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	England and Wales High Court (Queen's Bench Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Queen's Bench Division) Decisions >> Browning & Anor v Messrs Brachers (a firm) [2003] EWHC 1091 (QB) (15 May 2003) URL: http://www.bailii.org/ew/cases/EWHC/QB/2003/1091.html Cite as: [2003] EWHC 1091 (QB)

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IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		15 May 2003

Mr Justice Eady :

1. On 9 April this year, there was argued before me an appeal from an order of Master Turner dated 19 December 2002, in respect of which he had handed down a reserved judgment dated 2 December. The hearing took place on 21 November (a date relied upon as significant in the context of limitation). Permission was granted by Leveson J on 19 February 2003. In accordance with the modern practice, the appeal is by way of review rather than a re-hearing.
2. The claim as it stands is a professional negligence action against solicitors who acted for the Claimants, Mr and Mrs Browning, from July 1992 pursuant to a retainer which was terminated on 4 November 1996. The present proceedings were begun by writ on 5 November 1998 and the Claimants are seeking a very substantial sum of damages, which I have been told is in the region of £2 million. The Defendants were originally instructed on 24 July 1992 to advise the Claimants in connection with proceedings brought against them, and a counterclaim which they wished to pursue, in the Kingston County Court.
3. That original litigation arose out of a transaction whereby Mr and Mrs Browning had acquired a business known as Bowyers Court Farm from Kenneth and Sheila Gilham. It is Mr and Mrs Browning's case that the relevant contract was entered into orally on or about 18 February 1991 and completed in the following April. They acquired as part of the arrangements 135 goats, in respect of which they plead that certain representations were made prior to contract upon which they placed reliance. It is said that the representations, which related to the health of the goats, turned out to be false and that Mr and Mrs Browning suffered loss as a result.
4. While these matters were still being assessed with a view to claiming against the vendors, in September 1991 Mr Gilham issued the County Court proceedings to recover the outstanding balance of the purchase price (namely £8,778.80). So it came about that Mr and Mrs Browning wished to rely on the alleged misrepresentations, and other matters, by way of set off and counterclaim. They had initially engaged the services of a solicitor called Mr J B O Hinchliffe who was a sole practitioner in East Grinstead. In due course, however, on 6 August 1992 the relevant legal aid certificates were transferred to enable Brachers (the present Defendants) to take over the conduct of the litigation (through their Mr Alexander Wilson). Unfortunately, meanwhile, summary judgment had been entered on 1 July 1992 in respect of Mr Gilham's claim. Brachers managed to arrange, however, for an order to be granted on 21 August 1992 for conditional leave to defend (on payment into court of £5,000). At the time, Mr and Mrs Browning thought it appropriate to invite Mr Hinchliffe through Brachers to contribute to that payment because it was his fault (so they argued) that judgment had been entered. Progress in the litigation thereafter is said to have been "desultory".
5. Eventually, in April 1996, the Kingston County Court set the action down for trial and a date was fixed (13 December in the same year). There then followed an unfortunate sequence of events. First, Mr Gilham died on 2 August 1996 after a long illness. Then, on 24 September, an attempt was made by Brachers to serve an expert report which Messrs Barlows (who had been acting on Mr and Mrs Gilham's behalf) declined to accept. This prompted Brachers to issue an application on 27 September for further directions. In mid-October, they took further steps; in particular, they attempted to serve a supplementary report from a different expert (Mr Baird) and a number of witness statements. They also indicated an intention to serve further witness statements in due course.
6. A hearing took place on 25 October 1996 before His Honour Judge Bishop, who directed that Mrs Gilham be joined as the executrix of her late husband's estate. He then adjudicated upon the matter of further expert reports and witness statements. He refused Mr and Mrs Browning permission to adduce any additional evidence for three reasons:

1) There was no explanation for the late service of the evidence, nor indeed any affidavit supporting the application.

2) Brachers should not have permitted the action to be set down (six months before) if there was important evidence still to be served.

3) Meanwhile, prejudice had occurred because of Mr Gilham's death, which included difficulty in dealing with the additional evidence proposed.

