Anthony Murphy, Ciaran Murphy and A & C Enterprises Ltd (plaintiffs) v John F. Proctor practising under the style and title of John F. Proctor & Co. (defendant).

Professional Negligence - Conveyancing - Duty of solicitor to client - Whether solicitor failed to identify to clients the extent of lands they were purchasing - Whether planning search should have been carried out prior to the signing of the contracts - Conflict of evidence - Credibility of witnesses.

The High Court (before Mr Justice Kelly): judgment delivered 11 October 2000.

Where there were conflicts of evidence between the plaintiffs and their witnesses and the defendant, as to what the plaintiffs were told they were purchasing, the defendant was found to be the more reliable and believable witness and was found to have discharged his duty to the plaintiffs. Where a planning search was not carried out prior to the contract being signed and no loss had accrued to the plaintiffs, the defendant was found not to be liable.

Mr Justice Kelly so held in assessing the credibility of the parties in this action. On the issue of liability, he found in favour of the defendant and dismissed the plaintiffs' action.

Andrew Bradley SC, James Gilhooly SC and Kevin Staunton BL for the plaintiffs; Hugh O'Neill SC and Rachel Meagher BL for the defendant.

Mr Justice Kelly set out the background to the case by stating that the first plaintiff was a former milk roundsman. The second plaintiff, who was not related to him, was a former barman. In the late 1980s they decided that they would like to buy a shop premises which would be run by the second plaintiff. In early 1989 the first plaintiff came across a premises which he thought would be suitable. The shop sold groceries and newspapers and it had a delicatessen. Laid out on the forecourt of the shop were pallets of coal, flowers and a steel cage which stored gas cylinders. The forecourt also accommodated a telephone kiosk which belonged to Telecom Eireann. A canopy was suspended over the whole length of the forecourt. A price of £123,000 was agreed with the owner which the plaintiffs financed through a loan from a company called Highland Leasing.

The defendant was then retained by the plaintiffs. Mr Justice Kelly stated that it was common case that the premises was not all that it seemed to be. The forecourt at the front of the shop was not for all practical purposes in sale. It was in the ownership of Dublin Corporation on foot of a sublease created in 1934 for a term of 485 years but nonetheless the previous owner had for many years used the forecourt for the purposes of the display and sale of the goods already described. Mr Justice Kelly said that the owner had in fact gone further and obtained planning permission for the whole site including the forecourt from Dublin Corporation and that no action had been taken on foot of this permission. The plaintiffs believed that this forecourt formed part of the premises being sold to them, that the defendant should have informed them if this was not so and that it was part of the defendant's duty to apprise them of what they were buying. The defendant accepted that he had such a duty but that he had discharged it and consequently the plaintiffs had no case against him.

Mr Justice Kelly was of the view that in order to adjudicate on the conflict he would have to consider the evidence in some detail.

Mr Justice Kelly stated that the contract was signed on 14 March 1989 and that the significant period was therefore the period immediately prior to that date when the bulk of the meetings took place. Mr Justice Kelly found as a fact that the first meeting took place on 1 March 1989 at the defendant's office. Mr Justice Kelly was of the opinion that it did not take anything as long as the plaintiffs alleged and while the defendant was made aware of certain details regarding the financing of the purchase at that meeting, there was no discussion as to the plaintiffs' future plans for the premises. Subsequent to this meeting, the vendor's solicitor by letter dated 1 March 1989, sent to the defendant an agreement for sale, copy title documents and searches in trust. The covering letter made it clear that the closing date was 10 March 1989 and that time was to be of the essence in respect of the contract. It sought by return the agreement duly executed together with a deposit of £10,300. Mr Justice Kelly continued that in addition to providing this extraordinarily short closing date the contract was not subject to loan approval being obtained by the plaintiffs.

The first plaintiff alleged that the second meeting between himself and the defendant lasted two and a half hours. Again, on the evidence, Mr Justice Kelly found that the plaintiff was mistaken in his recollection and that his testimony was not reliable either as to meetings, dates, duration of meetings or matters discussed. Mr Justice was satisfied on the evidence that the next meeting which took place between the plaintiffs and the defendant was on 7 March 1989. Mr Justice Kelly stated that at this meeting the defendant went through the contract and advised against signing it because of its unconditional nature, time having been made of the essence, and the very short closing date. The value of the stock in sale was also discussed and in Mr Justice Kelly's view it was this issue which was most important to the plaintiffs at this time and not the details of what they were purchasing. The closing date was moved to 14 March 1989 which was the crucial meeting at which the contract was signed.

Mr Justice Kelly said that prior to this both plaintiffs claimed that there was an additional meeting with the defendant at the site of the shop. Mr Justice Kelly remarked that there was great confusion between both plaintiffs as to the time and duration of this meeting and furthermore that there was a total conflict of testimony as to this meeting ever taking place. Mr Justice Kelly said that the plaintiffs gave a description of the defendant looking at the shop, indicating that he thought they were paying a bit over the odds, examining the forecourt with the material for sale on it with the telephone kiosk clearly evident. Mr Justice Kelly noted that the second plaintiff claimed that they walked to the edge of where the phone box joined the property and showed the defendant this forecourt as part of the property that was being purchased.

