Mr Bell asked his solicitors to transfer the matrimonial home into his wife’s sole name. He was to receive a one-sixth interest of the gross proceeds on a sale. His interests were to be protected by a trust deed or mortgage. The solicitor drafted the documents and the transaction was completed; but no declaration of trust or mortgage was prepared or executed. The house was eventually sold and the wife spent all the proceeds. More than six years after the transfer of the house to the wife, the plaintiff started proceedings against the solicitors.
Held: He suffered damage when he transferred title, rather than the later date at which his wife sold the house and dissipated the proceeds.
Nicholls LJ said: ‘Due to the defendants’ negligence, the plaintiff parted with his legal estate in the property conveyed to his wife in exchange for an equitable interest in the proceeds of sale. That equitable interest until secured by a charge or acknowledged by a deed of trust was clearly less valuable to the plaintiff. Unprotected against the interests of third parties by registration of a charge or of a caution, it was less valuable still. I consider therefore that the plaintiff’s cause of action arose when he parted with his property or at the latest at the time when the careful solicitor would have affected registration either of a charge or of a caution.’ and ‘the question of damage and the limitation period in negligence claims has been a troublesome one for some years’ His cause of action in negligence accrued when the transfer was executed without the protection of the plaintiff’s interest in the house or its proceeds of sale. The damage, such as it may have been, was sustained when the transfer was executed and handed over. At that point the plaintiff parted with title to the house, and he became subject to the practical inconveniences which might flow from his not having his wife’s signature on a formal document.
Judges:
Nicholls LJ
Citations:
[1990] 2 QB 495
Jurisdiction:
England and Wales
Citing:
Cited – Forster v Outred and Co CA 1981
A mother signed a mortgage deed charging her property to H as security for a loan to her son. She claimed the solicitor had been negligent in his advice. The solicitor replied that the claim was out of time. The loss accrued not when demand for . .
Cited by:
Cited – Daniels v Thompson CA 18-Mar-2004
The executor brought an action against the solicitor who had advised his client in connection with the transfer of her house in which she was to continue to live, saying he should have advised her that the gift would not protect her from Inheritance . .
Cited – Green and Another v Alexander Johnson (A Firm) and Another ChD 26-May-2004
The judgment related to the assessment of damages for professional negligence by the defendants. The court deprecated the practice of separating off assessments of damages from the principal claim, since this created a risk of confusion. The . .
Cited – The Law Society v Sephton and Co and others CA 13-Dec-2004
The Society appealed dismissal for limitation of its claim against the defendant firm of accountants arising from alleged fraud in approval of a solicitor’s accounts.
Held: The liability did not arise until the Society decided to make . .
Cited – Law Society v Sephton and Co (a Firm) and Others HL 10-May-2006
A firm of solicitors had a member involved in a substantial fraud. The defendant firm of accountants certified the firm’s accounts. There were later many calls upon the compensation fund operated by the claimants, who sought recovery in turn from . .
Cited – First National Comercial Bank plc v Humberts CA 27-Jan-1995
The plaintiff loaned money on the basis of a negligent survey by the defendant. The borrower subsequently defaulted, and the lender issued a writ. The defendant said that the claim was time barred.
Held: The court allowed the plaintiff’s . .
Cited – Watkins and Another v Jones Maidment Wilson (A Firm) CA 4-Mar-2008
The claimants alleged professional negligence by the defendant solicitors in advising them to agree to a postponment of a completion. The defendants raised as a preliminary issue the question of limitation. The claimant said that the limitation . .
Cited – Pegasus Management Holdings Sca and Another v Ernst and Young (A Firm) and Another ChD 11-Nov-2008
The claimants alleged professional negligence in advice given by the defendant on a share purchase, saying that it should have been structured to reduce Capital Gains Tax. The defendants denied negligence and said the claim was statute barred.
Cited – Axa Insurance Ltd v Akther and Darby Solicitors and Others CA 12-Nov-2009
The court considered the application of the limitation period to answering when damage occurred when it arises under an unsecured contingent liability. The claimant insurance company had provided after the event litigation insurance policies to the . .
Cited – Bowling and Co Solicitors v Edehomo ChD 2-Mar-2011
The court was asked ‘when an innocent vendor whose signature is forged on the documents for the conveyance of land suffers damage, for the purposes of limitation of an action arising from a solicitor’s breach of duty. Is it on the exchange of . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence, Limitation
Updated: 29 April 2022; Ref: scu.196070
