Stovold v Barlows (A Firm) [1995] EWCA Civ 34 (13 October 1995)

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN’S BENCH DIVISION
(MR JUSTICE JOWITT)

Royal Courts of Justice
Strand
London WC2
13th October 1995

B e f o r e :

LORD JUSTICE STUART-SMITH
LORD JUSTICE OTTON
and
LORD JUSTICE PILL

____________________

MR STOVOLD
Plaintiff/Respondent
– v –
BARLOWS (A FIRM)
Defendant/Appellant

____________________

(Handed Judgment of John Larking, Chancery House,
Chancery Lane, London WC2. Tel: 0171 404 7464
Official Shorthand Writers to the Court)

____________________

(HANDED HTML VERSION OF JUDGMENT OF JOHN LARKING, CHANCERY HOUSE,
CHANCERY LANE, LONDON WC2. TEL: 0171 404 7464
OFFICIAL SHORTHAND WRITERS TO THE COURT)
HTML VERSION OF JUDGMENT
(AS APPROVED BY THE COURT)
____________________

Crown Copyright ©

LORD JUSTICE STUART-SMITH: This is an appeal from a judgment of Jowitt J. given on 6 October 1993 whereby he awarded the Plaintiff £96,312.43 by way of damages and interest.

The Plaintiff was the owner of a house called Birdfield in Godalming. In September 1989 he was extremely anxious to sell it because he had already bought another house, the purchase of which was financed in part by a very substantial bridging loan. The Defendants are a firm of solicitors who had acted for the Plaintiff for a considerable time and had been so retained to handle the future sale of Birdfield; the partner concerned was a Mr. Campbell. In September 1989 he was instructed by the Plaintiff in the proposed sale of the house to a Mr. Susans. This sale never materialised. The Judge held that was the fault of the Defendants; the house was subsequently sold at a lower price; the damages which he awarded represented the difference in the two prices, together with the additional interest paid on the bridging loan.

In this appeal the Defendants challenge both the Judge’s findings in respect of negligence and causation of loss.

I must set out the facts in some detail. On 11 September 1989 Mr. Susans, introducing himself as`Mr. James’, viewed Birdfield. Next day he made an offer of £450,000, which was refused by the Plaintiff. On 13 September, this time by his real name, Mr. Susans increased the offer to £500,000 on the basis that this was a private sale, that is that no commission was to be paid to the estate agents. Completion was to be within a month. The offer was accepted and the Plaintiff instructed Mr. Campbell and Mr. Stephen Dunn of Dunn & Company, practising in Kingston-upon-Thames, was instructed by Mr. Susans.

The estate agents insisted that they were entitled to their commission, which was agreed at £10,000. Later, on 13 September, Mr. Susans increased his offer to £505,000, which was again accepted, subject to contract, and this was communicated to Mr. Campbell the next day. It is common ground that both vendor and purchaser regarded the matter as of great urgency, so much so that the Plaintiff asked Mr. Campbell to fax the documents and draft contract to Dunn & Company. Mr. Campbell explained that he could not do that; the documents were too big, they would have to be photocopied and divided and that would create a difficulty to Mr. Dunn which would defeat the object of the exercise in sending them quickly.

On 14 September, which was a Thursday, there was an important telephone conversation between Mr. Campbell and Mr. Dunn. The latter asked for the title deeds (it was unregistered land) and draft contract to be sent. Mr. Campbell said he would put them in the post that night.

Nothing was said about sending them through the document exchange (DX system) and Mr. Dunn did not say that he was not a subscriber to the DX system.

Mr. Campbell wrote a letter addressed to Stephen Dunn & Company and gave it to his secretary to forward together with the documents. She, apparently in accordance with the office practice, considered that the documents should be sent by DX, she looked at the DX directory for Kingston-upon-Thames, but not in the alphabetical index, and saw an entry for Dunn & Company. In fact, unbeknown to her, these were the well known tailors and outfitters. But this mistake was not discovered by the Defendants until later the next week, by which time Mr. Susans had withdrawn from the negotiations to purchase Birdfield and was intent on buying another house.

