[CHANCERY DIVISION]

MIDLAND BANK TRUST CO. LTD. AND ANOTHER v. HETT, STUBBS & KEMP (A FIRM)

[1972 G. No. 2267]

Solicitor - Negligence - Tort, whether liable in - Option to purchase farm - Solicitor's omission to register option as land charge - Option defeated by sale of land to third party - Whether right of action against solicitors statute-barred - Whether solicitors liable both in tort and contract

Limitation of Action - Contract, breach of - Negligence - Solicitor's failure to register option to purchase farm - Land sold to defeat option - Whether solicitor's duty continuing one - Whether action statute-barred

In March 1961 W agreed to grant his son, G, an option to purchase from him a 300-acre farm which at that time was let to G at a rent of £900 per annum. They went to the defendant firm of solicitors, and S, the senior partner, drew up a document which W signed and which was dated March 24, 1961, whereby in consideration of £1 paid by G, W thereby granted to G the option of purchasing the farm at £75 per acre. The option was expressed to remain effective for 10 years. G duly paid the consideration of £1 but, unfortunately, S omitted to register the option as an estate contract under the Land Charges Act 1925. On a number of occasions, consulted the defendant firm on the question whether he should exercise the option. On August 17, 1967, W, with

the object of defeating the option and having discovered, through consulting with fresh solicitors, that the option had not been registered, sold and conveyed the farm to his wife for £500. After the sale K, a partner in the defendant firm, sought to remedy his firm's omission by registering the option under the Land Charges Act 1925 and, on October 6, 1967 G served formal notice in purported exercise of the option. Neither W nor his wife complied with the notice. On March 28, 1968, W's wife died. On January 27, 1970, G commenced proceedings against his father, W, and against his mother's executors, of whom he was himself one, seeking, inter alia, a declaration that the option was binding on her estate, and claiming specific performance. On February 8, 1972, W died, and on May 11, 1973, G also died. The plaintiffs, G's executors, continued the action, but the action failed save for an award of damages against W's estate.

On July 21, 1972, G had commenced an action against the defendant firm of solicitors, claiming damages for negligence or breach of professional duty in neglecting to register the option, and in failing to advise G as to the necessity of so doing.

On the question whether the action against the defendant firm, which was continued by G's executors, was barred by the Limitation Act 1939, and had already become barred before the date of the sale and conveyance of the farm to W's wife: -

Held, (1) that there was no general or continuing duty arising out of G's retainer of the defendant firm of solicitors to consider the enforceability of the option on every occasion on which they were consulted as to a possible exercise, nor to check, on such occasions, whether it had in fact been duly registered under the Land Charges Act 1925 (post pp. 402H - 403G).

Duchess of Argyll v. Beuselinck [1972] 2 Lloyd's Rep. 172; Griffiths v. Evans [1953] 1 W.L.R. 1424, C.A.; Hall v. Meyrick [1957] 2 Q.B. 455, C.A. and Wood v. Jones (1889) 61 L.T. 551 considered.

(2) That a duty of care was imposed upon the defendant firm of solicitors by reason of the relationship of solicitor and client existing between the parties, and that the defendants were therefore liable in tort, independently of any liability in contract, for their negligence in omitting to register the option before a third party had acquired an adverse interest in the farm; and that, since the cause of action in tort did not arise until the damage occurred on August 17, 1967, a date within six years before the date of the writ, the plaintiffs' cause of action was not statute-barred under the Limitation Act 1939 (post, pp. 417A-E, 433C-F).

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465, H.L.(E.), Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, C.A. and dictum of Lord Salmon in Arenson v. Arenson [1977] A.C. 405, 434, H.L.(E.) applied.

Groom v. Crocker [1939] 1 K.B. 194, C.A.; Clark v. Kirby-Smith [1964] Ch. 506; Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 and Cook v. Swinfen [1967] 1 W.L.R. 457, C.A. not followed.

Heywood v. Wellers [1976] Q.B. 446, C.A. considered.

(3) That since the negligence relied upon was not the giving of wrong and negligent advice, in which case the

breach of contract would necessarily have arisen at a fixed point of time, but was a simple nonfeasance, the duty of the defendant firm of solicitors to register the option continued to bind them until it ceased to be effectively capable of performance on August 17, 1967, and therefore, since the action against the defendants in contract was not statutebarred, they were also liable to the plaintiffs in contract (post, pp. 435A-E, 438D-F, H - 439A).

Bean v. Wade (1885) 2 T.L.R. 157, C.A. distinguished.

Observations on the principle of stare decisis (post, p. 405B-G).

The following cases are referred to in the judgment:

Addis v. Gramophone Co. Ltd. [1909] A.C. 488, H.L.(E.).

Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229; [1968] 2 W.L.R. 366; [1968] 1 All E.R. 543, C.A.

Anns v. Merton London Borough Council [1978] A.C. 728; [1977] 2 W.L.R. 1024; [1977] 2 All E.R. 492, H.L.(E.).

Anon (1372) Fitzherbert's smith's case (1534) Natura Brevium 94D (Year Book 46 Edw. III Trin. 19).

Arenson v. Arenson [1977] A.C. 405; [1975] 3 W.L.R. 815; [1975] 3 All E.R. 901, H.L.(E.).

Argyll (Duchess) v. Beuselinck [1972] 2 Lloyd's Rep. 172.

Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197; [1964] 3 W.L.R. 1162; [1964] 3 All E.R. 577.

Bailey v. Bullock [1950] 2 All E.R. 1167.

Barnett v. Chelsea and Kensington Hospital Management Committee [1969] 1 Q.B. 428; [1968] 2 W.L.R. 422; [1968] 1 All E.R. 1068.

Battley v. Faulkner (1820) 3 B. & Ald. 288.

Batty v. Metropolitan Property Realisations Ltd. [1978] Q.B. 554; [1978] 2 W.L.R. 500; [1978] 2 All E.R. 445, C.A.

Bean v. Wade (1885) 1 T.L.R. 404; 1 Cab. & Ell. 519; 2 T.L.R. 157, C.A.

Blyth v. Fladgate [1891] 1 Ch. 337.

Boorman v. Brown (1842) 3 Q.B. 511; sub nom. Brown v. Boorman (1844) 11 Cl. & Fin. 1, H.L.(E.).

Bottomley v. Bannister [1932] 1 K.B. 458, C.A.

Brown v. Howard (1820) 2 Brod. & B. 73.

Candler v. Crane, Christmas & Co. [1951] 2 K.B. 164; [1951] 1 All E.R. 426, C.A.

Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758; [1963] 2 W.L.R. 210; [1963] 1 All E.R. 341, H.L.(E.).

Clark v. Kirby-Smith [1964] Ch. 506; [1964] 3 W.L.R. 239; [1964] 2 All E.R. 835.

