Ezekiel v Lehrer
| Jurisdiction | England & Wales |
| Judge | Lord Justice Ward |
| Judgment Date | 30 January 2002 |
| Neutral Citation | [2002] EWCA Civ 16 |
| Docket Number | Case No: A3/2001/0782 CHANI |
| Court | Court of Appeal (Civil Division) |
| Date | 30 January 2002 |
[2002] EWCA Civ 16
Lord Justice Ward
Lord Justice Jonathan Parker and
Mr Justice Harrison
Case No: A3/2001/0782 CHANI
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM CHANCERY DIVISION
Mr Justice Evans-Lombe
Royal Courts of Justice
Strand, London, WC2A 2LL
Mr Michael Driscoll Q.C. and Mr Luke Norbury (instructed by Messrs Landons for the Appellant)
Mr Michael Pooles Q.C. and Mr Philip Moser (instructed by Messrs Pinsent Curtis Biddle for the Respondent)
On 18 th March 1999 the appellant Mr Freddy Jacob Ezekiel, made a claim against his former solicitor, the respondent Mr Abraham Mayir Lehrer, for damages for professional negligence. His cause of action had accrued on 28 th September 1990, eight and a half years previously. Not surprisingly the defendant alleged it was statute-barred. Oh no, said Mr Ezekiel, asserting that relevant facts had been deliberately concealed from him by the defendant and were not discovered until March 1996 so that time only began to run from that date pursuant to s. 32 of the Limitation Act 1980. Although the trial had been listed to start on 30 th April 2001, Evans-Lombe J. summarily dismissed the claim on 21 st March 2001 pursuant to CPR Rule 24.2 but only awarded part of the costs to the defendant. Both appeal to us.
The question for decision in Mr Ezekiel's appeal could be framed in this way: is one to be treated as having knowledge of a fact which one has forgotten about eleven weeks later and does not remember again until some five years after that? Untrammelled by great learning from departments of psychology and philosophy, the common-sense answer would be, "yes, of course". That might be the end of this appeal but, alas, it cannot be the end of the judgment. I must do more to set out the facts.
Mr Ezekiel is an engineer and inventor and businessman. He was keen to develop a device known as the "Nursery Angel". When a baby in its cot began to cry a sound activated motor would rock the baby's cradle, play the soothing sound of the swish of the sea and a lullaby in tandem if necessary to soothe and settle the child. His invention, the idea for which occurred to him when he suffered a heart attack in January 1981, was to incorporate a sensitive vibration sensor which could register even the faint heartbeat of a baby which, if the heartbeat became too irregular or ceased, could set off an alarm. He believed it could be extremely useful in preventing cot deaths. He began to collaborate with a Mr Ezekiel Simon through his company Simon Technologies Ltd. (which I shall call either "STL" or "the old company"). Mr Ezekiel's son-in-law, Mr Shina, became a director of the company.
The appellant arranged finance for the old company with his bank, the Royal Bank of Scotland ("RBS"). The bank took a debenture over the company's undertaking to secure the overdraft facilities granted to it. During 1989 there were further dealings with the bank and Mr Ezekiel says that it was agreed that he would charge 16 Nant Road N.W.2. ("the property") to enable a £50,000 loan facility to be made available to his nephew. He would also charge properties in Portland Road, South Norwood, and Princes Road, Buckhurst Hill, to secure the advance of an additional £100,000 to the old company. He says that the bank by mistake required him to charge the property to support the borrowings of the old company, not the borrowings of nephew Daniel. On the claimant's account, there was considerable confusion.
Be that as it may the matters material to the appeal took place in September 1990. The appellant alleges that he had been engaged in discussion with the bank at which it was agreed that the old company was no longer financially viable and should be put into receivership; that a new company of the same name (Simon Technologies Ltd.) (which I shall call "the new company") would be formed. The bank would provide facilities to the new company in the first place to enable it to purchase from the receiver the equipment and assets required for the Nursery Angel project to be continued and a further advance of £250,000 to enable the new company to continue that project. The security for these advances would be a charge over the property, 16 Nant Road, and a charge over a property known as Trutex Mill in Bury, Lancashire. He says that these arrangements were set out in a letter dated 12 th September 1990 addressed to the bank and handed over to the bank on that day when the arrangement was confirmed. After the meeting with the bank the appellant's son prepared a letter and faxed it to Mr Shina who signed it and faxed it to the bank that same day and faxed a signed copy to the appellant. In that letter Mr Shina wrote as a director of the old company to confirm that it was in order for the bank to put the company into receivership.
