IN THE HIGH COURT OF SOLOMON ISLANDS
(Chetwynd J)

Civil Claim No. 98 of 2008

BETWEEN

SAMANI LOGARA DAUSABEA KALIUAE GETU
Claimant

And

ATTORNEY GENERAL
(Representing Chief Valuer of Lands)
First Defendant

And

EDDIE KOUTO
Second Defendant

Mr Getu in person
Mr Firigeni for the First Defendant
Mr D Hou for the Second Defendant

Date of Hearing: 23rd May 2012

Date of Judgment: 16th July 2012

Judgment

1. This case is relatively straightforward. The Second Defendant owned a property in Honiara. More correctly, he was the registered owner of a fixed-term estate, PN 191-018-234. He wanted to sell it. He advertised the property. The Claimant responded and negotiations began. This was sometime in October 2006. The Second Defendant asked the First Defendant to prepare a valuation for him. That was done and a copy can be seen at page 83 of the court book. The purpose of the valuation was acknowledged as being, "required for general sale purposes. The valuation can also be used for mortgage purposes..". The First Defendant valued the property at $100,000.00. The Claimant and the Second Defendant entered into a written agreement on 26th November 2006 whereby the Claimant purchased the property for $90,000.00. Subsequently the Claimant says he "discovered" the value of the property was less than $100,000.00. He sues both the former owner and the valuer for his losses.

2. By an Amended statement of case filed on 29th June 2010 the Claimant says he relied on the valuation when agreeing to buy the property for $90,000.00. He says the First defendant was negligent. The particulars of negligence are:

(i) Failure to devise, institute and maintain a monitoring system of data of sale comparative sales so as to avoid economic loss to the claimant

(ii) Failure to carry out proper checks on FTE PN 191 018 0 234 to ascertain that 50% of the portion of the land comprised of steep slope of land

(iii) Exposed the Claimant to risk of economic loss which could have been avoided by due and reasonable care

(iii) Failed to warn or adequately warn the Claimant on possible dangers associated with reliance on valuation report dated 1st November 2006 

The Claimant also says he, "will rely on the maxim of res ipso loquitor as evidence of negligence against 1st and 2nd Defendants". For good measure the Claimant also alleges breach of both a common law duty and a statutory duty under the Lands and Titles Act [Cap. 133].

3. The Claim is badly drafted. It will be noted the Claimant appeared in person. However, he is not a lay person he is a qualified lawyer. Be that as it may, he should not be penalised simply because of the badly drafted claim. As long as there is the kernel of a case there the court must do the best it can in deciding what is being claimed and on what basis. It is relatively straight forward in this case; the Claimant is saying the First Defendant is liable to him for negligently overvaluing the property. It is not entirely clear what the Claimant is saying in respect of the Second Defendant.

4. A general statement of the law is that a valuer does owe a duty of care if he knows or ought to know a third party is likely to rely on his report. There is a long line of cases which follow on from the decision in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465, [1963] 2 All ER 575 which support that view. For example Lord Griffiths in the case of Smith v Eric S Bush, Harris v Wyre Forest District Council [1990] 1 AC 831 at 865, [1989] 2 All ER 514 at 536, HL said;

"The necessary proximity arises from the surveyor's knowledge that the overwhelming probability is that the purchaser will rely on his valuation – the evidence was that the surveyors knew that approximately 90% of purchasers did so – and the fact that the surveyor only obtains the work because the purchaser is willing to pay his fee . . . I would certainly wish to stress that, in cases where the advice has not been given for the specific purpose of the recipient acting on it, it should only be in cases where the adviser knows that there is a high degree of probability that some other identifiable person will act on the advice that a duty of care should be imposed" 

5. In this case it is acknowledged the valuation was for "general sale purposes" and could be used for mortgage purposes, meaning presumably, it could be shown to a lender to establish the value of the security being offered. The First Defendant clearly had it in mind the valuation was not for the Second Defendant's exclusive use and must have contemplated the very real possibility it would be shown to a prospective purchaser as a bargaining ploy or even to support a mortgage application to finance the purchase. 

