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Lawbite: let the client be the judge...

  • United Kingdom
  • Litigation and dispute management
  • Real estate
  • Real estate litigation

01-06-2017

Orientfield Holdings Ltd v Bird & Bird LLP [2017] EWCA Civ 348

The Court of Appeal has dismissed an appeal from Bird & Bird LLP (“B&B”) to set aside a ruling that it acted negligently by failing to disclose relevant information in relation to the purchase of a £25.75 million property for Orientfield Holdings Ltd (“OHL”).

B&B provided a report on title (“ROT”) to OHL, which did not highlight the existence of a Plansearch Plus Report (the “Planning Report”) and plans identified in the Planning Report to build two schools nearby to the property. Prior to completion, OHL learnt of the development and purported to rescind the contract. Following settlement of a claim by the sellers, who were seeking to forfeit the deposit, OHL issued a claim against B&B for the remaining half of the deposit plus interest and costs.

The High Court gave judgment in favour of OHL and concluded that B&B had a duty to explain the results of the Planning Report by way of a summary of the contents in the ROT and it was a breach of that duty to say that the information provided did not reveal anything that adversely affected the property. HHJ Pelling QC did accept that B&B was not under a duty to obtain the Planning Report as it was not obliged to undertake investigations that were not requested by OHL. He found, however, that having carried out such a search, B&B had a duty to explain the results of that search to OHL.

B&B appealed the decision and argued that the trial judge had erred in (i) failing to explain what the terms of the summary should have been (ii) finding that a summary would have revealed the existence of the development and (iii) finding that OHL would have pulled out of the purchase.

Lady Justice Gloster upheld the decision of the High Court and despite conceding that the judgment ought to have “worked through the issue of causation more methodically and explicitly”, concluded that “a non-negligent summary would have resulted in the detail of the development emerging” as it was obvious from the face of the Planning Report that the school development was potentially highly significant and “the conclusion that OHL would have withdrawn from the purchase at that time is unassailable.”


Key points

  • this case highlights the scope of solicitors’ duties and in particular their reporting obligations to their clients
  • a solicitor may not be obliged to undertake investigations that are not expressly or impliedly requested by the client but, if it does so, it must consider reporting on the findings
  • the duty to communicate matters actually known to a solicitor is to communicate information that may be material, which is an intentionally low threshold
  • a non-negligent solicitor would have prepared a summary of the Planning Report in the ROT which would have highlighted the existence of the development, explained its potential significance, and triggered the client to ask for further investigation to be carried out
  • it is for the client to judge the impact of the information and make the commercial judgments in relation to matters, not the solicitor

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