BAILII [Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

England and Wales Court of Appeal (Civil Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Padden v Bevan Ashford Solicitors [2011] EWCA Civ 1616 (21 December 2011)
Cite as: [2011] EWCA Civ 1616, [2012] 2 Costs LO 223, [2012] 1 WLR 1759, [2012] 2 FCR 264, [2012] PNLR 14, [2012] 2 All ER 718, [2012] WLR 1759

[New search] [Context] [View without highlighting] [Printable RTF version] [Buy ICLR report: [2012] 1 WLR 1759] [Help]

Neutral Citation Number: [2011] EWCA Civ 1616
Case No 9BS90309
Royal Courts of Justice
Strand, London, WC2A 2LL
Date: 21/12/2011

His Honour Judge Denyer QC
Case No 9BS90309

Royal Courts of Justice
Strand, London, WC2A 2LL

B e f o r e :



Appellant Claimant
- and -

Respondents Defendants


Richard Owen-Thomas (instructed by Samuels Solicitors) for the Claimant
Karen Shuman (instructed by Ashfords LLP) for the Defendants
Hearing date: 12 December 2011



Crown Copyright ©

    The Master of the Rolls:

  1. This is an appeal, brought with the permission of Leveson LJ, by the claimant, Heather Padden, against the dismissal of her claim for damages by His Honour Judge Denyer QC, sitting as a High Court Judge in the Bristol District Registry. The claim was based on an allegation that the defendants, Bevan Ashford, a firm of solicitors, had failed to advise her properly in connection with a transaction ('the transaction') whereby she effectively lost her interest in her home, and in certain endowment policies, shares and pensions.
  2. The facts

