Conway v Ratiu and Others

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLord Justice Auld,Lord Justice Laws,Lord Justice Sedley
Judgment Date08 November 2005
Neutral Citation[2005] EWCA Civ 1302
Date08 November 2005
Docket NumberCase No: A2/2004/0948

[2005] EWCA Civ 1302





Royal Courts of Justice

Strand, London, WC2A 2LL


The Right Honourable Lord Justice Auld

The Right Honourable Lord Justice Laws and

The Right Honourable Lord Justice Sedley

Case No: A2/2004/0948

1) Nicolae Christopher Ratiu
2) Simon Harry Karmel
3) Regent House Properties Ltd
David Peter Conway

Sir Sydney Kentridge QC, Mr Kenneth MacLean QC & Mr James Goldsmith (instructed by Clifford Chance) for the Appellants

Mr Romie Tager QC & Mr William Bojczuk (instructed by David Conway & Co) for the Respondent



Page 2 Paragraph 1

The main issues at trial

Page 4 Paragraph 6

The Facts

Page 5 Paragraph 10

Mr Conway's involvement as a solicitor in the acquisition and sale of No 32

Page 7 Paragraph 14

Regent's proposed purchase of No 24

Page 9 Paragraph 19

The issues on appeal

Page 21 Paragraph 54

Breach of fiduciary duty and breach of duty of confidence

Page 23 Paragraph 56

Issues arising as to the existence of and breach of fiduciary duty

i) Whether Mr Conway owed a fiduciary duty to Regent

Page 25 Paragraph 61

ii) Conflict of interest

Page 38 Paragraph 88

iii) Informed consent

Page 46 Paragraph 99

Duty of Confidence

iv)a) The extent of relevant confidential information imparted to Mr Conway

Page 48 Paragraph 103

iv)b) Burden of proof as to misuse of confidential information

Page 54 Paragraph 116

Meaning and Justification

vi) The possible meanings of the letter of 6 th December for justification

Page 60 Paragraph 132


Page 68 Paragraph 147

vii)b) The Judge's directions on the application of the subjective test of malice

Page 75 Paragraph 163


vii) Whether the Judge misdirected the jury on damages or whether their award was perverse

Page 79 Paragraph 175

Lord Justice Auld

Lord Justice Auld



This is an appeal of Mr Nicolae Ratiu, Mr Simon Karmel and Regent House Properties Ltd (all of whom I shall collectively call "Regent" unless otherwise indicated) against a jury's finding of liability and award of damages of £96,000 on 31 st March 2004 in favour of Mr David Conway, a practising solicitor with the London firm, David Conway & Co., in his claims against Regent for damages for libel and malicious falsehood in a trial presided over by Tugendhat J.


The claims arose out of a letter of complaint by Regent to the agent for the Trustees of the Eyre Estate ("Eyre"), owners and vendors of a development site in St John's Wood. Regent complained that Mr Conway, whom they had instructed through a nominee company called Pristbrook Limited ("Pristbrook") to act for them as their solicitor in the purchase and, then, sale of a development site at No. 32 Elm Tree Road ("No.32") in St John's Wood, had, in his personal capacity, competed with them in bidding for another nearby and closely related site, Nos. 24–26 Elm Tree Road ("No. 24"). In particular, Regent complained that he sought to re-open the bidding after Mr Karmel had informed him that Eyre had accepted Regent's offer. Before making his rival bid, Mr Conway had contemplated that he might accept instructions from Regent to act for them on the acquisition of the site or that he might enter into a business deal with them for the purpose of such acquisition.


The letter, which was written by Mr Ratiu on behalf of Regent to Mr Julian Briant of the firm of Cluttons, chartered surveyors, acting as agents for Eyre, read as follows:

"Further to your fax of earlier today, we are extremely concerned that we are being asked to bid against Mr Conway.

We have reached agreement with you on two separate occasions. We informed Mr Conway that you had accepted an unconditional offer for the property from us and asked him to act for us in the purchase.

He then used this confidential information to put in a higher offer.

We are aware of your duty as trustees to obtain the highest price for the property. The trustees will however want to complete the purchase. If you proceed with the sale to a person who used confidential information obtained through a solicitor/client relationship, we will do all in our power to prevent the formalisation of a contract in breach of the duties owed by the solicitor.

