Mansion Estates Ltd v Hayre & Co (a firm)

A solicitor’s conveyancing retainer includes advising on title matters that may foreseeably restrict the use or enjoyment of retained land and calculating Stamp Duty Land Tax accurately. The civil standard of proof remains the balance of probabilities, regardless of the seriousness of an allegation or its consequences. Seriousness affects the assessment of inherent probabilities, not the standard itself. Witness credibility must be assessed by considering the evidence as a whole, including contemporaneous documents, independent evidence, consistency and demeanour. Where a solicitor’s negligence causes the wrong plan to be attached to a transfer, recoverable loss may include the resulting diminution in value. The Stamp Duty Land Tax treatment of linked transactions may depend on substantial performance, including payment and delivery of possession.

Mansion Estates Ltd claimed damages from its conveyancing solicitors, Hayre & Co, in respect of two alleged breaches of retainer. First, it alleged that the wrong plan was attached to a transfer of 60 Toller Lane, thereby restricting access to and diminishing the value of land retained by Mansion Estates. Secondly, it alleged that the solicitors wrongly calculated Stamp Duty Land Tax on the acquisition of the whole site, failing to account for the simultaneous subsale of part to Narwar Khan. The principal factual issues were which plan had been supplied, whether advice about the consequences of the subsale had been given, when the transactions were substantially performed, and whether the alleged breaches caused recoverable loss.

1. Liability on the Land Claim. The retainer extended to advising on title matters that might blight or limit the reasonably foreseeable use or enjoyment of the property, and to ensuring that only the correct amount of Stamp Duty Land Tax was paid. The court preferred the claimant’s evidence and found that the signed plan supplied by Raj Khan was replaced by a different plan when the transfer was prepared. The solicitor did not advise the claimant of the relevant access problems. The attendance note relied upon by the defendant materially misrepresented the advice given.
2. Proof and credibility. Applying Re B (Children) [2008] UKHL 35, there is one civil standard of proof. The seriousness of an allegation does not impose a higher standard, although inherent probabilities must be assessed in context. The court assessed the witnesses by reference to consistency, contemporaneous records, independent evidence, inherent probability and demeanour, with particular weight given to documentary evidence.
3. Causation and loss. Had the correct plan been attached, the retained land would not have been blighted. Alternatively, the prospective purchaser of 60 Toller Lane would probably have agreed before completion to arrangements preserving access. The recoverable loss was £211,500 for diminution in value and £470 for attempted cure. No further wasted expenditure was established, and contributory negligence did not arise on the facts.
4. SDLT Claim. The statutory concession under section 45 of the Finance Act 2003 was available because the purchase and subsale were substantially performed at the same time. Payment of the purchase monies and delivery of the keys were sufficient substantial performance. In any event, the solicitor should have advised that separate representation could have enabled the concession to be used. The claimant recovered the £18,000 overpayment.
5. Order. Judgment was entered for the claimant for £229,970.