Reading solicitor Pitmans has warded off a substantial claim by Summit Property Ltd for damages despite a ruling that it was in breach of duty.
The claim concerns the sale of the small Pincents Kiln Industrial Estate, near Reading, in December 1996. Pitmans acted for the purchaser, a wholly owned subsidiary of Longwood Estates Ltd, which contracted to buy the estate from Bass Pensions for £2.31m plus a profit share on a resale. The estate was resold in August 1997 for £4.2m.
Summit contended that Pitmans had been engaged to act on its behalf and had been instructed to purchase the estate in the name of its subsidiary, not a subsidiary of Longwood. Summit claimed Pitmans had acted in breach of duty when the firm caused the exchange of contracts to be made by another company.
Defending the claim, Pitmans argued that even if it was in breach of duty, the breach did not cause any loss to Summit, because Summit would not have succeeded in exchanging contracts itself, either directly or through a subsidiary.
Pitmans argued that even if Summit had succeeded in exchanging contracts itself and had later resold at a profit, it would not have been entitled to keep the profit, but would have been liable to account for it to Longwood.
In the Chancery Division, Park J found that Pitmans did owe a duty to Summit, which it breached when it exchanged contracts on behalf of a company which was not Summit’s subsidiary. However, he ruled that the breach did not cause any loss to Summit and accordingly dismissed the claim.
“Pitmans breach of duty to Summit Property may have prevented Summit Property from entering into a contract to purchase the estate, but it would have been a contract the benefit of which Summit Property could not have claimed as its own,” he said.
“The failure of that contract to materialise cannot have caused Summit Property any financial loss which it can recover by way of damages, however inappropriate Pitmans actions on 24 December 1996 may have been”.
Summit Property Ltd v Pitmans (a firm) Chancery Division (Park J) 2 October 2000.
Philip Brook Smith (instructed by Davies Arnold Cooper) appeared for the claimant; Alan Steinfeld QC and Gilead Cooper (instructed by Ince & Co) appeared for the defendant.
PLS News 3/10/00
