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Case name Neutral citation Legal points Case summary Comment Denning v Greenhalgh Financial Services Ltd [2017] EWHC 143 (QB) Financial advice – scope of retainer - limitation This case involved an application to strike out a claim for damages for professional negligence under CPR 3.4(2)(a) or for summary judgment pursuant to CPR 24.2(a). The claim was brought against financial advisers for breach of an alleged duty in contract and tort for not performing a detailed review of pension transfer advice given eight years earlier by different advisers. The transcript contains a useful review of: (1) The scope of the duty of care upon professional advisers at common law and the extent to which advisers were required to go outside the terms of their retainer. The court emphasised a point made by Patten LJ in Mehjoo v Harben Barker (a firm) [2014] EWCA Civ 358 that there is no such thing as a “general retainer” and the terms and limits of a retainer and any consequential duty of care depends upon what the professional is instructed to do. A professional is not under a roving general duty to have regard to and advise on all aspects of the claimant’s affairs absent a request to do so. (2) Limitation under the extended 3-year latent damage provisions in s 14A Limitation Act 1980. The court reviewed the meaning of “knowledge” and the principles to be applied from the caselaw. (3) The extent to which an earlier FOS complaint impacted upon causation. The points are equally applicable to financial advice in connection with mortgages.
Case name Neutral citation Legal points Case summary Comment Toombs v Bridging Loans Ltd (Unrep) Court of Appeal 14 Feb 2017 Professional negligence – valuation – limitation – Nykredit principles This was an appeal against a first instance decision to grant summary judgment against a bridging loan company on a claim for damages for professional negligence against a valuer for providing a negligent valuation in respect of proposed security. In 2006 the valuer valued the property at £730,000 (assuming planning for the construction of a 3-storey building) against which the bridging loan company advanced £500,000 for six months. The borrower defaulted and the property was repossessed and sold at a shortfall. It was contended that the true value of the property (which only had planning permission for the construction of a 2-storey building) was £450,000. The claim form was not served until May 2016. The judge held that the claim was time barred applying Nykredit Mortgage Bank Plc v Edward Erdman Group Ltd (Interest on damages) [1997] 1 WLR 1627. In the case of a negligent valuation of an intended loan security, in order to identify when damage first occurred the court had to compare the difference between (a) the amount of money lent plus interest, and (b) the value of the rights acquired, namely the value of the borrower’s covenant to repay and the true value of the property. The damage had been sustained when the borrower defaulted in May 2007 at which point it was clear that the borrower’s covenant to repay had insufficient value. The Court of Appeal agreed. The application of the Nykredit principles can be difficult in practice. For other recent cases, see Tiuta International (in Liquidation) v De Villiers Chartered Surveyors Ltd [2016] EWCA Civ 661; LSREF III Wight Ltd v Gateley LLP [2016] EWCA Civ 359; and Canada Square Operations Ltd v Kinleigh Folkard & Hayward (unrep) London CC 17 Sept 2015.
Case name Neutral citation Legal points Case summary Morris v Godiva Mortgages Ltd [2017] UKUT 44 (TCC) Land registration – alteration of register – forgery - practice and procedure This is a decision of the Upper Tribunal Tax and Chancery Chamber on appeal from the First-Tier Tribunal Land Registration Division. It arose out of an application by two former registered proprietors for alteration of the register in consequence of what was alleged to have been a forged TR1, and consequentially for alteration of a subsequent registered charge to restrict the amount to the amount paid in discharge of their previous mortgage. At first instance, the Tribunal Judge rejected the application based on the evidence, but in doing so he directed the hearing to continue notwithstanding the unavailability of a particular witness to attend at an adjourned hearing. On appeal, the Upper Tribunal concluded that the non-attendance of the particular witness made no difference. He was under no obligation to attend. He did not have to prove that the TR1 was genuine; it was for the applicants to prove it was a forgery. The first instance judge was entitled to find, on the weight of the evidence, that the applicants came nowhere near discharging the burden of proof. The applicants’ questions in cross-examination (which they produced on appeal) would not have made any difference. The Upper Tribunal did however express some concern that at the close of the hearing, the judge invited the parties to make written submissions on an alternative case which had not been pleaded, namely whether it was open to him to find that the TR1 could be set aside as an unconscionable bargain. Reference had been made at the hearing to Hayer v Hayer [2012] EWCA Civ 257 in which it was held that a judge should not have allowed an amendment to pleadings on the last day of a trial at the judge’s own suggestion. However, the applicants did not take up the suggestion.
Publication The Chancery Guide was updated on 9th February 2017. The Guide covers all aspects of practice and procedure in the Chancery Division, and its provisions, particularly in relation to case management, and such things as the preparation of bundles, is occasionally incorporated in county court directions.