Boateng v Hughmans
| Jurisdiction | England & Wales |
| Judge | Sir Christopher Slade,Lord Justice Latham,Lord Justice Mummery |
| Judgment Date | 10 May 2002 |
| Neutral Citation | [2002] EWCA Civ 593 |
| Court | Court of Appeal (Civil Division) |
| Docket Number | Case No: A3/2001/0896 |
| Date | 10 May 2002 |
[2002] EWCA Civ 593
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE CHANCERY DIVISION
HIS HONOUR JUDGE RICH QC
(SITTING AS A DEPUTY HIGH COURT JUDGE)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Mummery
Lord Justice Latham and
Sir Christopher Slade
Case No: A3/2001/0896
Mr David Schmitz (instructed by Thomas Watts & Co) for the Appellant
Mr Gavin Hamilton (instructed by Reynolds Porter Chamberlain) for the Respondent
Introduction
What has to be proved by the claimant in a case where the negligence of his solicitor has consisted of the failure to give him proper advice, in order to establish a sufficient causal link between the solicitor's negligence and the loss which he has sustained and thus entitle him to substantial damages? That is the principal issue raised by this appeal.
By a judgment delivered on 30 th March 2001, His Honour Judge Rich QC, sitting as a Deputy Judge of the Chancery Division, found for the claimant, Mr Boateng, on the issue of liability in proceedings for negligence brought against his former solicitors, the defendant firm Hughmans ('the firm'), but assessed merely nominal damages in the sum of £2. He refused Mr Boateng permission to appeal. Mr Boateng now appeals from that judgment with the permission of Peter Gibson L.J., who adjourned to the appeal the hearing of an application by Mr Boateng to adduce further evidence.
Subsequently, Peter Gibson L.J. gave the firm permission to cross-appeal and granted them an extension of time for filing a respondents' notice. He adjourned to the appeal the hearing of an application by the firm to adduce further evidence.
The facts
The only witnesses who gave oral evidence at the trial were Mr Boateng and Mr Fleischmann, the partner in the firm who had acted for Mr Boateng in the relevant conveyancing transaction. Mr Fleischmann claimed to have little or no recollection of the events of 1987, the date of the transaction. The judge found that Mr Boateng himself was confused and self-deluded and that, despite his obviously sincere attempts to give honest evidence, he had to treat his evidence as wholly unreliable except where supported by documents. In the circumstances, the judge's findings of fact as to the history of the events was based on the firm's files, which were unfortunately incomplete. Although Mr Fleischmann told him that his practice has since changed, his evidence was that at the relevant time he, regrettably, kept no attendance notes in regard to conveyancing matters.
I take the facts largely from the judge's judgment. In 1987, Mr Boateng, who had been living in the ground floor of a house known as 50 Great North Road, Highgate, for some 12 years, occupied it as the tenant of London & Quadrant Housing Association. It is common ground that his was either a secure or statutory tenancy. The rest of this three storey house ('the property') was vacant and the property had fallen into disrepair.
In 1987 Mr Boateng sought the advice of the firm as to suing London & Quadrant in order to enforce their repairing covenant obligations. London & Quadrant offered, instead of repairing, to sell the freehold of the property to Mr Boateng for £65,000. But he had no money to effect the purchase. He conceived the idea of finding builders who would finance the purchase and convert the property into three flats, of which he would retain the ground floor flat, while they took their profit from the sale of the other two.
During the course of 1987, estate agents instructed by Mr Boateng obtained a number of interested enquiries from persons whom he met. One enquiry came from a small private company called Balancan Ltd. ("Balancan"), represented by its director a Mr Lee.
The files seem to show that the transaction with Balancan envisaged was always one under which Mr Boateng, having first purchased the freehold of the property from London & Quadrant, would sell it on to Balancan.
The files also show that Mr Boateng saw Mr Fleischmann on 28 th April 1987. The following day, solicitors for Balancan wrote to Mr Fleischmann saying..
"In view of the fact that your client will have the option to purchase a lease of the ground floor flat on completion, we will obviously have to agree terms of lease and look forward to hearing from you."
