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	England and Wales Court of Appeal (Civil Division) Decisions
You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Hiseman v Janes [2001] EWCA Civ 1007 (18 June 2001) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2001/1007.html Cite as: [2001] EWCA Civ 1007

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IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
APPLICATIONS FOR PERMISSION TO APPEAL
AND AN EXTENSION OF TIME

		Royal Courts of Justice Strand London WC2 Monday, 18th June 2001

1. LORD JUSTICE ROBERT WALKER: This is an application by Mr Stephen Hiseman who has appeared in person for permission to appeal and an extension of time for appealing from an order of Mr Justice Holland mad on 4th October 2000. The judge's order dismissed an action by Mr Hiseman against his former solicitor, Mr David Janes, on the grounds that liability had not been established and that the claim would in any event have been statute barred.
2. The sequence of events began as long ago as 1989. In April 1989 Mr Hiseman decided to buy two leasehold properties, Nos 2 and 3 Lees Place, London W1 from a company called Eucolight Ltd ("Eucolight"). The solicitors acting for Eucolight were Mishcon de Reya. The agreement was that the price for No 2 Lees Place would be £250,000 and for No 3 Lees Place £675,000, making a total of £925,000. Mr Hiseman acquired a company called Boldline Ltd as a corporate vehicle for the purchase of No 2. In the case of No 3 he himself intended to purchase it.
3. The judge's finding was at that time that Mr Hiseman was a mature and successful businessman and that Mr Janes was an experienced conveyancing solicitor. It seems that at that time he was practising as a sole practitioner at 90 Jermyn Street although at other times Mr Janes has had one or more partners in practice with him.
4. On 4th April two contracts came into existence. One was signed by Mr Hiseman on behalf of Boldline to acquire No 2 and the other was signed by Mr Hiseman on his own behalf to acquire No 3. The contracts provided for reduced deposits totalling the sum of £50,000 to be paid on exchange of contracts, the balance to bring up the level of deposit to 10 per cent (that is a further £42,500) to be paid if completion had not taken place by 16th May 1989, which was the contractual date for completion. It appears that Mr Hiseman had a problem over finding funds for completion, and negotiations took place between Mr Janes and Mishcon de Reya. The judge found as a fact that those negotiations were approved by Mr Hiseman and from the file of papers before me - although the file does not always tell the full story - it seems that Mr Janes was in touch with his client over these negotiations. The outcome was a letter sent by Mishcon de Reya to Mr Janes dated 24th May 1989. It referred to a telephone conversation that afternoon in which Mishcon de Reya informed Mr Janes that they had instructions -

"to agree the proposals basically as set out in your letter of 12th May which will obviously need to be slightly varied in that we are now beyond 16th May."

5. The letter went on to summarise the essential points:

"1 The contractual completion date remains 16th May.

2 You will remit to us the balance of the 10% deposit i.e. £42,500 without delay.

3 The whole of the deposit will be held by us as agents of the vendor.

4 Interest on the balance of the purchase price will accrue at the contractual rate as from 16th May and that balance will of course be reduced as soon as we receive the balance of the 10% deposit.

5 Neither we nor our clients will serve a notice to complete prior to 1st June.

6 You and your clients will accept the validity of the licence to assign Lees Place of which a copy has already been supplied to you."

6. I should mention two points on that letter. First, it is plain that the deposit of £50,000 originally paid was held by Mishcon de Reya as stakeholder. Second, the reference to a licence to assign was to a licence for an assignment granted by the head landlord, an unlimited company called Grosvenor (Mayfair) Estate, which is no doubt connected with the Duke of Westminster's settled estates. Mr Hiseman has told me this morning that that letter was never answered and he challenges that it ever represented a final agreement reached between the firms of solicitors. However, Mr Justice Holland appears to have made a clear finding to that effect and it does not appear that that point was taken before him, at any rate with the clarity with which it has been put forward this morning.
7. Mishcon de Reya had obtained a licence for the assignment from Grosvenor (Mayfair) Estates which ran for three months from 13th April 1989. After the letter of 24th May it appears that Mr Hiseman was still not in a position, either personally or through Boldline, to pay the sum of £42,500 required to bring the deposit up to the 10 per cent level.
8. On 27th June 1989 Mishcon de Reya served a notice to complete under the Standard Conditions of Sale, that notice to expire on 18th July 1989. Mr Janes wrote to Mr Hiseman a letter which contained the sentence:

"I know you are aware of the consequences."

