Guy v Mace & Jones & Ors

A solicitor acting solely for one party to a conveyancing transaction does not ordinarily owe a duty of care to the other party merely because the transaction is unusual, urgent or supported by inadequate documentation. A duty may arise where the solicitor assumes responsibility towards the other party, but the facts must establish that assumption.

A breach of duty does not found recovery unless it caused legally recoverable loss. A claimant’s informed approval of the transaction, or a deliberate decision to postpone available protective steps, may break the chain of causation. The ex turpi causa defence depends on whether the claimant’s wrongdoing caused the loss, rather than merely occasioned it.

The claimant alleged that three firms of solicitors negligently facilitated the transfer of a large brownfield development site to a company controlled by the financier who had funded its acquisition. He claimed the firms owed him duties of care, breached those duties by handling signed conveyancing documents improperly, and caused the loss of the land and related expenditure.

The court considered separately the roles of Mace & Jones, George Davies Solicitors and Weightmans. It also considered whether the claimant had approved the transfer, whether his delay in registering protective measures caused or contributed to his loss, the value of the land after remediation and planning risks, and whether any claim was barred by ex turpi causa.

1. Mace & Jones. Mr Maharaj acted for TAL, not for the claimant. The claimant had neither retained him nor relied on him, and there was no sufficient evidence that he assumed responsibility towards the claimant. The unusual nature and urgency of the transaction, the absence of direct communication and the failure to verify the consideration did not create a duty of care. The claim against Mace & Jones therefore failed.
2. George Davies. Mr Bibby owed the claimant a duty while retained. It was proper conveyancing practice to obtain pre-signed documents where completion was expected during the claimant’s absence abroad. Supplying copies of the file under a letter bearing the claimant’s signature was not negligent. Although Mr Bibby might arguably have sought the return of the signed TR1 when his retainer ended, that failure was not the effective cause of the subsequent use of the document. The claim against George Davies failed.
3. Weightmans. Weightmans accepted that Mr Hewitt should have recovered the executed TR1 from Mr Luqman and should not have allowed it to remain in his possession. The court also assumed, without finally deciding, that Mr Hewitt breached duty by failing to explain to Mr Maharaj that he was not instructed on the sale and that the consideration remained unresolved. Those breaches did not cause recoverable loss.
4. Causation and loss. The court found that the claimant knew of and approved the transfer, or at the latest knew of it by October or November 2004. He deliberately delayed protective action while pursuing a potential transaction involving the land. That decision, made while receiving legal advice, broke the chain of causation. In any event, the value of the land at the assumed valuation date, after appropriate remediation and planning discounts, was less than the liabilities to be deducted, so no loss was proved.
5. Ex turpi causa. The court tentatively considered that the defence would not have succeeded if the claims had otherwise been established. The alleged dishonest inflation of the stated price would have been merely an occasion for the loss; the effective causes would have been the fraudster’s instructions and the solicitors’ conduct.

The claims were dismissed.

First-instance decision. No appellate history is stated in the judgment for this action.