Platform Funding Ltd v Bank of Scotland Plc (Formerly Halifax Plc)

This is an appeal against an order of His Honour Judge Collins CBE made on 2^nd November 2007 in the Central London County Court giving judgment for the claimant, Platform Funding Ltd (“Platform Funding”) against the defendant, Bank of Scotland Plc, for damages to be assessed. The defendant was formerly known as Halifax Plc, but in relation to the matters with which this appeal is concerned it traded under the name of Colleys and it is therefore convenient to refer to it in this judgment by that name.

The appeal concerns the nature of the obligations undertaken by a surveyor who is instructed by a mortgage lender to value the property offered by the borrower as security for a loan. The lender in this case was Platform Funding which was approached by a borrower, Mr. David Hewes, for a loan to be secured by a mortgage on a property known as 1 Bakers Yard, Belchmire Lane, Gosberton, Lincolnshire. Colleys carried on business as surveyors and valuers and in circumstances to which it will be necessary to refer in greater detail in due course provided Platform Funding with a valuation of a property identified in its report as 1 Bakers Yard, Belchmire Lane, Gosberton. The valuer’s report contained the following certificate:

“Declaration

This valuation is for the benefit of Platform Funding Limited, its successors, assignees and transferees . . . . . .

I certify that the property offered as security has been inspected by me and that the above valuation is a fair indication of the current open market valuation for mortgage purposes . . . . . . .”

Unfortunately, however, the valuer had not inspected 1 Bakers Yard, which was a plot of land on which stood a house still in the course of construction. He had been misled by Mr. Hewes into inspecting 5 Bakers Yard, a plot close by on which stood a house that had almost been completed.

In January 2003 Platform Funding advanced Mr. Hewes £154,495 on the security of a mortgage on 1 Bakers Yard. However, Mr. Hewes failed to maintain the payments due under the loan agreement and in November 2004 Platform Funding repossessed the property in order to realise its security. At that point the mistake came to light. By that time the amount outstanding on the loan account was £184,951.68. The property was sold for £154,506.99 after deduction of the costs of sale, leaving a shortfall of £30,444.69. Platform Funding sought to recover its loss from Colleys.

At this point it is necessary to describe in greater detail how this state of affairs came about. In September 2002 Mr. Hewes approached a mortgage broker called The Mortgage Helpdesk for assistance in arranging a loan. On 12^th September an application for a loan was filled out by a representative of The Mortgage Helpdesk, Mr. Allan Davis, on the basis of instructions received from Mr. Hewes. It was directed to Victory Home Loans (“Victory”), a trading name of GMAC-RFC Ltd, and sought a loan of £120,000 to be repaid over 25 years. The borrower’s present address was stated as 1 Bakers Yard and he was said to have lived there for one year and two months. Those statements were false (though there is no reason to think that Mr. Davis was aware of the fact) because at that time the house at 1 Bakers yard was little more than a shell, having no roof or windows. In the box for details of the arrangements for a valuer to gain access to the property there were entered the words “Via Mr. Hewes” and a mobile telephone number was provided.

The details of the circumstances under which Colleys were instructed to inspect and value 1 Bakers Yard are somewhat obscure, but their essentials are reasonably clear. The Mortgage Helpdesk, probably acting through another intermediary, Solent Mortgage Services (“Solent”), instructed Colleys by telephone on 4^th November 2002 on behalf of Victory to carry out what is known as a ‘Schedule 1’ inspection of the property and provide a valuation. A Schedule 1 inspection is a relatively superficial inspection sufficient to enable the surveyor to provide a general description of the nature and condition of the property in question. It is the type of inspection normally required by mortgage lenders, whose concern is to ensure that the property provides adequate security for the contemplated loan. The nature of the inspection is reflected in the fee paid to the surveyor - £250.

There is no written record of the telephone conversation between Solent and Colleys, but the terms of the instructions are reflected in a printed sheet entitled ‘Instructions to Valuer’ produced by Colleys later the same day. In it Mr. Hewes is named as the applicant and the address of the property to be valued is stated as 1 Bakers Yard. The purchase price is stated to be £300,000. The instructions indicated that access to the property could be obtained by contacting Mr. Hewes and a telephone number was provided. All that information must have been provided over the telephone. Although the printed sheet makes provision for the insertion of some detailed information about the property (type, number of bedrooms, number of garages, tenure etc.), none was inserted, other than the purchase price. I think it is clear, therefore, that at the time Colleys were instructed they were given no information about the property other than its address and purchase price.

Later the same day an employee of Colleys, Jane Yarham, telephoned Mr. Hewes to make an appointment for the surveyor to attend. Mr. Hewes asked for his visit to be deferred to enable him to complete some work on the windows. Miss Yarham made a handwritten note on the instruction form reflecting that part of her conversation with Mr. Hewes. She also made a handwritten note that the property was a detached house with four bedrooms and two garages. She can only have obtained that information from Mr. Hewes. Having spoken to the surveyor who was to carry out the inspection, Mr. Faux, an appointment was made for him to attend on 18^th November.

Bakers Yard is a short road running off Belchmire Lane. The land on the right hand side as one enters the road was once in single ownership, but by the time of Mr. Faux’s inspection it had been divided into five plots. The plots were numbered from 1 to 5, number 1 being nearest Belchmire Lane, but none of them displayed a house number. Mr. Hewes had almost completed building a detached house on plot number 5 which he said he hoped to occupy within a matter of weeks. On plot number 1 there was a substantial detached house still in the course of construction. That was 1 Bakers Yard.

Before he went to inspect 1 Bakers Yard Mr. Faux telephoned Mr. Hewes to make arrangements to gain access to the property. In the course of their conversation Mr. Hewes told him that the property to be valued could be identified by a feature post box on the front wall which others in the road did not have. On entering Bakers Yard he disregarded plot number 1, which did not correspond with the description he had been given by Mr. Hewes, and drove to the far end where he saw the house with a feature post box and found Mr. Hewes. Mr. Hewes showed Mr. Faux round the house and generally led him to understand that he had come to the right place. Mr. Faux carried out an inspection and on 19^th November he produced a report valuing the property at £230,000 in its current condition.