  3. The facts found by the Judge were, in summary terms, as follows.
  4. The claimant married in 1977. By March 2003, she and her husband had three children of whom the oldest was 17; they lived in a substantial house in Broadclyst, near Exeter, in Devon ('the house'), which they jointly held under a long lease granted by the National Trust. They also had a joint bank account, and some shares and endowment policies (of which the claimant may not have been aware). Until the events which give rise to this claim occurred, the claimant's husband appeared to be a successful financial consultant employed by a company called Arbuthnot Pensions and Investments Ltd ('Arbuthnot').
  5. On 21 or 22 March 2003, the claimant was told, apparently out of the blue, by her husband that she could not go on a projected shopping expedition, as their joint bank account had been frozen, by Arbuthnot, with whom he had a dispute which would be sorted out.
  6. In the early evening of 25 March, the claimant's husband arrived at the house with his solicitor, Mr Lawson, who told the claimant that the dispute had 'turned criminal', as her husband had taken money, apparently about £200,000, owned by one of Arbuthnot's clients, a Mrs Partridge, for his own purposes. According to her evidence, Mr Lawson told the claimant that that 'the only way [her husband] could avoid a criminal prosecution was to sell the [house] and give the money to Mrs Partridge' and that, if she did not do this, her 'children would see their father go to prison.' Mr Lawson, she said, explained that she should get independent legal advice, but added that this was 'for the sake of formality' and that she should 'ignore any advice that she might be given not to sign'.
  7. Following that meeting, Mr Lawson sent the claimant a letter on 27 March recording that, in order 'to assist' her husband, the claimant had said that she was 'willing to effectively give up [her] interest in [the house and certain] endowment [policies, pension rights and shares].' The letter went on to say that it was 'imperative because of the extent of the assets that you are willing to give up in the circumstances that you have independent advice and it is right that you should do so.' That letter was apparently received by the claimant the following day, 28 March.
  8. On that day, the claimant tried to see an independent solicitor. It is not entirely clear what she understood the purpose of this to be. She had a draft letter ('the draft letter') with her, addressed to Mrs Partridge's solicitors, Everys, in which the independent solicitor was to confirm that she 'consents to forego her interest in [the house], the endowments, and her interest in Mr Padden's pension policies', It appears that she had other documents with her, including the freezing order obtained by Mrs Partridge and the affidavit in support of the application for that order. She also said that she had copies of the documents she was to sign in order to charge the house, but that seems unlikely, as such documents do not seem to have been prepared at that time.
  9. The first two solicitors she called on declined to advise her, apparently because of the size of the proposed transaction. She then visited the defendants' Tiverton branch and told a receptionist that she needed to see a solicitor urgently, not least because she needed to get back home to see her children. She then was introduced to Rebecca Shinner, who, it transpires had only very recently qualified as a solicitor. Ms Shinner, who no longer works for the defendant, was described by the claimant as being 'very gentle' and 'young'.
  10. The meeting which then ensued was short. The claimant's evidence was that it may only have lasted 5 minutes, although she also suggested that it may have been as long as 15 minutes. A significant, and possibly the main or even only, reason why it was so short is that the claimant wanted to get away to see her children.
  11. It seems clear that the claimant explained her predicament to Ms Shinner. As the Judge put it, the claimant's 'main concerns were that her husband not be sent to prison, not for his sake particularly but for the sake of the children' and that, in the light of what Mr Lawson had told her, 'the only way in which he might avoid going to prison was to pay back Mrs Partridge.' It seems clear that she told this to Ms Shinner, who advised the claimant not to proceed with the projected transaction. When the claimant made it clear that she was going to proceed, Ms Shinner said 'I hope your husband is worth it'. The claimant replied that it was the children she was concerned about, not her husband.
  12. At the end of this short meeting, Ms Shinner explained that the defendants' policy was that the first half-hour given over to a client was free of charge.
  13. At least from the evidence before the Judge, it does not appear that anything more of substance was said at this meeting. There appears to be no contemporaneous record of the meeting.
  14. On 1 April, the defendants sent a fax (apparently under Ms Shinner's reference) to Mr Lawson, the claimant's husband's solicitor, stating that they had been asked by the claimant to write to 'confirm her consent to transfer her interest in [the house and other assets] having taken independent legal advice from this firm as to the consequences of doing so', and adding that it was her wish that the transaction 'should be dealt with as quickly as possible.' It seems pretty clear from the first and last sentences of this letter ('the 1 April letter') that the claimant must have shown the draft letter to Ms Shinner.
  15. On 10 April, four draft documents ('the four documents') were taken by the claimant's husband to the Exeter branch of the defendants, which he visited with the claimant. Some of the four documents had apparently been sent by Mr Lawson to the claimant's husband, and others had apparently been picked up on the way from Everys, Mrs Partridge's solicitors. At the defendants' Exeter offices, the claimant and her husband met Gary Mackay, a solicitor who had qualified in 1998 (and became a partner in the defendants in 2004).
  16. In the defendants' Exeter offices, the claimant signed the four documents, as required of her (presumably as indicated by Mr Mackay). Those documents, which were also signed by her husband, were (i) a second mortgage ('the mortgage') over the house as security for a debt (which was recorded as being £740,000), (ii) a charge over certain shares ('the shares'), (iii) a charge over certain endowment policies ('the policies'), and (iv) a Deed ('the Deed', which referred to the other three documents), all in favour of Mrs Partridge. (The four documents were also signed by Mrs Partridge, but it is not clear from the evidence, and does not matter, whether this was before or after they were signed by the claimant and her husband.)
  17. Mr Mackay witnessed the signature of the claimant and her husband on each of the four documents. He also 'certif[ied]' in the mortgage ('the certificate') that the claimant had 'had the consequences of this deed and the obligations which it imposes on her explained by a solicitor/ legal executive' and that he was 'satisfied' that she 'understands the nature of this deed and its meaning and effect' and that 'to the best of [his] knowledge [she] has freely consented to it without undue influence or … in reliance upon any misrepresentation…'.
  18. In the Deed, it was recited that the claimant's husband had made 'alleged unauthorised investments' with Mrs Partridge's money, recorded as being £800,000, and, in the body of the Deed, it was stated that (i) the claimant's husband 'agreed to pay' Mrs Partridge £860,000 and her costs, (ii) he agreed to secure the surrender and charge of the policies, and to procure the execution and registration of the mortgage, (iii) the claimant and her husband agreed to sell the house, and (iv) the claimant consented to the terms of the Deed, and confirmed ('the confirmation') that 'she has taken advice from Messrs Bevan Ashford, Solicitors, and will execute' the mortgage and the charges over the shares and the policies.
  19. The claimant said in evidence that she received no advice whatever from Mr Mackay. She says that Mr Mackay asked her if she wanted advice, whereupon her husband 'jumped in' and told Mr Mackay that she had had already talked to a solicitor. Mr Mackay did not give evidence, and there is no contemporary evidence to the contrary, and the Judge (perhaps unsurprisingly) did not suggest that he rejected the claimant's evidence on this point.
  20. The rest of the history can be very shortly stated. The claimant's husband was prosecuted in mid-2005 for obtaining money (about £2 million in all, it appears) by deception from a number of Arbuthnot's clients including Mrs Partridge, and he was convicted and sentenced to six years in prison. The claimant started divorce proceedings against him in 2009, and they were divorced a little more than a year ago, shortly after which he died. Meanwhile Mrs Partridge sought to enforce her rights as mortgagee, and the claimant tried to set aside the documents on the ground of undue influence, in proceedings with Mrs Partridge, which were eventually compromised. Pursuant to the terms of compromise, the house was sold in 2009, with the proceeds (or at any rate the great majority of the proceeds) presumably being paid to Mrs Partridge, and the claimant moved into rented accommodation, in which she now lives with her three children.
  21. These proceedings

