(New Zealand Court of Appeal) The claimant had agreed to make a loan to X and to take security for it on a yacht. The defendants, who were X’s solicitors, certified to the claimant that the instrument of security executed by X in relation to the yacht was binding on him. In fact, as the defendants knew, it was not binding on him because he was not, and was not intended to become, the owner of the yacht.
Held: The fact that a certificate is sent by a solicitor to a lender confirming the giving of independent advice and that guarantors had signed the guarantee voluntarily may place a duty of care on the solicitor in relation to the lender.
Cooke J said: ‘the relationship between two solicitors acting for their respective clients does not normally of itself impose a duty of care on one solicitor to the client of the other. Normally the relationship is not sufficiently proximate. Each solicitor is entitled to expect that the other party will look to his own solicitor for advice and protection.’
Richardson J said: ‘This is not the ordinary case of two solicitors simply acting for different parties in a commercial transaction. The special feature attracting the prima facie duty of care is the giving of a certificate in circumstances where the [defendants] must have known it was likely to be relied on by the [claimant].’
Cooke J, Richardson J
[1983] NZLR 22
England and Wales
Cited by:
Cited – Connolly-Martin v Davis CA 27-May-1999
A claim was brought by a party against counsel for his opponent who had gone beyond his authority in giving an undertaking for his client.
Held: The claim had no prospect of success, and had been struck out correctly. Counsel offering to the . .
Cited – Steel and Another v NRAM Ltd (Formerly NRAM Plc) SC 28-Feb-2018
The appellant solicitor acted in a land transaction. The land was mortgaged to the respondent bank. She wrote to the bank stating her client’s intention to repay the whole loan. The letter was negligently mistaken and the bankers allowed the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Professional Negligence
Updated: 12 January 2022; Ref: scu.424848
