Clarke v Bruce Lance & Company

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date30 October 1987
Judgment citation (vLex)[1987] EWCA Civ J1030-2
Docket Number87/1060

[1987] EWCA Civ J1030-2





(Mr. Justice McCullough)

Royal Courts of Justice

Lord Justice May


Lord Justice Balcombe


John Edward Clarke
Respondent (Plaintiff)
(1) Bruce Lance & Company (a firm)
(2) Bernard F. Lance
(3) Richard A. Sherwood
(4) Robin A. Lucas
(5) Stephen P. Gasper
(6) Dominic Widdowson
Appellants (Defendants)

MR. G. HARRAP (instructed by Messrs Moore Blatch & Company, Hants) appeared on behalf of the Respondent/Plaintiff.

MR. D. JACKSON (instructed by Messrs Ince & Company) appeared on behalf of the Appellants/Defendants.


This is the judgment of the Court.


This appeal, from the order of McCullough J. (sitting in chambers at Winchester) made on 27th March 1987, raises the question whether under English law a potential devisee under a will can recover damages in tort from the testator's solicitor for negligence when acting for the testator in an inter vivos transaction affecting the subject-matter of the devise. The negligence is alleged here to consist essentially of a failure to advise the testator that the particular transaction (the grant of an option at a fixed price exercisable after the death of survivor of the testator and his wife) was an uncommercial and misconceived transaction, likely to harm the interest of the potential devisee.


It is necessary to set out the substance of the allegations pleaded in the amended statement of claim. The allegations of negligence are denied and the case has not yet been tried on the facts, but for the purposes of this appeal, which arises from an application by the defendants to strike out the amended statement of claim as not disclosing any reasonable cause of action, we must assume that the facts as pleaded in the amended statement of claim are true. In summary form those facts are as follows:


(1) By his Will dated 30th January 1973, prepared and drawn up by the defendant solicitors, John Edward Clarke ("the testator") devised his freehold premises known as Kingshill Service Station, great Kingshill, Buckinghamshire to his trustees upon trust as to the net income thereof as to four fifths to his wife and as to one fifth to the plaintiff upon his reaching the age of 21, and upon the death of his wife to hold the capital upon trust for the plaintiff absolutely.


(2) By a lease dated 5th April 1973 the testator granted one Leonard George Hoare a tenancy of the said premises for a term of 21 years.


(3) At the end of 1978 the defendants were retained by the testator to act on his behalf in relation to a proposed deed of variation of the lease into which he contemplated entering.


(4) On 18th January 1979 the testator and Hoare entered into the deed of variation, which included a term that Hoare should have the option of purchasing the premises comprised in the lease at the price of £28,000, such option to be exercisable by notice in writing given at any time within six months from the death of the last survivor of the testator and his wife.


(5) The defendants were in breach of the duty that they otoed to the testator in that they—

  • (a) failed to advise him that granting an option over the demised premises to Hoare at a fixed price of £28,000, and on such terms as to its exercise, was a wholly uncommercial and misconceived transaction;

  • (b) failed to advise him that such an option could be exercised many years later when, through inflation and a general rise in property prices, the true value of the premises could substantially exceed £28,000.


(6)The defendants knew, or ought to have known, that the plaintiff's interest as a beneficiary under the terms of the Will would, or would be likely to, be affected by the grant of the option in the deed of variation. The defendants therefore owed to the plaintiff a duty of care similar to that which they owed to the testator in this respect, and of which they were likewise in breach.


(7) The testator died on 29th March 1981.


(8) The value of the premises had increased substantially. The testator's widow was still alive, but the plaintiff had suffered, or would suffer, damage.


The writ in the action was issued on 14th August 1984, but it was not until 7th November 1986 that an effective (amended) statement of claim was served. The defendants served a defence on 27th November 1986 and at the same time issued their summons to strike out the statement of claim. That summons came before Mr. District Registrar Lowe sitting in chambers at Bournemouth on 15th January 1987, when he ordered that the amended statement of claim be struck out as disclosing no reasonable cause of action. From that order the plaintiff appealed to the judge in chambers and, as we have said, McCullough J. allowed the appeal, but granted leave to appeal to this court.