In the event, for reasons which are unexplained, Victory did not make an advance to Mr. Hewes and as a result Mr. Davis of The Mortgage Helpdesk set about helping him find another lender. On or about 5^th December 2002 Mr. Davis spoke to Colleys asking that the report produced by Mr. Faux for Victory be ‘re-typed’ for Flagship Homeloans (“Flagship”), which was a trading name used by Platform Funding. Having received their agreement, he wrote confirming his instructions and enclosing a cheque for the additional fee. In return Colleys drew up an inspection report and valuation in the standard form required by Flagship. Shortly thereafter, probably on 18^th December, Platform Funding was approached for the first time by Solent acting on behalf of The Mortgage Helpdesk with an application by Mr. Hewes for a loan secured by a mortgage on 1 Bakers Yard. The application was supported by the necessary documentation, including the valuation of 1 Bakers Yard provided by Colleys. That was the first Platform Funding had heard of Mr. Hewes or 1 Bakers Yard. Apart from being addressed to Flagship, the report contained the same information as had been provided to Victory. It also contained the declaration mentioned earlier.

The case put forward on behalf of Platform Funding at trial was very simple: Colleys had accepted instructions to value 1 Bakers Yard; they had produced a report addressed to Platform Funding certifying that they had inspected the property; Platform Funding had made an advance on the strength of that report and was therefore entitled to rely on the certificate as having contractual effect; having failed to inspect the property, Colleys were in breach of contract. The case appears to have been argued on the assumption that Colleys received their instructions from Platform Funding, but as will be seen that was not in fact the case. Although Platform Funding alleged in its particulars of claim that Colleys were obliged to use the care and skill to be expected of a competent valuer, it did not allege any breach of that obligation and did not lead evidence to support a finding of negligence. Colleys’ case was that they were required to do no more than exercise such skill and care as might be expected of a reasonably competent valuer and that in the absence of an allegation that they had failed to do so the case against them must fail.

The judge recognised that in general a professional person only undertakes to exercise reasonable skill and care, but he thought that, if a surveyor accepts instructions to inspect a particular property, he assumes an unqualified obligation to inspect the property to which his instructions relate. He put the matter in this way:

“. . . . . [a valuer] is concerned with valuing a piece of property and the primary obligation of the valuer is to go to the property which he is asked to look at and value it. The scope for reasonable skill and care in the case of the valuer arises when he is performing the valuation. But in my judgment to suggest that the valuer has performed his contract when he values a completely different property to the one he is instructed to value makes a nonsense of the essential obligation which the valuation of property entails.”

In an engaging and very able argument Mr. Grant on behalf of Colleys submitted that the valuer’s duty in a case of this kind is simply to exercise that degree of skill and care in and about the performance of his instructions as is to be expected of a reasonably competent surveyor and valuer; and that in a case where the property is identified in his instructions solely by its address or some other description, that applies equally to locating the property to be inspected, which is simply the first step in carrying out those instructions. So far as the certificate contained in the declaration is concerned, he submitted that, when read in context, it cannot be construed as giving an unqualified assurance that the surveyor has inspected the property to which the report relates.

Although Mr. Payton for Platform Funding based his case primarily on the certificate, it is convenient to consider the general position first, since an understanding of the underlying position may inform the construction of that part of the report.

The principle that a person who provides services calling for particular skill undertakes to exercise that degree of skill and care as is to be expected of a reasonably competent professional can be traced back to at least the mid-nineteenth century. In Harmer v Cornelius (1858) 5 C.B. (N.S.) 236 Willes J. giving judgment in the Exchequer Chamber said:

“When a skilled labourer, artizan, or artist is employed, there is on his part an implied warranty that he is of skill reasonably competent to the task he undertakes, – Spondes peritiam artis. Thus, if an apothecary, a watch-maker or an attorney be employed for reward, they each impliedly undertake to possess and exercise reasonable skill in their several arts. The public profession of an art is a representation and undertaking to all the world that the professor possesses the requisite ability and skill.”

The case concerned the employment of an artist as a “panorama and scene-painter” for a period of at least a month. The court held that the employer was entitled to terminate the contract after two days when the artist proved to be incompetent. The court was not concerned, as we are, to enquire whether the artist had assumed an unqualified obligation of any kind, but one cannot help wondering what it would have said if the plaintiff had demonstrated consummate artistic skill in depicting the wrong subject matter.

It is now accepted without question that when a person is instructed to act in a professional capacity he assumes an obligation to exercise that degree of skill and care which is to be expected of a reasonably competent member of the profession. The issue in this case, however, is not whether that principle applies to surveyors and valuers – it was accepted, quite rightly, that it does (see, for example, the observations of Lord Templeman in Smith v Eric S. Bush [1990] 1 A.C. 831 at 850-851) – but whether that is the limit of their obligations, unless by their terms of engagement they have expressly promised to achieve a particular result.

It has been observed on many occasions that those who provide professional services do not generally give an unqualified undertaking to produce the desired result. Thus in Greaves & Co. (Contractors) Ltd v Baynham Meikle & Partners [1975] 1 W.L.R. 1095 Lord Denning M.R. said at page 1100D:

“Apply this to the employment of a professional man. The law does not usually imply a warranty that he will achieve the desired result, but only a term that he will use reasonable care and skill. The surgeon does not warrant that he will cure the patient. Nor does the solicitor warrant that he will win the case.”

I am inclined to think that the reason why the law does not ordinarily construe the contract in such cases as giving rise to an unqualified obligation owes more to the nature of the services themselves, the context in which they are to be provided and the fact that the desired result is not one which any professional person can reasonably guarantee, than to the fact that the provision of the services involves the exercise of special skill. In other contexts the law has no difficulty in implying an unqualified obligation to achieve the desired result. For example, if one employs a skilled craftsman to make a table, the law will normally imply a term that the table will be reasonably fit for its purpose; and as Lord Denning observed, again in Greaves & Co. (Contractors) Ltd v Baynham Meikle & Partners:

“. . . when a dentist agrees to make a set of false teeth for a patient, there is an implied warranty that they will fit his gums: see Samuels v Davis [1943] K.B. 526.”

In principle, therefore, although there is every reason to assume, in the absence of a term to the contrary, that a professional person has undertaken no more than to use reasonable skill and care in relation to matters calling for the exercise of his professional skill and expertise, there would seem to be no good reason why one should make a similar assumption in relation to other aspects of his instructions. As to those, one would expect to construe the terms of engagement in each case to ascertain the precise nature of the obligations undertaken, without making any prior assumption that they are qualified or unqualified. The engagement of a photographer to take a portrait photograph of a particular person provides an illustration. The photographer undertakes no more than to exercise reasonable professional skill and care in and about the creation of the image, but there is no obvious reason why one should assume, in the absence of a term to the contrary, that he did not accept an unqualified obligation to photograph the right person. On the contrary, one might think it more natural that he should have done so. However, Mr. Grant submitted that the authorities indicate otherwise and it is to these that I now turn.

