Balogun v Boyes Sutton and Perry (A Firm)

JurisdictionEngland & Wales
JudgeLord Justice Lloyd Jones,Lady Justice King,Lady Justice Gloster
Judgment Date21 February 2017
Neutral Citation[2017] EWCA Civ 75
CourtCourt of Appeal (Civil Division)
Date21 February 2017
Docket NumberCase No: A2/2015/0535

[2017] EWCA Civ 75

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM HIGH COURT, QUEEN'S BENCH DIVISION

MICHAEL BOWES QC

(SITTING AS A DEPUTY HIGH COURT JUDGE)

HQ13X04269

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lady Justice Gloster

(Vice-President of the Court of Appeal Civil Division)

Lord Justice Lloyd Jones

and

Lady Justice King

Case No: A2/2015/0535

Between:
Balogun
Appellant
and
Boyes Sutton and Perry (A Firm)
Respondent

Nigel Woodhouse (instructed by Simons Rodkin Solicitors LLP) for the Appellant

Oliver Radley-Gardner (instructed by Reynolds Porter Chamberlain LLP) for the Respondent

Hearing date: Wednesday 25th January 2017

Approved Judgment

Lord Justice Lloyd Jones
1

This is an appeal against the order of Mr Michael Bowes QC, sitting as a Deputy High Court Judge, made on 25 March 2015 dismissing the claim of Mr Abimbola Balogun ("the appellant") against Boyes Sutton & Perry, a firm of solicitors ("the respondent") for damages for professional negligence and/or breach of contract in connection with the appellant's acquisition of a 15 year commercial lease of a unit, Unit 1, on the lower and upper ground floors of a building at 214–218 Norwood Road, London SE27 ("the unit").

2

The order was made following a trial of preliminary issues relating to breach of duty, causation and contributory negligence. The judge found that the claimant had failed to prove any breach of duty on the part of the respondent in relation to any of the grounds alleged against it. The claim therefore failed in its entirety and it was unnecessary for the judge to consider any issues of causation or contributory negligence.

Background Facts

3

The appellant instructed Mr Christopher Davies ("Mr Davies"), at that time a partner in the respondent firm, in February 2011 in connection with his proposed acquisition of a 15 year commercial lease of the unit. It was common ground that Mr Davies knew from the outset that the appellant intended to fit out and run a restaurant in the unit.

4

In 2011 the appellant owned two other restaurants in London, specialising in African cuisine, which he had been operating for a number of years. The new restaurant was also intended to specialise in this type of cuisine. The appellant is a qualified chartered accountant and a Fellow of the Association of Chartered Certified Accountants. The judge was satisfied that the appellant had substantial experience in operating a restaurant and was commercially aware in a general sense.

5

Mr Davies qualified as a solicitor in about 1976 and was a partner of the respondent firm until his retirement. He practised for 40 years in commercial conveyancing and private client work and was the senior partner of the respondent at the time that he acted for the appellant. The judge was satisfied that in 2011 Mr Davies was a highly experienced solicitor with substantial experience of commercial conveyancing work. Mr Davies stated in cross-examination that he had been involved with around ten leases of restaurants as shell fit-outs during his 40 years experience, around a third of the total number of restaurant lettings he had dealt with.

6

The premises within which the unit is contained were developed by Mizen Properties Ltd ("Mizen") following a grant of planning permission on 28 October 200They consisted of commercial units and a Health and GP centre on the ground and basement levels and residential premises above the ground floor. Following the completion of the development, on 13 February 2009 Mizen granted a 999 year lease ("the headlease") of the commercial units and the Health and GP Centre to Anacar Ltd ("Anacar"), an associated company.

7

Mizen then sold its interests to London & Quadrant Housing Trust Ltd ("L&Q"), so that at all material times L&Q were the head landlord and Anacar its tenant of the commercial units. The lease which the appellant was to acquire was therefore an underlease from Anacar in respect of the unit.

8

The unit had planning permission for restaurant use. A purpose built ventilation shaft led from the ceiling of the ground floor and ran through the entire building to the roof of the second floor. The shaft was part of the design of the building.