On Friday 15 September, at about 10.50 a.m., Mr. Susans telephoned Mr. Dunn to find out if the documents had arrived. He was told they had not. He told Mr. Dunn to`scream at them’, that is Barlows, if they did not arrive by the second post. The documents did not arrive in the second post; but Mr. Dunn did not telephone the Defendants.

Mr. Susans had been sent by other agents particulars of a house called Stray House. He and his wife went to look at it at 4 p.m. on Friday. He made an offer to buy it for £525,000, either on the Friday or Saturday. That offer was accepted by the owners of Stray House on the Monday and Mr. Dunn was so informed by Mr. Susans and the estate agents. Arrangements were made for the necessary documents for that sale to be sent by courier to Dunn & Company.

That afternoon the Plaintiff telephoned Mr. Susans; he was told that the documents had not arrived from the Defendants but Mr. Susans was still prepared to proceed if they were received the next day and contracts exchanged by 22 September.

On Tuesday 19 September the Plaintiff visited Mr. Campbell. He told him that the documents had not been received by Dunn & Company. Mr. Campbell telephoned Dunn & Company and was told, erroneously, that they had arrived, information that he passed on to Mrs Stovold. Later that morning, at 11.25, Mr. Susans telephoned Mr. Dunn about the purchase of Stray House, the contract for which had arrived in Dunn & Company’s office. He made no mention of Birdfield. Sometime in the afternoon of that day Mr. Dunn telephoned Mr. Campbell to say that the documents relating to Birdfield had not arrived, but that in any event his client, Mr. Susans, had withdrawn from the sale of Birdfield. Contracts for the sale of Stray House were exchanged on Friday 22 September.

At trial the Plaintiff’s primary case was that the Defendants were in breach of contract in refusing to accept the Plaintiffs’ instructions to fax the documents to Mr. Dunn. The Judge rejected this case. He held that there were good reasons not to do so and there was no breach of professional duty. The Plaintiff accepts that finding.

But he held that the Defendants were negligent in the circumstances in sending the documents by DX. He expressed his conclusion in these passages (transcript 9F-H):

“I am afraid I cannot accept Mr. Campbell’s explanation and justification that the DX system was by now so widely used that a solicitor was justified in assuming, when it came to sending important documents whose timely receipt was important, that the recipient would be on the DX system, without making any enquiry of that solicitor, and without having any letter from him on which a DX number was shown.”

He also criticised the secretary. He said (p. L2A-F):

“Bearing in mind that Dunn & Company is a well-known retail outlet, it would have behoved the secretary, when looking in the Kingston section, to pause and ask whether this was the right Dunn & Company. To have asked herself that question would have led her to the general index. Indeed, there is advice in the directory that the alphabetical section is used, though it would be wrong to say that a failure to use the alphabetical section as a first step is necessarily negligent. By no means would it be. But, when there has been no confirmation from Mr. Dunn that he is on document exchange, when he practised under the name of Dunn & Company which, as I have said, is a well-known firm name, when it is apparent that there are, albeit there may not be many, retail outlets who subscribe to the DX system, it would have been appropriate to look at the alphabetical section, from which it would have been seen that there were (I have not counted them with any precision) but upwards of two hundred Dunn & Company’s up and down the land. No sensible person in a solicitor’s office would have thought that there were so many firms of solicitors in the country called Dunn & Company.”

And finally (at pp.l2G-l3B):

“I stress again, these were important documents, time was pressing, and they had to reach their destination quickly. There was a duty of care on the part of Barlows, which is accepted, to see that the documents went by a proper method in order to be received at a proper time by Mr. Dunn, and that must mean at least by the deadline.

I am afraid I have come to the conclusion that the assumption that was made in so important a matter was a negligent assumption to have been made.”

Mr. Marks QC criticises this finding. He submits that at most the conduct of the Defendants was a mere error or slip not amounting to professional negligence, but brought about by a series of mischances, in particular that the name Dunn & Company should appear in the DX directory. He further submits that the Judge’s criticism of the secretary is misplaced and smacks of hindsight. Every judge has to guard against the wisdom of hindsight in deciding whether a defendant’s conduct falls short of what is to be expected of a reasonably competent professional man. The facts have to be looked at through the eyes of those whose conduct is in question. But, for my part, I do not think the Judge fell into this error in this case.

