Firm sees off £100k CoA claim after admitting negligence

Topics: Conveyancing

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A law firm that admitted negligence has fought off a £100,000 claim after the court decided no harm was caused by its mistake.

In Bacciottini & Anor v Gotelee and Goldsmith, the Court of Appeal today agreed to restrict damages to £250 after finding property purchasers had ultimately suffered no loss by rectifying the mistake before litigation had taken place.

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Ipswich firm Gotelee and Goldsmith had been taken to the Court of Appeal by former clients over the fallout from its handling of a property purchase.

The buyers had purchased a rural property in Suffolk in 2007 for £600,000 and took out a £495,000 mortgage, with a view to upgrading the site for resale.

But within a year it emerged that planning consent from 1974 had placed a restriction dictating that the building could be used only for residential purposes in conjunction with the occupation and ownership of another nearby site, which had been sold off independently some years earlier.

When made aware of the restriction, the buyers had applied for it to be lifted, and, having paid a £250 application fee, were granted approval in 2009.

But in the meantime the buyers had also issued a claim form in the Chancery Division, asserting that the property's value with the restriction was no more than £300,000.

At trial the judge awarded damages of just £250, to cover the cost of the application to the local authority, but nothing more.

The claimant took the case to the Court of Appeal for a two-day hearing in January, arguing that the judge should have awarded a sum of £100,000 to cover the difference between the value of the property in May 2007 without the restriction, and the value of the property at that date with the restriction.

The claimants said they would not have purchased the property if they had received proper advice on the restriction. 

On appeal, their lawyers conceded that this was a case of ‘capital loss, not ongoing loss’ and maintained that the claimants were still entitled to damages for the difference in value of the property.

Gotelee and Goldsmith said the claimants had already got what they wanted through the lifting of the restriction, and to award any more would be to overcompensate them.

Lord Justice Davis agreed there were no grounds in the appeal to overturn the trial judge’s ruling, saying there was nothing remaining that required compensation.

As the firm’s lawyers had conceded, news about the restriction must have been a ‘tremendous shock’, but ultimately this was a case of ‘all’s well that ends well’ and there was no occasion for pursuing a claim.

Davis added: ‘By reason of the subsequent removal of the restriction the appellants have suffered no loss and there is nothing in respect of which they require to be compensated. That is the nub of it.’

 

Readers' comments (26)

  • Do the claimants now have a case against their new solicitors for suggesting the result might be otherwise, assuming they did of course. Secondly, could they go back to Gotelee and Goldsmith to claim their wasted costs? And if they were to advise them, negligently, that they could...

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  • No, because their current solicitors gave perfectly competent advice, to the effect that their was a good argument (based on Gardner v Marsh & Parsons) that the subsequent release of the planning restriction was res inter alios acta.

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  • And because, Anon 7.38 "they're all in this together".

    But, Anon 7.37, "their perfectly competent advice" was wrong... Doesn't that matter?

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  • No, it doesn't matter, because it was perfectly competent advice. Do you think that every solicitor who loses a case at trial is negligent? It works like this. Client comes in. You tell him that negligence is clear, but quantum is problematic. You explain that he can argue that he is entitled to the diminution in value (Gardner v Marsh & Parsons), but warn him that the court may not accept that argument and may decide that his loss is limited to the cost of removing the restriction (£250). He tells you to go ahead and argue for the diminution in value. He loses. Your arse is covered, because you gave competent advice.

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  • Thanks for that, Anon., and let's just hope that the second firm of solicitors gave the impeccable advice you would have done... and recorded it in writing.

    And I wonder how the costs were awarded?

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  • [Sigh]

    Costs follow the event. The claimant will have been awarded his costs on the standard basis. However, the operation of Part 36 may mean that the usual rule is displaced if, for example, the defendant made a settlement offer during proceedings.

    Would you like somebody to explain Part 36?

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  • As to costs, it is set out in paragraph 3 of the judgment:-

    "Since the Judge ordered the appellants to pay the great amount of the respondent's costs it may be that this appeal has in reality become as much about costs as about damages. At all events, we were informed that previous attempts at mediation were unsuccessful. "

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  • Don't forget DC it's all the solicitors' fault, racking up huge fees by giving competent advice then acting on instructions.

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  • Seems to be a case where the loss was in effect a potential one never realized (because they never sold up) and subsisted only so long as the restriction was in placed - once this was gone what loss remained? I can't see that there'd have been any quantifiable diminution beyond that point so the decision on that basis seems sound. The situation would obviously be different in a case where, for instance, a surveyor or solicitor failed to find or notify a client of subsidence.

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  • I have no doubt that Dyson will use this as a springboard to impose meagre fixed fees for all chancery matters with a value of less than £250,000.

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