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	England and Wales High Court (Technology and Construction Court) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Technology and Construction Court) Decisions >> Republic International Trust Company Ltd v. Fletcher Ramos and Co [2000] EWHC Technology 65 (30th August, 2000) URL: http://www.bailii.org/ew/cases/EWHC/TCC/2000/65.html Cite as: [2000] EWHC Technology 65

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Republic International Trust Company Ltd v. Fletcher Ramos and Co [2000] EWHC Technology 65 (30th August, 2000)

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION

TECHNOLOGY AND CONSTRUCTION COURT

BEFORE HIS HONOUR JUDGE RICHARD HAVERY Q.C.

BETWEEN

REPUBLIC INTERNATIONAL TRUST

COMPANY LIMITED

Claimant

and

FLETCHER RAMOS & CO ( A FIRM )

Defendant

Case number 1998 TCC 584

Date of Trial: 3rd /4th/8th/9th/10th/11th/15th/16th/17th/19th/22nd//May 2000

Date of Judgment: 30th August 2000

Fiona Sinclair for the Claimant: ( Solicitors: Reynolds Porter Chamberlain )

Sarah Hannaford for the Defendant ( Solicitors: Park Nelson )

JUDGMENT

CONTENTS

REPUBLIC INTERNATIONAL TRUST COMPANY LIMITED

v.

FLETCHER RAMOS & CO.

JUDGEMENT

Introduction

1. This is a claim for damages for negligence against a firm of building surveyors arising out of a contract to survey and report on the condition of a house known as Stretton Hall, in Cheshire. Stretton Hall has Listed Grade 2* status. It was built probably about 1763. The survey was carried out principally by Mr. George Tytherleigh, with a contribution by his partner Mr. Stephen Fletcher. Mr. Tytherleigh signed the report. The survey was commissioned by the claimants with a view to purchase of the property by the first claimant, a trust company incorporated in the Republic of Ireland. The first claimant holds property that is the subject of a family trust, the MJ Taylor settlement. The beneficiaries of the settlement are Mr. Michael Taylor and his minor children. The second and third claimants are trustees of the trust. The survey was carried out in October 1993, and the report was dated 20^th October 1993. The report valued the house (in 11 acres) at £1.25 million.

2. After the claimants had received the report, they bought the house. Mr. Michael Taylor and his family moved into it. In 1995 the first claimant instructed contractors to carry out works of refurbishment to the house. The contractors were Symm & Company Limited ("Symm"). A short time after they started the works, they discovered dry rot in the house. The house turned out to be riddled with dry rot. The report mentioned dry rot, but the claimants claim that the report gave inadequate warning of dry rot. They claim that they would not have bought the house had the report contained an adequate warning.

The Report

3. The central part of the house contains three storeys. There are two wings, each two storeys high. They are here called the left-hand wing and the right-hand wing, in accordance with their locations as viewed by one standing outside the house and facing its front. The drawing room at the back of the left-hand wing occupies both storeys. At the front of the central part of the house, there is a bay which has a flat roof.

4. The report consists of 59 pages of typescript, together with appendices. I quote from it as follows.

5. With reference to the chimney stacks, the report says

. . . . . there is some modest evidence of shrinkage cracking to the bedding and flaunching around the various pots. This will permit rainwater ingress and ideally, modest repair pointing should be undertaken.

The section on the main roof mentions

. . . . . lead lined internal angle valley gutters, lead lined horizontal inner valley gutters and lead lined horizontal perimeter outer parapet gutters. In addition there is a section of flat roof extending over the front elevation bay projection and this roof is constructed flat and surfaced in lead. . . . .

That section also says

The only possible criticism of the various leadwork details is that a number of the fixing/holding straps to the various ridges and hips have been wind uplifted and accordingly these should be replaced/refixed.

General condition of the various dormer windows noted to be reasonably satisfactory although modest evidence of timber rot decay has affected the corner posts/bottom rails in one or two instances and therefore, some repair attention will be necessary.

The report continues:

PARAPET WALLS

Parapet walls to the main roof are constructed 9"/13½" thickness common brickwork and the top of the wall is surfaced with sandstone copings. General condition noted to be satisfactory although it is evident that there is some open joint pointing to the sandstone copings and consequently, some modest pointing attention is appropriate.

RAINWATER GUTTERS

As aforementioned the main roof is provided with traditional lead lined parapet gutters.. . . . . Whilst general condition of gutters noted to be satisfactory it was evident that there is varied surface water retention in some of the guttering and consequently it is imperative that all outlets are clear and free from obstruction at all times.

RAINWATER DOWNPIPES

Rainwater downpipes comprise a combination of original cast iron hopper heads with an apparent combination of original lead and cast iron downpipes and including also, large cast iron junctions and fixing plates between the lead pipe lengths. Whilst the general condition appeared to be reasonably satisfactory there was, nevertheless, substantial evidence of splitting/cracking damage having occurred to the lower section downpipes on the front elevation and adjacent to the intersection of the main building with the lefthand side extension. This pipework has been tape repaired in at least three places and commencing adjacent to the lower string course on level line with the ground floor window sills. The repairs do not appear to be fu1ly effective and at time of inspection, there was varied evidence of rainwater cascading on the outer side of the pipework. This is a potential serious condition as evidenced by the extensive algae discoloration on the outer elevation brickwork and lower sandstone plinth with associated internal evidence that will be referred to later in the report. All pipework in this condition must be replaced as a matter of urgency.

In relation to window frames, the report says

As these are the original windows then there is some not untypical evidence of weathering and modest timber rot decay although, in general terms, this is more of a minimal nature although, needless to say, on-going maintenance attention will have to be anticipated.

The report continues:

CEILINGS

. . . . . there was minor cracking and old damp patch staining evident to the dining room ceiling and this appeared to be located underneath the bathroom en suite appointment off the principal first floor bedroom. Under these circumstances it is more than likely that such evidence is attributed to water leakage from the bathroom appointments. This evidence did not appear to be recent.

INTERNAL

The general impression of the standards of internal decorations in the principal circulation areas and individual rooms is one of good quality standard and possibly, sympathy with the period. Highlighted items are the paintwork gilding to the capitals in the entrance hall and dentil frieze details in the dining room. In addition some wall surfaces are covered in traditional stretched fabric and with some sheen finished wallpapering. Nevertheless and even in these rooms, there is some scope for further improvement, i.e. water stains still evident to the ceiling underside in the dining room.

MAIN SECOND FLOOR ROOF SPACE

. . . . . Quite clearly this is the original roof construction, despite later roof recovering, and has been well executed with construction timbers comprising good quality pine, pitch pine and, to trusses, oak. In addition the truss members are connected with traditional timber dowel pegs, cast iron straps with cast iron bolt connections. General condition of this construction noted to be satisfactory.

LEAKS

There was no apparent evidence of any leakage through the roof slopes, ridge, hip, valley or chimney stack intersections. Insofar as the valleys are concerned it is noted that later valley boards have been introduced.

ROOF SPACE UNDER FRONT BAY FLAT ROOF                               LEAKS

Whilst there is no apparent evidence of any current leakage, it was noted that there is old water staining to the underside of the flat roof boarding and adjacent flat roof joists. Doubtless this evidence is associated with conditions prior to roof recovering.

With regard to the basement, the report said this:

DAMPNESS

There is varied evidence of dampness penetration in the various cellar rooms although, quite frankly, this condition would be reasonably expected unless any of the walls had been later tanked - and this has not been carried out except (possibly) in the billiard room. The essence with dampness in basements is that the condition should be, at least, contained so as to ensure that no associated problems - and possibly more serious - ensue. In particular this comment refers to the possibility of timber rot decay occurring in the timber flooring in the ironing room.

On the general condition of the house, the report continued:

GENERAL CONDITION

STRUCTURE

The main structural condition of this property was noted to be very sound and doubtless an obvious reflection of its substantial main structural content in terms of walls and roof.

DAMPNESS

Damp meter readings, with an electronic damp/moisture meter, were taken in all external and internal walls, floors, skirting boards and chimney breasts and in particular, including the basement areas and where, it would be reasonably expected, that dampness of a general rising nature would be expected to be present.

Typical of any property of this type and age, the existence of a basement with enclosed - at front - lower externally - dampness of the more common 'rising' nature would be unlikely to have affected the ground floor accommodation of the building and as any basement does act in the capacity of lowering the adjacent water table. Nevertheless, both rising dampness and - from the external walls - penetrating dampness in any basement would be to some extent anticipated unless the property had been later tanked within that accommodation although this was not evident. As a consequence it was of little surprise that some dampness was evident to both the front and rear external basement walls although by normal standards this was considerably less than might have reasonably been anticipated. The overall atmosphere in the basement was both warm and dry and at a level not generally associated with cellar accommodation. Nevertheless if total eradication of dampness is required then some further work will be necessary. On the other hand, and as it is a basement, then some element of dampness that can be 'contained ' may well be acceptable. However, such levels should not extend to anything likely to affect parts of the building fabric, ie the timber framed flooring in the laundry room and the later lined walling in the billiard room.

Obvious evidence associated with penetrating dampness was noted in the centre store room being apparent in the left-hand side splay return wall and also a section of the left-hand side filled in recess walling.

What was equally apparent, and somewhat more disturbing, was the indication of dampness discoloration affecting the upper level right-hand side internal wall in the next room section together with the adjacent ceiling brickwork vaulting. Obviously this evidence could not be related to either simple rising dampness or external wall penetrating dampness. Further associated investigation clearly revealed that this problem was directly related to the external evidence aforementioned and affecting the left-hand side short return length section sandstone plinth (and brickwork above) and between the junction of the main three storey building and the left-hand side two storey building. This evidence was identified as the result of rainwater downpipe leakage - ongoing - and from general appearance somewhat long standing.

A related check at ground floor level and in the understairs wc highlighted high level damp meter reading levels in above skirting board wall plaster and high levels, also, in the adjacent skirting boarding and timber floorboarding. Within this understairs room there is only a small section of boarded flooring.

The source of the dampness penetration can be - and must be - eradicated and quite clearly this will require simply replacing the defective rainwater downpipes. However, there are other possible further side effects that must also be investigated and these are referred to below.

Investigations at upper floor levels revealed evidence of dried out damp patches to the ceiling over the dining room - this has already been identified as being located under the en-suite bathroom off the principal bedroom and/or the adjacent dressing room if the faulty pipework extended from the vanity unit.

A damp patch was identified in the second floor attic games room – and being adjacent to the left-hand side of the rear dormer window intersection - although a test with a damp meter indicated the condition to be 'dry' and externally, there was no evidence to suggest any defects in the leadwork details between the side of this dormer window and the roof slating. Nevertheless, and given occasions of particular inclement weather with high winds and driving rain - it may not be uncommon for isolated short term weather penetration being unavoidable.

DRY ROT

Physical evidence of dry rot is not noted from the survey inspection but nevertheless, attention was alerted to the serious possibility that such problems could/might arise as a result of both water penetration and dampness. In particular the evidence of dampness resultant from the front elevation leaking rainwater downpipe and which has saturated over some period of time the main wall brickwork and masonry could have created conditions suitable for an outbreak of this particular problem in areas, currently, unseen. This possibility was further highlighted by the internal high damp meter readings in the wallplaster and adjacent timbers in the understairs cloakroom. This will require further investigation by means of positive exposure, ie removal of board timbers in order to expose and appraise the conditions underneath, in both the understairs cloakroom and the adjoining study floors. Even if no positive evidence is noted it will nevertheless be necessary to treat the adjoining brickwork with eradication treatment so as to ensure that the problem might not later arise.

The problem with dry rot decay is that once an outbreak has occurred and flourished then it is possible for it to spread into other parts of the property - not affected by dampness - through both brickwork masonry and wallplaster. Such work can only be carried out by a reliable specialist as in the case of aforementioned woodworm infestation treatment.

The other area of concern, and that will require investigation, is in the basement and in particular, the boarded flooring in the ironing room - adjacent to the staircase flight from the breakfast kitchen and where slight softness in timber floorboarding was noted. In addition the evidence of dampness affecting the side and front external walls in the billiard room - and behind the wall panelling - should also be investigated by removal of panels in order to expose and diagnose the general conditions.

Slight evidence was also noted in the drawing room of slight wall/ceiling plaster imperfection adjacent to the internal wall adjoining the hall and being in a position that is, over the drawing room, roofed over and with there being horizontal guttering adjacent to the extended main building side external wall. Consequently this evidence could be associated with previous dampness penetration and should also be investigated.

Further enquiries may also indicate that previous work to the property has been associated with earlier evidence of dry rot and consequently this should also be verified.

The outbreak of dry rot in any property of this age and size would always be expensive to eradicate/eliminate.

WET ROT

There was no apparent evidence internally, of any wet rot decay in timbers apart from the possibility that the softness noted in the floorboarding in the basement ironing room and in any timbers behind the wall boarding in the billiard room .[Sic]. . . . . It was noted to have affected a number of lower section window frames and window sills in a number of basement rooms, window sills at upper floor levels and dormer window frames in a number of the second floor attic rooms. Any such identified evidence of timber rot decay should be repaired - items such as this can normally be dealt with in conjunction with attention to exterior paintwork with proprietary treatments to sterilize/preserve such timber rather than, necessarily, cutting out and splice repairing. Obviously treatment will depend upon individual circumstances.

RAINWATER GOODS

A particular defective section of rainwater downpipe has already been identified -original lead pipe - with numerous basic "taped" repairs. This must also raise the question of any other similar constructed downpipes that may give cause for some concern. Possible tell-tale signs in this connection is any evidence of algae staining/open jointed brickwork to the rear, adjacent to such fixed pipes. Such evidence was apparent on the rear elevation - both short length side returns from the main centre building section did display such possible evidence. As downpipes are principally, but not all, traditional lead, then the possibility of fracture splits cannot be ignored although, generally speaking, the lead material does have an improved longevity over cast iron. Nowadays it is possible to obtain facsimile reproductions of these downpipe (and other rainwater goods) profiles in reinforced glass fibre material. Such replacement may well be worthy of consideration and should certainly apply to the definitely defective pipework.

Under the heading "General Interior", the report continued:

CLOAKROOM

Evidence of dampness noted in above skirting board wall plaster in upper section together with similar level readings in adjacent skirting boards and floorboards.

BASEMENT:

LAUNDRY ROOM

There is obvious evidence of damp penetration adjacent to the rear external wall including the junction of the cast iron soil pipe.

LARGE CELLAR

Extensive evidence of dampness penetration noted through the ceiling vaulting and adjacent side external and internal walls. It is this evidence of dampness penetration that suggests long term rainwater downpipe leakage/wall fabric saturation and will require further investigation.

The discussion at the end of the report contained the following observations:

D I S C U S S I 0 N

SUMMARY

Most certainly this is a property of some resplendent grandeur both externally and internally and has generally been extremely well maintained and improved by the present vendor.

Whilst it is considered that there would be little point in simply reiterating the finer points of this property it is nevertheless appropriate to highlight those items revealed following the survey inspection and that will require further investigation and/or certain expenditure.

. . . . .

Although there is varied evidence of dampness in the basement areas, always to be expected, it is the evidence of penetrating dampness resultant from the leaking rainwater downpipe that does give some cause for concern regarding the possible long term problems that could arise from any outbreak of dry rot. Obviously the source of the dampness can be easily remedied - the vendor already claims this to be the case - but this is little more than a temporary (and untidy) repair - and this could be in the form of replacement materials either original in construction or modern simulated.

