In Balogun v Boyes Sutton & Perry [2017] EWCA Civ 75; [2017] PLSCS 45 a tenant claimed damages from his solicitors on the ground that they had been negligent while advising him on the grant of a 15-year underlease of part of a building.
The premises were ready to be fitted out and the tenant planned to open a restaurant there. It was essential to the operation of the restaurant that the tenant should have access to, and be entitled to use, the purpose-built ventilation shaft in the building. But, following completion of the underlease, the superior landlord became concerned about the work needed to render the ventilation shaft operable.
Following discussions with the superior landlord, which led nowhere, the tenant decided to sue his solicitors. Had they negligently failed to advise him that the easements and rights granted by his landlord’s headlease, and in his underlease, were open to interpretation and/or that the tenant was not entitled to connect to, and use, the ventilation shaft? The Court of Appeal decided that the tenant did have the right to use the ventilation shaft, but agreed that his solicitors should have advised him that there was real scope for doubt about the meaning of the rights granted.
In Queen Elizabeth’s School Blackburn Ltd v Banks Wilson Solicitors (a firm) [2001] EWCA Civ 1360, the court explained that practitioners owe a duty of care to their clients to take reasonable care to protect them against the risk of being involved in litigation. So if a solicitor knows that a clause in a document might be ambiguous, or that it could be interpreted differently, he has a responsibility to explain this to his client.
In this case, the tenant’s solicitor should have appreciated that there was a possible mismatch between the terms of the headlease and the underlease, which might compromise the tenant’s right to use the ventilation shaft. Was the risk sufficiently great that the tenant’s solicitor should have warned his client about it? The court explained that the answer to the question will depend on the strength of the factors favouring a different interpretation.
The tenant’s solicitor had interpreted the underlease correctly. However, there had been a significant risk that the court might reach a different conclusion. So the tenant’s solicitor should have advised his client that the underlease was ambiguous and amended it to clarify the position. And so the tenant won his battle in the Court of Appeal, but lost the case because nobody was disputing the tenant’s right to use the ventilation shaft.
The court ruled that the problem had arisen because the tenant was not entitled to carry out the work needed (which involved the construction of a chimney about the building) in order to use the ventilation shaft. And the court exonerated the tenant’s solicitor from any negligence on this score because the tenant had led him to believe that the ventilation shaft was ready for immediate use and had chosen not to provide a schedule of his fitting out work prior to completion of the underlease, despite encouragement from his solicitor to do so.
Allyson Colby is a property law consultant