Asiansky Television Plc & Anor v Bayer-Rosin

A conveyancing solicitor must understand and explain the legal effect of compulsory purchase notices affecting land. Once a Notice to Treat and Notice of Entry have implemented a compulsory purchase order, the acquiring authority may have possession rights over the affected land, leaving the client without vacant possession and unable to rely on the selling local authority to resolve the position. The solicitor must give a clear warning and enable an informed decision. Causation in negligent advice requires a finding about what the client would probably have done if properly advised. Where the trial judge materially underestimates the breach and the appellate court cannot safely make that counterfactual finding, the issue should be retried.

The appellants’ companies purchased a contaminated site from Brent Council for a proposed Asian Centre. The respondent solicitors acted on the purchase. Compulsory purchase orders affected approximately 40 per cent of the site, and Notices to Treat and Notice of Entry had been served. The appellants alleged that the solicitors failed to explain the legal consequences and the inadequacy of a Department of Transport letter of comfort. Hunt J found a limited breach, awarded nominal damages for breach of contract, and otherwise dismissed the claim. The appeal concerned the extent of the solicitors’ breach and whether proper advice would have caused the appellants not to exchange contracts.

1. Appeal and breach. The appeal was allowed and the order below was set aside. Laws LJ delivered the judgment, with Arden LJ and Simon Brown LJ agreeing. The solicitors’ admitted failure to explain the letter of comfort understated a much wider professional negligence.
2. Effect of the compulsory purchase notices. Service of a Notice to Treat creates a relationship analogous to vendor and purchaser. A Notice of Entry entitles the acquiring authority to obtain possession and exclude the owner, occupier or other persons. Once possession has been taken, withdrawal of the Notice to Treat is constrained by the landowner’s right to compensation. The expression that a compulsory purchase order has been implemented was treated as appeal terminology rather than a statutory term of art. The court referred to Holloway v Dover Corporation [1960] 1 WLR 604 for the quasi-contractual effect of a Notice to Treat.
3. Solicitor’s duty. From at least receipt of the relevant documents on 20 August 1992, a competent conveyancing solicitor should have appreciated that the Department of Transport had rights over about 40 per cent of the site, including possession rights without limit of time and the ability to exclude the purchaser. The solicitor should also have appreciated that Brent Council was legally unable to control the Department’s use of those rights. The client should have been plainly warned that vacant possession would not be obtained and enabled to decide with full knowledge of the position. The report on title and treatment of the letter of comfort failed to meet that duty.
4. Causation and reliance. Causation required a factual assessment of what the client would probably have done if properly advised. The Court of Appeal could not safely make that finding because the trial judge had materially underestimated the breach and the client had not been distinctly cross-examined on the relevant counterfactual. The finding that the client relied on Brent Council to resolve the problem lacked a sufficient evidential basis, since the Council had no voice in the Department’s use of the implemented orders.
5. Change of case. The implementation of the orders had been advanced before the trial judge and had not caused procedural disadvantage requiring exclusion on appeal. A new trial was therefore ordered on causation before a different High Court judge. Costs of the appeal were awarded to the appellants; costs below were reserved.

1. Court of Appeal (Civil Division) allowed the appeal, set aside the order below, and directed a new trial on causation: [2003] EWCA Civ 1405.
2. Queen’s Bench Division, Hunt J, on 13 December 2002, dismissed the claim against the respondent solicitors save for nominal damages for breach of contract.