. . . . .

 

The general quality and standard of the repairs/replacement to the main roof coverings is to be commended but minor repairs should also be considered, ie possible replacing occasional split slate and refixing of lead straps.

There is modest evidence of open joints to the sandstone copings at main roof level together with open joints in the adjacent chimney stacks brickwork and also adjacent to the lead flashings between the chimney stacks and the roof coverings. This will require repair attention.

A number of windows are affected by some evidence of wet rot decay - principally window sills - and these should receive repair attention together with similar defects to some of the roof intersection dormer windows.

RECOMMENDATIONS

Following the survey inspection and report general comments and recommendations, it is considered that there is no reason why you should not proceed with purchase of this property provided it does fulfil your personal requirements, you are mindful of the items that will require immediate/early attention and in view of the size and age of the property, ongoing maintenance attention will have to be anticipated as in any period property, but particularly one of such generous size.

Nevertheless this is a quite superb building and certainly appears to combine the attractions of a country house and yet be of reasonable sized maintainable proportions. Nevertheless, these points are for one of individual choice.

In proceeding with purchase it is nevertheless recommended that the following items be dealt with:-

. . . . .

We are concerned about the penetrating dampness that has affected the part of the property adjacent to the defective rainwater downpipe. Simply removing the source of leakage and hopefully, allowing the wall masonry to dry out naturally will be quite inadequate. This condition does raise potential hazards as aforementioned, and consequently, it is imperative that reliable specialist investigations be undertaken. Principally, this should involve exposing the timbers within near vicinity to the dampness in order to establish their condition and regardless of such, undertake preventative eradication treatment. In essence, this would be the timbers in the understairs cloaks and the adjoining study. In addition the suspected damp timbers in the floor of the basement ironing room and dado wall linings in the basement billiard room should also be subjected to such exposure investigation. As aforementioned, an outbreak of dry rot in any part of the property could spread regardless of the condition of those timbers that could be subsequently affected.

. . . . .

General repairs of a lesser nature should be undertaken to brickwork, parapet walling and any leadwork to the main roof together with pointing attention around the chimney pots flaunching.

General repairs to evidence of wet rot decay affecting the various frames - and dormer windows - should be undertaken but possibly, in conjunction with paintwork redecorations.

It is appreciated that guidance as to costs in the aforementioned matters would be helpful but this would be somewhat difficult at this stage as there must be certain "unknowns" regarding the possible side effects of long term water/dampness penetration into the building fabric. In addition maintenance on any property of this type will always tend to be expensive.

The report continued:

C 0 N D I T I 0 N S

OBLIGATORY NOTE

This Report provides a general guide as to the state of repair. No exposure work whatsoever has been carried out, the foundations have not been inspected, nor the chimney stacks other than from the ground. Plasterwork has not been tested, no underfloor inspections made and flooring where concealed by coverings was not inspected. Flues were not examined.

We have not inspected any parts of the property which are covered, unexposed or inaccessible. We are therefore unable to report that such parts are free from rot, woodbeetle or other defects.

. . . . .

GENERAL ITEMS FOR THE PURCHASER'S SOLICITORS

. . . . .

D. Obtain copies of any original survey reports, certificates of guarantee and/or insurance policies in relation to any specialist treatments undertaken to the property, ie woodworm treatment.

6. The first question is whether the report gave due warning of the risk of existing massive dry rot. The second question is whether, if not, the failure to give such warning arose out of the defendant's negligence. At this point I consider the first question. No complaint is made about the adequacy of the warning of damp in the basement or of damp arising from the defective downpipe.

7. The report contained warnings of local decay caused by timber rot, for example decay of the dormer windows and other windows. It gave warning of decay in the basement. It gave urgent advice as to repair of rainwater downpipes. It gave various warnings of local dampness, for example in the dining room ceiling, in the drawing room wall and ceiling (slight imperfection, requiring investigation), in the second floor attic games room and in the cloakroom. It mentioned past damp on the underside of the boarding of the flat roof of the bay. It gave warnings of penetration of dampness, both rising and horizontal, in the basement. It advised that that condition should be at least contained, to avoid the occurrence of possibly more serious problems, specifically in the ironing room. But it said that dampness in the basement was to be expected. Somewhat more disturbing was the evidence of dampness arising from the defective downpipe. That source of damp had to be eradicated, which simply required replacement of the defective downpipes. But it could have given rise to dry rot, a possibility highlighted by high damp meter readings in the cloakroom. That would require further investigation by removal of board timbers. It was not suggested that such investigation should be carried out before purchase. That would have required the consent of the seller, which was obviously unlikely to be obtainable. The basement was described as the other area of concern (emphasis added).

8. Thus the body of the report, before the discussion section, gave some warning of dry rot, but no indication that the house might be riddled with a massive attack. There were warnings of damp conditions, but nothing to give a purchaser who was willing to spend some money on the property (and any purchaser of such a property would be in that category) cause for anxiety about buying it. That that was the tenor of the report is borne out by the discussion section, which expresses "some cause for concern regarding the possible long term problems that could arise from any outbreak of dry rot". That does not in my judgement imply, and certainly does not emphasize the risk of, an existing outbreak of dry rot. The same applies to the recommendation that there was no reason why the client should not proceed with purchase of the property. The recommendation that reliable specialist investigations be undertaken is preceded by the words "in proceeding with purchase" and is clearly intended to be complied with after purchase.

9. I conclude that the report contains no adequate warning of a serious risk of existing massive dry rot in the building, such as to give the client reason to doubt whether he should buy it. The body of the report, the summary and the recommendations were all to the same effect.

Surveyor's duties in relation to dry rot

10. Mr. Ronald Wilde, FRICS, FCIArb., FAE, AIWSc., gave expert evidence on behalf of the claimants in two capacities: as a building surveyor and as an expert in the field of dampness and timber decay in buildings. Mr. Kenneth Hawley, FRICS, gave expert evidence as a building surveyor on behalf of the defendants. Those experts helpfully agreed a number of propositions set out in numbered paragraphs, from which I quote as follows:

3.1 In relation to matters concerning dry rot of which surveyors generally should be aware when surveying and reporting on existing buildings, the surveyor should consider and report on the direct evidence of an attack by the dry rot fungus. We consider that this will be one or more of the following:

3.1.1 The presence of the mycelium of the fungus.

3.1.2 The presence of a sporophore (fruiting body) of the fungus which is very distinctive, if seen.

3.1.3 The presence of the spore dust (which is very distinctive if present in large quantities).

3.1.4 The typical cracking and cubing of the timber, resulting in loss of substance.

3.1.5 A lack of resistance when probed with a sharp pointed instrument.

3.1.6.Waviness on the surface of some infested timber.

3.1.7 A characteristic smell (but only detectable usually after opening up).

4.1 A surveyor also has to consider any indirect evidence which may indicate certain risks that exist but which, because of the restrictions and limitations of the survey, could not be resolved. The risk that a surveyor has to address can be one or more of the following:

4.1.1. That there is active dry rot in concealed timber.

4.1.2. That there is dormant dry rot in such timber which could be revived if made wet.

4.1.3. That there is dead dry rot which may have caused loss of strength of structural timbers.

4.1.4. That the condition of the fabric of the building is such that could lead to an outbreak of dry rot in the future.

5.1 Some of the signs which a surveyor will look for in seeking indirect evidence are:

5.1.1. Evidence of past dampness which may indicate the possibility of a concealed dormant or dead attack.

5.1.2. Signs of distress or distortion in the structure indicating a possible failure of timber structural members because of a past or present dry rot attack.

5.1.3. Signs of past dry rot repairs.

5.1.4. Evidence of disrepair which could be allowing the fabric of the building to become wet.

11. Mr. Tytherleigh was questioned about those propositions and he agreed with all of them. He also agreed that so far as signs of direct evidence of dry rot are concerned, unless a surveyor can positively diagnose that something he has found is not dry rot, the safe course is to advise on the basis that it is. Mr. Wilde and Mr. Hawley further agreed as follows:

6.1.	A surveyor, when making a building survey for a prospective purchaser, needs to advise the client of the presence and/or risk of fungal decay in the building. In doing so the matters which the surveyor will consider are:
	6.1.1.	All direct evidence of the presence of dry rot needs to be recorded.
	6.1.2.	The need for further investigations necessary to confirm the extent of defects or possible defects in the building should be identified.
	6.1.3.	A surveyor should identify all areas of potential risk in a property and report all visible evidence to his client with advice on the limitations of his inspection and recommendations for further investigations where appropriate.
	6.1.4.	It is the responsibility of a surveyor to use language in his report that demonstrates the seriousness or potential risk of defects.
	6.1.5.	Where a surveyor finds the need for further investigations to be carried out this should be stated in unequivocal terms.

The survey

12. Mr. Tytherleigh first inspected the property on 8^th October 1993. The bulk of that inspection was of the exterior of the building. He wrote in his witness statement that his immediate reaction to the interior of Stretton Hall was that it was very impressive. It looked very grand, furnished with what he believed to be eighteenth century furniture. There were no signs of any work having recently been undertaken or completed. It was a "lived in" house. It did not look like a property which had been neglected in any way, but one which had had a lot of money spent on it. His second inspection took place on 12^th October 1993. During that inspection he dealt with the interior of the building on a room by room basis, followed by the roof spaces. He had no access to the roof space of the left wing; his access to the roof space of the right wing was by peering through a hatch opening which afforded room only for his head and shoulders. He inspected the roof space over the central part of the house wherever he was able to go. There was not access to all the roof spaces. Where he was able to gain access to the roof spaces he did so by crawling through hatches from the second floor. In particular, he inspected the roof space above the front bay.

The bressummer

13. The principal criticism that the defendants make of Mr. Tytherleigh's survey is his admitted failure to notice the condition of a bressummer over the front bay and to deduce that it was evidence of dry rot.

14. Mr. Michael Taylor called in Mr. Neil Cummings, a chartered building surveyor, in May 1995 to assist in relation to the dry rot problem. Mr. Cummings gave evidence before me which included descriptions of what he saw when he inspected Stretton Hall in May 1995. It was common ground that there was no material deterioration in the state of the timbers between 1993 and 1995. Mr. Cummings described the state of the timbers in the roof space of the bay. It should be borne in mind that he had better access to that space than had Mr. Tytherleigh in 1993, since the plasterboard wall in the attic had been removed in 1995. He said in his witness statement:

At the time of my inspection the internal stud wall to the flat roof void had been removed but I understood from the builder that a hatch was present at the time of the survey and that this void was easily accessible from the second floor through a hatch opening outwards laterally. . . . . Here I saw by the light of a torch crumbling dry rot infested timbers with the characteristic cubed shape. When I disturbed the timbers I saw mycelium internally in the timbers.

15. Mr. Cummings gave evidence that on his first visit he saw the bressummer in situ. On his second visit it had been removed and left for inspection near the front door. Having regard to his almost contemporaneous notes, which are dated, though not necessarily correctly, I am not satisfied that Mr. Cummings's recollection that he saw the bressummer in situ is correct. Nevertheless, he saw the beam, and it showed signs of past dry rot attack. I have seen photographs of it in situ and it is clear that it had been repaired by splicing on a new piece.

16. In 1993, the hatch leading into the space under the flat roof of the bay was about two feet high. Mr. Tytherleigh crawled into the space carrying a torch, a damp meter and a bradawl. He was not able to stand up in the space, which was about three feet six inches high. He moved around on his hands and knees. There was nothing to obstruct his vision of the brickwork or of the timbers in the roof space. He saw old water staining to the underside of the flat roof boarding and adjacent flat roof joists. He checked it with the damp meter and found it to be dry. He concluded that the staining was not evidence that dry rot existed there. The bressummer was in line with the front elevation of the building behind the bay, and its ends were embedded in the masonry of the wall of the bay. The following exchange took place in the course of Mr. Tytherleigh's cross-examination by Miss Sinclair, counsel for the claimants:

Q. We are in the same area. This then was a very important timber; was it not?

A. This was a bressummer beam.

Q. This was the only timber that you could see at the point at which it bore on the masonry and was embedded in the masonry.

A. Yes.

Q. You would want to examine it with the utmost care, would you not?

A. I did.

Q. We can see from photograph 25, page 108, that at the other end -- this is looking from inside the void at the other end of the beam -- the beam had been repaired. Do you agree?

A. Yes.

Q. The end of the original beam, which we see on the left-hand side of the photograph, has been cut off, just past the bolt, and the new section has been affixed at the wall end; do you agree?

A. Yes.

Miss Sinclair then drew Mr. Tytherleigh's attention to a white stain on the original beam near the point of repair and put it to him (in accordance with the evidence of Mr. Wilde) that that was a mycelium stain. The exchange continued:

Q. It is a mycelium stain; is it not?

A. I do not know.

Q. The only plausible explanation for that repair was a past timber decay episode at the end of that beam; was it not?

A. I would say "yes" to that. Yes.

Q. The only possible explanation was an earlier dry rot attack where the timber was embedded in the masonry.

A. Or wet rot.

Q. What it meant was that the timber had been wet at that end because the wall had become wet; do you agree?

A. Yes.

. . . . . .

Q. One cannot exclude, can one, the possibility that this repair was a dry rot repair?

A. You cannot exclude it.

. . . . .

Q. The fact is, is it not, that you did not see the repair to the end of the bressummer beam when you inspected that roof void in 1993?

A. I have admitted that.

Q. You have. The reason that you did not see it is because you were not in fact alive to the importance of that beam.

A. I disagree with that.

17. In paragraph 12 of his first supplemental witness statement Mr. Tytherleigh said, with regard to the bressummer:

At the time of the original inspection this timber was visually sound and my suspicions were not alerted to any problems in the form of penetrating dampness, odour etc. nor was it vulnerable to "easy" penetration with a bradawl – although it could be argued that this would depend on where the bradawl was inserted.

Mr. Tytherleigh's reference to the original inspection is a reference to the inspection he carried out in 1993, in contradistinction to an inspection he carried out in April 1995, after the dry rot had been discovered. Miss Sinclair cross-examined Mr. Tytherleigh about paragraph 12:

MS SINCLAIR: You say there, Mr Tytherleigh, that this beam, although you do not say in your statements where you carried out the test, this beam was not vulnerable to easy penetration with a bradawl?

A. That is right.

Q. Although it could be argued that this would depend on where the bradawl was inserted by which you mean, do you not, that if it had been inserted at the masonry end of the beam it is likely that the bradawl would have sunk into the timber?

A. No, by that I was referring to inserting the bradawl on the other side of the beam, i.e. the side nearest to the accommodation as opposed to the side facing into the roof void.

Q. Mr Tytherleigh, it is accepted that that side of the beam was never open to your inspection. You have never been criticised, have you --

A. No.

Q. -- for not inspecting that side of the beam?

A. Indeed, that is right.

Q. What you are doing in this witness statement is answering the criticism that you should have inspected this side of the beam?

A. Yes, but when I carried out my subsequent inspection it was all open to me to inspect. I was able to draw the conclusion from the side that was unavoidably not accessible at the time to try and establish in my own mind what might or might not have been evident on the side that I did inspect.

