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Case No: FC3 1999/7524/A2
QBENI 1999/0643/A2
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE QBD (HH Judge Baker QC
sitting as a judge of the High Court)
Royal Courts of Justice
Strand, London, WC2A 2LL
Thursday 6 April 2000
B e f o r e :
LORD JUSTICE STUART-SMITH
LORD JUSTICE MUMMERY
and
LORD JUSTICE CLARKE
|
FARLEY
|
Respondent
|
|
-
and -
|
|
|
SKINNER
|
Appellant
|
_____________________________
(Transcript of the Handed Down Judgment of
Smith Bernal Reporting Limited, 180 Fleet Street
London EC4A 2HD
Tel No: 0171 421 4040, Fax No: 0171 831 8838
Official Shorthand Writers to the Court)
_____________________________
Mark Simpson (instructed by Messrs Williams Davis for the Appellant)
Martin Spencer (instructed by Messrs Irwin Mitchell for the
Respondent)
_____________________________
Judgment
As Approved by the Court
Crown Copyright ©
LORD JUSTICE STUART-SMITH:
The Claimant's pleaded case
1. By his `Re-amended Statement of Claim' the claimant pleaded the following
matters:
"1. The defendant is a chartered surveyor in practice at Hurstpierpoint in
Sussex. In or about December 1990 he accepted the plaintiff's instructions to
inspect and report on a private dwelling-house called Riverside House,
Blackboys, East Sussex (`the property'). The plaintiff explained, as was the
case, that he was considering the purchase and refurbishment of the property
for his own use and occupation, especially for weekends and holidays. He
specifically asked the defendant to advise whether the property might be
affected by aircraft noise.
2. The defendant accepted those instructions and accordingly owed the
plaintiff a duty to inspect and report on the said property with the skill and
care to be expected of a reasonably competent chartered surveyor.
5. The defendant inspected the said property on Monday 10 December 1990. On
Monday 17 December 1990 he reported to the plaintiff in writing. He did so
knowing that the plaintiff would rely on his report in deciding whether to
purchase and refurbish the property. But the defendant failed to inspect and
report with reasonable skill and care. On page 35 of his report he wrote:
"You have also asked whether you [sic] felt the property might be affected by
aircraft noise, but we were not conscious of this during the time of our
inspection, and think it unlikely that the property will suffer greatly from
such noise, although some planes will inevitably cross the area, depending on
the direction of the wind and the positioning of the flight paths."
6. That advice was negligent. Had the defendant taken reasonable care he
could have ascertained that the property was a short distance from a navigation
beacon and that from time to time, especially at weekends, its use and
enjoyment was badly affected by aircraft noise."
2. Paragraphs 6 and 7 plead the claimant's purchase and expenditure of
substantial sums in refurbishment. Paragraph 8 alleges that it was not until
early 1985 when the claimant took up residence that he discovered that the
property was affected by aircraft noise. The date is wrong and should be June
1991.
3. Paragraph 9 claims the loss and damage as follows:
"By reason of the defendant's negligence as aforesaid the plaintiff has
incurred loss and suffered damage; and he claims damages on his own behalf and
as trustee for himself and Mr David Parsons.
Particulars
(i) The value of the property, had it been (in respect of aircraft noise) as
described by the defendant on page 35 of his report, would have equated with
the price paid by the plaintiff or thereabouts. Its true value, affected as it
is by aircraft noise, was and is substantially less
(ii) The plaintiff's use and enjoyment of the property has been impaired by
aircraft noise."
By amendment there was a claim for £63,000 - the cost of removal on the
basis that the claimant had decided to sell and move house because of the
noise. He later changed his mind and that claim was deleted. There was also a
claim for the cost of refurbishment; but that claim was also deleted by
amendment. I have set out the material part of the pleadings because it is of
some importance in this case to see how the case was pleaded and presented in
the court below.
The Judge's findings
4. In his judgment, given on 27 May 1999, His Honour Judge Peter Baker QC,
sitting as a judge of the High Court, accepted the claimant's account of the
conversation in which the instructions were given to the defendant. As pleaded
in the `Further and Better Particulars' it was said:
"The plaintiff spoke to the defendant on the telephone at great length some
weeks before the report was written. He cannot recall the precise words he
used in the course of this conversation (which dealt with a number of matters)
but they were to this effect: "I want you to check that there is no problem
with aircraft noise, because the house is within a fifteen mile radius of
Gatwick. I want you to make sure it is not on a flight path and is not
affected by aircraft noise." "
In evidence he said:
"I want you to check whether there is a problem with aircraft noise because the
house is within 15 miles' radius of Gatwick. I want you to make sure it is not
on a flightpath and that it is not affected by aircraft noise. Alternatively I
asked him to check whether or not the property would be affected by aircraft
noise particularly because of its relative proximity to Gatwick. I said I
particularly did not want to be on a flightpath."
5. The problem with aircraft noise is that between about 6-8am and between
5.30-7pm aircraft coming into land at Gatwick tend to stack up at what is
called the Mayfield Stack, if they cannot find a slot to land. The judge
described it as follows:
"The position is, with regard to aircraft noise, as is clear from the
documentary evidence that has been obtained, that there is the Mayfield stack
which is not far away which aeroplanes join at a certain height and maintain in
a sort of spiral, as it were, until there is a slot ready for them to land at
Gatwick. That means that one aircraft may pass and repass on more than one
occasion."
and
"It is fair to say that these aircraft are some miles away, and they are not
below, I think, usually, about 6,000 feet although very occasionally there is
one lower than that. Nobody claims that it is at Mr Farley's house, rather
like having a house at the end of a B52 runway, but it is a question of degree,
and Mr Atwood's evidence was called to help me on that matter."
Mr Atwood was a sound engineer called on the claimant's behalf. The house was
nowhere near the flight path in and out of Gatwick, that being 20 miles to the
north.
6. The judge held that the defendant was liable. It is not entirely clear to
me in what respects the judge held Mr Skinner to have been negligent. All he
says is, "It seems plain to me that Mr Skinner was not properly or adequately
carrying out his instructions." But it seems to have been accepted by the
defendant that if the instructions were as the claimant alleged, Mr Skinner
should have made enquiries of the Civil Aviation Authority at Gatwick, and that
if he had done so, he would have learnt of the Mayfield Stack. Be that as it
may, and despite what might be thought somewhat imprecise instructions and a
guarded answer given by Mr Skinner in his report (set out in paragraph 5 of the
`Re-Amended Statement of Claim'), the judge's finding of negligence is not
challenged by the Appellant in this court.
7. The judge rejected the claimant's principal claim for diminution in value of
the property in the sum of about £70,000. In so doing he preferred the
evidence of the defendant's expert witness; there was also agreed evidence of
three of the claimant's neighbours who said they were not in the least troubled
by aircraft noise and that of a chartered surveyor who was familiar with
properties in the neighbourhood who said that aircraft noise was not a factor
raised in relation to property in the area and Blackboys was not materially
affected by aircraft noise.
8. However, the judge awarded the claimant £10,000 for distress and
inconvenience caused by the noise. The judge's findings with regard to the
effect on the claimant were as follows:
"Firstly he is particularly vulnerable because he has a habit, practice, of
being an early riser and of wishing, when clement weather conditions prevail as
even in this country occasionally do, to sit outside on his terrace, or
whatever, and enjoy the delightful gardens, the pool and the other amenities
which is made pretty intolerable, he says, and I accept from his point of view
between say, the hours of 6 o'clock and 8 o'clock in the morning which is the
time when he would be minded to do this.
Likewise, pre-dinner drinks are not made the better for the evening activity in
the sky not far away. That he is not a man, if I may say so, with excessive
susceptibilities is shown by the fact that he did his best to grit his teeth
and put up with it but, as he ultimately said, "Why should I when I had
endeavoured to cover this particular point in the instructions that I had
given to a professional man who I had paid to do this?" He finds it a
confounded nuisance, and this is a matter that, of course, he will be stuck
with. It is not a case of something like drains or dry rot or what have you
that he can do anything about. Short of buying Gatwick and closing it down,
this is a matter that will continue."
9. The judge referred to the case of Watts v Morrow [1991] 1 WLR 1421
and said, "It seems to me that the interference was very much less than the
real discomfort that has been sustained by Mr Farley in this case." It is
against the award of £10,000 that the defendant appeals to this court.