6. Of course, it is not simply enough to establish the First Defendant owed a duty of care. The Claimant in this case has to prove, on the balance of probabilities, the First Defendant has breached that duty of care. He has attempted to do so by saying I have two other, lower, valuations and so the valuer must have been negligent. His valuations were carried out in early 2008. The Claimant included the valuations in the court book but it became clear very early on in the trial that he had not made any attempt to actually agree the contents of the court book. Counsel acting for the defendants said the Claimant's valuations were not agreed. Clear directions were given during the pre-trial conference held in February about evidence and what else needed to be done before trial, the date of which was also fixed at that hearing. No order was ever drawn up by the Claimant. He had not made arrangements for his valuers to attend court and give evidence even though he must have appreciated what they would say was vital to his case and even though he had indicated at the pre-trial conference he was calling them. When asked, his explanation why they were not being called was garbled and, quite frankly, very difficult to understand. He appeared to be saying the valuations were part of a sworn statement he had made and were therefore on the record and needed no further proof. An application for an adjournment was refused. It was refused because the Claimant had not complied with the directions given 3 months previously and because the case was already 4 years old. One clear reason for the delay in getting the matter to trial was the Claimant's previous failures to comply with orders and directions.

7. The Claimant has the misconceived notion that his lower valuations must mean the First defendant was negligent. All the two valuations say is the valuers who carried them out valued the land at $38,000.00 and $65,000.00. Neither included any comment on the valuation given by the First Defendant. Neither makes reference to any reason why the valuation given by the First Defendant could be considered to be negligent. It should be noted the Claimant maintains his lower valuations are between $38,000 and $45,000. He arrives at the latter figure by deducting what he has spent on "excavating the site" from the higher of the valuations.

8. The First defendant was called to give evidence. He confirmed the content of a sworn statement he had made and which was filed in court on 12th February 2010. He explained he had looked at information about other properties sold in the area and calculated a rate per square metre. He considered the range to be between $50 and $100 per square metre. He based the valuation of the present property on a rate of $54 per square metre. This was based on the open market value principle of a willing seller and a willing buyer. He confirmed he had inspected the property and his comments on what he found were included in the report. He had taken into account the site was on a hillside. He was cross examined by the Claimant. He agreed there were other "methodologies" that could be used to arrive at a valuation but he felt the one used by him as set out in the report was perfectly valid. He maintained it was a professional valuation. 

9. It is for the Claimant to prove his case. Whilst it has to be accepted the First Defendant did in all probability owe some duty of care to the Claimant there is no evidence to show he was negligent and breached that duty of care. To argue that negligence has been proved because there are two lower valuations is naïve in the extreme especially when the lower valuations relied on are so different from each other. The Claimant does not seem to have even contemplated the possibility that; heaven forbid, his valuations are wrong. The Claimant has not even come close to proving negligence. The Claim against the First Defendant must fail.

10. As mentioned earlier it is difficult to ascertain what the claim against the Second Defendant is based on. It seems to be based on a breach of contract (see paragraph 6 of the amended statement of case filed 29th June 2010) but that issue is not further pleaded except for some reference to an implied term in the contract between the defendants. There is an allegation the Second Defendant was negligent as well but on what basis is not clear. The Claimant seems to be saying if the First Defendant was negligent then so was the Second Defendant. In evidence there was mention of collusion and fraud but those matters were not pursued except in support of a general assertion that something was wrong. There is also reference to misrepresentation and a claim the Second Defendant knew the valuation was over inflated. What this all amounts to seems to be an acknowledgment the claim against the Second Defendant can only succeed if the claim against the First Defendant does. There is no independent claim against the Second Defendant. The claim against the Second Defendant must also fail. 

11. Judgement is to be entered against the Claimant. The Claimant shall pay the costs of the defendants on a standard basis. If the costs cannot be agreed then they shall be assessed by the Registrar of the High Court on that basis.

Chetwynd J