In Greaves & Co. (Contractors) Ltd v Baynham Meikle & Partners consultant engineers were instructed to design a warehouse, the first floor of which, as they knew, was to be used for storing drums of oil that would be moved around by fork-lift trucks. The warehouse was built to the engineers’ design but after a few months’ use the first floor began to crack because it was not strong enough to bear the loads imposed on it. The main contractor, by whom the engineers had been employed, made a claim against them alleging that they had impliedly warranted that their design would produce a building fit for its intended use. Despite recognising that a professional man does not normally undertake an unqualified obligation to produce the desired result, the court held in that case that the exchanges between the parties were such as to give rise to an implied term that the warehouse as designed would be fit for the purpose for which it was required. In other words, the engineers assumed an unqualified obligation to produce a suitable design.

In Barclays Bank Plc v Weeks Legg & Dean [1999] Q.B. 309 the court had before it appeals in three cases in which solicitors had given undertakings to apply purchase moneys received from a bank or the purchaser solely for acquiring a “good marketable title” to the property in question. In each case the claimant brought an action against the solicitors for damages for breach of the undertaking claiming that they had failed to obtain a title which provided satisfactory security. Millett L.J. held that a good marketable title was a title which, in the event of a sale, a vendor could compel a reluctant purchaser to accept and that the solicitors’ undertakings were qualified in the sense that in each case they had given an undertaking to obtain that which a reasonably competent solicitor acting with proper skill and care would accept as a good marketable title. It is interesting, however, to see the reasons which led Millett L.J., after some initial hesitation, to reach that conclusion as a matter of the construction of the undertaking in each case. They reflect the fact that the solicitor acting for the purchaser is unable to do more than exercise professional skill and judgment in deciding whether the title being offered by the vendor is one that meets the necessary requirements and that it was inconceivable in these cases that the solicitors should have assumed a more onerous obligation to the claimants than to their own clients.

In Zwebner v The Mortgage Corporation Ltd [1998] P.N.L.R. 769 Mr. Zwebner applied to the defendant for a loan to be secured on a property owned jointly by himself and his wife. The defendant instructed solicitors to act for it in the transaction and they provided a report on title which contained an undertaking that all appropriate documents would be “properly executed” on or before completion. The solicitors sent the mortgage deed to Mr. and Mrs. Zwebner for signature and received it back apparently having been duly executed by each of them. It later transpired, however, that Mrs. Zwebner knew nothing about the transaction and that Mr. Zwebner had forged her signature on the document. As a result, she brought proceedings against the defendant claiming that the mortgage was not binding on her and the defendant made a claim over against the solicitors for damages for negligence and for breach of contract in failing to comply with the undertaking given in the report on title.

Although the claim in contract turned on the proper construction of the undertaking, it inevitably gave rise to some discussion of the general nature and scope of a solicitor’s duty when retained to act in a matter of this kind. Thus, counsel for the solicitors argued that it would be wrong to construe the undertaking that the documents would be “properly executed” as giving rise to a warranty that they had been signed by Mrs. Zwebner in the presence of a witness because that would transfer the entire risk of fraud onto one who was merely providing professional services. He submitted that the expression “properly executed” should be limited to matters of form and the mechanics of completion. However, Robert Walker L.J. (with whom Hobhouse and Waller L.JJ. agreed) found it difficult to read the undertaking in that way and was not persuaded that the consequences of giving weight to the word “properly” were so unreasonable as to justify a construction which largely disregarded it. He therefore held that the solicitors were in breach of contract. In that case, therefore, the solicitors were held to have undertaken an unqualified obligation to obtain the signature of Mrs. Zwebner.

The case on which Mr. Grant relied most strongly was Midland Bank Plc v Cox McQueen [1999] Lloyd’s Rep. PN 223. It concerned the plaintiff’s retainer of the defendants to act as its solicitors in connection with a loan to a Mr. Dukes to be secured by an “all monies” security over a property owned by his wife, Constance Jean Dukes. The bank instructed the defendants to obtain the signature of Mrs. Dukes to a mortgage over the property and to explain the implications of the wording to her. The document also contained provision for the solicitors to certify that they had explained its contents to Mrs. Dukes and that she had signed it of her own free will. Mr. Dukes attended the defendants’ offices with a woman pretending to be his wife. The defendants explained the contents of the document to her and she signed it. The defendants then signed the certificate confirming that they had explained the contents of the documents to Constance Jean Dukes and that she had signed it of her own free will. A few years later, when the bank sought to realise its security, Mrs. Dukes denied any knowledge of the mortgage and the facts came to light. The bank sued the defendants alleging, among other things, that they had failed to act with reasonable skill and care, were in breach of contract in failing to perform their retainer and were in breach of the warranty contained in the certificate. The judge dismissed the claim on the grounds that there had been no breach of duty of any kind on the part of the defendants. On appeal the bank accepted that the solicitors had not failed to exercise reasonable skill and care, but pursued its claims for breach of contract and breach of warranty.

The central issues that arose for consideration on the appeal, therefore, were whether by entering into the retainer the defendants had assumed an unqualified obligation to obtain the signature of Mrs. Dukes and whether by signing the certificate they had had given an unqualified warranty that they had done so. The first of those issues turned on the correct construction of the retainer; the second on the correct construction of the certificate. The defendants submitted that it would be inappropriate to construe the retainer as imposing an absolute obligation on them because solicitors, like other professional men, undertake only to use reasonable skill and care and do not guarantee a result.

Lord Woolf M.R. identified the question for decision in that case as being whether the bank intended to ask for, and whether the solicitors intended to give, a promise to answer for the fraud of the customer even if that fraud could not be detected by exercising all proper care. He pointed out that the defendants could not have undertaken an absolute obligation to obtain Mrs. Dukes’s signature, since she might have decided not to proceed with the transaction, and that the obligation to explain the nature of the instrument to her necessarily involved a degree of judgment as to the precise nature and extent of what was required in order to bring the substance of it home to her mind. He considered that such obligations were better suited to a requirement to exercise a reasonable standard of care and distinguished Zwebner v The Mortgage Corporation on the grounds that there were significant differences in the terms of the two retainers.

