Watts v Morrow  1 WLR 1421
Surveyor’s report negligently failed to show structural defects; measure of damages
Watts instructed Morrow to provide a full structural survey on a house he wished to purchase. The report found the property to be sound, stable and in good condition. Such defects as there were could be dealt with as part of ordinary, on-going maintenance and repair. Watts purchased the property and subsequently discovered substantial defects which cost over £33,000 to correct. Watts brought an action for breach of contract.
Watts argued the survey had been sub-standard and in breach of contract because Morrow had failed to identify the substantial defects. As such, Watts sought to recover the cost of the repair work together with further damages for the distress caused by having to live on a ‘building site’ for several months. Watts bought the house in reliance on the report and the house had not been in the condition as described in the report. Therefore, he contended, the correct measure of damages was the sum necessary to restore the property to the condition described in the report. Morrow contended the correct measure of damages was the excess purchase price which had been paid in reliance on the report. He also contended that damages for distress were irrecoverable.
Watts recovered damages for the excess purchase price paid in reliance on the report, and not the cost of conducting the repairs. The proper measure of damages was the sum necessary to put Watts in the position he would have been if the report had been correctly prepared. Therefore, the loss he suffered was the difference in value of the property as it was presented in the report, and its value in its actual condition. Modest damages for physical discomfort were awarded.