Oxford Property Investments Limited & Anor. v Peter Lynn & Partners

On summary judgment and amendment applications, a claim must have a realistic prospect of success, supported by a coherent and properly particularised case with an evidential foundation. The court may analyse the evidence and reject implausible or internally inconsistent assertions, but must avoid conducting a mini-trial.

A professional adviser’s duty is defined by the purpose of the retainer and the risks against which the duty was assumed. It does not extend to every loss following a breach. Loss from a separate transaction requires a sufficient nexus with the subject matter of the duty. Security for costs may properly be ordered by payment into court where a proposed group-company guarantee provides unreliable protection.

The claim arose from alleged negligence by solicitors instructed in connection with the purchase of a development property. The First Claimant discontinued its claims. The Second Claimant, Sapphire, pursued claims for anticipated profits from the property and sought to amend its pleading to claim profits from two separate developments, Oaklands and Newbury.

The court considered the Defendant’s applications for summary judgment and security for costs, and Sapphire’s application to amend. The central issues were whether the amended claims had a real prospect of success, whether the alleged duty extended to the claimed losses, and whether security should be provided by payment into court or by guarantees from related companies.

1. Amendments concerning Oaklands and Newbury. The application was refused. The proposed case was materially inconsistent with Sapphire’s evidence and earlier pleaded position. The evidence did not establish a realistic prospect of showing that the Defendant had been retained, expressly or impliedly, in relation to those developments. The court was entitled to assess implausibility, inconsistencies and the absence of contemporaneous support.
2. Scope of duty and duty nexus. The purpose of the retainer concerning the Solihull property was to protect Sapphire against the risks of losing the finder’s fee or the opportunity to purchase the property using development finance. There was no sufficient nexus between those risks and the alleged loss of profits from Oaklands and Newbury. A solicitor’s duty does not extend to every kind of harm resulting from breach.
3. Summary judgment on the Solihull property claim. The application was dismissed. Sapphire had a real prospect of establishing that advice on development finance formed part of the retainer and that the duty could extend to the stronger position it would have occupied if finance had been available. Whether finance could have been obtained and whether the claimed profits would have been made required determination at trial.
4. Remoteness. The contractual test applied. The amended Oaklands and Newbury case did not plead the special knowledge needed to establish recoverable loss of profits.
5. Security for costs. Sapphire was ordered to pay £500,000 into court. The proposed guarantees were not shown to provide reliable protection, while the evidence indicated that payment into court would cause limited prejudice and would not stifle the claim.