Negligence — Action against solicitors for negligence and breach of duty — Lack of due care in serving notices of termination of tenancy under the Landlord and Tenant Act 1954, Part II — Plaintiff wished to terminate the lease of a road frontage, which he had let for advertising purposes, in order to sell the freehold with vacant possession — Defendants, a firm of solicitors, served a number of notices on the lessees of the advertising rights, purporting to be in accordance with the 1954 Act, but the first four of the notices were defective — As a consequence of the first defective notice the date for completion of the sale of the freehold had to be postponed and the plaintiff suffered loss and damage — Conflict of evidence — Judgment for plaintiff
owner of land in Ilford, Essex, let a road frontage to a company for the
purpose of erecting and displaying advertising panels — Later the plaintiff
wished to sell the land with vacant possession and, in order to do so, he had
to serve an effective notice under section 25 of the 1954 Act terminating the
tenancy of the advertising frontage — The defendants were retained as
solicitors to deal with the sale of the freehold and the termination of the
advertising lease — There followed an extraordinary story of mismanagement,
light-hearted attitude to professional standards and conflicting testimony —
Apparently, four notices of termination served by the defendants, particularly
the first, were defective and incapable of terminating the lease — Proper inquiries
were not made into the crucial question of the correct date to be set for the
termination of the lease — Eventually the purchaser of the land came to the
rescue by entering into direct negotiations with the lessees of the advertising
frontage — This resulted in the latter agreeing to surrender their lease and
accepting a new lease lasting until July 1 1989 and thereafter from month to
month — The new lease contained a provision for either party to terminate the
lease on 28 days’ notice in writing and, with the authority of the court under
section 38(4) of the 1954 Act, the provisions of sections 24 to 28 were
excluded — The sale of the freehold was eventually completed seven days after
the contractual date, with an agreed reduction of the original sale price
found that in causing the first of the defective notices to be sent out the
defendants failed to make the reasonable and proper inquiries which were open
to them to clarify the position, took a risk, and in so doing acted in breach
of their duty to exercise the skill and care which were to be expected of
normal, reasonable and competent solicitors in the performance of their duties
— They were therefore liable in damages to the plaintiff — The damages had been
agreed and the agreed sum was payable together with interest thereon
No cases are referred to in this report.
The plaintiff in this case, David Robins,
sued the defendants, Meadows & Moran, solicitors, of Romford, Essex, for
damages on account of negligence and breach of duty in relation to the sale of
the plaintiff’s property at 758-766 Eastern Avenue, Newbury Park, Ilford,
Essex, and the termination of a lease of a road frontage of the property for
advertising purposes to Mills & Allen Ltd.
John Powell QC (instructed by Payne Hicks
Beach) appeared on behalf of the plaintiff; John Stevenson (instructed by Ince
& Co) represented the defendants.
Giving judgment, JUDGE BATES QC said:
The plaintiff in this action is David Robins. He is a greengrocer, who, in 1983
with the assistance of a mortgage from the Bank of Ireland, bought property at
758-766 Eastern Avenue, Newbury Park, Ilford, Essex (‘the premises’).
On May 27 1983 the plaintiff entered into
an agreement with Mills & Allen Ltd (‘Mills & Allen’) to let the road
frontage of the premises to them for a period of five years for the purpose of
erecting and displaying advertisement panels. Pursuant to the agreement, a
lease was entered into on July 1 1983.
In October 1987 the plaintiff decided to
sell the premises. For this purpose he engaged a firm of chartered surveyors
and estate agents called Glenny, of Barking, Essex. The plaintiff’s son, Mr
David Lee Robins (‘Mr Robins’) was and is an employee of that firm. In a letter
dated October 18 1987, Glenny accepted instructions to dispose of the freehold
interest in the premises on behalf of the plaintiff.
A firm of solicitors, Budd & Co [of
Buckhurst Hill], had acted for the plaintiff in 1983 in relation to his grant
of the lease of the road frontage to Mills & Allen. But Budd & Co were
apparently not prepared, or at any rate not anxious, to act for the plaintiff
in determining the lease of Mills & Allen. They declined instructions.
Mr Robins recommended the defendants,
Meadows & Moran, a firm of solicitors in Romford, Essex, to his father and,
through Mr Robins acting as agent for his father, they were engaged. The
defendants admit that they were retained for reward to act as solicitors for
the plaintiff in relation to the sale of the premises and the termination of
the tenancy of Mills & Allen of part of the premises.
Under an agreement dated December 16 1987
(‘the sale agreement’), the plaintiff agreed to sell the freehold interest in
the premises to the purchaser, Cambridge Park Developments Ltd, for £399,000,
with a deposit of £20,000 to be paid to the defendants as stakeholders for the
plaintiff. The completion date was March 30 1988.
Clause 9 of the agreement provided:
The property is sold subject to and with
the benefit of an agreement for the erection and maintenance of advertisement
hoardings made between the vendor of the one part and Mills & Allen Limited
of the other part, this agreement being due to expire on 13th June 1988 in
respect of which notice terminating the tenancy has been served under the
provisions of the Landlord and Tenant Act 1954. A copy of both the agreement
and the said notice are annexed hereto and no further objection or requisition
shall be raised.