Q. In paragraph 12 you are talking about your original inspection, are you not; that is how you begin the paragraph?

A. That is where I am referring to the beam on the side that I did have access to.

Q. Yes. On that side you accept that had the bradawl been inserted in a different place, it is likely that it would have sunk into the timber?

A. There is a possibility.

Q. There was only one sensible place to use your bradawl, had you inspected this end of the beam, Mr Tytherleigh, and that was where it abutted the masonry; do you agree?

A. I do, yes.

Q. That is not, however, where you carried out the test. Is that not right?

A. No, I disagree with that. You insert the bradawl within close proximity of the wall masonry.

Q. If you had done as you say, and used your bradawl on this end of the beam, Mr Tytherleigh, you could not have failed, could you, to notice the repair which is just to the left of your head; do you agree?

A. I do not agree. I am holding a torch in my left hand, the bradawl in my right hand and I am pointing it towards the intersection of the beam and the masonry. I am in a close-up position so the light would not shine on the section where the repair was. It all looks quite clear and easy to see in the photograph but in the circumstances under which I took the inspection at the time I would not accept that it was quite so straightforward.

Q. Presumably in order to find your way to the other end of the void using your torch you followed the line of the beam, is that not right?

A. When you are in a void of this nature the tendency is to crawl. Consequently, for most of the time the hand which holds the torch rests on the ground, or the torch rests on the ground and you use that as a form of leverage to move yourself around. So the tendency is for the torch in most cases to be at a lower level than at a higher level.

Q. In this void, as we know, you spotted water staining on the roof boards and spars?

A. Yes.

Q. So in this case we know that you shone your torch upwards?

A. I did indeed shine my torch upwards.

Q. Mr Tytherleigh, I do not think we are going to get any further in this direction. You accept that this section of brickwork inside the void was the only area of the internal parapet wall which was available for your inspection in 1993, do you not?

A. Yes.

Q. Given your general concern about parapet walls and dry rot, examination of this wall was an important part of your investigation, was it not?

A. Yes.

Q. You say in your witness statement that you took a damp meter reading on this wall?

A. Yes.

Q. There is no mention of a reading having been taken in this area in either your inspection notes or in your report, are you aware of that?

A. I do not refer all the time to locations where I receive a negative reading or a nil reading.

Q. But a negative reading in this area was particularly important to you, was it not, because you had a particular concern about parapet walls and dry rot?

A. Yes.

Q. Nonetheless, you did not think that reading worth recording?

A. I would recall dictating a report -- a survey report is a combination of notes and memory. I can recall very clearly any property I go to very, very meticulously when I am dictating a report.

Q. Quite clearly, the single reading which you took on this expanse of brickwork was not taken near the end of the beam which we see in photograph 25, was it?

A. I cannot be certain. I cannot be certain whether it was one reading, two readings or three readings that I took on the masonry.

Q. Come on, Mr Tytherleigh, there is no suggestion whatsoever, is there -- you have never suggested that you took more than a single reading in that void, is that not right?

A. I do not think it is right.

Q. I shall be corrected if there are references that I have not found. In your witness statement, for the very first time you suggest that one damp meter reading was taken in that void on the masonry?

A. That might or might not be a correct statement.

Q. You, I expect, use a damp meter which relies upon the conductance of electricity to produce a reading?

A. That is right. The normal surveyors' tool, a portable damp meter.

. . . . .

Q. Furthermore, your damp meter reading would tell you something, if it told you anything at all, only about the surface of the masonry in this void; is that not right?

A. Yes.

Q. It does not tell you anything about whether the core of the wall is wet?

A. No.

Q. So you accept, do you not, that your reading could not tell you that the wall was not wet where the bressummer was embedded in it?

A. No, it could not.

18. I am satisfied that Mr. Tytherleigh ought to have inserted the bradawl into the timber close to the wall, but did not do so. I am not satisfied that if he had done so he would necessarily have found soft timber such as to indicate that the wood was rotten. I am satisfied, however, that in spite of the limitations of space, no surveyor acting carefully could have failed to notice that the bressummer had been repaired by cutting off the end and splicing a new timber to it. He would shine his torch on to the beam and thereby reveal the repair. Mr. Tytherleigh said in evidence that the beam of his torch must have missed the repair; he could not recall whether he shone the torch along the length of the beam. He said:

All I can say is I could not have done at that particular part.

I am not satisfied that a careful surveyor, shining his torch along the beam, would necessarily have noticed the traces of mycelium.

19. Miss Sinclair continued her cross-examination of Mr. Tytherleigh:

MS SINCLAIR: If you had seen this repair to the bressummer beam that we see on photograph 25, Mr Tytherleigh, you would have appreciated, would you not, that new timber had been fixed to old timber with no barrier between them; do you agree?

A. Yes.

Q. The new timber had been set into the masonry without any barrier between the brickwork and the timber; do you agree?

A. You can see from the photograph, yes.

. . . . .

Q. If the wall at this point became wet again, the new timber section would become wet again, would it not?

A. Yes.

Q. There appears to be, I think we discussed this yesterday, a tar oil derivative such as creosote brushed onto the end on the new beam, do you agree?

A. Yes.

Q. That is not a particularly effective fungicide, is it?

A. Not, it depends on the depth of penetration.

Q. Its fungicidal properties are some of the well-known properties of tar oil derivatives such as creosote, do you agree?

A. That is right, yes.

Q. So it would appear, would it not, had you seen this that whoever carried out this work was making an attempt to protect the end of the new beam from fungal attack?

A. Yes.

Q. But it is not a particularly good quality repair, is it, Mr Tytherleigh?

A. No.

Q. That is something that you would have recognized, had you seen it?

A. Yes.

Q. Had you seen this, seen the poor repair, and also seen defects in the parapet wall and leadwork, which we established yesterday you did not see because you did not look at the leadwork, you would have realized, would you not, just how this timber had become wet in the past and required repair?

A. Wet in the past, yes, but not wet at the time.

Q. Wet in the past. The reason for the repair had been water penetration to the end of the original bressummer, do you agree?

A. Yes.

Q. Fungal attack, attack by rot; yes, do you agree?

A. Of a species unidentified, yes.

Q. But your concern of course was dry rot, was it not?

A. Yes.

Q. The repair which had been carried out was a poor repair, unlikely to be particularly effective; do you agree?

A. Yes.

Q. Had you found defects in the leadwork above, then ex hypothesi those defects would not have been repaired as part of the works which Mr Broome had had carried out, something you would have been aware of had you gone back up to the roof and looked around; do you agree?

A. Yes.

Q. What that came down to was this, was it not, that there had been a past problem in this property with timber decay caused by water penetration from roof level but that it had been poorly repaired and the defects at roof level remained in place?

A. I do not agree because there was no evidence of dampness.

Q. Had you got to that stage in your reasoning and seen the condition of this beam you would have concluded, would you not, or should have, that other structural timbers embedded in masonry at this level were also at risk; do you agree?

A. Yes.

Q. As you returned to your inspection of the interior of the building, you would have been on the lookout for signs of timber decay elsewhere in the property?

A. Yes.

Q. So when you went back on 12th October to inspect the interior, that is one of the things which would have been uppermost in your mind?

A. Yes.

Q. You would have been looking for signs of timber rot; yes?

A. Yes.

Q. Including dry rot?

A. Including dry rot.

20. Mr. Hawley gave this evidence in answer to questions from Miss Sinclair:

Q. You agree with me, I think, that Mr Tytherleigh ought to have seen this repair when he was inspecting the beam?

A. Yes.

Q. Do you also agree with me that he ought to have concluded that this repair was probably due to an earlier attack of timber rot in this beam?

A. I think he would have drawn that conclusion, yes.

Q. When I say timber rot, of course he could not exclude dry rot, could he?

A. No.

Mr. Hawley was questioned by Miss Sinclair about the duties of a surveyor in those circumstances:

Q. If you find a repair, as a building surveyor, which you conclude is probably or possibly a repair carried out in response to a dry rot problem, I suggest there are two considerations that you ought to bear in mind. Can I tell you what they are in turn and see whether you agree that this is something that a building surveyor should have in mind in that situation. First of all, this is a dry rot repair. That means there has been water ingress in this part of the property in the past; do you agree?

A. Yes.

Q. It also means that there is a chance that eradication of that past attack might not have been successful; do you agree?

A. That is not an automatic conclusion.

Q. It might not have been successful. It also means, does it not, because this is a dry rot repair, that given what we know about dormancy of dry rot, the rot having possibly not been eradicated may remain in a state where it may be revived?

A. If water is present again, yes.

Q. So, that is the dry rot part of the phrase "dry rot repair". Moving on to the repair side, if you find a repair which you think is likely to be a dry rot repair, you consider first of all that that part of the property had been vulnerable to dry rot in the past; do you agree?

A. Yes.

Q. You consider whether the repair has included measures to remove the source of moisture ingress which created the vulnerability, do you agree?

A. Yes.

Q. A possibility that you need to consider is that the timber might have been repaired, the source of moisture ingress might not have been addressed as part of the repair; do you agree?

A.You would investigate those matters, yes.

21. Mr. Wilde gave this evidence:

Q. In your view, did Mr Tytherleigh carry out a reasonably careful inspection in that roof space?

A. I do not believe he could have, no.

Q. Why do you say that?

A. Because there was good access in there and all surveyors of course are used to doing things by torch light and to have failed to have seen that the end of the bressummer had been cut short, I find it very difficult to find anybody who had gone to that end could fail to see that the bressummer was cut short.

Having seen that and having seen that the other timber was built into the wall, I believe that a careful surveyor had to consider this because we know that parapet walls are a potential risk. Mr Tytherleigh agrees with me on this, he has said so.

The problem with this building is that you could not see most of the inner face of the parapet or the brickwork immediately below it because there were attic rooms created. I should add that houses that do not have attic rooms built inside the roof void, the profile of the roof, are much easier to deal with because the roof timbers are exposed and there is no need to cover them up. When you actually utilize some of that space as living accommodation, then you do not like to look at the timbers and you cover up all the messy bits. It was behind that that the risk existed and the surveyor surveying Stretton Hall was faced with a problem, that he had some hidden brickwork where timbers might be vulnerable and, on the face of it, he had no access to any timbers that could have given him some idea of what might be happening.

But then, inside this void in the front bay, lo and behold there was one substantial timber built into the parapet. So that was important from its own point of view; it was also important as an indicator to what might be happening to enable him to form an opinion about the remainder of timbers built into the wall. Here was this timber and it was not just a timber built into the wall, it was a timber that had been cut short at some time and another piece bolted on the end. That in itself -- I can think of no explanation for that repair, other than that the original entire length of this timber had decayed at the end. When it was examined further, it was found that in fact the new part of timber was also decayed, so it was an ongoing problem.

Now, it was not visually apparent. What was apparent was that it had been coated with some kind of wood preservative. The only explanation for that dark staining I think is a wood preservative, although it is not the kind of wood preservative that is normally used by treatment companies. It is tar oil. The trouble with tar oil preservatives, it is difficult to get them to penetrate. They are excellent on telegraph poles and railway sleepers because they use a hot process that brings the creosote into the timber, but you cannot do it in buildings, apart from the fact it makes a nasty smell in a building. That is an indication, I think, certainly of treatment but I cannot think of any other reason why a dark liquid should have been painted on the end of the timbers; it is not a very good treatment.

Mr. Wilde was a highly-qualified expert in building surveying and in timber decay. Before 1970 he was a director of a timber treatment company. Since 1970 he has been in private practice as a building surveyor. He has published a number of articles both on surveying and on dampness and timber decay. Miss Hannaford, counsel for the defendants, submitted that his evidence needed to be treated with caution, since he was a surveyor who specialized in dry rot. She submitted that Mr. Wilde would have had dry rot more in mind than the ordinary competent surveyor by whose standards Mr. Tytherleigh's performance is to be judged. I accept that submission. Indeed, Mr. Wilde appeared to be conscious of the danger. I nevertheless accept Mr. Wilde's above evidence.

The leadwork of the roof.

22. Evidence of the condition of the leadwork of the roof in 1995 was given by Mr. Aidan Mortimer, Mr. Paul Hooper and Mr. Neil Cummings. In April 1995 Mr. Mortimer and Mr. Hooper climbed on to the roof of the central block through windows at attic level and inspected it. They concluded straight away that there might well be water leaking into the house through the roof. The detailing of the lead parapet gutters and of the internal lead gutters was poor. Bay lengths were too long, steps were insufficient in height and laps were too short. Most of the parapet coping stones had no lead under them to stop water from entering the solid walls at high level, some copings were cracked, and pointing between stones was missing. The lead cappings of the cornices were too short: the lead should oversail the edge of the cornice. The internal valleys were in satisfactory condition.

23. As to the internal lead gutters, Mr. Cummings explained that there were some original internally-run gutters which appeared to be lead pipes or lead troughs running through the roof void before discharging into the external gutters or downspouts. He suspected that leakage from the internal gutters would probably be the cause of dampness in the area of the archway between the first floor landing and the right wing.

24. Mr. Cummings expressed his views about the roof in a report that he wrote in June 1995. He wrote in that report:

At first glance it is apparent that the roof has been recovered in more recent years, but that some of the leadwork is of greater age. Superficially, the roofs appear sound, but a closer examination of the leadwork reveals some poor detailing and work not in accordance with the Lead Development Association handbook. In particular, lengths of leadwork greater than that recommended are present in valleys – in some cases the lead has been merely welded together – possibly where a split has occurred in the past. Where steps occur in the valleys, small tears can be seen in the adjacent leadwork, and some of the steps are too shallow, resulting in a risk of water ingress where backing-up may occur in winter conditions.

Mr. Cummings made the same criticism of the lead covers of the cornices as Mr. Mortimer.

25. Mr. Mortimer was cross-examined as to the incidence of leakage:

Q. How many actual places on the leadwork on the roof did you find actual evidence of leakage, current leakage, underneath in the property? How many places?

A. Difficult to say. I would imagine half a dozen or so.

26. The gutters round the roofs of the wings were constructed in a manner which is now, as I understand it, obsolete. They rested directly on top of the brickwork of the walls. The roof slating came down to the head of the brick wall and, rather than oversailing it and having an eaves gutter or not oversailing it and having a gutter inside a parapet, there were simply timber fascia boards on the outside of the gutter. The lead was dressed over the top of the fascia boards and, on the inside, it was dressed over the wall plate and the lower part of each rafter. I accept the evidence of Mr. Wilde, given on the basis of photographs, that there was insufficient, if any, fall in the gutters to prevent the collection of standing water. If there were any holes or cracks in the lead, the water would be liable to enter the wall from the top. Indeed, Mr. Mortimer gave evidence from his own observation that there was "a long flat gutter simply on top of the brick wall".

27. Mr. Hooper, cross-examined about the decision to renew or replace the rafters in the roofs of the wings, said:

We went up and had an inspection first of all and we were hoping against hope that we did not have to touch the wing roofs but once we saw the state of the lead, exposed a little bit, it just became apparent that we could not.

28. I conclude that in 1995 the leadwork of the roof was defective in the respects indicated in the above evidence. I am satisfied that its condition in 1993 was not materially different.

Construction defects in the roof.