Then it is said by Mr. Marks that the Judge has missed out of his consideration a vital link in Mr. Campbell’s assumption. It was not only that in his experience nearly all solicitors were subscribers to the DX, but he was entitled to assume that if his secretary found the correct name in the directory, this would confirm and strengthen his assumption, and that it was a reasonable one. Although the Judge dealt with the conduct of Mr. Campbell and the secretary separately, I do not think he overlooked this aspect of the matter.

In my judgment, the Judge was entitled to find that the DX system was not so widely used by solicitors as Mr. Campbell suggested. Mr. Dunn’s evidence was that a majority of solicitors were members, but a lot of smaller firms were not. This was not just a routine transaction where it did not greatly matter if the documents were received this week or next. It was of crucial importance, as Mr. Campbell recognised, that they were received by Mr. Dunn as soon as possible. In these circumstances it was incumbent on Mr. Campbell to ensure that the documents were properly addressed. He is not an insurer; he could not be responsible for an uncovenanted delay in the post, if through fault of the Royal Mail the package was wrongly directed or lost. But he was not entitled to assume without any enquiry or check that Mr. Dunn was a subscriber or that the Dunn & Company in the directory was necessarily the correct one.

The Judge supported his conclusion by two lines of reasoning or tests. He said (transcript 10D-11B):

“In my view, one can test it in this way: if Mr. Campbell were right that a solicitor is justified in assuming that, because another firm is a firm of solicitors, it will be a member of the DX system unless there is something to indicate to the contrary, Mr. Dunn, not being a member, would surely have a fair experience of trouble in this way, of documents being sent to him by DX and not arriving because he was not a member of DX. There is no evidence from him that he laboured under any such difficulty. True it was that there had been problems over Royal Mail post addressed to Dunn & Company, which had gone in Kingston-upon-Thames to the wrong Dunn & Company, and that was the reason why he did not subscribe to the DX system, and one can understand why, because the DX system does not require that any address is given for the addressee, only the name and the DX number.

Moreover, if Mr. Dunn had experienced that kind of difficulty, as it seems to me he would, if the assumption Mr. Campbell made was justifiable, it would be astonishing that Mr. Dunn, obviously a competent and careful solicitor, should not have had the practice of stressing, if something was to be sent to him, “I am not a subscriber to DX” to avoid the trouble he would have been bound to experience were Mr. Campbell right.”

In a powerful submission Mr. Marks has criticised this reasoning. He points out that the Judge had overlooked or misunderstood some of the evidence of Mr. Dunn. At p. 3B Mr. Dunn said:

Mr. Justice Jowitt

You say you do not think you had spoken to Mr. Campbell of any particular way of getting the documents to you?

A. I cannot be specific about this particular conversation, but, at the time, I was experiencing difficulties with a confusion over the DX system and my firm and the firm of tailors so that, in that area, if the subject of the DX system was mentioned, I would have explained specifically I was not on the DX system to avoid confusion with the tailors.”

It is perhaps unfortunate that this answer was not further pursued. But I agree with Mr. Marks that the witness cannot have been referring to the Royal Mail and he cannot have been saying that DX mail intended for the tailors was wrongly directed to his firm. He can only have meant that people wishing to send his firm documents had made the same mistake as Mr. Campbell.

As to the second point, Mr. Dunn’s evidence was as follows (pp. 2lD-22C):

“Q. But you are not able, from your own experience and practice as a sole practitioner, not using the DX yourself, to say whether the post is referred to generally as the Royal Mail?

A. I have worked in other firms where they are on the DX, and in conversation even now with other solicitors they would generally say “I am sending you something by DX”, and I would say, “No, please do not do that, I am not on the DX. Please send it by post.”

Q. So, you would expect to say “I am not on the DX”?

A. Yes, the normal practice on a new transaction is I would send off a letter immediately if I could, and it’s clear from that letter heading that I am not on the DX. But, if a letter does not go out, then I will speak to the other side, and I believe that I would have said, “We are not on the DX, please do not put it in the system”.

