Morshead Mansions Ltd v PJD Langford & Ors

On a renewed application for permission to appeal, permission should be refused where the proposed claims have no real or reasonable prospect of success. An allegation of deliberate concealment does not overcome a limitation difficulty without significant supporting material. A claim that a solicitor failed to advise on an obvious matter already known to the client may have no reasonable prospect of establishing the alleged duty. Advice that a subcommittee could be formed does not establish a viable claim without evidence that the subcommittee sat. Describing the threshold as “not arguable” rather than “real prospect” does not affect the outcome where the claim fails under either formulation.

This was a renewed application by Morshead Mansions Ltd for permission to appeal a decision of Mr Justice Crane in the Chancery Division dated 15 August 2003. Permission had previously been refused on paper by Lord Justice Jonathan Parker.

The proposed claims were brought against solicitors and company directors. One alleged breach of fiduciary duty and deliberate concealment of a mistake concerning who should send a letter. The other alleged that a solicitor advised certain directors that they could form a subcommittee and pursue only some tenants for service charges. The central issues were whether either claim had a real prospect of success and whether the judge had applied the wrong permission threshold.

Permission to appeal refused.

1. Fiduciary-duty claim. Although Mr Justice Crane was prepared to accept that a fiduciary duty existed, and Lord Justice Jacob accepted that proposition with considerable reservations, there was no significant material suggesting any course of deliberate concealment of the solicitors’ mistake. The proposed claim therefore could not overcome the limitation difficulty. The court also considered that there was no reasonable prospect of establishing a duty to advise the client who should send the letter. The client knew the position, which was obvious and did not require legal advice.
2. Subcommittee claim. The evidence showed, at most, that the solicitor advised that a subcommittee could be formed. There was no evidence that any subcommittee ever sat. A significant limitation defence also applied. The claim consequently had no real prospect of success.
3. Permission threshold. The submission that the judge had applied a test of whether the claim was “not arguable”, instead of whether it had a real prospect of success, did not assist the applicant. The former formulation might have been more stringent in the applicant’s favour, and the distinction made no difference on the facts. There was no reasonable prospect of success.

Order: Permission to appeal refused.

1. Court of Appeal (Civil Division): On 29 March 2004, Lord Justice Jacob refused the renewed application for permission to appeal: [2004] EWCA Civ 430.
2. High Court, Chancery Division: Mr Justice Crane gave the decision challenged on 15 August 2003. Permission had previously been refused on paper by Lord Justice Jonathan Parker.