The UK Court of Appeal recently handed down its decision in Tiuta International Ltd (in liquidation) v De Villiers Surveyors Ltd, where the question before the Court was whether a lender could recover all its loss from a negligent valuer in connection with a refinance loan or if the lender was limited to the amount lost in topping up the original loan.

In February 2011, the appellant lender in Tiuta International Ltd (in liquidation) v De Villiers Surveyors Ltd instructed the respondent surveyor to value a property and relying on that valuation, lent £2,560,168.45 to a third-party property developer. The property developer subsequently asked the lender to top-up the facility and the lender did so, relying on a second valuation provided by the surveyor in December 2011. When the term of the facility expired, a balance of £2,840,000 was outstanding. The loan was not repaid and the lender appointed receivers to enforce its security. The property was sold for an amount that was 30 – 40% lower than the surveyor’s valuation, and so the lender brought proceedings in the UK High Court to recover its loss.

The surveyor argued that as the lender provided the additional funds to the property developer by refinancing the original facility, rather than by simply varying the original agreement, it had already sustained the majority of its alleged loss when it made the original loan and the alleged negligent December 2011 valuation had only caused the lender to make a much smaller top-up loan. The Court agreed and ruled that the lender’s loss should be limited to the amount lost in topping-up the original facility. Summary judgment was granted.

On 1 July 2016, in a majority of two to one, the UK Court of Appeal allowed the lender’s appeal against the summary judgment, holding that the surveyor should be held liable to the lender for the whole of the loss flowing from the second negligent valuation.

The Court noted that:

it is inherently unfair that, where both parties are commercial organisations, a negligent valuer could use an attack on the legitimate working practices and systems of the appellant as a means of escaping part of the consequences of his or her negligence”.

The Court further noted that:

“the respondent valued the property in the expectation that the appellant would advance funds up to its reported value in reliance on the valuation”.

As it was not a matter that could be determined on a summary application, the case proceeded on the assumption that the second valuation was negligent. The respondent may yet avoid liability if it is found at trial that the second valuation was not negligent.


It should be noted that this is a UK decision and as such, is of persuasive authority in Ireland only. However, we don’t see any reason why a similar action could not be brought in Ireland as the ruling by the Court of Appeal was decided on common law principles and was not statute-based. It is a welcome decision for lenders as it is now arguable that a lender may recover its full loss in the event that a valuation given for the purpose of a refinancing was negligent.