9. In view of Mr Hiseman's position as a successful businessman with a significant interest in property, no doubt he was aware of the consequences. On 17th July - that is the day before the notice to complete was to expire - Mr Janes told Mishcon de Reya that his client was not going to complete because he was unable to. On 18th July, therefore, Mishcon de Reya wrote to Mr Janes announcing that they were reluctantly forfeiting the deposit of £50,000, calling for the balance of the deposit of £42,500 and indicating an intention to re-sell the property and to claim for any loss on the re-sale while crediting the amount of the deposits.
10. Mishcon de Reya had not extended the licence to assign beyond 13th July when the three-month period of its validity expired. However, Mr Justice Holland made a clear finding of fact that a further licence to assign could have been readily obtained from the head landlord. The properties were eventually sold in March 1990 for £775,000. A licence for assignment was forthcoming on that occasion.
11. On 6th October 1989 Eucolight sued in the High Court for £42,500. On 11th April 1990 the defendant put in a defence and counterclaim taking the point that the notice to complete was not valid because the licence to assign had expired by 18th July 1989 so the vendor was no longer ready, willing and able to complete. Whether that point would have prevailed at trial is something that will never be tested. It was sufficient to prevent any successful application for summary judgment. On 30th May 1990 Eucolight made a further claim for the loss on the resale. However, in September 1992 Eucolight was struck off the register - not, Mr Hiseman stresses, wound up as the judge seemed to have thought - and the outcome was that the proceedings lapsed.
12. The consequence was that Mr Hiseman lost no more than the deposit of £50,000 and the judge commented that he might have been expected to regard this as a satisfactory state of affairs. However, plainly he did not. His position is that the counterclaim, if vigorously pursued against Eucolight, might have been successful. He also contends that he might have joined Mishcon de Reya as a defendant to the counterclaim and that firm would, no doubt, have been a substantial defendant able to pay any damages awarded against it. Very belatedly Mr Hiseman decided to sue Mr Janes. The writ was issued on 17th February 1999 and a statement of the claim was delivered alleging negligence both in the conveyancing transaction (see paragraph 7 in the statement of claim) and in the conduct of the subsequent proceedings commenced by Eucolight (see paragraph 11 of the statement of claim). Paragraph 7 contains four sub-paragraphs of particulars of alleged negligence.
13. At the trial, at which Mr Hiseman was represented by solicitors and counsel, the judge rightly rejected three of these sub-paragraphs as unarguable. However, he rightly gave fuller consideration to paragraph 7 (1) that Mr Janes failed to notify the claimant that the vendor was no longer in a position to complete. That point was based on the three-month period after which the licence to assign expired, as it happens, five days before the final date for completion specified in the notice to complete. The argument was that Mr Janes should have gone through the motions of being ready to complete on 18th July 1989 unless and until it became apparent that Mishcon de Reya had obtained an extension of the licence to assign. The judge said of that:

"The problem with this ingenious scenario is that by the time one gets to the end of it one is conscious that one has long, long since departed from the standard of conduct of a reasonably skilled solicitor.

When Mr Hiseman instructed Mr Janes he hoped he had fully instructed someone whose skills and attributes included his standing as a solicitor, a concept with implications in terms of integrity and professional relationships. A solicitor for a purchaser can attend a necessarily pre-arranged completion meeting knowing that he is not there to complete but simply to seek to smoke out and exploit a possible weakness in the vendor's position, but I refuse to hold that a failure to do so in favour of up-front candour, namely that, `It is a waste of time attending completion, having regard to my instructions', is or could be negligent."

14. The judge dismissed the allegations of negligence in the litigation also. Counsel instructed by Mr Janes had put forward a defence and counterclaim which prevented Eucolight from obtaining summary judgment. There is no evidence that Mr Hiseman instructed Mr Janes to take the initiative in pressing the counterclaim. Of this part of the claim the judge said:

"The overall result was, in my judgment, highly advantageous for Mr Hiseman in that his liability was limited, as I have so far indicated. For my part, I cannot discern any negligence whatsoever over the failure to rock that particular boat with a view to pressing matters further.

At this distance in time, there is nothing to indicate a failure by Mr Ja[n]es to conduct the litigation with anything other than the care and skill to be expected of him."

15. The judge then observed that the claim was hopelessly statute barred. Mr Hiseman knew or was in a position to know about the licence to assign point ever since his counsel settled the defence and counterclaim in 1990.
16. In his carefully prepared skeleton argument Mr Hiseman has taken eight separate points, some of which he has elaborated this morning. The first point he takes is that the judge erred in holding that under the contracts in their original form deposits totalling £50,000 were held by the vendor's solicitors as agents for Eucolight. As I have already said, it seems clear that the £50,000 was originally held by them as stakeholders. But I do not read the judge's judgment as saying anything other than that. What he said was:

"It is to be borne in mind that at that stage Mr Hiseman was concerned to buy time. The question was, what consideration should he give? If one looks at the terms that had been negotiated and finally appeared for confirmation in the letter of 24th May, the one such piece of consideration that is new and fresh is the notion that the whole of the deposit would be held by Mishcon de Reya as agents of the vendors."

