Extract
Johnson v Gore Wood & Co., Court of Appeal - Queen's Bench Division, May 31, 2002, [2002] EWHC 776 (QB)
Case No: HQ 0101191Neutral Citation Number: [2002] EWHC 776 (Ch)IN THE HIGH COURT OF JUSTICEQUEEN'S BENCH DIVISIONRoyal Courts of JusticeStrand, London, WC2A 2LLDate: 03.05.2002Before :THE HONOURABLE MR JUSTICE HART- - - - - - - - - - - - - - - - - - - - -Between :- - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - -Mr Roger Ter Haar QC & Mr Simon Howarth (instructed by Shoosmiths, Solicitors) for the ClaimantsMr Alan Steinfeld QC & Miss Elizabeth Ovey (instructed by instructed by Beachcroft Wansbroughs, Solicitors) for the DefendantsHearing dates : 16.01.2002 - 22.02.2002Judgment Handdown: Friday 03.05.2002- - - - - - - - - - - - - - - - - - - - -JUDGMENTSigned: ...................................................... The Honourable Mr Justice HartDate: ......................................................This judgment will be made available on the Court Service web site: http://www.courtservice.gov.uk/sitemap.htm under the heading "judgments" on the homepage Mr Justice Hart: INTRODUCTION1. The claimant Mr Johnson is a businessman who conducted his business affairs through a number of companies. One of his businesses was property development, which he carried on through a company, WestWay Homes Limited (WWH), of which he was managing director and holder of all but two of the 1000 issued shares. 2. Acting on behalf of WWH, Mr Johnson in 1987 instructed the defendants Gore Wood & Co. (GW), through a partner in the firm named Robert Wood, to act as solicitors for WWH in connection with a proposed purchase of land at Burlesdon in Hampshire (the Sunnyfields site) from a Mr Moores. WWH had, in 1986, acquired an option to purchase Mr Moores' land for £175,000. WWH planned to develop the land, but various difficulties had first to be overcome: access to the land was dependent on acquisition of a "ransom" strip of land owned by a third party, and Mr Moores had only a possessory title to part of the land. Prior to September 1987 WWH had used the services of a Mr Skitch as a solicitor to deal with these matters.3. By the middle of February 1988 these problems had been overcome and WWH had obtained outline planning permission for development of the land as sheltered housing. The site was by then considerably more valuable than it had been at the date the option had been granted, being worth perhaps some £600,000. The property market had also risen appreciably since that date and appeared to be on a continuing rising trend. By this time, after a number of extensions, the period for the exercise of the option had become fixed to expire on 19 February 1988.4. On 15 February 1988, the day fixed for completion of the purchase of the ransom strip, GW were instructed by Mr Johnson to exercise the option. Pursuant to those instructions GW wrote two letters to McCarrahers, the solicitors acting for Mr Moores, one dated 15 February and the second dated 18 February 1988.5. Mr Moores refused to recognise that there had been a valid exercise of the option agreement upon the basis that under the terms of the option agreement service should have been upon him personally.6. Having obtained the advice of counsel (Mr Owen Rhys), GW were instructed by Mr Johnson to issue proceedings against Mr Moores for specific performance of the contract created by the exercise of the option and damages in lieu of or in addition to specific performance. This was done in March 1988 (the Chancery proceedings). An alternative claim was made against McCarrahers claiming damages for breach of warranty of authority. However, Mr Johnson was advised by GW and by counsel from March 1988 onwards that WWH had a potential claim against GW in respect of the allegedly negligent exercise of the option, in respect of which it ought to seek independent advice. In June 1988, Mr Johnson on behalf of WWH retained Paris Smith & Randall (PS&R) for that purpose. Privilege has not been waived by WWH as to the advice received from PS&R. The result, however, was that GW continued for the time being to act for WWH in the proceedings. It did so on the basis that it would render no bills for its profit costs until the conclusion of the proceedings. By the end of November 1989, with the trial by then imminent, GW came to the conclusion that it could no longer continue to act. PS&R at that point went on the record for WWH.7. The Chancery proceedings came on for trial before HHJ Blackett-Ord Vice-Chancellor on 15 January 1990. Judgment, delivered on 18 January 1990, resulted in an order for specific performance being made against Mr Moores and an inquiry as to damages was also ordered. The alternative claim against McCarrahers was dismissed with costs. Mr Moores had been legally aided from an early stage of the litigation and from October 1989, because of his mental condition, had been acting through a guardian ad litem. He appealed against the judge's decision, but his appe...See the full content of this document
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