Coats Patons (Retail) Ltd. v. Birmingham Corporation (1971) 69 L.G.R. 356.

Consett Industrial and Provident Society Ltd. v. Consett Iron Co. Ltd. [1922] 2 Ch. 135, C.A.

Cook v. Swinfen [1967] 1 W.L.R. 457; [1967] 1 All E.R. 299, C.A.

Davies v. Hood (1903) 88 L.T. 19.

Davies v. Lock (1844) 3 L.T. O.S. 125.

Dearle v. Hall (1828) 3 Russ. 1.

Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373; [1972] 2 W.L.R. 299; [1972] 1 All E.R. 462, C.A.

East Suffolk Rivers Catchment Board v. Kent [1941] A.C. 74; [1940] 4 All E.R. 527, H.L.(E.).

Edwards v. Mallan [1908] 1 K.B. 1002, C.A.

Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801; [1976] 2 W.L.R. 583; [1976] 2 All E.R. 5, C.A.

Everett v. Griffiths [1920] 3 K.B. 163, C.A.

Fish v. Kapur [1948] 2 All E.R. 176.

Great Western Railway Co. v. S.S. Mostyn (Owners) [1928] A.C. 57, H.L.(E.).

Griffiths v. Evans [1953] 1 W.L.R. 1424; [1953] 2 All E.R. 1364, C.A.

Groom v. Crocker [1939] 1 K.B. 194; [1938] 2 All E.R. 394, C.A.

Hall v. Meyrick [1957] 2 Q.B. 455; [1957] 3 W.L.R. 273; [1957] 2 All E.R. 722, C.A.

Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465; [1963] 3 W.L.R. 101; [1963] 2 All E.R. 575, H.L.(E.).

Heywood v. Wellers [1976] Q.B. 446; [1976] 2 W.L.R. 101; [1976] 1 All E.R. 300, C.A.

Howell v. Young (1826) 5 B. & C. 259.

Hughes v. Twisden (1886) 55 L.J.Ch. 481.

Jackson v. Mayfair Window Cleaning Co. Ltd. [1952] 1 All E.R. 215.

Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399, C.A.

Kelly v. Metropolitan Railway Co. [1895] 1 Q.B. 944, C.A.

Lake v. Bushby [1949] 2 All E.R. 964.

Manby and Hawksford, In re (1856) 26 L.J.Ch. 313.

Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443; [1975] 3 W.L.R. 758; [1975] 3 All E.R. 801, H.L.(E.).

Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223; [1970] 2 W.L.R. 802; [1970] 1 All E.R. 1009, C.A.

Mutual Life and Citizens' Assurance Co. Ltd. v. Evatt [1971] A.C. 793; [1971] 2 W.L.R. 23; [1971] 1 All E.R. 150, P.C.

Newsholme Brothers v. Road Transport and General Insurance Co. Ltd. [1929] 2 K.B. 356, C.A.

Nocton v. Lord Ashburton [1914] A.C. 932, H.L.(E.).

Otto v. Bolton and Norris [1936] 2 K.B. 46; [1936] 1 All E.R. 960.

Quinn v. Leathem [1901] A.C. 495, H.L.(I.).

Robertson v. Bannigan, 1964 S.L.T. 318.

Sachs v. Henderson [1902] 1 K.B. 612, C.A.

Sawyer v. Goodwin (1867) 36 L.J.Ch. 578.

Short v. M'Carthy (1820) 3 B. & Ald. 626.

Simmons v. Pennington & Son [1955] 1 W.L.R. 183; [1955] 1 All E.R. 240, C.A.

Smith v. Fox (1848) 6 Hare 386.

Turner v. Stallibrass [1898] 1 Q.B. 56, C.A.

Wilkinson v. Sibley [1932] 1 K.B. 194, C.A.

Williams v. Glasbrook Brothers Ltd. [1947] 2 All E.R. 884, C.A.

Wood v. Jones (1889) 61 L.T. 551.

Young v. Bristol Aeroplane Co. Ltd. [1946] A.C. 163; [1946] 1 All E.R. 98, H.L.(E.).

The following additional cases were cited in argument:

Bolam v. Friern Hospital Management Committee [1957] 1 W.L.R. 582; [1957] 2 All E.R. 118.

Chin Keow v. Government of Malaysia [1967] 1 W.L.R. 813, P.C.

Fleming v. Manchester, Sheffield and Lincolnshire Railway Co. (1878) 4 Q.B.D. 81, C.A.

Greaves & Co. (Contractors) Ltd. v. Baynham Meikle & Partners [1975] 1 W.L.R. 1095; [1975] 3 All E.R. 99, C.A.

Legge v. Tucker (1856) 1 H. & N. 500.

Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] Q.B. 858; [1976] 2 W.L.R. 493; [1976] 2 All E.R. 65, C.A.

Steljes v. Ingram (1903) 19 T.L.R. 534.

ACTION

By a writ dated July 21, 1972, issued by Thomas Geoffrey Green, and a statement of claim dated April 11, 1974, the plaintiffs, Midland Bank Trust Co. Ltd. and Mrs. Margaret Ann Green, as executors of Thomas Geoffrey Green who had died on May 11, 1973, claimed damages against the defendants, Hett, Stubbs & Kemp, damages for negligence or breach of duty in that they, acting as solicitors for Thomas Geoffrey Green "neglected (at the date of grant of the option and at all material times thereafter) to register and failed (at the said date or at any time thereafter) to advise the plaintiff [Thomas Geoffrey Green] as to the necessity of registering an estate contract in respect of an option dated March 24, 1961, granted to him by Walter Stanley Green [his father] to purchase Gravel Hill Farm, Thornton-le-Moor, Lincolnshire, against the estate owner Walter Stanley Green." In the statement of claim there were also claims to further or other relief, all necessary accounts and inquiries, and costs. The defendants contended that if, which was denied, Thomas Geoffrey Green had any cause of action arising during his lifetime, the same was barred under and by virtue of the Limitation Act 1939.

The facts are stated in the judgment.

Jeremiah Harman Q.C. and Jonathan Parker for the plaintiffs. The plaintiffs' claim is for professional negligence by a solicitor, or alternatively for breach of contract, in failing to advise Geoffrey Green that his option to purchase the farm, of which he was a tenant, which his father Walter Green had granted to him would be defeated as against a purchaser for money, if it were not registered as a land charge. The plaintiffs contend that there is a cause of action in tort for negligence which only arose when the damage occurred, namely when the farm was sold by Walter to his wife Evelyne in August 1967.