However, Lord Woolf also considered that there were policy reasons for rejecting the bank’s argument and in view of the submission that similar considerations apply in this case I think I should set them out in full. He said at page 229 col. 1:

“In my judgment the decision in Zwebner should not be given a wide application. To do so would ignore the wider consequences of our decision. If commercial institutions such as banks wish to impose an absolute liability on members of a profession they should do so in clear terms so that the solicitors can appreciate the extent of their obligation which they are accepting. Frequently this sort of task is undertaken by small firms of solicitors who are already finding it difficult to remain viable. This is partly because they are heavily burdened by the costs of insurance. If they are to be liable for very substantial sums of damages as a result of the fraud of the customers of the bank which they cannot prevent, then either they will have to withdraw from providing those services or they will have to charge for their services at a rate which is very different from that which was charged here. Neither result is in the interests of the banks or their customers or the public. The result is not in the interests of the banks’ customers as they will not benefit from the explanation of the transaction from a member of the legal profession who is qualified to give that explanation. It is not in the interests of banks as they will have to pay higher fees which they may or may not seek to recover from their customers. It is not in the interest of the public because it is important that legal services are readily available and this will not be the case if small firms are unable to survive. Unless the language used in a retainer clearly has this consequence, the courts should not be ready to impose obligations on solicitors which even the most careful solicitor may not be able to meet.”

Lord Woolf also rejected the claim based on the certificate on the grounds that it was to be construed in a qualified manner in order to correspond with the retainer.

Mummery L.J. reached the same conclusion, basing himself on the true construction of the retainer. He said at page 230 col. 1:

“The letter was a retainer by the bank of a firm of solicitors to perform professional services of an advisory and ministerial kind for the bank. Professional services provided by the solicitors would not normally involve the guaranteeing of a result by them, such as verifying the identity of Mrs. Dukes, let alone providing the bank with what would amount to an insurance policy against the risk of fraud occurring in a transaction entered into by the bank with its customer, Mr. Dukes; a transaction about which the solicitors were told little by the bank and in which they had no input or influence.

The bank agreed to lend a substantial sum to their customer. That customer was Mr. Dukes. Mrs. Dukes was not a customer of the bank. She was not a client of the solicitors retained by the bank to obtain her signature. It is improbable that the solicitors would agree to provide to the bank more than the exercise of the reasonable care and skill of a competent solicitor in relation to the task to be undertaken. It was part of the bank's case against the solicitors that the retainer was subject to the usual implied duty of care. That implied term also governed the obligation to obtain the signature of Mrs. Dukes. The judge rejected the case of negligence against the solicitors. There is no appeal against that. The bank's case on the appeal rests on the contention that the wording of the retainer was apt to create an absolute obligation which would be breached by the solicitors, no matter what precautions they might have taken and what lengths they might have gone to ensure that the woman who signed the mortgage was Mrs. Dukes. For the reasons stated above and for the reasons stated by the Master of the Rolls, I am unable to accept the contention that this retainer, when construed in the context in which it was given and accepted, was intended to have that far-reaching effect.”

A number of conclusions may be drawn from these decisions. Perhaps the most obvious is that although there is a presumption that those who provide professional services normally do no more than undertake to exercise the degree of care and skill to be expected of a competent professional in the relevant field, there is nothing to prevent them from assuming an unqualified obligation in relation to particular aspects of their work. Whether a professional person has undertaken an unqualified obligation of any kind in any given case will depend on the terms of the contract under which he has agreed to provide his services. However, cases such as Greaves & Co. (Contractors) Ltd v Baynham Meikle & Partners and Midland Bank v Cox McQueen demonstrate that the very nature of the obligation on which the client relies may itself make it more or less likely that it was intended to be qualified or unqualified, as the case may be. I am not sure that it is helpful in a case such as the present to ask whether the professional person gave a promise to answer for the fraud of a third party (where that is the origin of the eventual loss), since in most cases neither party will have had that particular risk in mind. In my view it is better to ask whether, having regard to the facts and matters known to both parties when the instructions were accepted, the professional person assumed an unqualified obligation in relation to the particular matter in question. It does not follow, as was suggested in Midland Bank v Cox McQueen that, because the solicitors could not have assumed an absolute obligation to obtain Mrs. Dukes’s signature in all eventualities, their duty was simply to exercise reasonable skill and care. They could still have undertaken an unqualified obligation to ensure that the person to whom they explained the significance of the documents and whose signature they obtained (if they obtained one at all) was the real Mrs. Dukes, as the solicitors in Zwebner v The Mortgage Corporation in effect did. Finally, I think these authorities support the conclusion that, although the court should be cautious about holding that a professional person has undertaken an unqualified obligation in the absence of clear words to that effect, there is no reason not to give effect to the language of the contract where it is clear.

Mr. Payton for Platform Funding drew our attention to Jackson & Powell on Professional Liability, 6^th ed., paragraph 10-075 in which the learned authors discuss surveyors’ liability for breach of duty. They recognise that a breach of duty may take the form of a breach of a specific contractual duty and note that such a breach need not necessarily involve negligence, although it almost invariably will. One of the types of default discussed is “failing to carry out instructions”, and an example given (described as an “extreme case”) is of a surveyor who, having been instructed to survey a particular house, either fails to inspect it or inspects the wrong property. That might be taken as support for the proposition that to inspect the wrong property will normally constitute a breach of contract without more, but I think Mr. Grant was right in saying that the authors do not directly address the question currently before the court, namely, whether inspection of the wrong property would amount to a breach of contract in the absence of negligence. Nonetheless, there is undoubtedly force in the observation that a failure by a surveyor to carry out his instructions by inspecting the right property will almost invariably involve a degree of negligence.

The broader policy considerations which carried weight with Lord Woolf in Midland Bank v Cox McQueen were no doubt relevant in the context of that case, but I do not think they apply with the same force in a case such as the present. In the first place, it will surely be very rare for a surveyor to inspect the wrong property without being negligent in some respect. (The present case is unusual partly because Platform Funding did not attempt to put its case on that basis.) Moreover, the surveyor does have the means to satisfy himself that the property he is about to inspect is the property to which his instructions relate; indeed, he is likely to be better placed than his client, the proposed lender, to ensure that it is the property being offered as security.

