Swindle v Harrison
| Jurisdiction | England & Wales |
| Judgment Date | 25 March 1997 |
| Date | 25 March 1997 |
| Court | Court of Appeal (Civil Division) |
Court of Appeal
Before Lord Justice Evans, Lord Justice Hobhouse and Lord Justice Mummery
Negligence - solicitors - failure to disclose not fraudulent - causation
A person who raised a mortgage on her home, obtained a bridging loan and purchased another property was not entitled to recover from the solicitors who had provided the loan but had failed to disclose material facts and so were in breach of fiduciary duty, damages or compensation for loss of the value of equity in her home except on proof either that they had acted fraudulently or in a manner equitably equivalent to fraud, or that she would not have completed the purchase if full disclosure had been made and the breach not occurred.
The Court of Appeal so stated in a reserved judgment when dismissing an appeal by the second defendant, Mary Harrison, against an order of Mr Recorder Sir Andrew Watson at Warwick County Court on November 6, 1995 that no damages flowed from breach of duty and negligence by the plaintiffs, Stephen Swindle, Timothy Fillmore, Tony Cox and Rosalind Rowett, of Alsters, Leamington Spa, a firm of solicitors, in respect of making Mrs Harrison a bridging loan to purchase a property.
The judge had found that the plaintiffs were negligent and in breach of fiduciary duty in failing to disclose two material facts that Mrs Harrison's son's bank was unwilling to provide a reference which could mean he was unable to secure a loan to assist with the purchase and that the plaintiffs would profit from the bridging loan transaction.
Mr Duncan Matheson, QC and Mr Stephen Neville for the plaintiffs; Mr Edward Bannister, QC and Miss Isabel Hitching for Mrs Harrison.
LORD JUSTICE EVANS said that Mr Bannister had submitted that because the plaintiffs were in breach of duty therefore, applying Brickenden v London Loan & Savings CoUNK ((1934) 3 DLR 465, 469), they were liable to restore Mrs Harrison financially to the position she was in when their breach of duty occurred. It was not relevant to inquire whether or not she would have completed the purchase in any event. It was enough that she did in fact do so, and as enabled to do so by the plaintiffs' loan.
His Lordship would reject that argument because the authorities also showed that the stringent rule of causation or measure of damages, identified inCIBC Mortgages plc v PittELR ([1994] 1 AC 200) and Brickenden did not apply on breaches...
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