7. Mr and Mrs Browning plead that they thereby lost all reasonable prospect of succeeding in obtaining any award on their counterclaim – or at least any that was over and above nominal damages or sufficient to serve as a set off. That was the primary "loss of a chance" upon which they relied.
8. In the current proceedings Mr and Mrs Browning allege that their lost opportunity to pursue the full extent of their counterclaim in the County Court proceedings was caused by Brachers' negligence and/or breach of contract during the period of their retainer. The particulars relied upon are set out in paragraph 10 of the statement of claim (served on 5 November 1998). The sub-paragraphs are identified as (a) to (n). There is no need to rehearse them for present purposes. It will suffice to say, by way of summary, that their complaints consist of criticising the conduct of the litigation at various stages by reason of alleged tardiness, incompetence and errors of judgment.
9. The application which came before Master Turner on 21 November of last year was for permission to amend the statement of claim – primarily to add a new category of complaints against Brachers, relating to their failure to pursue a claim for negligence against Mr J B O Hinchliffe in relation to his drawing up of a memorandum of sale to record the transaction between the Gilhams and the Brownings. The document was prepared at Mr Browning's request and presented by Mr Hinchliffe for his consideration on or about 25 April 1991.
10. According to the evidence of Ms Philpott (now acting on the Brownings' behalf) in her witness statement of 5 July 2002, the agreement with the Gilhams was oral but a written memorandum was required by Mr and Mrs Browning's bank, from whom they were seeking finance to implement the agreement. It is obvious that Mr Hinchliffe was dependent on the Brownings for their instructions as to the terms of the oral agreement that had been concluded. In a letter of 25 April 1991, Mr Hinchliffe made it clear that he was presenting his draft "for your consideration and approval". Despite some subsequent amendments to the document, Ms Philpott states that Mr Browning signed the document without reading it. Whether it was read or not, it is fair to describe the document, as the Master did, in the following terms:

"It is a very short document, well laid out with neat headings and double spacing. It would not have taken more than two or three minutes to read".

11. One of the "neat headings" referred to "REPRESENTATIONS" and introduced these important words:

"The Purchaser acknowledges that he has not entered into this Agreement relying upon any representations made by or on behalf of the Vendor except those made in writing by the Vendor or notified to him in writing as being representations upon which reliance is placed".

12. It is of the essence of the new claim which is sought to be introduced that in drafting the memorandum, and particularly by including the "representations" clause, Mr Hinchliffe negligently failed to reflect the oral agreement. The complaint is made in light of later events – not least the fact that Mr Gilham prayed the clause in aid on 17 November 1992 in his County Court pleading, so as to preclude Mr and Mrs Browning from relying upon the misrepresentations.
13. There is no evidence to suggest that Mr Hinchliffe had been given any instructions about the alleged misrepresentations over the goats' health; nor yet that Mr Browning had informed him that the "representations" clause was actually inaccurate because such assurances had been given. It is said that Mr Hinchliffe should have drawn the clause to the attention of his clients and explained its potential significance.
14. Whatever may be the merits of this complaint, it is clear that Brachers wrote to Mr Hinchliffe shortly after they were first instructed and accused him of negligence in a letter of 8 September 1992 in relation to Mr Gilham's claim, in that Mr Hinchliffe had advised that there was no defence and admitted (by letter of 24 July 1991) that the sum claimed was indeed due. What is more, Brachers' letter of 8 September 1992 contained the Delphic sentence:

"In addition you were involved with the drawing up of the Agreement referred to in the proceedings, which document in itself has caused our clients' problems".

15. It is difficult to make much sense of that. If it was intended to suggest negligence, no breaches of duty were identified or financial loss calculated. In a witness statement for the purpose of the present litigation, dated 6 November 2002, Mr Hinchliffe observed:

"Although there is a mention of the drafting of the Memorandum of Sale in this same letter, I did not consider that this was the basis of the threat of a professional negligence claim against me as its mention seems like a minor afterthought".

The letter was not referred to again in later correspondence and Mr Hinchliffe heard no more of it for a decade. It appears from the witness statement of Ms Robson dated 12 November 2002 that the motivation for the letter of 8 September 1992 was to try to persuade Mr Hinchliffe to contribute to the payment which had been made a condition of the leave to defend (as described above).