As far as one can tell, the contract between Victory and Colleys in this case was entirely routine, both in its terms and in the manner in which it was entered into. Although they incorporated a number of terms relating to the nature of the inspection to be undertaken and the manner of reporting, Colleys’ instructions were to inspect 1 Bakers Yard, Belchmire Lane, Gosberton and to provide a report on its condition and value. They can therefore be regarded as typical of the instructions given by prospective mortgage lenders to surveyors and valuers every day of the week. The inspection and valuation of a property calls for the exercise of professional skill and judgment and one would not ordinarily expect a surveyor to assume an unqualified obligation in relation to the manner or extent of his inspection or the assessment of value. On the other hand, it is not at all clear why the surveyor’s obligation to inspect the property to which his instructions relate should be qualified in the same way. In many cases the actual performance of the inspection in terms of identifying boundaries, features etc. may call for the exercise of professional skill and judgment, but in nearly all cases, particularly those in which residential property is involved, the identification of the property to be inspected does not give rise to any significant difficulty. The surveyor is likely to be in a far better position than the lender to identify the property and if the position on the ground is uncertain there are a number of steps open to him to clarify it, the most obvious of which is to ask his client for more detailed instructions.

In the present case Colleys’ instructions were couched in clear and unqualified terms. The fact that the purchase price was said to be £300,000 did not, in my view, render them uncertain in any significant respect and neither party had any reason to think that there might be any difficulty in identifying the property. In those circumstances I do not think that the contract can properly be construed as providing that Colleys were to do no more than exercise reasonable skill and care to identify and inspect the property; in my view by accepting instructions to inspect and value 1 Bakers Yard they undertook an unqualified obligation to inspect that property and were in breach of contract in failing to do so. The fact that in this case the surveyors have to bear the consequences of Mr. Hewes’s fraudulent conduct is unfortunate, but I cannot see that justice demands that those consequences should fall on the shoulders of Victory, which was equally blameless and, if anything, even less well placed to avoid them.

Insofar as Colleys are to be treated as having been instructed by Platform Funding, that is sufficient to dispose of the appeal. However, since Platform Funding relies on a warranty said to be contained in the declaration forming part of the report, it is necessary to consider in a little more detail both the terms of the declaration and the circumstances in which the report came into its hands.

The correspondence to which I referred earlier, together with the evidence of Mr. Gargiulo, the Head of New Business at Platform Funding, leaves little room for doubt that the report that was eventually delivered to Platform Funding in support of Mr. Hewes’s loan application had been obtained by The Mortgage Helpdesk from Colleys without any prior reference to this new potential lender. The document was, in effect, simply purchased by The Mortgage Helpdesk for use by Mr. Hewes in support of a fresh application. The way in which the ‘re-type’ occurred suggests that it too was an entirely routine matter and I think one can safely assume, therefore, that Colleys were aware that the report would be used by The Mortgage Helpdesk and its client for that purpose. Platform Funding advanced money to Mr. Hewes on the basis of the report and in those circumstances I am satisfied that it is entitled to rely on the declaration as having contractual effect. However, that still leaves open the question of its construction, as was the case in Midland Bank v Cox McQueen.

The certificate in this case falls into two parts: the first limb relates to the inspection of the property offered as security; the second with its valuation. Mr. Grant submitted that the word “certify” must bear the same meaning in relation to both parts of the sentence and that since the second part, which confirms that the valuation given is a fair indication of the current open market valuation for mortgage purposes, can only sensibly be understood as containing a qualified undertaking as to the property’s value (that is, one that carries within it the implied statement that it represents the surveyor’s opinion based on the exercise of reasonable skill and judgment), the same must be true of the first part. Accordingly, the statement in the first part of the sentence that the surveyor had inspected 1 Bakers Yard is to be understood as qualified in a similar way.

I accept that the word “certify” is used in the same sense in relation to each limb of the sentence, but I am unable to accept that the two limbs are necessarily dealing with the same kind of subject matter. A certificate that the property has been inspected need not, and on the face of it does not, involve a qualification of any kind, whereas a certificate that the valuation given is a fair indication of the current open market valuation clearly does, if only because of the use of the expression “fair indication”. I see no reason, therefore, why the word “certify” is not apt to govern both halves of the sentence.

In Midland Bank v Cox McQueen all three members of the court thought that the certificate that the documents had been explained to Mrs. Dukes and that she had signed it of her own free will should be construed by reference to the obligations which the solicitors had assumed under the retainer. Where instructions to a surveyor require a report to be provided in a standard form which includes a certificate that the property has been inspected, I do not think that it is possible to ignore the terms of the certificate when construing the nature of the instructions, since the terms of the certificate themselves shed light on the nature of the obligation that he is being asked to undertake. In the present case, however, it is unnecessary to consider that aspect of the matter because Colleys were not instructed by Platform Funding. One is simply left with the report containing the certificate. The question is one of construction.

If it were generally recognised that surveyors instructed to carry out inspections and valuations of this kind did not assume an unqualified obligation to inspect the property to which the instructions relate, I can see that the first limb of the certificate might be construed in the way suggested by Mr. Grant. That would be no more than an example of what Mummery L.J. in Midland Bank v Cox McQueen referred to as the contextual approach to construction. However, since I am satisfied that that is not the case, the certificate should, in my view, be construed in accordance with its terms. Colleys certified that they had inspected 1 Bakers Yard, but they had not done so and on the face of it, therefore, are therefore liable for breach of contract.

In their defence Colleys pleaded that Mr. Hewes was the agent of Platform Funding to identify the property to be valued and that Platform Funding was therefore estopped from denying that they had inspected the right property. That part of the case was expressly abandoned at trial, however, and the judge therefore quite understandably made no findings in relation to it. In the course of his argument Mr. Grant (who did not himself appear at the trial) invited the court to consider the point. In my view we should decline the invitation. Insofar as the judge’s findings bear on this question they do not suggest that the argument had any substance, since Mr. Hewes was merely identified as the person who could give access to 1 Bakers Yard. There is nothing to suggest that he was authorised to do anything on behalf of Victory or that he could properly be regarded as the agent of Platform Funding for any purposes. However, quite apart from that, I do not think it would be satisfactory for this court to allow the argument to be resurrected at this stage in the absence of any findings directly relating to it.

For these reasons I would dismiss the appeal.

I have read in draft the judgments of Sir Anthony Clarke MR and Lord Justice Moore-Bick and regret that it is necessary to choose between them. However, I would respectfully agree with that of Moore-Bick LJ and will seek to give my reasons for doing so, although I doubt that I can add materially to what he has written.

Two questions arise. The first assumes the absence of the contractual certificate ultimately entered into by Colleys (by which original trading name we are referring to the defendant and appellant in these proceedings), and is whether every obligation entered into by a professional valuer when he undertakes the valuation of premises is an obligation limited to one of exercising skill and care. The second concentrates on the certificate and asks whether there at any rate is to be found an obligation which goes beyond one limited to the exercise of skill and care.

