In Freemont (Denbigh) Ltd v Knight Frank LLP [2014]
EWHC 3347 (Ch) the Court reaffirmed the well-established principle
that a valuer does not owe a duty of care to an investor where he
is instructed to produce a report for one purpose but his report is
relied on by the investor for other purposes.
Facts
In 2006, Knight Frank was instructed by Freemont to provide a
valuation report in support of a loan application to fund a
redevelopment. The site was valued at GBP 17- 18.7 million
depending on planning permission. Freemont saw this valuation as
the minimum price it should accept when selling the site and
therefore rejected subsequent offers it received from developers
both in the region of GBP 11 million. In the event, the site was
not redeveloped and fell into disrepair to the extent that it was
regarded as worthless by Freemont by the time proceedings were
brought. Freemont claimed that Knight Frank had been negligent and
overvalued the site and sought damages
