Channon v Lindley Johnstone
| Jurisdiction | England & Wales |
| Judge | Lord Justice Potter,Lord Justice Judge,Lord Justice Henry |
| Judgment Date | 20 March 2002 |
| Neutral Citation | [2002] EWCA Civ 353 |
| Docket Number | Case No: A2/2000/3669 |
| Court | Court of Appeal (Civil Division) |
| Date | 20 March 2002 |
[2002] EWCA Civ 353
Lord Justice Henry
Lord Justice Potter and
Lord Justice Judge
Case No: A2/2000/3669
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION BRISTOL DISTRICT REGISTRY
(His Honour Judge Meston QC)
Christopher Gibson QC (instructed by Bond Pearce, Exeter, for the appellant)
Roger ter Haar QC (instructed by David Burrows, Bristol, for the respondent)
INTRODUCTION
In this case both the claimant and the defendants appeal from the judgment of His Honour Judge Meston QC, sitting as a High Court Judge, given on 24 November 2000 when he awarded the claimant damages for the professional negligence of the defendants, his former solicitors, in relation to their preparation for, and representation of, the claimant at a hearing before District Judge Rutherford on 10 December 1992 in the Bath County Court; and thereafter in prosecuting the claimant's appeal from the District Judge's decision which HH Judge Batterbury affirmed. The proceedings concerned the claim of the claimant's former wife for financial relief following the parties' divorce. The outcome proved highly unsatisfactory, if not ruinous, to the claimant. In the light of the issues and the contentions of the parties on this appeal, it is necessary to set out the underlying facts in some detail.
THE FACTS
The claimant and his wife were both born in 1944, married in 1968 and had two children, a disabled son named Ian, born in 1972 (aged twenty at the first hearing), and a daughter, Kathryn, born in 1976. Thus she was a minor dependent child of the family, aged sixteen at the relevant time. Mr Channon was an engineer, whose main operative company for his own work was called Channon Design Limited. Mrs Channon was a qualified nurse and was working part time towards the end of the marriage. Mr Channon was a chronic diabetic.
By the time of the first hearing, the claimant and his wife personally owned two freehold properties in Holcombe. One was the matrimonial home, a jointly owned converted bungalow called 'Woodlands', alongside which the claimant also had a quite substantial engineering workshop in which he pursued his career as an engineer/inventor. 'Woodlands' was subject to a mortgage in favour of National Westminster Home Loans Limited and also to a second charge in favour of the National Westminster Bank which secured the guaranteed liabilities of his various companies and his personal overdraft. The other property was the next door bungalow called 'Sylvanook'. It was unoccupied and in need of some repairs. It was free of any mortgage and was in the claimant's sole name. The other two principal assets available for division were a pension fund called the Bob Channon Executive Pension Trust and a company called Shellcourt Limited (the issued share capital of which was owned as to 99 shares by Mr Channon and as to 1 share by Mrs Channon) which owned two factory units which were commercially let.
The marriage broke down in 1991 and Mrs Channon consulted a firm of solicitors called Faulkeners, who wrote to the claimant in May 1991. He turned for advice to Mr Hendey of the defendants who had acted for him in a number of business matters. Mr Hendey's practice was mainly business and commercial law but he did some matrimonial work for existing clients and he agreed to act. He replied to Faulkeners setting out a summary of the assets and liabilities of the marriage as he understood them and proposed that the claimant should have 'Woodlands' and that Mrs Channon should have 'Sylvanook', a nominal order being made for maintenance. Agreement was not reached and considerable tension developed over what the claimant thought was his wife's unreasonable attitude and the view made clear by her solicitors in correspondence that they distrusted the financial disclosure given by Mr Channon. They asserted the complexity of the claimant's finances and that accountants should be involved.
Mrs Channon issued her petition for divorce in January 1992. It included claims for ancillary relief with which she proceeded in April 1992 following cancellation by the claimant of a standing order in her favour. Her affidavit, sworn in April 1992, put the claimant to proof of his earnings, capital and company interests. On 1 May 1992 the claimant swore an affidavit which largely dealt with various conduct allegations raised by his wife, but it also dealt with financial matters. Whether or not (as suggested by Mr Hendey in evidence below) it was intended only for use in expected proceedings for maintenance pending suit, to be supplemented later at the final hearing, the affidavit was insufficiently full or clear in relation to the claimant's means. Judge Meston described it as having 'left a lot to be desired both as to content and form. It did not appear to follow any structural scheme to set out income, outgoings, assets and liabilities and other relevant matters'.