It has been the assumption for many years that a solicitor's liability arises only in contract: see Cordery on Solicitors, 6th ed. (1968), p. 187 et seq.; Clark v. Kirby-Smith [1964] Ch. 506 and Groom v. Crocker [1939] 1 K.B. 194. But more recently there has been a substantial change of attitude by the courts, since the decision in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465. Groom v. Crocker and Clark v. Kirby-Smith were both heavily doubted in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801. An action can be brought in negligence as well as in contract. In the present case the plaintiffs were consulted in connection with the option throughout the 1960s, and specifically in June 1967. The fact that the option, and its exercise, was a point which was being constantly raised by Geoffrey, meant that the defendants should have had all the more reason to check to make sure that the option had been duly registered. The validity of the option was crucia

to the scheme which Geoffrey had in mind in June 1967. Instead the defendants failed to advise Geoffrey of the need for registration and, indeed, advised him that the option was binding on the land.

The defendants were under a continuing obligation in regard to the option.

Liability in negligence arises only at the time when the damage occurs: see Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] Q.B. 858 and Anns v. Merton London Borough Council [1978] A.C. 728. [Reference was made to Brown v. Boorman (1844) 11 Cl. & Fin. 1 and to Nocton v. Lord Ashburton [1914] A.C. 932.]

If the plaintiffs have a claim in negligence, as is contended, the damage occurred only when the farm was conveyed to Evelyne in August 1967, and accordingly that is the date from which the limitation period commences to run. Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, 818, supports the conclusion that an action may lie both in contract and in tort for breach of a duty under a contract. The principle of liability for negligence applies to professional men. The duty of care should not be cut down by contractual considerations. The plaintiffs in their pleadings allege both breach of contract and negligence. Since the damage did not occur until August 1967, the plaintiffs' claim is not statute barred.

Both parties are agreed that (if necessary) there should be an inquiry to ascertain the amount of damages, as to (i) the loss of value of the farm, based on its value with vacant possession as at August 16, 1967, less the cost of the option, and (ii) the amount of costs which have reasonably been incurred in attempting to mitigate the plaintiffs' loss [i.e., the costs of the action Midland Bank Trust Co. Ltd. v. Green [1978] 3 W.L.R. 149].

R. A. Gatehouse Q.C. and Ian McCulloch for the defendants. There is no action in tort against a solicitor. The dicta in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, 817 et seq, do not assist the plaintiffs. The court there held, unanimously, that the statement as to the estimated annual through-put of petrol amounted to a collateral warranty; see per Lord Denning M.R. at p. 818, per Ormrod L.J. at pp. 823-827, and per Shaw L.J. at pp. 830-832. The court further held that the contract (which did not itself contain any warranty as to through-put) did not deprive the plaintiff of his pre-existing cause of action for negligent misstatement which induced him to enter into the contract. See per Lord Denning M.R. at p. 820, per Ormrod L.J. at p. 827 et seq. and per Shaw L.J. at pp. 832-833. But neither Lord Justice gave any support to Lord Denning M.R.'s views at p. 819. In Brown v. Boorman, 11 Cl. & Fin. 1, it was held that where there is a contract and something is to be done in the course of the employment which is the subject matter of the contract, the party injured, if there is a breach of duty in the course of that employment, may recover either in tort or in contract; but nevertheless the sole question in that case was whether once the verdict of a jury has been obtained one should upset that verdict because it may have been on one cause of action when there may have been another cause of action as well. The scope of the decision is very limited; see per Lord Brougham, at pp. 36-39; per Lord Cottenham at pp. 40-41 and per Lord Campbell at pp. 42-44.

Where substantive rights do come in issue and raise difficult problems as to whether the cause of action is in contract or in tort questions arise (i) on limitation of actions, (ii) on the measure of damages, (iii) on costs, (iv) on the amendment of pleadings after the period of limitation has expired and (v) on the joinder of parties.

For over 150 years it has been accepted that an action against a solicitor is contractual, as being a matter arising out of the contract of retainer, see Short v. M'Carthy (1820) 3 B. & Ald. 626, perAbbot C.J. and per Holroyd J., and Howell v. Young (1826) 5 B. & C. 259. Where a solicitor's retainer involves a duty to do something to protect a person's title to property, his obligation is to give the necessary notice, or do such other act as is required, within a reasonable time: see Bean v. Wade (1885) 2 T.L.R. 157. In that case the lower court held that there was a continuing duty, but that decision was overruled by the Court of Appeal. The present case is substantially indistinguishable from Bean v. Wade. The solicitor's retainer gave rise to a duty to perfect the plaintiffs' title to the option within a reasonable time. That duty was broken, but any action upon the breach is statute barred. There was no separate co-existing duty upon which a separate cause of action could be founded. In Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, 204, Diplock L.J. held that the duty of exercising reasonable care and skill owed by an architect to his clients arose out of contract, and that any action brought for failure to comply with that duty was founded on contract, and on contract alone. [Reference was made to Groom v. Crocker [1939] 1 K.B. 194, 197, 198, 199 and 222; Clark v. Kirby-Smith [1964] Ch. 506; Hall v. Meyrick [1957] 2 Q.B. 455, 468, 477, 481: Steljes v. Ingram (1903) 19 T.L.R. 534; Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399; Legge v. Tucker (1856) 1 H. & N. 500 and Fleming v. Manchester, Sheffield and Lincolnshire Railway Co. (1878) 4 Q.B.D. 81.]

It is true that in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, Lord Denning M.R. referred to the words, of high authority, of Viscount Haldane L.C. in Nocton v. Lord Ashburton [1914] A.C. 932, 956, where he said that for failure to perform his obligation a solicitor might be made liable in law in contract or in tort, for negligence, in breach of the duty imposed upon him, but in the same case Lord Dunedin, at p. 964, put the solicitor's liability firmly in contract, and Lord Denning M.R.'s view may be treated as heretical. The liability is commonly referred to as "negligence," without due thought as to whether the remedy lies in contract or in tort. The words of Lord Denning M.R. in Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] Q.B. 858, 866, 867 correctly state the law. [Reference was made to Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758; Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373 and Anns v. Merton London Borough Council [1978] A.C. 728.] In negligence the cause of action arises when the damage is done, even when such damage is minimal.

Any cause of action in contract would be statute-barred. The limitation period would have expired by March 1967. It is accepted that Mr. Aymere Stubbs must have been negligent in not registering the option, at or soon after the time when it was granted. Any other act of negligence would

equally have been statute-barred if it occurred before July 21, 1966. Any act of negligence occurring after the conveyance to Mrs. Evelyne Green on August 17, 1967, would have been irrelevant. As to the standard of care required of a professional man, reference was made to Bolam v. Friern Hospital Management Committee [1957] 1 W.L.R. 582; Chin Keow v. Government of Malaysia [1967] 1 W.L.R. 813; Greaves & Co. (Contractors) Ltd v. Baynham Meikle & Partners [1975] 1 W.L.R. 1095; Duchess of Argyll v. Beuselinck [1972] 2 Lloyd's Rep. 172; Griffiths v. Evans [1953] 1 W.L.R. 1424 and Hall v. Meyrick [1957] 2 Q.B. 455. The defendants were not consulted as to the enforceability of the option prior to September 1967. Mr. Kenneth Stubbs had not heard of any family discord, and in those circumstances there was no reason why he should when consulted on tax matters in June 1967, have checked to see whether the option had been duly registered. In the circumstances there was only one duty resting upon the defendants, namely to register the option within a reasonable time. That duty was broken once and for all when such reasonable time had elapsed, and any action arising from that breach has long since became statute-barred.