16. Before turning to consider the Master's refusal to allow the amendments, I must pause to comment on the nature of the claim the Claimants now wish to make and in what circumstances it could avail them. In the grounds of appeal, the proposed cause of action is described as being "for the loss of a chance". It could only be of assistance to Mr and Mrs Browning, however, if one assumes a specific hypothetical scenario. One has first to address the possibility that the counterclaim in the County Court proceedings is successful on its underlying merits; that is to say, that the court has at least accepted (a) that representations were made on Mr and Mrs Gilham's behalf, (b) that Mr and Mrs Browning were entitled to rely upon them, (c) that they were false, and (d) that they caused the damage alleged. Secondly, one has to proceed on the basis that the Brownings only failed in that counterclaim because the Gilhams played the trump card of Mr Hinchliffe's "representations" clause (in accordance with the pleading of 17 November 1992). That would entail a finding by the court that the clause was included in breach of duty and that it did not reflect the true position (despite the fact that Mr Browning signed it without objection).
17. It will thus be readily appreciated that the potential claim against Mr Hinchliffe was not "free-standing" (i.e. independent of the merits of the pleaded claims and counterclaims in the County Court action). This led Mr Croxford Q.C., for the present Defendants, to characterise it in argument as "parasitic" upon the subsistence of the counterclaim. This is indeed obvious from the way the claim has been pleaded. One need perhaps look no further than the wording of the proposed paragraph 11(6) of the draft amended statement of claim for which permission is sought:

"To the extent that the Claimants' counterclaim would have failed as a result of or was weakened by the inclusion of the Representations Clause in the Memorandum of Sale (denied), the Claimants lost the opportunity to pursue Mr Hinchliffe in respect of the loss suffered thereby".

It is accordingly necessary, as a matter of logic, to assess the present application alongside the fate of the counterclaim and, in particular, the relevance of the events of 1996. I shall return to this in due course.

18. The Master gave a number of reasons for his decision, each of which needs to be considered. The order in which they are addressed does not particularly matter.
19. The Master concluded on its merits that the proposed claim would not have "a real prospect of success". It is accepted that the correct test to apply on an application to amend is that governing summary judgment under CPR Part 24. Naturally, a "real" prospect of success is to be contrasted with a "fanciful" prospect of success: see e.g. Swain v. Hillman [2001] 1 All ER 90. In forming a judgment on that issue, the court should beware of conducting a "mini-trial" of the issues and not pre-judge the outcome of disputed questions of fact. One of the criticisms levelled that the Master here is that he did just that.
20. The Master considered the pleaded cases and the extent of the evidence before him. He considered, of course, both the merits of a claim in negligence against Mr Hinchliffe and those of a claim against Brachers for not having pursued Mr Hinchliffe. He placed emphasis upon the lack of any evidence to the effect that the Brownings ever informed him about the representations on which they wished to rely. It is also uncontroversial that Mr Hinchliffe on 25 April 1991 invited his clients to consider and approve the memorandum, including the "representations" clause. That was against the background of an oral agreement, the terms of which only the parties could identify. When he had taken into account all the material before him, the Master concluded that there was no realistic prospect of success for any claim founded upon negligence on Mr Hinchliffe's part. Nor could he discern any other compelling reason for permitting the claim to be added. I can find no fault with his reasoning.
21. It is true that, in considering the merits of any claim against Brachers (as opposed to one against Mr Hinchliffe), other factors come into play such as e.g. whether a competent solicitor would have thought legal aid was obtainable to support a claim by the Brownings against Mr Hinchliffe during the pendency of the Gilhams' claim against them. Evidence was introduced as to the actual or supposed thought processes of Mr Wilson (the relevant solicitor representing the Brownings' interests within Brachers at the material times). For example, Ms Robson of Barlows, at paragraph 22 of her witness statement dated 12 November 2002, related on his instructions how all minds were focused on the Gilham claim, and she set out the three reasons he had given her for not pursuing Mr Hinchliffe during the relevant period. These were apparently as follows:

i) If the Brownings were successful in their counterclaim against Mr Gilham, no action would lie against Mr Hinchliffe. If they were to lose, this would in all probability come about because the court rejected the Browings' version of events in February to April 1991. In that event, a claim against Mr Hinchliffe would be unwise.

ii) It was unlikely (in his view) that legal aid would be obtained to pursue two parallel actions in respect of the same loss. (This is a view with which Ms Philpott disagreed.)

iii) There was "very little evidence that Mr Hinchliffe had in any event been negligent" (which would have affected the chances of obtaining legal aid in any event).