29. Wet brickwork acts as a reservoir for water. Where timbers are in contact with brickwork which is or might become wet because of weatherproofing defects, there is a risk that wood-rotting fungi will take hold in those timbers. The risk is increased in buildings of traditional construction, such as the present, which have timbers set into walls and which also have parapet walls, because such walls were commonly built without sufficient measures to prevent water entering the brickwork and permeating down through the main walls of the building.

30. Mr. Wilde said in his report:

It is unusual for parapet walls in old buildings to have damp-proof courses in them to prevent water that might enter at the top from falling to the main wall below although this is standard building practice in modern buildings.

Parapet walls are normally associated with lead-lined parapet gutters which are prone to overspill when blocked, wetting the brickwork below and which will leak if the lead splits or if the steps are too shallow.

Traditional construction of trussed roofs (as used in most traditional large buildings and as used at Stretton Hall) has these timbers built into the main walls for bearing in what is the most likely part of the wall to be wet.

. The potential problems in this location should cause concern to surveyors and should make them particularly anxious to see if any of their doubts can be resolved. All too often the limitations of the survey prevent such resolution.

Where the doubt remains this must be conveyed to the prospective buyer of the property in terms commensurate with the unresolved risk.

31. There were a number of features in this case suggestive of an increased risk of water penetration.

32. Mr. Tytherleigh noted in his report that there was some open joint pointing to the sandstone copings, and commented that some modest pointing was appropriate.

33. There were also defects in the lead of the parapet gutters. The parapet gutters were covered with duckboards. Those boards were about ten feet long and Mr. Tytherleigh did not attempt to lift them. He was thus unable to see the condition of the leadwork. In his witness statement, Mr. Tytherleigh said this:

I inspected the roofs on 8 October 1993. In my view, the lengths of the gutter and valley bays were typical of and suitable for a property of this age. However, all these surfaces were covered with timber-framed duckboards and this limited the general surface inspection although sections of boarding were lifted - where possible and safe in order to identify the covering material.

The following is an extract from the transcript of the cross-examination of Mr. Tytherleigh by Miss Sinclair:

MS SINCLAIR: You agreed with me earlier, Mr. Tytherleigh, that defects in the lead work in parapet gutters will increase the risk of the wetting of the parapet wall. I imagine then, given your awareness of the risk of dry rot in this area, that you are particularly interested in the lead work at parapet level?

A. I am indeed, if it is practicable to be viewed.

Q. . . . . . I can find in your report, Mr Tytherleigh, no mention of the condition of the lead work to the parapet gutter on the main building because it is not there. That is right, is it not?. . . . . You do not comment there, do you, on the condition of the lead work?

A. I do not make comment, no. Most of these were not possible to see because of the duck boarding.

. . . . .

Q.. . . . . Given that you are particularly interested in the lead work -- for the reasons that we have rehearsed -- if these duck boards were a significant hindrance to your inspection, that was something which ought to be mentioned in your report; is it not?

A. In conjunction with internal evidence of water penetration associated with problems with the parapet gutters, yes.

Q. I see. Had you found internal evidence of water penetration, then you would have been concerned about your lack of access to the lead work on parapet gutters.

A. As to the source of the water penetration, yes.

Q. When you were up on the roof on 8th October, you had not inspected the interior of the building, had you?

A. No, I had not.You did not know at that stage, did you, whether there would be water staining in the interior?At that stage, I would not.

Q. You did not know, at that stage, whether you should be looking under the duck boards to inspect the condition of the lead or not?

A. But if I had found internal evidence, I would have returned to check over the external evidence.

Q. It is easy enough, is it not, Mr Tytherleigh?

JUDGE HAVERY: Forgive me. That means you would have gone back and –

A. I would have gone back again, yes.

Q. -- lifted up the duck boards?

A. If I could or in -- so far as the duck boards on the outside parapet walls are concerned, I would not have tried to do it myself. I would have recommended that an inspection be undertaken.

Q. Because of the danger of falling over, is that it?

A. That is correct, yes.

MS SINCLAIR: You did not lift up the duck boards. So you were not able to check whether that detail in the parapet gutter was correct.

A. That is so.

Q. Similarly, you were not able to check whether the lengths of lead used in the parapet gutter were appropriate lengths.

A. No.

. . . . .

Q. You were not able to check whether there were any splits or tears in the lead in the parapet gutter?

A. No.

Q. Had you lifted up the duck boards and had you seen defects in the lead in the parapet gutter, you would have been concerned about water penetration to the parapet wall below, would you not?

A. I would indeed.

Q. You would have been concerned about the effect of that water penetration on timbers embedded in the parapet wall?

A. Yes.

The effect of that evidence is that Mr. Tytherleigh considered it unnecessary to inspect the leadwork of the parapet gutters since he found no evidence of water penetration associated with problems with the parapet gutters. For the same reason he considered it unnecessary to state in his report that he had been unable to lift the duckboards and inspect the gutters, or to recommend that an inspection be undertaken.

34. I do not accept that that was a reasonable course of action. Prima facie, a surveyor should properly inspect the lead of the gutters. That must be a most important part of his survey, regardless of whether he has found or ought to have found evidence of dry rot. If he has found it impossible or unsafe to inspect the lead of the gutters I would expect a careful surveyor at least to say so. Indeed, Mr. Tytherleigh did report on the condition of the duckboards (which he referred to as snowboards) and recommended their general replacement, yet made no mention of the danger or difficulty to him of removing them. Moreover, there would have been no danger in lifting the duckboards over the bay or adjacent to it. He did not lift those duckboards either.

35. The lengths of lead in the parapet gutters were too long by modern standards, and in consequence thermal movement was liable to cause overstress in the lead. There were indeed cracks in the lead. If Mr. Tytherleigh had lifted a duckboard over the parapet gutter adjacent to the flat roof of the bay, he would have seen a tear in the lead. Mr. Hawley was shown a photograph of that tear taken in 1995. He was of the opinion, which I accept, that it would have been there in 1993.

36. There was also defective pointing in the brickwork of the parapet wall on the outside which was readily visible from the roof of the bay.

37. It was alleged that defects in the lead covering of the cornice led to ingress of water. I accept that there were defects in the lead covering of the cornice, and that the lead covering was not up to modern standards in that it did not lap over the edge of the cornice. I am not satisfied that that led to ingress of water to the building in significant quantities or that Mr. Tytherleigh ought to have reported on a risk that that was so.

Was it dry rot?

38. Mr. Tytherleigh visited the house on 5^th April 1995 and inspected the bressummer. Using a crowbar, he detached pieces of the outer casing (as he described it) of the replacement section of the bressummer so that he could gain access to what he described as the inner decayed section. The pieces that he detached were sent to a firm of timber experts, Cementone Beaver, who reported as follows:-

Our examination of the decayed timber samples from Stretton Hall reveals that in the main the damage has been due to the activity of brown rot fungi and we cannot exclude the possibility that this may include dry rot.

The timber samples were completely dry on arrival (all were poled together, an oven-drying method was used to determine a moisture content of 8.0% w/w which can be considered very low since the wood has a very low density). If this condition is representative of those throughout the building and in the timbers' full cross-section we conclude that there is no risk of any further decay occurring for the time being. After several years the mycelial tissues present within the timber will certainly be dead (although spores present could of course germinate in the presence of new sources of damp).

Unfortunately, we will not be able to carry out any meaningful assessments of the presence of preservatives on/in the samples due to their advanced stage of decay.

As per our discussion with George Tytherleigh, we advise that any larger beams in the areas affected should be deep drilled to ascertain moisture levels in full x-section before finally deciding on whether any action is merited.

39. It was suggested that the timber was more moist when it was despatched than when it was received by Cementone Beaver. I am satisfied that Mr. Tytherleigh properly wrapped it before despatching it and that there was no material change in its moisture content between the time of its despatch and the time of its testing by Cementone Beaver.

40. It was questioned whether dry rot existed in the bressummer. It is true that it was not found by Cementone Beaver. A publication adduced in evidence by Mr. Wilde, Decay of Timber and its Prevention, by Cartwright and Findlay (1958), stated that wood decayed by Merulius Lacrymans (dry rot) shows no characteristic microscopic features by which the fungus responsible can be identified. Mr. Jeff Howell, the defendant's expert witness on timber decay, accepted that that was so. Nevertheless, Mr. Howell considered that the photographic evidence of the repaired beam before it was removed indicated wet rot. Mr. Wilde was unable to say what was the nature of the rot in the wood spliced on to the original part of the bressummer, but he considered the stain on the original part of the beam to be evidence of dry rot.

41. Mr. Wilde and Mr. Howell differed as to the interpretation of photographs of various timbers and laths uncovered during the works of refurbishment. In a number of instances Mr. Wilde considered that dry rot was evident, where Mr. Howell considered that various other species of rot, namely wet rot and white rots, were apparent. I was not impressed by Mr. Howell's evidence, which seemed to be largely based on book learning. Where it differs from that of Mr. Wilde on the identification of species of wood-rotting fungi, I prefer the evidence of Mr. Wilde.

42. I conclude that the cause of the original decay of the bressummer was dry rot. The decay of the timber spliced into it probably had the same cause.

43. There was other, direct, evidence of dry rot in the timbers of the building. Mr. John Taylor was a qualified joiner who ran his own business specializing in woodworm treatment, damp-proofing and dry rot. He visited the property in 1995 in order to treat it for woodworm. Mr. John Taylor saw evidence of active dry rot beneath the floorboards at second floor level. He saw there a moist fruiting body and a mycelium which was moist to the touch. I am satisfied that he was right in identifying that as dry rot. He also saw live dry rot in the form of mycelium and hyphae strands in the core of the brickwork.

44. Miss Hannaford submitted that in 1995 the house was dry, and that such dry rot as was found was old and dry. The implication, I think, is that the dry rot was dead and that there was no need to repair the timbers or the roof. Mr. Cummings gave evidence that all the dry rot that he saw at Stretton Hall had a cobwebby appearance and was dormant. The dry rot, however, spread extensively over brickwork and timber in the areas of the house which it covered. In the majority of cases the timber was structurally unsound. I have mentioned above Mr. John Taylor's evidence of having seen active dry rot. There is evidence, which I accept, that timbers were damp. However, those timbers were unexposed at the time of the survey.

45. Mr. Mortimer said in his witness statement that dry rot was discovered at roof level and had spread to or was also to be found in rooms on the first and ground floor. It was put to him in cross-examination that it was possible that the dry rot had started at ground floor level and spread upwards. His answer was "Highly unlikely I would think".

46. I am satisfied that there was ingress of water from time to time through the defective leadwork of the roof and through open joint pointing between the coping stones of the parapet wall. I am satisfied that there was some active dry rot, that there was a risk that other dry rot was dormant and could have been re-activated by the presence of moisture, and that some timbers were so damaged as to require replacement.

Negligence

47. I am satisfied that Mr. Tytherleigh was negligent in not observing that the bressummer had been repaired. He ought to have observed that it had been repaired and to have concluded that its repair might have been necessitated by dry rot. That would have been evidence of past ingress of moisture into the building; indeed, he saw water staining on the underside of the roof boarding. He ought to have appreciated that his damp meter reading or readings in the roof space gave no assurance that the interior of the brickwork in contact with the beam was not a reservoir of moisture, let alone that it was incapable of becoming such a reservoir. He ought then to have looked again carefully at the roof. Such inspection ought at least to have revealed the crack in the lead adjacent to the flat roof over the bay. In that case, he ought to have appreciated that the condition of the fabric of the building was such as could lead, or could have led, to an outbreak of dry rot, and to have said so in his report. If he considered himself unable to inspect any of the leadwork, his report ought to have stated that fact. In either case, his report ought to have contained a warning that the client should not buy the house without carrying out investigation into possible dry rot unless the client were willing to run the risk of possibly extensive damage by dry rot.

48. Miss Hannaford submitted that if Mr. Tytherleigh had seen the repair to the bressummer, and given that he found no problems by use of his bradawl or moisture meter, his duty was simply to advise that the reason for the past repairs should be verified. That, she submitted, is exactly what he did. She pointed to a passage in his report that I have quoted. It says, under the rubric dry rot, that slight evidence of plaster imperfection in the drawing room could be associated with previous dampness penetration and should be investigated, and continues:

Further enquiries may also indicate that previous work to the property has been associated with earlier evidence of dry rot and consequently this should also be verified.

The outbreak of dry rot in any property of this age and size would always be expensive to eradicate /eliminate.

It is not clear to me, and I doubt that it would be clear to the client, what message the first of those paragraphs is intended to convey. If anything, it seems to suggest that if it is verified that unspecified previous work to the property was associated with evidence of dry rot, that is a reassurance that such dry rot and its cause have been eliminated. It does not appear what otherwise is the point of verification. No course of action is suggested in the event of verification. If it was intended as a warning to verify that previous work was not associated with evidence of dry rot, the intention is obscure. Moreover, no guidance is given as to the consequences of non-verification. In my judgement, the passage that Miss Hannaford relied on does not assist her.

The archway.

49. Mr. Neil Cummings was a building surveyor with 23 years' experience as such. When he was called in by Mr. Michael Taylor in May 1995 to assist in relation to the dry rot problem at Stretton Hall, he went round the house room by room, looking at each room very carefully for symptoms of wet rot, dry rot and woodworm. He also investigated the roof, parapet walls and chimneys. There was no furniture or soft furnishings in the property, and large areas of plaster had been removed from walls and ceilings. He saw dry rot in a number of rooms throughout the house in areas which would have been covered when the defendants carried out their survey in 1993.

50. On the entrance to the right-hand wing on the first floor Mr. Cummings observed what he described in his witness statement as follows:-

Dry rot [was] found in the door head leading from first floor landing to right hand wing. . . . .

The evidence here which I saw was the uneven appearance of plasterwork (suggesting water damage which would have been visible before any opening up took place) and characteristic distortion in the timbers forming the door lining/architrave. The distortion I saw was a rippling effect in the surface of the joinery caused by shrinkage of the timber as the dry rot fungus destroyed the internal wood. The distortion would have been obvious by sight, coupled with the associated blistering of the adjacent plasterwork where it had been damaged by water leakage from above. A sharp implement (a penknife or small screwdriver blade) driven into the timber would have had little resistance on entry or removal.

In his site notes of his visit, which were brief in the extreme, he made no mention of the door, but in a memorandum of 2^nd June 1995 he noted

Dry rot found in door head leading from first floor landing to right-hand wing. Apparently caused by leaking valleys and/or lead waste pipe above.

In cross-examination he gave this evidence:

Q. At the time you visited, presumably plaster had been [re]moved around this door head?

A. No, it had not.

Q. There had been some dry rot found in the walls in this sort of vicinity, had there?

A. At the time of my first inspection I am not sure that there had, actually. I think there was suspicion that there might be some.

. . . . .

A. . . . . .What I saw in fact was a patch of plasterwork which was uncharacteristic. In my job, I get to see lots of old properties where water is penetrating through a wall and there is plaster on the other side. If there has been serious water ingress, you do find there is a very uneven texture or appearance to the plaster. The remainder of the plasterwork in the area did not have that appearance at all, so it looked like something locally had done this, possibly due to a leaking pipe or maybe leakage from the wall above, the parapet wall. It certainly did seem to be different in that area and, associated with the minor rippling effect on the architrave, it would make me think that there might be something amiss there.