Harman Q.C. in reply. The defendants' expert witnesses placed emphasis on the fact that the option was written in the handwriting of a reliable senior partner in the defendant firm of solicitors. It was suggested that this fact reduced any need which there might have been to check that the option had been duly registered, but it cannot be the law that the more obvious the need for registration the less the need to check whether registration had in fact been carried out. A solicitor's accepted practice should be to attach the registration to the option in question; had that been done, the absence of registration would have been noticed in the present case.

There are two quite separate heads of liability; contract and tort. Was there a contract of retainer in the present case? Have the plaintiffs proved it? If so, what was the nature of such retainer? The answer to these questions is that the plaintiffs have simply proved that the defendants acted for Geoffrey Green for some time. There was no evidence that a bill for work in connection with the option was ever submitted to Geoffrey, or paid by him. So the retainer, which the plaintiffs have alleged, can only have been a contract in these terms: - "Will you please look after my legal affairs?" The duties arising from such a retainer must be considered in the light of what the solicitor was asked to do. An unwritten retainer is to be construed against a solicitor; Griffiths v. Evans [1953] 1 W.L.R. 1424. The defendants owed a duty to look after every aspect of Geoffrey's affairs, on separate particular retainers: Hall v. Meyrick [1957] 2 Q.B. 455. No joint retainer is alleged.

It may be that the plaintiffs have failed to prove any contract at all in relation to the grant of the option. If there were no contract, then plainly there was a general duty of care towards Geoffrey, which is borne out by the fact that the option document itself was kept by the defendants in Geoffrey's file. If the defendants' action in relation to the option was gratuitous, there is clearly a liability in tort. The retainer, if any, was not "will you look after the option and protect it within a reasonable time?"

Their duty was to protect it by registration, before someone else acquired an adverse interest in the farm.

The later cases differ fundamentally from the earlier ones, where the contract had been broken irrevocably. A contract is not ended by one party failing to perform one of his obligations; the contract remains on foot, and can be enforced by specific performance, so long as the act required by the contract can still be performed. The early cases of Short v. M'Carthy, 3 B. & Ald. 626, and Howell v. Young, 5 B. & C. 259, are readily distinguishable from the present case. Important differences exist between cases where a breach has occurred and cannot be rectified, and cases, such as the present, where the option could have been registered at any time before the conveyance of August 1967, and the breach thereby rectified.

In Bean v. Wade, 2 T.L.R. 157, the contract with the solicitor was to perfect the title of the new trustees. The conclusion reached by the Court of Appeal in that case was a conclusion based upon the particular facts of that case: it was not and could not have been a decision that in law in all contracts between solicitors and clients the duty of a solicitor was limited in such a manner that it was to be regarded as broken at a particular date and once and for all. The case did not decide a point of substantive law. In Groom v. Crocker [1939] 1 K.B. 194 the award of &40S. nominal damages was for a different breach of duty, a technical one. There is no effective cause of action until the damage has occurred and become irreparable.

In the present case there are really two claims in breach of contract: the first, for failure to register the option within a reasonable time, which has become statute-barred; and the second, based on a fresh contract arising when Geoffrey made an express request to Kenneth Stubbs for reassurance as to the enforceability of the option, particularly in June 1967. This second contract gives rise to pure questions of fact.

If there was no contract of retainer in 1961 then the matter becomes too clear for argument. If there was no such contract, then the damage caused by failure to register did not arise until 1967, and therefore the cause of action in tort is not statute-barred. Since Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 there have been two conflicting lines of authority of co-ordinate courts, and in these circumstances a judge of first instance is entitled to choose which authority he will follow. The Court of Appeal in Sparham-Souter v. Town and Country Developments (Essex) Ltd. [1976] 1 Q.B. 858 disapproved of the decision of Diplock L.J. in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197.

The decision of the Court of Appeal in Groom v. Crocker [1939] 1 K.B. 194 is inconsistent with the decision of the House of Lords in Anns v. Merton London Borough Council [1978] A.C. 728. It is a nonsense to suggest that where there is a contract, there can be no liability in tort. Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 is consistent with there being a continuing duty of care exercisable so long as the act required by the contract can be performed.

Gatehouse Q.C. in further argument. Bean v. Wade, 1 T.L.R. 404, is indistinguishable from the present case, and it is an authority which the

court is bound to follow. There was in that case a duty to preserve a right of property free from incumbrances. A retainer had to be inferred, and there was no indication that the solicitors did not continue to act for the trustees.

OLIVER J. The late Mr. Walter Green owned a 300 acre farm known as Gravel Hill Farm, Thornton-le-Moor, in Lincolnshire. His elder son, Geoffrey, had a tenancy of the farm from his father at a rent of £900 per annum. It will be convenient to refer to them by their Christian names. In March 1961 they came to an arrangement under which Geoffrey was to be entitled to an option to purchase the freehold reversion at a price of £75 per acre exercisable at any time during the next 10 years. In order to put this into a regular and enforceable form they together visited a firm of solicitors in Brigg, Messrs. Hett, Davy & Stubbs (now Hett, Stubbs & Kemp), which had previously acted for each of them individually. There they saw the senior partner, Mr. Aymere Albert Fletcher Stubbs, a solicitor of great experience in conveyancing matters and, according to the evidence of his son, a meticulous lawyer. Mr. Stubbs drew up a formal option agreement in his own handwriting and Walter signed it. It was in these terms:

"To: Thomas Geoffrey Green, Gravel Hill Farm, Thornton-le-Moor. In consideration of the sum of one pound paid by you to me I hereby give you the option of purchasing the Gravel Hill Farm now in your occupation at the sum of £75 (seventy five pounds) per acre. This option to remain effective for ten years. Dated this 24th March 1961."

That was signed over a sixpenny stamp.

An issue has been raised in this action as to whether the £1 was ever paid. Both Walter and Geoffrey have died since this action was commenced, as has Mr. Stubbs senior, so that the payment is not easily susceptible of proof. I have admitted, under the Civil Evidence Act 1968, evidence in the form of affidavits of Walter and Geoffrey and hearsay statements of Geoffrey, and there is a conflict between the testimony of the two persons primarily concerned. Geoffrey has sworn that he did pay it, and with the option being drawn up in the presence of the meticulous Mr. Stubbs, I think that the overwhelming likelihood is that it was paid. For what it is worth - and I am far from convinced that it makes any difference in the result - I so find as a fact.

