Outer House case in which a property developer sought damages from his solicitors in respect of professional negligence.
The developer argued that, as a result of the solicitors’ negligence (in failing to advise him correctly), he entered a contract to sell land which was conditional on him obtaining planning permission (for residential development) within a period of 12 months and which made provision for the purchaser to withdraw from the contract if planning was not contained within the period but contained no corresponding provision allowing the developer to withdraw in the same situation. Consequently, when the developer failed to obtain planning permission, he was unable to withdraw from the contact and, as a result, and claimed that he was unable to accept an offer from an alternative purchaser at a higher price.
After considering the evidence of various witnesses, Lord Brodie found that the developer had failed to show that the solicitors were guilty of a failure to exercise reasonable care. Although the solicitors’ had given no direct advice to the developer himself, Lord Brodie held that the solicitors had given advice on the effect of the clause to the developer’s father who he found to be acting as an agent for the developer with actual authority to conclude the missives on his behalf. Lord Brodie accepted evidence to the effect that the developer’s father had repeatedly given instructions to the solicitors[1]
in the past (on behalf of, and with the knowledge of, the developer) and noted:
“It may be that there was no express agreement between father and son conferring the authority of the latter on the former. Indeed I would be surprised were that so. What is more probable is that they developed a way of working over a series of transactions, without ever formalising it. They were practical men operating in a very dynamic environment who were, reasonably enough, interested in making money in a booming market. Neither had much interest in “paper work”.”
The full judgement is available from Scottish Courts here.
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[1] Although not of significance to the decision, it is of some note that there was a difference of opinion between the expert witnesses as to whether a solicitor of ordinary competence exercising reasonable care can properly take a client’s instructions to conclude an onerous contract, such as the sale of heritage, through an intermediary. In the opinion of Professor Rennie, a solicitor should never take instructions from an intermediary without express antecedent authority having been given to do so. However, in the opinion of Donald Reid, a solicitor would be entitled to make “a judgment call” as to whether he did have his principals’ authority on the basis of all of the facts and circumstances of the case.
