Rozzell v Speakman & Co

A solicitor advising a co-owner about a charge over the family home must explain the practical consequences of signing and not signing, including the effect on the co-owner’s financial interest. The advice need not use particular colloquial words if its substance and implications are clear. An appellate court may interfere with a trial judge’s factual conclusion where the conclusion cannot be reconciled with accepted written evidence and the appellate court is equally well placed to assess that evidence.

The claimant sued her former solicitors for negligence arising from advice given before she signed a second charge securing her husband’s bank overdraft against their jointly owned home. The Chester County Court accepted that she had not been expressly told that, if she did not sign, her financial interest would be preserved even if her husband became bankrupt, and awarded damages of £22,500.

The defendants appealed, contending that the judge’s finding was inconsistent with the solicitor’s accepted evidence, the attendance notes and concessions made by the claimant. The central issue was whether the necessary advice had in fact been given.

1. Appeal allowed; claim dismissed. The court accepted that the defendants would have been negligent if they had failed to explain that, without the charge, the bank could enforce only against the husband’s interest, whereas signing exposed both interests to enforcement.
2. The evidence showed that the claimant understood that signing would make her liable for her husband’s debt. The first attendance note recorded that the charge was for his indebtedness, not hers. The solicitor’s evidence stated that she had explained the different consequences of signing and not signing. At the second meeting she recapped the alternatives and the action that could be taken against their respective interests.
3. The attendance-note reference that the bank could eventually get the wife out of the house did not make the advice misleading. The notes were a shorthand record, not a verbatim transcript, and the advice was accurate on the issue which principally concerned the claimant: the risk of losing the home.
4. The duty did not require the solicitor to use the particular expression that the claimant’s interest would be preserved or that there would be a pot of money after sale. The clear implication of explaining that enforcement without the charge was limited to the husband’s interest was sufficient.
5. Although appellate courts normally defer to findings based on witness assessment, this was a case where the judge’s conclusion depended on written material and was inconsistent with accepted evidence. The Court of Appeal was therefore as well placed as the trial judge to determine the issue.
6. The claimant was ordered to pay the defendants’ costs of the action and appeal, subject to the stated costs directions.

• Court of Appeal (Civil Division): allowed the defendants’ appeal from the Chester County Court and dismissed the claim.
• Chester County Court: HH Judge Barnett awarded the claimant £22,500 against her former solicitors.