There can be no shadow of doubt that it was the firm's duty, acting as it was for both parties to the transaction, to complete the matter by taking the necessary steps to see that Geoffrey's interest was fully protected by registering the option as an estate contract under the provisions of the Land Charges Act 1925. For some reason Mr. Stubbs, meticulous conveyancer though he was, did not do this. Whether he intended to do it and put it on one side and then forgot; whether he thought that in a family transaction of this sort it was practically unnecessary; or whether, for some reason, it simply slipped his mind, remains a mystery. For whatever reason, he omitted to do it immediately after the grant of the option, and

that omission remained unremedied until September 1967 when the option was registered by another member of the firm, his son, Mr. Kenneth Stubbs.

Unfortunately, when Mr. Kenneth Stubbs finally put in train the steps which his father had so strangely omitted to take it was already too late. Walter, having, for some reason, repented of the grant of the option and having, through some other solicitors whom he consulted, discovered that it had not yet been registered against him by his former solicitors, had determined to defeat it by conveying the farm to his wife, Geoffrey's mother, for a small, but not entirely nominal, consideration of £500. That transaction was - unknown to Geoffrey and to Messrs. Hett, Davy & Stubbs - completed on August 17, 1967, some 6½ years after the grant of the option. In proceedings by Geoffrey's executors against his father's and his mother's executors which recently came before me I found myself compelled to hold that the option had been defeated except to the extent, for what it is worth, of grounding a claim for damages against Walter's estate.

On July 21, 1972, family negotiations for the settlement of the dispute having failed to produce any result, Geoffrey commenced this action against his former solicitors for damages for breach of their professional duty.

The damage sustained by Geoffrey and his family as a direct result of the failure of Messrs. Hett, Davy & Stubbs to do, before August 17, 1967, what it was their plain duty to do has been very great. The estimate of his accountants in June 1967 was that the exercise of the option, followed by a sale and lease back of the farm - which was what he then intended - would have brought him a profit of £37,750. But of course, it does not end there, because the effect of his inability to acquire the freehold meant that he stayed on under his existing tenancy, the rent under which was promptly increased, and that, on his subsequent death, his widow and family, as the law then stood, had no security of tenure.

There was no possible way in which, during the 6½ years which elapsed between the grant of the option and its frustration on August 17, 1967, Geoffrey could have discovered that registration had not been effected, unless Messrs. Hett, Davy & Stubbs, who continued to act as his solicitors throughout, had told him; no way in which he could have complained of or rectified their omission, of which, it must be inferred, he remained in total ignorance until he was told about it by Messrs. Hett, Davy & Stubbs in late 1967. I do not for one moment suppose that, until then, he had any idea of the purpose of or necessity for registration. He was a farmer, not a lawyer; and the earliest moment at which he could possibly have mounted any claim against the defendants was after a conference with counsel in late 1967, up to which time it seems that Mr. Stubbs, who had continued to advise him, was still hopeful that there might be a chance of enforcing the option against the land in the hands of Mrs. Green senior.

To the claim now made the solicitors plead that any action is barred by the Limitation Act 1939 - indeed not only is barred now but was barred by about the end of March 1967, which is the expiration of the period of six years from the date upon which they say that they ought to have done what they did not do. The plea of limitation is an unattractive plea at the best of times. It is doubly unattractive - even when presented

by an advocate as skilled as Mr. Gatehouse - when the circumstances are, as it is claimed here that they are, that the claim became barred not only before any damage at all occurred but even before the unfortunate victim of the wrong could, by any conceivable stretch of imagination, have discovered that any damage might occur or could have taken any practical steps to prevent it or seek any redress. I say this in no spirit of criticism of Mr. Kenneth Stubbs and his partners, for it is the familiar experience in cases such as this that solicitor defendants are not, practically, entirely free agents in the matter of the defences which may be raised on their behalf. But the fact remains that it is an unattractive plea. Nevertheless, if it is good in law, the defendants are entitled to succeed and the action must be dismissed.

Before turning to the questions of law raised by this case, I must first expand a little on the history of the matter and state my findings on certain factual issues which are in dispute. One of the issues on the pleadings is raised by the non-admission that the defendants, who are sued as a firm, are the same firm as Hett, Davy & Stubbs in which, at the material time, Mr. Aymere Stubbs was a partner. Mr. Kenneth Stubbs however, in his evidence, admits to a partnership between himself and his father at the material time and states that his father was then, and that he himself is now, the senior partner of the firm. And Mr. Gatehouse has not taken any point as to misjoinder of parties although I did, at an early stage, raise a query as to whether any such point arose. The more critical issue is raised by the non-admission of any retainer. The case was opened on the basis that there was a retainer by Geoffrey. Throughout, this has not been disputed by Mr. Gatehouse. And it was not until his reply that Mr. Harman took the point that he himself had failed to prove any retainer and that any liability which the defendants might have was, therefore, non-contractual. I am bound to say that when the case has been presented and fought throughout on a particular basis, the adoption of a wholly different approach in reply, even if technically open on the pleadings, strikes me as a little less than satisfactory. But since the point has been raised I must state my conclusions.

So far as the documents show, the first approach in the matter seems to have come from Walter, because Mr. Aymere Stubbs' diary entry for March 23, 1961, shows that Mr. Green senior telephoned him in the afternoon re "sale to Derek Green" - that was his younger son - and "option. Geoff." Geoffrey, at a conference with counsel in 1970 - a note of which was taken by Miss Bush, a legal executive of the plaintiffs' present solicitors - told counsel that he and his father went to Mr. Stubbs' office when the option was drawn up in Mr. Stubbs' handwriting, that he paid the £1 consideration to his father there and then, and that the option was deposited with the solicitors.

Mr. Kenneth Stubbs' evidence - and it is supported by the documents - was that the firm had acted as solicitors for the Green family - an expression which he later identified as meaning Walter and Geoffrey - since 1939, but there is no trace of any bill for this particular work being rendered to Geoffrey. Geoffrey, at the conference with counsel which I have mentioned, surmised that it might have been paid by his father. That is quite possible, if indeed a separate bill was rendered at all. The

probability is that it was absorbed in the general costs attributable to the sale to Derek Green which was proceeding at the same time.

Who actually paid the bill, however, does not, I think, matter. Hett, Davy & Stubbs had acted from time to time for each of the parties individually and together - there is a bill rendered to Geoffrey in 1959 for the preparation of a deed of gift from Walter to Geoffrey - and this was quite clearly work on which the firm was being instructed by both and for which they were entitled to charge, whatever arrangements might have been made between Walter and Geoffrey as to who was to bear the charge. When the option was signed it was left with Mr. Stubbs and placed in the strong room and was retained by him in safe custody for Geoffrey. And subsequently Mr. Stubbs opened a file relating to Geoffrey and the option. I see nothing to suggest that this was being undertaken merely as a friendly service to Geoffrey and I am not, in any event, convinced that, on the view that I take of the law, it would make any difference to the result if it were. But in fact I find the inference irresistible that there was on March 24, 1961, a retainer from Geoffrey under which Mr. Stubbs was acting and under which he bound himself to act as a matter of contract.

