(first) Walter Scott Sneddon And (second) Sneddon & Son, Ssc Against A Decision Of The Scottish Legal Complaints Commission
| Jurisdiction | Scotland |
| Judge | Lord Bracadale,Lord Philip,Lady Smith |
| Judgment Date | 12 August 2015 |
| Neutral Citation | [2015] CSIH 62 |
| Court | Court of Session |
| Docket Number | XA162/14 |
| Published date | 12 August 2015 |
| Date | 12 August 2015 |
EXTRA DIVISION, INNER HOUSE, COURT OF SESSION
[2015] CSIH 62
XA162/14
Lady Smith
Lord Bracadale
Lord Philip
OPINION OF THE COURT
delivered by LADY SMITH
in the Appeal
by
(FIRST) WALTER SCOTT SNEDDON and (SECOND) SNEDDON & SON, SSC
Appellants;
against
A decision of The Scottish Legal Complaints Commission
Respondents:
Act: Davies; TC Young Wilson Terris
Alt: Barne; Anderson Strathern LLP
12 August 2015
Introduction
[1] This is an appeal against a decision of the Scottish Legal Complaints Commission (“SLCC”) in which it upheld a complaint against a solicitor, Mr Walter Sneddon, in relation to the retention of £1,000 of the purchase price due under missives for the sale of a house in Falkirk to his clients, the complainers. SLCC concluded that the solicitor had provided an inadequate professional service and determined that his firm should waive certain fees and pay compensation.
[2] The issue for this court is whether or not the SLCC were entitled, in response to the complaint and on the facts found, to conclude that the appellants had provided an inadequate professional service. No issue is raised regarding the redress determined upon.
Background
[3] Missives for the sale to the clients of the house were concluded on 16 December 2011. The price was £370,000 and entry was to take place on 20 January 2012.
[4] Sometime during the first half of January 2012, the roof of the house suffered storm damage. By letter dated 16 January 2012, the first appellant wrote to the seller’s solicitors, stating:
“Our clients have today advised us that while passing the property at the weekend they noticed some significant storm damage to the roof. Please therefore confirm what arrangements are in hand to carry out the necessary repairs to the roof prior to settlement. Our clients have indicated they would wish the opportunity to inspect any such repairs as soon as the same have been carried out.”
In accordance with what is now normal practice in residential property transactions, the missives incorporated standard conditions. The particular conditions referred to were those contained in the Combined Standard Clauses (2011 Edition) specified in a Deed of Declaration registered in the Books of Council and Session on 22 September 2011 (“the 2011 Conditions”). Paragraphs 18(a) and (b) of the 2011 Conditions provide:
“ 18 RISK
- The Seller will maintain the Property in its present condition, fair wear and tear excepted, until the time at which settlement takes place.
- The risk of damage to or destruction of the Property howsoever caused will remain with the Seller until the time at which settlement takes place.”
and Clause 22 provides:
SUPERSESSION OF MISSIVES
22. The Missives shall cease to be enforceable after a period of 2 years from the Date of Settlement except insofar as (i) they are founded upon in any court proceedings which have commenced within the said period or (ii) this provision is excluded in terms of any other condition in the Missives.”
[5] There was, accordingly, no doubt that the repair of any storm damage caused to the roof between the date of conclusion of the missives and the date of entry was the contractual responsibility of the sellers. Further, if that responsibility had not been discharged prior to the date of entry, it would subsist thereafter subject only to parties’ agreement to the contrary or the operation of the two year time bar provided for in paragraph 22.
[6] Accordingly, the issue that the first appellant had to address was how to protect his clients’ interests given the obvious possibility of the repairs not having been carried out by the imminent date of entry. One option would have been to negotiate a reduction in the price of the property but that does not appear to have been considered. Another option was to try to have the sellers agree to the retention of a portion of the price; that was what the first appellant evidently decided to do. By letter dated 19 January 2012, he wrote to the seller’s solicitors, stating:
“Our clients have contacted us to advise that they have been in contact with your clients by email. Apparently your clients were unaware of the storm damage to the roof. We understand that your clients are arranging for the roof to be repaired next week.
In the circumstances we would propose to make a retention of £1,000 from the purchase price until the roof repairs are satisfactorily completed. Please take immediate instructions and revert to us by return fax with confirmation that this is acceptable.”