  22. The claimant issued proceedings against the defendants in early April 2009, claiming damages for their negligently having failed to advise her properly in connection with the transaction. In their Defence, the defendants contended that (i) they were not in breach of any duty to the claimant, (ii) any claim based on the 28 March meeting was time-barred, and (iii) the claim anyway failed on causation.
  23. In due course, the case came on before Judge Denyer QC, on a hearing which was due to last three days. However, at the end of the claimant's evidence on the first day, the Judge effectively stopped the trial by saying in terms that he considered that the claimant had not established her claim – i.e. that there was no case for the defendants to answer. Having heard brief submissions, the Judge adjourned, and, on the morning of the second day, he gave a judgment dismissing the claim.
  24. The main issue on this appeal is whether the Judge was entitled to conclude at the end of the claimant's evidence that the defendant solicitors had satisfied their duty to her. However, the defendants raise an alternative argument namely that, even if breach of duty were established, the claim should fail on causation, because the claimant would have acted no differently, even if she had been advised as she contends that she should have been.
  25. In connection with the main issue, the fact that the Judge effectively stopped the trial of his own motion may appear at first sight to cut both ways. On the one hand, it is an unusual course to take, and can fairly be said to be surprising given that (i) the precise extent of a solicitor's duty of care to a client in unusual circumstances, (ii) what advice, if any, was tendered when there is no contemporaneous record, and (iii) whether the advice tendered to the client satisfied that duty, are often not easy questions to resolve, especially in an unusual case, and when the events happened some time ago. On the other hand, active judicial case management, even during a trial, is to be encouraged in general, and this court should be very slow to interfere with a trial judge's decisions in that area.
  26. In the end, however, it seems to me that these two competing arguments miss the central point. As both Mr Owen-Thomas and Ms Shuman (who presented their respective cases clearly and succinctly) accepted, the essential question is whether, given the evidence which he had heard and read and the findings of fact he had made, the Judge was right to conclude that the claim should be dismissed. If he was right in so holding, then the appeal must fail. The mere fact that the Judge initiated, indeed almost imposed on the parties, an application to dismiss the claim after the claimant had given her evidence would not invalidate his conclusion: that conclusion stands or falls on whether the Judge was right on the substantive law. On the other hand, if the Judge was wrong in so holding, then the appeal must be allowed and a retrial ordered. The fact that the claimant had made out her claim on her own evidence could not possibly justify judgment being entered in her favour: the defendants must have the opportunity to give evidence (although their witnesses may not remember much), and also to argue that, even if they fail on breach of duty, the claimant would have acted as she did even if the correct advice had been tendered, and that the claim is, at least in part, time-barred.
  27. I turn, then, to the central question: was the Judge right to conclude, on the evidence which he had seen and heard, and the primary facts which he found, that the claimant's case should be rejected – i.e. was he right to conclude that the defendants were not in breach of their duty to the claimant?
  28. The relevant case law

