Technotrade Ltd 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. After the landslip, the seller assigned its contractual rights against Technotrade to Larkstore by deed. 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.
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Decision/Outcome
The Court of Appeal dismissed Technotrade’s appeal on the assignment issue. The assignment transferred the seller’s cause of action for the alleged breach even though the landslip had already occurred. Larkstore could pursue losses flowing from the original breach which the seller could have recovered had it retained the development. Whether the report was defective and whether particular losses were caused by the breach or were too remote remained to be decided.
Reported citations [2006] 1 WLR 2926, [2006] WLR 2926
