Practice and Procedure


PUBLISHED October 27, 2003

A firm of solicitors was liable to pay a former client basic damages and wasted expenses due to the negligent advice it gave on the planning status of a building in the course of purchasing the building for the client.Claim for damages for professional negligence. The claim arose out of the purchase of a leasehold property by the claimant, Grosvenor ('G'), in October 1999. A partner ('JH') in the defendant law firm ('the solicitors') acted for G on the purchase, as well as for the vendor. The property was a listed building that had not been used or occupied since 1991 and had fallen into severe disrepair. Following completion, G submitted a full planning and listed building application to the local authority. It did not seek a change of use to office use because it believed that a 1994 consent for office/residential use had been implemented. However, the local authority informed it that the 1994 consent had not been implemented and had therefore lapsed. G eventually obtained consent to use the building as a house. It made no attempt to re-sell it, due to its failure to obtain consent for office use, and instead intended to refurbish the building and eventually enfranchise it under the Leasehold Reform Act 1967. On 7 July 2002 Peter Smith J gave judgment for G against the solicitors for damages, to be assessed, on the basis that it had failed to advise G of the risk that the 1994 consent had not been duly implemented. G submitted that: (i) had it been so advised, it would not have purchased the lease; and (ii) as a result of JH's negligence, it had overpaid for the lease and incurred wasted expenditure.HELD: (1) JH was negligent in the advice he gave, or failed to give, G on the planning position. Peter Smith J had already finally decided that point and his conclusion was correct. In addition, JH breached duties of care by his advice, or lack thereof, in relation to the provisions of the lease on consent for alterations, the freedom to assign and the significance of the removal of the first floor room from the title. (2) G would not have purchased the lease at all had it been properly advised by the solicitors on the planning position. (3) The basic measure of damages to which G was entitled was the difference between the price it paid for the lease and the true value of the lease in October 1999. In addition, G was entitled to recover any wasted expenditure incurred as a consequence of the solicitors' negligence. (4) The solicitors were liable to pay to G basic damages of ?10,000 and wasted expenses of £181,667.Claim allowed.

[2003] EWHC 2413 (Ch)