In August 1992, Mrs Channon, in the light of the claimant's behaviour towards her, obtained an order excluding the plaintiff from the matrimonial home at 'Woodlands', while permitting him access to the workshops and outbuildings. She obtained a decree nisi on 14 October 1992 and, on 10 December 1992, the District Judge heard her application for financial relief. Both parties were represented by counsel; Mr Crabb for the claimant and Mr Evans for Mrs Channon. The District Judge read affidavit evidence and heard oral evidence from both parties. However, he lacked any supplementary or more complete affidavit from the claimant who plainly had a number of deficiencies as a witness. Above all, the District Judge lacked any evidence from an accountant to make clear the true financial picture in relation to the claimant's income, liquidity and assets reasonably available to provide for his wife. The difficulties to which this gave rise and the context in which Judge Meston held the defendants to have been negligent can best be described by setting out the following passage from his judgment:
"It was very hard to discern on reading the affidavit what Mr Channon's income was said to be. Lists of regular outgoings were set out in two different paragraphs, some of them in round figures, making no attempt to separate out personal and domestic expenditure from business expenditure. Moreover, those lists would suggest that several likely expenses have been left out. All in all, the affidavit left a confusing and unfair picture of Mr Channon's circumstances. In preparing that affidavit Mr Hendey did not seek any assistance from Mr Channon's accountant, Mr Blanning, who had acted for Mr Channon for some considerable time … and who would have been ready and able to assist Mr Hendey, and was willing to do so, despite some unpaid fees …
In the present case there were strong reasons for involving Mr Channon's accountant from the outset. (1) He had acted for Mr Channon for a number of years and had therefore a good existing knowledge and understanding of his affairs … (2) Mrs Channon's solicitors had already warned that they expected accountants to be involved, suggesting that they might involve one to assist in the investigation of Mr Channon's finances. (3) The accountant almost certainly would give a more accurate objective and coherent explanation of Mr Channon's business activities and finances than Mr Channon himself. (4) Information that came directly from the accountant would be likely to carry more weight than Mr Channon's own assertions in an affidavit or any submissions to the court from a legal representative. (5) Information from an accountant would minimise the risk of later contradictions or inconsistencies appearing.. [he].. could have provided the company accounts and draft accounts, a picture of Mr Channon's income from all sources, a picture of his personal taxation liabilities and of his potential liquidity or liquidity problems. He could also provide an explanation of Capital Gains Tax and other fiscal implications of any particular solution or proposed solution in the case. In particular, it was almost certain that the accountant could have presented the necessary evidence to prevent or rebut the misconceptions and suspicions on the part of Mrs Channon's advisers as to Mr Channon's financial position and dealings and dispel their belief that his affairs were more complex than in reality they were. In short … the early involvement of an accountant would.. probably have protected Mr Channon from most, if not all, of the problems and misunderstandings which later emerged. ….. The figures which the accountant provided for the legal aid application which he could have provided for the first substantive hearing would have shown that Mr Channon's true income could not have been as high as was suggested by counsel for Mrs Channon before the District Judge, and indeed it was also later established in 1995 that Mr Channon's income at the time was very low indeed. That was established by the accountant figures which he provided to the Inland Revenue who accepted those figures on the basis of the accounts and information then provided..[which].. established.. that Mr Channon had no taxable income from Channon Design Limited for the years with which we are concerned in the matrimonial and ancillary relief proceedings."
At the end of July 1992, Mrs Channon's solicitors had written to say that on the basis of the affidavit sworn by Mr Channon they estimated the net assets to be £220,000 and that Mrs Channon would settle for...
To continue reading
Request your trial
-
Hamilton-Jones v David & Snape (A Firm)
...[1987] QB 514, [1987] 2 WLR 469; rvsd [1988] 1 All ER 833, [1988] QB 665, [1988] 2 WLR 671, CA. Channon v Lindley Johnstone (a firm) [2002] EWCA Civ 353, [2002] Lloyd’s Rep PN 342. F v Wirral Metropolitan BC [1991] 2 All ER 648, [1991] Fam 69, [1991] 2 WLR 1132, CA. Farley v Skinner[2001] U......
- Thomas v Albutt
-
Maria Boyle v Thompsons Solicitors
...reports of 2007 from Dr Tomkinson and Mrs MacLaren had been before the Panel? 81 Counsel were only able to find one case, Robert Channon v Lindley Johnstone (A Firm) [2002] EWCA Civ 353, where what was being valued was the loss of a chance following the presentation of the claimant's origin......
-
Riaz Ahmad v 1) Clive Graham Wood
...lost a real chance of doing better in the litigation than he did. They say the approach to be taken is that which was adopted in Channon v Lindley Johnstone [2002] EWCA Civ 353; [2002] PNLR 41. There it was common ground that the damages for the alleged negligence of the solicitors in ques......
-
Court Of Appeal Confirms Reflective Loss Rule Will Bar Claims Of Former Shareholders Of A Dissolved Company Because The Principle Must Be Determined At Time Of Alleged Loss
...Ltd (No 2) [1982] Ch 204, Johnson v Gore Wood & Co [2000] UKHL 65, Marex, Primeo, Allianz Global Investors GmbH v Barclay Bank plc [2002] EWCA Civ 353, and The reflective loss principle applies where a shareholder brings a claim "in respect of loss which he has suffered in that capacity, in......