Previous hearing of the Appeal
10. The Appeal was first heard by a court consisting of Judge and Hale LJJ.
They did not agree in the result. However, their judgments appear to have been
handed down in the usual way. Whereupon Mr Simpson, on behalf of the
Appellant, applied, pursuant to the Supreme Court Act 1981, Section 54(5), for
the appeal to be reargued before a court of three judges. The question arises
as to what is the status of the judgments given by Judge and Hale LJJ. In my
opinion, they do not constitute the judgment of the court, nor do they form any
part of that judgment, since no order was made. Had they not acceded to Mr
Simpson's application, the appeal would have been dismissed on the basis that
the court or a majority of it had not disagreed with the trial judge.
Nevertheless, having been handed down, the judgments are in the public domain,
and they have been referred to in the course of argument, each side seeking to
draw strength from them. In my experience it is unusual for the court in such
circumstances to hand these judgments down, rather than simply indicating to
the parties that they could not agree; whereupon an application can be made
under s.54(5). In my opinion this is the better practice. Apart from anything
else it enables the matter to be reargued either before a completely different
constitution or one consisting of the two original members, plus a third. This
course was adopted in the recent case of Nipa Begum v Tower Hamlets LBC
[2000] 1 WLR 306 (see my judgment at p331). This latter course has the
advantage that on re-argument and reconsideration one of the disagreeing Lord
Justices may change his or her mind, as happened in that case. It also may
enable the appeal to be dealt with more expeditiously by concentrating the
argument on the issues that divide the court.
The Law
11. The law is succinctly stated in the much cited judgment of Bingham LJ in
Watts v Morrow [1991] 1 WLR 1421. The main question in that case was
whether on a claim for breach of contract against a surveyor on the grounds
that he had negligently failed to report certain defects in the house which the
claimant proposed to buy, the claimant could recover the cost of making good
the defects or only the diminution in value of the house by reason of the
existence of those defects. The court held that the latter was the proper
measure of the damage. But the court also considered whether the claimant
could recover damages for distress and inconvenience. At p1445 Bingham LJ
said:
"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 not, I think, founded
on the assumption that such reactions are not foreseeable, which they surely
are or may be, but on considerations of policy.
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 or if the
contrary result is procured instead. If the law did not cater for this
exceptional category of case it would be defective. A contract to survey the
condition of a house for a prospective purchaser does not, however, fall within
this exceptional category.
In cases not falling within this exceptional category, damages are in my view
recoverable for physical inconvenience and discomfort caused by the breach and
mental suffering directly related to that inconvenience and discomfort. If
those effects are foreseeably suffered during a period when defects are
repaired I am prepared to accept that they sound in damages even though the
cost of the repairs is not recoverable as such."
The reference to cases in the exceptional category are exemplified by the cases
of Jarvis v Swan Tours Ltd [1973] QB 233 and Heywood v Wellers
[1976] QB 446. Ralph Gibson LJ's judgment is to the same effect (see p1439f to
1442c). Sir Stephen Brown P. agreed with both judgments.
The Appellant's submissions
12. Mr Simpson submitted first that what Mr Farley experienced here did not
fall within the physical inconvenience and discomfort test laid down in
Watts v Morrow; that the judge misdirected himself in concluding that it
did, if that was indeed his conclusion; alternatively there was no evidence to
justify such a finding. Secondly, he submitted that the case had never been
pleaded or presented in the court below as one falling within the exceptional
category, nor did the judge purport to find that it did. That the argument
that it did, raised for the first time at the previous hearing in this court,
without amendment to the pleading or a respondent's notice, ought not to be
entertained; or if it was entertained it was wrong as a matter of law and on
the facts.
The Respondent's submissions
13. Mr Spencer, on behalf of Mr Farley, submits that the judge purported to
find, and did find, that what Mr Farley experienced amounted to physical
inconvenience and distress, and that since there was evidence to justify this
finding, this court should not interfere with it. Alternatively, that the case
came within the exceptional category.
The judgments of Judge and Hale LJJ
14. Both Judge and Hale LJJ accepted Mr Simpson's first submission that what
was claimed did not amount to distress and inconvenience within the rule stated
in Watts v Morrow. But Judge LJ held that the case fell within the
exceptional class of cases, and he would have dismissed the appeal on this
basis. He also dismissed an appeal and cross-appeal on the quantum of damage.
Hale LJ did not agree; she would have allowed the appeal and, in the light of
her judgment, the appeal and cross-appeal on quantum did not fall for
consideration.
The first question
15. Did what Mr Farley experience amount to physical inconvenience and
discomfort and mental suffering directly related to that inconvenience and
discomfort? I think Mr Spencer is right in his submission that the judge
purported to be finding that it did. Since that is the only way the case was
being put, he could not otherwise have awarded damages under this head and has
clearly made reference to that case. I am however by no means clear that the
judge correctly directed himself in accordance with that case. Thus for
example at p5E he said:
"....and the second head is in the case of a surveyor's contract, general
damages for distress; distress and inconvenience caused by physical
consequences of the breach of contract."
The judge did not cite the passage from Bingham LJ's judgment or indeed that of
Ralph Gibson LJ; and if this passage was a summary, it was not an accurate one.
The important thing is that the inconvenience and discomfort should be physical
inconvenience and discomfort. I have already set out the judge's findings as
to what Mr Farley experienced in paragraphs 8 and 9. In the passage quoted in
paragraph 9 again the judge does not advert to the fact that it has to be
physical discomfort and physical inconvenience.
16. But even if the judge correctly directed himself, in my judgment the
evidence did not support a finding of physical discomfort and inconvenience.
In the passage of the judgment cited in paragraph 8, the judge describes it as
"a confounded nuisance." In his witness statement Mr Farley speaks of the
"aircraft noise being a real source of annoyance and discomfort to me" (see
paragraphs 41-42), there is no hint of physical discomfort, nor I think could
there be. Earlier in the statement he speaks of becoming more and more
incensed by the noise and the fact that he had sought to guard against it
(paragraph 22). That is the effect of his oral evidence; the whole emphasis is
on annoyance (see Transcript 11 May p3 E-F, Transcript 12 May pp4C-5B, 5F,
6F-G, 7B-C, 15B-C). There is no hint of physical discomfort.
17. Nor can I accept the argument that because the claimant hears the noise
through his ears and therefore experiences it through his senses, this amounts
to physical discomfort. Persistent high levels of noise can cause physical
discomfort, indeed it is a well known form of torture; equally high levels of
noise over long periods can lead to deafness. But there is nothing approaching
that here. Noise of lesser levels can of course give rise to an action for
nuisance, if it affects the use and enjoyment of land; but that is not enough
to satisfy the Watts v Morrow test. All distress, annoyance,
frustration, vexation and so on is a reaction to things perceived through the
senses, usually of sight or hearing. But that does not make the distress
physical.
18. No doubt, as Bingham LJ pointed out, it is a policy decision that the law
does not give compensation for distress, frustration, anxiety, displeasure,
vexation or aggravation. But the reasons are understandable. In an action for
damages for personal injury, the claimant must prove either physical injury or
a recognised psychiatric injury. Distress and annoyance will not do. In an
action against a professional man for negligent advice or information the
damage that is normally within the contemplation of the parties is financial
loss. But if the unreported defects have to be made good while the purchaser
is living in the house, it is readily foreseeable that for a relatively short
time while that work is being done, great physical discomfort and inconvenience
of living on a building site, without facilities and in cramped conditions will
be experienced. The court can appreciate the physical conditions and award an
appropriate sum. But annoyance, vexation etc. is entirely subjective; moreover
as this case illustrates, I find it difficult to see how it can be assessed.
The claimant decided, for his own personal reasons, not to move house. So if
he is to be awarded damages for annoyance, over what period is it to be
assessed? It is not just for a relatively short period while physical defects
to the property are made good. In his witness statement he says that he will
live at the house for "the next few years." But Mr Spencer submitted that it
should now be taken that he will stay there indefinitely.
19. In a case of personal injury the court can assess the extent and effect of
permanent disability on the claimant's loss of amenity and financial loss; but
the assessment is an objective one although the quantum will vary with the
characteristics of the claimant such as age, earning capacity and matters of
that sort. Moreover, I cannot accept that anything that was said by the House
of Lords in Ruxley Electronics v Forsyth [1996] AC 344 can be taken to
have affected the decision in Watts v Morrow. The case was cited in
argument but not referred to in the speeches. It cannot possibly have been
overruled. But I shall have to refer to the case on the second question, since
Mr Spencer relied on obiter dicta by Lord Mustill and Lord Lloyd of
Berwick in support of his alternative case that this claim fell within the
exceptional category referred to by Bingham LJ.
20. For these reasons, and in accordance with the opinions of both Judge and
Hale LJJ, I do not consider that the judge's conclusion can be sustained on the
basis that he decided it.
