Sajjad Soofi Against Jeffrey Martin Dykes
| Jurisdiction | Scotland |
| Judge | Lord Mulholland |
| Neutral Citation | [2017] CSOH 2 |
| Court | Court of Session |
| Docket Number | A473/13 |
| Published date | 06 January 2017 |
| Date | 06 January 2017 |
| Year | 2017 |
OUTER HOUSE, COURT OF SESSION
[2017] CSOH 2
A473/13
OPINION OF LORD MULHOLLAND
In the cause
SAJJAD SOOFI
Pursuer
against
JEFFREY MARTIN DYKES
Defender
Pursuer: Sandison QC, Rose; Balfour & Manson Solicitors LLP
Defender: McBrearty QC; CMS Cameron McKenna Solicitors LLP
6 January 2017
Introduction
[1] The pursuer Sajjad Soofi is suing as assignee of Bonafied Enterprises International Limited (in administration) [ BEI]. The defender is Jeffrey Martin Dykes, a solicitor with Dykes, Glass and Co, a Glasgow firm of solicitors. The action concerns the purchase of a petrol station, car wash and shop in Alexander Street, Airdrie in 2008. This unincorporated business, known as Airdrie Autopoint, was purchased by BEI from Ms I A Young. The purchaser was represented by the defender. The terms of the bargain were contained in an offer dated 9 November 2007, a qualified acceptance dated 25 March 2008, letters dated 16 April and 29 August 2008 and a letter concluding a binding contract dated 29 August 2008. Entry was taken on 1 September 2008. The price paid was £850,000 apportioned £450,000 to the heritable property, £385,000 to goodwill and £15,000 to fixtures and fittings.
The Pursuer’s Case
[2] In advance of the purchase BEI had obtained from the seller financial information relating to the trading history of the business, which financial information was used inter alia for the purpose of valuing the business including the goodwill. The pursuer avers that the defender failed to have included in the missives a provision to warrant the accuracy and completeness of the financial information provided by the seller and relied on by BEI in the purchase. The pursuer further avers that the defender failed to take any steps to advise BEI as to whether it should seek such a warranty, or obtain the informed instructions of BEI as to whether it should seek such a warranty. It is averred in the pleadings that such warranties are commonly sought and granted in transactions of this nature and had the defender displayed the skill and care to be expected of an ordinarily competent solicitor, advice would have been tendered to the purchaser that such a warranty should be sought from the seller. The defender denies negligence. The pursuer’s case is twofold. The principal case is a no transaction case, namely that had such a warranty been sought the seller would not have agreed to it and as a result the purchase would not have taken place. The alternative case is that had such a warranty been provided, the purchaser would have an action against the seller for breach of warranty.
Plea of No Fair Notice
[3] The action came before me for debate on the issue of whether the pleadings give fair notice to the defender of the pursuer’s case. Counsel for the defender submitted that the central plank of the pursuer’s case was that the financial information provided by the seller was inaccurate. If the pursuer failed to establish this then he will not have established loss and the action would fail. It was not enough to establish a breach of duty. With regard to the pleadings there was a lack of essential specification as to the manner in which the financial information provided by the seller was inaccurate. The defender has not received fair notice as to what the pursuer’s case is on this essential point. In particular, there is no specification on the financial performance of the business post-sale so that it can be compared with the financial information provided to and relied on by the purchaser pre-sale. The financial information provided pre-sale was for 2004 – 2006 (appended to a valuation report which is No 6/4 of process). No information was provided in relation to the financial performance post-sale. In circumstances where the pursuer avers that the financial information provided by the seller was inaccurate it was necessary for him to detail the specific aspects which is said to be inaccurate and the extent to which it is said to be so. The pursuer has failed to do this. The pleadings on this are in the broadest terms. This has placed the defender in a position where he does not have fair notice of the pursuer’s case, and as a result is not in a position to properly investigate and prepare to meet the pursuer’s case, such as the instruction of a forensic accountant. No expert accountancy report has been produced by the pursuer on the inaccuracy of the financial information provided. The defender is left to speculate as to the pursuer’s case. For example, does the inaccuracy relate to inflated sales figures or understated costs? The defender does not know and cannot know from the pleadings. The pursuer’s case as pled was that the business did not make a profit from 2008 onwards and could not be run at a profit, therefore there must have been a problem with the financial information provided pre-sale to the purchaser. This was a non sequitur. There could be many reasons why the business was not run at a profit such as high interest costs of the purchase being met from the business or the amount of...
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