Aside from all this I bear in mind the observations of Scott L.J. in Groom v. Crocker [1939] 1 K.B. 194, 222 that a retainer will be presumed if the conduct of the parties shows that the relationship of solicitor and client has in fact been established between them.

Mr. Aymere Stubbs appears next to have been consulted by Geoffrey about the option on January 3, 1964 - apparently Geoffrey was then thinking of going into partnership with somebody and was contemplating exercising the option. Mr. Stubbs made a note of this which was put on the file and apparently he took the opportunity of looking up the option and made a note of the strong room reference number. The firm - again I think by Mr. Aymere Stubbs - also acted for Geoffrey during that year in the purchase of a farm at Linwood, but the option does not seem to have been mentioned again until February 22, 1965. This time it was Mr. Kenneth Stubbs who saw the client. He made a note, which was also put on the file, that Geoffrey had said that he wanted to exercise the option, and Mr. Stubbs then gave him some advice on the effect that this might have when his father died, having regard to the loss of agricultural relief which would ensue if, for the farm, there were substituted in the estate a sum of cash.

Mr. Stubbs told me that this was his first contact with the matter, although he knew about the existence of the option from his father, who had mentioned it to him at the time when it was granted. Mr. Stubbs told me that his normal practice, when an application for registration of a land charge was made, was to have a carbon made of the typed insertions on the application form, which would then be kept in the client's file; and for the acknowledgment from the registry - which then took the form of a buff card - to be attached, when received, to the actual document, assuming that that remained in his firm's possession. He told me, too, that he would expect his father to have followed the same practice. Naturally no such documents were present, and it was put to him that he ought to have noticed this. He certainly inspected the option itself because he

made a summary of its terms on his father's note of the interview that he had had with Geoffrey on January 3, 1964. He said in evidence that his mind never adverted to the question of registration. He knew his father as a careful conveyancer and he either did assume or would, if he had thought about it, have assumed that his father had taken this obvious and elementary step.

The question of the exercise of the option does not seem to have been further pursued at that stage, and Mr. Stubbs had no particular recollection of seeing Geoffrey again during 1965. In 1966, however, the firm did a good deal of work for him. During that year he made arrangements for the sale of Walk Farm, which he had bought in 1964, and Poplar Farm, which belonged to his father, to the Central Board of Finance for the Church of England, and for the lease back to him of those farms by the purchaser. It seems that Walter wanted to distribute the proceeds of Poplar Farm to his sons and daughters but arrangements were made for Geoffrey to borrow his sisters' shares and to use them for the purchase of yet another farm, Manor Farm, which was purchased at about the same time, subject to the tenancy of a Mr. Ranby. The sales of Poplar Farm and Walk Farm and the purchase of Manor Farm were completed in June 1966. There followed negotiations with Mr. Ranby about rent and dilapidations and, in about October 1966, Messrs. Hett, Davy & Stubbs acted for Geoffrey on the sale of a small piece of land owned by Geoffrey at South Kelsey. The only significance of this to the present dispute is, first, in relation to evidence given by Mrs. Green, Miss Bush, and Mr. Michael Lawrence of the plaintiffs' solicitors, in respect of which notice was given - rather late in the day - under the Civil Evidence Act 1968 and, secondly, in relation to submissions which Mr. Harman made as to the defendants' duty at a later stage when they were consulted in the following year.

The notice, to which I need not refer in detail, indicated that it was proposed to give evidence of statements made by Geoffrey (a) to his wife in October, November or December 1966 that he had consulted Mr. Kenneth Stubbs concerning the exercise of the option following the sale and lease back of Manor Farm and had been assured that it was valid: (b) to Mr. Lawrence that in June 1967 he had received a similar assurance; and (c) to counsel that at least once a year from 1961 to 1967 Mr. Kenneth Stubbs had assured him that the option was valid.

Mrs. Green, in her evidence, said that they frequently discussed the option and that her husband had inquired about it and been assured that it was all right. She was, however, very vague about dates although she said that the correspondence about the land at South Kelsey had reminded her that there had been such a conversation at about that time; that is, in October 1966. In cross-examination she reiterated more firmly that she knew that she had asked him about the option in October 1966 and he had said he had been assured that it was all right.

Now Mrs. Green was, I am sure, a perfectly honest witness, but her recollection is obviously at fault in a number of respects. For instance, she could not have discussed the matter with her husband in October 1966 "following the sale and lease back of Manor Farm," as the notice states, because we know from the documents that that sale and lease back did not

take place until 1968. Nor, even accepting Mrs. Green's evidence at its face value, is there any indication of what period her husband was referring to when he said that he had received the assurance that the option was valid. He could have been referring for instance to his meeting with Mr. Aymere Stubbs in 1964.

The date is critical, because it is upon the basis of this testimony that the plaintiffs seek to say that a fresh duty arose in Mr. Kenneth Stubbs to make a search and register the option, and, in order to be of any service to them, the consultation and advice has to fall within a bracket from July 21, 1966 (six years before the writ) to August 17, 1967 (the date of Walter's conveyance to his wife). Mr. Kenneth Stubbs denies that he was ever consulted prior to September 1967 with regard to the enforceability, as opposed to the exercise, of the option, or that he was ever asked for or gave any such assurance. Mr. Harman asks me to reject that testimony because, as he points out, Mr. Stubbs remembers very little beyond what is recorded in the documents. I am, however, bound to say that it seems to me almost overwhelmingly unlikely that he would have omitted to search if his attention had been directed to the question of enforceability, having regard to what in fact happened in September 1967 when he undoubtedly was consulted about it. His immediate reaction then was to make a search.

Miss Bush's evidence carries the matter no further because all that Geoffrey said in her presence was that he had received an assurance once a year from 1961 to 1967, without putting any date upon it. Mr. Lawrence had little more to add: Geoffrey told him, he said, that "he had been to see Mr. Stubbs and had been assured that the option was valid." This statement, he says, he related to June 1967, but Mr. Kenneth Stubbs' telephone diary entries indicate that Geoffrey was on holiday between June 1 and June 19 and although he had a short telephone conversation with Mr. Stubbs on June 19 - in which, I think, he must have mentioned his desire to exercise the option - there is no indication that he went to see Mr. Stubbs during this month.

