The central submission on appeal was that the decisions of the Trinidad and Tobago Court of Appeal and High Court were incorrect as a matter of law because they were contrary to the scope of duty principle established in SAAMCO and recently considered in Manchester Building Society and Khan.
The Valuer submitted that the loss suffered by the Lender should be split into two distinct categories: (1) loss suffered because the land was overvalued as being for commercial use rather than residential (assuming that there was good title to the land); and (2) loss suffered because title to the land was defective. It was argued that the second type of loss was outside the scope of the Valuer's duty of care and therefore irrecoverable because it was the job of the lawyers and not the Valuer to investigate title to the land.
The Privy Council agreed with the Valuer and emphasised that it was particularly important to consider the purpose of the advice or information being given in determining the scope of the duty of care (as was made clear by the Supreme Court in Manchester Building Society and Khan). Here, the purpose of the Valuer's report was to value the property on the assumption that there was good legal title to the land. It was not for the Valuer's report to advise on, or give information about, the title to the land and it was clear the Lender was not looking to the Valuer's report with regard to title.
Consequently, the proper calculation involved deducting US$2.375 from the amount of the loan (US$3m) on the basis that that was the valuation of the land for residential use and assuming the Guarantor had good title, resulting in a recoverable loss of US$625,000.
After correctly applying the scope of duty principle in the Valuer's favour, the Privy Council noted that the Lender's settlement with its lawyers was irrelevant for the purposes of the Lender's claim against the Valuer as the loss attributable to the defective title fell outside the Valuer's duty of care.
The Valuer's failure to draw sufficient attention to the fact that there were occupiers on the land had no effect on the Privy Council's findings, for two reasons: (1) this additional finding of negligence was merely a different breach of the same duty of care in valuing the land and had no impact on the scope of that duty; and (2) the evidence in relation to the occupiers and the nature of their occupation was unclear.