The decision in Orientfield Holdings Ltd v Bird v Bird LLP [2017] EWCA Civ 348; [2017] PLSCS 104 reminds us that reporting to clients requires attention to detail, skill and judgment. The company had sued its solicitors for failing to advise on the results of a Plansearch Plus report obtained in connection with the acquisition of a residential property for £25m. Plansearch Plus reports contain useful information about planning activities in the area around a property and deal with a wider geographic area than would ordinarily be covered by a local search.
The seller had opposed the redevelopment on two occasions, but did not reply to a pre-contract enquiry asking if the seller was “aware of any proposals to develop property or land nearby, or of any proposals to make alterations to buildings nearby”. Instead the seller advised the buyer to “make your own inquiries”. In subsequent correspondence with the buyer’s solicitor, the seller’s solicitor suggested that a Plansearch report would reveal “all the planning applications in the area”.
The resulting report revealed 251 planning applications of a residential and non-residential nature within 300 metres of the property. The buyer’s solicitor took the view that nothing needed to be brought to the buyer’s attention – and reported to his client accordingly. But, when the buyer discovered that a nearby school was to be redeveloped into a new six-storey academy, it rescinded the contract, and settled proceedings against the seller on terms that the deposit and interest earned on it were to be divided equally between the parties. Were the buyer’s solicitors liable for the remainder of the buyer’s losses? The trial judge ruled that they were.
The buyer’s solicitors appealed, arguing that the buyer had not provided any specific instructions as regards its requirements for the property. Therefore, they were not in a position to identify any specific planning application as more or less important to the buyer. In addition, simply summarising the report would not have revealed the significance of the development. But the Court of Appeal upheld the first instance decision.
The court did not say that Plansearch reports are required in every case. But, having requisitioned the report, the law firm was under a duty to explain the results to the buyer. The trial judge ruled that “a proper summary would have highlighted the development and explained its potential significance (ie it would not merely have repeated basic information from the Plansearch report); the respondent would have then instructed the appellant to look into the development; and thus, the details of the development would thereby have emerged”. The Court of Appeal was unable to find any basis for a successful appeal and agreed that the buyer would have withdrawn from the transaction, had it been properly informed.
The ruling that it will not suffice to repeat basic information from a data provider’s report indicates that reports on title need to include some “value added” commentary to help a buyer understand why information may be significant (especially if a seller’s replies to enquiries are unsatisfactory). Solicitors should also explain what further information may be available and invite their clients to decide what, if anything, requires further investigation to assuage any concerns that they might have.
Allyson Colby, property law consultant