Q. What sort of area of plasterwork are you talking about?

A. Probably about one square metre.

51. Mr. Tytherleigh was unable to identify what Mr. Cummings was referring to. He went back to the property after it had been sold by the claimants. He gave the following evidence in cross-examination:

Q. You heard Mr Cummings give evidence yesterday about what he saw at the architrave around the door leading from the main building to the right-hand side wing at first floor level, did you not?

A. I have seen Mr Cummings' statement and I heard what he said.

Q. He is a surveyor like yourself, is he not?

A. Yes.

Q. He recognized in that location, he said, a square metre of unusual-looking plasterwork and some characteristic distortion in the timber lining to the architrave?

A. That is what he said but I disagree with him.

Q. You were not there when he made his inspection, were you?

A. I disagree with the evidence. I have returned to Stretton Hall and I could see no indication at all to suggest that there could have been as much as a square metre of any damage at all in that area. We could not understand the conclusion he came to in identifying that area . . . . .

Q. . . . . . You visited Stretton Hall again on 5th April 1995, did you not?

A. Yes.

Q. Mr Cummings did not visit until 22nd May 1995; are you aware of that?

A. Yes.

Q. At the time you visited he had not carried out his inspection, is that not right?

A. That is right.

Q. So when you visited that was not one of the parts of the property to which you were taken in order to show you evidence of dry rot attack?

A. No, it was not.

Q. If the plaster distortion and the timber distortion which Mr Cummings said he saw was there in 1993, and if, having seen and recognized the significance of the repair to the bressummer beam, you had been on the lookout for dry rot problems on the first call, it is likely, is it not, that you would have noticed what Mr Cummings noticed?

A. Regrettably Mr Cummings provided no photographic evidence of what he allegedly saw. I have not been able to identify subsequently in my own mind what on earth he was talking about. I can say no more than that.

Q. He has spoken about a square metre of uneven plaster and characteristic distortion, a rippling in the timber of the architrave at that door opening. If you will assume with me that that was there in 1993 when you inspected, it is something that you should have seen, is it not?

A. In that opening there was no architrave, there was only a panelled lining. It was not a door. It was simply an opening, my Lord.

Q. It was a panelled opening. I apologize if my incorrect use of terminology is misleading. I imagine what we have there is an opening without a door leading from the main building to the wing; am I right?

A. You are.

Q. And the thickness of the walls means that there is a space on the inside of that opening for timber panelling?

A. No. When I went back to the property recently to have a look at these various parts, I was not even certain that it was of a timber construction. This raised even more queries in my mind, our minds, as to what on earth Mr Cummings was talking about. Unfortunately, there was no photograph.

Q. You are aware, are you not, that the Trust has sold Stretton Hall since your visits in 1993 and 1995?

A. Yes.

Q. You may or may not be aware, are you, that the current owner has had further works carried out?

A. Yes. What we saw was not new work, I must emphasize that.

In re-examination he said this:

Q. Have you been back to inspect this architrave since 5th April 1995?

A. Yes.

Q. Was that before or after the property was sold by the trustees or both?

A. Afterwards.

Q. Can you describe what you saw on your subsequent inspections?

A. Yes. This opening, my Lord, is an opening in a brick wall of some two foot thickness and it is semi-circular at the head and it is lined with panelling. The panelling appears to be of timber construction but it is not, it is a plaster construction. You could tell it was old, if not the original, simply by the dare I say generations of paintwork whereby the moulding had lost its profile and this is what confused me as to what on earth Mr Cummings had been talking about.

Q. When you say that you could tell it was old if not original, did you form a view as to whether or not it had been replaced during the 1995 works?

A. There was no evidence to suggest it had been replaced.

Q. When did you first become aware that the allegation in relation to this area was that there was 1 square metre of plaster said to be imperfect in some way?

A. The area 1 square metre was provided by Mr Cummings in his evidence yesterday and that was the first time the extent of the allegation had been made clear to me.

. . . . .

. . . . . the height from the top of the opening to the ceiling was probably less than a foot because in this particular section of the building the ceilings were very low. They were the servants' quarters.

52. I accept that Mr. Cummings found dry rot in the arch, and thus that the panelling was of timber in 1995 and not plaster. But there is no contemporary evidence about the rippling woodwork or the uneven plaster. I do not doubt the sincerity of Mr. Cummings's evidence, but the first mentions of those matters are some years after the event. It does seem that the reference in Mr. Cummings's note of June 1995 to a door is mistaken. His recollection, as given in the course of evidence I have quoted above, was that the rippling was minor and he was not sure that even in 1995 the dry rot had been found by others. The totality of the evidence on this point is too uncertain for me to draw the conclusion that the state of the arch when the defendants carried out their survey was such that any careful surveyor would have seen evidence of possible dry rot there.

The window.

53. Mr. Paul Hooper was a carpenter who worked on the house in 1995. He had worked as a sub-contractor for Symm since 1979. Shortly after dry rot had been found in the bressummer, Mr. Hooper was looking for dry rot in the area of a window lighting the main stair well. He described that as the obvious place to look, below the side of the bay. He did not consider himself an expert in the subject of dry rot, but he had come across it fairly regularly over the previous 15 years. Standing on the landing, he saw evidence of dry rot in the front architrave, he believed at the top. It was not much above eye level, he thought about 2¹/₂ metres from where he was standing. I am satisfied it must have been rather more than that, to wit about 4 metres. The way he put it in his witness statement was that the window frame looked rather suspect to him. The paintwork was flaky. He said "When we scraped away the covering paint we found the frame was riddled with dry rot".

54. Mr. John Taylor, too, saw evidence of dry rot in the window. He described it as a deflection in the lining of the window. He was not sure where he had been standing, but he thought it was more than 12 feet from the window. He had been finding dry rot in the house for something like 1¹/₂ months, and he accepted that by the time he saw that evidence he was suspicious of everything.

55. Both Mr. Hooper and Mr. John Taylor found the evidence of dry rot at the window in circumstances where they were aware that much dry rot in the building had already been uncovered. I am not persuaded that a careful surveyor with no other evidence of dry rot would necessarily have noticed it. Given the strong evidence of the possibility of dry rot in the bressummer, however, Mr. Tytherleigh ought in my judgement to have noticed it. In fact, given the evidence of possible dry rot in the bressummer, the further evidence is immaterial in my judgement.

Causation

56. Miss Hannaford submitted that the claimants did not rely on the report.

57. The report was dated 20^th October 1993. The claimants gave authority to the bank to transfer funds for the purchase to Berg & Co., the claimants' solicitors acting in the transaction, on 21^st October. Mr. Leighton, trustee and second claimant, gave evidence that at that stage the decision to purchase the property had been made. The date for exchange of contracts had been fixed for 28^th October, and 29^th October had been fixed as the date for completion. The defendants faxed two pages of the report to Berg & Co. on a date that does not appear, but must have been 20^th or 21^st October, since it was manifestly acted on by Berg & Co. by letter dated 21^st October to the vendor's solicitors. Mr. Michael Taylor acted as the agent of the claimants in relation to the purchase of the property, to the extent that things needed to be done locally. It was he who sent a copy of the report to the claimants. It is possible that Mr. Leighton did not see it until 28^th October, when he signed the contract for the sale of the property. Mr. Leighton said in his witness statement that he read the report, but could not recall the details. He did recall reading the summary. He also gave evidence that he focused on the recommendation stating that it was considered that there was no reason why the trustees should not proceed with purchase of the property, and on the valuation of Stretton Hall with 11 acres at £1,250,000.

58. Mr. Michael Taylor gave evidence that he received the report two days before completion. From the context, it appears that by "completion" he meant exchange of contracts. There is an attendance note of Berg & Co. dated 26^th October, stating that Berg & Co. had read the report and that they and their client were concerned about the planning position. The two pages of the report initially faxed to Berg & Co. had contained advice about the application of planning legislation. Mr. Leighton was on holiday in Scotland at the time. Thus it appears that the reference to the client is a reference to Mr. Taylor. Moreover, there is an attendance note of the following day stating that Berg & Co. had discussed with Mr. Taylor another matter mentioned in those two pages of the report, and that he was aware of the relevant recommendations. It is clear that Berg & Co. had received the whole report by 26^th October, and although the attendance notes dealt only with the matters raised in the two faxed pages, I am satisfied that Mr. Taylor had read the report, in so far as he did read it, by 26^th October.

59. Mr. Taylor was in a hurry to purchase the property before the bank foreclosed on the vendor, who was in financial difficulties. In his witness statement dated 16^th August 1999 he said this:

I actually spoke to Mr Tytherleigh a number of times on the telephone and I met him on one occasion, although I cannot say exactly when that was. Whenever I spoke to him I was keen to know his view on the property and the results of his visits. I cannot remember when I was sent a copy of the Report but it was probably not long after the Report was completed on 20^th October 1993. I did not read every page of the Report not only because it was extremely long and detailed but also because I spoke to Mr Tytherleigh on the telephone before I had received the Report and asked him whether there were any problems. I cannot remember exactly what he said but the gist was that the property was in extraordinarily good condition and that the few problems which existed were listed in the summary at the end of the Report. He then listed for me, on the telephone, what the problems were. He mentioned a leaking water downpipe and said it should be urgently repaired. He also mentioned some of the other items in the summary, like windowsills and minor work to the roof. I understand that the Statement of Claim refers to this conversation having taking place after I had received the Report. On reflection, I think it took place before I received the Report, but after Mr Tytherleigh had completed the Report and sent it to me although I did receive further assurances from Mr Tytherleigh after receiving the Report as discussed below.

As suggested by Mr Tytherleigh, when I received the Report, I concentrated on the summary at pages 52 onwards. My reaction was that I was being told Stretton Hall was in very good condition, the Trustees should repair the leaking downpipe but that was all they were directed to do before purchase. The Report did not warn of any reason why the purchase should not go ahead and indeed Mr Tytherleigh never said anything to me to that effect and it valued the property at £1.25 million. I also read the Summary very much in the light of the conversation I had recently had with Mr Tytherleigh where he had assured me there were no serious problems and the property was in extraordinarily good condition.

. . . . .

After reading the report I mentioned the leaking rainwater downpipe to Mr. Broome [the vendor] and my recollection is that he told me he had already repaired it. I then asked Mr. Tytherleigh on the telephone whether there was anything apart from repairing the downpipe I should do before the trustees purchased the property. He said no.

60. Mr. Tytherleigh said this in his witness statement dated 20^th August 1999:

I note from paragraph 11 of the Statement of Claim that it is alleged Mr. Taylor spoke to me on the telephone. I do recall this conversation, but I do not have any note as to the content of the discussion which was only in general terms. I am not aware of any note, which might have been taken by Mr. Taylor either.

In summary, however, it was indeed my view that Stretton Hall was in extraordinarily good condition, subject to the leaking downpipe . . . . .

Nevertheless, in the telephone conversation which took place, I would have referred Mr. Taylor to my report and told him that I stood by it. Indeed there would have been no point in my having advised at such length and in so much detail if I were subsequently to tell him that it should be ignored.

In a further witness statement dated 22^nd October 1999, Mr. Tytherleigh said:

The telephone discussions which took place with Mr. Taylor at the time of the survey/submission of report/pre exchange of contracts concentrated on those items which were highlighted in the summary section of the final report. However, Mr. Taylor is also correct in his recollection that we discussed matters prior to completion of the report. As such, I concentrated on those items that were specifically apparent following the survey inspection.

I did not suggest to Mr. Taylor – nor would I to any client – that they simply concentrate on the summary section of the Report therefore implying that all content that preceded that section was of little importance relatively. I did not state or imply that the various report recommendations could be postponed until after the decision to purchase or that matters raised should not be considered as matters of urgency.

I did not say to Mr. Taylor that simply repairing a downpipe was all that needed to be done prior to purchase of the property.

In cross-examination, he gave this evidence:

Q. He told you he was in a rush to get the survey done?

A. He was in a hurry, yes.

Q. He telephoned you, he has told his Lordship, on a number of occasions --

A. Yes.

Q. -- during the preparation of your survey report and after you had completed it, yes?

A. Yes.

Q. When he telephoned you, he was asking for the bottom line on the condition of this property, was he not?

A. He was looking for a bottom line but, as a professional person advising a client, it was not for me to take the responsibility that he should ignore certain aspects of my report simply to suit his circumstances.

Q. When he came on the telephone, the gist of his enquiry to you was: Look, Mr Tytherleigh, I am in a hurry, is there anything wrong with this property which means I should not purchase it? Was that not the thrust of his enquiry?

A. That was the thrust of his enquiry and my response to that was: If you want to see what I found as to actual defects on the ground, then by all means look into the summary but I refer you to the body of the report and I am also anxious to know if you want to come back to me as to what is the result of the further enquiries before contract with regard to any specialist work that has previously been undertaken. I would not tell any client any other thing.

. . . . .

Q. In fact, your response was: Well, no, actually this property is in extraordinarily good condition, there are a few bits and pieces which are problematic but you will see them set out in my summary at the end of the report.

A. Subject to the other general recommendations, not of itself.

61. I am satisfied that the gist of the telephone conversations between Mr. Taylor and Mr. Tytherleigh was that the property was in extraordinarily good condition apart from the downpipe, and that Mr. Taylor should read the whole report. The tenor of the conversations was the same as the tenor of the report. I am satisfied that by 26^th October 1993 Mr. Taylor had read the parts of the report headed Summary, Recommendations and Valuation. I am satisfied that he relied on the report and on his conversations with Mr. Tytherleigh in deciding not to ask the trustees not to sign the contract for the purchase of the house. I am not satisfied that Mr. Leighton directly relied on the report in not desisting from signing the contract, though he may have done. I am satisfied that he relied on Mr. Taylor, his agent, in not so desisting.

Terms and conditions

62. The defendants contend that the contract was subject to their standard terms and conditions, which relieve them from liability.

63. Mrs. Hazel Leighton, one of the claimant trustees, wrote to the defendants on behalf of the claimants on 5^th October 1993 instructing them to carry out the survey. She wrote "As instructed to you verbally, we would like you to conduct a survey of the property to ensure it is sound". That letter was sent by fax and was answered on the same day. That answer stated "Our terms of engagement normally require fee payment following notification that the survey report has been completed". No enclosure was mentioned, nor is it suggested that there was an enclosure.

64. The first mention of terms and conditions in these proceedings was a statement in the expert's report of Mr. Hawley, written on 28^th September 1999. He wrote:

The defendant utilised a standard letter of confirmation of instructions in relation to the survey and valuation of residential properties and attached to their letter of confirmation a leaflet entitled "Brief resume of major items covered in the survey report". A copy of these standard documents is attached as appendix B to this report. I understand these were submitted to the claimants at the time of instruction.

Appendix B exhibited a standard letter which on the first page stated

. . . . . as per our telephone conversation/your visit to our office of that date/your instructing letter/as we discussed the survey is subject to our usual terms and conditions of engagement a set of which is enclosed with this letter and which we confirm to you. Any variance of these terms will be the subject of written confirmation by us.

Appendix B contained a copy of the leaflet mentioned by Mr. Hawley which stated in paragraph 18 that the survey excluded those areas of the building which were covered, unexposed or not readily accessible. On the back page conditions of engagement were set out, including condition 6, which stated

The report will not purport to express an opinion about or to advise upon the condition of uninspected parts and should not be taken as making any implied representation or statement about such parts.

