Sykes v Midland Bank Executor and Trustee Company Ltd
|England & Wales
|LORD JUSTICE SALMON,LORD JUSTICE KARMINSKI
|13 March 1970
|Judgment citation (vLex)
| EWCA Civ J0313-2
|13 March 1970
|Court of Appeal (Civil Division)
 EWCA Civ J0313-2
In The Supreme Court of Judicature
The Court of Appeal
From: Mr. Justice Paull - London)
Lord Justice Harman
Lord Justice Salmon and
Lord Justice Karminski
Mr. A. LEIOLIN PRICE, Q.C. and Mr. PETER SLOT (instructed by Messrs. Herbert Smith & Co.) appeared on behalf of the Respondents (Plaintiffs).
Mr. JOHN BRIGHTMAN, Q.C. and Mr. JOHN JOPLING appeared on behalf of The Law Society.
LLORD JUSTICE HARMAN: (Judgment read by Lord Justice Karminski)
This is an appeal from a decision of Mr. Justice Paull pronounced in July last year whereby he awarded a sum of £9,000 to the plaintiffs by way of damages for the negligence of their solicitor.
The plaintiffs were and are a firm of architects and surveyors practising in Hull. Shortly before the year 1960 they took in a new partner, one Needham, a quantity surveyor, and their business being on the upgrade decided to acquire a branch office in London. This they did by an underlease of the 16th May, 1960, whereby the firm acquired a suite of offices in Maddox Street, W.1, for a term of 5 years expiring in June, 1965, at a rent of £50 a year. The document contained a number of covenants on the sub- lessees' part of which I notice in particular No. 10, a covenant not without the previous consent in writing of the lessors and the superior lessors to carry on upon the premises any trade or business other than as offices in connection with the lessees' (that is, the firm's) business of architects and surveyors. Clause 12 contained a prohibition against any alterations without the previous consent in writing of the lessors and the superior lessors. Clause 13 prohibited advertisements or signboards. Clause 15 forbade underletting or parting with possession or assigning any part of the demised property without the consent in writing of the lessors and the superior lessors, which consent should so far as the lessors were concerned not be unreasonably withheld in the case of a respectable or responsible tenant or assignee. Clause 18 contained a similar prohibition against making alterations.
This document shows that albeit for a term of five years an absolute prohibition against change of use was no deterrent to the plaintiff firm. Similarly clause 13 prohibiting advertisements or signboards. Clause 15 forbade underletting or parting with possession or assigning without the consent of the lessor or superior lessors, which consent so far as the lessors were concerned should not be unreasonably withheld. Here andelsewhere is a distinction drawn between the lessor and the superior lessors, the lessor alone being bound not unreasonably to withhold his consent and this may have some bearing on the document in question.
These premises and some further rooms, taken in 1962 on terms which I need not particularise, were intended to be merely stop-gaps until the firm could find more suitable quarters in London. Mr. Needham was the partner permanently working in London. The senior partner, Mr. Elsworth Sykes senior, remained in Hull and his son Mr. Sykes junior journeyed between the two.
The defendant in the action as originally constituted was one Rignall, a solicitor practising under the style of Mainprize & Rignall and housed in the same building in Hull as the plaintiffs, whom he had long advised. It is an unfortunate feature of the case that both Mr. Rignall and the elder Sykes died before the action came to trial, with the result that what passed between them is unknown. The suit as now constituted is between two of the present partners of the firm, the younger Sykes and Needham, as plaintiffs, and the personal representatives of Rignall as defendants.
During 1963 Mr. Needham was on the look-out for more suitable London offices for the firm and in May, 1963, thought he had found suitable accommodation in a block called Roxburghe House in or off Regent Street, and in February, 1963, terms had been agreed with the estate agents for two suites on the third floor for a term of 10 years at a rent of 28/- a square foot, which amounted to £3,545, subject to formal contract to be approved by the parties' solicitors and to certain internal alterations. This offer was communicated by Mr. Needham to Mr. Rignall and he was instructed to advise accordingly and is found on the 28th February, 1963, writing to Mr. Sykes on the details of the proposed underlease. The solicitors to the immediate lessors, Morohan Ltd., who occupied other rooms in the same building and were architects, were D.J. Freeman & Co., and they sent a draft of the lease for approval to Mr. Rignall on the 7th March, 1963.He sent copies both to Mr. Sykes and Mr. Needham and it was understood that the matter should be dealt with expeditiously.