As a matter of fact a number of notices
were served, purportedly under the provisions of the Landlord and Tenant Act 1954.
The first four of them were defective. As a consequence of the first defective
notice, the plaintiff was unable to give vacant possession of the premises as
required by the sale agreement and this agreement was varied by the parties in
accordance with the terms of a letter dated
the purchaser. The terms of that letter were as follows:
Further to our recent telephone
conversation and a meeting between our respective clients, we understand that
this matter is still to proceed but with variations on the original contractual
terms as follows:
(1)
Our clients will immediately receive the sum of £19,000 by way of refund
of most of their deposit monies, you will retain the outstanding £1,000 until
completion.
(2)
Completion to be delayed until 3rd July 1989.
(3)
You will on behalf of your clients tender a fresh Landlord and Tenant
notice upon Mills & Allen, terminating their rights of occupancy under the
terms of the lease. Before doing so, we are to peruse and approve the said
notice.
(4)
Our clients to be allowed access immediately to the premises to carry
out all and any works that they may wish, including works of construction,
without any interference from your clients.
(5)
The sum of £12,500 to be paid to our clients by way of compensation for
the delayed completion, such sum to be deducted from the original completion
price.
(6)
All other terms of the existing contract are to remain.
It concludes:
We await hearing from you in due course
that these are approved whereupon we can agree in open correspondence to vary
the terms of the original agreement.
These terms were accepted on behalf of
the plaintiff by the defendants in a letter of the same date (March 18 1988) to
Luper & Co.
The defendants acted principally through
a partner in the firm, Mr R H Meadows. Under cross-examination, he said that he
had expertise in conveying commercial property and that he was familiar with
the Landlord and Tenant Act 1954. But four of the notices under the Act, and
particularly the first notice, were defective. Counsel for the defendants
submitted that the defendants had an overriding duty to comply with their
clients’ instructions and that the defendants had done no more than that and
were not to blame for any loss or damage suffered by the plaintiff.
The instructions were given by Mr Robins
on behalf of the plaintiff. They were given orally at a short meeting on
November 10 1987 with Mr Meadows. According to Mr Robins, he told Mr Meadows
that the premises were likely to be sold and that his father wanted the
defendants to act in the sale and also in the termination of the tenancy of
part of the premises of Mills & Allen. At the meeting, Mr Robins produced
for Mr Meadows the documents relating to the tenancy which had been sent to him
by Budd & Co. There were two documents and I find on the evidence that one
document was a copy of the schedule to the agreement dated May 27 1983 between
the plaintiff and Mills & Allen, and the other document was a copy of the
lease pursuant to that agreement, with one page missing. Mr Meadows pointed out
to Mr Robins that it was not possible to reconcile the lease with the schedule.
Mr Robins had already realised this. It was obviously a very unsatisfactory
position.
In response to request 4 for further and
better particulars under para 3 of the defence, the defendants gave the
following answer. Mr Meadows was told that a purchaser had been found for the
plaintiff’s property at a price believed by the plaintiff and by Mr Robins to
be ludicrously high and that it was wished to exchange contracts as soon as
possible. Mr Meadows was told that the plaintiff’s main concern was to
terminate the tenancy for an advertising hoarding of Mills & Allen, which
was of importance because Mills & Allen’s hoardings were at the front of
the site on Eastern Avenue. Mr Robins produced a document which he said was a
lease in favour of Mills & Allen. Although in a blue folder marked ‘Lease’,
the only documents contained therein were a form of agreement and a schedule on
Mills & Allen’s writing paper. Mr Meadows perused the documents and told Mr
Robins that they could not be the lease because the agreement was not executed
or dated and the items in the schedule could not be correlated with the form of
agreement. Mr Meadows proposed he should seek to clarify the position with Budd
& Co, the plaintiff’s former solicitors, but was instructed not to do so
because Budd & Co’s affairs were in a state of disorder and they would not
co-operate, it being further explained by Mr Robins that the person dealing
with the plaintiff’s affairs at Budd & Co had disappeared and was suspected
of mortgage fraud. Mr Robins said that, in those circumstances, nothing could
be done by Budd & Co and that inquiries made of them would only delay the
termination of the Mills & Allen tenancy. At Mr Meadows’ suggestion, Mr
Robins departed to clarify the position with the plaintiff and subsequently
returned to see Mr Meadows, probably on the same day. Mr Robins stated that his
father was adamant that the documents produced were the material ones and that
no others existed.
In evidence Mr Robins denied that he said
that a ‘ludicrously high’ offer had been made for the premises. Indeed, he said
that, at the date of the meeting, they did not have a purchaser. Mr Robins
denied that he instructed Mr Meadows not to clarify the position with Budd
& Co. He also denied that he had said that ‘Budd & Co’s affairs were in
a state of disorder’ and ‘that the person dealing with the plaintiff’s affairs
at Budd & Co had disappeared and was suspected of mortgage fraud’.
