Hilton v Barker Booth & Eastwood (A Firm)
| Jurisdiction | UK Non-devolved |
| Judge | LORD HOFFMANN,LORD HOPE OF CRAIGHEAD,LORD SCOTT OF FOSCOTE,LORD WALKER OF GESTINGTHORPE,LORD BROWN OF EATON-UNDER-HEYWOOD |
| Judgment Date | 03 February 2005 |
| Neutral Citation | [2005] UKHL 8 |
| Date | 03 February 2005 |
| Court | House of Lords |
[2005] UKHL 8
HOUSE OF LORDS
My Lords,
For the reasons given in the speeches of my noble and learned friends Lord Scott of Foscote and Lord Walker of Gestingthorpe I too would allow this appeal and make the order proposed.
My Lords,
For the reasons given in the speeches of my noble and learned friends Lords Scott of Foscote and Lord Walker of Gestingthorpe, which I have had the advantage of reading in draft, I too would allow this appeal and make the order which has been proposed by Lord Walker.
My Lords,
I have had the advantage of reading in draft the opinion prepared by my noble and learned friend Lord Walker of Gestingthorpe and am in full agreement with the reasons he has given for allowing this appeal. I wish particularly to associate myself with my noble and learned friend's remarks in paragraphs 10 and 47 of his opinion. Since, however, your Lordships are disagreeing both with the trial judge and a unanimous Court of Appeal, I want to add a few words of my own.
The issue in this case is determined, in my opinion, by the principles expressed in Moody v Cox [1917] 2 Ch. 71. Lord Walker has cited the relevant passage from the judgment of Lord Cozens-Hardy MR. I would add to that citation a passage from the judgment of Scrutton LJ, at p 91. Scrutton LJ referred to evidence given by the defendant Cox to the effect that he, Cox, knew that the price the client, Moody, was paying for the cottages was a good deal more than the value that had been placed on the cottages for probate purposes and that he, Cox, had not told the client the amount of the probate valuation. Scrutton LJ then continued:
"A man who says that admits in the plainest terms that he is not fulfilling the duty which lies upon him as a solicitor acting for a client. But it is said that he could not disclose that information consistently with his duty to his other clients, the cestuis que trust. It may be that a solicitor who tries to act for both parties puts himself in such a position that he must be liable to one or the other, whatever he does. The case has been put of a solicitor acting for vendor and a purchaser who knows of a flaw in the title by reason of his acting for the vendor, and who, if he discloses that flaw in the title which he knows as acting for the vendor, may be liable to an action by his vendor, and who, if he does not disclose the flaw in the title, may be liable to an action by the purchaser for not doing his duty as solicitor for him. It will be his fault for mixing himself up with a transaction in which he has two entirely inconsistent interests, and solicitors who try to act for both vendors and purchasers must appreciate that they run a very serious risk of liability to one or the other owing to the duties and obligations which such curious relation puts upon them."
The reasoning in Moody v Cox did not depend on the circumstance that actual misrepresentations might have been made by the solicitors to their client. It depended on the failure by the solicitors to disclose to their client information that it was their contractual duty to him to disclose. The fact that the disclosure of the information would, or might, have placed the solicitors in breach of duties they owed to others did not relieve them of the contractual duties they had undertaken or of the legal consequences of their breach of those contractual duties.
The Court of Appeal in the present case recognised, I think, that in general it could be no answer to a claim for damages for breach of a contractual obligation that performance of the obligation would have constituted a breach of a contractual obligation owed to someone else. Hence the attempt by Sir Andrew Morritt V-C to identify an implied term in the contract between the appellant and his solicitors under which the solicitors would be excused from disclosing to the appellant information that they were legally obliged to someone else to treat as confidential (see paras 32 and 33 of Sir Andrew Morritt V-C's judgment). I agree with Lord Walker that the proposed implied term cannot be justified by any of the various tests for the implication of terms into a contract. If, when instructing the respondent firm to act for him, the proposed implied term had been put to the appellant, it is inconceivable that he would have responded "Yes, of course", or with words to that effect. He would have asked what sort of information his solicitors were talking about and to whom the duty of confidentiality was owed. He would surely have asked for guidance as to whether his assent to the proposed term would be prejudicial to his interests. The implied term route as a way of relieving the respondent solicitors of contractual obligations that they would otherwise have owed the appellant seems to me to be an impossible one.
