Donsland Limited v Van Hoogstraten & Ors

Permission for a second appeal should be granted where the proposed appeal raises an issue of public importance and legal principle, and has a respectable prospect of success on the facts. The question whether solicitors have implied authority to take limited steps in litigation without express instructions is distinct from the question whether their conduct justified wasted-costs proceedings. A conclusion that solicitors incurred costs without professional dereliction does not determine whether they were entitled, or obliged, to take protective steps within the scope of an implied retainer.

The appellant sought permission for a second appeal from decisions of the Lambeth County Court. The district judge considered an application made on behalf of a company whose sole director had died to be wrong and one that should never have been made. The circuit judge described it as wholly misconceived.

The proposed appeal concerned the circumstances in which solicitors’ implied authority may extend to taking steps in litigation without express instructions, and whether the solicitors’ limited conduct fell within any implied retainer. A related wasted-costs issue was raised conditionally by respondent’s notice.

1. Permission granted. The proposed appeal raised a general issue of public importance and legal principle concerning the extent of solicitors’ implied authority to take steps in litigation without express instructions.
2. The applicant had shown an arguable proposition with a realistic prospect of success. The relevant issue was whether the solicitors’ limited steps, taken to protect the company’s position after the death of its sole director, fell within an implied retainer or amounted to a dereliction of professional duty.
3. The court distinguished between incurring costs where there was no professional dereliction in standing back and the separate question whether continuing in a limited way to protect the company’s position was itself unauthorised or improper.
4. The wasted-costs issue was properly left undecided below because of the decisions on the court’s inherent power. If the appellant succeeded on the implied-authority issue, that question could be raised by respondent’s notice and should then be remitted to the county court for further consideration.
5. The court also indicated that the solicitors’ indemnity fund might have an interest in addressing the issue, and that the Law Society could be informed if the fund did not participate.

Application allowed; costs to be costs in the appeal.

• Court of Appeal (Civil Division): Permission for a second appeal granted from the decisions below; the merits were not determined.
• Lambeth County Court: The district judge considered the application materially made on behalf of the company to be wrong and one that should never have been made.
• Appeal judge: The application was described as wholly misconceived.