Farley v. Skinner [2001] UKHL 49 (11 October 2001)

A prospective home buyer specifically asked his surveyor to investigate aircraft noise. The surveyor's negligent report caused the buyer distress and loss of amenity after purchase. The House of Lords awarded damages for this non-pecuniary loss, establishing that this is possible where peace of mind is a major, not necessarily sole, object of the contract.

Facts

Mr Farley, who was approaching retirement, was seeking to purchase a substantial country residence for quiet enjoyment. He became interested in a property known as ‘The Grange’ in Sussex but was concerned about the potential for aircraft noise, as it was located 15 miles from Gatwick Airport. He engaged the defendant, Mr Skinner, a chartered surveyor, to inspect the property. Mr Farley gave a specific instruction to Mr Skinner to investigate whether the property would be affected by aircraft noise. Mr Skinner’s report negligently concluded that the property was unlikely to be ‘greatly affected’. Relying on this advice, Mr Farley purchased the property. After moving in, he discovered that the property was in fact situated directly under a navigation beacon used by aircraftstacking before landing at Gatwick, resulting in frequent and severe noise which significantly disturbed his peaceful enjoyment of the property.

Issues

The primary legal issue before the House of Lords was whether damages could be awarded for non-pecuniary loss (mental distress, inconvenience, and loss of amenity) for a breach of contract. Specifically, the court had to determine if such damages were recoverable when the provision of pleasure, relaxation, or peace of mind was a ‘major or important part’ of the contract, but not its sole or exclusive object. This required a re-evaluation of the exception to the general rule against such damages, as articulated in previous cases like Watts v Morrow [1991] 1 WLR 1421. A secondary issue was whether the noise constituted ‘physical inconvenience’, providing a separate basis for an award of damages.

Judgment

The House of Lords unanimously allowed the appeal, restoring the trial judge’s award of £10,000 for distress and inconvenience. The Law Lords clarified and extended the principles governing the recovery of non-pecuniary damages in contract.

Lord Steyn

Lord Steyn reasoned that the restrictive approach, limiting recovery to cases where the ‘very object’ of the contract was pleasure, was too narrow. He held that it was sufficient if the provision of that amenity was a ‘major or important’ term or object of the contract. He distinguished between mere disappointment and distress caused by a sensory experience resulting from the breach. He stated:

But the case is different where the subject-matter of the contract is a promise of a pleasurable experience or the provision of a pleasurable amenity. In such cases if the promise is not fulfilled, the promisor may be held to have assumed an obligation to compensate the promisee for the loss of the non-pecuniary benefit…it is sufficient if a major or important object of the contract is to give pleasure, relaxation or peace of mind.

He found that Mr Farley’s specific instruction regarding aircraft noise made the assurance of tranquillity a major object of the contract, thus bringing the claim within the scope of the exception.

Lord Scott of Foscote

Lord Scott reached the same conclusion via a slightly different route. He preferred to ground the award not in ‘mental distress’ but in the claimant’s loss of a contractual benefit. Mr Farley had paid for a specific service — an investigation and report on aircraft noise — and did not receive the benefit of that bargain. He also emphasised the concept of ‘physical inconvenience’, finding that the noise was more than mere annoyance and constituted a physical imposition on Mr Farley’s senses, which was itself a recoverable head of damage. He stated:

The aircraft noise…was not just an inconvenience. It was an intolerable nuisance. It caused Mr Farley at least intermittent and sometimes prolonged physical discomfort… The right to damages for the discomfort is, in my opinion, conceptually distinct from the right to damages for the disappointment and distress at not having received the benefit of the surveyor’s contractual promise.

He viewed the £10,000 as a modest award for the loss of the amenity and the physical inconvenience Mr Farley had to endure because of the surveyor’s negligence.

Implications

Farley v Skinner is a landmark decision in the law of contract remedies. It significantly broadened the availability of damages for non-pecuniary loss by moving from a strict ‘sole object’ test to a more flexible ‘major or important object’ test. This decision has had a substantial impact on consumer and professional service contracts, particularly where aspects of personal enjoyment, amenity, or peace of mind are central to the client’s purpose. It reinforces that where a specific assurance relating to quality of life is sought and given as a key part of an agreement, a breach of that assurance can lead to damages for the resulting distress and loss of enjoyment. The case also affirms that damages for ‘physical inconvenience’ resulting from a breach are a distinct and recoverable head of loss.

Verdict: The appeal was allowed. The House of Lords restored the trial judge’s award of £10,000 in damages for distress and inconvenience.

Source: Farley v. Skinner [2001] UKHL 49 (11 October 2001)