  29. The nature of a solicitor's duty when advising a client has, of course, been the subject of many judicial observations over the years. When, as here, the extent of a solicitor's duty is in issue, it is always worth bearing in mind what was said by Oliver J in Midland Bank Ltd v Hett, Stubbs & Kemp [1979] Ch 384, 403, namely that 'the court must beware of imposing upon solicitors … duties beyond the scope of what they are requested and undertake to do'. He then reiterated the familiar test, namely 'what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession'.
  30. Where a solicitor is advising a client in connection with a proposed action, Fletcher Moulton LJ said in Re Coomber [1911] 1 Ch 723, 730 that, while the solicitor 'is not bound to say … "if I were you I would do it"; or "if I were you I would not do it", … [he] should put clearly before the [client] the nature and consequences of the act … [so] that from the clear language of an independent mind they should know what they are doing.'
  31. Where a wife is charging the matrimonial home as security for the husband's business debts to a bank, 'the scope of the responsibilities of a solicitor who is advising the wife' was considered in the characteristically authoritative opinion of Lord Nicholls of Birkenhead in Royal Bank of Scotland plc v. Etridge (No 2) [2001] UKHL 44, [2002] 2 AC 773, paras 64-68:
  32. 64. In identifying what are the solicitor's responsibilities the starting point must always be the solicitor's retainer. What has he been retained to do? As a general proposition, the scope of a solicitor's duties is dictated by the terms, whether express or implied, of his retainer. In the type of case now under consideration the relevant retainer stems from the bank's concern to receive confirmation from the solicitor that, in short, the solicitor has brought home to the wife the risks involved in the proposed transaction. As a first step the solicitor will need to explain to the wife the purpose for which he has become involved at all. He should explain that, should it ever become necessary, the bank will rely upon his involvement to counter any suggestion that the wife was overborne by her husband or that she did not properly understand the implications of the transaction. The solicitor will need to obtain confirmation from the wife that she wishes him to act for her in the matter and to advise her on the legal and practical implications of the proposed transaction.
    65. When an instruction to this effect is forthcoming, the content of the advice required from a solicitor before giving the confirmation sought by the bank will, inevitably, depend upon the circumstances of the case. Typically, the advice a solicitor can be expected to give should cover the following matters as the core minimum. (1) He will need to explain the nature of the documents and the practical consequences these will have for the wife if she signs them. She could lose her home if her husband's business does not prosper. Her home may be her only substantial asset, as well as the family's home. She could be made bankrupt. (2) He will need to point out the seriousness of the risks involved. The wife should be told the purpose of the proposed new facility, the amount and principal terms of the new facility, and that the bank might increase the amount of the facility, or change its terms, or grant a new facility, without reference to her. She should be told the amount of her liability under her guarantee. The solicitor should discuss the wife's financial means, including her understanding of the value of the property being charged. The solicitor should discuss whether the wife or her husband has any other assets out of which repayment could be made if the husband's business should fail. These matters are relevant to the seriousness of the risks involved. (3) The solicitor will need to state clearly that the wife has a choice. The decision is hers and hers alone. Explanation of the choice facing the wife will call for some discussion of the present financial position, including the amount of the husband's present indebtedness, and the amount of his current overdraft facility. (4) The solicitor should check whether the wife wishes to proceed. She should be asked whether she is content that the solicitor should write to the bank confirming he has explained to her the nature of the documents and the practical implications they may have for her, or whether, for instance, she would prefer him to negotiate with the bank on the terms of the transaction. Matters for negotiation could include the sequence in which the various securities will be called upon or a specific or lower limit to her liabilities. The solicitor should not give any confirmation to the bank without the wife's authority.
    66. The solicitor's discussion with the wife should take place at a face-to-face meeting, in the absence of the husband. It goes without saying that the solicitor's explanations should be couched in suitably non-technical language. It also goes without saying that the solicitor's task is an important one. It is not a formality.
    67. The solicitor should obtain from the bank any information he needs. If the bank fails for any reason to provide information requested by the solicitor, the solicitor should decline to provide the confirmation sought by the bank.
    68. As already noted, the advice which a solicitor can be expected to give must depend on the particular facts of the case. But I have set out this "core minimum" in some detail, because the quality of the legal advice is the most disturbing feature of some of the present appeals. The perfunctory nature of the advice may well be largely due to a failure by some solicitors to understand what is required in these cases.'
  33. Where a wife provides her interest in the family home (and often in other assets) to a bank as security for her husband's liabilities, there is an obvious risk that she may subsequently allege that the security should be set aside because it was obtained by her husband's undue influence, of which the bank had notice. In order to minimise the risk of such a claim being successfully advanced, a bank should ensure that the wife has proper legal advice: that should significantly reduce the risk both of undue influence, and, even more, of the bank being held to have had notice of any undue influence. Hence, Lord Nicholls's references to the bank's reliance on the solicitor's advice in the penultimate sentence of Etridge, [2002] 2 AC 773, para 64.
  34. In my judgment, Lord Nicholls's observations in the five paragraphs just quoted are, subject of course to the facts and circumstances of each particular case, a very good guide to the appropriate approach where an individual (whether or not a wife) seeks advice from a solicitor about an intended provision of significant security in a transaction, which, at least on the face of it, would be for the sole financial benefit of another person who is in a close personal relationship with the individual.
  35. The Judge's reasons for finding no breach of duty

