Time to get back into work mode after the summer slumber and look at a decision slipped out by the Court of Appeal right at the end of term on the last day of July. A controversial decision of Akenhead J in the TCC last year has been overturned, to the relief of the defendant architects and their insurers.
The original decision had seen judgment in favour of the claimant purchasers of a number of flats in a new-build block against the architect who provided a Professional Consultant’s Certificate (“PCC”) for each flat. The PCC certified that the architect had inspected the project at various stages of construction and that he was satisfied that the development had been built soundly. The architect was engaged and paid by the developer but he knew that the certificates were to be delivered by the developer to the purchasers and//or their lenders to help the sales to go through.
There was a significant problem in respect of the purchasers who had not seen or known of the content of the certificates before they purchased: how cold they make out reliance or any other route to making the architect liable fro the failures? The trial judge found reliance made out because they had been assured that a certificate would be forthcoming, and found that the provision of the certificates was akin to collateral warranties. The legal and construction professions were left scratching their heads.
The Court of Appeal has restored order.
First, the tortious duty owed was restricted to negligent misstatement in respect of the content of the certificates, rather than there being an additional duty of care owed by the architect to purchasers to take care in the carrying out of the inspections giving rise to the certificates. The source of any duty owed to the purchasers was found in the certificates themselves, and these, by definition, did not exist at the time of the inspections.
Second, the cause of action based on negligent misstatement required actual reliance on the content of the certificates before any purchaser completed the purchase. This could conceivably be by being told of the content once the certificate existed, but it could not be (as the trial judge had found) by being assured that a certificate would eventually be forthcoming.
Third, the trial judge was wrong to find anything sufficient in the PCCs to make out a collateral warranty or any such contractual duty. While consideration could be made out in the transaction as a whole (even if it did not “move” from the promisee (purchaser) to the promisor (architect)), the wording used was all in the nature of a certificate to be relied upon rather than a guarantee or warranty.
See Hunt & ors v Optima & ors  EWCA Civ 714.