Stoll & Ors v Wacks Caller (A Firm)

A solicitor advising on a purchase conditional upon planning permission must identify and explain material risks which may elude an intelligent lay client. This includes the risk that a third party may challenge the planning permission by judicial review. The solicitor should consider proposing a contractual mechanism preserving the purchaser’s right to withdraw if such a challenge arises, and should not omit that step without the client’s informed consent.

For causation, the claimant must prove on the balance of probabilities what the claimant would have done. Where the issue concerns a third party’s hypothetical conduct, the claimant must establish a real or substantial chance that the third party would have acted favourably. A purely speculative chance is insufficient.

The claimants purchased a house and land for redevelopment under a contract conditional upon obtaining satisfactory planning permission. Their solicitors amended the planning condition but did not advise about the risk of judicial review or seek to include a contractual “call-in” clause preserving the conditionality of the transaction after a planning permission was granted.

Planning permission was later quashed following a third-party challenge. The claimants alleged that, had a call-in clause been proposed, they would have withdrawn from the purchase and avoided their loss. The issues were whether the solicitors were negligent and, if so, whether the omission caused recoverable loss.

1. The court held that the defendants were in breach of duty. A reasonably competent conveyancing solicitor should have alerted an inexperienced property purchaser to the possibility of a third-party judicial review challenge and considered whether a call-in clause was appropriate. The contract was conditional upon planning permission and was not, as the defendants suggested, effectively an option.

2. The solicitor should not have refrained from proposing such an amendment without first raising the issue with the client and obtaining informed instructions. There was sufficient time before exchange of contracts to address the matter.

3. Applying