Adam Robert Giaquinto & Ors v ITI Capital Ltd
[2023] EWHC 2467 (KB)
Oxford Property Investments Limited & Anor. v Peter Lynn & Partners
22 March 2023
[2023] EWHC 624 (Comm)
High Court
A company sued its former solicitors for messing up a property deal. The company tried to add more losses to the case, but the judge said no because there wasn't enough proof. However, the judge let the original case continue because there was enough evidence of negligence. The judge also made the company put £500,000 aside to cover the solicitors' costs just in case.
Key Facts
- •Second Claimant (Sapphire) sued Defendant (Peter Lynn & Partners) for negligence in acting as its solicitors during a property purchase.
- •Damages claimed are up to £21.5 million.
- •Sapphire sought to amend its claim to include loss of anticipated profits on two additional properties (Oaklands and Newbury).
- •Three applications were before the court: summary dismissal, amendment, and security for costs.
- •The First Claimant (OPI) discontinued its claims.
- •Sapphire's case rested on alleged negligent assurances by the Defendant that Sapphire would be protected in its dealings with another developer, Mr. Downer.
- •The key dispute involved whether the Defendant owed a duty of care to Sapphire regarding the loss of profits on Oaklands and Newbury and the scope of the duty related to the original property purchase.
- •Significant inconsistencies and lack of contemporaneous documentation in Sapphire's evidence and amended claim were noted.
Legal Principles
Test for summary judgment under CPR Part 24: A 'realistic' prospect of success, more than merely arguable, considering available and reasonably expected evidence, but without a 'mini-trial'.
Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch)
Test for amendment: Claim must be more than merely arguable; must carry some degree of conviction, be coherent, properly particularized, and supported by evidence.
Kawasaki Kisen Kaisha Ltd v James Kemball Ltd [2021] EWCA Civ 33; ED & F Man Liquid Products Ltd v Patel [2003] EWCA Civ 472; Elite Property Holdings Ltd v Barclays Bank Plc [2019] EWCA Civ 204
Duty of care in negligence: Six questions including the scope of duty and duty nexus; The duty extends only to risks the advice was intended to guard against.
Manchester BS v Grant Thornton [2021] UKSC 20
Test for remoteness of damages in solicitor negligence: Contractual test; losses recoverable if not unlikely to result from the breach and known to the solicitors prior to the breach.
Wellesley Partners LLP v Withers LLP [2015] EWCA Civ 1146
Security for costs: Court has discretion to order security, often payment into court, but alternatives like guarantees are possible; test is whether an order would be just.
CPR Part 25; The White Book
Outcomes
Sapphire's amendment application to include claims for loss of profits on Oaklands and Newbury was dismissed.
Insufficient factual basis for a retainer; lack of real prospect of success in establishing a duty of care extending to those losses; inconsistencies and implausibility in evidence; remoteness of claimed losses.
Defendant's application for summary judgment on Sapphire's claim for loss of profits on the original property was dismissed.
Sapphire had a real prospect of success in showing a duty of care regarding the advice on development finance, even if the primary duty was to secure the finder's fee. The duty arguably extended to protecting Sapphire's position if the deal with Mr. Downer fell through.
Defendant's application for security for costs was granted; Sapphire ordered to pay £500,000 into court.
Guarantee from OPI and subsidiaries deemed unreliable; insufficient evidence of assets and their enforceability; payment into court was a more just and reliable way to protect Defendant's costs.
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