Mr Justice Kelly noted the defendant's denial in the most categoric terms that he ever attended on site and that he had never gone on to a premises for conveyancing purposes. Mr Justice Kelly also noted that the defendant went so far as to claim that the plaintiffs' evidence on this point was a fabrication. In considering the evidence Mr Justice Kelly remarked that if the site meeting did take place on 14 March 1989 or shortly beforehand and took the form alleged by the plaintiffs involving inter alia an inspection of the forecourt, that it would be highly unlikely that the defendant within a short time thereafter when he read the title would not have seen that the forecourt pointed out by the plaintiffs was not part of the property to which they would be entitled to possession. In Mr Justice Kelly's view it was equally unlikely that the defendant would not have drawn this to the attention of the plaintiffs so that even if the meeting had taken place it would not have helped the plaintiffs. However, having regard to the demeanour of the witnesses, the quality of their evidence, their recall and the existence of contemporaneous records insofar as there were any, Mr Justice Kelly concluded that he preferred the evidence of the defendant and he found as a fact that there was no meeting between the two plaintiffs and the defendant on the site prior to the contract being signed on14 March 1989.

Mr Justice Kelly stated that the meeting on 14 March took place between the plaintiffs and the defendant in the defendant's office. At this point the contract had been amended by agreement to extend the closing date to 23 March 1989. Mr Justice Kelly noted that at this point the defendant voiced his concern that the contract was still an unconditional one not being subject to loan approval and that the plaintiffs wished to proceed nonetheless. On the crucial issue of whether the defendant advised the plaintiffs as to what they were buying prior to the contract being signed, Mr Justice Kelly was satisfied that the defendant did so advise. He accepted that the defendant advised the plaintiffs that the forecourt as identified on the map which he produced to them that day was not part of the premises that they were buying albeit the forecourt had for years beforehand been used by the vendor for the purposes of displaying goods for sale. Mr Justice Kelly stated that the explanation was given in non-technical language and made it clear that the plaintiffs were not getting the forecourt as part of the premises. Mr Justice Kelly also accepted that the defendant told the plaintiffs that there would probably be no problems with continuing the use but that it could not be guaranteed. In light of this advice it was Mr Justice Kelly's view that the plaintiffs were people who were prepared to take a chance and this is what they did.

Mr Justice Kelly referred to an additional allegation of negligence which was that the defendant ought to have carried out a planning search not merely prior to the closing of the sale but prior to the signing of the contracts. The planning search, which was carried out prior to the closing, uncovered an enforcement order of 8 April 1988 which had been made by the planning authority requiring the removal of a sign and the steel cage on the forecourt and the discontinuance of the forecourt for use as a fuel storage area. Mr Justice Kelly was of the view that the plaintiffs could not show that any loss would flow to them even if such a planning search were appropriate as it would only have demonstrated the existence of an enforcement notice in respect of part of the premises that was not in sale and the defendant had told the plaintiffs that the forecourt was not in sale. Mr Justice Kelly held that the plaintiffs had not made out a case in this regard.

After the closing on 23 March 1989, the plaintiffs traded at the premises and after some weeks instructed an architect and quantity surveyor with a view to its redevelopment. Planning permission was obtained and application was made for its financing to bankers Hill Samuel. The defendant next became involved with the premises on 28 September 1989 when the plaintiffs informed him that the plans would involve demolition of the shop and the building of a two-storey building with an apartment upstairs and that they had applied for a loan of £180,000 for this. Mr Justice Kelly stated that at no time was the planning permission or the plans made available to the defendant at this meeting. Mr Justice Kelly further stated that from an attendance note prepared by the defendant of the meeting, he was satisfied that the defendant advised the plaintiffs that they should not carry out any work on the premises until such time as they were in a position to draw down the loan facilities from Hill Samuel. This advice was given again at a later stage but the plaintiffs did not heed it and before the financing arrangements had been finalised they carried out a demolition of the premises. Any such advice was denied by the plaintiffs. Mr Justice Kelly again favoured the evidence of the defendant remarking that the failure on the part of the plaintiffs to take the advice given was consistent with the way in which they behaved at the time when the sale was closed. Again, Mr Justice Kelly refered to a total conflict of testimony between the parties as to whether the defendant was present at the demolition. The defendant was emphatic that he was not on site. Mr Justice Kelly also accepted the defendant's evidence on this occasion finding his testimony more convincing than that of the witnesses who averred otherwise.

Mr Justice Kelly found that the next contact took place on 16 October 1989 when the first plaintiff called the defendant and requested a meeting with him and the architect to discuss problems encountered in the course of the development. At this point the defendant got out the title documents and the first plaintiff pointed out where he was developing. Mr Justice Kelly said that the defendant's reaction was to indicate that he didn't think that that was the plaintiffs' property and he confirmed that the portion of the property which was pointed out was outside the original building and was subject to the Dublin Corporation lease. When the first plaintiff indicated that the entire forecourt was included in the development, the defendant told him to stop work on site immediately. Mr Justice Kelly stated that contrary to this advice, the contractors continued to work. Mr Justice Kelly concluded that ultimately it became necessary to buy out Dublin Corporation's interest which resulted in the present proceedings.

Mr Justice Kelly found in favour of the defendant in this action. Mr Justice Kelly held that the defendant did indicate to the plaintiffs what they were purchasing and where conflicts of testimony as between the plaintiffs their witnesses and the defendant occurred, the defendant was the more reliable and believable witness. Mr Justice Kelly also found that the plaintiffs were prepared to take chances and act against advice given to them and did so on a number of occasions. Consequently, Mr Justice Kelly found that on the issue of liability the defendant had none to the plaintiffs and he dismissed the action.

Solicitors: Giles J. Kennedy & Co. (Dublin) for the plaintiffs; Matheson Ormsby Prentice (Dublin) for the defendant.