The second question
21. Was this a contract to provide pleasure, relaxation or peace of mind, so
that it comes within that exceptional class of contract for which damages for
non-physical distress and annoyance can be awarded? The first point to make is
that this was not the way the case was pleaded or presented in the court below;
nor was the point raised in a respondent's notice. That does not necessarily
prevent this court from entertaining it if it is a pure point of law. `The
rule is that, if a point was not taken before the Tribunal which hears the
evidence, and evidence could have been adduced which by any possibility would
prevent the point from succeeding, it cannot be taken afterwards. You are
bound to take the point in the first instance, so as to enable the other party
to give evidence' (see Ex parte Firth in Re. Cowburn (1882) 19 Ch D 419 at p429 per Sir George Jessel MR). Even if the point is a pure point of
law, the Court of Appeal has a discretion to exclude it (Pittalis v
Grant [1989] QB 605 at 611 per Nourse LJ). Mr Simpson submitted that he
would have wished to cross-examine Mr Farley further, if he had known he was
facing such a case. I am not persuaded that there is very much in this point.
The question seems to me to be one of construction of the contract as a whole
and whether it falls into the exceptional category. But I think that one of
the problems that has arisen is that there has tended to be over- concentration
on the instructions in relation to aircraft noise, which was in truth only one
of a considerable number of aspects which Mr Skinner was asked to consider in
making his report. The opening paragraph of the written report, dated 17
December 1990, is in these terms:
"In accordance with your instructions we write to say that we carried out an
inspection of the above property on Monday 10th December 1990 to enable us to
advise you as to its general and structural condition."
22. In any event it seems clear that the previous Court of Appeal allowed this
point to be argued, it having been raised in the respondent's skeleton
argument, and it has been argued before us. The importance however which I
attach to the way the case was presented until it reached this court is that it
never appears to have occurred to the claimant's advisers that this was one of
those exceptional contracts, notwithstanding that they were entirely familiar
with the case of Watts v Morrow. I do not find this surprising because
in my view it plainly was not. What has to be considered is the contract as a
whole and not simply one relatively minor aspect of the overall instructions,
which can perhaps be said to relate more to the enjoyment of a house than some
others. This emerges very clearly from the decision of this court in Knott
v Bolton (1995) 11 Const. L.J. 315.
23. In that case the plaintiffs wished to build their `dream home'. The
defendant architect was given instructions as to their wishes in relation to
many features of the property that he was to design, including a wide staircase
embracing a gallery area and an imposing and impressive entrance hall. The
defendant's design did not achieve this. The plaintiffs sought an award of
general damages for their disappointment and distress at not getting what they
had given instructions for. It was said that the case fell within the
exceptional category. Russell LJ, with whom Henry and Ward LJJ agreed, after
citing the passage from Bingham LJ's judgment in Watts v Morrow said at
p376:
"One or two comments upon that passage are apposite. In my judgment the words
"the very object of a contract" are crucial within the context of the instant
case. The very object of the contract entered into by Mr. Terence Bolton was
to design for the Knotts their house. As an ancillary of that of course it was
in the contemplation of Mr. Bolton and of the Knotts that pleasure would be
provided, but the provision of pleasure to the occupiers of the house was not
the very object of the contract and there was nothing in the contractual
relationship between Mr. Bolton and the Knotts to indicate that he in any sense
warranted or expressed himself to be contractually bound to provide for the
Knotts the pleasure of occupation. Of course the pleasure of their occupation
was an ancillary of the object of the contract, but was not the very object of
the contract. The other comment I make about Watts v. Morrow is this:
Neither Mr. or Mrs. Knott contend that they have suffered any physical
inconvenience or discomfort in consequence of the defective design of the
entrance hall and staircase. So this is not a case where mental distress is a
part of physical inconvenience as to an extent was the position in Watts v.
Morrow.
Mr. Cousins has endeavoured to persuade us that the true nature of the contract
entered into by Mr. Bolton in the instant case was to provide pleasure for Mr.
and Mrs. Knott. I disagree. The true nature of the contract was that which an
architect enters into in any situation where he is designing a home. The true
nature of the contract was to design the home. It was not to provide pleasure
for Mr. and Mrs. Knott, although that was a necessary ancillary of what Mr
Bolton did."
24. That case is binding on us, and in any event I respectfully agree with it.
If anything it is a stronger case than the present, because it appears to have
been treated as a contract to achieve a result, and not merely one to exercise
reasonable care and skill. I am quite unable to conclude that in this case the
contract was anything other than an ordinary surveyor's contract such as is
referred to in Watts v Morrow. It is not infrequently the case that the
surveyor is asked to have regard to particular matters such as drains, tree
roots affecting foundations, potential development on adjacent property,
potential for extending or altering the house and matters of that sort. All
these matters, as well as structural defects may affect the purchaser's
enjoyment of the property and are ready fuel for irritation and annoyance if
they are not as the surveyor reports. But that does not in my view affect the
nature of the contract.
25. Watts v Morrow has been followed in a number of other reported cases
since: Verderame v Commercial Union [1992] BCLC 793 CA; R v Investors
Compensation Scheme ex parte Bowden [1994] 1 All ER 525 CA; McConville
v Barclay's Bank HH Judge Hick QC. Times 30.6.93; McLeish v
Amoo-Gottfried [1994] 10 PN 102 Scott-Baker J; Alexander v Rolls
Royce [1996] RTR 95 CA; Wapshott v Donovan [1996] PNLR 361 CA.
26. Mr Spencer submitted that the decision in Watts v Morrow requires it
to be reconsidered in the light of the observations of Lord Mustill and Lord
Lloyd of Berwick in Ruxley Electronics v Forsyth [1996] AC 344. In that
case the plaintiffs contracted to build a swimming pool in the defendant's
garden. It was an express term of the contract that the pool should be 7'6"
deep at the deep end. As constructed it was only 6' deep. The defendant
counterclaimed the cost of rebuilding the pool to the required depth which
would have amounted to £21,560. The trial judge rejected that claim but
awarded £2,500 for loss of amenity. The Court of Appeal allowed the
defendant's appeal; but the House of Lords restored the judge's award, holding
that the cost of rebuilding was out of all proportion to the benefit to be
obtained and the proper measure of damages was not the cost of reinstatement
but the diminution in the value of the work occasioned by the breach, even if
that amounted to a nominal award. There was no appeal as to the award of
£2,500.
27. Counsel for the defendant abandoned the claim for £2,500 because it
was inconsistent with the owner's claim for reinstatement costs or nothing.
And not surprisingly the plaintiff's counsel did not support it either. Only
two of their Lordships dealt with the point in passages which are clearly
obiter. Lord Mustill at p360 said:
"In my opinion there would indeed be something wrong if, on the hypothesis that
cost of reinstatement and the depreciation in value were the only available
measures of recovery, the rejection of the former necessarily entailed the
adoption of the latter; and the court might be driven to opt for the cost of
reinstatement, absurd as the consequence might often be, simply to escape from
the conclusion that the promisor can please himself whether or not to comply
with the wishes of the promise which, as embodied in the contract, formed part
of the consideration for the price. Having taken on the job the contractor is
morally as well as legally obliged to give the employer what he stipulated to
obtain, and this obligation ought not to be devalued. In my opinion however
the hypothesis is not correct. There are not two alternative measures of
damage, at opposite poles, but only one; namely, the loss truly suffered by the
promisee."
28. Lord Lloyd of Berwick said at p374:
"Addis v. Gramophone Co. Ltd. established the general rule that in
claims for breach of contract, the plaintiff cannot recover damages for his
injured feelings. But the rule, like most rules, is subject to exceptions. One
of the well established exceptions is when the object of the contract is to
afford pleasure as, for example, where the plaintiff has booked a holiday with
a tour operator. If the tour operator is in breach of contract by failing to
provide what the contract called for, the plaintiff may recover damages for his
disappointment: see Jarvis v. Swan Tours Ltd. [1973] QB 233 and
Jackson v. Horizon Holidays Ltd. [1975] 1 WLR 1468.
This was, as I understand it, the principle which Judge Diamond applied in the
present case. He took the view that the contract was one "for the provision of
a pleasurable amenity." In the event, Mr. Forsyth's pleasure was not so great
as it would have been if the swimming pool had been 7 feet 6 inches deep. This
was a view which the judge was entitled to take. If it involves a further
inroad on the rule in Addis v. Gramophone Co. Ltd. [1909] AC 488, then
so be it. But I prefer to regard it as a logical application or adaptation of
the existing exception to a new situation. I should, however, add this note of
warning. Mr. Forsyth was, I think, lucky to have obtained so large an award
for his disappointed expectations. But as there was no criticism from any
quarter as to the quantum of the award as distinct from the underlying
principle, it would not be right for your Lordships to interfere with the
judge's figure."
