foscote

Speeches October 11, 2001

Where a surveyor had negligently advised that it was unlikely that a property the plaintiff was considering buying would be greatly affected by aircraft noise, the plaintiff was entitled to damages for breach of contract in respect of the interference with his enjoyment of the property caused by such noise.

The House of Lords allowed an appeal by Mr Graham Farley from the Court of Appeal (Lord Justice Stuart-Smith, Lord Justice Mummery and Lord Justice Clarke) (The Times April 14, 2001; (2000) Lloyd's Rep 516) who by a majority (Lord Justice Clarke dissenting) had allowed an appeal by the defendant, Mr Michael Skinner, from an award of £10,000 damages made by Judge Peter Clark, QC, sitting as a Queen's Bench Division judge on May 27, 1999.

Mr Martin Spencer for Mr Farley; Mr Mark Simpson and Mr Spike Charlwood for Mr Skinner.

LORD STEYN said that in 1990 Mr Farley, wanting to buy a country residence, had become interested in a property at Blackboys in Sussex some 15 miles from Gatwick International Airport. A property offering peace and tranquillity had been the raison d'etre of the proposed purchase.

He had engaged Mr Skinner as his surveyor. In addition to the usual matters, Mr Farley had specifically asked Mr Skinner to investigate whether the property would be affected by aircraft noise; he did not want a property on a flight path.

Mr Skinner had reported that he thought it unlikely that the property would suffer greatly from such noise. The plaintiff had bought the property.

Over the next few months he had spent some £125,000 on modernisation and refurbishment. During that period he had been unaware that there was a significant problem associated with aircraft noise. He had moved in in June 1991.

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After moving in he had quickly discovered that the property was indeed affected by aircraft noise. In fact, it was not far from a navigation beacon around which, at busy times, aircraft would be stacked.

Aircraft frequently passed directly over, or nearly over, the house. The impact of aircraft noise on the tranquillity of the property was marked.

It was common ground that Mr Farley's enjoyment of the property was diminished. Nevertheless, after initial vacillation, he had decided not to sell and did not presently intend to do so.

The judge had found that Mr Skinner had been negligent and that if he had carried out his instructions properly Mr Farley would not have bought the property.

Mr Farley was not a man of excessive susceptibilities, as shown by the fact that he had done his best to put up with the noise, but he found it a confounded nuisance. For what the judge described as the -discomfort" sustained by Mr Farley, he had awarded him £10,000.

With reference to what Lord Justice Bingham had said in Watts v Morrow ((1991) 1 WLR 1421, 1445), the judge had said that, Mr Farley having spent a considerable sum on alterations at a time when he had not known of the aircraft noise, he should not be penalised for deciding not to move.

The judgments in the Court of Appeal and the arguments before the House of Lords had taken as their starting-point the propositions enunciated by Lord Justice Bingham in Watts:

"1 A contract-breaker is not in general liable for any distress, frustration, anxiety, displeasure, vexation, tension or aggravation which his breach of contract may cause to the innocent party. This rule is ... founded ... on considerations of policy.

"2 But the rule is not absolute. Where the very object of a contract is to provide pleasure, relaxation, peace of mind or freedom from molestation, damages will be awarded if the fruit of the contract is not provided...

"3 In cases not falling within this exceptional category, damages are ... recoverable for physical inconvenience and discomfort caused by the breach and mental suffering directly related to that inconvenience and discomfort..."

Useful as Lord Justice Bingham's observations undoubtedly were, they had never been intended to state more than broad principles.

In Watts there had been no reason to consider the case where a surveyor was in breach of a distinct and important contractual obligation intended to afford the buyer information confirming the presence or absence of an intrusive element before committing himself to the purchase.

The general principle in contract law was that compensation was only awarded for financial loss resulting from a breach of contract: Livingstone v Rawyards Coal Co ((1880) 5 App Cas 25, 39).

The present case concerned the scope of the limited exceptions to the principle mentioned by Lord Justice Bingham.

It had to be approached on the basis that Mr Skinner's obligation to investigate aircraft noise had been a major or important part of the contract between him and Mr Farley and that Mr Farley's claim was not for injured feelings caused by the breach of contract but for damages flowing from Mr Skinner's failure to investigate and report, thereby depriving Mr Farley of the chance of making an informed choice whether or not to buy, resulting in mental distress and disappointment.

It was difficult to reconcile the decision of the House of Lords in Ruxley Electronics and Construction Ltd v Forsyth ((1995) AC 344) with the decision of the Court of Appeal in the present case.

His Lordship was satisfied that the principles enunciated in Ruxley in support of an award of damages for a breach of contract in respect of the provision of a pleasuarable amenity had been authoritatively established.

As Lord Mustill had said (at p360) the principle of pacta sunt servanda would be eroded if the law did not take account of the fact that the consumer often demanded specifications that, although not of economic value, had value to him.

It had been submitted for Mr Skinner, first, that even if a major or important part of the contract was to give pleasure, relaxation and peace of mind, that was not enough: the object of the entire contract had to be of that type.

Second, it was submitted that the exceptional category did not extend to a breach of a contractual duty of care, even if imposed to secure pleasure, relaxation and peace of mind; it only covered cases where the promissor guaranteed achievement of the object.

Third, it was submitted that by not moving Mr Farley had forfeited any right to recover non-pecuniary damages.

The first submission fastened on to a narrow meaning of the words "the very object of (the) contract" in Watts. Cases where a major or important part of the contract had been to secure pleasure, relaxation and peace of mind had not been under consideration in that case.

There was no reason in principle or policy why the scope of recovery in the exceptional category should depend on the object of the contract as ascertained from all its constituent parts. It was sufficient if a major or important object of the contract was to give pleasure, relaxation or peace of mind.

Knott v Bolton ((1995) 11 Const LJ 375), which appeared to assist Mr Skinner and which the Court of Appeal had treated as binding on it, had been wrongly decided.

Nor ought the distinction between an obligation to exercise reasonable care and a guarantee of achievement of a result to prevail. It was certainly not rooted in precedent, and if it were the law the law would be seriously deficient.

Mr Farley's third submission had also to be rejected. The judge had found that Mr Farley had acted reasonably in making the best of a bad job. His decision not to move had also avoided a larger claim against Mr Skinner. There was no satisfactory legal principle on which it should divest him of a claim for non-pecuniary damages.

While Lord Justice Bingham's dicta in Watts were of continuing usefulness as a starting-point, they would have to be read subject to the three points on which his Lordship had rejected Mr Skinner's submissions.

It was strictly unnecessary to consider whether the judge's decision could be justified on the ground that the breach of contract had resulted in inconvenience and discomfort, but his Lordship had not been persuaded that his decision to that effect had not been open to him on the evidence that he had accepted.

Lord Browne-Wilkinson agreed with Lord Steyn and Lord Scott. Lord Clyde and Lord Hutton delivered speeches concurring in allowing the appeal. Lord Scott delivered a speech agreeing with Lord Steyn.

Solicitors: Irwin Mitchell, Leeds; Williams Davies Meltzer.

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