Mappouras v Waldrons Solicitors

A solicitor’s admitted breach of contract or negligence establishes an entitlement to damages, but recovery depends on loss caused by the breach. Where a statutory restriction meant that a proposed appeal could not succeed, failure to lodge the notice caused no substantial loss. The appropriate award was nominal damages, marking the breach rather than compensating loss. A first-instance order dismissing the claim was therefore inappropriate where judgment for the claimant had already been entered and only damages remained to be assessed. For costs, the court must exercise its discretion afresh where the first-instance decision proceeded on that mistaken basis. A claimant who pursued substantial damages but recovered only a nominal sum could properly be ordered to pay the costs.

The appellant instructed the respondent solicitors to lodge a notice of appeal against a county court possession and money judgment obtained by his landlord. The solicitors admitted that they had failed to do so negligently and in breach of contract. The appellant claimed substantial damages, including loss connected with an alleged right to buy the premises and a proposed business opportunity.

At a hearing to assess damages, HHJ Rundell concluded that County Courts Act 1984, section 77(6)(e), barred an appeal on the relevant questions of fact. He rejected the alleged losses and dismissed the claim, ordering the appellant to pay costs. Permission to appeal was restricted to whether the admitted breach entitled the appellant to nominal damages. The central issues were the effect of the statutory appeal restriction, the proper damages order, and the costs consequences.

Appeal allowed to a limited extent. Lord Justice Kay delivered the judgment, with Sir Swinton Thomas agreeing.

1. The general appeal right in section 77(1) of the County Courts Act 1984 was subject to the specific restriction in section 77(6)(e). In possession proceedings, no appeal lay on a question of fact where, by virtue of section 34(2)(a) of the Housing Act 1985, possession could be granted only if the court was satisfied that it was reasonable to do so. The proposed appeal concerned factual issues about water-rate payments and housing benefit. It therefore could not succeed. The appellant should have received clear advice about that position.
2. The solicitors’ admitted failure to lodge the notice of appeal was a breach of contract and negligence. However, the statutory bar meant that the proposed appeal could not have benefited the appellant, so no substantial loss was caused. The appellant was nevertheless entitled to damages for the breach. As no compensatory loss had been proved, the proper award was nominal damages of £15. The order dismissing the claim was set aside and judgment was entered for that sum.
3. The court declined to enlarge the permission to appeal to challenges concerning the business plan and other factual findings, since those matters were not critical to the outcome.
4. The first-instance costs discretion had been exercised on the erroneous basis that the appellant had failed in the claim. The Court of Appeal therefore exercised the discretion afresh. Although the appellant technically obtained nominal damages, he had pursued substantial damages and achieved no significant part of what he sought. He was ordered to pay the respondents’ costs below, with the £15 nominal damages set off against the costs bill, and £3,000 costs of the appeal.

• Court of Appeal (Civil Division): [2002] EWCA Civ 842. Appeal allowed only to the extent of replacing the dismissal with judgment for nominal damages of £15; the appellant remained liable for costs.
• Walsall County Court: HHJ Rundell rejected the claim for substantial damages and ordered the appellant to pay the respondents’ costs. The Court of Appeal held that the proper order was nominal damages rather than dismissal.