Horsfall v Haywards (A Firm)

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
JudgeLORD JUSTICE MUMMERY,LORD JUSTICE BUXTON,LORD JUSTICE HIRST
Judgment Date18 February 1999
Judgment citation (vLex)[1999] EWCA Civ J0218-4
Date18 February 1999
Docket NumberQBENF 98/0055/13

[1999] EWCA Civ J0218-4

IN THE SUPREME COURT OF JUDICATURE

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE CHANCERY DIVISION

(MR JUSTICE EVANS-LOMBE)

Royal Courts of Justice

Strand

London WC2

Before:

Lord Justice Hirst

Lord Justice Mummery

Lord Justice Buxton

QBENF 98/0055/13

Jenifer Horsfall Violet Ruth Powell
Appellants
and
Hawayrds (A Firm)
Respondent

MRS T ROSEN PEACOCKE (Instructed by Messrs Mills & Reeve, Norwich, NR2 4TJ) appeared on behalf of the Appellant

MISS C FURZE (Instructed by Messrs Greene & Greene, Bury St Edmunds, IP33 1QB) appeared on behalf of the Respondent

1

Thursday 18 February 1999

LORD JUSTICE MUMMERY
2

INTRODUCTION:

3

This is an appeal by a firm of solicitors, Haywards (the Solicitors) from an order made against them on 27 November 1997 by Evans-Lombe J for the payment of £87, 503. 17 damages for professional negligence. The damages were assessed as the full value of a beneficial interest in remainder in Mill House, Wickham Skeith, Eye, Suffolk and contents (the House) owned by Mr Ronald Horsfall (the Testator), the plaintiffs' uncle.

4

It was the Testator's intention that his will and codicil, drafted on his instructions by Mr Landin of the Solicitors, should provide that the House be held in trust for his wife, Maud, for life, with remainder to the plaintiffs, his two nieces, in equal shares. This intention was known to the Testator's wife and to the plaintiffs before the Testator made his will. He executed the will on 30 December 1985 and the codicil on 3 July 1989. He died on 8 November 1992. Probate of the will and codicil was granted on 25 June 1993. Mrs Maud Horsfall and the first plaintiff, Jenifer Horsfall, were the personal representatives.

5

Under the terms of the will, as drafted by Mr Landin, the House became the absolute property of the Testator's widow. This is not immediately obvious on a first reading of the will by a person unused to drafting, reading or construing wills and trust deeds. By clause 4(1) the House was left in trust for Mrs Maud Horsfall for life and after her death upon the trusts of the residuary estate. Under clause 5 the residue was left to Mrs Maud Horsfall absolutely if she survived the Testator for 28 days. If she did not, the residue was held in trust under clause 7, subject to the payment of pecuniary legacies in clause 6, for the plaintiffs in specified shares. Mrs Maud Horsfall survived the Testator. She is still alive. Under the will as drafted the plaintiffs have no entitlement to any beneficial interest in the House.

6

The Issues

7

The hearing before the judge was solely concerned with the question of damages since it was common ground that

8

(1) the Solicitors owed a duty of care to the plaintiffs, as well as to the Testator, to draft the will in accordance with the Testator's instructions;

9

(2) the Solicitors had acted in breach of that duty. Instead of drafting the will so that the House was left to Mrs Maud Horsfall for life, with remainder to the plaintiffs, Mr Landin drafted a will under which Mrs Maud Horsfall was entitled to the House absolutely.

10

The arguments before the judge concerned questions of mitigation, causation and quantum. The judge rejected all the Solicitors' arguments. He held that the plaintiffs were entitled to damages based on the net value of the House, subject to a continuing life interest in favour of Mrs Maud Horsfall, without reduction. The Solicitors appeal.

11

The Factual Background

12

In order to understand the arguments and counter arguments on mitigation, causation and quantum it is necessary to amplify the factual background.

13

(1) The House

14

The House was originally vested in the Testator and his wife as beneficial joint tenants. The unchallenged evidence was that they were both "tough characters". In October 1985 instructions were given by both of them to the Solicitors for the preparation of their wills and of a Deed of Gift of the House. They had reached an agreement that Mrs Maud Horsfall should assign her beneficial interest in the House to the Testator, so that he would become solely entitled to it and could create a testamentary trust of the House for Mrs Maud Horsfall for life, with remainder to the plaintiffs.

15

On 30 December 1985 three documents drafted by Mr Landin were executed: a Deed of Gift by Mrs Maud Horsfall of her beneficial joint interest in the house; the will of Mrs Maud Horsfall; and the Testator's will. Mrs Maud Horsfall was aware, as were the plaintiffs, of the Testator's intention to provide in his will that she should have only a life interest in the House and that the House should thereafter pass to the plaintiffs.