No copy of the documents in appendix B to Mr. Hawley's report appears in the disclosed documents in the court bundles.

65. On 5^th November 1999 the defence was amended to allege that the contract incorporated the defendants' standard conditions of engagement which were sent to Mr. Taylor under cover of the defendants' letter dated 5^th October 1993.

66. There is in the court bundles, between copies of two letters dated 5^th October 1993, a copy of the second, undated, page of a letter from the defendants. The addressee is not identified. That page contains four paragraphs of text. The first, second and fourth are in terms substantially identical to those of the last three paragraphs of the standard letter exhibited by Mr. Hawley, save that a blank in the latter for the fee for the inspection is filled in. The third paragraph of the undated page states:

If you have any queries on the content of this letter or other documentation forwarded to you please contact us immediately, before the survey is carried out.

After the signature in the name of the defendants, the abbreviation "Enc" appears, followed by this note:

A copy of the letter sent by facsimile transmission to Ms Leighton is enclosed herewith for your information.

I infer that the second page is the second page of a letter from the defendants to Mr. Michael Taylor, and that it enclosed a copy of the answer letter of 5^th October to the claimants that I have mentioned above. Such a copy does indeed appear in the bundle immediately before the undated second page.

67. In his first supplemental witness statement, dated 22^nd October 1999, Mr. Tytherleigh wrote

I sent Mr. Taylor a copy of my letter to Mrs. Leighton, together with a copy of our standard form setting out our conditions of engagement and brief resume of major items covered in the survey report.

Mr. Taylor accepted that he received one letter from the defendants, though he did not recall its content or whether it contained any terms and conditions. He gave evidence that he immediately destroyed the letter and telephoned the defendant to inform it that it should address all correspondence to the trustees and remove his name from their records. He was of the firm opinion that there should never be any correspondence relating to trust matters that had his name on it. His general practice in such cases was to telephone the firm in question telling them not to send correspondence to him and to destroy it. He did not know to whom he spoke in the defendant firm. I am satisfied that he did not speak either to Mr. Tytherleigh or to Mr. Fletcher. There were three or four members of the staff who would answer the telephone in the absence of a partner. Mr. Tytherleigh gave this evidence in cross-examination:

Q.. . . . . Neither your report nor your fee note was sent to Michael Taylor, were they?

A. No.

Q. That was, was it not, because he had telephoned your firm and insisted that communications not be addressed to him?

A. Yes.

I accept Mr. Taylor's evidence that he could not recall the terms of the letter he had received from the defendants, or whether it contained any terms and conditions. I am not satisfied that it did.

68. It follows that the defendants cannot rely on their standard terms and conditions.

Measure of damages.

69. If the contract had been properly performed, the claimants would not have bought the house. So the loss they have suffered is prima facie the difference between the price paid and the value of the house in its true condition.

70. Neither the price paid nor the value of the property in its true condition is agreed.

The price paid.

71. The property surveyed was Stretton Hall in 11 acres. The property transferred was Stretton Hall in 32 acres at a stated price of £1,250,000. The experts were not agreed that that was the true price of Stretton Hall in 32 acres. It is common ground between counsel that the value of the extra 21 acres should be deducted from the true price to arrive at the price paid for Stretton Hall in 11 acres. The experts were agreed that the value of those 21 acres was £78,000.

72. In addition to the 32 acres, a number of parcels of land close to Stretton Hall and valuable chattels in the house were sold to the claimants at the same time, by the same vendor or companies associated with him. The facts are these. There was a contract for the sale of Stretton Hall, gardens and land adjoining comprising an area of 32 acres, being then unregistered land and described in part 1 of the first schedule to the contract, together with registered land comprising four registered title numbers, identified in part 2 of the first schedule and part 2 of the third schedule. Those four title numbers comprised 109 acres. The contract provided for the unregistered and the registered land to be sold at the aggregate price of £1,366,400, without breaking down the price. It also provided for sale of the chattels at £683,600. Two other contracts provided for the sale of two other parcels of registered land close to the Hall at £180,000 and £170,000. Those three contracts were all made on the same day, 28^th October 1993, and clearly represent a single overall transaction. The land in question was the subject of five transfers, all made on 29^th October 1993. The unregistered land, namely the Hall and 32 acres, was transferred at £1,250,000. Three of the four parcels of registered land the subject of the first-mentioned contract were transferred together at a price of £56,400; the fourth was transferred separately at £60,000. Each parcel of land the subject of the other two contracts was transferred at the price stated in the respective contract.

73. Miss Hannaford submitted that the price paid by the claimants for Stretton Hall plus 11 acres was to be determined by taking the contract price of Stretton Hall plus 141 acres, viz. £1,366,400, and deducting the value of the additional 130 acres. The experts had agreed the value of 21 of those acres at £78,000. Mr. Major, the defendants' expert valuer, valued the other 109 acres at £2,000 an acre, making a total of £218,000. Thus a total of £296,000 had to be deducted from the price of £1,366,400, leaving a figure of £1,070,400 as the true price paid for Stretton Hall plus 11 acres.

74. Miss Sinclair submitted that the true price paid for Stretton Hall plus 11 acres was simply the transfer price, £1,250,000, less £78,000, the agreed value of the extra 21 acres. Miss Hannaford acknowledged that that logic was attractive at first sight. But she submitted that it led to an anomalous conclusion. For it left the price of the remaining 109 acres as £116,400, the difference between £1,366,400 and £1,250,000. Thus the price of the 109 acres was only £1068 an acre, markedly less than its value, £1,500 or £2,000 an acre as given by Mr. Froude, the claimants' expert, and only about half the figure of £2,000 an acre given by Mr. Major.

75. Both arguments imply that Stretton Hall plus 11 acres was bought at a price below its market value, since the experts were agreed that the market value of Stretton Hall plus 11 acres, as described, was £1,250,000. Miss Hannaford's argument implies that the other 109 acres must have been bought at their market value. There is no logic in that. Moreover, Miss Hannaford's argument ignores any difference there may have been between the price and the market value of the chattels and of the other land, which between them were sold at the ostensible price of £1,033,600.

76. It has not been suggested, nor does it appear, that the transfer prices were in any way a sham. They were determined at a time when the claimants were unaware of their cause of action against the defendants and had no reason artificially to inflate their claim. Miss Hannaford's argument implies that the true price of the Hall plus 32 acres was £1,148,400. In my judgement, by far the best evidence of the true price of Stretton Hall plus 32 acres is the transfer price of £1,250,000. Accordingly, I find the true price paid for Stretton Hall plus 11 acres to have been £1,172,000.

Value of the house in its true condition.

77. Mr. Andrew Froude FRICS, chairman of Jackson-Stops and Staff, gave expert valuation evidence on behalf of the claimants. Mr. Jonathan Major FRICS, an associate partner of Strutt and Parker, gave expert valuation evidence on behalf of the defendants. Those two experts were agreed that the open market value of Stretton Hall plus 11 acres as described in the report was £1,250,000. Both of them gave evidence of the value of the property in October 1993 on various assumptions as to the cost of the remedial work.

Cost of repairs.

78. The agreed value of £1,250,000 of Stretton Hall plus 11 acres was arrived at on the basis of the condition of the property as reported. Thus the cost of repairs relevant to the valuers' valuations is the cost of putting the property into that condition. The exercise is to determine the cost, as of 1993, of remedying the causes and effects of dry rot in so far as they were not reported on and in so far as necessary. The fact that some of that expenditure might have been incurred in any event is irrelevant. The claimants are not seeking to recover the actual cost of repairs. Nor are they seeking to value the property as it was by reference to the actual cost of repairs.

79. Works of refurbishment had been embarked upon before the dry rot was discovered. The contractor, Symm, was a business established in 1815 and based in Oxford with long experience of dealing with historic buildings. Symm began work on 14^th March 1995. Dry rot was first discovered towards the end of March 1995. Plaster was stripped off in the area concerned in order to see how badly the timber was affected and how far the dry rot extended. Mr. Aidan Mortimer, Group Chief Executive of the Symm Group, who gave evidence before me, attended the site about once a week. He wrote in his witness statement

The course of action which we adopted . . . . . was to expose the timber or wall structure around the dry rot outbreak, look carefully at how badly the timber was affected and replace only those timbers which were structurally damaged, keeping as much of the original timber as we could. The inner skin of the brickwork parapet wall was in a poor state of repair as was the brickwork immediately under the wall plates. Much of the inner skin and brickwork under the wall plates was carefully taken down and rebuilt to provide a sound and more weatherproof structure.

The work commenced on the front elevation but we gradually made our way through to the back of the house, rather like detectives, following the dry rot around the building. Because of the way in which dry rot spreads, we could not be certain that we had found everything and we often discovered that we would find it in the floor of a particular room and we would then need to look at the ceiling of the room below which itself would lead us on to dry rot progressing down the walls of that room below. . . . . . it is always easy with the benefit of hindsight to argue that the work should have been carried out in a different way but I think that at the time we proceeded in the most prudent way possible.

Mr. Mortimer prepared the claimants' Scott Schedule. He wrote this in his witness statement:

In early 1999, I was asked by the Claimants' solicitors to prepare a schedule detailing the dry rot visible at Stretton Hall, the extent and location of the dry rot and the cost of remedial works.. . . . . I had prepared a document setting out in detail what I saw at Stretton Hall and what work was carried out. I used this as the basis for the schedule. Also as the work went on for over a year and I visited every week I have a fairly good memory of what was found, where, and how we put it right. Symm always keeps time sheets for all the labourers who have worked on site for a period of 6 years.

Accordingly, I went to our archives and pulled out all the time sheets for every man who had worked at Stretton Hall and all the invoices which we had kept on file of the materials, plant and sub-contract services which we had purchased. I then sat down to reconcile the invoices and the time sheets with the work which had actually been carried out. This was an extremely time consuming process and took me and other members of our staff about 30 man days to complete.. . . . .

I then actually listed by reference to three levels of the house (the roof and second floor, first floor and ground floor) the work carried out by each of the men on site. . . . . .The result is that the document I produced listed the work carried out at each of the three levels referred to above, who did the work, when they did it, what their discipline was and how much it cost. It also set out the cost of materials, plant and subcontractors and I am as certain as I can be that the background invoices and time sheets will back up the figures I produced.

80. In the Scott Schedule, the sum of £748,925.15, not including VAT, is claimed to be the relevant cost of repairs. The total final account sum, including the cost of the refurbishment works, was £1,354,650, not including VAT. Mr. Mortimer excluded costs of work carried out in the basement. He was right to do so. No complaint was made about the defendants' report in relation to the basement. On the other hand, work in relation to the ceiling of the ground floor study (called the second study in the Scott Schedule) was included, although that area was the subject of warning in the report. The cost of the work to the ceiling of the second study does not separately appear, but it must represent a very small part of the total Scott Schedule sum. In the circumstances, I shall ignore it.

81. Miss Sinclair submitted that the exercise carried out by Symm to prepare the Scott Schedule was an attempt to cost the dry rot works as if they had been done pursuant to a dedicated contract, rather than as additions to the refurbishment contract. Whatever the degree of success of the attempt, I accept that the principle is correct.

82. Mr. Philip Fidler FRICS, FCIArb was a quantity surveyor jointly instructed by the parties. He reviewed the costs of the work identified in the Scott Schedule. He arrived at a figure of £732,704.86, including decorations at £36,004.42. He calculated the prime cost element of the balance of £696,700.44 at £535,923.41. Those figures were not called in question as such. Mr. Fidler did, however, question whether some of the items related, or related wholly, to dry rot repairs.

83. Since the valuation of the property is not a precise exercise, there is no point in going into the minutiae of the cost figures. The valuers have generally given their values in multiples of £25,000. I shall adopt a broad-brush approach.

84. Miss Hannaford attacked the Scott Schedule figures on two broad grounds: that the work was unnecessarily expensive and that not all of it properly fell within the exercise. As to the former ground, she relied first on the fact that the contract price was costs plus 30 per cent. She relied secondly on the absence of cost control on the contract. There is no doubt that the claimants regarded expense as no object. Whilst purchasers of properties such as Stretton Hall can be expected to be wealthy, and to require the highest standards of materials and workmanship, the damages must be calculated on the assumption of competitive prices consistent with those standards. I shall return to consider the point further.

85. Miss Hannaford made a number of points in support of her second broad ground, which I shall now consider.

86. Miss Hannaford submitted that the claimants could not show that there was ingress of moisture into the building, and therefore could not show that the bulk of the remedial works were necessary. I reject that submission. There were potential points of ingress of water into the building, not mentioned in the defendants' report, which needed repair to avoid further attack by dry rot.

87. All the parapet and central valley gutters, including the lead flat over the projecting bay, were reformed with new timber sub-structures and stepped plywood gutter bays and covered with new lead. That, in my judgement, involves betterment, since the defendants had given some warning about the lead. I have quoted it above, but for convenience I repeat it here:

General repairs of a lesser nature should be undertaken to brickwork, parapet walling and any leadwork to the main roof . . . . .

Mr. Mortimer was questioned about the replacement of the lead:

Q. Any damage to the existing lead work could, in fact, have been repaired by use of patch repairs or replacement of some sections of lead work, could it not?

A. No, that is not the case. It was in very poor condition generally speaking the lead; and lifting and trying to reuse lead of that age is impractical. You may lift it and have it salvaged, have it re-melted, but it would have been impractical to reuse that lead or indeed to repair it in our opinion.

Q. How many actual places on the lead work on the roof did you find actual evidence of leakage, current leakage, underneath in the property? How many places?

A. Difficult to say. I would imagine half a dozen or so.

. . . . . . .

Q. Your major concern about this roof as I understand it, Mr Mortimer, is that it did not comply with modern Lead Development Association Standards; is that not right?

A. No, that is not the case. In many cases if old roofs -- the current codes as I understand it have grown up through time, and it is very common to find very large heavy code lead bays on buildings that are perfectly satisfactory. In this case there were splits; the detailing was poor; the steps in the lead gutters were too shallow and generally speaking the condition, in our view was poor; and minded that Mr Taylor wanted this building to have a considerable life-span, we discussed with him the re-roofing of the building and between us agreed that that was the best course of action for his future use of the building.

Q. Right. So he ended up with a top quality new roof.

A. Yes, that is correct.

I accept that evidence. I do not regard the description of the roof as being in a condition requiring "general repairs of a lesser nature" [sc. of a scope less than the undertaking of preventative treatment of the timbers affected by leakage of water from the defective downpipe] as warning the reader of the substantial repairs that were necessary to prevent the recurrence of dry rot. Even if it was not impossible to repair the lead, I conclude that any saving of cost in repairing it so as to bring the roof into a condition no better than that reported would have been relatively small, and negligible for present purposes. In those circumstances, the betterment is irrelevant.

88. Mr. Mortimer's evidence quoted above covered the wings as well as the main roof. The report contained advice that the left wing gutters should be investigated, though there was no reason why the purchase should not proceed. That, in my judgement, implies that although some expense would be incurred, the condition of the gutters was not such as to affect the value of the house. I reach the same conclusion as that arrived at in the preceding paragraph.