I have to bear in mind too that the statements made in the presence of Miss Bush and Mr. Lawrence were made some 2½ years after the trouble had arisen and at a time when an action against the defendants was in contemplation, an action in which it must have been obvious that a limitation point was likely to be taken. Miss Bush took a full note of the conference with counsel and it is evident from that that Geoffrey's recollection was at fault in at least two material respects, because he said first, that after the initial grant of the option the only partner whom he consulted was Mr Kenneth Stubbs, which is clearly wrong, and secondly, that he never discussed the question of registration with his solicitors, whereas he had attended a conference with counsel and it is obvious from counsel's subsequent opinions, which I think Geoffrey must have seen, that the matter was fully discussed.

I do not, in the result, think that I can treat any of this testimony as reliably establishing that there was during the relevant period any consultation with or assurance by Mr. Kenneth Stubbs as regards the enforceability of the option, and I must accept his evidence upon this point.

What there undoubtedly was - and this is common ground - was a considerable consultation about its exercise - its desirability and consequences

from the point of view of death duties. As I have already mentioned, Geoffrey telephoned Mr. Stubbs on June 19, 1967. It appears to have been a short conversation early in the morning and the subject matter is described as "Ranby rent," but I think that the question of the effect of the exercise of the option must have been mentioned then, and indeed Mr. Stubbs so recollects, for that afternoon Mr. Stubbs made a fairly long telephone call to Geoffrey's accountant, Mr. Kewley of Messrs. R. N. Storr & Co. I surmise that the subject matter must have been the tax and duty position if the option were exercised. Mr. Kewley had a meeting with Geoffrey that day and took down details of what was the acquisition of the freehold of Gravel Farm and also of an adjoining farm known as Shifty Nooking. He formed the view that counsel's opinion should be taken and appears to have telephoned to Mr. Stubbs to express that view. On the following day he wrote this letter to Mr. Stubbs:

"With reference to our telephone conversation yesterday, our client considers, and we agree, that this is a matter on which counsel's opinion should be taken. We trust you concur.

"The salient points are as follows: 1. Gravel Hill Farm, Thornton-le-Moor, comprises 300 acres and has for some years been tenanted by our client at an annual rental of £900, the tenant bearing all outgoings doing all repairs and maintenance. 2. As you are aware, our client has an option to purchase. 3. If the option is exercised a private investor will buy Gravel Hill Farm together with an adjoining farm of 235 acres at £200 per acre, and rent back to our client at £9 per acre (i.e. 4½ per cent. of £107,000). The lease would be for an indefinite number of years. The adjoining farm is not in our client's ownership or possession at the moment. 4. If this option is exercised there will be an immediate cash profit of £125 per acre on 300 acres, namely £37,500. 5. The position concerning death duties in relation to our client's father is one in which you are no doubt involved. It is desired to know when to exercise the option, and what the position would be regarding the incidence of capital gains tax and death duties.

"We shall be pleased to give you any further information you may require."

Following that Mr. Stubbs got out the option and drew some instructions to counsel which started "Instructing solicitors are concerned on behalf of Mr. Walter Stanley Green... and his son Mr. Thomas Geoffrey Green." They had, in fact, no instructions from Walter, but I suppose that Mr. Stubbs must have assumed that the project was being planned by Geoffrey in consultation with his father. The instructions set out the option verbatim and explained the operations proposed, which consisted of exercising the option and subselling to an investor who would purchase the adjoining farm and let the whole back to Geoffrey at £9 per acre. The instructions concluded:

"Mr. T. G. Green is desirous of considering at what stage it would be best for him to exercise the option, whether to do so now or await developments and, if anything unfortunate should happen to Mr. W. S. Green before March 24, 1971, when the option expires, whether to exercise the option at that stage. Counsel is requested to advise:

1. As to when he considers it best for Mr. T. G. Green to exercise the option. 2. As to the incidence of capital gains tax and death duties. 3. Generally in the matter."

I have set this out in some detail because it forms the foundation for a submission to which I will return in a moment. But just to complete the history, before counsel's opinion was received, Mr. Stubbs, on August 25, 1967, received a letter from Messrs. Roythorne informing him that Walter had consulted them and asking for his documents. Now it might have been thought that this would have alerted Mr. Stubbs to the possibility of disharmony in the family and caused him to consider for a moment, in the light of the scheme upon which he was taking counsel's advice, whether the option was properly protected. But even if this is right, it would have done no good in fact, because the conveyance of the farm had already taken place.

Mr. Stubbs did not, in fact, become alert to the danger until September 4, when his client telephoned him and voiced a suspicion that something was going on between his father and his mother. At that stage, without telling his client, Mr. Stubbs made a search - even then, I note, asking only for a postal and not a telephonic reply - and upon receiving the result, which showed no subsisting entries, he effected a registration, again without consulting Geoffrey. It was, of course, too late and when, a month later, Geoffrey, on Mr. Stubbs' advice, sought formally to exercise the option, he was met with the response that it had not been registered and that the land had been sold.

The case raises some important points of principle which have been extensively canvassed in argument, including questions, which I have not found at all easy, as to the application of the doctrine of stare decisis. In deference to the very full argument of counsel, I think that I must state fully the reasoning by which I have been led to my conclusions even at risk of overburdening an already lengthy judgment. The argument has thrown up three principal questions of law, or of mixed law and fact.

First, assuming that an action based on the original failure to register is statute-barred, did anything occur subsequently to impose upon the defendants a fresh duty, the neglect of which can be made the subject matter of complaint? Secondly, did the defendants, quite apart from any contractual obligations which they assumed, owe a general duty to the plaintiffs' testator, the breach of which would give rise to an action in tort, when, but only when, damage was occasioned? Concealed in this is a further question as to the duty of a judge of first instance when confronted by conflicting or apparently conflicting authorities. Finally, on the footing of a solely contractual liability, is an action for damages barred by the Limitation Act 1939?

It will, I think, be convenient if I deal with these matters in order and under their separate headings even though this may necessitate referring to the same authority more than once in different contexts.

1. Did a fresh duty arise after July 21, 1966?

In case this case goes further I must, in any event, state my findings on certain evidence adduced in support of this submission, but I deal with

it first also because, if it is well founded, it concludes the case in the plaintiffs' favour and I need not go on to consider the further questions of law which otherwise arise.

It arises out of an amendment to the pleadings which Mr. Harman sought leave to make and which I granted, against Mr. Gatehouse's opposition. As originally pleaded, the case being made - in so far as it did not rest simply upon a failure to register after March 1961 - was that the defendants acted as Geoffrey's solicitors; that he sought their advice from time to time as to whether the option was valid and subsisting; and that they failed to advise him of the need for registration and indeed wrongly advised him that the option was binding upon the land. That was denied in the defence although it was admitted that the defendants were consulted about the matters raised in Mr. Kewley's letter. Particulars were then sought of the occasions upon which it was alleged that the defendants had been consulted as to the validity of the option and a number of occasions were specified. None of those now has any relevance, because they were either before July 21, 1966, or after August 17, 1967.

