Hughmans (A Firm) v Dunhill

On summary judgment, the court must not conduct a mini-trial. Where central issues have a real prospect of success and require disclosure, oral evidence or cross-examination, they should proceed to trial.

The scope of a solicitor’s retainer and the existence of a duty of care are fact-dependent. Plausible counterfactuals and loss-of-chance claims are not defeated merely because loss cannot yet be quantified. A later consent order does not necessarily break the chain of causation.

An allegation of breach of trust against a non-party should not ordinarily be determined on a summary judgment application.

Hughmans claimed solicitors’ fees of £179,666.68 from Alexandra Dunhill. Ms Dunhill counterclaimed for negligence, misrepresentation and breach of fiduciary duty, and sought to amend the proceedings to add her minor son as a counterclaimant.

Mr Justice Arnold granted summary judgment for Hughmans, dismissed the counterclaim, refused the proposed amendment and dismissed Ms Dunhill’s application for summary judgment on seven issues: [2015] EWHC 716 (Ch). The appeal concerned whether the Judge had improperly conducted a mini-trial and whether Ms Dunhill’s own summary judgment application had been correctly refused.

The Court of Appeal allowed the appeal in relation to summary judgment for Hughmans on the claim and counterclaim, and in relation to the refusal to amend the Defence and Counterclaim. It dismissed the appeal against the refusal of Ms Dunhill’s application for summary judgment.

1. Summary judgment. The Judge had correctly cited the principles summarised by Lewison J in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. He nevertheless conducted a mini-trial on matters central to the Defence and Counterclaim. Those matters had a real prospect of success and required disclosure, oral evidence and cross-examination.
2. Retainer and duties. The extent of a solicitor’s retainer and the existence of a duty of care are acutely fact-dependent. It was arguable that Hughmans’ retainer extended beyond the variation application, including advice concerning Mr Turner’s cross-application and possible non-disclosure. The Judge was wrong to conclude that there was no real prospect that Hughmans owed duties to the children, or at least a duty to advise Ms Dunhill about their rights. The children’s interests in the settled funds, and their financial position’s connection with Ms Dunhill’s ancillary-relief proceedings, made the issue unsuitable for summary determination.
3. Causation and loss. Ms Dunhill’s counterfactuals, including a possible favourable compromise or a more favourable outcome before DJ Berry, had a real prospect of success. Further investigation might have exposed non-disclosure concerning the Welsh properties and affected the treatment of the 2003 Consent Orders and Mr Turner’s credibility. The inability to quantify overall loss at that stage, particularly where loss of a chance was alleged, was not fatal. The 2014 Consent Order did not break the chain of causation, and Hughmans did not allege that it represented a failure to mitigate loss.
4. Ms Dunhill’s application. It was unnecessary to make formal declarations on the first three issues. Issue (iv), alleging breach of trust by Mr Turner, was inappropriate for determination because he was not a party and had not participated. Issues (iv) and (v) were properly left with the other issues, while issues (vi) and (vii) were strenuously disputed. The Judge’s decisions were within the range of a proper exercise of discretion.

• Court of Appeal (Civil Division). The appeal was allowed insofar as the High Court had granted summary judgment for Hughmans on the claim and counterclaim and refused the amendment. The appeal was dismissed insofar as it challenged the refusal of Ms Dunhill’s application for summary judgment.
• High Court (Chancery Division). Mr Justice Arnold granted summary judgment for Hughmans, dismissed the counterclaim, refused the proposed amendment and dismissed Ms Dunhill’s summary judgment application: [2015] EWHC 716 (Ch).