The underlease transaction

9

In late 2010, the appellant became aware that the unit was being offered as a commercial letting with permitted planning use as retail (A1), office (A2) or restaurant (A3). The unit was being let out as a shell with capped services, ready for tenant fit-out. The appellant wanted to use the unit as a restaurant on the upper ground floor but as a dance/nightclub on the lower ground floor. In order to do so the appellant would have required further planning permission for change of use to A4 (which the unit did not enjoy) and a relaxation of the opening hours restrictions.

10

On 9 December 2010 the appellant contacted the lettings agency offering the unit on behalf of Anacar, referred to his recent visit to the unit and stated "I also confirm that there already exist (sic) an extractor vent as you stated you had been informed by your engineers".

11

Once the respondent had been engaged by the appellant in February 2011, negotiations proceeded between the respondent and solicitors acting for Anacar. The correspondence included an email from Anacar's solicitors to Mr Davies on 15 March 2011 which enclosed:

(1) The draft underlease;

(2) Official entries for Anacar's headlease;

(3) Official entries for the freehold which was said to be in the process of being transferred to L&Q pursuant to a pre-existing agreement;

(4) The deed of variation of Anacar's Headlease including a clean copy of the varied headlease; and

(5) The planning consent granted to Mizen.

12

The appellant met Mr Davies at the respondent's offices on 8 April 2011. The parties differ in their account of that meeting, in particular regarding what was said about implementation works necessary to render the ventilation shaft operable. The judge accepted Mr Davies's account that he was told that no further implementation works were necessary, and that the shaft was in a condition whereby it could be put to use upon fit-out.

13

Completion took place on 26 April 2011. Subsequently, a dispute developed between the appellant and L&Q over the nature of the proposed works. In particular, L&Q were concerned over the size of the chimney above the ventilation shaft which was proposed by the appellant.

14

By June 2012 a firm of M&E experts had been instructed by the appellant. They produced documents setting out what they considered necessary for the ventilation system to be put in place.

The issues in the High Court

15

At the trial of the preliminary issues the appellant's primary claim was that the respondent failed to provide him with any or any adequate advice as to the permission he needed from the superior landlord, L&Q, in order to use the ventilation shaft which was essential to operate the restaurant. This claim was based on an alleged failure by Mr Davies to advise the appellant after the appellant's express instructions regarding the ventilation shaft at the meeting on 8 April 2011.

16

The claim was also put on an alternative basis ("the secondary claim") that even if the appellant had not given express instructions, the respondent should nevertheless have advised the respondent to seek the agreement of Anacar to amend the underlease. It was said that the wording of the draft underlease created a "risk" in relation to which advice and drafting were required.

17

In addition the appellant claimed that

(1) the respondent had failed to advise him adequately in respect of Condition 4 of the local planning authority's permission relating to the use of a flue to remove all fumes from cooking processes;

(2) the respondent had failed to advise him adequately on the plans he submitted to Anacar;

(3) the respondent had failed to advise him that plans registered at HM Land Registry in respect of Anacar's title did not show that the outdoor seating area fell within its title and that Anacar might not be able to lease the same to the appellant.

18

The central issue on the trial of the preliminary issues was whether Mr Davies had a duty to advise the appellant and to secure relevant rights and consents in relation to ducting work in the ventilation shaft based on express instructions given to Mr Davies by the appellant during the meeting on 8 April. This turned on what was said during the meeting, in particular whether the appellant explained to Mr Davies that ducting would need to be installed in the ventilation shaft.

19

The appellant's evidence was that he had informed Mr Davies at that meeting that implementation works were necessary to render the ventilation shaft operable. He remembered telling Mr Davies during the course of that meeting how pleased he was that, for the first time since entering the restaurant business, he had a purpose-built ventilation shaft in which he could install his ducting for the extraction of fumes. He remembered telling Mr Davies that the ducting would run from the premises to the top of the building. He had mentioned the ventilation shaft that ran from the premises to the roof and had said that that was where, for health and safety purposes, he would install the ducting from the kitchen extractor.

20

Mr Davies's recollection was very different. He recalled that he was told that no further implementation works were necessary and that the ventilation shaft was in a condition whereby it could be put to use upon fit-out. He stated that the appellant told him that the premises were purpose-built and had a pre-existing ventilation shaft in place for use in the kitchens. Nothing the appellant had said in relation to his intentions regarding the ventilation shaft gave Mr Davies any indication that any additional work was required before the...

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