Offer-Hoar v Larkstore Ltd - 2006

Offer-Hoar v Larkstore Ltd [2006] EWCA Civ 1079

Whether developer could sue on basis of report commissioned by previous owner of land

Facts

Larkstore purchased a site for development. The seller of the land had commissioned a soil inspection report from Technotrade which found the site suitable for the proposed development. Larkstore began the developments and a landslip occurred causing damage to Offer-Hoar’s property. The original seller of the land assigned by deed the rights stemming from the inspection report after the landslip. Larkstore sought damages from Technotrade.

Issues

Technotrade argued the assignment did not occur until after the landslip and, therefore, the original owners of the land had not suffered any losses because of the report. As such, Larkstore, as assignee could not recover higher damages than the assignor could have recovered. The only compensation an assignee could claim would be the losses which had accrued to the assignor at the date of the assignment, and as no such damage occurred whilst the land was in the assignor’s ownership, it followed that no right of action arose. Larkstore contended the right of action accrued when the defective report was prepared, and a right of action is not limited to the damage which occurred at the time of the breach but extends to cover losses after the breach. The rights had been validly assigned to them and it followed they could claim for breach of contract.

Decision/Outcome

Larkstore could claim for breach of contract. The report could be validly assigned and relied on by a purchaser even though the damage occurred before the assignment. The remedy was not limited to damages which occurred at the time the right of action accrued. The right of action accrued when the report was supplied, and Larkstore could recover damages for all losses stemming from the breach.