[7] The seller’s solicitor responded by letter faxed the same day, stating:
“Our clients are agreeable to a £1,000 retention in respect of roof repairs. As soon as the repairs have been carried out our clients wish immediate release of the retained funds.”
[8] The transaction settled on 20 January on which date £369,000 was paid by the clients, being the purchase price “less the agreed retention of £1,000 in respect of the roof repairs to be carried out.” (see: first appellant’s letter dated 19 January 2012). It appears that the £1,000 retention money was held by the first appellant.
[9] After the clients had taken entry, they raised concerns with the first appellant in relation to a number of matters which they considered to constitute substantial defects in the property. Their list included various problems with the roof including that there were missing slates due to storm damage. The first appellant reported their concerns to the seller’s solicitor, observing “You are obviously already aware of the damage to the roof, which is subject to a retention.” (see: first appellant’s letter dated 24 January 2012).
[10] The first appellant understood that no repairs had been carried out to the roof at all. He wrote again to the sellers’ solicitors, by letter dated 1 February 2012 stating:
“….Our clients have also advised us that no repairs have yet been carried out to the roof. As you are aware your clients agreed with our clients that the roof repairs would be carried out last week.
We therefore put your clients on notice that if your clients have not had the roof repairs carried out by Sunday 5th February, then our clients will instruct their own tradesmen to carry out the necessary repairs and use the retention of £1,000 to cover the costs therefor.”
[11] The seller’s solicitor responded promptly, the same day, by a letter which included the following:
“We have received an email from our clients confirming that the roofer was to have visited the property last week. Our clients are seeking confirmation from the builder that they instructed as to whether or not this has been done and we shall revert to you on this matter in due course. In the meantime should your clients instruct their own tradesmen to carry out any work then this is strictly on the basis that our clients do not consent to the use of any of the retention monies…………………
………………………………….
Roof
………………………………..
….in the meantime any work carried out by your clients will be carried out at their own expense without liability to our clients. In particular our clients do not consent to any of the retention monies being used for this purpose.”
[12] The ensuing correspondence between the solicitors indicates that, whatever the true position, the first appellant continued to believe that no roof repair had been carried out at the instance of the sellers at all and he continued to press them, through their solicitors, to do the repairs.
[13] He thus wrote again to the seller’s solicitor, by letter dated 19 March 2012 stating:
“Our clients require the roof repairs to be undertaken within the next 7 days, failing which they shall instruct the work themselves and apply the retention towards the cost.”
[14] On 27 March, the first appellant advised the clients that they could instruct their own contractors to carry out the roof repairs and use the retention monies to pay for those works. Then, on 28 March, he wrote to the sellers’ solicitors stating that the roof repairs had not been carried out and:
“Accordingly, our clients are now arranging for the work to be undertaken by their own tradesmen and the £1,000 retention will be applied towards the costs thereof. We enclose a copy of the estimate obtained by our clients for the roof works for your information.”
[15] It is not clear what his basis was for considering that the storm damage repair would cost as much as or more than £1,000, as is indicated by the statement that the money would be applied “towards” the cost of the repairs; the estimate provided to him by the clients indicated that it would cost considerably less than that.
[16] By letter dated 2nd April, the sellers’ solicitor advised that the roof repairs had been carried out, reiterated that they did not accept that the retention money could be applied to the cost of any repairs instructed by the purchasers and warned that, if the first appellant uplifted the £1,000 without their consent, they would report him to the Law Society of Scotland. On 3 April, the first appellant retracted his earlier advice; he told the clients that they could not in fact use the retention money to pay for any roof repairs instructed by them.
Law Society of Scotland Rules and Guidance, Division C: Conveyancing
[17] The relevant guidance issued by the Law Society of Scotland, on retention of funds in the context of a conveyancing transaction, is in the following terms:
“Where a sum of money is to be retained at settlement of a conveyancing transaction, the conditions upon which it is retained should be set out in writing at settlement. The agreement should specify the time limit for implementation. Matters should not be left to recollection of telephone conversations which may become vague with the passage of time.
If funds were retained pending fulfilment of certain conditions by the seller, they should be released when those conditions have been fulfilled in terms of the written agreement....
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