Lane v Cullens Solicitors & ors [2011] EWCA Civ 547

WTLR Issue: December 2011 #114

JOHN LANE

V

(1) CULLENS SOLICITORS

(2) BOWLING & CO LLP

(3) BOWLING & CO (SOLICITORS) LLP

Analysis

The claimant was the brother of the deceased. She died intestate on 22 January 1997. The claimant became her personal representative pursuant to a grant of letters of administration made on 2 August 2000. The claimant was entitled to one third of the deceased’s estate there being two other stirpital branches of the family. One such branch was represented by the claimant’s brother. The claimant’s niece who was entitled to one sixth of the deceased’s estate intimated a claim that she was entitled to the deceased’s home. She did this in October 1998. The claimant, while being advised by solicitors, distributed a substantial amount of the deceased’s estate (£40,000 of an estate worth £61,000) to himself and his brother notwithstanding that the niece’s claim had not been withdrawn in February and March 2001. The niece issued proceedings in April 2001 claiming an interest in the deceased’s property on the basis of proprietary estoppel and asserting that she had transferred the property to the deceased on the understanding that it would be left to her in the deceased’s will, which of course it was not. In fact, the deceased had attempted to leave property to the niece but the deceased’s will was not validly executed. That claim in proprietary estoppel was successful. The niece recovered the sums that had been paid out of the deceased’s estate by the claimant (including the sums paid to the brother) from the claimant; she obtained an order that the claimant account to her, on 14 October 2002, an order that the claimant and his brother each repay her the sum of £20,000 on 2 June 2003 and, as the brother failed to do this, an order that the claimant repay the £20,000 attributable to the brother in January 2005. The claimant sued his solicitors in negligence for failing to advise him not to distribute any money to any beneficiary given the claim that had been asserted by the niece. This claim was defended on the basis that it was statue barred.

HHJ Mackie QC held that the claim was statute barred because the cause of action arose when the claimant paid money over to himself and his brother and that was more than six years before the negligence action was commenced. This constituted loss because the claimant was then liable to repay the sums paid away to the true owner.

It was argued by the claimant that, although he had made payments to himself and his brother qua personal representative, he had not changed his legal position by those payments. There would have been no change to his legal position unless and until the niece established her rights and made a claim against him which required him to refund any part of the distribution. He argued that a claim in proprietary estoppel is contingent because of the uncertainty as to the remedy which the court will impose and therefore no loss was caused to him as a result of the solicitors’ negligence until the niece made out her claim and an order was made in her favour.

Held (dismissing the appeal)

  1. (1) Prior to making the distribution to himself and to his brother the claimant had had £61,000 in his solicitors’ client account in respect of the administration of the deceased’s estate. There was a claim intimated by the niece but he was protected in the sense that he could hold on to the assets which represented the deceased’s estate and no other assets could be answerable for the claim and depending on his conduct of any defence he had a reasonable prospect of being able to be indemnified out of the assets for the costs of defending the claim. By parting with £40,000 to himself and his brother he altered his position significantly because he had less in his hands to answer the claim. This was certainly the case in respect of the £20,000 paid to the brother because the very act of parting with the funds altered his position to his detriment, Law Society v Sephton [2006] 2 AC 543 distinguished, Guardian Trust & Executors Co of New Zealand Ltd v Public Trustee of New Zealand applied.
  2. (2) Even on the claimant’s own argument the niece’s claim was a vested rather than contingent because the niece’s claim could well have been put in constructive trust (in addition to proprietary estoppel).
Judgment LORD JUSTICE LLOYD: [1] This appeal raises again the question when a cause of action in tort arose, being a claim in negligence against solicitors. His Honour Judge Mackie QC. sitting in the London Mercantile Court held that the claimant’s cause of action had arisen more than six years before the issue of the …
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Counsel Details

Counsel Simon Howarth (Crown Office Chambers, 2 Crown Office Row, Temple, London EC4Y 7HJ, tel 020 7797 8100, e-mail mail@crownofficechambers.com), instructed by William Graham Law Ltd (24 Neptune Court, Ocean Way, Cardiff, CF24 5PJ, tel 029 2089 5100, e-mail legal@wglawltd.co.uk) for the appellant.

Jamie Carpenter (Hailsham Chambers, Ground Floor, 4 Paper Buildings, Temple, London, EC4Y 7EX, tel 020 7643 5000, e-mail clerks@hailshamchambers.com), instructed by Weightmans LLP (India Buildings, Water Street, Liverpool, L2 0GA, tel 0151 227 2601) for the respondents.

Cases Referenced

Legislation Referenced

  • Inheritance (Provision for Family and Dependants) Act 1975
  • Limitation Act: 1980
  • Section 2 Law of Property (Miscellaneous Provisions) Act 1989