Under cross-examination, Mr Meadows said
that his recollection was that the plaintiff had a buyer but his impression was
that the buyer was not named. It is significant that there is no mention of a
buyer in an attendance note by Mr Meadows dated November 10 1987. The
attendance note is in the following terms:
Attending: Mr David Robins when he called
into the office, bringing with him what purported to be the lease of 758-768
Eastern Avenue to Messrs Mills & Allen. This document was in a very unusual
form and none of the items in the schedule seemed to tie up with the body of
the document. I queried with him whether this was in fact a lease as none of it
seemed to be executed properly or dated properly. He said he would check with
his father. He later called back, having checked with his father, and he
confirmed that this was indeed the lease of the premises and that we should go
ahead at once and serve the notice under the Landlords and Tenants Act.
Mr Robins denied that he said that he
would check with his father or that he called back later. He said that, even if
he had said that he would check with his father, it would have been to no avail
because his father never kept any documents. This seemed to me to be consistent
with the attitude of the plaintiff, as demonstrated by his evidence in the
witness box. He looked to his solicitors, as he said, ‘to do the business’. The
plaintiff also denied that his son had referred back to him for documents.
It is also significant there is no
mention in the attendance note of Budd & Co that their affairs were in a
state of disorder and that they would not co-operate. In this context,
reference may be made to subpara 1 of the para headed ‘Communications with
Clients’ (in appendix C), dealing with professional standards and issued by the
Law Society, where it is stated, inter alia, that:
A solicitor should consider whether it is
appropriate to confirm in writing the advice given and the instructions received.
There was no such confirmation from the
defendants. It was certainly appropriate, in my judgment, to make such
confirmation in writing that what was required was a notice under the Landlord
and Tenant Act 1954, in which dates would be crucial, and the documents which
were before the solicitors did not correlate.
On November 16 1987 Mr Meadows gave
written instructions to Mr M Voyes, an employee of his firm, to serve the
appropriate notice on the tenants, Mills & Allen. His instructions were in
the following terms:
Mr Robins requires us to serve notice
under the Landlord and Tenant Act terminating the tenancy on the expiry of the
existing lease. He will oppose a grant of a new tenancy as he wishes to develop
the land. Can you please serve the appropriate notice in duplicate? I have made a company search to obtain the
registered office. Can this please be done as a matter of urgency?
There is nothing on the face of these
instructions to indicate that there was any problem and this in fact would
appear to be the way in which Mr Meadows dealt with the situation. He had
documentation presented to him and that, he said in examination-in-chief, was
it. He said he had a number of clients like the plaintiff and that, if called
in to sort out a lease, he often had to write history. The clear impression he
gave me was that, generally, he got on with what he had. With the documentation
which he had and on the basis of no further information, Mr Meadows accepted in
cross-examination that, in causing the first section 25 notice to be sent out,
he was making an educated guess; he was taking a risk. I agree. And I find on
the evidence that he did not do this in consequence of the instruction of the
plaintiff. In particular, I accept the evidence of Mr Robins that he told Mr
Meadows to contact Budd & Co and clarify the position. I do not accept Mr
Meadows’ evidence that he suggested contacting Budd & Co but was told by Mr
Robins that it would be futile or pointless as the firm was in trouble and
disarray.
On the basis of the information that he
had, it was hazardous and incompetent, in my judgment, for Mr Meadows to cause
the first defective notice to be issued. In doing so, he was, in my judgment,
acting in breach of a term to be implied in his retainer; namely, that he
would exercise the skill and care to be expected of a normal, reasonable and
competent solicitor in the performance of his duties.
Mr Meadows contacted the Bank of Ireland,
but he could and should, in my judgment, have contacted Budd & Co. In
cross-examination Mr Meadows accepted that this is what a competent solicitor
would have done. In addition, inquiries could have been made of Blythe Owen
George & Co, solicitors for Mills & Allen, or of Mills & Allen
itself. Mr Meadows was not in a position to act competently on the basis of the
information he had. He should have clarified the position.
The parties have agreed a statement as to
the sale of the premises in the following terms. Mills & Allen served a
counternotice to the section 25 notice served on December 30 1988 indicating
they would not be willing to give up possession. The purchaser, with the full
consent of the plaintiff, opened negotiations with Mills & Allen and, as a
result, Mills & Allen agreed to surrender their lease dated July 1 1983 and
to take a new lease of the premises until July 1 1989 and thereafter from month
to month. The new lease contained a provision for either party to terminate the
lease on 28 days’ notice in writing and, with the consent of the court, the
provisions of the Landlord and Tenant Act 1954 were excluded from the new
lease.
The sale was eventually completed on July
10 1989, seven days later than the contractual date. The purchasers paid
interest in accordance with the contract for a seven-day period. Apart from a
small apportionment of rent, the plaintiff received on completion £385,500,
that representing the purchase price of £399,000 less a retained deposit of
£1,000 and the £12,500 being the agreed reduction in the price as negotiated in
March 1987.
In the circumstances, the plaintiff’s
claim succeeds and he is entitled to damages and interest thereon. As I
understand it, the amount of damages is agreed but not the interest.
