In this case the valuer was sued for basing his valuation on an overstatement of the croppable area on a farm. The valuer had prepared the valuation so that it could be used by a vendor and purchaser to fix a price between them.
Duty of care
The Court summarized the current state of the law with regards to negligent valuation as follows:
A valuer may in certain circumstances owe a duty of care to the recipient of a valuation containing negligent misstatements causing economic loss, even in the absence of a contractual relationship between the valuer and the recipient of the valuation. A duty of care is recognised to exist where the valuer actually knows or ought to have known that the person in question would rely upon the valuation so prepared. In respect of the objective limb of that formulation, it is noted that subjective knowledge of the particular recipient or purpose to which the valuation would be put is not relevant. In addition, there is the further requirement that a finding of a duty of care be reasonable in all the circumstances. Accordingly, the subjective knowledge, actual or potential, of the valuer is a relevant consideration in determining reasonableness.
Turning to the situation where the valuer’s opinion as to value is being used to fix a price the court adopted the following comments:
An action for damages for negligence will lie against a valuer to whom the parties have referred the question of valuation if one of them suffers loss as the result of his negligent valuation.
On the question of whether the identify of the party relying on the valuation was necessary at the time the valuation was conducted the court held:
Each case must be decided on its own facts. The lack of specific knowledge of the identity of APF does not of itself mean that no duty of care was owed to APF. The proposition to that effect inverts the appropriate inquiry. A duty of care arises where the valuer knew or ought to have known that the valuation would be acted upon in connection with some matter of business or serious consequence by a client of Boyds. Even if Mantach believed the 2001 Mantach valuations were prepared for the Robinsons only, and not APF (although the findings of the primary judge do not appear to accept that such a subjective belief existed), it was aware that the Robinsons’ involvement extended to some form of joint venture both directly through the Agtech Report and by its awareness of Boyds involvement and its realisation that the potential transaction might extend beyond refinancing by the Robinsons.
Quantification of damages
As the case involved a purchase the trial judge chose to rely on the difference between the amount actually paid and the value of the property at the time of purchase, the primary judge regarded himself as applying the usual rule as to damages for a misleading and deceptive representation, and negligent misstatement, that the basic measure should be the difference between the price paid and the true value at the time of purchase. This was an application of the rule laid down by the High Court in Kizbeau Pty Ltd v W G & B Pty Ltd  HCA 4:
In an action for damages for deceit for inducing a person to enter a contract of purchase, which is an action that is closely analogous to an action for damages for breach of s 52, the courts have consistently held that the proper measure of damages is the difference between the real value of the thing acquired as at the date of acquisition and the price paid for it.
The Full Court found the trial judge was in error noting:
The present case is not one in which a purchaser was induced to enter into a purchase transaction by representations that were misleading and deceptive, or constituted negligent misstatements. APF had already made a decision that it would purchase the property. The purpose of obtaining the valuation from Mantach, was not to enable APF to make a decision whether to purchase, but merely to assist in fixing the price at which they would purchase. In these circumstances, the loss suffered by APF as a result of the misrepresentations in the Mantach valuation, may not be measured appropriately by the application of the usual rule that the damage suffered is the difference between the real value at the date of purchase and the price paid. Where reliance on misleading representations does not make the difference between a decision to purchase and no purchase at all, the usual rule may not be applicable.
In this case the purchase price was to be determined by reference to the average of two valuations. The court found that had the valuation not been negligent this would have occurred and the difference between the price that would have been paid under that scenario and the actual price paid was the measure of damages.
The court had to determine the proportionate liability as between the owner who intentionally deceived valuer and in that way contributed to the loss. The trial judge determined the issue on the basis of the principal in Burke v LFOT Pty Ltd  HCA 17. Burke had the same fact (a case of a misleading and deceptive vendor and a negligent professional adviser of a purchaser). His Honour followed Burke in holding that the vendor, whose conduct misled and deceived the valuer as well as the applicant, was not entitled to contribution from the valuer. The Valuer was entitled to indemnity from the owner.
The Full Court found the trial judge was in error in applying Burke as in that case, the vendor of a property was liable for misleading and deceptive conduct, by making untrue representations to the purchaser about the financial standing of the tenants of the property. The purchaser’s solicitor was liable for breach of retainer as solicitor, and negligence, in failing to advise the purchaser to make adequate inquiries about the financial standing of the tenants. The High Court found that there was not sufficient relationship between the bases of the liability of the two parties to permit the misleading and deceptive vendor to recover contribution from the solicitor, who had omitted to perform a professional duty. In this case, the full court held, the causes of action against the vendor and the valuer were substantially similar.
The Full Court was at pains to point out that the trial judge did not make a finding of fraud against the vendor in respect of the representations about croppable land, or the failure to correct them subsequently. A finding of fraud, if made, would have differentiated the liability of the vendor from that of the valuer, and would have justified the trial judge’s conclusion that the vendor should not be entitled to claim contribution from the valuer, and the valuer was entitled to indemnity from them.
Accordingly the case was one in which the misleading and deceptive conduct and negligence of the vendor and the misleading and deceptive conduct and negligence of the valuer both contributed to the loss and damage suffered by the purchaser. The conduct of each was not distinguishable in substance. The similarity of the causes of action, coupled with the manner in which the conduct of each combined to bring about the loss and damage, dictated the conclusion that the case was a proper one for contribution and the apportionment was set at 50%.