Mason v Richard Freeman & Co (a firm)

A solicitor’s retainer is defined by the instructions actually given, interpreted objectively against the factual background known to the parties. A solicitor does not assume responsibility to protect a third party’s beneficial interest merely because a proposed registration is said to be acceptable, particularly where the third party is not the client and no sufficiently clear instructions are given by the client. An instruction that, after completion, there be no remaining liability in respect of a property may require redemption of the client’s mortgage only. It does not ordinarily impose an obligation to discharge every personal or trust liability connected with the property, especially where the sale proceeds cannot meet all claims and the solicitor was not expected to supply the shortfall.

Mr Mason brought a professional-negligence claim against his solicitors, Richard Freeman & Co, seeking an indemnity for £200,000 paid to Mr Kjellin under a consent order settling claims for breach of contract and trust. The claims arose from the purchase and later sale of a flat in which Mr Kjellin asserted a 50 per cent beneficial interest.

His case was that the solicitors had failed to protect Mr Kjellin’s interest by registration and had failed to comply with an instruction that no liability relating to the property should remain after completion. His claim was dismissed by the High Court, where His Honour Judge Richard Seymour QC held that neither alleged duty existed: [2009] EWHC 1099 (QB). The appeal concerned whether those conclusions were wrong.

Rimer LJ delivered the leading judgment. Sir Scott Baker and Lord Justice Wall agreed. The appeal was dismissed unanimously.

1. First alleged breach. The judge had accepted Mr Kjellin as an honest and reliable witness but had not fully explained why the closing words of his witness statement did not require a finding that instructions to register a charge had been given. That omission did not justify substituting a different finding or ordering a retrial. The judge had heard the oral evidence, and there was no transcript. The Court of Appeal could not conclude that his assessment of the evidence as a whole was unsound.
2. The evidence did not establish that Mr Mazzier had assumed a duty to register a charge protecting Mr Kjellin’s interest. Mr Kjellin was not Mr Mazzier’s client. The account of the telephone conversation did not clearly establish that an instruction had been passed to, or accepted by, Mr Mazzier. It was improbable that a solicitor would accept instructions from an unknown non-client through a telephone conversation without obtaining the relevant agreement and specific instructions. Mr Mazzier therefore assumed no duty, either to Mr Kjellin or to Mr Mason, to effect the registration.
3. Second alleged breach. The meaning of the instruction that there be no remaining liability in respect of the property after completion had to be assessed objectively against the background known to the parties. That background included the Capital mortgage, for which Mr Mason was sole mortgagor. The reasonable interpretation was that Mr Mason sought release from further obligations under that mortgage.
4. The proposed wider interpretation, requiring the solicitors to ensure satisfaction of every liability connected with the property, including Mr Mason’s obligations to Mr Kjellin, was untenable. The sale proceeds could not meet both the mortgage redemption figure and Mr Kjellin’s eventual claim, and there was no suggestion that the solicitors were expected to fund the shortfall. The instruction imposed no duty to ensure that Mr Mason was discharged from his obligations to Mr Kjellin.
5. The Court did not address the respondent’s alternative argument that the claim was tainted with turpitude, since the alleged duties failed. The appeal was dismissed.

1. Court of Appeal (Civil Division): dismissed the appeal unanimously.
2. High Court of Justice, Queen’s Bench Division: His Honour Judge Richard Seymour QC, sitting as a High Court judge, dismissed Mr Mason’s professional-negligence claim on 15 June 2009: [2009] EWHC 1099 (QB).