Davies & Ors v Jones & Anor

Liability for retention monies paid through another party’s solicitors required proof that those solicitors acted for the alleged debtor, or that the debtor retained control over the money. Solicitors expressly acting for a substitute purchaser were not shown to be agents for the original purchaser merely because the original purchaser’s solicitors authorised direct payment to the vendors. A Quistclose trust claim had no real prospect of success where no condition was imposed on the particular monies returned. Permission to appeal against summary judgment was refused.

The appellants, a private pension fund, sold land and garage premises to the first respondent under an agreement retaining £100,000 for outstanding works. On completion, the money was sent to solicitors acting for the second respondent, LIDL, after the transfer was made to LIDL. The High Court granted leave to amend but entered summary judgment for the first respondent. The appellants alleged breach of contract and trust, including a Quistclose trust. The central issue was whether the receiving solicitors acted for the first respondent, or left him with control over the retention monies.

The application concerned the order for summary judgment against Mr Jones. The order granting leave to amend was not challenged.

1. The pleaded Quistclose trust claim had no real prospect of success. The relevant document, including its manuscript amendment, did not impose any condition on the particular monies returned.
2. The contractual and trust claims against Mr Jones depended on showing that Bevan Ashford received or controlled the retention monies on his behalf, or otherwise acted so that he retained power of control over them.
3. Bevan Ashford’s letter stated that it acted for LIDL. The authority from Mr Jones’s solicitors extended only to arranging payment of the completion monies directly to the appellants. It did not establish that Bevan Ashford acted as Mr Jones’s agent or that he controlled the retention monies.
4. The evidence that the appellants’ solicitor understood that the retention would later be repaid did not identify a precise representation made on behalf of Mr Jones.

There was therefore no realistic prospect of demonstrating that Mr Jones was responsible for the £100,000 or that the judge had erred. Permission to appeal was refused.

• Court of Appeal (Civil Division): On 4 June 2008, the application for permission to appeal was refused: [2008] EWCA Civ 764.
• High Court, Chancery Division, Carmarthen District Registry: Wyn Williams J granted leave to amend the particulars of claim and awarded summary judgment to the first defendant on 7 January 2008.