Conveyancing firm avoids £100,000 damages claim despite admitting negligence

A conveyancing firm has avoided paying £100,000 (plus interest) despite admitting negligence after the Court of Appeal upheld a decision to award just £250 damages.

Ipswich firm Gotelee and Goldsmith (now known as simply Gotelee) had been taken to Court former clients over the fallout from its handling of a property purchase. The complainant had purchased a rural property in Suffolk in 2007 for £600,000 and took out a £495,000 mortgage, hoping to upgrading the site for resale.

However within a year it emerged that planning consent from 1974 had placed a restriction dictating that the building could be used only for residential purposes in conjunction with the occupation and ownership of another nearby site, which had already been sold off independently. When made aware of the restriction, the buyers had applied for it to be lifted, and, having paid a £250 application fee, were granted approval in 2009.

But in the meantime the buyers had also issued a claim form in the Chancery Division, asserting that the property’s value with the restriction was no more than £300,000. At the previous trial the judge awarded damages of just £250, to cover the cost of the application to the local authority, but nothing more.

The claimant took the case to the Court of Appeal for a hearing on 19th and 20th of January, arguing that the judge should have awarded a sum of £100,000 plus interest to cover the difference between the value of the property in May 2007 without the restriction, and the value of the property at that date with the restriction.

The buyers said they would not have purchased the property if they had received proper advice on the restriction. However on appeal, their lawyers conceded that this was a case of “capital loss, not ongoing loss” but maintained that the claimants were still entitled to damages for the difference in value of the property.

Gotelee and Goldsmith said the claimants had already got what they wanted through the lifting of the restriction, and to award any more would be to overcompensate them. Lord Justice Davis agreed there were no grounds in the appeal to overturn the trial judge’s ruling, saying there was nothing remaining that required compensation.

As the firm’s lawyers had conceded, news about the restriction must have been a “tremendous shock”, but ultimately this was a case of “all’s well that ends well” and there was no occasion for pursuing a claim.

When it came to disposition, Lord Justice Davies said: “As the arguments wore on, and having also reflected further since the hearing, I have increasingly come to the view that there is rather less to this case than possibly first meets the eye and which doubtless prompted leave to be given on the papers by the Single Judge. I am of the clear opinion that the Judge (even if, in some respects, certain passages of his judgment and aspects of his approach are debatable) reached the right conclusion.

“What determines the outcome of this case in my view is an application, by reference to the facts, of the core principle set out in Livingstone v Rawyards Coal Co. By reason of the subsequent removal of the restriction the appellants have suffered no loss and there is nothing in respect of which they require to be compensated. That is the nub of it.”

Today’s Conveyancer has approached Gotelee Solicitors for comment.

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