Sale of property — Green belt — Solicitor — Sale conditional on removal of land from green belt — Whether solicitor under duty to understand and advise upon implications and consequences of contract — Claim allowed in part
The claimants owned a property situated within the green belt and adjacent to Heathrow Airport. In 1998, they entered into a contract with a property developer, giving the latter an option to purchase their property. The option was exercisable within three months following any change to the green belt boundary, pursuant to a planning inquiry, whereby substantially the whole of the property would be excluded from the green belt. The defendant solicitor had acted on behalf of the claimants in respect of the contract.
The first claimant believed that the property would be excluded from the green belt upon the publication of the inspector’s report recommending its exclusion. The solicitor in question did not know what procedural steps were necessary before land was released from the green belt. The inspector’s report was published in November 1998. In the event, the option period would not have been triggered until April 2001 (had not the first claimant entered into a fresh agreement in January 2001 for the sale of the property for an increased price).
The first claimant complained that the solicitor had wrongly advised her that the property would be excluded from the green belt, or had failed to advise her that the condition precedent would run only from the local authority’s adoption of the inspector’s report. The claimants sought damages against the defendant on the grounds that, having sold the property to the developer for £1.272m for completion on 20 March 2001, they had suffered a loss of £448,000, the value of the property at that date being £1.720m.
Held: The claim was allowed in part.
A solicitor had a duty to understand the effect of the document being negotiated and might have a duty to be in a position to correct its client’s misunderstanding of an important part of the transaction.
In the present case, the solicitor had reason to believe, owing to the first claimant’s experience in property, her involvement in the inquiry, and her negotiation of the contractual provisions, that the first defendant knew the procedure for release from the green belt. But this did not mean that the solicitor was relieved of the duty of understanding the contract and its effect.
It was part of the duty of a commercial conveyancer to know or advise on the procedure for the removal of land from the green belt. All would depend upon the circumstances, but where release from the green belt was one of the important terms of the contract, that knowledge or advice might be required.
On the balance of probabilities, the court was satisfied that the solicitor in question had been negligent. She accepted that, had she had appreciated the procedures involved in the release of land from the green belt, she would have notified the claimants.
However, the first claimant had failed to show that, had she known about the green belt procedures, she would not have signed the contract and sold the property to the developer at that time or would have negotiated different terms to protect herself against the risk of delay. Consequently, the claimants were entitled to no more than nominal damages.
Paul Morgan QC and Greville Healey (instructed by Osmond & Osmond) appeared for the claimants; David Halpern (instructed by Beachcroft Wansbroughs) appeared for the defendants.
Eileen O’Grady, barrister