  36. So far as the events of 10 April were concerned, the Judge said, in para 33 of his judgment, that he was 'quite satisfied that at no stage on 10 April, on [the] evidence, were Bevan Ashford asked to advise the claimant', as they 'were simply being asked to witness the signing of certain documents.' He then emphasised the point, by saying that the defendants 'were not being asked to advise [the claimant] in their capacity of solicitors, or her capacity as a client.' He therefore concluded in the next paragraph of his judgment that the claimant's claim 'must relate to the meeting with Ms Shinner on 28 March'.
  37. The Judge expressed his views about the meeting on 28 March in paras 39-41 of his judgment. In para 39, the Judge said that the 'situation' on 28 March was 'completely different from the one Lord Nicholls had in mind'. He also drew attention to the 'very short period of time' within which the claimant now contended the defendants should have advised her. He stated that to 'foist' a duty to give full advice 'on a solicitor who simply agreed to see someone who has come off the street without an appointment seems to me to be an absurdity'.
  38. In para 40 of his judgment, the Judge said that he accepted that 'by agreeing to see the claimant, the [defendants] did assume a degree of responsibility towards her'. However, he considered that to 'expect [Ms Shinner] in those circumstances to do more, in the context of a short, free session' than to tell the claimant 'do not sign' would 'impos[e] a wholly unreasonable standard of care on the solicitor concerned.' He made the point that, having been clearly told 'do not do it', 'the claimant chose to sign [and] did not seek further advice'. He pointed out that the claimant 'did not say, as she might have done, well, I think I had better come back and see you next week with a proper appointment and we can really go through this.'
  39. In para 41 of his judgment, the Judge said that he thought it would be 'simply unfair' in such circumstances to impose a duty on the defendants to give more advice than Ms Shinner gave on 28 March, as she 'abundantly discharged [the duty] by giving the warning she gave'.
  40. Discussion on breach of duty