Mr Fleischmann on 11 th May 1987 replied:
"Our client agrees in principle that the above premises is [sic] to be purchased from him in the sum of £100,000 subject to contract, and that he is to be granted a lease of the ground floor flat with an option to purchase at a nominal value the freehold after conversion."
It thus appears that the transaction at that time contemplated was one under which Mr Boateng would first purchase the freehold from London & Quadrant and then sell it on to Balancan, reserving to himself an option to purchase the ground floor flat.
It appears, however, that at least from 1987 Mr Boateng was also conducting negotiations with possible builder/purchasers other than Balancan. On 20 th August 1987 Mr Fleischmann wrote to him saying:
"I am not certain which builders you are dealing with, although I have written to some solicitors to ascertain the proposals. Obviously, the exchange of the contracts in relation to your purchase must be simultaneous with the sale. Perhaps therefore you could telephone me and let me know which builders you are dealing with and the details of your proposals, so that I may contact them."
Mr Boateng, having identified a different builder, Stonefeathers Ltd., Mr Fleischmann wrote a letter dated 21 st August 1987 to other solicitors:
"We act for Mr Boateng in connection with his current purchase of the above property from a Housing Association. We understand that you act for Stonefeathers Ltd. who have agreed in principle to purchase the property from our client for £105,000 for a 99 year lease, subject to the conditions attached to the copy letter herewith…..".
It therefore appears that Stonefeathers were willing to pay £5,000 more then Balancan for the grant of a 99-year lease, as opposed to a purchase of the freehold. Mr Boateng's evidence was that he had discussed with Mr Fleischmann the grant of a lease to Balancan. The judge rejected this evidence. However, he expressed the view that such an arrangement of the deal would have had important advantages in securing Mr Boateng's position, of which disadvantages Mr Fleischmann should have advised him. He found that no such advice had been given.
Mr Fleischmann had sent a draft contract, which is not in evidence, to Stonefeathers or their solicitors on 4th September 1987. On 11 th September 1987 he also sent out a draft contract, presumably in a different form, to Balancan's solicitors. In the event, the transaction with Stonefeathers did not proceed.
Subsequent discussions and negotiations ensued, which resulted in an exchange of contracts on 13 th November 1987 for the purchase by Mr Boateng of the property from London & Quadrant for £65,000 and the simultaneous exchange of contracts for the sale of the property by Mr Boateng to Balancan for £109,250. Both contracts provided for completion to take place on 11 th January 1988. The original draft of the contract sent by Mr Fleischmann to Balancan's solicitors on 11 th September 1987 is not in evidence, but, as the judge found, with the exception of the price which had apparently not yet been finally agreed, its contents could largely be inferred from the contract with Balancan as finally executed ("the Contract").
The other material provisions of the Contract were as follows:
"8. Unless otherwise specified in the Special Conditions hereto the property is sold with vacant possession on completion.
9. On completion of the sale to the Purchasers the Purchasers shall forthwith submit an application for Planning Permission and use their best endeavours to obtain a reasonably satisfactory Planning Permission from the local authority for permission to convert the building into three self-contained flats and to build an extension to the rear of the building at ground floor level to a depth of 12 foot and width of 10 foot and will pursue such planning application diligently… The Purchaser undertakes to use their best endeavours to obtain such permission and if a reasonably satisfactory Planning Permission is granted for the conversion of the building into three self-contained flats and erection of the said rear extension then the Purchasers will as soon as possible after the issue of the permission, carry out the necessary structural work in order to convert the building into three self-contained flats and build the said rear extension such work to be carried out diligently and in a good and workmanlike manner as quickly as possible but in any event within 9 months of the grant of Planning Permission (such time limit may be extended by mutual agreement of the parties hereto).
10. If the local authority shall not issue a satisfactory Planning Permission for the erection of the said rear extension (the decision of the Purchaser being final and binding to this effect) then such requirement shall lapse without any claim for compensation by either party against the other but the other terms and conditions of this agreement shall remain in full force and effect.
11.On the commencement of the building works the Vendor shall vacate the premises to leave full vacant possession of the whole building and the Purchaser undertakes to provide suitable accommodation to the Vendor and the Purchaser will be...
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