Midland Bank Trust Company Ltd v Hett, Stubbs & Kemp

JurisdictionEngland & Wales
Judgment Date1978
Date1978
Year1978
CourtChancery Division
[CHANCERY DIVISION] MIDLAND BANK TRUST CO. LTD. AND ANOTHER v. HETT, STUBBS & KEMP (A FIRM) [1972 G. No. 2267] 1977 Oct. 25, 26, 27; Nov. 1, 2, 3; 21 Oliver J.

Solicitor - Negligence - Tort, whether liable in - Option to purchase farm - Solicitor's omission to register option as land charge - Option defeated by sale of land to third party - Whether right of action against solicitors statute-barred - Whether solicitors liable both in tort and contract - Limitation of Action - Contract, breach of - Negligence - Solicitor's failure to register option to purchase farm - Land sold to defeat option - Whether solicitor's duty continuing one - Whether action statute-barred

In March 1961, W agreed to grant his son, G, an option to purchase from him a 300-acre farm which at that time was let to G at a rent of £900 per annum. They went to the defendant firm of solicitors, and S, the senior partner, drew up a document which W signed and which was dated March 24, 1961, whereby in consideration of £1 paid by G, W thereby granted to G the option of purchasing the farm at £75 per acre. The option was expressed to remain effective for 10 years. G duly paid the consideration of £1 but, unfortunately, omitted to register the option as an estate contract under the Land Charges Act 1925. On a number of occasions, consulted the defendant firm on the question whether he should exercise the option. On August 17, 1967, W, with the object of defeating the option and having discovered, through consulting with fresh solicitors, that the option had not been registered, sold and conveyed the farm to his wife for £500. After the sale K, a partner in the defendant firm sought to remedy his firm's omission by registering the option under the Land Charges Act 1925 and, on October 6, 1967, served formal notice in purported exercise of the option. Neither W nor his wife complied with the notice. On March 28, 1968, W'S wife died. On January 27, 1970, G commenced proceedings against W and against his wife's executors, of whom he was himself one, seeking, inter alia, a declaration that the option was binding on her estate, and claiming specific performance. On February 8, 1972, W died, and on May 11, 1973, G also died. The plaintiffs, G's executors, continued the action but the action failed save for an award of damages against W's estate.

On July 21, 1972, G had commenced an action against the defendant firm of solicitors, claiming damages for negligence or breach of professional duty in neglecting to register the option, and in failing to advise G as to the necessity of so doing.

On the question whether the action against the defendant firm, which was continued by G's executors, was barred by the Limitation Act 1939, and had already become barred before the date of the sale and conveyance of the farm to W's wife: —

Held, (1) that there was no general or continuing duty arising out of G's retainer of the defendant firm of solicitors to consider the enforceability of the option on every occasion on which they were consulted as to a possible exercise, nor to check, on such occasions, whether it had in fact been duly registered under the Land Charges Act 1925 (post, pp. 180F–181D).

Duchess of Argyll v. Beuselinck [1972] 2 Lloyd's Rep. 172; Griffiths v. Evans [1953] 1 W.L.R. 1424, C.A.; Hall v. Meyrick [1957] 2 Q.B. 455, C.A. and Wood v. Jones (1889) 61 L.T. 551 considered.

(2) That a duty of care was imposed upon the defendant firm of solicitors by reason of the relationship of solicitor and client existing between the parties, and that the defendants were therefore liable in tort, independently of any liability in contract, for their negligence in omitting to register the option before a third party had acquired an adverse interest in the farm; and that, since the cause of action in tort did not arise until the damage occurred on August 17, 1967, a date within six years before the date of the writ, the plaintiffs' cause of action was not statute-barred under the Limitation Act 1939 (post, pp. 193G–194B, 208G–209B).

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465, H.L.(E.), Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, C.A. and dictum of Lord Salmon in Arenson v. Arenson [1977] A.C. 405, 434, H.L.(E.) applied.

Groom v. Crocker [1939] 1 K.B. 194, C.A.; Clark v. Kirby-Smith [1964] Ch. 506; Bagot v. Stevens Scanlan & Co. Ltd.

Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197; Cook v. Swinfen [1967] 1 W.L.R. 457, C.A. and Heywood v. Wellers [1976] Q.B. 446, C.A. not followed.

(3) That since the negligence relied upon was not the giving of wrong and negligent advice, in which case the breach of contract would necessarily have arisen at a fixed point of time, but was a simple nonfeasance, the duty of the defendant firm of solicitors to register the option continued to bind them until it ceased to be effectively capable of performance on August 17, 1967, and therefore, since the action against the defendants in contract was not statutebarred, they were also liable to the plaintiffs in contract (post, pp. 210D–H, 213E–F, H–214A).

Bean v. Wade (1885) 2 T.L.R. 157, C.A. distinguished.

Observations on the principle of stare decisis (post, pp. 182F–183C).

The following cases are referred to in the judgment:

Addis v. Gramophone Co. Ltd. [1909] A.C. 488, H.L.(E.).

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229; [1968] 2 W.L.R 366; [1968] 1 All E.R. 543, C.A.

Anns v. Merton London Borough Council [1977] 2 W.L.R. 1024, [1977] 2 All E.R. 492, H.L.(E.).

Anon (1372) Fitzherbert's Smith's case (1534) Natura Brevium 94D (Year Book 46 Edw. III Trin. 19).

Arenson v. Arenson [1977] A.C. 405; [1975] 3 W.L.R. 815; [1975] 3 All E.R. 901, H.L.(E.).

Argyll (Duchess) v. Beuselinck [1972] 2 Lloyd's Rep. 172.

Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, [1964] 3 W.L.R. 1162; [1964] 3 All E.R. 577.

