The case of Hunt & Ors v Optima (Cambridge) Ltd & Ors [2014] EWCA Civ 714 involves claims by eight purchasers against Optima, the developer of a block of flats, and Strutt & Parker (S&P) who were engaged by the developer to issue architects’ certificates to purchasers of flats in relation to the construction work. It was alleged that the building works carried out by Optima were defective, and that S&P had carried out a negligent inspection of the building works and had therefore negligently issued architects’ certificates. The claimants alleged that S&P owed them a duty of care arising out of the negligent inspection and the issue of the certificates.
While timing issues differed slightly in some of the claimants’ cases, S&P’s defence was essentially two-fold: (1) that any duty of care arose out of the issue of the certificates alone (not the inspection process), and that since the architects’ certificates were not issued to the purchasers until after they had exchanged contracts (and in many cases completed), it could not be said that the purchasers had relied upon the certificates when entering into their contracts, and buying their flats; and (2) that the certificates were merely statements upon which reliance could be placed, and were not to be construed as contractual warranties. The court agreed with S&P, and held that because of the time at which S&P’s certificates were issued, it had assumed no responsibility to the purchasers.
The case demonstrates the differences between NHBC protection (effectively, an insurance policy covering defective works), collateral warranty/duty of care deeds (giving rise to actions for breach of warranty – actions in contract), and architects’ certificates (which are intended to give rise to a duty of care in tort). For a duty of care to arise under an architect’s certificate, the law of negligent misstatement is engaged. The recipient of an architect’s certificate will enjoy the protection of an action in tort if the information provided in the certificate is inaccurate and, as a result, loss is sustained. However, reliance is the key element, and a buyer can only be said to have relied upon a certificate if it had been made at the point when the buyer became committed to the purchase. In contrast, a breach of warranty claim depends simply upon being in a contractual relationship – whether the contract between the buyer and the consultant is created before a contract to buy is entered into, or after.