29. I see no reason why it should be thought that these passages affect the
decision in Watts v Morrow which was cited in argument, but not referred
to in the speeches. It is not difficult to classify a contract to build a
swimming pool as one of the Jarvis v Swans Tours Ltd category of
contract. In the Ruxley case there was an express contractual
obligation to achieve a result, not simply an obligation to exercise reasonable
care and skill in giving information or advice; the nature of the contractual
obligation is entirely different.
30. For these reasons I would allow the appeal.
LORD JUSTICE MUMMERY
31. I agree with the judgment of Stuart-Smith LJ.
In view of the sharp division of judicial opinion on the first and second
hearings of this appeal I shall add a few observations in favour of allowing
the appeal.
(1) Policy Considerations.
32. The relevant legal principles were stated by Bingham LJ in Watts -v-
Morrow. He mentioned, but did not discuss, the "considerations of
policy " on which the courts base the general rule that compensation for
intangible ( i.e. non-pecuniary, non-physical) harm is not recoverable in an
action for breach of contract. The policy factors are so patent that they do
not require much elaboration, though they are worth re-stating, as Mr Spencer
contends that the general rule should be reconsidered in the light of Ruxley
Electronics -v- Forsyth [1996] AC 344.
33. The policy considerations are discussed by Lord Justice Stuart-Smith in
paragraphs 18 and 19 of his judgment. They were examined by the Law Commission
in Part II of Consultation Paper No. 132 on Aggravated, Exemplary and
Restitutionary Damages (1993) under the headings of incommensurability,
subjectivity and difficulties of proof.
Paragraph 2.12 of the Consultation Paper stated that
"Compensation involves the reparation of harm by the delivery of an equivalent
or equivalent value.Compensation which takes the monetary form of compensatory
damages therefore encounters peculiar difficulties when the harm is
non-pecuniary. There is no exact equivalent and no standard measure of
assessment by reference to which the harm can be converted into monetary
form......This incommensurability gives rise to real danger of indeterminacy
and of inconsistent awards."
I agree.
34. The incontrovertible fact is that the unobservable subjective nature and
extent of intangible harm means that it is inherently difficult to prove (or
to refute) ; that, even if properly proved, it is impossible to measure as
there are no objective standards and no solid comparables ; that, even if
"measured", the amount awarded is open to the trenchant criticisms that it is
not truly or wholly compensatory, that it contains an impermissible punitive
element and that it reflects the intrusion of an unacceptable level of
subjectivity on the part of the judge ; and that the whole exercise fails to
satisfy a fundamental requirement of a fair and workable litigation system that
the outcome of a claim should be reasonably predictable, both as to liability
and quantum, so that the parties and their advisers can negotiate satisfactory
compromises and make informed decisions on Part 36 offers and payments and
their acceptance. As to the last point see the speech of Lord Steyn in Wells
-v-Wells [1999] 1 AC 345 at 388D-E.
35. The significance of the policy considerations is demonstrated by the facts
of this case and the history of these proceedings recounted in the judgment of
Lord Justice Stuart-Smith. I shall comment on only two points: the nature of
the harm and the nature of the contract.
(2) The Nature of the Harm.
36. What harm has Mr Farley suffered? He is upset by the noise of aircraft
flying over the garden of Riverside House en route for Gatwick. The noise is "a
confounded nuisance" in the early morning and early evening. Those are the
times of day when he likes to relax in the garden.
37. In order to succeed in his claim for damages for professional negligence Mr
Farley has to prove that he has suffered (a) pecuniary loss and/or (b) physical
inconvenience or physical discomfort and directly related "mental suffering"
caused by Mr Skinner's breach of duty. Pecuniary loss was not established.
Although the judge concluded that Mr Farley had suffered "real discomfort"
there was no evidence that this amounted to anything more than upset and
annoyance at hearing the sound of aircraft noise which diminished his
enjoyment of the garden. That complaint was unrelated to any physical
inconvenience or to any physical discomfort suffered by him and cannot
reasonably be described as directly related "mental suffering."
38. I do not understand why Mr Farley should be legally entitled to recover
from his surveyor any damages for hearing aircraft noise in his garden when Mr
Addis was told by the House of Lords in Addis -v- Gramophone Co Ltd
[1909] AC 486 that he was not entitled to recover any damages from his employer
for injury to his feelings on hearing the news that he was dismissed,
wrongfully and in a harsh and humiliating manner. That kind of harm is treated
by the law as an uncompensatable risk of life, whether it be in employment or
in the purchase and occupation of a home.
39. I appreciate the strength of Mr Farley's feelings: Mr Skinner negligently
failed to check the position with the Civil Aviation Authority and the
information supplied to him by Mr Skinner about aircraft noise affected his
decision to buy a house which he would not otherwise have bought. But Mr
Farley has not proved that he has suffered any pecuniary or physical harm in
consequence of that negligence. The law binding on this court has been applied
in many other cases and is reinforced by rational and pragmatic policy
considerations. The law is that Mr Farley's perception that the tranquillity
of his garden is spoilt by the presence of aircraft noise is not a recoverable
head of damage against Mr Skinner.
40. Even if it was, the quantification of the claim exposes the judicial
process to serious misgivings. I do not understand by what reasoning or on what
evidence the compensation under this head was assessed at £10,000. Why
not £5,000? Why not £20,000? The judge attempted to do his best on
exiguous material to measure the unmeasurable and in the result awarded
compensation for the uncompensatable. He was invited to participate in an
exercise which was more like a lucky dip than a judicial process.
(3) The Nature of the Contract
41. It is impossible to regard the contract between Mr Skinner and Mr Farley as
falling within the exceptional class of case in which the very object of the
contract is to produce a particular pleasurable result, such as a relaxing
holiday, a leisure amenity or a recreational activity. Mr Skinner was retained
as a surveyor to inspect and report on Riverside House. It was not a contract
for Mr Skinner to produce a result of rustic tranquillity. It was a contract
for him to supply information, including information on the position as to
aircraft noise, so that Mr Farley could decide whether or not to enter into
another contract i.e for the purchase of Riverside.
42. If Mr Skinner's failure to perform his professional task with reasonable
skill and care had resulted in the purchase of a property worth less than Mr
Farley had paid for it or in Mr Farley incurring the expense of selling up and
moving elsewhere, or in physical inconvenience or physical discomfort directly
leading to mental suffering, then damages could be recovered by Mr Farley. But
this is not such a case. Even if it was in the contemplation of the parties
that the level of aircraft noise would affect Mr Farley's pleasure in the use
of the garden at Riverside, damages for his disappointment and diminished
pleasure are not, for the policy reasons discussed above, recoverable for
breach of this kind of contract.
LORD JUSTICE CLARKE:
The Judgment
43. The key findings made and conclusions reached by the judge may be
summarised in this way:
1. The claimant instructed the defendant surveyor to inspect and report on
Riverside House at Blackboys in Sussex ("the property"), which he was
interested in buying.
2. He expressly instructed him to check whether the property might be affected
by aircraft noise, particularly because of its relative proximity to Gatwick
Airport, and to inform him accordingly.
3. The defendant accepted those instructions.
4. The defendant accordingly owed the claimant a duty, both in contract and at
law, to exercise reasonable skill and care in checking the position before
informing him whether the property might be affected by aircraft noise.
5. The defendant was in breach of that duty because he did not check the
position with the Civil Airport Authority as he could and should have done.
6. As a result of that breach, the defendant did not ascertain the true
position, which the judge summarised in this way:
"The position is, with regard to aircraft noise, as is clear from the
documentary evidence that has been obtained, that there is the Mayfield stack
which is not far away which aeroplanes join at a certain height and maintain in
a sort of spiral, as it were, until there is a slot ready for them to land at
Gatwick. That means that one aircraft may pass and repass on more than one
occasion. I have had the opportunity of seeing a video and sound recording
taken by Mr Farley, and that shows the frequency of the aircraft. One realises
that a recording can never give an accurate representation of how actually it
comes across, but it gives a fair representation of the sort of problem that Mr
Farley, and no doubt a number of others who live in the area have to contend
with. ... It is fair to say that these aircraft are some miles away and they
are not below, I think, usually, about 6,000 feet although very occasionally
there is one lower than that. Nobody claims that it is at Mr Farley's house,
rather like having a house at the end of a B52 runway, but it is a question of
degree, and Mr Atwood's evidence was called to help me on that matter."
Mr Atwood was a sound expert called on behalf of the claimant.