There was a meeting at the Hull office of the plaintiff firm at which the whole matter was apparently discussed, there being present Mr. Rignall, Mr. Sykes senior, his son and Mr. Needham, and as a result on the 20th March Mr, Rignall sent to Freeman & Co. a letter raising several points on the draft. The plaintiff firm did not consider the state of repair satisfactory and they were in fact allowed into possession early in April, 1963, for the purpose of making the required alterations and redecorations. The rent was made to run from the 8th April, from which day the plaintiffs may be taken to be in full possession, and the under lease was engrossed and in fact signed by all the partners by the 21st May and a counterpart sent to Messrs. Freeman. Thereafter there was some confusion in Mr. Rignall's office and the under- lease was mislaid and not in fact exchanged with the counterpart till 1964.
In January of 1964 the plaintiff firm agreed to take a new lease of a further suite of offices on the fourth floor in Roxburghe House at a rent of £1,820, plus a service charge, but otherwise containing the same covenants as the earlier document. This second underlease was dated the 27th April, 1964.
In 1965 the plaintiff firm found themselves overhoused and decided to underlet the fourth floor but on applying to the agents for the head landlords, Regional Properties Ltd., for a change of user on the proposed underletting they were greatly surprised to be confronted with a blank refusal on the part of the freeholders.
In the events which happened, the plaintiffs did not succeed in underletting the fourth floor premises until March, 1968, but by that time the freeholders had consented to the change of user desired and the new underletting was at a profit rental.
The negligence here alleged against Mr. Rignall consists in the fact that when advising on the underleases he did not draw the attention of the firm to the fact that there was an absoluteright in the freeholder to refuse his consent to a change of user, and it is said that this omission was a breach of contract by the solicitor in that he fell short of his duty to advise his clients of all the provisions in the underlease which might be of importance to them and might influence them in deciding whether or not to accept the terms offered. This necessitates a A careful examination of the terms of the underlease and of the only draft of it now available to the Court in the form of a completed draft with marginal notes.
The underlease is expressed to be made on the 27th April, 1964, between Morohan Ltd., defined as "the Lessor", and certain partners in the plaintiff firm described as practising together under the name and style of Elsworth Sykes & Partners "herein after called 'the Lessees' which expression shall where the context so admits include their successors in title and permitted assigns". It contained a demise of a suite of rooms on the third C floor of Roxburghe House from Lady Day, 1963, for 10 years less the last 10 days at a rent of £3,010 and a service charge of £325 a year. Clause 2 contained various covenants by the lessees of a usual kind, of which (viii) is not to make alterations without the previous consent in writing of the lessors and superior lessors, such consent not to be unreasonably withheld.
Clause (xi) was in these terms: "Not to use the demised premises otherwise than as offices in connection with the Lessees' business of Architects and Surveyors or as offices and showrooms in connection with any other business for which the permission in writing of the Lessor and the Superior Lessors has first been obtained such permission by the Lessor not to be unreasonably withheld".
Clause (xiii) is a covenant not to assign or part with possession without first obtaining the written consent of the lessor and the superior lessors, such consent not to be unreasonably withheld in the case of a proposed assignee or undertenant shown to be respectable and responsible, with a proviso limiting assignees or undertenants to one, and a number of other covenants.
A draft of this document was furnished to both Mr. Sykes and Mr. Needham with a number of marginal comments by Mr. Rignall. The drafts were returned to him with comments by the under- lessees as a result of which some alterations were made in the document; in particular, in clause (xiii) the limitation of assignees to one was deleted because the lessees were conscious that they might wish to sublet one of the sets of rooms without the other.
It is to be observed that clause (xi) has no marginal note against it and the judge found that it was not...
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