Balogun v Boyes Sutton & Perry (a firm)

Negligence – Solicitor – Duty of care – Appellant instructing solicitor at respondent form in connection with acquisition of lease of premises to be used as restaurant – Whether solicitor negligent in failing to advise and secure necessary rights in relation to required ducting work in ventilation shaft – Whether liable for failure to advise of risk that lease conferring no right to use shaft – Appeal dismissed The appellant instructed a solicitor, who was then a partner in the respondent firm, in connection with his proposed acquisition of a 15-year commercial lease of a unit on the lower and upper ground floors of a development in a building in London SE27. To the solicitor’s knowledge, the appellant proposed to fit out and use the premises as a restaurant specialising in African cuisine; the unit was being offered with planning permission for such restaurant use. In order to use the premises as a restaurant, the appellant needed to install ducting within a ventilation shaft which served the building, for the purpose of extracting of fumes. After completion of the purchase, a dispute arose between the appellant and the freeholder of the building over the nature of the proposed works. The appellant claimed damages against the respondent for professional negligence, contending that the solicitor had been under a duty to advise him and to secure relevant rights and consent, in relation to ducting work in the ventilation shaft. Dismissing the claim, the judge found that the appellant had told the solicitor that nothing further needed to be done to the ventilation shaft to make it fit to use and that the solicitor was not obliged to go behind the appellant’s factual instructions in that regard. He also rejected an argument that the solicitor should have enquired of the local planning authority whether approvals for the works, pursuant to a relevant planning condition, had been obtained, and that, had he done so, it would have emerged that no approvals were in place and therefore that the necessary ducting works had not been carried out. The appellant appealed. He raised the further arguments that: (i) properly construed, the terms of the underlease did not confer on him the right to use the ventilation shaft; or, alternatively (ii) if they did so, there had been a risk that they would not, of which the solicitor had been obliged to advice the appellant. He argued that there was a mismatch between the provisions of the headlease and the underlease in that regard and that the entitlement under the latter to use “Service Media… that belong to the Landlord” did not entitle him to use the ventilation shaft, both because it did not fall within the meaning of “Service Media” and because it fell outside the headlessee’s demise and therefore did not “belong to the Landlord”. Held: The appeal was dismissed. (1) The underlease conferred on the appellant a right to connect to and use the ventilation shaft. The ventilation shaft was properly to be regarded as “Service Media” within the meaning of the underlease. While it did not fall within the headlessee’s demise, the headlessee nonetheless had a right under the headlease to connect into and use the ventilation shaft; that created an easement in favour of the headlessee, which made it service media “belonging to” the headlessee within the meaning of the underlease. (2) Whether a solicitor was in breach of a duty to warn his client of the risk that a court might come to a different interpretation of a contractual provision from that which the solicitor advised was correct would necessarily be highly fact-sensitive, and would depend on the strength of the factors favouring a different interpretation and thereby giving rise to the risk. In the instant case, had the solicitor considered the relevant provisions as he should, he would have appreciated that there was a possible non-correspondence between the terms of the headlease and the underlease in relation to access to the ventilation shaft, which was a matter of great importance to his client’s project. Notwithstanding the conclusion now reached as to the correct interpretation of the provisions, the risk of a court coming to a different conclusion had been sufficiently great to require the solicitor to advise his client accordingly and to take steps to amend the draft underlease so as to remove the risk. The solicitor was therefore in breach of the duty owed to his client in failing to do so: Queen Elizabeth’s School Blackburn Ltd v Banks Wilson Solicitors (a firm) [2001] EWCA Civ 1360 and Barker v Baxendale Walker Solicitors [2016] EWHC 664 (Ch) applied. However, the appellant had suffered no loss as a result of that breach. Neither the freeholder nor the headlessee were disputing that the appellant had a right to access and use the ventilation shaft. The dispute was over the extent of that right. The limitations on the works which the appellant wished to carry out arose not from the underlease but from the headlease. That was not a matter connected in any way with the solicitor’s breach of duty and could not have been addressed by an amendment of the underlease. (3) The solicitor was not under any duty to investigate whether written approval had been given under the planning condition. First, there was nothing to put the solicitor on notice that he had been misinformed by the appellant as to whether work had been done in the ventilation shaft. The solicitor had drawn the planning condition to the appellant’s attention but the appellant had not responded on the point. The appellant had produced no detailed schedule of works prior to completion on the underlease, despite the solicitor’s encouragement for him to do so, since he did not yet know what works might be needed. It was hard to see how written approval under the planning condition could have been obtained in those circumstances. The appellant himself had taken the view that the approvals were a matter for the future. Even if the solicitor had been under a duty to make enquiry of the local planning authority, and it had become apparent that there was no written approval, that would not necessarily have told him anything about whether work had been done in constructing a flue in the ventilation shaft. The planning condition was tied to the operation of the restaurant, such that, until the restaurant was to operate, there was no requirement to comply with the condition. Accordingly, the fact that there was no written approval did not mean that no flue had been constructed in the ventilation shaft. It followed that the respondent was not liable to the appellant. Nigel Woodhouse (instructed by Simons Rodkin Solicitors LLP) appeared for the appellant; Oliver Radley-Gardner (instructed by Reynolds Porter Chamberlain LLP) appeared for the respondent. Sally Dobson, barrister Click here to read transcript: Balogun v Boyes Sutton & Perry (a firm)