7. Since the defendant did not know the true position as to aircraft noise at
the property, he could not tell the claimant what it was, save to report what
he learned on his visit to the property. His written report included the
following:
"You have also asked whether you felt the property might be affected by
aircraft noise, but we were not conscious of this during the time of our
inspection, and think it unlikely that the property will suffer greatly from
such noise, although some planes will inevitably cross the area, depending on
the direction of the wind and the positioning of the flight paths."
8. If the defendant had advised the claimant of the true position, as he would
have done if he had exercised all reasonable care and skill, the claimant would
not have bought the property. Contracts were exchanged on 16th
January 1991 and completion was on 28th February 1991.
9. The claimant did not ascertain the true position until after he moved in,
which was not until 13th June 1991 because the property was being
refurbished in the meantime at a cost of something like £100,000.
10. The claimant soon became aware of the noise from aircraft stacking over
Mayfield, which the judge described as follows:
"Here I think one must bear in mind that this was a specific contract dealing,
inter alia, with noise so far as the defendant is concerned, and I was
impressed by the account that Mr Farley gave of a number of matters. Firstly,
he is particularly vulnerable because he has a habit, practice, of being an
early riser and of wishing, when clement weather conditions prevail as even in
this country [they] occasionally do, to sit outside on his terrace, or
wherever, and enjoy the delightful gardens, the pool and the other amenities
which is made pretty intolerable he says, and I accept from his point of view
between, say, the hours of 6 o'clock and 8 o'clock in the morning which is the
time when he would be minded to do this.
Likewise, pre-dinner drinks are not made the better for the evening activity in
the sky not far away. That he is not a man, if I may say so, with excessive
susceptibilities is shown by the fact that he did his best to grit his teeth
and put up with it but, as he ultimately said, "Why should I when I had
endeavoured to cover this particular point in the instructions that I had given
to a professional man who I had paid to do this?" He finds it a confounded
nuisance, and this is a matter that, of course, he will be stuck with. It is
not a case of something like drains or dry rot or what have you that he can do
anything about. Short of buying Gatwick and closing it down, this is a matter
that will continue.
I find it not easy to assess damages under this head. If I may say so, like
surveyors, judges tend to regard comparables when dealing with, for instance,
personal injury matters and this sort of matter. The only, "comparable", that
can be put before me is the sort of figure that was awarded by the judge
originally in Watts' case and then reduced by the Court of Appeal. It
seems to me, that there the interference was very much less than the real
discomfort that has been sustained by Mr Farley in this case."
The reference to Watts' case in that passage was of course a reference
to the decision of this court in Watts v Morrow [1991] 1 WLR 1421.
11. It was reasonable for the claimant, after experiencing the noise at the
property, not to sell it but to stay. As the judge put it, after learning of
the problem only after he had spent a large sum on the property, he "made the
best of a bad job and stayed".
12. The claimant did not establish that the defendant's breach of contract in
failing to exercise reasonable care and skill and to inform him of the true
position as to aircraft noise led to any diminution in the value of the
property. However, the judge awarded him general damages for "distress and
inconvenience caused by physical consequences of the breach of contract" in the
sum of £10,000.
General Damages
44. The first question in this appeal is whether judge was right to award
general damages to the claimant. I am bound to say that unassisted by
authority I would unhesitatingly hold that he was. The defendant was in breach
of contract and in breach of his duty of care owed to the claimant at law in
failing to exercise reasonable care and skill in obtaining information about
aircraft noise and passing it on to the claimant. As a result the claimant
bought a property which he would not have bought but for the breach. Once he
ascertained the extent of the noise he acted reasonably in not selling the
property but in putting up with it. The noise was variously described by the
judge as `pretty intolerable', `a confounded nuisance' and `a real discomfort'.
If the claimant had sold the property and moved because of the noise it seems
to me to be likely that it would have cost him significantly more than the
£10,000 which he was awarded. In my judgment, he would in that event have
been entitled to recover by way of damages from the defendant the reasonable
cost of buying and selling the property and of moving to a new property. By
not moving and putting up with the noise he thus saved the defendant money.
45. In all these circumstances, in my opinion, the claimant should in principle
be entitled to recover general damages from the defendant and any analysis
which leads to the conclusion that he is entitled to nothing should be exposed
to detailed scrutiny. The argument that such damages are not recoverable
depends upon the principles in Watts v Morrow and their application to
the facts of this case. Watts v Morrow is one of a long line of
cases which are not all easy to reconcile. It is I think important to note
that it does not stand alone and must be considered in its context. Like many
other cases it was concerned with the circumstances in which damages for
non-pecuniary loss can be recovered for breach of contract.
46. The problem which the cases have sought to address is in what circumstances
it is appropriate to permit a claimant to recover damages for breach of
contract for non-pecuniary loss. It has long been recognised that it would not
be appropriate to permit a claimant to recover damages for breach of a
commercial contract in respect of disappointment or mental distress flowing,
however directly, from the breach. Moreover, it has been so held
notwithstanding the fact that the distress may have been within the reasonable
contemplation of the parties when the contract was made. Leading cases
include, in the employment context, Addis v Gramophone Co Ltd
[1909] AC 488. The reason for the general principle is essentially one of
policy. Thus, for example, in Hayes v James & Charles Dodd [1990] 2 All ER 815 Staughton LJ said (at page 823) that he would not view with
enthusiasm the prospect that every shipowner who successfully claimed freight
or demurrage could add a claim for general damages for mental distress suffered
while he was waiting for his money. I agree.
47. The general principle is that damages for breach of an ordinary commercial
contract cannot be recovered in order to compensate the claimant for
disappointment or distress. Watts v Morrow is one of many cases
which have explored the circumstances in which general damages can be recovered
for non-pecuniary loss suffered as a result of a breach of contract. The
principal judgment was given by Ralph Gibson LJ, but the relevant principles
are concisely stated by Bingham LJ at page 1445 in what has become a much cited
passage:
"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 not, I think, founded
on the assumption that such reactions are not foreseeable, which they surely
are or may be, but on considerations of policy.
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 or if the contrary
result is procured instead. If the law did not cater for this exceptional
category of case it would be de defective. A contract to survey the condition
of a house for a prospective purchaser does not, however, fall within this
exceptional category
In cases not falling within this exceptional category, damages are in my view
recoverable for physical inconvenience and discomfort caused by the breach and
mental suffering directly related to that inconvenience and discomfort. If
those effects are foreseeable suffered during a period when defects are
repaired I am prepared to accept that they sound in damages even though the
cost of the repairs is not recoverable as such. But I also agree that awards
should be restrained, and that the awards in this case far exceeded a
reasonable award for the injury shown to have been suffered. I agree with the
figures which Ralph Gibson L.J. proposes to substitute."
48. It can be seen that there are potentially two bases upon which general
damages may be recoverable in this class of case. The first is where the
breach has caused physical inconvenience and discomfort or, perhaps, physical
discomfort or inconvenience. Various different descriptions have been given in
the cases to what has to be proved under this head, to which I now turn.
Physical Inconvenience and Discomfort
49. At the trial it was submitted on behalf of the claimant that the facts of
this case fall into the exceptional category which Bingham LJ described as
`physical inconvenience and discomfort' caused by the breach. As I read his
judgment, the judge accepted that submission. If he had not done so, he could
not have found for the claimant because no other basis of recoverability of
general damages was advanced. Mr Simpson submitted on behalf of the defendant
that the judge was wrong so to hold. In order to decide whether the judge was
right or wrong it is I think helpful to consider what circumstances have been
held to amount to physical inconvenience and discomfort in this context.
50. It is to my mind important to note that damages are recoverable under this
head for physical inconvenience and that it is not necessary to establish any
kind of physical injury or loss, or indeed mental distress. Thus, for example,
in an early case, Hobbs v London and South Western Railway
Co (1874) LR 10 QB 111, the plaintiff his wife and two children took
tickets on the defendant's railway from Wimbledon to Hampton Court by the
midnight train. They were taken to Esher instead of Hampton Court and had to
walk between four and five miles home. The jury awarded £8 general
damages for the inconvenience of having to walk home. It was held by a
Divisional Court of the Queen's Bench that those damages were recoverable.
Cockburn CJ said (at page 111) that there was no authority that `personal
inconvenience, where it is sufficiently serious, should not be the subject of
damages' for breach of contract as being taken to be within the contemplation
of the parties. Blackburn J put it in much the same way at page 121. Mellor J
put the distinction between recoverable and irrecoverable damages thus (at page
122):
"I quite agree with my brother Parry, that for the mere inconvenience, such
as annoyance and loss of temper, or vexation, or for being disappointed in a
particular thing which you have set your mind upon, without real physical
inconvenience resulting, you cannot recover damages. That is purely
sentimental, and not a case where the word inconvenience, as I here use it,
would apply. But I must say, if it is a fact that you arrived at a place where
you did not intend to go to, where you are placed, by reason of the breach of
contract of the carriers, at a considerable distance from your destination, the
case may be otherwise. It is admitted that if there be a carriage you may hire
it and ride home and charge the expense to the defendants. The reason why you
may hire a carriage and charge the expense to the company is with the view
simply of mitigating the inconvenience to which you would otherwise be subject;
so that where the inconvenience is real and substantial arising from being
obliged to walk home, I cannot see why that should not be capable of being
assessed as damages in respect of inconvenience."
