Seema Ashraf v Lester Dominic Solicitors & Ors

The Estate of Mr Syed Ul Haq sued Rees Page in negligence alleging the firm owed a duty of care to the registered proprietor (Mr Ul Haq) when acting for the Bank in respect of a replacement transfer and charge. The Court of Appeal accepted the established principle that a solicitor generally owes duties only to their client and will only owe a duty to a third party in exceptional categories (for example where the solicitor steps outside their role or assumes responsibility, or where the retainer is to confer a benefit on a third party).

The lower courts were held to have been correct in rejecting the Estate's pleaded factual allegations that Mr Ul Haq had told the Bank's solicitor in 2010 that he had not signed the transfer: those pleaded factual assertions had no real prospect of being proved on the evidence available and could properly be dismissed on summary judgment. However, the Court of Appeal found an arguable novel point of law (not previously advanced in that precise form below) that, in completing and lodging Land Registry form AP1, the solicitor for the applicant may have stepped outside his purely client-facing role by giving confirmations in respect of other parties and thereby assumed a responsibility that could give rise to a duty of care. On that limited point the court allowed the appeal and set aside summary judgment so the claim may proceed to trial on that issue.

Background and parties:

• The claimant-appellant, Mrs Seema Ashraf, is the executrix of Mr Syed Ul Haq and pursued a negligence claim on behalf of his estate against Rees Page (the 7th defendant), a firm of solicitors instructed by the Bank of Scotland (the Bank/HBOS).
• The claim arises from a sequence of fraudulent events in relation to the sale of 91 Argyle Road in 2008, including misappropriation of completion funds by FLP's office manager, the lodging of an allegedly forged transfer (TR1), and eventual registration of the purchaser and the Bank's charge.

Procedural history:

• Rees Page obtained summary judgment from Deputy Master Lloyd (13 December 2019) on the basis that no duty of care was owed to Mr Ul Haq.
• The Estate appealed to the High Court; Edwin Johnson J dismissed the Estate’s appeal ([2022] EWHC 621 (Ch), 21 March 2022).
• The Estate obtained permission to appeal to the Court of Appeal limited to the summary judgment in favour of Rees Page; the Court of Appeal delivered judgment on 13 January 2023.

Nature of the claim and issues:

• Nature of claim: a claim in tort (negligence) that Rees Page owed a duty to Mr Ul Haq to take reasonable care to verify that the replacement transfer had been properly executed and witnessed.
• Principal issues: (i) whether pleaded factual disputes (notably alleged conversations in 2010 and 2011) prevented summary judgment; (ii) whether Rees Page as solicitor for the Bank owed any duty of care to Mr Ul Haq as a non-client; and (iii) whether completing and lodging the Land Registry AP1 form could amount to stepping outside the solicitor's client-only role so as to give rise to an assumption of responsibility and a duty to third parties.

Court’s reasoning and conclusion:

1. Factual disputes: the Court agreed with Edwin Johnson J that the Estate’s pleaded factual allegations (that Mr Ul Haq had told the Bank's solicitor in spring 2010 that he had not signed the transfer and had refused to attend Lester Dominic) had no real prospect of being established at trial. Contemporaneous documents and the solicitor’s coherent file notes undermined those allegations; there was no plausible evidential basis that further material would be produced on disclosure to rescue them.
2. Duty of care in principle: the Court restated the general rule that a solicitor acting for a client owes duties primarily to that client and not to opponents or third parties, subject to recognised exceptions (for example White v Jones style beneficiary duties, reliance/representations, and Al-Kandari type cases where the solicitor steps outside the client role and accepts responsibility).
3. Application of precedent: the Court considered P & P Property Ltd v Owen, White & Catlin LLP and related authorities and concluded that, up to the point before lodging the AP1, the circumstances were not sufficient to impose a duty of care to Mr Ul Haq.
4. AP1 point: the Court identified an arguable point that completing Box 13 of the Land Registry AP1 form entailed giving confirmations in respect of other parties and might be done for their benefit; in doing so the solicitor may step outside his purely client-facing role and assume responsibility. The Court regarded that argument as sufficiently arguable to require trial, noting that the point had not been fully developed or pleaded below in that precise way and that trial would determine the facts and any amendment issues.

Outcome: summary judgment in favour of Rees Page was set aside to the limited extent that the Estate may pursue at trial the contention that the AP1 confirmations created an assumption of responsibility and so a duty of care; the remainder of the appeal (including the contested factual assertions) was dismissed.

Appeal allowed in part. The Court dismissed the Estate’s factual pleaded allegations (those allegations had no real prospect of success on the evidence) and upheld the conclusions of the lower courts that, on the facts and law up to the point of lodging documents, there was no duty of care owed by Rees Page to Mr Ul Haq. However, the Court held that it was arguable that, by completing and lodging Land Registry form AP1 (Box 13 confirmations), the solicitor may have stepped outside his role for his client and assumed responsibility towards other parties, potentially giving rise to a duty of care; summary judgment was therefore set aside on that limited point so the matter may go to trial to determine the factual and legal issues arising from the AP1 issue.

Deputy Master Lloyd granted summary judgment for Rees Page (13 December 2019). The Estate’s appeal was dismissed by Edwin Johnson J in the High Court ([2022] EWHC 621 (Ch), 21 March 2022). The Estate appealed to the Court of Appeal which allowed the appeal in part ([2023] EWCA Civ 4, 13 January 2023) and set aside summary judgment limited to the question whether completing and lodging Land Registry form AP1 gave rise to an assumption of responsibility and a duty of care to the registered proprietor.