17. The judge's reference to a part of the bargain which is new and fresh shows to my mind clearly that the judge had well in mind that initially the deposit had been held by the solicitors as stakeholders. In any case the essential point was whether Mr Janes had obtained proper instructions for the variation, and the judge who heard and saw the witnesses made a clear finding that he did.
18. The second point taken is that the judge erred in finding that Eucolight could sue when it was not itself ready, willing and able to complete. Again, this point seems to me to attribute to the judge a view which he did not hold. The judge made a specific finding of fact that a further licence to assign could readily have been obtained from the head landlord within 24 hours' notice. That very short time scale may be questionable but the general thrust of the judge's finding is clear, and there are of course some matters of conveyancing which, provided that they can be dealt with at or immediately after completion, such as of course the discharge of an outstanding mortgage, are in no way an inhibition on the requirement of being ready, willing and able to complete.
19. The third point is that Mr Janes is said to have instructed counsel on a wrong basis as to the deposits, that is that they were held by Mishcon de Reya as stakeholders. The only instructions in the trial bundles, those dated 28th October 1993 to Mr Francis Moraes, correctly state that the solicitors held the deposits as agents for the vendor. Mr Hiseman has said that he was referring not to the instructions to Mr Moraes but to some other instructions. However I cannot, on the information before me, take that any further.
20. Then it is said that the judge failed to take account of Mr Janes having wrongly told Mr Hiseman that his counterclaim had been stayed. It is quite true that the effect of Eucolight's failure to provide security for costs was to stay its claim but not the counterclaim against it. However the defence was that the counterclaim could not possibly have succeeded. The judge was in no doubt that Mr Janes was acting wisely in not trying to press the counterclaim. I have read out a passage from his judgment referring to the wisdom of not rocking the boat. By May 1991 Eucolight was in default of an order for security for costs of £10,000 and it was struck off the register at some date in the next year. It seems highly speculative whether a judgment obtained during 1991 would have been enforceable against it.
21. Fifthly, it is said the judge is wrong in finding that there were no instructions from Mr Hiseman for his counterclaim to be pursued. From my reading of the trial bundle - but the trial bundle may not tell the whole story - this point depends on what period one looks at. Certainly on 9th October 1992 Mr Hiseman was writing to Mr Janes instructing him to proceed against both Eucolight and Mishcon de Reya. That instruction seems to have been countermanded so far as Eucolight was concerned in January 1993.
22. From the beginning of 1994 Mr Hiseman was writing frequent letters to Mr Denis Cooper, a managing clerk at Mr Janes's firm, asking for an up-date on the Eucolight position. For whatever reason Mr Janes's firm appears to have failed quite lamentably to answer those letters. By then Eucolight had long since been struck off the register. These matters were raised in paragraph 11 (4) and (5) of the statement of claim.
23. Points 6, 7 and 8 in the skeleton all go to the limitation issues. The limitation period was six years but capable of being extended in the event of fraudulent concealment, that expression being interpreted in an extended way. The general thrust of these parts of the skeleton is that by failing to answer letters and to hand over files Mr Janes's firm concealed facts from Mr Hiseman so as to prevent time running for the purposes of the Limitation Act 1980.
24. It does appear - although I have heard only one side of the story -that there were some quite lamentable failings on behalf of Mr Janes's firm after 1993. Mr Hiseman's new solicitors had to obtain an order against the principals in David Janes and threaten them with committal for contempt of court before the matter was fully dealt with. Nevertheless, there are some serious and, in my view, insurmountable difficulties in relying on those matters for the purpose of the proposed appeal.
25. First, the essential facts had, as the judge held, come out in counsel's advice and pleadings as long ago as 1990. Failures in 1994 or 1995 or 1996, however deplorable, could not stop time running if it had once started. Second, the judge found that there was no loss in any event. To pursue the counterclaim after 1993 with or without Mishcon de Reya as defendant would, as the judge found, have been a waste of money even if Mr Hiseman had had money. It appears that he was in receipt of legal aid. When he applied for legal aid in 1990 he said that he had no income and only negligible savings. Finally, and perhaps most importantly, the solicitors' failure to hand over papers had already been the subject of separate proceedings which have been concluded. It seems to me that it cannot be relied on as a separate substantive breach of duty in these proceedings and, as I understand it, Mr Hiseman does not seek to do so. He seeks to rely on it in connection with the limitation defence.
26. I can well understand Mr Hiseman's indignation at the way the solicitors treated his and his new solicitors' communications between 1994 and 1996. But that does not make good the defects in his claim over the events of 1989 and the period after that. It seems to me that the judge was correct in his conclusion, having seen and heard the witnesses, and that an appeal would be hopeless.
27. I therefore dismiss the application for permission to appeal and I need not consider whether to grant an extension of time.
Order: Application dismissed. The second application was adjourned