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.

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.’

 

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