Property loss would have occurred regardless of alleged negligence

It’s not enough to have a negligence claim against solicitors or other property professionals. Claimants need to be able to show that the negligence caused the loss claimed and to overcome any defence that the loss was too remote from the negligence.

In AW Group Ltd v Taylor Walton (a firm) [2014] the claimant’s case was that, had the defendants given adequate advice about the existing planning consents at the site, the lack of planning permission to park HGVs at the rear, and the prospects of getting satisfactory planning permission later, the claimant would have pulled out of buying the property (“Packhorse Place”) and would, if necessary, have resigned itself to the loss of the deposit, it had paid. and would have looked for somewhere else to buy.

The first instance judge had assessed the open market value of Packhorse Place on 2nd November 2005 with the benefit of its actual planning consents at £2.07 million, so that the claimant had overpaid £730,000 relative to it’s worth at the time.

The court found that the devendant’s negligence was not the effective cause of its loss as the claimant would have gone ahead anyway. The claimant was already too committed to the purchase of Packhorse Place to be able to back out by the time the defendants ought to have warned of the planning difficulties. :

1. it would have been too late to find and purchase an alternative site. At best, a temporary alternative might have been leased.

2. The deposit of £140,000 would have been forfeited to the Seller of Packhorse Place.

3. The claimant would have suffered a penalty of up to £500,000 if it did not vacate its existing site, Chaul End.

4. On past experience, even after getting competent advice from the defendants, the claimant’s managing director would have taken the pragmatic view that enforcement action at Packhorse Place was unlikely, and nothing seriously to worry about.

5. The businesses of the claimant’s associated companies AWT and AWCR, housed at Chaul End, lost money. The claimant’s main reason for relocating to Packhorse Place was the obtaining of roll-over relief, rather than ensuring their long term survival.

6. The claimant could take the risk of enforcement action, because it would be unlikely to have become effective early enough to prevent the claimant getting full roll-over relief from Capital Gains Tax by moving to Packhorse Place. In fact, both companies went into insolvency procedings before effective enforcement action was taken against them.

7. There was insufficient evidence provided to support the claimant’s allegation that their bank would have withdrawn or reduced funding for the purchase had they been properly notified and advised by the defendants about the planning position.

So the claim failed on causation grounds alone and the appeal against dismissal of the claimant’s claim against the defendant was dismissed.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.