Defendant solicitors advising service of fresh statutory demand claiming rent arrears – Statutory demand set aside by deputy registrar – Plaintiffs claiming wasted legal fees paid to defendant and loss of rent – Whether defendant negligent – Claim dismissed
The plaintiffs were the trustees of a trust which owned a number of properties. By a lease dated March 25 1983 the trustees let to M, under a business tenancy, the first and second floors of 55 Beauchamp Place, London SW3. The term was for 12 years from February 11 1983 and the lease was drawn in conventional form, containing a proviso for re-entry in the event of non-payment of rent and a covenant not to assign without first obtaining a written licence from the trustees. By a letter of June 8 1989 M requested a licence to assign the remainder of the lease to CB. Subsequently, a draft licence was drawn up. A formal licence, however, was never completed. M moved out of the premises, CB moved in and thereafter rent was unpaid. On November 7 1990 the plaintiffs issued a writ against M claiming possession and rent for the September quarter of 1990. M claimed that the plaintiffs had acted unreasonably in failing to execute a licence to assign and were in breach of their obligation under the lease to that effect, and that the proceedings against him should be dismissed.
In due course the solicitors acting for the plaintiffs at that time, MWC, sought advice from counsel. Subsequently a statutory demand was served. The plaintiffs then terminated MWC’s retainer and in November 1992 instructed the defendant, who advised that a fresh statutory demand should be served in order to avoid the difficulties which might arise in relying on that served by MWC. M applied to have the fresh demand set aside on the grounds that the sums claimed were already the subject of High Court action. The defendant was advised by counsel that there was more than a 50% chance that the demand would not be struck out. However in June 1993 the deputy registrar struck out the demand. In February 1994 the plaintiffs determined the defendant’s retainer and appointed other solicitors. The plaintiffs issued proceedings against the defendant claiming that it had taken the wrong course of action against M by following MWC in issuing the statutory demand with the inevitable result that the demand was struck out.
Held The plaintiffs’ claim was dismissed.
The defendant had not been negligent. It had owed a duty of care to the trustees and had been retained to give advice and to take appropriate action in relation to outstanding legal difficulties in connection with the tenancy of the premises and it had carried out precisely that task. It had taken the advice of counsel into account and it had been reasonable to conclude that there were difficulties in the High Court proceedings for possession. The statutory demand had been served bearing in mind the trustees’ desire to obtain as much money as possible from M and the desire to bring him to the negotiating table. The defendant had concluded, despite some disquiet about the fact of the concurrent proceedings, that the service of the fresh statutory demand would be effective to bring M to negotiation. Therefore the course taken by the defendant had been reasonable and one which a reasonably competent solicitor could legitimately take, having regard to all the circumstances of time, cost and pressure to procure settlement.
Christopher Coney (instructed by Fuglers) appeared for the plaintiffs; Jalil Asif (instructed by Cripps Harries Hall, of Tunbridge Wells) appeared for the defendants.
