Spencer-White v Harding Evans LLP, Court of Appeal - Civil Division, June 14, 2017, [2017] EWCA Civ 434

Issuing Organization:Civil Division
Actores:Spencer-White v Harding Evans LLP
Resolution Date:June 14, 2017
 
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Case No: B2/2015/1451

Neutral Citation Number: [2017] EWCA Civ 434

IN THE COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM THE COUNTY COURT AT CARDIFF

His Honour Judge Milwyn Jarman QC

HC110C1402

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 14/06/2017

Before :

LADY JUSTICE RAFFERTY DBE

and

LADY JUSTICE SHARP DBE

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Between :

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Mr John Dagnall (instructed by QualitySolicitors Rubin Lewis O'Brien) for the Appellant

Mr Graeme McPherson QC (instructed by DWF LLP) for the Respondent

Hearing date: 15 February 2017

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JudgmentLady Justice Sharp :

  1. This is an appeal with permission of Lewison LJ, against the order of HHJ Milwyn Jarman QC as set out below.

    The facts

  2. The Respondent to this appeal is a firm of solicitors. The Defendant, and Appellant is Paul Spencer-White. The Respondent acted for the Appellant for about 9 years between 2002 and March or May 2011 in relation to a large number of matters, most of which were commercial and residential property transactions. Mr Michael Jenkins was the Respondent's commercial property partner who dealt with the Appellant day to day, although another solicitor, Ms Strong, did so during a period in 2010 when Mr Jenkins was on secondment. The Respondent also carried out certain work for the Appellant and his then wife jointly, for example in relation to the annual rent review on a property they jointly owned in Aberystwyth called the Academy.

  3. The relationship between the two men was a friendly one. However, the position changed in 2011. A deed of variation (the Blockbuster deed) drawn up by the Respondent and signed by the Appellant in relation to a property in Brecon, which the Appellant leased to Blockbusters, provided that there should be a rent free period until 25 March 2011. The Appellant claimed he did not authorise this variation but had only agreed a rent free period until 1 February 2011. The Respondent's position was, however, that the Appellant had instructed Mr Jenkins by telephone on 23 February 2009 that he was content for the end-date for the rent free period to be until the 25 March 2011.

  4. In consequence of the disagreement over this issue the Appellant ``terminated the relationship'' with the Respondent. The Respondent was not at that stage engaged in any contentious or non-contentious matters for the Appellant (i.e. there were no `live' retainers); therefore this termination meant only that the Appellant did not instruct the Respondent in respect of any new matters.

  5. However, the Respondent had incurred fees and disbursements in the sum of £3,231.36 plus interest for work the firm had carried out for the Appellant in relation to a proposed (but ultimately abortive) sale to a Mr and Mrs McDougall of a property owned by him, namely 6 Vineyard Mews in Richmond.

  6. On 8 December 2011, the Respondent invoiced the Appellant for that sum. The Appellant refused to pay. In consequence, the Respondent exercised a lien over the Appellant's files and it eventually issued these proceedings, a Part 7 Claim, claiming the sum of £3,231.36 (fees of £2,692.80, plus VAT) plus interest. The Respondent acknowledged it had sums of £587.50 and £1,023.12 belonging to the Appellant in its client account, but claimed to be entitled to retain those sums to be offset against the sum invoiced when it obtained judgment. The Appellant disputed the Respondent's entitlement to the sum of £3,231.36; by the time of the trial, he had relied on a considerable number of grounds of defence and counterclaims. An important part of his case that he was under no obligation to pay the fees claimed arose from his discovery in 2012 that the Respondent had, so he believed, acted for the Appellant's ex-wife, after, on the Appellant's case, it had agreed not to do so. Broadly speaking however, the matters relied on in his defence fell into three categories:

    i) Technical objections to the amounts that had been billed;

    ii) A claim that the Vineyard Mews retainer was an entire contract, and that as the sale of that property had not been completed, the Respondent was not entitled to charge the fees claimed in the Invoice; and

    iii) An overarching assertion that he was not obliged to pay the Invoice in any event because the Respondent's conduct in acting for the Appellant's ex-wife, after assurances were given in September 2008 and June 2009 that it would not do so, entitled the Appellant to rescind ``all retainers and relationships and contracts between the [Respondent] and [the Appellant] from July 2009''. Therefore, so it was said, the Respondent was not entitled to charge the Appellant any fees for work done after it accepted instructions to act on the ex-wife's behalf; the Appellant was entitled to damages and/or an account of profits made by the Respondent from the Appellant and his ex-wife after that date, and the Respondent was not entitled to a lien over the Appellant's client files.

  7. As for the counterclaims, these were based on contractual retainers existing between the Respondent and the Appellant. It was alleged that the Respondent had been negligent in respect of two of those retainers:

    i) The retainer in respect of the Deed of Variation for the Blockbuster lease (the Appellant claimed sums he alleged he had lost as a result of the unauthorised extension of the rent free period); and

    ii) The Vineyard Mews retainer.

  8. The Appellant also alleged the Respondent had wrongly detained his files (a claim which included an assertion that the Respondent had lost files relating to land known as Hillside).

    The First Instance Decision

  9. The trial took place before the judge over the course of four days, in March 2015. The judge handed down a reserved judgement on 16 April 2015.

  10. The judge approached the matter by first resolving two major disputes of fact. The first was whether the rent free period for the Blockbuster lease extended to 1 February 2011 or 25 March 2011. He resolved that issue in the Respondent's favour. The second related to the counterclaim based on the assurance which the Appellant claimed...

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