As to the first question, it is common ground that the basic obligation of a professional person retained to exercise his professional skill is an obligation of reasonable professional skill and care (“reasonable care”). In as much as that basic obligation is concerned, there is no implicit undertaking to achieve a certain result: as has been said, there is no implicit promise by a doctor to cure his patient or by a lawyer to win a case.

The issue however is whether it follows that every aspect of the professional man’s retainer is limited to that exercise of reasonable care which he professes to bring to bear to its performance. The answer appears to be that it is not, and that this is sometimes because of additional express language which affects the retainer and sometimes because of the inherent nature of things. Thus a dentist who agrees to make a set of false teeth gives an implied warranty that they will fit his patient’s gums: Samuels v. Davis [1943] KB 526 (CA). The judgments expressly record that this court’s conclusion did not depend on any decision as to whether that was a contract of services or for the sale of goods. In either event, the implied warranty did not depend on any express language of the retainer. Thus consultant engineers instructed to design a warehouse impliedly warranted that their design would be fit for its purpose: Greaves & Co (Contractors) Ltd v. Baynham Meikle & Partners [1975] 1 WLR 1095 (CA). That again did not depend directly on any express warranty, nor did it depend on the supply of any goods as part of their services: but it arose out of the particular facts of that case, whereby the parties’ “common intention was that the engineer should design a warehouse which would be fit for the purpose for which it was required” (at 1100F). Thus solicitors who undertook as part of a conveyancing retainer that all appropriate documents would be “properly executed” but were deceived by a forgery were held to have entered into an unqualified obligation to obtain the signature of the borrower’s wife: Zwebner v. The Mortgage Corporation Ltd [1998] PNLR 769 (CA).

There are, of course, other cases which illustrate the underlying default situation where the defendant’s obligation remains one limited to the taking of reasonable care. Thus in Barclays Bank plc v. Weeks Legg & Dean [1999] QB 309 (CA) where the undertaking was to apply purchase moneys for acquiring a “good marketable title”, this court held that such a title was one which a competent solicitor acting with reasonable care would accept as such. That was a conclusion of construction taken against the background of a solicitor’s basic professional duty to purchaser and lender alike. And in Midland Bank plc v. Cox McQueen [1999] Lloyd’s Rep PN 223, where solicitors had undertaken to a mortgagor to explain a mortgage to a borrower’s wife and certified that they had done so and had obtained her signature of her own free will, this court construed the obligations undertaken thereby against the background that it would be unlikely that a solicitor who was carrying out those instructions with all proper care should nevertheless be promising to answer for the fraud of the mortgagor (who had introduced a woman to impersonate his wife).

I see no reason to give any of these cases, all of them in this court, any prominence over any other. They all turn on their own particular facts. They nevertheless allow the following conclusions: (1) that the default obligation is one limited to the taking and exercise of reasonable care; (2) that it requires special facts or clear language to impose an obligation stricter than that of reasonable care; (3) that a professional man will not readily be supposed to undertake to achieve a guaranteed result; and (4) that if he is undertaking with care that which he was retained or instructed to do, he will not readily be found to have nevertheless warranted to be responsible for a misfortune caused by the fraud of another. It follows from the jurisprudence and from these conclusions to be derived from them, however, that it is not possible to support a blanket approach whereby, even in the absence of an express warranty, a professional’s responsibility is nevertheless always limited to the taking of reasonable care.

In particular, none of the cases we have been asked to consider, not even Midland Bank v. McQueen, is like the present in that the defendant has simply failed to carry out the instructions which he has accepted, in effect failed to carry out his retainer. Although I agree with Moore-Bick LJ that the passage at para 10-075 of Jackson & Powell on Professional Liability, 6^th ed, 2007, does not ultimately address the question before the court, nevertheless it is helpful to this extent, in drawing attention to the special case of “failing to carry out instructions”, with the example given of a surveyor who either fails to carry out any inspection at all or inspects the wrong property. Examples could perhaps be multiplied: the portrait artist who paints the wrong person; the solicitor who conveys the wrong property; the photographer who photographs the wrong marriage; the lecturer who delivers the wrong lecture. All may be brilliant, and to have done what they did with the utmost care, but, like the A level student who answers the wrong question, they have all fundamentally failed to carry out their instructions. In another context, and admittedly without the present issue before the court, the same distinction, between carrying out instructions at all, and carrying them out well or badly, was made in Veba Oil Supply and Trading GmbH v. Petrograde Inc [2002] 1 All ER (Comm) 306. I think the judge put the matter well and succinctly when he said:

“The scope for reasonable skill and care in the case of the valuer arises when he is performing the valuation. But in my judgment to suggest that the valuer has performed his contract when he values a completely different property to the one he is instructed to value makes a nonsense of the essential obligation which the valuation of property entails.”

I agree with that distinction, and I do not think that any of the cases relied upon by Mr Grant for Colleys shows that it is wrong to make it. In other words, the normal retainer is that the surveyor undertakes to inspect and value the property he has been instructed to inspect and value, and also to carry out that inspection and valuation with reasonable care. If it were not so, the valuer who valued the wrong house (without any want of care), like the photographer who photographed the wrong wedding (equally without any want of care), could demand his fee: there has been no breach, for each has acted with all reasonable care. But the idea of the valuer and photographer being able to demand their fee is plainly flawed.

Of course, like any distinction drawn by the law for the purpose of fairly and accurately articulating the briefly stated arrangements of mankind, it is possible to think of more or less difficult cases which challenge the issue of which side of the line a particular decision should fall on. What, therefore, of the examples canvassed before us of the surveyor who inspects the right property but errs in the extent of the garden which applies to it? Or of the surveyor who fails to visit all the rooms or spaces in a property? Or of the surveyor who inspects the wrong flat in a house? I am not deterred by such examples. I have an untutored opinion about each of them, but would prefer to leave such cases to be argued on their particular facts. I do not think that they displace the intuitive and common-sense view that the inspection of the wrong property, like the painting of the wrong portrait, or the photographing of the wrong wedding, is a straightforward breach of retainer and contract, and one which does not depend on the taking or absence of reasonable care. I do not think that a surveyor, when he is retained to inspect and value a particular property, is to be thought of as saying to his client: “I will only take reasonable care to ensure that the property I will inspect will be the property you have instructed me to inspect. I do not undertake to do so.” Nor do I think that the client would have such a limited obligation reasonably in mind at the time of retainer. I therefore respectfully cannot agree with the Master of the Rolls that it would be very odd to think of the parties agreeing that Colleys would be liable to the bank if they had never inspected (even if they had exercised reasonable skill and care in not doing so). I would suggest that it would be much odder to think of the parties agreeing that Colleys would not be liable if they had never inspected (even if they had exercised all reasonable skill and care).