22. Although these matters were canvassed in evidence, they do not seem to me to make any difference. The Master was entitled to base his judgment on the merits, as he plainly did, on the fundamental issue of whether, on the undisputed facts, a claim could be made out against Mr Hinchliffe that he was in breach of duty during the period of his retainer. He was entitled to come to a negative conclusion and in my judgment he was clearly right to do so. In the circumstances, my own conclusion in that regard is sufficient to dispose of this appeal. Arguments were, however, addressed to me on the Master's other reasons and I shall also consider those.
23. I now turn to the interesting question of limitation, since another of the Master's substantive grounds for refusing permission was that the claim would be statute barred. The point has to be considered against the background that it is agreed between the parties that the proposed new claim does not arise out of "the same facts or substantially the same facts as are already in issue": see CPR Rule 17.4 (2).
24. The Master is criticised for not spelling out his reasons for concluding, as he did, that "the claim in respect of Mr Hinchliffe's actions is time barred". I was referred in this context inter alia to English v. Emery Reimbold & Strick Limited [2002] 1 WLR 2409 at [6] to [21] and Flannery v. Halifax Estate Agencies Limited [2000] 1 WLR 377, 381-2 (per Henry L.J.). It is true that he could have set out the arguments in rather more detail but, albeit the passage is somewhat elliptical, it is quite possible from what he said on the face of the judgment, and from the limitation arguments advanced before him on that occasion, to identify what those reasons were (see the judgment of Lord Phillips M.R. in English at [26]).
25. Having referred to the Court of Appeal's decision in Welsh Development Agency v. Redpath Dorman Long Limited [1994] 1 WLR 1409, the Master decided that the material date for limitation purposes was 21 November 2002 (i.e. the date of the hearing).
26. He appears to have decided the time bar point on the basis that Brachers had ceased to act before (albeit shortly before) 21 November 1996. Accordingly, any material acts or omissions on their part would have occurred outside the primary limitation period.
27. It has been argued by Mr Alex Charlton, on the Claimants' behalf, that the relevant six year period did not expire until on or about 24 or 25 April 1997; that is to say, six years after the supply by Mr Hinchliffe of the allegedly defective memorandum. The cause of action against Brachers would not be complete until the damage accrued (i.e. when the Brownings lost their right to sue Mr Hinchliffe) : see e.g. Moore v. Ferrier [1988] 1 WLR 267 and Knapp v. Ecclesiastical Insurance Group Plc [1998] PNLR 172, 185 (per Hobhouse L.J.).
28. There are difficulties about this riposte. For one thing, it follows that the claim against Mr Hinchliffe, for whatever it was worth, remained available to the Brownings after the termination of Brachers' retainer. In Mr Charlton's phrase it would have been "as potent on the last day of the six year period as on the first". It could have been pursued, therefore, by Reid Minty & Co who took over the conduct of the litigation. It was they who "let" the limitation period expire. If (and I emphasise that word) any solicitor should be sued for negligence, then the appropriate candidate would be the solicitor acting in the lead up to the expiry of the relevant period (i.e. Reid Minty).
29. To put it another way, the loss of any claim against Mr Hinchliffe cannot (Mr Croxford argues) be attributed to a breach of duty on Brachers' part by reason of failing to issue proceedings against Mr Hinchliffe before the expiry of only (approximately) five years and seven months from Mr Hinchliffe's alleged breach of duty.
30. So too, if the relevant damage suffered by Mr and Mrs Browning was the loss of an opportunity to sue Mr Hinchliffe (on or about 24 April 1997), it is not on a proper analysis right to attribute that loss to a negligent failure by Brachers to sue Mr Hinchliffe prior to 21 November 1996. The causal link is said to be absent.
31. I understand from the context that the Master's conclusion on limitation was to a large extent founded upon considerations of this kind.
32. Mr Charlton sought to rely in this context on a passage in Jackson & Powell on Professional Negligence (5^th Edn), at para. 10-329, and the Australian case of Macpherson & Kelly v. Prunty [1983] VR 573. The submission is that both Brachers and Reid Minty could be culpable in respect of the lost opportunity to sue Mr Hinchliffe – even though Reid Minty's omission might be classified as having "greater causative potency".
33. The learned editors suggest that "where successive solicitors are liable for the same loss, in most cases the firm which acted later would have to pay the larger share of the damages", but that in what they term an "extreme case" the first solicitor's negligence may be "spent", with the result that the second solicitor alone would be liable. They then qualify the proposition by adding that their observations are made "at a very general level" and that each case turns upon its own facts.
34. In the light of this passage, and the Australian case of Macpherson & Kelly, Mr Charlton submits in effect that the cause of action against Brachers would not be complete until the loss was incurred (i.e. when the opportunity to sue Mr Hinchliffe was lost at the end of April 1997) and that the causal link was not necessarily broken with the termination of Brachers' retainer in November 1996 – because that lost opportunity could properly be classified as "the same loss", being a loss causally linked to the failure to sue Mr Hinchliffe on the part of both Brachers and Reid Minty during their successive periods of retainer.