  41. I have three concerns about the approach taken by the Judge in his judgment, which, particularly when taken together, lead me to the clear conclusion that, subject to the defendants' causation argument, this appeal must be allowed. First, the Judge wrongly wrote off the defendants' involvement on 10 April. Secondly, the Judge was over-impressed with the fact that the claimant's meeting with Ms Shinner on 28 March was short and free of charge. Thirdly, he was too impressed by the claimant's determination to proceed with the transaction come what may.
  42. The first of these concerns focusses on the Judge' finding that, on 10 April, the defendants 'were simply being asked to witness the signing of certain documents', so that 'in truth, [the claimant] was not a client as of 10 April'. In my view, in the light of the certificate made by Mr Mackay, and the confirmation contained in the Deed in which he witnessed the signatures, Mr Mackay was crucially more involved in the transaction than as a mere witness. By signing the certificate Mr Mackay confirmed that the claimant (i) had been given appropriate legal advice about the mortgage, and (ii) to the best of his knowledge, understood the effect of the mortgage, and was not acting under undue influence or pursuant to a misrepresentation. The effect of (i) must be that Mr Mackay either had given appropriate advice himself or had taken reasonable care to ensure that the claimant had received such advice. On the evidence before the Judge, unless he was relying on the 28 March meeting, Mr Mackay did not give the claimant any advice, and the only reason he had for thinking that the claimant had had any advice was that he was told that she had by the claimant's husband, the very source of any potential undue influence or misrepresentation, which was plainly not enough to discharge his duty. As to (ii), unless he was relying on the 28 March meeting, it does not appear that Mr Mackay could, on the evidence before the Judge, have properly expressed a view, as he did not have any relevant conversation with the claimant.
  43. So far as the Deed was concerned, the effect of the fact that Mr Mackay witnessed the claimant's signature on a document which stated that his firm had advised her can be said to be less clear, as it might be said that he may not have read the document if he was only witnessing signatures. However, as Sullivan LJ pointed out, given that the claimant's husband took the claimant to a solicitor to witness their signatures on the four documents, and to give the certificate, a judge may well conclude that it was likely that a competent solicitor would have ensured that he understood the basic nature of the transaction contained in the four documents, of which the mortgage, on which he was providing the certificate, was clearly part - especially as the documentation ran to a total of less than fifteen pages, most of which were in large well-spaced type.
  44. The reason that a solicitor should properly advise and question his or her client in a case such as this, is not simply to protect the client from entering into a financially disadvantageous transaction under undue influence or misrepresentation. The purpose of such advice is, as Lord Nicholls said in Etridge [2002] 2 AC 773, para 64, also to explain that the other party to the transaction, in this case Mrs Partridge, will 'rely upon his involvement to counter any suggestion that the [claimant] was overborne by her husband'. In addition, the purpose of such advice and questioning is also, in a sense, to the client's disadvantage, as it enables the solicitors to confirm to other parties to the transaction (as Mr Mackay did in this case) that she has received such advice and questioning, thereby protecting such other parties against a subsequent claim by the client to set aside the transaction. Of course, that is a somewhat one-sided way to put the point, as the advice is, even in that latter sense to the client's benefit, because, if the client wants the transaction to proceed, she needs that confirmation, because without it, the other party would not enter into it.
  45. Given that that the certificate and the statement were intended to protect Mrs Partridge from any subsequent claim by the claimant to set aside the mortgage or the other documents on the ground of undue influence or misrepresentation, it must follow that Mr Mackay was accepting for himself, and thus for the defendants, a concomitant obligation to the claimant to have advised and questioned her (or at least to have taken all reasonable steps to satisfy himself that she had been advised and questioned) to the extent that a reasonably competent solicitor, making the certificate witnessing the Deed with the statement, would have done in the circumstances.
  46. Before discussing what that advice and questioning would have involved, I propose to consider the second concern which I have about the Judge's reasoning.
  47. The second concern is that the Judge gave too much weight to the fact that the meeting of 28 March was free of charge and so short in duration. Thus, he distinguished the present case from the type of case described by Lord Nicholls in Etridge [2002] 2 AC 773, para 64-5, on the basis that the claimant's meeting with Ms Shinner lasted 'for a very short period of time', was 'a short, free session' and was a meeting with 'a client who had just come off the street'. But the whole point of the claimant consulting the defendants, as Ms Shinner should have appreciated, and appears to have appreciated from the 1 April letter, was to ensure, as far as a reasonable solicitor could have done in the circumstances, that the claimant understood the effect of the documentation and was free of any undue influence or misrepresentation.
  48. At least in normal circumstances, merely advising a person in the position of the claimant in late March or early April 2003 that she should not enter into the contemplated transaction, seems to me to fall well short of the duty imposed on a solicitor when called on to perform the duty which culminates in signing a certificate such as that signed by Mr Mackay. As Fletcher Moulton LJ said in Coomber [1911] 1 Ch 723, 730, the ultimate purpose of consulting a solicitor is not normally to be advised in terms whether or not to enter into the contemplated transaction: it is to ensure that one understands the nature, effect, and potential consequences of the transaction, and is not under a misapprehension or undue influence. Of course, the Judge was right to say that each case turns on its precise facts, and the precise extent of a solicitor's duty when advising a person in the position of the claimant in this case must depend on all the facts of the particular case.
  49. Having said that, I consider that providing the bald advice not to enter into the transaction cannot have been a sufficient discharge of the defendants' duty to the claimant on 28 March if that duty was accurately reflected in the 1 April letter sent by Ms Shinner to Mr Lawson. Particularly as the Judge did not consider that letter when reaching his decision as to the scope of the defendants' duty on that day to the claimant, it is hard to see how his view on that issue could safely stand in any event.
  50. It is at this point sensible to consider what advice a solicitor in the position of Ms Shinner on 28 March or Mr Mackay on 10 April should have been expected to give, at least on the basis of the evidence before the Judge and his findings of primary fact.