89. Miss Hannaford submitted that the works to the roof of the right-hand wing were caused by general nervousness and the fact that by the time it came to be re-roofed all the other roofs had been re-roofed. Therefore the costs should not be allowed. I reject that submission. The reasons given by Miss Hannaford were only part of the whole. More important reasons given by Mr. Mortimer were that the wing had the same gutter problem as the left wing, and substantial dry rot had been found in the rooms beneath the roof of the right wing.

90. In the case of both wings, the timbers were substantially affected by woodworm. That factor contributed largely to the decision to re-roof at any rate the left wing. A substantial element of the cost was not related to dry rot. The timbers riddled with woodworm were removed, and those remaining were treated for woodworm and dry rot. The total cost does not appear. The budgeted approximate figure was £15,000. Miss Hannaford made the general submission that Mr. Mortimer's overall figure of relevant costs in the Scott Schedule contained substantial mistakes and could not be relied on. Since it was not broken down in an intelligible way, the claimants had to prove each item of cost, over and above some items which she accepted totalled £66,000. I reject that submission. I accept Miss Sinclair's submission that the claimants acted reasonably in deciding that the dry rot works, the necessity for which was unexpected, should be carried out as the refurbishment contract progressed. Detailed contemporaneous records of the works, distinguishing between those relating to dry rot and the others, were not kept by Symm in 1995 since they had no reason to do so. The only way in which Symm could perform the necessary costing exercise was by reference to the detailed knowledge which Mr. Mortimer and Mr. Hooper had of the entire job, and the relative proportions and costs of the dry rot and other elements. I am satisfied that that laborious and difficult exercise was carried out honestly and skilfully, though by no means infallibly. Subject to the evidence that particular corrections are necessary, I regard Mr. Mortimer's evidence of the relevant costs as the best evidence available, and broadly reliable. I shall deduct £15,000 for this item. In my judgement, that figure will not give rise to injustice to the defendants, and takes into account the fact that the burden of proof lies on the claimants.

91. The report advised that some modest pointing attention to the parapets was appropriate. In fact, all existing copings were uplifted and a lead damp-proof course was introduced. The copings were re-fixed, and damaged copings were repaired or replaced as required. I am satisfied that all that was necessary. There is no evidence that it would have cost less, nor is it probable that it would have cost significantly less, to have left out a modest amount of pointing. However, the introduction of the lead damp-proof course appears to have cost £8,000. That work does in my judgement give rise to betterment over the condition of the property as described. I deduct £8,000 on that account.

92. The cost of leadwork to the cornice was claimed at £11,000 in the Scott Schedule. I accept that it was a sensible precaution to repair the cornice, given the presence of dry rot in the building and the risk of its repetition. However, I am not satisfied that damp had entered the building by reason of the condition of the cornice. Nothing was said about the cornice in the defendants' report. The valuers have valued the building on the basis of its condition as described in the report, which in my judgement means, in this context, on the basis that no work to the cornice was required. I am not satisfied that the work to the cornice was required. Thus the £11,000 ought to be deducted from the cost of repairs in order to arrive at the diminution in value.

93. The defendants said that the wholesale removal of plaster and associated works in order to facilitate irrigation of brickwork with pesticides was unnecessary and damaging, and was not approved either by reputable building conservationists or by authorities on the subject of dry and wet rot. I am entirely satisfied, in particular on the evidence of Mr. Wilde, that although BRE digest 299 is largely dismissive of the use of irrigation, it is a technique that is still widely adopted across the timber treatment industry. Not only was it, in my judgement, reasonable to carry it out, but in view of its widespread adoption it is properly included in the costs of repair for the purposes of the present exercise.

94. The insulation to the roof was replaced. The inadequacy of the insulation may have caused condensation, giving rise to a risk of further outbreaks of dry rot. Since Mr. Tytherleigh did state in his report that the insulation provision was somewhat minimal by modern standards, albeit without making reference to dry rot in that context, the costs of the new insulation should not be included in the cost of repairs. However, although the new insulation is mentioned in the Scott Schedule in the narrative of the works of repair, there are no identifiable items showing that any such costs were included.

95. In the Scott Schedule it was claimed that a water tank had to be removed from the roof in order to afford access to the lead for repairs. Mr Mortimer gave evidence that his recollection was that the tank was on the roof. Mr. Tytherleigh's report states clearly that both the cold water storage tanks and the central heating header tanks were situated in the roof void. I am satisfied that Mr. Mortimer was mistaken in that respect, and that the item for removal of the water tank should not be included. The amount is £8,000.

96. A sum of approximately £7,000 was claimed for renewing all pipeworks to second floor bathrooms as required to accommodate dry rot eradication and repair works. Miss Hannaford questioned Mr. Mortimer about that on the basis that the pipework was for new bathrooms. Mr. Mortimer explained that it was necessary to remove the old pipework in order to gain access to the joists that required repair. That pipework was 20 or 30 years old and it was bad practice to put the same old pipes back. He said he had tried to make an apportionment between work required for repair and work required for the new bathrooms; but he could not say without checking whether that had been done in this case. He accepted that the sum of £7,000 could not possibly relate to renewing pipework to the one original bathroom. In the circumstances, I am satisfied that this sum is substantially in excess of the relevant cost of repair. There is no evidence on which I can assess a proper sum. The claimants have therefore failed to satisfy me that any sum in respect of this item can go towards the cost of repairs.

97. A sum of £22,500 is included in the Scott Schedule for rainwater goods. There were broadly two reasons for that expenditure. First, Mr. Michael Taylor wished to have the existing lead rainwater pipes refurbished and have paint removed from them. It was not economic to do that. Second, the drainage of the roof was redesigned. I am not satisfied that either of those things was necessary in order to put the property into the condition described in the report.

98. The Scott Schedule contains a figure of £38,000 for decorations. Mr. Fidler's figure, as I have said, was £36,004.42. I am satisfied that not all of those decorations were necessitated by the dry rot works. No breakdown of the figures has been put before me, but from the evidence of the nature of the works, I assess the relevant costs at half that sum, £18,000. I shall consider that figure separately from the prime costs.

99. A sum of £63,000 was included in the Scott Schedule for electrical works. The contractor was a company called Monard. That sum represented 40 per cent. of Monard's final costs. It was stated in the Scott Schedule that Monard's work included the rewiring of the majority of the house as a result of the dry rot remedial works at roof, second, first and ground floor levels. Costs specifically related to dry rot remedial works were difficult to define. 40 per cent. was an estimated proportion of the whole work that directly resulted from the dry rot remedial work. Miss Hannaford criticized that apportionment on the ground that part of the total sum was incurred pursuant to a quotation dated 14^th February 1995, before the dry rot was discovered. The quotation, which was for £18,000, stated:

Rewire the ground floor and the remainder of the first floor to bring the electrical installation up to current standards. Please note this is a worst case figure as the extent of VIR cabling is unknown until the work commences. This wiring is not unsafe at present; however, as major works are being carried out to the house we would recommend that this work be undertaken.

I reject Miss Hannaford's argument. The work quoted for on 14^th February 1995 may or may not have included work which in any event would have been necessitated by the eradication of dry rot. I have no reason to doubt Mr. Mortimer's figure of 40 per cent., which he applied to the whole.

100. Miss Hannaford submitted that items relating to bedroom wardrobes should not have been included in the Scott Schedule. They amount to some £3,800. She submitted that the expense was not allowable because the work had been contracted for before the dry rot was discovered. It may be that some of the work was not to do with dry rot. But Mr. Mortimer gave evidence that in stripping off plaster and accessing the roof structure, cupboards were taken off and later reinstated. I am satisfied that at least some of this expense is allowable, but in the event the amount, if any, to be deducted is too small to have any effect on the value of the property.

101. Miss Hannaford made a similar submission in relation to rebuilding of the dormer windows. The following exchange took place in her cross-examination of Mr. Mortimer:

Q. So you are saying, I think, that the costs on this page include non-dry rot works?

A. No. I am saying that we believe that the weathertight, the sound weathertightness of the roof and indeed parapets and all other external details at that level is essential to stop dry rot recurring. You and others will make a decision over whether that is to be included or not but we included it in here because it was part of that original roof covering exercise, some of which was, you rightly point out, noted in the original correspondence with Mr Taylor.

Q. What I am suggesting is that the new dormer windows were noted in the original correspondence?

A. Correct, yes.

Q. So your inclusion of them in this schedule gives Mr Taylor the benefit of new dormer windows which he was otherwise going to be paying for anyway?

A. Correct.

I am satisfied that this work would have been included in a contract for the repair of the dry rot. The fact that Mr. Taylor would have been paying for the windows anyway is irrelevant. But the fact that they were new does represent a degree of betterment. The amount involved is some £3,000. Possibly the cost of simply repairing the windows would have been less, but any difference is negligible. I conclude that no deduction is to be made in respect of it.

102. Mr. Fidler gave evidence that the cost of the site hut element of the preliminaries had not been apportioned between dry rot works and other works. He had been instructed not to make such an apportionment himself. Miss Hannaford submitted that that cost should be apportioned. I accept that submission. I have added up the amounts concerned, and they come to the sum of £2,400. The prime costs of the dry rot work and the other work, as estimated by Mr. Fidler, were approximately equal. I shall arbitrarily apportion the costs of the site hut equally. There should thus be a deduction of £1,200 from the costs in the Scott Schedule.

103. Miss Hannaford submitted that all minibus costs had been included in the Scott Schedule. No apportionment had been made between dry rot works and other works. As I understand it, those costs were incurred in order to transport Symm's workers between Oxford and Stretton Hall. I reject Miss Hannaford's submission. Minibus charges are claimed for a total period of 36 weeks. Allowing about 27 weeks for the original works as extended (see below), and bearing in mind that the overall contract period was about 12 months, I find it entirely credible that Mr. Mortimer carried out an apportionment as he claimed in evidence to have done.

104. Miss Hannaford also submitted that all the accommodation costs of the workforce had been included in the Scott Schedule. That was clear, she said, from Mr. Fidler's evidence. In fact, Mr. Fidler gave evidence that he had not checked the point.

105. Miss Hannaford made the further point that Mr. Mortimer had agreed that re-plastering work had been included in the original refurbishment contract and the same work was included in the Scott Schedule. Mr. Mortimer gave this evidence on the point:

We have tried to apportion on the job . . . . . as best we could. There will be, I have no doubt, anomalies because the base information was not accurate enough to do that.

I am satisfied that Mr. Mortimer has made a reasonable apportionment, sufficiently accurate for present purposes.

106. Miss Hannaford submitted that Velux roof lights should not have been included in the Scott Schedule. I accept that submission. The amount is £400.

107. The Scott Schedule included the cost of a new cold water main. Mr. Mortimer accepted that it might well have been necessitated not by the dry rot works but by an increase in the size of the cold water tanks. The cost, so far as I can tell, is either £800 or £1,200. I shall deduct £1,000 on account of the new cold water main.

108. The scaffolding costs included in Mr. Fidler's figure for the prime cost were £24,000. Mr. Fidler said that it appeared that the whole of the account of the scaffolding sub-contractor had been included. The figure appearing in the Scott Schedule was £32,000. Nevertheless, Mr. Fidler's figure was not arrived at by apportionment and has been taken as the basis of this exercise. It appears that the scaffolding was used largely for the dry rot works. But the period when the scaffolding was up was greater than it would have been if the dry rot works had stood alone. I cannot tell whether the costs are proportional to the time. I expect that they contain a fixed element and that only part of the costs are time-dependent. But if I assume that the total costs are proportional to the time I shall, I think, be making an assumption which, if it is incorrect, will be in favour of the defendants and will thus be justified having regard to the burden of proof. I deduct £12,000 on this account.

109. I conclude that the deductions that should be made from the prime cost of the dry rot works as calculated by Mr. Fidler should be £86,100. That leaves £449,823.41.

110. I turn to the first broad ground of Miss Hannaford's attack on the Scott Schedule figures: that the work was too expensive. Miss Hannaford's second point, which I shall consider first, was the absence of cost control that is inherent in a cost-plus contract. It is true that no cost control was exercised by or on behalf of the claimants. And they paid Symm's accounts without question. There was no evidence of any delay or inefficiency in the carrying out of the work. As to the wage rates of the workmen and rates for plant, Mr. Fidler wrote this in his report:

The hourly rates paid by Symm and Co to its self employed workmen apart from travelling time ranged from £10.94 to the Hooper brothers, who both appear to have had additional responsibilities to those of a normal craftsmen, to around £9.00 for craftsmen performing normal tasks. Labourers on the whole received £5.50 per hour. The Hooper brothers were paid an increased rate of £11.37 from 1^st July 1995. Disregarding the Hooper brothers I would have expected normal time working by self employed craftsmen at that time to be no more than £8.50 per hour although enhanced rates would apply for work done out of hours. The £9.00 or so paid by Symm and Co was an all in rate regardless of the hours worked which included normal levels of overtime. On the other hand the rates paid by Symm and Co to its self employed labourers are less than the £6.00 or so that I would have expected to pay such workmen for normal time working. Again the Symm and Co rate applied to overtime as well as normal time work. I have not calculated the effect of substituting the rates I would have expected compared to those of Symm and Co. Neither have I reviewed the rates charged for plant provided by Symm and Co.

He also wrote to the effect that he had insufficient information to guess at the savings that might have been achieved by competitively tendering the work of the major sub-contractors.

111. Mr. Fidler gave this evidence in answer to questions from Miss Hannaford:

Q. You refer there to costs plus agreements and you say, about four lines from the bottom of that paragraph, that: "It is important to realize that a cost plus arrangement has little or no risk for the contractor concerned. By this I mean pricing risk as well as delay risk." Is that right?

A. That is correct.

Q. It is also the case with cost plus, is it not, that the client will pay for any inefficiencies of the contractor?

A. Indeed.

Q. That will be particularly the case if there is no independent quantity surveyor scrutinizing the costs as the project continues?

A. Or someone on site perhaps, such as a clerk of works, who may be there permanently or visiting to check on things.

Q. Going back to my example of a job taking two weeks for a labourer which should only have taken two days, the two weeks will be passed on to the client in a cost plus contract?

A. It might well do, yes.

Q. In this cost plus contract it seems inevitable that it would have been passed on, does it not?

A. Yes, it does.

Q. I do not know whether you are aware of the evidence given by Mr Leighton to the effect that he never queried the estimates or cost reports provided by Symm?

A. I was not aware that he had given that evidence but it did seem obvious from what I saw in the papers.

Q. You would presumably agree that if work is being done on a cost plus basis it will be sensible for the costs to be monitored independently so that only reasonable costs are paid to avoid the employer having to pay for the contractor's inefficiencies?

A. Indeed. As I was explaining earlier, it would be quite a simple matter for a cost plus arrangement with a standard form for there to be competition on the fee.

Q. It is not only in relation to time, is it, where the employer is likely to suffer on a cost plus arrangement; the same may apply to materials, may it not?

A. Yes.

Q. So the client will take the risk of unnecessary materials being bought or used?

A. Or left on site too long with a view to plant and preliminary items.

Q. So you are taking my point in relation to materials and extending it to plant and preliminary items?

A. Indeed. The prime cost system does all those things.

He also wrote in paragraph 143 of his report:

Symm and Co's company accounts for the year ended 31^st March 1996 show a profit before tax of £342,169.00 compared to £9,044.00 the previous year. Conveniently for us the turnover for the Stretton Hall project would have occurred almost entirely in their 1996 financial year and I assess that between 25% and 30% of that year's turnover of £4,704,028.00 was in respect of Stretton Hall. This seems to suggest that the very significant increase in profit in 1996 was related to their work for the claimants, and bears out what I have managed to deduce from my background researches.