His test was thus `real and substantial physical inconvenience'.
51. That approach has been followed in a number of cases since 1874, to which
it is necessary to refer to only a few. For example, in Bailey v
Bullock [1950] 2 All ER 1167 the defendant failed, in breach of
contract, to exercise reasonable care and skill as the plaintiff's solicitor.
As a result the plaintiff did not obtain possession of a dwelling house which
he had let and he and his wife had to live in cramped conditions with his
parents in law. Bray J held that damages for inconvenience and discomfort were
recoverable. In doing so he followed Burton v Pinkerton (1867)
LR 2 Exch 340 and Hobbs v London and South Western Railway. He said (at
page 1170) that there was a real difference between what he described as `mere
annoyance and injury to feelings, on the one hand, and physical inconvenience,
on the other'. He then quoted the part of the judgment of Mellor J in the
Hobbs case which I have set out above, and referred to the
judgments of the other members of the court, which he said decided that in a
case based on a breach of contract alone damages could be awarded for `serious
physical inconvenience and discomfort'. He added (at page 1171):
"During the course of the argument before me, counsel for the defendants was
disposed to admit that if in the present case the plaintiff had chosen to
mitigate the discomfort to which he was subjected by taking rooms for himself
and his family at an hotel or making other arrangements for his accommodation,
it would have been extremely difficult for the defendants to have resisted a
claim for special damages based on the cost of such accommodation. It would
indeed, be curious if, in the circumstances of this case, because the plaintiff
suffered the inconvenience rather than incur expense to avoid it, he should be
deprived of any remedy. Such, in my opinion, is not the law. I consider that
Hobbs' case and Burton v Pinkerton clearly establish that in a
proper case damages for personal inconvenience may be recoverable in an action
of this kind."
52. Those seem to me to be powerful considerations. They also show that no
distinction is to be drawn for this purpose between a case like Hobbs,
where the contractual obligation was to achieve a certain result, and a case
like Bailey, where the contractual obligation was simply to
exercise reasonable care and skill.
53. Watts v Morrow was itself a case in which the plaintiffs, who were a
husband and wife, instructed the defendant to survey a property which they
proposed to purchase as a second home. The defendant made a report which
referred to a number of defects but failed to identify a number of other
defects which were subsequently found to exist. The judge held that that
failure amounted to a breach of the defendant's duty to exercise reasonable
care and skill as a solicitor. If the plaintiffs had known of the defects,
they would either not have bought the house at all or only at a much reduced
price. A considerable amount of repair work was carried out during which the
plaintiffs spent their week-ends at the house in what Mr Watts described (and I
think the judge accepted) were deplorable conditions.
54. This court held that that the claimants were entitled to damages for the
diminution in value of the property as a result of the defendant's breach of
contract, that the contract was an ordinary surveyor's contract and that, in
addition to the diminution in value, the claimants were entitled to recover
general damages for what Bingham LJ described in the above passage as `physical
discomfort and inconvenience'. Ralph Gibson LJ cited a number of cases
including (apart from what may be called the holiday cases) Hobbs v London
and South Western Railway Co, Bailey v Bullock,
Addis v Gramophone Co Ltd, Groom v Crocker [1939] 1 KB 194,
Heywood v Wellers [1976] QB 446, Perry v Sidney Phillips &
Son [1982] 1 WLR 1297, Bliss v South East Thames Regional Health
Authority [1987] ICR 700 and Hayes v James & Charles Dodd.
55. The conclusions reached by Ralph Gibson LJ can be seen from these passages
in his judgment. He said at page 1440:
"As to the law, it is, in my judgment, clear that Mr and Mrs Watts were not
entitled to recover general damages for mental distress not caused by physical
discomfort or inconvenience resulting from the breach of contract."
56. He then preferred the views of Oliver and Kerr LJJ in Perry's case
to those of Lord Denning, namely that damages were recoverable for `the
discomfort and so on suffered by the plaintiff as a result of having to live
for a lengthy period in a defective home', as Oliver LJ put it, or because of
the `physical consequences of the breach', as Kerr LJ put it. Ralph Gibson LJ
added at page 1441:
If, then, the plaintiffs, for breach of a contract of this nature, are entitled
only to damages in respect of physical discomfort or inconvenience resulting
from the breach, it is clear, as in Perry v Sidney Phillips & Son
... that such damages are recoverable where, as contemplated by the
defendant, the plaintiffs move into the property and live there in physical
discomfort because of unreported defects such as an evil-smelling cesspit or a
leaking roof.
57. Finally, at page 1442, he said that in the case of the ordinary surveyor's
contract, damages are only recoverable for distress caused by physical
consequences of a breach of the contract. In the event this court awarded
£750 for the physical discomfort over an eight month period in so far as
it was caused by the unreported defects. That sum was substituted for the sum
of £4,000 which the judge had awarded on the basis that the contract was a
contract for peace of mind and freedom from distress, which this court held
that it was not. The sum of £4,000 also included the consequences of
discomfort caused by all the work, whether caused by the unreported defects or
not, which this court held that he should not have done.
58. There are few, if any, other cases which help on the question of what
amounts to sufficient physical inconvenience or discomfort to entitle a
claimant to general damages in this class of case. In Heywood v Wellers
this court held that the plaintiff was entitled to damages for molestation from
a solicitor who had negligently failed to prevent a man molesting her by taking
appropriate legal action. More recently, since Watts v Morrow, in
Wapshott v Davis [1996] PNLR 361 the plaintiffs claimed damages
against solicitors who negligently failed to notice a defect in the title of a
property which they were buying. They were held to be entitled to damages
under various heads including general damages for inconvenience, namely that as
a result of the breach, they had to stay where they were and start a family in
confined circumstances. In giving the leading judgment, with which Hobhouse
and Aldous LJJ agreed, Beldam LJ said at page 379:
"Although a distinction is sometimes drawn between a breach of a contract
entered into for the purpose of providing comfort and enjoyment and other
contracts in which the vexation and distress resulting from the breach are
merely a consequence of the breach, it seems to me that a more valid
distinction is between compensation awarded for mere disappointment at the
failure of the other party to the contract to fulfil his bargain and actual
discomfort and inconvenience and distress consequent on events which are
reasonably foreseeable at the time of entering into the agreement.
In the present case the question for the court seems to me to be whether the
defendant solicitors retained to act on behalf of a young couple buying a
single bedroom flat with modest accommodation could reasonably foresee as a
consequence of a breach of duty that the flat would or might be unsaleable and
that a young couple might be compelled to remain in cramped conditions if they
started a family. In my judgment, in such circumstances the reasonable
solicitor ought to contemplate such consequences. His clients are not
pensioners seeking a retirement home but a young couple making their first
purchase. I would hold that damages for inconvenience and distress due to
being unable to sell the leases were not too remote, nor can I see any reason
of policy on which the law would refuse compensation or recovery in these
circumstances."
59. Mr Simpson submitted that the first of those paragraphs did not
correctly state the relevant principles in the light of the decision in
Watts v Morrow. I am, however, unable to accept that submission,
save to this extent. I recognise that it was not written in the context of a
case where there were no physical consequences of the breach of contract except
disappointment or distress caused by the fact of the breach. It was, however,
part of a considered judgment, with which both Hobhouse and Aldous LJJ agreed
and which was written after express consideration of Watts v Morrow in
the context of a case in which there was physical inconvenience. Its
significance is that it draws a distinction between disappointment at the
failure of a party to fulfil his bargain on the one hand and actual discomfort
and inconvenience and distress on the other.
60. The question is on which side of the line the instant case falls on the
facts. I have already set out the key conclusions reached by the judge. In
short he held that the noise from the aeroplanes was pretty intolerable and a
confounded nuisance and that it caused the claimant real discomfort. The judge
concluded that that discomfort was greater than that found by this court in
Watts v Morrow. In my judgment, he was entitled so to hold. The
claimant's complaint was of noise, which of course affects one of the senses,
namely hearing. It is, in my judgment, a physical inconvenience to have to put
up with noise causing annoyance of the kind found by the judge. It has been
held that it is a physical inconvenience to have to walk four to five miles at
night or to live in cramped conditions for some months or to have to put up
with inconvenience during repairs. I do not think that there can be any doubt
that to have to put up with an evil-smelling cesspit of the kind referred to by
Ralph Gibson LJ in Watts v Morrow would involve physical
inconvenience. In my opinion, the same is true of noise.
