Vendor and purchaser — Conveyance — Sale of house — Contract and title deeds sent to vendor’s solicitors at wrong address — Vendor withdrawing from sale — Subsequent sale at lower price — Judge awarding damages and interest representing difference in two prices — Court of Appeal reducing award — Appeal allowed in part
The plaintiff was the owner of Birchfield, Godalming, Surrey. In September 1989 he was anxious to sell it because he had already bought another house, the purchase of which was financed in part with a substantial bridging loan. The defendants were a firm of solicitors who had acted for the plaintiff for a considerable time and had been retained to handle the future sale of Birchfield, but the proposed sale never materialised. At first instance it was held that that was the fault of the defendants, who were negligent in sending the title deeds and draft contract to the vendors’ solicitors at the wrong address using Document Exchange (DX) to which those solicitors did not subscribe. The would-be purchasers of Birchfield found another house to buy almost immediately. Birchfield was subsequently sold at a lower price. The damages awarded represented the difference in the two prices together with the additional interest paid on the bridging loan. The defendants appealed.
Held The appeal was allowed in part.
1. The judge was entitled to find that the DX system was not so widely used by solicitors as the defendants suggested. It was not just a routine transaction where it did not greatly matter if the documents were received one week or the next. It was of crucial importance that they were received as soon as possible. In those circumstances it was incumbent on the solicitors to ensure that the documents were properly addressed. A solicitor was not an insurer. He could not be responsible for the uncovenanted delay in the post, if the package were wrongly directed or lost through the fault of the Royal Mail. But he was not entitled to assume, without any inquiry or check, that the vendor’s solicitor was a subscriber. The court would uphold the judge’s decision that the defendants were negligent.
2. The negligence was the defendants’ conduct in using the wrong method of delivery. It was the negligent conduct on that particular day, which happened to be a Thursday, which caused the loss. It was no defence to say that the same conduct on the following day would not have been actionable as the weekend would have intervened.
3. The proper approach to the question of causation, where the loss depended upon the action of an independent third party in circumstances which ex hypothesi did not arise, was to evaluate the loss of the the plaintiff’s chance that if the documents had arrived, the sale would have gone ahead: see Allied Maples Group Ltd v Simmons & Simmons [1993] EGCS 109 and in the Court of Appeal (unreported May 12 1995).
4. There had been a double contingency: first, that the documents would not have arrived on Friday, even if they had been posted through the mail, as they could have been, on Thursday night. Second, on the evidence, even if they had arrived on Friday morning, the purported purchaser of Birchfield would still have gone to look at an alternative house and decided that he preferred it. Taking both those matters into account, the chance was assessed at 50%. Therefore, the judge’s award of £96,312.43 by way of damages and interest would be reduced by 50%.
Jonathan Marks QC (instructed by Blake Lapthorn, of Fareham) appeared for the appellant; Martin Mann QC and Christopher Gosland (instructed by Tanner Vowles & Cheshire, of Bristol) appeared for the respondent.