Q. But that did not actually happen on this occasion?

A. I cannot say. It’s my usual practice.

Mr. Justice Jowitt

You say your experience is the sender will say, if he is going to send it by DX, “I will send it by DX”, and then you say, “No good, I am not on DX”.

Miss Boswell

I do not think that was the effect of the evidence. If you could go through it again?

Mr. Justice Jowitt

Yes, it was. But, by all means go through it again if you wish.

Miss Boswell

Mr. Dunn, you indicated in answer to my question that you would, in the normal course, send a letter on a new transaction, which shows you are not on the DX?

A. Yes, it’s self evident.

Q. Or, if you did not send a letter you would indicate.

Mr. Justice Jowitt

I heard that evidence. You are overlooking the earlier answers, which the witness gave to you,

“The practice is” and he says “I have it now, and I have had it when I worked in firms who have DX. If someone is going to send something by DX and is telling you he is going to send it, he will say, not `I’m posting it’, he will say `I am sending it DX'”. Is that right?

A. I think that’s correct.

Miss Boswell

But you yourself do not use DX and you yourself would not use those terms?

A. No.

Q. In relation to the DX, is it a system which is generally used by solicitors for the exchange of documents?

A. It is, yes.

Q. And, as far as you are aware, are most firms of solicitors members of the DX?

A. I would say the majority, yes.”

Unfortunately this evidence is not as clear as it might be, and I can understand how the Judge thought that in the second answer Mr. Dunn had simply omitted to mention the statement of the other person to the effect that he was sending the documents by DX. But a careful analysis of the transcript, which of course the Judge did not have the benefit of, does not in my view support the Judge’s second reason.

Mr. Mann QC, for the Plaintiff, accepts that the Judge’s reasoning is flawed. But he submits that nevertheless the conclusion was correct. I have been somewhat troubled by this aspect of the matter. But the Judge’s conclusion accords with my own, namely that in a matter as important as this, where it was vital that Mr. Dunn received the documents as soon as possible, risks should not have been taken or assumptions made on such fundamental matters as the proper address of the recipient. I would therefore uphold the Judge’s conclusion that the Defendants were negligent.

By his Respondent’s notice, Mr. Mann also argued, albeit without conviction, that the Judge should have found that Mr. Campbell was negligent in refusing the Plaintiff’s request to telephone Mr. Dunn and enquire about the receipt of the documents. The answer to this submission is that Mr. Campbell gave an explanation to the Plaintiff for not doing so, which the Judge considered was reasonable. The Plaintiff could have overridden this advice and instructed Mr. Campbell to telephone, but he did not; albeit reluctantly, he accepted it. In these circumstances, only if the advice itself was negligent, could the Plaintiff succeed. Mr. Mann does not seek to say that it was.

I turn then to the question of causation. The Judge approached this aspect of the case on the basis that the Plaintiff had to satisfy the Court on the balance of probability that if the documents had arrived at the latest on Monday 18 September, Mr. Susans would have bought Birdfield and not Stray House. If the Plaintiff succeeded, he would recover his full loss; if he did not, he got nothing. In my judgment, this is the wrong approach to the question of causation where the loss depends upon the action of an independent third party in circumstances which ex hypothesi did not arise. The proper approach is to evaluate the loss of the Plaintiff’s chance that if the documents had arrived, the sale would have gone ahead. This was held to be the case in a recent decision of this Court in Allied Maples Group Ltd. v. Simmons & Simmons, unreported Transcript 12 May 1995. In the course of my judgment in this case, with which Hobhouse L.J. agreed, I said (at p. 14):

“3. In many cases the plaintiff’s loss depends on the hypothetical action of a third party, either in addition to action by the plaintiff, as in this case, or independently of it. In such a case does the plaintiff have to prove on balance of probability as Mr. Jackson submits, that the third party would have acted so as to confer the benefit or avoid the risk to the plaintiff, or can the plaintiff succeed provided he shows that he had a substantial chance rather than a speculative one, the evaluation of the substantial chance being a question of quantification of damages?

