Solicitor’s negligence — Conveyancing — Counterclaim in proceedings for unpaid fees — Whether claimant firm exceeding its authority — Whether claimant negligently advising the defendant — Whether any loss occurring — Claim allowed — Counterclaim dismissed
The claimant firm of solicitors acted for the defendant on the purchase of a London property. Following the exchange of contracts, but before completion, the defendant terminated the claimant’s retainer and refused to pay its outstanding fees.
The claimant brought proceedings to recover those fees. The defendant, by her counterclaim, contended that the claimant had acted in excess of its authority in exchanging contracts for the purchase, and had been negligent. The alleged negligence included pressurising the defendant to exchange before the necessary finance was in place and without negotiating better terms, and failing to inform her of the much lower price at which the vendor had purchased the property, which had been revealed in the pre-contract documentation sent to the claimant. The defendant argued that she would not have purchased the property but for the claimant’s actions, and she sought to recover the difference between what she had paid for the property and its actual current value.
The evidence was that the defendant had been present in the claimant’s office when contracts had been exchanged in the course of a telephone conversation between the claimant and the vendor. The defendant maintained that she had instructed the claimant not to exchange until it had reviewed the contract with her the following day. The claimant insisted that the defendant had specifically instructed it to exchange. The claimant denied negligence and further contended that, even if it had been negligent as alleged, the defendant had suffered no loss, because the purchase would have proceeded at the same price in any event, as the defendant had very much wanted the property and the vendor had been driving a hard bargain.
Held: The claim was allowed and the counterclaim dismissed.
On the evidence, the defendant had authorised the exchange of contracts, and that authorisation had not been obtained by any pressure applied by the claimant. The claimant had drawn the defendant’s attention to the risk of exchanging when she did not have financing in place; it had not been incumbent upon the claimant to dissuade her from doing so, given that she was an experienced businesswoman and had been confident of obtaining the necessary finance. The claimant had been entitled to conclude that the defendant was capable of weighing the risks involved. Nor was it any part of the claimant’s duty to advise the defendant not to exchange without first obtaining better terms. It had been entitled to proceed on the basis that the defendant was aware of the risks and was capable of assessing them. It was a matter for the defendant whether she chose to exchange contracts on the agreed terms or not.
Although the claimant had been negligent in failing specifically to inform the defendant of the price paid by the vendor for the property, the defendant had suffered no loss as a consequence. Although the defendant would have sought to use that matter as a bargaining tool, there was no real or substantial chance, as opposed to a speculative chance, that the vendor would have agreed to any reduction in the price, for the reasons put forward by the claimant.
Robert Moxon Browne QC and Charles Dougherty (instructed by Kennedys) appeared for the claimant; Andrew Onslow QC (instructed by Watson Farley & Williams) appeared for the defendant.
Sally Dobson, barrister