61. There was ample evidence to support the conclusion reached by the judge,
who after all had the benefit of seeing the claimant give evidence. In the
claimant's statement he said that the aircraft noise was a real source of
annoyance and discomfort to him. The house and terrace were supposed to be a
place where he could enjoy the country. In the course of the appeal we saw
part of a video taken by the claimant which was also seen by the judge, which
no doubt had its limitations so far as concerns the distance away the
aeroplanes were and the noise they made, but which showed how attractive the
gardens were. The claimant also said in his statement that he tried to ignore
the aircraft noise, which `became so intrusive to the delightful setting of the
house and grounds'. In evidence he adopted his statement and said that he
finds the aircraft noise particularly annoying. In cross-examination he said
that the property is especially affected by aircraft noise both mornings and
afternoons when traffic is at its peak and stacking therefore takes place. He
particularly notices it in the summer because that is when he is out in the
garden. He later said that it is intensely annoying. It was put to him that
what particularly annoyed him was not the noise but the fact that he had asked
the defendant to look into noise. However, he said that it was both. In
re-examination he repeated what he had said in chief:
"I find the intrusion of aircraft noise particularly annoying, more so because
I had taken the precaution to ask what before I bought the property whether or
not it would be affected by aircraft noise."
62. Mr Simpson submitted that the evidence supports only annoyance and not
physical discomfort. However, I am unable to accept that submission. The
evidence shows that the effect of the stacking in the morning and the evening
is that aircraft go round frequently. For example, on the day that Mr Attwood
attended, he measured results from 21 aircraft (not of course all different
because of the stacking) between 0655 and 0815. It is evident that they can be
heard from the terrace and the garden. In my judgment it can properly be said
that it is physically inconvenient to listen to aircraft noise and that the
judge's conclusion that the claimant had to put up with real discomfort is
justified.
63. I recognise that there is evidence from others that they were not affected
by the noise in the same way, but, as Mr Simpson correctly accepted, the
question is whether the claimant suffered physical inconvenience or discomfort.
In my judgment he did. In all the circumstances I have reached the clear
conclusion that this is not a case of mere disappointment, aggravation or
vexation because of the breach but of real physical inconvenience, namely
having to put up with the noise. In doing so I bear in mind that the claimant
only has to show physical inconvenience and not any kind of physical injury or
damage. The facts of this case seem to me to fall clearly on the physical
inconvenience side of the line identified in the cases. So to conclude is to
my mind consistent with the rationale behind the distinction and would
certainly not open the floodgates which the rule of policy limiting general
damages is designed to avoid.
64. I recognise that Stuart-Smith and Mummery LJJ have reached a different
conclusion, but, for the reasons which I have tried to give, I prefer the view
of the judge. I would only add this in the light of comments during the
argument that the difficulty of arriving at a fair figure in a case of this
kind suggests that general damages should not be awarded in this class of case.
I do not share that view. There are many areas in which courts have to assess
damages as a broad jury question, just as they have to assess issues of
apportionment in a broad way: see eg in the latter context Thompson v Smiths
Shiprepairers (North Shields) Ltd [1984] 1 QB 405 per Mustill J at 443-4.
In the context of damages the problem was considered by both Lord Mustill and
Lord Lloyd in Ruxley Electronics and Construction Ltd v
Forsyth [1996] AC 344.
65. In that case the claimants claimed damages for breach of a contractual
obligation to build a swimming pool with a diving area 7 feet 6 inches deep.
The defendants had built the pool with a diving area only 6 feet deep. The
claimants said that they were entitled to the cost of rebuilding the pool with
a diving area 7 feet 6 inches deep, whereas the defendants said that they were
only entitled to the difference in the market value of the property, which was
nil. The judge had rejected both approaches and awarded £2,500 general
damages for loss of amenity. This court held that the claimants were entitled
to the cost of repairs. The House of Lords held that they were not. In the
House of Lords neither side challenged the award of general damages, no doubt
for tactical reasons. However, Lord Mustill, Lord Lloyd and Lord Bridge
expressly approved it (and Lord Keith may have done) and as to the difficulty
of assessing damages Lord Mustill said (at page 361):
"The amount may be small, and since it cannot be quantified directly there may
be room for difference of opinion about what it should be. But in several
fields the judges are well accustomed to putting figures to intangibles, and I
see no reason why the imprecision of the exercise should be a barrier, if that
is what fairness demands."
66. Lord Lloyd said much the same at page 374, adopting a statement made by Sir
David Cairns in Atkins Ltd v Scott (1991) 7 Const LR 221, where
he said:
"There may be many circumstances where a judge has nothing but his common sense
to guide him in fixing the quantum of damages, for instance for pain and
suffering, for loss of pleasurable activities or for inconvenience of one kind
or another."
In my opinion much the same applies to the assessment of damages in a case of
this kind.
67. I all the circumstances, I would hold that the judge was right to award
general damages for physical inconvenience and discomfort and that, subject to
quantum, the appeal should be dismissed.
Quantum - Causation
68. Mr Simpson relied upon the following observation of Bingham LJ in Watts
v Morrow (at page 1445):
"If, on learning of the defects which should have been but were not reported, a
purchaser decides, for whatever reason, to retain the house and not move out
and sell, I would question whether any loss he thereafter suffers, at least in
the ordinary case, can be laid at the door of the contract-breaker."
Mr Simpson submitted that that was the case here and that it followed that the
claimant should only be entitled to damages in respect of the period up until
he decided not to leave. He suggested that a reasonable period to take for
this purpose would be a year and that it should be held that after that any
loss was not attributable to the defendant's breach of contract or duty.
69. I am unable to accept that submission. It is conceded by Mr Simpson that
if damages are recoverable in principle the inconvenience was caused by the
breach at least for a time. The question is therefore whether there was at any
time a break in the chain of causation because of the claimant's decision to
stay. In my opinion, on the judge's findings of fact, there was not. The
judge held that it was reasonable for him to stay. Whatever the subjective
reasons which led him to stay, it was in my judgment reasonable for him to stay
and put up with the inconvenience given that he had spent a large amount on
refurbishment and that the cost of selling the house and buying a new one and
the cost of moving would be substantial. I have already indicated my view that
it would have cost significantly more than £10,000. It is not surprising
that in these circumstances it has not been alleged that the claimant should
have mitigated his loss by selling and moving. In my judgment there was no
break in the chain of causation on the facts of this case and the judge was
right so to hold.
Quantum - General
70. It is stressed in Watts v Morrow that the measure of damages
in this class of case should be modest. Mr Simpson correctly observed that
there is no reported case in which a claimant has been awarded anything like
£10,000 for damages of this kind. In these circumstances he submitted
that an award of £10,000 was excessive, especially given that the claimant
only visits the property from time to time and that the noise is only a problem
in the summer when he can be on his terrace or in the garden.
71. In the judgment which Judge LJ gave in this matter in the circumstances
which Stuart-Smith LJ has described, he said this:
"The last question is the figure assessed by the judge. £10,000 reflected
his judgment of Mr Farley, the impact of the noise on him, evidence from others
living locally, his conclusion that the value of the property was undiminished,
and the impact of video and uncontradicted expert evidence about the noise, its
nature and extent, advanced on behalf of Mr Farley. He considered the relevant
circumstances including the time during which the noise had already been
endured and some of the future imponderables.
When I first read the papers my immediate reaction was that this award was a
very high one. However, given the particular features of this unusual case,
and the length of time during which the problems have already been endured, and
will continue, no basis for a justifiable reduction in these damages has been
shown."
I agree. This is indeed a very unusual case. The judge had to do his best to
arrive at a fair figure for compensation over a very much longer period than in
any previous case. In my judgment, in all the circumstances the award was not
excessive.
72. In the result I would hold that the judge was right and that the appeal
should be dismissed.
Ordinary Surveyor's Contract?
73. Mr Spencer submitted in the alternative that, if this was not a case of
physical inconvenience or discomfort, the claimant was entitled to recover on
the ground that this was not an ordinary surveyor's contract of the kind
discussed in Watts v Morrow, but a contract one of the purposes of which
was to provide peace of mind. Mr Simpson correctly submitted that this was not
the way the case was put before the judge, although I agree with Stuart-Smith
LJ that the respondent should be permitted to take the point, which depends
upon the correct view to take of the contract. Mr Simpson also submitted that
this is an ordinary surveyor's contract and not a case in which (as Bingham LJ
put it) the very object of the contract was to provide pleasure or peace of
mind. He relied upon Knott v Bolton (1995) 11 Const LR 315.