Although there is not a great deal of authority, and none in the Court of Appeal, relating to solicitors failing to give advice which is directly in point, I have no doubt that Mr. Jackson’s submission is wrong and the second alternative is correct.”

I then reviewed the authorities which, in my view, support this conclusion. At p. 2O I said:

“But, in my judgment, the plaintiff must prove as a matter of causation that he has a real or substantial chance as opposed to a speculative one. If he succeeds in doing so, the evaluation of the chance is part of the assessment of the quantum of damage, the range lying somewhere between something that just qualifies as real or substantial on the one hand and near certainty on the other. I do not think that it is helpful to seek to lay down in percentage terms what the lower and upper ends of the bracket should be.”

Millett L.J. delivered a concurring judgment on this point.

The Judge cannot be criticised for adopting the approach that he did because he was invited to do so by both counsel, and of course he did not have the benefit of the Court’s judgment in the Allied Maples case.

Both counsel sought and obtained leave to amend the notice of appeal and respondent’s notice to rely on the reasoning contained in that decision. Mr. Marks submitted that the Judge was in error in concluding that on balance of probability Mr. Susans would have bought Birdfield and, more importantly, he should have held, and this Court should hold, that upon the evidence there was no real or substantial chance that he would have done so. He submits that all evidence shows that Mr. Susans had decided to buy Stray House by Monday 18 September and was no longer interested in Birdfield, save as a fail safe if Stray House should fall through. If that is correct, then he submitted that there was no real chance to be evaluated.

The Judge expressed his conclusions as follows (Transcript p. 18):

“Now, the draft contract on Stray House was not received at the offices of Messrs Dunn & Company until Tuesday the 19th. It follows from that, and this is my finding having listened to Mr. Susans’ evidence, weighed it carefully, and reminded myself of the criticism which is to be made of him that, if the draft contract in respect of Birdfield had arrived at Mr. Dunn’s office on the Monday, the 18th, in advance of the contract which arrived the following day in respect of Stray House, Mr. Susans would have gone ahead and purchased Birdfield. A fortiori if the Birdfield papers had reached Dunn & Company on Friday, the 15th, as they probably would have done if posted by Royal Mail on the 13th.

Miss Boswell for the defendants has invited me to read the situation in a different way. Mr. Susans had gone to see Stray House on Friday, the 15th. He had made an offer and had clinched his offer, subject to contract, certainly by Monday the 18th, and so, she urges me to say that, by this time, Stray House was Mr. Susans’ primary objective and Birdfield was to be seen as the failsafe if there was a hitch so far as Stray House was concerned.”

The Judge’s finding is based on an answer given in re-examination (Transcript p. 16):

“Q. If you had the contract for Birdfield on the Tuesday, that is to say before the contract for Stray House had come out, can you give any idea of what you would have done?

A. Again, as I was just saying to My Lord, it’s very difficult. It would have been a joint decision with my wife, and it’s probable that we would have carried on with Birdfield because of the access, which eventually drove us to move. It’s probable.”

This answer depends upon hindsight, since he accepted that he did not appreciate the poor access until later; moreover it is inconsistent with two previous answers that he had given (p. 6B-C):

Q. If, on the Tuesday morning, that is the morning after you said you would buy Stray House for five hundred and twenty five, if, on the following day, your solicitor had received Mr. Stovold’s contract, would you have proceeded with that?

A. I think that is a bit of a hypothetical question, if you don’t mind me saying, and I do not know if I could really answer that. I would need to be put in that position, and I would also need really to speak to my wife on that. I think there is probably quite a reasonable chance that we would still have proceeded with Birdfield. As it happened, the house that we purchased did not suit us and were rushed into it, and have moved from there since. That’s why we are now living at Blandford.”

And at p. 15G:

“Q. Am I right to understand your evidence in this way: once you had seen Stray House, then, if contracts had appeared for both, you find it really impossible now to say which you would have gone for?

A. Yes, that is correct, My Lord. I would have needed to talk to my wife about it, and it is very difficult to say what one might have done, and I find it extremely difficult to be absolutely honest and say I would have gone for Birdfield or I would have gone for Stray House. Stray House had very bad access, and that’s why eventually we moved from there, so it could well be we would have proceeded with Birdfield, especially seeing as we had shaken on the deal at the time, but I find it very difficult to say.”

