Proof appointed in action by homebuyers against solicitor firm that failed to inform them of nearby housing proposal

About this case:

• Citation:
  [2025] SC FAL 4
• Judgment:
  External link
• Court:
  Sheriff Court
• Judge:
  Sheriff S G Collins

Fraser and Vivian Allison instructed Russel & Aitken (Falkirk & Alloa) Ltd in relation to the purchase of a house next to an undeveloped greenfield site. They averred that the defenders failed to inform them of the contents of a Property Enquiry Certificate sent to them before settlement, and that had they known about it they would have withdrawn from the transaction. The defenders sought dismissal of the action or failing that deletion of some of the pursuers’ averments of loss.

The case was heard by Sheriff Simon Collins, with Blane, solicitor, appearing for the pursuers and Steel, advocate, for the defenders.

Intended to move

The pursuers instructed the defenders to act for them in the purchase of the house at 6 Hillcrest Square, Falkirk. Missives were concluded with a date of settlement of 21 December 2021. The missives incorporated clause 21 of the Scottish Standard Clauses, obliging the sellers to exhibit a Property Enquiry Certificate and entitling the pursuers to resile without penalty if it disclosed “any matter which was materially prejudicial to the purchaser or the property”.

Shortly before settlement, the defenders received a PEC from the seller’s solicitors disclosing a PEC on the greenfield site to the west of the property. They did not send a copy of the PEC to the pursuers or inform them of the proposal, which they averred they only discovered in January 2022 when they learned that an appeal was lodged by the developer against the refusal of planning permission. That appeal was successful, and the houses subsequently built.

It was averred by the pursuers that, had they been aware of the proposal, they would not have proceeded with the transaction. They now intended to move elsewhere and would incur loss in doing so in respect of conveyancing costs, capital expenditure on the property prior to learning of the proposal, and damages for inconvenience and stress.

Counsel for the defenders accepted that the pursuers’ averment that they would not have purchased the property if they had known the content of the PEC was a matter for proof. However, the pursuers offered only to prove that the defenders were required to “inform” them that the PEC disclosed information which “may” have been material to them. The presupposition was that the defenders could somehow know that the proposal would be material to the pursuers, absent a communication to that effect.

In the event that the action was not irrelevant for that reason, counsel submitted that the averments of loss were irrelevant and/or lacking in specification. The pursuers did not say what steps they had taken to sell the house, three years since becoming aware of the proposal, nor made any averments on the current value of the property. Even if there was loss, it had not crystallised, and this was fatal.

Not an irrelevant claim

In his decision, Sheriff Collins began by observing: “It was common ground that the familiar test in Hunter v Hanley (1955) was applicable. In other words the pursuers say that no solicitor of ordinary reasonable competence would have failed to make them aware of the housing proposal prior to settlement, thereby giving them the right to resile. That is not a claim which is irrelevant and necessarily bound to fail, and it does not become so just because the pursuers did not previously tell the defenders that such a housing proposal would be materially prejudicial to them.”

He continued: “Whether a claim of this kind succeeds is ultimately a matter of facts and circumstances as established by evidence. There may be cases where something disclosed by the PEC is on the face of it so minor that a reasonably competent solicitor would not be under an actionable duty to inform their client of it (for example, an application for permission to replace the windows on a nearby listed building). On the other hand there may be cases where there could be no sensible dispute that the solicitor would be obliged to inform the client (for example, that permission had been granted for developing an open cast mine next door to the subjects of sale).”

Turning to the pursuers’ averments of loss, the sheriff said: “Obvious evidential issues are likely to arise as to why the pursuers have not moved since January 2022, nor apparently taken any steps preparatory to doing so. These issues will no doubt be put to them, but if the pursuers’ evidence on the foundational facts were to be accepted, it may then also be accepted that they will incur costs in buying, selling and removing from the property which, but for the defenders’ claimed breach of contract and/or negligence, they would not have incurred.”

He concluded: “It is not necessary for the pursuers to aver and prove the overall value of the property with and without the capital expenditure. These are simply matters which the sheriff, after proof, may wish to take into account in taking the broad and robust approach to quantification.”

Sheriff Collins therefore appointed the matter to a proof before answer with all pleas standing.