In any event, the description of the information about Mr Bromage that ought to have been disclosed to the appellant as "confidential" seems to me a red herring. I doubt whether a fact that is a matter of public record, such as a bankruptcy or a criminal conviction, can justify such a description. The reason why it would have been a breach of the solicitors' duty to Mr Bromage to inform the appellant of Mr Bromage's bankruptcy and criminal conviction was not because the information was "confidential" but because it was their duty as Mr Bromage's solicitors to do their best to further Mr Bromage's interests in the transaction in respect of which Mr Bromage had instructed them. To have disclosed those facts to the appellant would surely have peremptorily frustrated the proposed transaction. It would, therefore, have been a breach of their duty to Mr Bromage to have done so.
So the conclusion seems to me inescapable that the solicitors had put themselves in a position in which they owed to their two clients, Mr Bromage on the one hand and the appellant on the other hand, contractual duties that were inconsistent with one another. If, at an early stage, they had told the appellant that they could not act for him and that he should go to other solicitors, they would have extricated themselves from their dilemma. In the event, however, they continued to act for both clients and it was inevitable that they would be in breach of the contractual duties they owed to one or the other. The unfortunate victim turned out to be the appellant and they have no answer, in my opinion, to his claim against them for damages for breach of contract.
So I would allow this appeal and make the order that Lord Walker has proposed.
My Lords,
The facts of this case need to be set out in some detail. The courts below do not seem to have found them particularly shocking. I have to say that I do. It adds to my dismay that if (as I would) your Lordships allow this appeal, it will still not achieve finality in the appellant's efforts to obtain redress for the wrong which was done to him nearly fifteen years ago.
The facts
The appellant Mr Ian Hilton started work in 1972, at the age of 17, as an apprentice bricklayer. He became an experienced subcontractor in the house-building industry. In 1978 he became a client of the respondent, Barker Booth and Eastwood ("BBE"), a firm of solicitors practising in Blackpool. In the mid 1980s Mr Hilton began to trade as a developer in a small way of business, buying small sites in or around Blackpool. He traded in partnership with his wife, but he was the only one who was in any way active in the business. In 1988 the partnership made a profit of over £100,000 from developing and selling two sites. In the course of that transaction he called on his solicitor, Ms Helen Lawson of BBE, and was introduced to her partner Mr Kevin Gorman. At that time Mr Gorman ranked fourth, and Ms Lawson fifth, out of the six partners in the firm.
In 1989 Mr Hilton separated from his wife. At that time they owned two undeveloped sites, one at Falmouth Road, Blackpool (acquired in 1985) and another larger site at Watson Road, Blackpool (acquired in 1988). The Falmouth Road site was developed by the erection of one house and was transferred into the sole name of Mrs Hilton. The Watson Road site was a larger area suitable for the erection of several flats. In 1990 it was still undeveloped. Mr Hilton put up a large sign carrying the words "Hilton Homes" and his telephone number.
In June or July 1990 Mr Hilton received a phone call (perhaps as a result of the "Hilton Homes" notice) from Mr Neil Bromage. Mr Bromage introduced himself as a cousin of Mr Hilton's estranged wife (and it is accepted that he was a cousin of hers) but Mr Hilton had never met him before and had no idea who he was. In the next few weeks Mr Hilton had a number of phone calls and visits from Mr Bromage, all concerned with possible development plans. Mr Bromage expressed an interest in buying the flats at Watson Road, once they had been built. In his witness statement Mr Hilton described Mr Bromage as pestering him.
What Mr Hilton did not know, and did not discover until much later, was that Mr Bromage had only a few months before been released from prison on licence. On 30 October 1989 he was sentenced at Preston Crown Court to nine months' imprisonment after pleading guilty to three offences of participating in the management of a company while an undischarged bankrupt, one offence of fraudulent trading, and nine offences of obtaining credit while an undischarged bankrupt. He was released from prison on 16 March 1990.
These facts were however known to BBE since that firm had acted for Mr Bromage in the criminal proceedings. Mr Gorman had not himself acted in the criminal proceedings but he knew of Mr Bromage's...
