Darby & Darby (A Firm) v Helen Joyce

JurisdictionEngland & Wales
JudgeLord Justice Rimer,Lord Justice Tomlinson,Lord Justice Longmore
Judgment Date20 May 2014
Neutral Citation[2014] EWCA Civ 677
Date20 May 2014
Docket NumberCase No: B2/2013/1068
CourtCourt of Appeal (Civil Division)

[2014] EWCA Civ 677

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM EXETER COUNTY COURT

Mr Recorder Mitchell

Claim No: 1EX90060

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

Lord Justice Longmore

Lord Justice Rimer

and

Lord Justice Tomlinson

Case No: B2/2013/1068

Between:
Darby & Darby (A Firm)
Appellant
and
Helen Joyce
Respondent

Mr Bernard Livesey QC and Mr Joshua Munro (instructed by Kennedys Law LLP) for the Appellant

Mr Guy Adams (instructed by WBW Solicitors) for the Respondent

Hearing date: 21 November 2013

Lord Justice Rimer
1

This appeal, by Darby & Darby ('Darby'), a firm of solicitors, defendants to the claim, is against an order made on 27 March 2013 by Mr Recorder Mitchell in Exeter County Court by which the recorder, so far as material, gave judgment in favour of Helen Joyce, the claimant/respondent, against Darby for: (i) damages for professional negligence for £186,007.94; (ii) an account of the cost of work carried out to the property the subject matter of the claim, for which account Darby was to be answerable; (iii) an assessment of interest, to be dealt with at the conclusion of the account; and (iv) costs.

2

Jackson LJ gave permission to appeal. Darby challenges the recorder's order on the grounds that he misdirected himself on causation and quantum. Darby was represented before us by Mr Livesey QC (who did not appear below) and Mr Munro, who did; and Ms Joyce by Mr Guy Adams, as below.

3

The case is heavily fact-based. I shall first summarise the facts as found by the recorder, supplemented by fuller references to the documents and to the written and oral evidence material to the issues on the appeal. I shall then deal with the issues.

The facts

4

Tamarisk, Hillesdon Road, Torquay was until 27 August 1985 part of a large plot owned by Gordon Hoyle and his wife Edwina ('the Hoyles'). On that day, the Hoyles transferred part of the plot to Mr and Mrs Shambrook, including the detached house known as Tamarisk, and then built a house called Marina View on their retained land, which they occupied. Both Tamarisk and Marina View enjoyed views over Torquay Marina.

5

Clause 2 of, and the third schedule to, the transfer of 27 August 1985 imposed 12 restrictive covenants on Tamarisk for the benefit of Marina View, including these two:

'1. Not to use any building for any purpose other than as or incidental to a single private dwelling.

5. Not to make any alteration or addition to the exterior or external appearance of the Property [Tamarisk] or the buildings thereon nor to erect any walls, fences or buildings (whether temporary or otherwise) without first obtaining the written consent of the Transferor [the Hoyles], the Transferee being responsible for the Transferor's legal and surveyors' costs in connection with all matters arising out of any application for consent whether or not such consent is granted.'

The latter covenant ('the alterations covenant') is of major significance in the events that happened. The former covenant ('the user covenant') played a smaller role.

6

In March 2007, Ms Joyce agreed, subject to contract, to buy Tamarisk from the then owners, Mr and Mrs Owens. She instructed Mr John Darby of Darby to act for her on the purchase. The purchase was 'at more or less the height of the property market'. The Owens imposed pressure on its progress but the recorder correctly noted that that did not reduce Mr Darby's duty to act as a reasonably competent conveyancing solicitor. One of Ms Joyce's complaints was that he did not inform her of the existence of the covenants or (as follows) explain them to her. The charges register of Tamarisk did not set out the terms of the covenants: it simply recorded that covenants had been imposed by the 1985 transfer, but Mr Darby had a copy of the transfer and so he faced no difficulty in advising about them.

7

Ms Joyce had a 30-minute meeting with Mr Darby on 25 April. That was the only meeting they had during the conveyancing process. Mr Darby made no attendance note (an unprofessional omission that was a feature of all his dealings with Ms Joyce). Ms Joyce did make a note, which she agreed was not a complete record of all that was discussed. She denied that Mr Darby advised her about the covenants. Mr Darby had no memory of advising her about them: his case was that he would have done so because that is what he would normally have done. The recorder found that he did not advise Ms Joyce about them and so breached the duty expected of him as a reasonably competent conveyancing solicitor. The breach was both of his retainer and of the duty of care owed in tort.