  51. The claimant was, as the Judge said, a 'highly intelligent and well educated woman', and it appears clear that she understood the effect of the four documents. So this is not a case where she can have any effective complaint about not having been advised as to the effect and potential consequences of executing the four documents. However, she was not a lawyer, she was being faced with a very difficult choice, and she was, according to her evidence, being subject to intense pressure from Mr Lawson (and, I think, her husband) to enter into the transaction. On about 25 March, she had been presented, out of the blue, with information which showed her husband was a fraudster, and which threatened imminently to ruin her family life and her financial security, and, as a result, she was having to choose between leaving her husband to face the music alone and her children suffering as a result, or risking all her assets in trying to help him, with no certainty that it would do so. Mr Lawson, her husband's solicitor, whom the claimant described as 'very aggressive', was pressurising her to take the latter course, saying that it was the only way her husband could avoid prosecution.
  52. In those circumstances, it seems to me particularly important that a solicitor should have emphasised to the claimant the desirability of exploring why she was prepared to put her home and assets at severe risk simply to protect a husband who had turned out to be a fraudster. The claimant's answer, as I understand it, would have been that it was to protect the children from their father being sent to prison, but that answer would have cried out for further examination. It appears that her view, based on what her husband's solicitor had told her in forceful terms, was that, by signing the four documents, she would have a good, or at least reasonable chance, of preventing her husband being prosecuted and going to prison. As the Judge rightly said, this assessment was 'almost certainly wrong': whatever she did, a prosecution was almost inevitable.
  53. A solicitor, properly advising her about the proposed transaction, should have told her of the importance of finding out all the relevant facts, before she executed the four documents – the sort of advice Lord Nicholls was describing in subpara (3) in Etridge [2002] 2 AC 773, para 65. As Hughes LJ said, the obvious course would have been to suggest that the claimant authorise the solicitor to meet or telephone Mr Lawson (and maybe the claimant's husband) to find out the full extent of the husband's defalcations. If it had been discovered that, as was the case, those defalcations were far more extensive than the £200,000 which the claimant believed to be owing to Mrs Partridge, any solicitor would have been bound to tell her that, to put it at its lowest, it was very unlikely that, by executing the four documents, she would save her husband from prosecution or prison.
  54. In my opinion, if, as was the case on 28 March, the claimant indicated that she had insufficient time to be properly advised, the proper course for a solicitor would have been to explain to the claimant that she needed full advice about the course she was proposing to take, coupled with some investigation as to the facts. She should have been told in clear terms that a hurried short meeting was simply inappropriate, bearing in mind the importance, riskiness and probable pointlessness of the transaction she was about to enter into, the inadequacy of the information available at the moment, and her inevitably upset and emotional state, coupled with the pressure being put on her. The Judge seemed to think that it was for the claimant to ask for such a further meeting, but it seems to me that a solicitor who, at least according to the 1 April letter, had given the claimant 'independent legal advice' should have explored and tested her reasons for entering into the transaction, or at least advised her as to the importance of doing so.
  55. If there is a rehearing, it may be concluded that the claimant turned down clear advice from Ms Shinner, who was not due to give evidence before Judge Denyer, that a short meeting was not nearly good enough and that she ought to have a fuller meeting. If Ms Shinner did give such advice, then it might well put a different complexion on matters, as it is obviously not possible for a solicitor to force an unwilling client to be advised. But such a possibility seems inconsistent with the letter of 1 April, and there is nothing in the evidence, as far as I can see, to support such a conclusion.
  56. Very much the same sort of considerations apply to Mr Mackay on 10 April, on the basis of the claimant's evidence as to what transpired that day. Before he signed the certificate (and, it may be said, before he witnessed her signature on the Deed with the statement), Mr Mackay should have seen the claimant on her own, and given her similar advice to that which, as it seems to me on the evidence before the Judge, Ms Shinner should have given, especially in the light of what she said in the 1 April letter. Again, on a rehearing, it may transpire that Mr Mackay, who was due to give evidence to Judge Denyer, did give appropriate advice on 10 April, but there appears to have been no note of the meeting on that day.
  57. It is true that the defendants did not charge for the meeting on 28 March, for the letter of 1 April or for what they did on 10 April. However, on the facts of this case, I do not think that their duty was any different from what it would have been if they had charged. When the claimant met Ms Shinner on 28 March 2003, she was clearly seeking legal advice from solicitors in connection with a transaction which she was about to enter into, a transaction which was, from her perspective, both very important and very risky. The defendants seem to have accepted that, as otherwise they could not have written the 1 April letter. (As it happens, it seems to me that there was a contract on 28 March, as the claimant was not told that there would be no charge until the end of the meeting with Ms Shinner, so the arrangement at the start of the meeting must have been that she impliedly agreed to pay the defendants at their normal rate or - if different - at a reasonable rate.)
  58. The same point may be made about Mr Mackay on 10 April, when he not merely witnessed the documentation whereby the claimant effectively guaranteed her husband's liability to pay £800,000: he formally 'certif[ied]' as he did, and witnessed the Deed containing the statement by the claimant .
  59. I now turn to my third concern, namely that the Judge appears to have been impressed by the point that the claimant appeared to have been set on the course of entering into this otherwise highly disadvantageous transaction mainly, or even perhaps solely, because of her determination to keep her husband out of prison for the children's sake. To my mind, that can fairly be said to tell as much in favour of her case on breach of duty as against it. The claimant had been led to believe that she might well prevent her husband going to prison by what Mr Lawson, her husband's solicitor, had said in strong terms. But it was a reason which, if investigated and discussed, would have been shown to be unlikely to stand up. Further, as Lord Nicholls emphasised in Etridge [2002] 2 AC 773, para 64, if Mr Mackay had advised as he should have done, at least in a paradigm case, he should have explained to the claimant why he was advising her and providing the certificate, which might also have brought home to the claimant that she was unwise to be executing the documents
  60. So, as I see it, there is real force in the argument that the most important purpose of independent legal advice in this case would have been to explain to her that her main, or perhaps sole, purpose for entering into the transaction was very weak as it would very probably not be achieved.
  61. Concluding remarks

