Solicitor’s negligence — Failure to apply for relief from forfeiture — Whether negligence causing loss where replacement solicitor also failing to make prompt application — Claim allowed
The claimant golf club had retained the services of the defendant firm of solicitors. The land upon which the club had been built was owned by two different freeholders (T&R and GA), each of which had granted a 50-year lease to the claimant. Each lease was liable to forfeiture in the event of breach of a covenant in the other.
M purchased the T&R land and effectively became the claimant’s landlord in respect of that land. He also entered into negotiations to purchase shares in the claimant club and began to run the club in the expectation of the deal being completed. However, M failed to pay the rent to GA.
GA peaceably re-entered its part of the land in reliance upon arrears of rent. The defendant informed it that the claimant intended to apply for relief from forfeiture, in response to which GA indicated that it would be willing to consent to relief if all the arrears were paid. The claimant transferred the money to the defendant, but the latter failed to pay this to GA and neglected to make any application for relief from forfeiture. The claimant subsequently instructed a different solicitor, which advised it that any application for relief from forfeiture would not succeed. An application was eventually made but was summarily dismissed.
The claimant brought a negligence claim against the defendant. The latter did not dispute its negligence in failing to make an application for relief against forfeiture or that such an application would almost certainly have succeeded at that time. However, it argued that any such breach had caused the claimant no loss, since an application would also have succeeded had one been made when the second solicitor was instructed. Thus, the cause of the claimant’s loss was the failure of that firm to make a prompt application.
Held: The claim was allowed.
There was no doubt that the “but for” test of causation was satisfied: but for the defendant’s failure to apply for relief, the claimant would have obtained that relief and its 50-year lease would have been restored. The fact that an application could have been made when the second firm of solicitors was first instructed did not absolve the defendant of its responsibility. The purpose of the law in imposing a duty on solicitors to act with reasonable skill and care was to protect the client against the risk that its legal rights might be lost, which was precisely what had happened here. There was nothing unfair or unreasonable in holding the defendant liable for the very damage that its duty required it to prevent. Where two tortfeasors were responsible for the same damage, one of them might have a claim for contribution against the other, but that did not absolve an original tortfeasor from its liability to the injured claimant. In any event, it was clear that any application made at the time of instruction of the second firm would have been hard fought, unsuitable for summary determination, capable of being brought only in the High Court, and far more difficult than the equivalent application would have been had it been made by the defendant. It was clear that the claimant’s chose-in-action, consisting of the right to apply for relief, had been substantially damaged or devalued by the defendant’s inactivity.
Romie Tager QC and Stuart Hornett (instructed by Barker Gillette) appeared for the claimant; Jonathan Seitler QC and Thomas Dumont (instructed by Brown Jacobson, of Nottingham) appeared for the defendant.
Sally Dobson, barrister