Anna Christie v Mary Ward Legal Centre & Anor
[2023] EWHC 1814 (KB)
Tonstate Group Limited & Ors v Rosling King LLP
31 July 2024
[2024] EWHC 2005 (Ch)
High Court
Lawyers messed up a case, and the judge said they have to go to trial to defend themselves. The judge also said the lawyers were wrong to question a previous court decision about a legal rule (the Duomatic principle) that helps decide if shareholders approved a bad deal.
Key Facts
- •Tonstate Group Ltd (in liquidation) and others sued Rosling King LLP for professional negligence.
- •Rosling King acted for the claimants in litigation against Mr. Wojakovski.
- •The negligence claims centered on Rosling King's alleged failures: aimless litigation strategy, failure to identify a winning legal argument (the Duomatic principle), and advising a loan in breach of court undertaking.
- •Rosling King challenged Zacaroli J's decision in Tonstate Group Ltd v Wojakovski [2019] EWHC 3363 (Ch) regarding the Duomatic principle.
- •The claimants sought to strike out parts of Rosling King's defence challenging the Duomatic Judgment.
- •Rosling King sought to strike out the claimants' negligence claims and for reverse summary judgment.
Legal Principles
Duomatic principle: Informal unanimous assent of all shareholders is as binding as a formal resolution.
Re Duomatic Ltd [1969] 2 Ch 365
Exceptions to Duomatic principle: Ultra vires acts, insolvency, dishonesty towards the company, bad faith.
Palmer's Company Law, various cases cited
Professional negligence: Solicitors owe a duty to exercise reasonable skill and care.
Implied terms of retainer, common law duty of care
Statement of case requirements: Plead material facts to define issues for decision.
Boake Allen v HMRC [2006] EWCA Civ 25, UK Learning Academy v Secretary of State for Education [2020] EWCA Civ 370
Summary judgment: Court should not embark on a mini-trial; claimant needs a real prospect of success.
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
Precedent: Judges should follow decisions of co-ordinate jurisdiction unless plainly wrong.
Willers v Joyce (No 2) [2018] AC 843, Bilta (UK) Ltd v Tradition Financial Services Ltd [2023] Ch 343
Loss of a chance: Damages recoverable for lost opportunity in litigation due to negligence.
Various cases cited (implied)
Outcomes
Defendant's Application dismissed.
Claimants had a real prospect of success on negligence claims; issues of fact and causation required trial.
Claimant's Application granted.
Rosling King's challenge to the Duomatic Judgment was without merit; Duomatic Judgment was correctly decided.
Parts of Rosling King's defence challenging the Duomatic Judgment struck out.
The Duomatic Judgment was correctly decided as a matter of law.
Claimants granted permission to amend Particulars of Claim.
Amendments addressed the court's concerns regarding particularisation and provided a coherent case.
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