D Morgan plc v Mace & Jones

Solicitor — Negligence – Damages – Claimant landowner obtaining planning permission for quarrying activities — Claimant wanting to use site as landfill – Claimant seeking advice from defendant solicitors — Defendant relying on advice of counsel advising implied consent for landfill in existing planning consent – Counsel subsequently changing advice – Claimant seeking damages against defendant in negligence — Whether defendant acting negligently in failing to clarify counsel’s amended advice — Whether claimant suffering loss by acting on advice — Claim dismissedIn 1993, the claimant acquired a quarry and obtained planning permission for quarrying activities. It wanted to use the site for landfill/tipping purposes but the permission or the conditions attached to it did not expressly refer to either activity.The claimant sought the advice of the defendant solicitor, which in turn relied on the advice of counsel that, in the light of the decision in Irlam Brick v Warrington Borough Counci. [1982] JPL 709 that where positive conditions required works to be carried out the condition granted permission for those works, and planning permission for landfill was therefore implied.In 1998, the defendant changed its advice following a further opinion from counsel and informed the claimant that, as a result of the express terms of the planning permission, waste could not be brought onto the site. The defendant advised that the claimant should apply, under section 73 of the Town and Country Planning Act 1990, to amend the terms of the planning permission so as to vary the planning conditions. However, if problems arose in respect of that application, the claimant could make a fresh application for planning permission. A section 73 application was made in 2002, which was not finally granted until 2009.The claimant issued proceedings against the defendant, seeking damages for negligence. The claim exceeded of £40m, most of which consisted of a claim for loss of profits. Proceedings issued against the counsel whom the defendant had instructed were compromised without any admission of liability.The claimant argued that the defendant should have questioned the counsel’s advice of 1998, and had been negligent in failing to do so; and it should have advised the claimant to make a fresh claim for planning permission and its failure to do so had resulted in the claimant suffering loss because it would have secured permission on more advantageous terms. Held: The claim was dismissed.A claim against a solicitor for negligence had to be considered in the light of the circumstances at the time on which the advice was given. Where leading counsel stated that his advice meant X, while his instructing solicitor and his knowledgeable client believed that it meant Y, it was possible that the advice was unclear or open to more than one interpretation, and therefore required clarification. In such circumstances, the solicitor would have to resolve the potential confusion: Bolam v Friern Hospital Management Committee [1957] 1 WLR 582, Midland Bank Trust Co v Hett Stubbs & Kemp [1979] Ch 384 and Ridehalgh v Horsefield [1994] Ch 205 considered.In the instant case, the court had to consider whether, when reading the 1993 and the 1998 advices together, a reasonably competent solicitor would have thought that uncertainty or a lack of clarity might arise in what was being said. Taken on its own, counsel’s 1998 advice was not unclear since it said, in terms, that waste could not be brought onto the site. The potential for confusion had resulted from a consideration of that advice in the context of the earlier advice of 1993, which said the opposite. There was too big a gap between the potential effect of the advice in 1993 and the potential effect of the 1998 advice for the matter to be left unchallenged. The defendant should have recognised the potential for confusion and conflict and sought clarification from counsel. Its failure to do so was negligent: Irlam Brick and Bernard Wheatcroft Ltd v Secretary of State for the Environment (1981) 257 EG 934 considered. However, the burden of proof was on the claimant to prove causation. For causation purposes, it was only if counsel would or should have advised that only a fresh planning application would bring the permission that the claimant sought, that the causation argument would be possible. On the evidence, any request for such clarification would not have caused counsel to give a different advice on the steps that it should take. Moreover, on the material before the court, nothing led to the conclusion that counsel should have advised that, as a matter of law, any section 73 application was doomed to fail, and that the only way in which consent for tipping could be obtained was by making a fresh application. It was wrong in principle to conclude that because a solicitor should have gone back to counsel on one point to seek clarification, the case on causation against the solicitor was made out. On that assumption, counsel should have reconsidered the entire case and given completely different advice on a separate point, despite the fact that the original advice on that separate point was not unclear, and the solicitor could not be criticised for not querying it. Any other conclusion would result in a solicitor that should have sought clarification on one topic losing its ability to rely on the rest of the advice of counsel and make it automatically liable for the errors in the rest of that advice, irrespective of whether obvious.Furthermore, the claimant had failed to demonstrate that, on the hypothetical basis, progress on the planning application, as opposed to an application to amend, which was intended to have the same effect, would have been quicker than it was. The claimant’s conduct in the course of the litigation did not suggest that progress would have been quicker in making a fresh application than it had been in applying to amend the existing permission. Not only had this litigation taken an unconscionable time to reach trial, but the vital elements of the damages claim, that is, the schedule of loss and the supporting expert’s evidence, had provided only recently as a result of an unless order. Finally, the factual basis was insufficient to support the heads of damages claimed to justify the claim for professional negligence. The loss of profit claim was flawed and could not be accepted by the court. The court did not consider that any of the sums claimed were recoverable because of the various assumptions on which they depended, none of which were supported by the facts.Nicholas Davidson QC and Anneliese Day (instructed by Systech Solicitors) appeared for the claimant; David Hart QC and John Whitting (instructed by Beachcroft LLP, of Manchester) appeared for the defendant.Eileen O’Grady, barrister