Solicitors firm Bird & Bird LLP has failed in a challenge to a ruling that it was negligent in failing to tell the prospective purchaser of a mansion in St John’s Wood about a planned academy school development nearby.
The Court of Appeal today dismissed Bird & Bird’s appeal, Lady Justice Gloster saying that it should have been “perfectly obvious” to anyone reading a Plansearch Plus report carried out that the school development “was, or was potentially at least, highly significant”.
The case raises important issues relating to the scope of conveyancing solicitors’ duties to pass on potentially material information to clients.
The Court of Appeal backed the June 2015 High Court ruling in which Judge Pelling QC found in favour of Orientfield Holdings – a British Virgin Islands vehicle set up by Hong Kong businesswoman Rebecca Chow – in its £1.7m claim.
Orientfield ultimately pulled out of the £25m purchase of the seven-bedroom property at 56 Avenue Road, London, NW8, in 2011, after discovering plans for the 1,400 pupil, six-storey academy. But by that point, Orientfield had already paid a £2.75m deposit.
Proceedings between Orientfield and the sellers were settled with the deposit being split between them, and Orientfield sought to recover the other half, plus other costs, from the solicitors that had represented it, Bird & Bird.
Judge Pelling found that Bird & Bird had been in breach of duty in failing to pass on information about the school development after obtaining a Plansearch Plus report, and instead to state in a report on title that the information provided by the sellers in replies to pre-contact inquiries did not reveal anything that adversely affected the property.
Bird & Bird was granted permission to appeal in respect of causation only, and argued that the judge fell into “serious error” by failing to make any findings at all as to precisely what aspects of the report the firm should have summarised for Orientfield, and in what terms.
However, Lady Justice Gloster said that, having read the report, “it would not have been difficult for any non-negligent solicitor to have prepared a very brief summary of the features of the development, together with a recommendation as to what further steps were necessary to ascertain what the impact of such a development might be”.
She added: “Against that background, the fact that the judge did not himself formulate precisely the terms in which a non-negligent solicitor should have formulated the summary to my mind goes nowhere.”
Orientfield Holdings Ltd v Bird & Bird LLP Court of Appeal (Gloster and King LJJ) 9 May 2017
John Wardell QC and Geoffrey Zelin (instructed by Wedlake Bell LLP) for the respondent
Joanna Smith QC and Tiffany Scott (instructed by Triton Global Ltd T/A Robin Simon) for the appellant
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