But a more fundamental attack on the Judge’s finding is made by Mr. Marks. He submits that the evidence shows clearly that when Mr. Susans had seen Stray House he was no longer interested in Birdfield and the Judge should have so found.

Despite the discreditable behaviour of Mr. Susans in attempting to avoid the payment of the estate agent’s commission, the Judge was impressed by Mr. Susans and regarded him as a witness of truth. In these circumstances, this Court will only interfere with the Judge’s finding if it can be shown that his conclusion is inconsistent with other acceptable oral or documentary evidence, or that he had not taken proper advantage of the fact that he had seen and heard the witnesses give evidence. This is undoubtedly so where the Judge has to determine credibility as to past factual events. This case is somewhat different, since the question is what would Mr. Susans have done in a hypothetical situation. Nevertheless, I would not be disposed to interfere with the Judge’s finding on this point based as it is at least in part on his assessment of Mr. Susans, unless I was convinced that it was wrong, on the basis that it can be demonstrated to be incorrect in certain important respects, is inconsistent with other acceptable oral or documentary evidence and cannot be reconciled with his behaviour and that of his solicitor. We have had the benefit of a penetrating analysis of the evidence by Mr. Marks and I am satisfied that once Mr. Susans and his wife had seen Stray House and he had made up his mind to offer an acceptable figure for it, he was no longer interested in Birdfield, save as a fail-safe in the event that the sale of Stray House did not materialise.

First it is necessary to consider Mr. Susan’s evidence as to why he went to look at Stray House at all. At pp.3G-4B he said:

“Q. Mr. Susans, it appears that, not very long after shaking hands with Mr. Stovold, in fact, you became aware of another property, then called Stray House at Elston?

A. That’s correct.

Q. And did you go to see that?

A. Yes, much really against my better judgment. I believe it was probably four or five days later, and with a lot of getting on to my solicitor and Mr. Stovold, and no contracts arriving, I was then getting quite suspicious and beginning to wonder perhaps if there was some double dealing going on and Mr. Stovold had somebody else interested in his house, bearing in mind, I think, his house had been reduced from somewhere perhaps in the region of six or seven hundred thousand pounds to our figure, and I was very anxious. I did not actually go out myself looking for another property because, being in my business, when you shake somebody’s hand, you do try and stick to the deal, and I was faxed some information from an estate agent who I bought houses off in the past in Farnham. That was Stray House.”

At pp. 4H-5B he said:

“Q. Can you just summarise to his Lordship the circumstances in which you agreed to purchase that property?

A. We would have seen this property over that weekend, I would have assumed, if this date was a Monday, and we were faxed the details of the property, and they were very, very anxious to sell the property. Both my wife and I went and inspected the property. This is four days after Birdfield’s contracts had not arrived, and they agreed to sell us the property. We were told initially it was around five hundred thousand pounds. Then I contacted the estate agent, Mr. Paul Ormorod acting there, who said it was going on the open market in a couple of weeks’ time and would be marketed in Country Life and various other magazines, and I asked him what sort of amount would buy the property, and he said he would recommend an offer of five hundred and twenty-five would be accepted, and I agreed to pay five twenty-five for it. I felt the property was good value for money at that price, and we purchased it.”

At p. 6F he said:

“Q. Would you not agree with me, Mr. Susans, that, having seen Stray House over the weekend, as you say, if you had really wanted Birdfield, you would have made an effort actually to get the documents on the Monday?

A. I think we did make all the efforts that we could. I was in contact with Mr. Stovold and with my solicitor, and in those four or five days, from agreeing to buy the property, I do not think I could have made any more effort than I did. Probably four or five phone calls a day.”

At pp. 13F-14A:

“Q. It appears that by about twelve o’clock you had actually instructed him on the new property?

A. So I would not really have expected him to carry on asking for contracts on a property when I have said I am going along with another property.

Q. So it would be right to say, would it not, that by Monday, by the time you had agreed on the purchase of Stray House, you really did not expect anything more to happen in relation to Birdfield?