I would comment briefly on two arguments raised before us. The first is that a professional surveyor or valuer, like a solicitor, should not readily be thought of as promising to answer to his client for the fraud of a third person. Like Moore-Bick LJ, I am inclined to think that does not readily answer the issue before us, in part because neither party will have had that particular risk in mind, but also in part because the fraud of a third party will simply be the mechanism of loss, and the real issue is whether what has occurred is a breach of the surveyor’s (or solicitor’s) obligations. Whether those obligations sound only in negligence or whether there is some stricter duty is the very issue to be determined, and that must be determined for reasons other than the mechanism of loss. The client may very well be thought of as saying: “Well, I do not absolve you of your failure, just because of any fraud of my counter-party. It is your job to use your professional expertise to see that you are not deceived by his fraud. And besides that, you have undertaken to carry out a (careful) inspection in any event.” That is the issue. Furthermore, it is the local surveyor on the spot, not the bank at some quite possibly central location, who is responsible for ensuring that the inspection of the right property is carried out. The bank is in no position to do so, the local surveyor is.

The other matter is the suggestion that the issue needs to be considered on the basis or assumption that the surveyor has used all reasonable care to inspect the right property. I agree that such an assumption could be made, for the issue is whether he is liable even though he has used such care. However, the facts in the case are that Platform Funding Limited never pleaded or sought to prove a want of care and rested on their submission that Colleys had breached a strict obligation to inspect and value the right property. That, after all, is the advantage of a strict obligation, that it frees the obligee from any need to go down the much harder route of proving negligence. Thus the point before us is one of construction, of retainer and/or certificate, free of any merits or demerits so far as presence or want of care are concerned. In sum, I agree with Moore-Bick LJ that in the normal retainer of a surveyor to inspect and value a property there is an inherent obligation to inspect and value the right property, such that inspection and valuation of a completely different property is a breach of contract, notwithstanding the surveyor’s care.

I turn therefore to the second issue, as to whether the certificate in any event amounted to a contractual warranty that 1 Bakers Yard had been inspected. The certificate provided:

“I certify that the property offered as security has been inspected by me and that the above valuation is a fair indication of the current open market valuation for mortgage purposes…”

Moore-Bick LJ’s view is that it is a warranty, at any rate when viewed against the background of the true meaning of the underlying retainer. Of course, for the reasons he gives, the two questions are inter-connected. The certificate has to be construed against its background.

For myself, however, I would go further than Moore-Bick LJ. This litigation has shown, on an issue which has not previously been determined in our jurisprudence, that the underlying retainer is something that can be argued about, and has led to a difference of opinion in this court. In such circumstances, it is a matter on which the parties may well be thought of, at any rate conceptually so, as wanting express definition. I do not think that there can be much plainer expression than the words “the property…has been inspected by me”. Even against a background where otherwise the obligation to inspect would only have been one of the taking of reasonable care to inspect, I do not accept that those words can properly be interpreted as meaning: “I have taken reasonable care to inspect the property”. It is nevertheless submitted that this is an interpretation which should be adopted because the latter part of the certificate speaks of the valuation as a “fair indication”. I am readily prepared to assume that reference to “fair indication” is consistent with an obligation only to value with reasonable care. That would be very similar to the way in which this court construed “good marketable title” in Barclays Bank v. Weeks Legg & Dean. However, I do not accept that that means that the first part of the certificate has to be interpreted as similarly dealing only with an obligation of reasonable care. There is a clear distinction between the two halves of the sentence. The first half is a simple statement of fact (“has been inspected by me”), but the second half is a statement of expert opinion. There is no need either way for the interpretation of the one to infect the interpretation of the other. But I would also suggest that if the certifier did not in fact hold that opinion, then, quite apart from any question of fraud, there would be a straightforward breach of the contractual warranty in question.

In sum, I would dismiss this appeal.

I gratefully adopt Moore-Bick LJ’s recitation of the facts and adopt the same abbreviations as he has used. I have reached a different conclusion from his on the critical question in this appeal.

The initial agreement in which Colleys were engaged was made between Victory and Colleys on the telephone. Colleys were told that the property to be valued was 1 Bakers Yard, that the purchase price was £300,000 and that access to the property would be provided by Mr Hewes. His telephone number was provided. It is common ground that under that agreement, so far as the valuation was concerned, Colley’s obligation was limited to exercising all reasonable skill and care to be expected of a valuer. It is however said that, so far as identifying the property was concerned their obligation was not limited to the exercise of all reasonable skill and care but was absolute. For my part, I would hold that all their obligations were limited to obligations to exercise reasonable care and skill.

I agree with Moore-Bick LJ in [16] that it is now accepted without question that when a person is instructed to act in a professional capacity he assumes an obligation to exercise reasonable skill and care. In my opinion Colleys’ valuer was acting in a professional capacity from the moment he set out to comply with his instructions. He had to decide which house was the property to value and to inspect it as appropriate in order to arrive at a fair value. It might not be at all easy to decide which was the right house or, for example, if he had been asked to value a flat, which was the right flat in a particular house. He would be expected to take reasonable care to identify the house. Thus he would be expected to make reasonable enquiries, as for example here by asking Mr Hewes, whom he might well reasonably expect to be honest. However, absent an express term of the contract that he was undertaking an absolute obligation in respect of the whole or part of his instructions, or an implied term to that effect, I would hold that there was no breach of contract unless he failed to exercise reasonable skill and care.

In this regard I have found the most useful case to be Midland Bank Plc v McQueen [1999] Lloyd’s Rep PN 223, which Moore-Bick LJ discusses in some detail in [24-30] above. In the context of solicitors, Lord Woolf said at page 229 in the passage quoted in [27] above that if commercial institutions like banks wish to impose liability on members of a profession they should do so in clear terms so that they can appreciate the extent of the obligation they are accepting. Although Lord Woolf set out a number of factors of particular relevance to solicitors, I have little doubt that he would have said much the same of valuers. Although it was not the case on the facts here, there are many firms of small valuers and estate agents who charge very low fees for carrying out valuations. In my opinion the principle identified by Lord Woolf should apply to valuers as to solicitors. I feel sure that he would have so held.

