Father and daughter purchasing flat – Father instructing solicitors – Solicitors dealing exclusively with father and not communicating with daughter – Mortgage granted to daughter on guarantee given by father – Mortgage falling into arrears and mortgagee obtaining possession – Daughter alleging solicitors failing to advise her – Whether solicitors owed daughter duty of care – Whether solicitors had satisfied any duty of care owed – Claim dismissed
The plaintiff was a clinical medical student aged 22 years. Her father, S, wanted to buy a property in which the plaintiff and other students could lodge and which could be a London home for S and his wife. A suitable flat at 31 Kennington Palace Court, Sandcroft Street, London SE11, was found. S instructed the defendant firm of solicitors whom he had previously instructed and who therefore knew something of his financial worth and business background. The defendant was informed that S would be providing £20,000 and the balance by way of mortgage. The defendant sent S the purchaser’s part of the contract to sign in readiness for exchange, which S duly returned with the deposit. The Halifax Building Society made an offer to the plaintiff of an advance for £123,500, which was to be guaranteed by S.
In November 1989 contracts for the purchase of the leasehold were exchanged. The defendant sent a letter to S, enclosing a copy of the Halifax offer, which informed S that ‘there will be the transfer and mortgage forms for your daughter to sign and the Halifax guarantee for you to sign’. In anticipation of completion the plaintiff signed an authority for the defendant to release £13,000 from the advance. The defendant then wrote to S enclosing the transfer and mortgage deeds and the Halifax guarantee together with the Mortgage Conditions 1988, asking S to forward them to the plaintiff and ensure that the transfer and the mortgage deed were signed by the plaintiff. Completion took place and the plaintiff was registered as proprietor. The defendant had dealt exclusively with S, and had sought neither to communicate directly with the plaintiff nor to give her any advice. The mortgage account fell into arrears, and the Halifax obtained possession. The plaintiff issued proceedings and claimed that, although the defendant’s contract of retainer had been with S, the defendant had owed her a duty of care which it had breached in allowing her to execute the mortgage without first having advised her as to its legal effect.
Held The plaintiff’s claim was dismissed.
1.There had been a special relationship between the plaintiff and the defendant and therefore the defendant had owed a tortious duty of care to the plaintiff even though she was not its client: see White v Jones [1995] 2 AC 207.
2. However, since the contract had been between S and the defendant, it had not entailed taking the plaintiff on as a client for the purpose of giving her advice. Therefore the duty of care owed to the plaintiff was restricted to the exercise of reasonable skill and care in carrying out the transaction according to S’s instructions. The defendant had satisfied that duty by securing a good marketable title to the flat, and the plaintiff’s registration as proprietor thereof. Accordingly, the defendant had not been in breach of the duty it had owed to the plaintiff.
James Ramsden (instructed by Clifford Chance) appeared for the plaintiff; Jane Mishcon (instructed by Bond Pearce, of Plymouth) appeared for the defendants
