Peter George Wyatt+margaret Campbell Wyatt V. Anna Crate+jacqueline Murray
| Jurisdiction | Scotland |
| Judge | Lord Boyd of Duncansby |
| Neutral Citation | [2012] CSOH 197 |
| Court | Court of Session |
| Published date | 24 December 2012 |
| Year | 2012 |
| Date | 24 December 2012 |
| Docket Number | A302/11 |
| OUTER HOUSE, COURT OF SESSION [2012] CSOH 197 | |
| A302/11 | OPINION OF LORD BOYD OF DUNCANSBY in the cause PETER GEORGE WYATT and MARGARET CAMPBELL WYATT Pursuers; against ANNA CRATE and JACQUELINE MURRAY Defenders: ________________ |
Pursuers: Bowen QC; Harper Macleod LLP
Defender: Barne; Balfour & Manson LLP
24 December 2012
[1] This action arises out of the purchase by the pursuers, Peter George Wyatt and Margaret Campbell Wyatt of a house at Ivybank, 6 Meadowfoot Road, West Kilbride, Ayrshire. In March 2007 they instructed the solicitors firm of Wm Crate & Co (the solicitors) to act for them in the purchase of the property. An offer was submitted to the seller's agents JAS Campbell & Co on 6 March 2007. The offer was accepted subject to qualifications contained in their letter dated 23 March 2007. These qualifications were accepted by the solicitors by letter to JAS Campbell & Co dated 17 April 2007 thus concluding the bargain. The pursuers aver that the qualifications were accepted by the solicitors without them being informed of the terms of the letter of 23 March and without their instructions. Had they known of the terms of the letter of 23 March they would not have agreed to the conclusion of the bargain. The pursuers aver that this was a breach of duty by the solicitors and that they acted without the authority of the pursuers. They claim damages in consequence of their breach of duty.
[2] William Crate, described as the sole partner (sic) in the now dissolved firm of Wm Crate & Co, died on 29 April 2007. The defenders in this action are the executors nominate of the late William Crate.
[3] This action came before me on the procedure roll in respect of the parties' preliminary pleas. For the reasons outlined below I have decided to sustain the defenders' first and second pleas-in-law and dismiss the action.
[4] The relevant averments for the pursuers are these. In condescendence 2, after narrating the exchange of letters between the respective firms of solicitors (being the offer and qualified acceptance for the purchase of the property) the pursuers aver that:
"On 12 April 2007 Liz Campbell, the Firm's legal executive, telephoned the first pursuer, informed him of a gas and electricity safety inspection and replacement of slates at the rear of the property and then ask him if he wished to conclude the bargain. The first pursuer asked her to be more specific and she advised him that 'the whole situation was in good order'. Acting on that advice and without having been informed of Messrs JAS Campbell & Co's letter of 23 March 2007 the first pursuer confirmed that the bargain should be concluded. Without notifying the pursuers of the letter of 23 March 2007 and without taking their instructions in this regard the Firm by letter of 17 April accepted all the qualifications contained in the qualified acceptance of 23 March 2007 and held the bargain concluded."
In condescendence 3 the relevant averments are:
"It was an implied term of the contract that, in providing conveyancing legal services, the Firm would use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. In the exercise of such knowledge, skill and care it was the Firm's duty to inform the pursuers of the letter of 23 March 2007 sent by Messrs JAS Campbell & Co and to take their instructions in relation thereto. It was their duty not to accept all the qualifications contained in the qualified acceptance of 23 March 2007 and to hold the bargain as concluded without the pursuers' express instructions to do so. No reasonably competent firm of solicitors exercising such knowledge, skill and care would have acted as the Firm did. The Firm's acts and omissions amounted to a breach of the implied term. Had the pursuers known of the terms of the letter of 23 March 2007 they would not have agreed to the conclusion of the bargain. That breach caused the pursuers to sustain loss and damage. But for the Firm's breach of contract the pursuer would not have sustained loss and damage."
In condescendence 4:
"As a result of the Firm's breach of contract the pursuers have suffered loss and damage. Had the pursuers been made aware of the letter of 23 March 2007 they would not have agreed to the conclusion of the bargain on 12 April 2007. The pursuers were deprived of the opportunity of withdrawing from the bargain. They have incurred expenses in relation to the Property which they would not otherwise have incurred and which are not expenses which they would otherwise have incurred in the purchase of an alternative property. A schedule of those expenses and supporting invoices is produced and referred to for its terms which are incorporated herein for the sake of brevity. The total sum of said losses is £38,747.27. This is the sum sued for."