74. Unless bound by authority to hold the contrary, I would not hold that it
was right in principle to focus on the contract as a whole. It is surely
sufficient to satisfy the test that the object of a particular part of the
contract is to provide peace of mind. Thus in Branchett v Beaney
[1992] 3 All ER 910 this court considered whether the object of the
covenant of quiet enjoyment in a lease was to provide peace of mind or freedom
from duress. It was held that it was not, but the significance of the case to
my mind is that the court did not ask the question whether the object of the
lease as a whole was to provide peace of mind, but whether the object of the
covenant was to do so. That seems to me to be the correct approach in
principle because it makes much better sense, although I recognise that (as
Stuart-Smith LJ has described in detail) it was rejected in Knott v
Bolton. Unfortunately Branchett v Beaney was not
cited in Knott v Bolton.
75. Nor was the decision of this court in Jackson v Chrysler
Acceptances Ltd [1978] RTR 474, where the claimant buyer of a motor
car included in his claim for damages for breach of a contract of sale a claim
for general damages to reflect the fact that his holiday was spoiled in
circumstances where it had been within the contemplation of the parties that he
would take the car on holiday. Megaw LJ, with whom Shaw and Waller LJJ agreed,
applied ordinary contractual principles to the claim and held that the claimant
was entitled to substantial damages for his spoiled holiday. It was not
suggested that that was wrong because the holiday had only been one of the
objects of the contract. Mr Simpson submitted that that case was wrongly
decided, but in my opinion (apart from being binding on us) it was correct in
principle and shows that in a case of breach of contract it is not necessary to
establish that the whole object of the contract was to provide pleasure or to
ensure peace of mind in order to recover general damages of that kind. Bingham
LJ would in my view have been most unlikely to have said that it was if
Jackson had been cited in Watts v
Morrow.
76. Mr Simpson submitted that the decision in Jackson is
inconsistent with the later decision in Alexander v Rolls Royce Ltd
[1996] RTR 95, where it was held that a claimant was not entitled to
damages for loss of enjoyment in the use of a Rolls Royce, but the court was
not there considering the precise point discussed in Jackson, which in
any event was not cited. I would not hold that Jackson
was wrongly decided, even if it were open to this court to do so. Equally,
in the light of the approach both in that case and in Branchett,
given that neither case was cited in Knott v Bolton, I do not
think that we are bound to hold that the question depends upon the object of
the contract as a whole. I can, however, see that it is at least arguable that
we are and it seems to me that this is an area of the law which is ripe for
consideration by the House of Lords or the Law Commission.
77. I entirely agree with the approach of Judge LJ to this part of the case.
He said:
"The starting point for the alternative route is that Mr Skinner's liability
to Mr Farley is predicated on his failure properly to look into the question
which, as he knew, loomed significantly in his client's mind, aircraft noise as
a possible source of interference with the peace and tranquillity which was an
essential requirement of the home he was thinking of buying. Mr Skinner was
not, of course, guaranteeing that peace, nor warranting that aircraft would not
fly overhead, nor was Mr Farley paying for him to perform that impossibility.
The criticism of Mr Skinner was not that he failed to produce the impossible -
guaranteed freedom from aircraft noise - but that, as a result of his
negligence Mr Farley was misled into buying a home which suffered from the very
defects which he had employed Mr Skinner to investigate and report. This was
not guaranteed peace, but accurate information about the impact of aircraft
noise in the locality. It was not simply part of the general retainer, but
rather a specific and distinct obligation accepted my Mr Skinner for which he
was separately remunerated. In my judgment this was not an "ordinary
surveyor's contract", and it would not be right to approach the question of
damages as if it were.
If Mr Farley's damages were wholly subsumed in his (unsuccessful) claim for the
diminution in value of his property (because potential purchasers do not share
his determination to avoid aircraft noise, or would find the aircraft noise in
the locality less intrusive than he does) the consequence would be that
notwithstanding Mr Skinner's negligence, which left Mr Farley to endure what is
a "confounded nuisance" to him, he suffered either no recoverable loss or no
loss capable of being quantified in monetary terms.
That result seems absurd."
I do not think that it is quite right to say that the defendant was separately
remunerated for his advice on noise, although he would, as I understand it,
have charged separately for any time spent investigating the problem. Subject
to that, I entirely agree with Judge LJ. The reason why it can properly be
held that the object of part of the contract was peace of mind was that the
defendant was specifically asked to give him information about aircraft noise.
78. After setting out the passage from the judgment of Bingham LJ quoted
above, Judge LJ said:
"Applying these principles to the present case, Mr Farley was plainly not
entitled to damages for his understandable irritation and disappointment that
his surveyor had let him down. That does not mean that he cannot be
compensated for the aircraft noise to which his surveyor's negligence exposed
him. Adapting the language used by Bingham LJ, the exceptional feature of the
relationship in this particular case was the specific retainer intended to
provide Mr Farley with accurate information (ranging from comforting assurances
to adequate warnings) in relation to aircraft noise. Without the peace of mind
induced by Mr Skinner' negligence he would not have bought the house, and so
found himself subjected to the "confounded nuisance" which has plagued the
still plagues him. Thus he ended up with the precise inconvenience and lowered
amenity which the special retainer had been designed to avoid.
In my judgment this sounds in damages."
Again I entirely agree. The defendant was expressly asked to investigate the
noise. The claimant's object in asking him to do so was for his peace of mind.
In these circumstances the law should afford the claimant a remedy.
79. Finally I quote one last passage from the judgment of Judge LJ. After
referring to Ruxley and setting out the passages from it which
have been quoted by Stuart-Smith LJ, he said:
"The distinctions between Ruxley Electronics and the present case are
obvious, but like the builder who failed to provide a swimming pool which did
not conform with the householder's requirements, Mr Skinner failed to provided
his client with accurate information which would have led him to avoid the
specific problem which he wished to avoid, the purchase of a home with aircraft
noise at levels which were unacceptable to him. The present damage to Mr
Farley's amenity and enjoyment of his home was directly linked to and a
foreseeable consequence of his surveyor's negligence. In these circumstances
the claim against Mr Skinner is not defeated by the fact that he did not
guarantee that there would be no significant aircraft noise, nor by Mr Farley's
failure to establish any consequent diminution in the value of the property.
If Mr Farley could not recover damages there would indeed, as Lord Mustill
commented, be something wrong with the law."
Yet again, I entirely agree. In particular I agree that there is no relevant
distinction in this regard between a case, like Ruxley, in which the
defendant expressly promised to achieve a result, and the instant case, in
which the defendant promised to use all reasonable care and skill to
investigate the effect of aircraft noise at the property and tell the claimant
80. For these reasons, like Judge LJ, I would hold that if (contrary to my
view) the claimant did not suffer any or any sufficient physical inconvenience
such as to entitle him to general damages for breach of contract, he is
entitled to general damages for breach of contract.
81. I would also hold that he was entitled to recover damages in tort. The
defendant owed the claimant a common law duty to exercise reasonable care to
investigate the effect of aircraft noise at the property and to tell the
claimant. He had assumed the responsibility of doing so and knew that the
claimant would be likely to rely upon what he was told, which indeed he did,
with the result that the claimant bought the property and had to put up with
the noise. I did not understand Mr Simpson to argue that the defendant was not
in breach of a duty of care. In these circumstances I can see no policy reason
why the claimant should not be entitled to recover general damages to
compensate him for having to put up with the noise. On the contrary, it seems
to me that ordinary members of the public would expect him to receive
compensation, provided that it is assessed on a reasonable basis.
82. I recognise that it was held by this court in Verderame v Commercial
Union Assurance Co Plc [1992] BCLC 793 that the policy
considerations should be the same whether the claim is founded in contract or
tort, but it seems to me that that too leads to the conclusion that, since
there is no good policy reason for denying recovery in tort, there is no good
reason for denying recovery in contract. I would therefore hold that, whether
putting up with the aircraft noise is classified as physical inconvenience or
not, the claimant should be compensated by an award of general damages. It
follows that for the reasons which I have tried to give I have reached a
different conclusion from Stuart-Smith and Mummery LJJ, and indeed Hale LJ. I
would dismiss the appeal.
Order: Appeal dismissed with the costs, detailed assessment if
not agreed. £10,750 to be repaid to Defendant with interest and special
account rate. Permission to appeal was refused stay in respect of the detailed
assessment of costs was refused.
(Order does not form part of the approved judgment)
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