We will do everything in our power to prevent Mr Conway using this information to our detriment.

We have already contacted the Law Society on this matter and are awaiting their response. We are ready and willing to exchange and complete on the basis of the offer that you have already accepted and have confirmed our meeting tomorrow morning at the offices of Pemberton Greenish together with our solicitors Clifford Chance."


It should be noted that the core allegation in the letter is that Mr Conway, in his capacity as solicitor for Regent, had misused confidential information imparted to him by Regent that Eyre had accepted its unconditional offer for No 24. There is no express reference in the letter to the amount of the offer. I should also record at this stage that, on the same day, Mr Ratiu also wrote letters to Mr Conway and the Law Society complaining in similar terms, though, contrary to the assertion in his letter to Mr Briant, he had not contacted the Law Society.


The nub of Regent's complaint, as expressed in that letter to Eyre's agent, Cluttons, was that that Mr Conway should not have bid for No 24 or sought to re-open the bidding once Regent had informed him that Eyre had accepted its offer. Regent maintain that he thereby put himself in a position of conflict between his duty as a solicitor to them as his clients and his personal interest in which he would inevitably (consciously or subconsciously) misuse his clients' confidential information.

The main issues at trial


Regent accepted at trial that the letter was defamatory in that it contained an allegation of unprofessional conduct of Mr Conway as a solicitor. The Judge, Tugendhat J, ruled that the letter was protected by qualified privilege, a ruling that Mr Conway does not challenge. The main issues for the Jury were (i) the meaning of the defamatory words and whether such meaning was justified (ii) if not, whether Regent had lost the protection of qualified privilege because they had been actuated by malice and (iii) damages. If Regent established justification or Mr Conway failed to establish malice, the claim would fail. However, the jury found that the defamatory letter on its true meaning was not justified and that, in writing it, Regent had been actuated by malice.


The issues of justification and malice both turned on the duties, if any, of trust, loyalty and confidence, owed by Mr Conway as a solicitor to Regent, whether viewed as a past, existing and/or prospective client. Regent maintain that the Judge's directions to the Jury on the law and on its application to the facts of the case were wrong and/or contradictory and that, as a result, the Jury's verdict is unsafe and ought to be set aside. They argue that if the Judge had properly directed the jury on these aspects of duty, they could not reasonably have found, as they did, in Mr Conway's favour.


Regent's case, in summary is that when Mr Conway made his bid for No 24 he owed them a fiduciary duty of loyalty and, in any event, a duty of confidence, and was in breach of both duties. They contend that the Judge erred as a matter of law and fact in a number of important directions to the jury on the issues of justification and malice, withdrew from them an essential part of Regent's case on both issues, namely that Mr Conway had a fiduciary duty to Regent, and, in any event, wrongly left the issue of malice to them when there was insufficient evidence of it. In the result, Regent ask the Court to enter judgment for them, alternatively to order a re-trial.


Mr. Conway's case is that he was never, whether as a solicitor or otherwise, at any stage under a fiduciary duty to Regent, and certainly not in relation to Nos 32 or 24, because such retainer as he had had was from Pristbrook, not Regent, and then only in relation to the purchase and sale of No. 32. He contends that the Judge's rulings and directions were sound in law and in fact.

The Facts

Mr Conway and Regent


Mr Conway was admitted as a solicitor in 1970 and has since been in private practice, initially in partnership with others and more recently as a sole practitioner in the West End of London. His main fields of practice are commercial and residential property transactions and company and commercial work. He has particular expertise in leasehold enfranchisement. Much of his practice involves transactions in residential properties in and around St John's Wood, where he has lived for over 30 years, and acting in enfranchisement claims by tenants of major residential property owners in that area, including Eyre.


Mr Ratiu and Mr Karmel are friends and business partners. Regent House Properties Ltd is a property investment company, ultimately controlled by Mr Ratiu's family and of which Mr Ratiu, but not Mr Karmel, was a director. It owned and controlled a company called Warleggan Group Limited ("Warleggan"), of which Mr Ratiu and Mr Karmel were directors. Warleggan, in turn, owned Pristbrook, of which they were also directors. The Judge directed the jury not to distinguish between Mr Ratiu and Mr Karmel on the one hand and Regent on the other for the purposes of the case, a direction not challenged in the appeal. But,...

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