I was also particularly struck by the passage from the judgment of Mummery LJ quoted in [29] above as follows:

“The letter was a retainer by the bank of a firm of solicitors to perform professional services of an advisory and ministerial kind for the bank. Professional services provided by the solicitors would not normally involve the guaranteeing of a result by them, such as verifying the identity of Mrs. Dukes, let alone providing the bank with what would amount to an insurance policy against the risk of fraud occurring in a transaction entered into by the bank with its customer, Mr. Dukes; a transaction about which the solicitors were told little by the bank and in which they had no input or influence.

The bank agreed to lend a substantial sum to their customer. That customer was Mr Dukes. Mrs Dukes was not a customer of the bank. She was not a client of the solicitors retained by the bank to obtain her signature. It is improbable that the solicitors would agree to provide to the bank more than the exercise of the reasonable care and skill of a competent solicitor in relation to the task to be undertaken. It was part of the bank's case against the solicitors that the retainer was subject to the usual implied duty of care. That implied term also governed the obligation to obtain the signature of Mrs Dukes. The judge rejected the case of negligence against the solicitors. There is no appeal against that. The bank's case on the appeal rests on the contention that the wording of the retainer was apt to create an absolute obligation which would be breached by the solicitors, no matter what precautions they might have taken and what lengths they might have gone to ensure that the woman who signed the mortgage was Mrs Dukes. For the reasons stated above and for the reasons stated by the Master of the Rolls, I am unable to accept the contention that this retainer, when construed in the context in which it was given and accepted, was intended to have that far-reaching effect.”

As in the case of the solicitors discussed in that passage, I think it improbable that valuers would agree to provide the lender with more than the exercise of reasonable care and skill. I entirely agree with Moore-Bick LJ in [30], first that, although there is a presumption that those who provide professional services normally do no more than undertake to exercise the degree of care and skill to be expected of a competent professional in the relevant field, there is nothing to prevent them from assuming an unqualified obligation in relation to particular aspects of their work and, secondly, that, whether a professional person has undertaken an unqualified obligation of any kind in any given case will depend on the terms of the contract under which he has agreed to provide his services. I further agree that the appropriate question to ask is whether, having regard to the facts and matters known to both parties when the instructions were accepted, the professional person assumed an unqualified obligation in relation to the particular matter in question.

At the end of [31] Moore-Bick LJ expresses the view that a failure by a surveyor or valuer to carry out his instructions by inspecting the property will almost invariably involve a degree of negligence. I certainly agree that it will very often do so. However, the key point in the present case is that no case of negligence was established against the valuers. The case must therefore be decided on the footing that they were not negligent in any respect. Did Colleys agree that they would be liable to the bank even if they exercised all reasonable skill and care? It would in my opinion have been a very odd agreement for them to have made.

In my opinion, it is improbable that, if the parties had been asked after the telephone conversation in which Colleys accepted instructions whether Colleys had assumed an unqualified obligation as to the identity of the property but not as to the valuation, they would have said no. They would surely have contemplated that the same duty would apply to the execution of all their instructions, namely to inspect no 1 Bakers Yard and value it. That is I think especially so here, where it was clear that the valuer was expected to be given access to the property by Mr Hewes. As I see it, part of the obligation to inspect and value the property was to locate it. It seems to me to make no sense, in the absence (as Lord Woolf put it) of a clear term, to hold that it was agreed that Colleys assumed an absolute obligation to locate it but only a qualified obligation to exercise skill and care in the inspection and valuation of it. The valuer was throughout acting in a professional capacity.

In my opinion there was no clear term imposing an absolute obligation on Colleys to locate the property. Without in any way suggesting that Mr Hewes was Victory’s agent, it appears to me that Victory was relying on Mr Hewes to give the valuer access to the property and no doubt, so far as appropriate, to give him information about where it was. This is not of course to say that it was not the obligation of the valuer to carry out the whole of his obligations with reasonable skill and care but it is I think relevant to the question whether the parties would have contemplated that Colleys were assuming an absolute obligation. They would in my opinion simply have contemplated that they would exercise reasonable skill and care, which would no doubt include, but not of course be limited to, having regard to information provided by Mr Hewes.

I recognise that in many cases the location of the property may pose no real problem. However, that might not be so. In an area where there are a series of properties under construction or in a building where there are a large number of flats, some partly built or, on an estate where there are a number of distinct buildings which might or might not be the relevant property, it might well need the professional skill of an estate agent or valuer or surveyor to identify the precise property which was to be inspected and valued. It is surely to be expected that the valuer would owe the same duty in respect of the location of the property as in respect of its inspection, which might also involve a consideration of what was truly part of the building.

In all these circumstances I would hold that the contractual obligation was not absolute. As to the certificate, I would hold that, as in the Zwebner case, it must be construed in the context of the contract. As Moore-Bick LJ explains in [36], when Platform came on the scene there was a ‘re-type’ so that Platform took over the benefit of the valuation and a certificate in the form used by Platform was provided to them. If, as I would hold, a surveyor would ordinarily undertake only to exercise reasonable skill and care, it would in my opinion be appropriate to construe the certificate in the same way. It follows that I would construe the certificate quoted by Moore-Bick LJ at [2] above as a certificate that Colleys had exercised all reasonable skill and care in the inspection of the property, in which I would include the location of the property.

For these reasons I would allow the appeal.

Since drafting the above I have seen a draft of the judgment of Rix LJ. I agree with him that the default position is as he has stated it at [48], namely that, while each case turns on its own particular facts, the decided cases allow these conclusions:

However, I remain of the view that those considerations lead to the conclusion that Colleys here were not promising to do more than exercise all reasonable skill and care. For the reasons I gave earlier, I would hold that there were here no special facts or clear language to impose an obligation stricter than that of reasonable care.

I only wish to add two further observations. The first is that, while I agree with the view expressed at [53] above that the question for decision is essentially one of construction, it can I think be tested by assuming (as Colleys are entitled to have assumed) that they acted with reasonable skill and care throughout. So tested, it is not in my opinion necessary to imply a term that Colleys owed an absolute obligation to inspect no 1 Bakers Yard. Nor would I construe the agreement as containing such an obligation. As I see it, it is a case in which the default position is the appropriate one.

The second observation relates to the construction of the certificate. I adhere to my view that the certificate should be construed consistently with the obligations undertaken in the agreement. It follows that I adhere to my opinion, which I recognise is a minority view, that the appeal should be allowed.