The schedule of expenditure for works carried out on 6 Meadowfoot Road, West Kilbride is as follows:
"Total of Expenditure for Works carried Out on
6 Meadowfoot Road, West Kilbride
KA23 9BX
Ground Works £5528.32
Roofing £8361.50
Plumbing £ 970.02
Carpentry £7443.75
Painting £2640.00
Plastering £ 610.00
Goods to revamp Kitchen £ 891.58
Roughcasting £ 800.00
Industrial Vac (clear out the loft) £ 52.88
Chimney Sweep £ 60.00
Paint £ 259.00
Architects £ 94.00
Electrical £4270.78
Metal Gates and Wooden Fencing £1715.00
Security System Check £ 45.00
Sundry Expenses £3782.44
Wood Treatment in Loft £ 968.00
Insulation in Loft £ 255.00
Total £38,747.27"
In answer to a call for the defenders to identify which deleted condition is relevant to which head of loss it is explained and averred that the pursuers' claim is based on the loss of opportunity to withdraw from the bargain.
[5] The defenders' averments so far as material are to be found in answer 3 as follows:
"Further explained and averred that the Reporter to the Law Society's Complaints Committee concluded that it would have been good practice to discuss amendments to the missives with the pursuers and that a failure to do so amounted to an inadequate professional service by the Firm. The Reporter did not uphold two other complaints. Subsequently the Law Society's Client Relations Committee upheld all three complaints of inadequate professional service. The Client Relations Committee also directed the Firm to reduce its fees to nil and to pay compensation of £600. Further explained and averred that, according to the Client Relations Committee, the Firm did not have authority to conclude missives on behalf of the pursuers. On that basis the pursuers were not bound to purchase the property. The pursuers ratified the contract by instructing Ms Templeton to settle the transaction when they were under no legal obligation to do so."
Parties' submissions
[6] The parties' submissions focused on two issues: the quantification of damages and the averments of both parties on agency. I deal first with quantification of damages as that was the order that submissions were presented to me.
Submissions for the defenders re damages
[7] For the defenders Mr Barne's core proposition was that the normal rule that applied to damages for breach of duty of care in such a situation was diminution in the value of the property. This was not a hard and fast rule where other measures were appropriate but in this case there was no reason to depart from that rule. Conversely there was no basis in law for the approach currently sought by the pursuers. He pointed out that the averments do not say what the approach would have been had the pursuers been informed of the qualifications in the letter of 23 March. All that was said was that the bargain would not have been concluded. It was said in the pleadings that the pursuers had lost the opportunity of withdrawing but as at 12 April 2007 when the first pursuer had the conversation with Ms Campbell they did have the opportunity of withdrawing. What the pursuers were in fact saying was that they would not have proceeded on the terms contained in the qualified acceptance dated 23 March 2007. So he concluded that this was not a loss of chance case.
[8] Mr Barne maintained that the pursuers' pleadings in article 3 of condescendence were so lacking in specification as to fall into irrelevancy. He referred to the schedule of expenditure and pointed out that there was no attempt to tie these claims to any of the conditions in the missives deleted as a result of accepting the qualifications in the letter of 23 March. There was no link between these claims and any negligence on the part of the solicitors.
[9] Mr Barne suggested that the proper approach to damages was to assess the difference in value between the property without any defect and the property with the defect which had been acquired by the pursuers. This was a proper approach in cases of surveyors' negligence and should also be followed in this case. He submitted that on the pursuer's averments what they had as a result of the acceptance of the qualifications was a contract with a bundle of rights which was not as valuable to them as they might have been. He referred to Watts v Morrow [1991] 1 WLR 1421 in which the Court of Appeal in England confirmed that the proper measure of damages in such a case is the difference between the value of the property as it was represented to be and the value in its true condition. There is Mr Barne submitted no basis for recovering the cost of repairs even if the cost of these significantly exceed the difference in values. In this case the pursuer paid £160,000 for the property. If one took off from that sum the amount contained in the schedule of expenditure the pursuers were effectively going to receive a property worth £160,000 for little over £120,000.
[10] Mr Barne submitted that in a no transaction case in the absence of a fully identified situation the court tries to identify the real loss. That is done usually at the outset when the alleged breach of duty took place. That is...
To continue reading
Request your trial