A. Well, the contracts had not been forthcoming with all the shouting and screaming that I or Mr. Dunn had said and done, and so I think I was at the stage where I had just given up, and had decided that I would purchase the other property. It seemed to be the easy — they were prepared to sell, they were saying they were prepared to send me a contract.”

Much of this evidence is manifestly incorrect. It was not four days after the time when he could have expected to get the contract on Birdfield that he went to see Stray House, it was on the Friday, which was the earliest that it could be expected that the documents would have arrived. Moreover, neither he nor Mr. Dunn had communicated with either Mr. Campbell or the Plaintiff at all. This was quite untrue. Moreover, since Mr. Dunn had been told by Mr. Campbell that he was posting the documents on Thursday night, there was no basis for thinking that the Plaintiff was being duplicitous. Mr. Dunn could not have given Mr. Susans that impression. It is surprising that Mr. Dunn did not telephone on the Friday morning, having been instructed to scream at the vendors because the documents had not arrived. But the failure of either purchaser or his solicitor even to contact the vendors is in my view really only consistent with a decision to buy Stray House once he had seen it.

This is also the effect of Mr. Dunn’s evidence. Referring to a telephone conversation with Mr. Susans on Monday 18th, he said (at p. 6B):

“Q. I do not know whether you can recollect this specific conversation with Mr. Susans?

A. It was a fairly lengthy conversation. Again, with the passage of time, it might be difficult to be specific, but the general tone of it I recollect.

Q. I do not know whether you recollect whether, on that occasion, he made any reference to the Birdfield contract?

A. I believe he did, because I had, I think, agreed with him that I would not contact Barlows to say that we were withdrawing from the Birdfield purchase until such time as we’d actually got the contract papers on the other property, Stray House or Cottage.”

And (at p. 15C), speaking of the same conversation, he said:

“…when I was instructed on the proposed purchase of Stray Cottage where I think we had agreed that I would not inform Mr. Campbell that we were withdrawing from Birdfield until such time as we had the contract papers on Stray Cottage. The Stray Cottage contract papers were actually delivered by courier, and I think they were delivered on the 19th. So, at that point, I contacted Mr. Campbell at the first opportunity without prejudicing my client’s interests, in other words, as soon as I knew we had another suitable alternative purchase property, because I do recall advising Mr. Susans it would be foolish to withdraw from one property because he had not had the contract papers, only to find he would not get contract papers on the second one.”

Thus it was clearly Mr. Dunn’s understanding of his instructions that the purchase of Stray House was to go ahead, that his client wished to withdraw from the Birdfield negotiations, but he would not do so until Stray House was in the bag. This is consistent with the second telephone conversation on the l9th when Mr. Dunn told Mr. Campbell that the documents had not arrived, but in any event his client was withdrawing. It is plain, as it seems to me, that if Mr. Susans actually wanted to keep open the option of purchasing Birdfield, he and his solicitor would have done what he said they did, namely to point out to the vendors that the documents had not arrived and press for them. But they did no such thing. Moreover, it would have been a serious breach of Mr. Dunn’s duty to his client to have withdrawn from Birdfield on the 19th when, had the documents been sent forthwith, exchange could still have taken place on 22 September, unless by then Mr. Susans had made a clear decision to buy Stray House. Both the timing of events and the absence of any communication from Mr. Dunn and Mr. Susans to the Plaintiff or his solicitors before the telephone conversation withdrawing on Tuesday 19th are born out by the documents and the other evidence in the case. It is plain that Mr. Susans was a man who, once he had made up his mind, stuck to his decision (see Mr. Dunn’s evidence at p. 7D). Accordingly, I cannot accept the Judge’s conclusion that if the documents had arrived on the Monday the sale would probably have gone ahead. To my mind, it is clear that by then Mr. Susans had determined to buy Stray House.

But what would have been the position if the documents had arrived on the Friday? It is common ground that they could and should have been sent on the Thursday. The Judge held that if they had been posted in the Royal Mail by first class post they would probably have arrived on the Friday, and certainly by the Monday. I see no reason to disagree with that finding. There was obviously a reasonable chance that they would have arrived on Friday. Mr. Susans said that if they had he would probably not have gone to look at Stray House (p. 15F).