Bailey v. Bullock [1950] 2 All E.R. 1167.

Barnett v. Chelsea and Kensington Hospital Management Committee [1969] 1 Q.B. 428; [1968] 2 W.L.R. 422; [1968] 1 All E.R. 1068.

Battley v. Faulkner (1820) 3 B. & Ald. 288.

Batty v. Metropolitan Property Realisations Ltd. [1978] 2 W.L.R. 500, C.A.

Bean v. Wade (1885) 1 T.L.R. 404; 1 Cab. & Ell. 519; 2 T.L.R. 157, C.A.

Blyth v. Fladgate [1891] 1 Ch. 337.

Boorman v. Brown (1842) 3 Q.B. 511; sub nom. Brown v. Boorman (1844) 11 Cl. & Fin. 1, H.L.(E.).

Bottomley v. Bannister [1932] 1 K.B. 458, C.A.

Brown v. Howard (1820) 2 Brod. & B. 73.

Candler v. Crane, Christmas & Co. [1951] 2 K.B. 164; [1951] 1 All E.R. 426, C.A.

Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758; [1963] 2 W.L.R. 210; [1963] 1 All E.R. 341, H.L.(E.).

Clark v. Kirby-Smith [1964] Ch. 506; [1964] 3 W.L.R. 239; [1964] 2 All E.R. 835.

Coats Patons (Retail) Ltd. v. Birmingham Corporation (1971) 69 L.G.R. 356.

Consett Industrial and Provident Society Ltd v. Consett Iron Co. Ltd. [1922] 2 Ch. 135, C.A.

Cook v. Swinfen [1957] 1 W.L.R. 457; [1967] 1 All E.R. 299, C.A.

Davies v. Hood (1903) 88 L.T. 19.

Davies v. Lock (1844) 3 L.T. O.S. 125.

Dearle v. Hall (1828) 3 Russ. 1.

Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373; [1972] 2 W.L.R. 299; [1972] 1 All E.R. 462. C.A.

East Suffolk Rivers Catchment Board v. Kent [1941] A.C. 74; [1940] 4 All E.R. 527, H.L.(E.).

Edwards v. Mallan [1908] 1 K.B. 1002, C.A.

Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801; [1976] 2 W.L.R. 583; [1976] 2 All E.R. 5, C.A.

Everett v. Griffiths [1920] 3 K.B. 163, C.A.

Fish v. Kapur [1948] 2 All E.R. 176.

Great Western Railway Co. v. Owners of S.S. Mostyn [1928] A.C. 57, H.L.(E.)

Griffiths v. Evans [1953] 1 W.L.R. 1424, [1953] 2 All E.R. 1364, C.A.

Groom v. Crocker [1939] 1 K.B. 194; [1938] 2 All E.R. 394, C.A.

Hall v. Meyrick [1957] 2 Q.B. 455; [1957] 3 W.L.R. 273; [1957] 2 All E.R. 722, C.A.

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465; [1963] 3 W.L.R. 101; [1963] 2 All E.R. 575, H.L.(E.).

Heywood v. Wellers [1976] Q.B. 446; [1976] 2 W.L.R. 101; [1976] 1 All E.R. 300, C.A.

Howell v. Young (1826) 5 B. & C. 259.

Hughes v. Twisden (1886) 55 L.J.Ch. 481.

Jackson v. Mayfair Window Cleaning Co. Ltd. [1952] 1 All E.R. 215.

Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399, C.A.

Kelly v. Metropolitan Railway Co. [1895] 1 Q.B. 944, C.A.

Lake v. Bushby [1949] 2 All E.R. 964.

Manby, In re (1856) 26 L.J.Ch. 313.

Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801, H.L.(E.).

Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223; [1970] 2 W.L.R. 802; [1970] 1 All E.R. 1009, C.A.

Mutual Life and Citizens' Assurance Co. Ltd. v. Evatt [1971] A.C. 793; [1971] 2 W.L.R. 23; [1971] 1 All E.R. 150, P.C.

Newsholme Brothers v. Road Transport and General Insurance Co. Ltd. [1929] 2 K.B. 356, C.A.

Nocton v. Lord Ashburton [1914] A.C. 932, H.L.(E.).

Otto v. Bolton and Norris [1936] 2 K.B. 46; [1936] 1 All E.R. 960.

Quinn v. Leathem [1901] A.C. 495, H.L.(I.).

Robertson v. Bannigan, S.L.T. 318.

Sachs v. Henderson [1902] 1 K.B. 612, C.A.

Sawyer v. Goodwin (1867) 36 L.J.Ch. 578.

Short v. M'Carthy (1820) 3 B. & Ald. 626.

Simmons v. Pennington & Son [1955] 1 W.L.R. 183; [1955] 1 All E.R. 240, C.A.

Smith v. Fox (1848) 6 Hare 386.

Turner v. Stallibrass [1898] 1 Q.B. 56, C.A.

Wilkinson v. Sibley [1932] 1 K B. 194, C.A.

Williams v. Glasbrook Brothers Ltd. [1947] 2 All E.R. 884, C.A.

Wood v. Jones (1889) 61 L.T. 551.

Young v. Bristol Aeroplane Co. Ltd. [1946] A.C. 163; [1946] 1 All E.R. 98, H.L.(E.).

The following additional cases were cited in argument:

Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] Q.B. 858; [1976] 2 W.L.R. 493; [1976] 2 All E.R. 65, C.A.

Steljes v. Ingram (1903) 19 T.L.R. 534.

ACTION

By a writ dated July 21, 1972, issued by Thomas Geoffrey Green, and a statement of claim dated April 11, 1974, the plaintiffs, Midland Bank Trust Co. Ltd. and Mrs. Margaret Ann Green. as executors of Thomas Geoffrey Green who had died on May 11...

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