Negligent Land Valuations: The Dangers Of Buying Before You Sell

Author:Ms Nicola Dunleavy
Profession:Matheson
 
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The September 2013 High Court judgment in Brownrigg v Leacy & Anor held two auctioneers to have acted negligently in the provision of land valuations.  The judgment set out a useful five stage analysis of what constitutes a negligent valuation, while sounding a note of caution for those who buy before they sell, risking a finding of contributory negligence.  Mr Brownrigg wished to purchase lands adjacent to his farm at public auction, in order to consolidate his holding.  If successful at auction he intended to then sell a separate plot of land to finance the purchase.  He sought valuations of the plot that he intended to sell from two auctioneers, Mr Leacy and Mr Kavanagh.  Mr Leacy valued the plot at between €10 and €11 million and Mr Kavanagh provided a valuation of €6.9 million.  Following receipt of the valuations, Mr Brownrigg provided the valuations to his bank and obtained a bank loan of €7.7 million to finance the purchase, contingent on the sale of his own plot.  He then successfully bid €5.9 million at public auction for the adjacent lands and paid a 10% deposit.  When his own plot was put up for sale the highest offer he received was €1 million.  Mr Brownrigg was therefore unable to complete the purchase of the adjacent lands and he forfeited his deposit of €590,000. Mr Brownrigg claimed that he had relied on the valuations provided and that the bank had also relied on the valuations in agreeing to provide the loan.  Mr Kavanagh did not defend the proceedings but Mr Leacy claimed that the letter he had provided was a "thinking of selling" letter rather than a valuation.  He said it amounted to an expression of opinion made in good faith.  Mr Leacy also queried the level of responsibility he had to Mr Brownrigg given that he did not retain him to act in the sale of the lands. The Judge held as...

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