We must first deal with the procedural point taken by Mr. Harrap for the defendants, namely that this is not an appropriate case for the summary remedy of striking out under Order 18, rule 19(1) (a). We accept that the power should only be used in plain and obvious cases (see Drummond-Jackson v. B.M.A. [1970] 1 WLR 688) but where, as here, a novel cause of action is propounded by the statement of claim and, after full argument, we are satisfied (as we are) that the novel cause of action has no chance of succeeding, then justice requires that it should be struck out now, and the defendants not exposed to a continuance of proceedings which must inevitably fail. See McKay v. Essex Health Authority [1982] Q.B. 1166 per Stephenson L.J. at p.1177 and per Ackner L.J. at p.1186. We adopt the same approach as that adopted by the Court of Appeal in New Zealand in Gartside v. Sheffield, Young and Ellis [1983] N.Z.L.R. 37, namely that where, as here, the issue of principle stands out plainly, it would be less than responsible to postpone grappling with that issue.


So we turn to consider the question of substance.


The circumstances in which the law will impose a duty of care on a person, such that a breach of that duty causing damage will give rise to a right of action in negligence on the part of a person to whom the duty is owed, have been the subject of much recent consideration in the higher courts. The point of departure is the speech of Lord Wilberforce in Anns v. Merton London Borough Council [1978] A.C. 728 at p.751:

"….. in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter—in which case a prima facie duty of care arises. Secondly, if the first qustion is answered affirmatively, it is necessary to consider whether there are any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise…..".


This passage has, however, been treated with some reservation in subsequent cases in the House of Lords (see Peabody Donation Fund v. Sir Lindsay Parkinson & Co. Ltd. [1985] A.C. 210, 240; Curran v. Northern Ireland Housing Association [1987] 2 W.L.R. 1943, 1047–1049) and for present purposes we proposed to adopt the test propounded by Lord Keith of Kinkel in the Peabody Trust case (supra) at p.240:

"The true question in each case is whether the particular defendant owed to the particular plaintiff a duty of care having the scope which is contended for, and whether he was in breach of that duty with consequent loss to the plaintiff. A relationship of proximity in Lord Atkin's sense [in Donoghue v. Stevenson [1932] A.C.562,580] must exist before any duty of care can arise, but the scope of the duty must depend on all the circumstances of the case."


Then, after a quotation from the speech of Lord Morris of Borth-y-Gest in Dorset Yacht Co. v. Home Office [1970] A.C. 1004, Lord Keith of Kinkel continued (at p.241):

"So in determining whether or not a duty of care of particular scope was incumbent upon a defendant it is material to take into consideration whether it is just and reasonable that it should be so."


The most recent case in this line of authority, the decision of the Privy Council in Yuen Kun Yeu v. A-G of Hong Kong [1987] 2 A.E.R. 705 confirms this approach: whether in the particular circumstances of the case there exist between the parties such close and direct relations as to give rise to a duty of care. Whilst foreseeability of harm is a necessary ingredient of such a relationship, it is not the only one: "Otherwise there would be liability in negligence on the part of one who sees another about to walk over a cliff with his head in the air, and forbears to shout a warning"—per Lord Keith of Kinkel delivering the judgment of the Board in Yuen Kun Yeu (supra) at page 710 H.


The question we have to decide is whether, on the facts as alleged in the amended statement of claim, a duty of care could have arisen between the defendant solicitors and the plaintiff. We accept that there may be circumstances in which a solicitor owes a duty of care to a person other than his client: see e.g. Wilson v. Bloomfield [1979] 123 Sol.Jo. 860, C.A. (an...

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    ...his lifetime owes no duty of care to a prospective beneficiary under the client's then will who may be prejudicially affected: see Clarke v. Bruce Lance & Co [1988] 1 WLR 881. As I have said, the scope of the solicitors duties to his client are set by the terms of his retainer: and as a......
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    ...beneficiaries. 25 Nor do I accept that it is so clear that there is a conflict of interests (of the type underlying the decisions in Clark v Bruce Lance & Co [1988] 1 WLR 881 and Punford v Gilberts [1998] PNLR 763) such that a White v Jones liability is impossible. Wilton had need of ca......
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1 books & journal articles
  • Solicitors' will-making duties.
    • Australia
    • Melbourne University Law Review Vol. 26 Nbr. 1, April 2002
    • 1 April 2002
    ...Dickey, Family Provision after Death (1992) 77-9, 184-5. (210) Sutherland [1980] 2 NZLR 536; Clarke v Bruce Lance & Co (a firm) [1988] 1 All ER 364, 369-70. Cf Worby v Rosser [1998] EWCA 3545 (Unreported, Court of Appeal, Nourse and Ward LJJ, 17 September (211) Henderson Trout II [2000]......

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