35. The only case cited by Mr Charlton in support was the Australian case to which I have referred, a decision of the Supreme Court of Victoria, Full Court. In that case, the first firm failed to institute proceedings for two years and nine months. There was then a delay in forwarding the file to the second firm, who wrongly assumed that a writ had been issued. An apportionment was made of 80% of responsibility to the first solicitors and 20% to the second.
36. It may, perhaps, be of some significance that on those facts the negligent omission on the part of the first firm impacted directly on the conduct of the second firm, in the sense that they assumed (wrongly) that the first firm had issued proceedings. That assumption seems to have been linked causally to their own failure to issue a writ. There would be no corresponding assumption on Reid Minty's part in the present case. Whether this would be a material distinction is a question which would perhaps require further argument.
37. I am far from convinced on the present facts that (assuming Reid Minty and Brachers to have been negligent in not suing Mr Hinchliffe) there is a chain of causation leading to the Claimants' lost opportunity in 1997, and attributable to the acts or omissions of both firms, such that it can be characterised as "the same loss". This point was not addressed specifically in argument and I therefore express no concluded view upon it. It is, however, unnecessary for me to do so for two reasons. First, I have already held, on the merits, that the Master was correct in his conclusion that there would be no real prospect of success on any claim founded on an allegation of negligence against Mr Hinchliffe. Secondly, and more pertinently in the present context, a further argument on limitation was deployed by Mr Croxford on the present appeal which had not been presented to the Master. To that I now turn.
38. This new argument was developed on the basis of the "parasitic" nature of the case against Mr Hinchliffe (see paragraphs 16 and 17 above). Mr Croxford argued that, since the fate of the counterclaim in the County Court proceedings was already sealed prior to the termination of Brachers' retainer, it is relevant to focus on when that occurred for the purpose of fixing the point at which the supposed cause of action accrued. Once the Brownings had lost the opportunity to pursue their counterclaim, they had also inevitably lost whatever contingent value was to be found in the claim against Mr Hinchliffe. It had no worth independently of the counterclaim because of its "parasitic" nature.
39. It does not perhaps matter very much when this occurred, save that it is clear on the Claimants' own pleading that the right to pursue the counterclaim was effectively lost, at the latest, by the date of the order of Judge Bishop on 25 October 1996: see paragraph 9 of the statement of claim. An alternative approach would be to fix the date when those facts were in place upon which Judge Bishop's order was based. One could argue, for example, that the material prejudice occurred, at the latest, by 2 August 1996 when Mr Gilham died. There is perhaps here an analogy with the older strike-out cases: cf. Khan -v- Falvey [2002] Lloyds P N 369 at [28] – [30] (per Sir Murray Stuart-Smith), [55] (per Chadwick L.J.) and [63] (per Schiemann L.J).
40. This argument, not placed before the Master, seems to me plainly to be correct. It provides an additional reason for upholding his decision. As it happens, it takes the expiry of the limitation period back in time several weeks or even months before the November date which he was contemplating. The proposed claim is nevertheless statute barred.
41. The Master also set out his thoughts on delay as militating against granting permission for these amendments. It was plainly relevant but not determinative. In view of his conclusions on the merits and on limitation, it is probably unnecessary to go into issues of delay. Delay would only be of significance if the proposed plea would be admissible in principle but gave rise to disproportionate prejudice by reason of lateness. In that event, it would become potentially important to consider such matters as e.g. whether any reason had been put forward for the delay, what the effect would be of the new claim on those concerned, and also upon the course of the litigation and on the administration of justice more generally. I need say no more about it.
42. I indicated at the conclusion of argument on 9 April that I would dismiss the appeal and give my reasons later. That I have now done.
43. I should like to add that I am grateful to counsel for their clear and helpful submissions. I am conscious that I have not referred to the detailed arguments on the cases they placed before me, and I intend no discourtesy. Although they were illuminating, the principles to be applied on such an application are reasonably clear. The facts are somewhat unusual, and it seemed to me to be right to concentrate on setting out what I consider to be the relevant parts of the history and then to apply the principles. Extensive citation of authority, in this judgment, might have obscured that process.
44. Counsel indicated on 9 April that, in order to save costs, they wished to avoid attendance on a formal handing down. I was entirely content with that. In the circumstances, the contents of this judgment will be conveyed to counsel via e-mail and it would then perhaps be convenient for them, in light of my reasons, to submit an agreed minute of order for my signature.