Whilst the costs of any inefficiencies or delays or excessive payments made by Symm would attract the uplift of 30 per cent., I do not regard that passage as affording significant evidence that any such unnecessary costs were incurred.

112. Mr. Mortimer gave this evidence in answer to questions from Miss Hannaford:

Q. Mr Taylor was a man who wanted an extremely thorough job done on his property, was he not?

A. Yes.

 

Q. He was happy to spend considerable amounts of money provided he thought that he was getting a top class job?

A. Yes.

Q. As a result of that, he did not always choose the cheapest materials or the cheapest method of doing work, did he?

A. We would be mindful of the costs but of paramount importance to him was to get the building finished to a high quality and swiftly.

Q. You presumably felt that your company was in a position to give him a Rolls Royce service, if I can call it that?

A. We felt we could do the work required to the standard required and we have a great deal of experience on these sorts of buildings and, yes, we felt we could provide the right product for him.

Q. Which, as I think you have just agreed with me, was a top class product?

A. In his words it was, yes; a Rolls Royce product.

Apart possibly from those questions, it was not put to Mr. Mortimer that Symm had carried out the work inefficiently or at excessive cost bearing in mind the quality of the work.

113. As to the on-costs and overhead allowances included in the prime cost, Mr. Fidler described them as reasonably generous.

114. On balance, I am satisfied that excessive costs were not incurred. I am not satisfied that the absence of cost control on the part of the claimants led to any increase in costs significant for the purposes of the present exercise.

115. As to the uplift of 30 per cent. over prime costs which was charged by Symm, Mr. Fidler considered that if competitive tenders had been sought, a much lower figure would have been obtained. There would have been a modest profit by the keen pricing standards of 1995 if no fee had been added. Symm would have obtained a fee of no more than 2 per cent. if competitive tenders had been obtained. He said in his report that competitive tenders could have been obtained by using the procedure of a management contract. It would have been possible, he said, for a designer to produce adequate drawings and specifications for the non-dry rot work on cost-plus basis. It would have been possible to cater provisionally for the investigation and treatment of dry rot. He went on to say in his report:

I am aware that the magnitude of the discovery of dry rot was something that occurred progressively. However, if a reasonably competitive arrangement had already been in place it should have been possible to negotiate adjustments to cater for the progressive increase in volume of dry rot work at related prices to the tendered cost- plus work.

116. I find Mr. Fidler's advocacy of a management contract unpersuasive. Moreover, it involves the assumption of a refurbishment contract. Whilst it may be fairly normal for a purchaser to refurbish a recently-acquired property, the valuers have given their valuations of the property in its actual condition by reference to the cost of repairs, not by reference to the marginal cost of repairs over and above any cost of refurbishment.

117. Mr. Mortimer gave evidence that the cost-plus arrangement turned out to be particularly appropriate given that the extent of work caused by the wet and dry rot became apparent only as the work progressed. The cost-plus basis allowed speed and flexibility. Mr. Fidler agreed that it was more flexible than other arrangements. Mr. Mortimer said that in his experience and in that of Symm

management contracting is rarely chosen for contracts of this nature. By management contracting Mr Fidler is referring to a contract where packages of work are put out to tender and a project manager co-ordinates these contractors on behalf of the client. However, this can often create difficulties in the interface between the various contractors and is a very time-consuming method not generally suited for remedial works to historic buildings where the nature and scope of the works required is often not known until the contract progresses, and the client does not want delay to the work causing loss of use of the building.

Symm are most often instructed on a 'traditional' basis by clients who choose us for our specialist knowledge and experience. Symm undertake a full consultancy role and provide the client with the full range of professional services and instruct sub-contractors where necessary. The client does not need to instruct separate professional advisers and can rely on Symm to co-ordinate all the works. In the present case, this arrangement meant that Symm was able to engage sub-contractors when it became necessary as the extent of the dry rot and the scope of the works became clear, and there was no delay while tenders were made. As this was not a management contract, but was a traditional contract, I therefore do not believe that it is helpful to look at management contracting in the present case or to compare this with traditional contracting.

118. I accept Mr. Mortimer's evidence that management contracting is rarely chosen for contracts of the kind which was carried out. In my judgement, a cost-plus contract would also have been appropriate in this case for a contract confined to the investigation, elimination and protection from dry rot, and for the reasons that he gave.

119. Mr. Mortimer criticized Mr. Fidler's analysis of the accounts of Symm that I have mentioned above, contained in paragraph 143 of Mr. Fidler's report. He said that Symm's total value of work carried out in the year ending 31^st March 1996 was £8,031,022 rather than the £4,704,028 identified from the company's published accounts which represented only the value of work actually invoiced in that financial year. I reject Mr. Mortimer's criticism. Mr. Fidler, as it seems to me, was using the expression turnover to refer to invoiced work.

120. The profit shown by the accounts represents 7.2 per cent. of turnover. If Mr. Fidler's implication that the profit on the work at Stretton Hall must have been at least 30 per cent. is correct, Symm would have made a small loss on the rest of their turnover in the year in question. That supports the conclusion reached by Mr. Fidler in the last sentence of paragraph 143 of his report. There is no evidence of the nature of the other work carried out by Symm in the year in question.

121. Mr. Mortimer said that it was Symm's common practice to recover overheads by way of on-costs and to charge a fee by way of an additional percentage. Our charges, he said, reflect the specialist nature of the work we carry out, our professional management expertise and high quality of craftsmanship. As I understand that passage, the fee represents a reward for special expertise, i.e., it represents profit. I conclude that Symm made a profit on this contract that at any rate for the year in question was exceptionally high. That suggests that under competitive tendering fees of significantly less than 30 per cent. might have been quoted, and that under negotiation Symm might have agreed to accept a lesser fee than 30 per cent. However, if a contractor without the professional skills of Symm were engaged, professionals would have to be engaged at extra cost. If a contractor without knowledge of traditional methods of construction and repair were engaged, a consultant would need that particular expertise and would need to be closely involved throughout the execution of the contract. Thus I find that competition is likely to lead to a higher fee than Mr. Fidler's figure of 2 per cent. Miss Sinclair did not contend for 30 per cent. She suggested 20 per cent.

122. Mr. Mortimer had an M.Sc. degree in historic conservation. For that degree, he wrote in 1997 a dissertation entitled "Managing to conserve". That dissertation contained a list of JCT contracts carried out by Symm between 1992 and 1997 on historic buildings. The list was selected at random and showed the professional fees charged in each case as a percentage of the contract, final account or budgeted sum. Those percentages ranged between 15 and 24 per cent. On the totality of the evidence, I am satisfied that a suitable contract is unlikely to have been obtainable at a lesser price than the prime cost plus 15 per cent.

123. Mr. Fidler pointed out that if a local contractor had been employed, the costs of the minibus driver, hotel accommodation and workmen's travelling and subsistence costs would not have been incurred. There is no evidence whether a local specialist contractor able and willing to carry out a contract of this specialist nature existed. It seems to me inherently less probable than not. I do not find it reasonable to deduct those costs from the prime costs.

124. The appropriate cost of repairs as of 1995 I find to be as follows. The prime cost is £449,823.41. To that is added a fee of 15 per cent., making £517,296.92, say £517,300. I have to add back £18,000 for decorations, making £535,300. By common consent, a deduction of 8 per cent. must be made to adjust for inflation of relevant prices between 1993 and 1995. That makes the appropriate cost £492,476. To that figure must be added VAT. The average rate of VAT chargeable on Symm's final account was approximately 7 per cent. Applying the same rate to the figure of £492,476 yields a total cost of about £527,000.

125. In a passage I have mentioned above, Mr. Fidler raised the question of the costs of investigation of dry rot. The question whether those costs are to be included in the assessment of the appropriate cost of repairs was not canvassed before me. Since the dry rot was discovered as the work continued, the costs of investigation were effectively included in Symm's final account, and at least a proportion of them must be reflected in the figure I have arrived at above. In Steward v. Rapley [1989] 15 EG 198 Purchas L.J. said at p.162, F

The basic assessment figure, on all the authorities, is what is the real value of the house tested against a careful inspection and followed by prudent further investigation.

Nicholls L.J. said (page 163, J)

What, then, was the true market value in August 1984 if the property had been described as it should have been? Had it been so described, the house would have been described as subject to dry rot along the lines of the Rentokil report, known to be extensive with a real possibility that there might be more.

In default of any other evidence, and the defendants called none, the best evidence of the market value of the property so described seems to me to be that contained in Mr Williams's second report, prepared later, when the full extent of the necessary work had been ascertained. Of course the sum of £33,200 there stated could not have been arrived at in August 1984 without very extensive opening up of the property. But I do not think that undermines the correctness of this sum. This was a property, subject to a serious defect which had to be remedied, but the extent of the defect - and hence the cost of the necessary remedial work - was not known. The existence of that defect did not come to light in the event in August 1984, but it ought to have done. Had it done so the necessary opening up could have been done then. The professional advice to buyers would have been not to proceed until the full extent of the dry rot was known for sure. In those circumstances, and failing cogent evidence to the contrary, I do not see why the market value of the property in August 1984 should not be the market value of the property in the condition in which it was thought to be, namely £60,000, less the cost of the necessary remedial work which full opening up then would have revealed.

The figure of £33,200 reflected the cost of remedial works at £26,800 including an allowance for betterment. It appears from the judgements that the cost of investigation should not be included, although without it the figure of £26,800 could not have been arrived at. However, the figure of £26,800 included an item from Protim Services for work done pursuant to a quotation. That company had inspected and investigated the property after some opening up before submitting its tender to eradicate the invasion of dry rot. The quotation doubtless included an amount to cover an average cost of carrying out inspections including those not leading to accepted tenders.

126. The matter not having been canvassed before me, it is unnecessary for me to decide whether I ought to make some adjustment to the figure I have arrived at above, or if so how much.

Diminution in value.

127. Valuation is not an exact science. Mr. Froude gave evidence, which I accept, that in a vendor and purchaser negotiation there is more often than not some rounding off, and when one is talking of a property within this range of value negotiation is likely to lead to a figure which represents increments of £50,000.

128. The experts were agreed that the diminution in value of the property was less than the cost of repairs. They differed as to how much less. The cost of repairs I have found to be £527,000. Mr. Major considered that if the cost were £525,000 the value of the house would have been £875,000. Mr. Major was not valuing the property on an open market basis, and it is clear from his evidence that in his view that caused his valuation to be higher than it would otherwise have been. I have to arrive at a value on the open market basis. Mr. Froude gave a value of £750,000 on the basis of costs of repair of £525,000. He accepted that the discount he was allowing from the cost of repairs in assessing the diminution in value was conservative. I find the value of the house to have been £775,000.

129. Thus the damages for diminution in value will be the price paid, £1,172,000, less £775,000, viz. £397,000.

Loss of use.

130. Miss Sinclair submitted that the works necessitated by the discovery of the dry rot problem at Stretton Hall prolonged Symms's contract and thereby kept Mr. Michael Taylor and his family out of the property for longer than would otherwise have been the case. They were accommodated in Brandon Lodge, another property on the estate, which the claimants would otherwise have let. The claimants claimed damages for the loss to the trust of the rental income from Brandon Lodge for a period reflecting the time when Mr. Taylor and his family might reasonably be regarded as being kept out of occupation of Stretton Hall by reason of the carrying out of the dry rot works.

131. Miss Hannaford's arguments against recovery of damages for loss of rent were directed solely to the facts. But she did not concede liability at law. I must therefore consider that question.

132. Miss Sinclair submitted that the cost of alternative accommodation was recoverable in law. There was ample authority, she submitted, for an award of damages for the cost of alternative accommodation in such a case. I was referred by way of example to the decisions of Paull J. in Hood v. Shaw (1960) 176 E.G. 1291,1295 and of Judge Graham Jones sitting as an Official Referee in Shaw v. Halifax [1994] 2 E.G.L.R. 95, 99 at L. In the former case, Paull J. held that "if a surveyor leads a person to purchase a house by a report which was negligent as to its condition, and it is not until the purchaser gets into the house and has lived in it a little time that he realizes, or can reasonably realize, that that report is simply not a true report", he is entitled to the costs he incurs for alternative accommodation which he occupies while the work of repair is carried out. The words in inverted commas are the words of Paull J. In the latter case, Judge Graham Jones held that the items expended by the purchaser in consequence of breach of the surveyor's duty which did not form part of the costs of repair were recoverable. In Watts v. Morrow [1991] 1 WLR 1421 C.A., Ralph Gibson L.J. (at p. 1441 G) expressly reserved his decision on the question whether costs incurred by a claimant in renting other accommodation were recoverable.

133. If the trustees would have bought Stretton Hall even if the contract had been performed, they would still have suffered the loss of use that in fact occurred. On that hypothesis, they have suffered no damage in respect of loss of use by reason of the defendants' negligence. In this case I am satisfied that they would not have bought the house if the contract had been performed. If the contract had been performed they would not, of course, have had the use of Stretton Hall; they might or might not have purchased another house, but either way there is no reason to suppose that they would have suffered loss of use of their property. Thus, on the facts of this case, their loss of use of Stretton Hall represents damage they have suffered by reason of the defendants' negligence. In my judgement that is consequential loss that they are entitled to recover from the defendant. It is true that the repair costs, which on the authority of Watts v. Morrow are generally irrecoverable as such, are also consequential loss. But the repairs go to increase the value of the house. Thus the repair costs and the overpayment for the house are not cumulative losses; and they are quantified (at any rate in general) by reference to the latter.

134. Mr. Taylor was out of occupation of Stretton Hall from April 1995 until May 1996, when the works were finally completed. Works of improvement had been carried out on Brandon Lodge, and it had been intended to let it out. Mr. Taylor and his family moved out of Stretton Hall into Brandon Lodge in April 1995 in order to allow the builders to get on with the work. Their return was delayed by the dry rot work. The evidence of actual loss of rent from Brandon Lodge is thin. Apart from the evidence of intention to let it out, the only evidence on the point is that Brandon Lodge was let from February 1997 at a rental of £2,250 per calendar month. There is no evidence that any attempt was made to let it earlier.

135. Miss Sinclair calculated the loss as follows. The original refurbishment contract was estimated at £315,000, with a contract period of 18 weeks. The estimate was increased to a sum of £476,000, to include further work. No period of time was stated. Prorating the time to the amount of the estimates yields a period of 27 weeks for the refurbishment works. The prolongation caused by the dry rot was therefore approximately six months. She sought damages for loss of use calculated as £2,250 a month for six months, viz. £13,500. She made no allowance for any inflation of rents between the time of Mr. Taylor's occupation of Brandon Lodge and 1997.

136. I am not satisfied that any actual loss of income, as opposed to loss of use, was incurred. Although no doubt Stretton Hall could command a substantially higher rent than Brandon Lodge, only a modest sum should be allowed for loss of use which has not demonstrably led to pecuniary loss. In my judgement, £4,000 is the proper sum to award by way of damages for loss of use of Stretton Hall.

Total damages.

137. Since the damages for diminution in value amount to £397,000, the total damages, including damages for loss of use, will be £401,000.