8

Contracts were exchanged on 4 May at a price of £460,000. Completion was on 14 June. Ms Joyce borrowed £391,000 of the purchase price from Northern Rock on the security of a charge of Tamarisk. Her title was registered at HM Land Registry and on 11 July Mr Darby sent her a copy of the entries of the registered title. As noted, the charges register did no more than to refer to the fact of restrictive covenants having been imposed by the 1985 transfer; and Ms Joyce did not have a copy of that transfer.

9

Ms Joyce lived with a partner, Neil Casey. They intended to do both interior and exterior works to Tamarisk. No permission from the Hoyles under the alterations covenant was required for the interior works, but it was required for the exterior works. The latter works were intended to include the installation of a pool in the garden, a balcony extension, a new patio area, terracing and landscaping. It was Ms Joyce's case that at the time of the purchase she also intended to subdivide Tamarisk either to enable her parents and grandmother also to live there or, alternatively, to let out part of it on a commercial basis: either alternative would have generated funds to finance the purchase and the works (in the former alternative, the relatives would contribute to the mortgage payments). The recorder noted that this intention 'arguably brought into play' the user covenant.

10

Ms Joyce commenced the works in September 2007. By mid-October they were well underway. She was unaware of any complication because of the alterations covenant. Down to then, her relationship with the Hoyles was amicable.

11

Things then changed. Mr Hoyle, on 15 October, provided Mr Casey with an extract from the 1985 transfer, including the covenants, and made it clear that the works could only continue with his consent. Ms Joyce did not understand why there should be a problem and ignored the request.

12

Mr Hoyle instructed Hooper & Wollen, solicitors ('H&W'). On 25 October, they wrote to Mr Casey, enclosed a copy of the covenants, referred to the alterations covenant, noted that the proposed alterations included the installation of a pool, a new boundary wall, a new veranda and a new garage, and concluded by stating that:

'… unless works ceases [sic] immediately until you receive written permission from [the Hoyles], then we will need to apply for an injunction to stop further works. We therefore look forward to hearing from you within the next 5 days with your written application for permission when our client will consider the matter further.'

Ms Joyce read that letter at the time of its receipt and agreed in her oral evidence that its last paragraph 'could not be clearer' and that she was left in no doubt as to what the Hoyles were asking for.

13

Following receipt of that letter, Ms Joyce re-instructed Mr Darby, who visited Tamarisk on 29 October. In accordance with his practice to date, he made no note. The recorder found that (contrary to Ms Joyce's case) 'Mr Darby did not tell [her] that [the alterations covenant] was not a problem,' nor did he tell her to stop the work. What he did was 'to agree to look into the matter, to advise and to assist in obtaining any necessary consent from the Hoyles'. Following the meeting, Ms Joyce sent him an email, which provided some general information about the works and said that Mr Casey had explained to Mr Hoyle what repair works were being carried out. She said that Mr Luscombe, of the local authority, had also said that 'there was nothing contravening the building regulations'. Mr Darby did not reply to her email, nor did he give Ms Joyce any advice.

14

A second head of Ms Joyce's complaints against Darby, which the recorder dealt with at this point in the story, is that they should not have accepted her instructions in relation to the Hoyles' complaints about the alterations. The recorder found that Mr Darby must, or should, have considered the possibility that he had not previously advised Ms Joyce of the alterations covenant; that there was therefore the possibility of a negligence claim; and that he should have considered the possibility of a conflict of interest if Darby continued to act. The recorder inferred that Mr Darby's recognition of the possibility of a claim explained why he did not open a new file and did not intend to bill Ms Joyce for his advice and assistance. He said that:

'89. The fact that Mr Darby continued to act, without at least obtaining informed consent from his client, sowed the seeds for all that was to follow and the way in which the developing dispute with the Hoyles was handled.'

The recorder's view was that Darby should not have continued to act in the matter. He summarised the position as follows:

'91. Looking at the totality of the situation and how it unfolded, it seems to me that the reason that such clear and unequivocal advice was not given, at least in part, was that Mr Darby felt unable to do so due to his own potential vulnerability to a claim. He became drawn into a...

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