Carter v Gamlens (A Firm)

A claimant seeking damages from a solicitor on a wasted-venture basis must prove affirmatively that proper advice would have caused withdrawal before exchange of contracts. A claimant cannot obtain that form of loss merely by showing that advice was inadequate. The court assesses alleged professional negligence by reference to the client’s actual instructions, knowledge and plans at the relevant time, without hindsight. A solicitor may be negligent in failing to draw attention specifically to an ambiguity in an existing document, but liability still depends on whether adequate advice would have made a material difference. Appellate intervention with findings based on witness credibility is justified only where there are sufficient grounds to reject the trial judge’s assessment.

Mr Carter appealed from the decision of Judge Paul Baker QC after a twelve-day Chancery Division trial concerning alleged solicitor’s negligence in a complex conveyancing transaction involving Harbury Hall and its stud farm. The judge awarded nominal damages for inadequate advice about drainage rights and rights appurtenant to Stables Cottage, but rejected claims concerning a right of pre-emption, a restrictive covenant, the removal of straw or manure, and other property rights.

On appeal, Mr Carter sought substantial damages, including damages on a wasted-venture basis, contending that proper advice would have led him not to proceed with the purchase. The central issues were whether that alternative case had been established, whether the solicitor’s advice about the covenant and pre-emption arrangements was adequate, and whether the evidence justified disturbing the trial judge’s factual findings.

1. Appeal dismissed. The order for nominal damages and the rejection of the remaining claims were upheld. The appellant was ordered to pay the respondent’s costs of the appeal, with detailed assessment. Permission to appeal to the House of Lords was refused.
2. The wasted-venture claim failed because the claimant had to prove affirmatively that correct advice would have caused him to withdraw before exchange of contracts. His pleaded case, witness evidence and closing submissions principally advanced a loss-of-profit or marriage-value case. The trial judge was entitled to find that he would have proceeded despite advice concerning the right of pre-emption and the restrictive covenant.
3. The court accepted that the solicitor’s failure to draw attention specifically to the meaning and scope of the expression “the lower apartment” in the restrictive covenant was an error of judgment. However, the trial judge had accepted her evidence that she gave repeated oral advice that development would require consent or acquisition of the upper apartment, and that the claimant nevertheless expected to persuade the other owner to sell. Those findings provided insufficient grounds for appellate interference.
4. The solicitor was not negligent in failing to secure stronger protection concerning the right of pre-emption. The registration of the right as a Class C (iv) land charge meant there was no practical danger of a sale occurring without notice. The evidence also established that the vendor would not have agreed to undertake litigation against his former friend, and insisting on such a term could have jeopardised the transaction.
5. The dirty-straw claim failed because the instructions given before exchange did not clearly require an express contractual obligation to remove a changing accumulation of manure from an operating stud farm many months later.

• Court of Appeal (Civil Division): [2000] EWCA Civ 137 — appeal dismissed.
• High Court, Chancery Division, Judge Paul Baker QC: following a twelve-day negligence trial, nominal damages were awarded on two heads of claim and the remaining claims were rejected. The citation of the lower-court decision was not stated in the judgment.