The following day, 13 th September 1990, Mr Ezekiel went to see Mr Lehrer. Mr Lehrer had been acting for him in connection with both business and family matters since about 1977, according to Mr Ezekiel. I recount what happened from his first witness statement made on 7 th February 2001. The account in the second witness statement is similar but less full.
"80. On 13 th September 1990 I went to Avi Lehrer's offices. I did so for the purpose of signing a second charge over the property pursuant to my agreement with the Bank for the facility for the new company and explaining the arrangements to the defendant. At the meeting, I told the defendant of the agreement I had reached with Mr Jackman [the Bank Manager] that a new charge was to be executed to be used for a new company to be known as Simon Technologies Ltd. I also explained that the charge was to be held in escrow pending my authorising its release upon the formation of the new company and that new company's acceptance of the Bank's facility.
81. At the defendant's offices, I signed a charge over the Property ("the second charge") in favour of the Bank so as to support the facilities of my new company which was to be known as Simon Technologies Ltd. A copy of the second charge is exhibited …
82. The defendant had searched among his files and produced a charge form for me to sign. He asked me if there was to be a facility letter and I told him it would be issued when the new company was formed. We discussed the availability of the existing name for the new company. I told him that the proposed receiver had said to me that I could have this name. The defendant said that if the name on the charge form had to be amended the charge could be initialled. He said he would keep the signed charge form on file until it was to be released."
The claimant's case as to what happened next was pleaded in the particulars of claim as follows:—
"27. On 13 th September 1990 and pursuant to the said agreement with the Bank on 12 th September, the plaintiff went to the defendant's offices and signed a charge ("the second charge") in favour of RBS, expressed to be security for the borrowings of Simon Technologies Ltd. The plaintiff signed the second charge intending for it to be security for the new company (to be known at Simon Technologies Ltd.) and not STL (which was about to be put into receivership).
28. At this meeting on 13 th September 1990, the plaintiff informed the defendant that the second charge was to be used for a new company and was to be held in escrow pending the plaintiff authorising its release upon the formation of the new company and that company's acceptance of the facility [as arranged on 12 th September].
29. Despite having been given clear instructions as to the basis on which the plaintiff was to sign the second charge (as to which see paragraph 28 above) the defendant proceeded to send the first [the charge to support the borrowings of Daniel] and second charges to H.M. Land Registry for registration. The first and second charges were registered at H.M. Land Registry on 1 st October 1990." (My emphasis added).
The appellant confirmed those allegations in his first witness statement saying:—
"13. The defendant's actions [in registering the second charge] were a clear breach of my instructions to him. I can only believe that the defendant failed properly to record those instructions and became confused as to which charge should be sent off for registration and which charge should be held in escrow. Furthermore, he failed to appreciate (despite everything I told him) or to keep in mind the fact that the second charge was to secure the borrowings of a new company, not STL [the old company]. In any event, I never authorised the defendant to send off the second charge for registration since he was to hold the charge in escrow pending events that never occurred." (My emphasis added).
So there we have it: "Despite having been given clear instructions", "the defendant's actions were a clear breach of my instructions to him".
The claim accordingly pleads breach of the implied terms of the solicitor's retainer and negligence the particulars of which were:—
"(i) The defendant failed to take or any proper instructions from the plaintiff regarding the second charge.
(ii) The defendant failed to take any or any proper instructions from the plaintiff as to whether the new company had been formed (it had not) and/or as to whether the escrow conditions had been fulfilled (they had not).
(iii) The defendant sent the second charge off for registration despite having been told that the second charge was to be security for a loan by RBS to a new company and that it was to be held in escrow.
(iv) The defendant sent the second charge off...
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