  62. I would therefore allow this appeal, unless the defendants can establish that the claimant would have entered into the transaction on 10 April even if they had given the correct advice.
  63. In my view, that argument can be very easily disposed of. It is classically a question for the trial judge, having heard and read all the evidence and having observed any relevant witness give evidence. The Judge made no express finding on the point, and, in so far as it is said that it is obvious that he would have accepted the defendants' case on the point, it would have been on a false premise, namely that the defendants did not have to give any further advice than they actually gave. Furthermore, if the defendants had advised as they should have done, it is conceivable that a judge could conclude that they would, or should, not have written the letter of 1 April, or provided the certificate of 10 April.
  64. In these circumstances, I would allow the appeal. On the basis of the evidence which he heard and read and the primary fact-findings which he made, the Judge was wrong to conclude that the defendants had complied with their duty to the claimant for the reasons which he gave, and it is not possible for this court to hold that the claimant would have acted no differently if she had been properly advised. There must be a new trial in front of a different judge.
  65. For the benefit of the defendants, two points should be made about this conclusion. First the conclusion and the reasoning on which it is based relate only to the breach of duty point: I have reached no conclusion on the other two points raised by the defendants. Secondly, my conclusion and reasoning are based on the primary facts found by the Judge after hearing only one witness, the claimant, and after forming a view on the facts and evidence which he referred to in his judgment. On any retrial, it will, at least in principle, be open to the defendants (i) (unless the parties otherwise agree) to test the claimant's evidence again, possibly with different results, (ii) to call witnesses to give evidence which adds to, or which contradicts, the claimant's evidence, or puts it in a different light, (iii) to argue that, once all the oral and written evidence has been heard and read, the facts which should be found by the retrial judge justify different conclusions from those which I have drawn from the evidence found by Judge Denyer, and (iv) to contend that they complied with any duty they owed the claimant, and, if they did not, that the claimant would have acted no differently if they had done so.
  66. I would also like to say that the active case management of the sort which the Judge adopted in this case would, in some circumstances, be appropriate: if a judge forms the clear and correct view that a claimant has not proved her case on her evidence, then it can save money and court time if he encourages the defendant to call no evidence. But it is a high risk course to take, as the history of this case shows, and it should only be adopted in a very clear case. The Judge thought that this case was very clear, and he explained why in a well expressed judgment. However, for the reasons given in this judgment, I think that he was mistaken. It was a particularly unfortunate course, because, as I understand it, the defendants only had one witness to call, Mr Mackay, the case was already going into a second day (if only for judgment), and, if the trial had been permitted to take its natural course, all the evidence and arguments could have been before the court and the case would still only have taken two days.
  67. At the end of the hearing of this appeal we told the parties that the claimant's appeal would be allowed, so we could deal with costs. As to that aspect, we considered that (i) it was not the fault of the claimant that the costs of the hearing before Judge Denyer will be (at least largely) wasted, so they should be costs in the case, but (ii) the claimant should have her costs of the appeal, as the defendants decided to resist the appeal: while that was a perfectly proper decision, it should carry with it the normal costs consequences.
  68. Lord Justice Hughes:

  69. I agree.
  70. Lord Justice Sullivan:

  71. I also agree

BAILII: Copyright Policy | Disclaimers | Privacy Policy | Feedback | Donate to BAILII