Surveyors’ negligence – Leasehold enfranchisement claim – Appellant retaining respondent surveyors in connection with application for lease extension – Appellant failing to apply to leasehold valuation tribunal by deadline – Appellant having to purchase extension at higher price – Whether respondents liable in damages for appellant’s loss resulting from failure to advise of deadline – Appeal allowed
The appellant retained the respondent firm of surveyors to act for her in connection with an application to extend the lease of her flat pursuant to the leasehold enfranchisement provision of the Leasehold Reform, Housing and Urban Development Act 1993.
In March 2000, she served a notice, under section 42 of the 1993 Act, exercising her right to extend the lease. By 5 June, all the terms apart from the premium had been agreed and that was to be the valuation date. The deadline for referring the dispute over the premium to the LVT was 8 November 2000. In August 2000, the respondents informed the appellant that, unless she paid their invoice, they could no longer act on her behalf. The appellant failed to apply to the LVT by the November deadline. Accordingly, her section 42 notice was deemed to have been withdrawn and she lost the chance of extending the lease under the Act for £380,900. She proceeded to purchase the extension outside the Act for £485,000 in October 2001.
The appellant subsequently sued the respondents for damages on the basis that, in breach of their retainer, they had negligently failed to make, or to advise her to make, an application to the LVT by 8 November. The county court found that the respondents had not breached their retainer since it had terminated in June 2000 and they had advised her of the importance of making an LVT application while acting for her. The appellant appealed, claiming that she had given general instructions to the respondents to obtain the lease extension. The respondents argued that they had been instructed on an ad hoc basis and not that that had ceased before the LVT application had to be made.
Held: The appeal was allowed.
The judge had had no evidential basis on which to conclude that the retainer had terminated in June 2000. The respondents’ letter of August recognised that they regarded themselves as still acting for the appellant since they had warned that they would be unable to continue to do so unless their fees were paid. The judge had made an unchallenged finding that, if the retainer was still continuing by August, it did not thereafter terminate as a result of the non-compliance with the terms of that letter. The judge ought to have found that it continued past 8 November. Accordingly, the judge’s finding that the retainer terminated in June was contrary to the evidence and therefore wrong.
If a professional person advised his client on a particular point as to the need to take a specific step by a specific time, there was no general principle that he was under a duty to keep repeating that advice. However, the judge had held that if the retainer was still continuing after June, the respondents were under an implied duty, as 8 November approached, to remind the appellant of the deadline, a finding that reflected the respondents’ own position as to what, in the ordinary course of their practice, they would have done.
Although the respondents might have told the appellant in June or July of the importance of the deadline, she was a client who was inexperienced in the relevant field, and could be expected to rely on professional advisers, such as the respondents, to remind her, when the time arose of the need to take appropriate procedural steps to protect her position. The fact that they would have done that in the ordinary course was a correct reflection of the legal obligation that, in the instant case, they would have been under: Howard & Witchell v Woodman Matthews and Co [1983] BCLC 118 applied.
Stephen Boyd (instructed by Wilson Barca LLP) appeared for the appellant; Michael Pryor (instructed by Bircham Dyson Bell LLP) appeared for the respondents.
Eileen O’Grady, barrister
