Flat purchase — Solicitor failing to make full inquiries — Road development — Plaintiff having to vacate premises during road works — Whether solicitor in breach of duty — Measure of damages — Property bought in rising market — Plaintiff also seeking statutory compensation — Whether compensation deductible from damages awarded — Judgment for plaintiff
The plaintiff worked in a junior capacity for London Docklands Development Corporation. She wished to purchase a flat and after having viewed 21 Narrow Street, St George Square, London E14, she engaged the defendant solicitor to act for her. At the time LDDC were engaged in plans for the Limehouse area and in particular plans for a new highway to be known as the “Limehouse Link”. The asking price of the flat was £125,000, which on the basis of a quick sale, was reduced to £115,000. The plaintiff stated that she had fallen in love with the flat “at first sight”. She invested £55,000 cash and borrowed £60,000 on a mortgage for the purchase. Her solicitor was under pressure of time. The exchange of contracts was scheduled for February 12 1989.
On February 10 he received a local search which, in reply to a question concerning possible construction of any new road or improvement to any road stated: “The applicant is advised to make enquiries of the LDDC to ascertain whether [it] has any proposals in the vicinity of the property”. The plaintiff was not informed of this answer. The court also concluded on the evidence that the defendant made no inquiries which would have elicited plans for a major new highway on the doorstep of her new home. Once work on the road began, the plaintiff was put to great inconvenience, having to more out of the premises. She claimed against her solicitor.
Held Judgment for the plaintiff.
1. The failure to make inquiries clearly constituted negligence by the defendant.
2. He submitted a number of factors which were intended to show that she would have proceeded to the purchase in any event, inter alia, her enthusiasm for the flat, the high-profile nature of the roadway plans and her work at LDDC. However, the court was not prepared to accept those submissions. It was satisfied that once the situation had been made clear to her, she would have walked away from the purchase.
3. The first and heaviest head of damage was the loss suffered in the capital value of her property as result of the defendant’s breach of duty. That was complicated by the economic turn down in the value of properties at the end of 1988.
4. There was a difference of opinion between the expert surveyors as to when the market peaked for Docklands property, but it had been agreed in principle that the value of damages was the difference between the price paid and the market value which the property possessed with the highway development and the inevitable accompanying inconvenience.
5. There was a huge difference in the figures given to the court. The approach accepted was that there would have been a market for the property for either an investor or an adventurous private purchaser who would have needed a real incentive to buy.
6. The plaintiff had since put in a claim under the Land Compensation Act 1973. However, neither counsel could cite any authority on the need to subtract such compensation from the damages. It was not appropriate to make such a deduction under that head of award given its speculative nature.
7. Damages would be assessed at £32,000 which included interest on the first head. Damages for the serious affect to her quality of life would be assessed at £6,000 to carry interest. Special damages for cracks and making good were £1,800.
Christopher Parker (instructed by Hamish McMillan) appeared for the plaintiff; Geoffrey Brown (instructed by Ince & Co) appeared for the defendant.