On this point I see no reason to differ from the Judge in accepting his answer. But the fact remains that there was clearly a possibility that he would have done so, being attracted by the fulsome terms in which Stray House had been recommended to him. In my opinion, what this Court must do is to evaluate the loss of the chance of the sale going ahead as a result of the Defendants’ negligence. There is a double contingency: first that the documents would not have arrived on Friday, even if they had been posted through the mail, as they should have been, on Thursday night. Secondly, even if they had arrived on Friday morning, that Mr. Susans would still have gone to look at Stray House and decided that he preferred it. Taking both these matters into account, I would assess the chance at 50%. Accordingly, I would allow the appeal in part and reduce the Judge’s award by 50%.

LORD JUSTICE PILL: I agree with Stuart-Smith LJ that the learned Judge was correct in concluding that the Defendants were negligent and would refer to the issue only in view of the criticism of his reasoning. On the assumption that the learned Judge misunderstood the evidence of Mr Dunn and Mr Dunn did normally take the initiative in telling other solicitors that he was not on DX, (a practice he did not follow on this occasion), that did not entitle the Defendants to assume that he was on DX.

Mr Dunn’s practice of disclosure, if it existed, was no doubt a helpful one. The duty remains squarely on a solicitor despatching documents however to take all reasonable steps to ensure that they are properly addressed and any failure by Mr Dunn to follow his practice on this occasion does not relieve the Defendants. They should not have made the assumptions they did in the circumstance which existed.

I also agree with Stuart-Smith LJ that the evidence of Mr Susans in re-examination that if he had received the contract for Birdfield before the contract for Stray House he would probably have carried on with Birdfield is not credible. The learned Judge did not have the benefit of the analysis of the oral and documentary evidence which has been made available to this Court and has been analysed by Stuart-Smith LJ. Upon that evidence, I am forced to the conclusion that once Mr Susans had decided to visit Stray House on Friday 15 September there was no substantial prospect, provided a contract for Stray House was forthcoming as in the event it was, that he would purchase Birdfield. The Plaintiff’s chance disappeared on Friday 15 September.

The spotlight then falls upon Mr Susans’ evidence in cross examination, hitherto of little significance, that had the Birdfield contract been received on Friday he probably would not have gone to see Stray House and I agree that there is no reason to reject that evidence. His state of mind on Friday becomes relevant once his evidence is rejected that even on the following Tuesday he would have preferred Birdfield if he had a contract. The substantial chance remained until the decision to visit Stray House was made.

Had the documents been posted on Thursday by first class post they would probably have arrived, the Judge found, on Friday. I agree that a substantial chance was lost to the Plaintiff by reason of the Defendants sending the documents on Thursday to the wrong address and agree with the assessment of the Plaintiff’s prospect of a contract at 50%.

Because we are finding for the Plaintiff on a basis not argued hitherto, I deal with a further point which might have been taken by the Defendants. My understanding of the learned Judge’s finding as to the time of posting is that he would not have found the Defendants negligent on the basis of delay if they had dispatched the documents on Friday 15th. The Judge noted at page 6 Mr Dunn’s compliment to Mr Campbell that “he had done quite well to have the papers ready to go out by that day” (Thursday). The Learned Judge regarded receipt by Mr Dunn on Friday 15th “or at the latest on Monday 18th” as appropriate so that dispatch in an appropriate manner for delivery by Monday 18th would probably not have been categorised an negligent.

If that is so, dispatch by DX at a time after Susans’ decision to visit Spring House, while negligent, would not have been causally negligent because the substantial chance of a contract would already have been lost. It may be considered ironic that a less efficient dispatch as to time might have permitted the Defendants to escape liability.

The negligence was however the Defendants’ conduct in using the wrong method of delivery on Thursday. It was the negligent conduct on that day which caused the loss and it is no defence to say that the same conduct on the following day would not have been actionable.

I would allow the appeal to the extent indicated by Stuart Smith LJ.

LORD JUSTICE OTTON: I agree with both judgments.

Order: Appeal allowed.

No order as to costs.

 

Source: www.bailii.org