16

2. Administration of the Estate

17

After the Testator's death Mrs Maud Horsfall decided to return to Canada, her birth place. She is a Canadian citizen. On 31 August 1993 she gave to the first plaintiff a Power of Attorney to conduct her affairs in England. She required her to assist in the winding up of her affairs in England and to transmit her assets to Canada. Mrs Maud Horsfall moved to Canada on 4 September 1993. She has not returned to England since then.

18

The House was sold on 1 September 1993. The net proceeds of sale, amounting to £79,000, were transmitted on Mrs Maud Horsfall's instructions from the Solicitors' client account to her bank account in Canada. This was done with the knowledge of both plaintiffs and of the Solicitors, who acted as solicitors to the estate.

19

3. The Plaintiffs' Claims

20

The first plaintiff did not play any active part in the administration of the estate. She did not see a copy of the will before Mrs Maud Horsfall returned to Canada. It was not until late 1994 that she did anything in relation to the interest which she hoped to acquire in the House under the will. Even when she saw the will she did not understand what rights were conferred upon her under it or that it was her duty to gather in and protect those funds not only for her own interest but also in the interest of her cousin, the second plaintiff. Both plaintiffs were concerned not to upset Mrs Maud Horsfall. They wanted to see that she could carry out her wish to establish herself in Canada where she had encountered difficulties in obtaining a Canadian state pension.

21

In late November 1994 the first plaintiff became concerned that her interest under the will might not materialise. She consulted Mr Landin on 6 December 1994. She raised the question of her interest under the Testator's will in the course of discussions. According to her evidence, which the judge appears to have accepted, Mr Landin's response was that, as far as he was concerned, she had no interest under the Testator's will and that it was never the Testator's intention that she should have an interest under it.

22

There were then discussions between the plaintiffs and later with a friend (who was also a solicitor) who recommended that they should seek a further appointment with Mr Landin. That was not done. The plaintiffs took no further action until November 1995 when they consulted their present solicitors. They gave them advice that led to the action for negligence against the Solicitors. The writ was issued on 26 February 1997.

23

On 13 December 1996 Mrs Maud Horsfall had made a Statutory Declaration in Canada stating that the House had been the only significant asset of the Testator and herself; that she left financial affairs in the hands of the Testator; that she received no independent legal advice during their marriage; that she was not clear about the Testator's estate; that she had no reason to believe that the sale proceeds of the House received by her were anything other than hers outright; and she added that

"If I had believed otherwise, I would have taken all action as would have been available to me to recover the assets for my own use and benefit, including a challenge of the Deed of Gift, as well as relief under the Inheritance (Provision for Family Independents) Act (sic!) 1975. Had I attempted to set aside the Deed of Gift and/or claim for relief under the 1975 Act, I have been advised that my case would likely have been successful."

24

At about this time Mrs Maud Horsfall paid the sum of £4,000 to the second plaintiff, but, in my view, that is irrelevant to the quantification of plaintiffs' claims against the Solicitors for negligence.

25

By the time the action came on for trial, the Solicitors admitted that they had acted in negligent breach of duty and that prima facie the damage flowing from that negligence was the value of the plaintiffs' interest in remainder in the House.

26

The Judgment

27

The judge correctly started from the position that prima facie the damage flowing from the admitted negligence was the value of the remainder interest in the House. This was, however, subject to issues of mitigation, causation and quantum of damage and, in particular, contentions that the value of the estate (and therefore of their interest in it) would have been reduced, possibly extinguished, by claims against it by Mrs Maud Horsfall if the will had contained the provisions intended by the Testator.

28

The judge summarised the Solicitors' submissions under two main heads:—

"The first head is the submission that if the will had contained provisions such as were intended by the deceased, there would in the result have been no assets with which to meet the plaintiffs' interests because those assets would have inevitably have been reduced by claims being made by Maud under the 1975 Act and also to set aside the Deed of Gift which she entered into in 1985 as having been procured by the undue influence of her husband upon her, or otherwise as an unfair dealing by him as a trustee of her, as well as his own,...

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1 books & journal articles
  • Restitution, Rectification, and Mitigation: Negligent Solicitors and Wills, Again
    • United Kingdom
    • The Modern Law Review Nbr. 65-3, May 2002
    • 1 May 2002
    ...Failure to Substantiate Testamentary Capacity’ (1984) 62 Can Bar Rev 457, 469–484); Corbett vBond Pearce (2001) 151 NLJ 609 (CA).16 [1999] 1 FLR 1182; on which see Rich, above n 13.17 [1999] 1 FLR 1182, 1189 per Mummery LJ. He was also motivated (as he had also been in Walker vMedlicott [19......

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