Purchase of land and premises — Land intended for development — Fence enclosing disputed strip with land for sale — Disputed strip belonging to another property — Ownership of disputed strip asserted by erection of new fence — Fence restored to former line without prejudice to rights — Solicitors not enquiring further — Purchasers having to acquire disputed strip in separate negotiation — Whether solicitors negligent — Decision against solicitors upheld on appeal
Freehold land and premises known as Garden House, Hartswood Road, London W12, were offered for sale and development of three luxury houses. On March 30 1988 the plaintiffs contracted to buy the land from the first defendants, completion to be within seven days of the grant of planning permission. The land situated to the north of Garden House was leased, by the freehold proprietors, to a nursery, and the demised premises of the nursery included a strip of land between 3 and 3.5 m wide (“the disputed strip”). For many years there had been a fence which completely enclosed the disputed strip with Garden House. Moreover, the site which was intended to be developed was the total area of Garden House together with the disputed strip. At all material times, the first defendant was alleged to have known that the freeholders and the tenant of the nursery claimed that they owned the strip despite the existence of the fence. The second defendants were the solicitors retained by the plaintiff developers to act for them in the intended purchase of the whole of the land with Garden House, including that enclosed by the fence. On June 11, the fence was removed and a new panel fence erected, enclosing the disputed strip with the nursery. The plaintiffs protested to the first defendant and the fence was removed and reinstated to the position of the old fence line. It therefore appeared that any dispute about ownership of the strip had been compromised on the basis that it was included with Garden House. However, the tenant of the nursery had expressly restored the fence without prejudice to the freeholders’ claims to that land. The contract for sale was completed at the end of June. A dispute then arose between the plaintiffs and the freeholders of the disputed strip because without it the proposed development would not fit on the site. The plaintiffs had then to buy the strip in order to proceed with their plans. They sued the first defendant, who took no part in either trial or appeal, for misrepresentation. They also sued their own solicitors for negligence. At first instance, inter alia, the judge awarded damages of £100,422.50 for breach of contract. The judge found that the solicitors had been negligent in that they had not given a land registry file plan to the plaintiffs and, in particular, that when the fence was moved, they had only arranged for it to be replaced on its former line. The solicitors appealed.
Held The appeal was dismissed.
1. On the question of the fence, it was insufficient on the part of the solicitors, in fulfilling their duty to their clients, to have asked for the fence to have been put back. At that point, “alarm bells” should have rung.
2. On the question of negligence, the solicitors relied on Saif Ali v Sydney Mitchell & Co [1980] AC 198. However, that would reduce the standard of care to “lower than the lowest common denominator”. The standard was that set in Midland Bank Trust Co Ltd v Hett Stubbs & Kemp [1979] Ch 384.
3. The court could not accept that even if the solicitors had asked for more information from the first defendant, it would have been to no avail.
Rupert Jackson QC and Thomas Putnam (instructed by Reynolds Porter Chamberlain) appeared for the appellant solicitors; and Teresa Rosen Peacocke (instructed by Izod Evans) appeared for the plaintiff purchasers.