To continue reading
Request your trial
-
Harlequin Property (SVG) Ltd and Another v Wilkins Kennedy (A Firm)
...requiring them to disclose that confidential information to the claimant or precluded them from acting for rival vendors. (b) Hilton v Barker, Booth & Eastwood [2005] UKHL 8: [2005] 1 WLR 567: the claimant was advised by the defendant solicitors in respect of a property development contrac......
-
Nihal Mohammed Kamal Brake v Geoffrey William Guy
...in the first place, and refer to a passage in Toulson & Phipps, Confidentiality, [5–053], who in turn rely on a dictum in Hilton v Barker Booth and Eastwood [2005] 1 WLR 567. This is a dictum of Lord Walker of Gestinghorpe (at [35]) in the context of a vendor entering into two irreconcilab......
-
3464920 Canada Inc. v. Strother et al., (2007) 241 B.C.A.C. 108 (SCC)
...to. [para. 36]. Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592, refd to. [para. 36]. Hilton v. Barker Booth and Eastwood, [2005] 1 All E.R. 651; 330 N.R. 317 (H.L.), refd to. [para. Côté et al. v. Rancourt et al., [2004] 3 S.C.R. 248; 325 N.R. 279; 2004 SCC 58, refd to. [para. 46......
-
3464920 Canada Inc. v. Strother et al., (2007) 363 N.R. 123 (SCC)
...to. [para. 36]. Canadian Aero Service Ltd. v. O'Malley, [1974] S.C.R. 592, refd to. [para. 36]. Hilton v. Barker Booth and Eastwood, [2005] 1 All E.R. 651; 330 N.R. 317 (H.L.), refd to. [para. 39]. Côté et al. v. Rancourt et al., [2004] 3 S.C.R. 248; 325 N.R. 279; 2004 SCC 58, refd to. [par......
-
Recent Ruling Highlights Different Disclosure Requirements For Accountants And Solicitors
...compared the cases of Kelly v Cooper [1993] AC 206, which involves defendant estate agents, and Hilton v Barker, Booth & Eastwood [2005] UKHL 8, where the defendants were solicitors. The judge concludes that the accountant's duty of disclosure is akin to that of an estate agent who in t......
-
RECONFIGURING THE NO CONFLICT RULE
...113 LQR 220 at 222. 56Bristol & West Building Society v MothewELR[1998] Ch 1 at 16; Hilton v Barker Booth and EastwoodUNK[2005] 1 All ER 651 at [29]. 57 The ambiguity is repeated in the Explanatory Notes to the Companies Act 2006 (c 46) (UK), para 305 which states: “[I]t [s 178] also makes ......
-
THE RESPONSIBILITIES OF LAWYERS for THEIR CLIENTS' MISSTATEMENTS AND OMISSIONS TO THE SECURITIES MARKET IN SINGAPORE
...Ageda[1973] Ch 30 at 48, per Megarry J; Boyce v Rendells(1983) 268 EG 268 at 272, per Lawton LJ. 44 See Hilton v Barker Booth & Eastwood[2005] 1 WLR 567 (information learnt in the course of acting for another retainer); Mortgage Express v Bowerman & Partners[1996] 2 All ER 836 at 842. 45JSI......
-
RECONCEPTUALISING FIDUCIARY REGULATION IN ACTUAL CONFLICTS.
...(n 3) 468-71. [49] See below Part III(A) for our discussion as to the reasons. (50) See, eg, Hilton v Barker Booth & Eastwood [2005] 1 WLR 567, 569 [4] (Lord Scott) ('Hilton'), quoting Moody v Cox [1917] 2 Ch 71, 91 (Scrutton LJ) (51) See Stewart (n 34) 690 (Foster J). (52) Ibid 709. (5......
-
Baker Tilly (a firm) v Makar [2010] EWCA Civ 1411 Tacit terms and the common unexpressed intention of the parties to a contract : recent case law
...of the contract. (See alsoMcCarthy v McCarthy & Stone Plc [2006] 4 All ER 1127 (Ch); Hilton vBarker Booth and Eastwood (a firm) [2005] 1 All ER 651 (HL); CrestNicholson Residential (South) Ltd v McAllister [2003] 1 All ER 46 (Ch);Ashworth Frazer Ltd v Gloucester City Council [2002] 1 All ER......