In the reply, however, the plaintiffs pleaded:

"3. In so far as the defendants acted in breach of duty as alleged in the said paragraphs, such duty was a continuing duty and the same was subsisting and the defendants were in breach thereof immediately prior to the execution of the conveyance hereinbefore referred to."

The amendment sought by Mr. Harman was in these terms:

"After paragraph 3, add a new paragraph, as follows: '3A. Further or alternatively, it was the duty of the defendants, on each and every occasion when the said Thomas Geoffrey Green sought their advice in relation to the said option, to satisfy themselves that the said option had been registered as an estate contract and - the said option not having been so registered - to advise him that the said option would, unless so registered, be void against a purchaser of a legal estate in Gravel Hill Farm for money or money's worth.'"

He also sought leave to add some further particulars to the particulars of paragraph 5 of the statement of claim already delivered. The only one I need refer to is this: "(v) That the said Thomas Geoffrey Green sought advice from the defendants in June 1967 concerning the exercise of the said option."

Mr. Gatehouse resisted this on the ground that it was a new case, but Mr. Harman relied on the reply, interpreting the words "continuing duty" as meaning "duty arising from time to time whenever any advice was sought in relation to the option." At that stage he expressly disclaimed any contention that there was a continuing duty in the sense of one which continued from day to day from March 1961 onwards. That is something to which I shall have to return later.

I allowed the amendment because it seemed to me that it involved no new cause of action beyond that embraced in the original writ - which specified a neglect to register "at the date of the grant and at all material times thereafter" - nor did it involve evidence of any new facts which had

not already been pleaded, but merely a deduction of law from facts already appearing on the face of the pleadings.

This new plea does however raise an issue of law not apparent upon the original pleadings, namely, what is the scope of a solicitor's duty when he is consulted about a particular aspect of a problem - is he entitled to confine himself to the particular matters for which he is retained to advise or must he consider all the circumstances affecting the underlying data including hypothetical circumstances or risks to which his attention is not directed and upon which his advice is not specifically sought?

As to this, I have heard the evidence of a number of practising solicitors. Mr. Harman modestly contented himself with calling one; but Mr. Gatehouse-mindful, no doubt, of what is said to be the divine preference for big battalions - called no less than three. I must say that I doubt the value, or even the admissibility, of this sort of evidence, which seems to be becoming customary in cases of this type. The extent of the legal duty in any given situation must, I think, be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by a professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which really amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been placed, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court; whilst evidence of the witnesses' view of what, as a matter of law, the solicitor's duty was in the particular circumstances of the case is, I should have thought, inadmissible, for that is the very question which it is the court's function to decide.

Predictably, the witnesses differed. Mr. Gibbon, an experienced conveyancing solicitor from Grimsby, told me that if he were consulted about any aspect of an option, he would make a search to see if it had been registered - assuming, of course that there was no documentary evidence of registration already on the file. Mr. Gatehouse's witnesses, on the other hand, concurred in saying that if they were consulted in the terms of Mr. Kewley's letter of June 20, 1967, it would not occur to them to query whether the option was registered or not. It would depend, as Mr. Stebbings put it, upon whether there was anything in the circumstances or the instructions to direct the solicitor's mind in that direction.

This seems to me, if I may say so, to be obvious common sense and I find nothing in the evidence of these gentlemen, helpful as they all tried to be, establishing a practice or general standard which assists me in this case. Mr. Harman sought to rely upon the fact that Mr. Stubbs was Geoffrey's solicitor under some sort of general retainer imposing a duty to consider all aspects of his interest generally whenever he was consulted, but that cannot be. There is no such thing as a general retainer in that sense. The expression "my solicitor" is as meaningless as the expression "my tailor" or "my bookmaker" in establishing any general duty apart from that arising out of a particular matter in which his services are retained. The extent of his duties depends upon the terms and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do.

Now no doubt the duties owed by a solicitor to his client are high, in

the sense that he holds himself out as practising a highly skilled and exacting profession, but I think that the court must beware of imposing upon solicitors - or upon professional men in other spheres - duties which go beyond the scope of what they are requested and undertake to do. It may be that a particularly meticulous and conscientious practitioner would, in his client's general interests, take i. upon himself to pursue a line of inquiry beyond the strict limits comprehended by his instructions. But that is not the test. The test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession, and cases such as Duchess of Argyll v. Beuselinck [1972] 2 Lloyd's Rep. 172; Griffiths v. Evans [1953] 1 W.L.R. 1424 and Hall v. Meyrick [1957] 2 Q.B. 455 demonstrate that the duty is directly related to the confines of the retainer. It is not seriously arguable that a solicitor who or whose firm has acted negligently comes under a continuing duty to take care to remind himself of the negligence of which, ex hypothesi, he is unaware: see, e.g., Kekewich J. in Wood v. Jones (1889) 61 L.T. 551, 552; but Mr. Harman suggests that in this case, because the exercise of the option was crucial to the scheme which Geoffrey was proposing in June 1967, it then became Mr. Kenneth Stubbs' duty to consider and check upon the registration of the option. But that was not what he was asked to do. The instructions were given in the context of an agreement between father and son who were on friendly terms and against the background that Mr. Stubbs' firm had, for years, acted as solicitors for both parties and would expect to know if Walter was contemplating any sale of his property. Mr. Stubbs told me - and I accept - that he had heard of no family discord and Geoffrey's own evidence, in the affidavit to which I have made previous reference, was that he had not quarrelled with his father. Furthermore, only in the previous year, Walter had, to Mr. Stubbs' knowledge, concurred with Geoffrey in the arrangements over Poplar and Walk Farms, all of which pointed to the existence of harmonious family relationships.

The state of Mr. Stubbs' knowledge of the family affairs is illustrated by the fact that he assumed, when giving instructions to tax counsel, that he was acting for both parties. I can, in these circumstances, see no reason why the possibility of Walter's disposing of the land in defiance of the option should then have been present to his mind nor why the instructions to advise as to the tax and death duty consequences should have suggested to him that he ought to check whether the option had been registered.

If there was no continuing duty to register up to this point, therefore - and that is the supposition upon which this submission is based - I can see nothing in the instructions given in June 1967 which would have revived it or created some fresh duty in Mr. Stubbs to consider whether or not the option had been registered.

I cannot, therefore, accept Mr. Harman's submissions upon this part of the case.

2. Are the defendants liable to the plaintiffs in tort?

I turn, then, to what is, on one view of the matter, the critical question in the case. That is, whether the plaintiffs' claim was barred by effluxion of time at or before the date when Walter disposed of the land. I Put it

in this form because although the writ was issued five years later, the logical consequence of the defendants' submissions is that the limitation period would have run even if a writ had been issued at that date.

Mr. Gatehouse's case is a very simple one. It rests on three propositions. (1) A solicitor's duty to his client under his retainer is a duty which arises from the contract, and from the contract alone, and there is no general duty to exercise care and skill such as would found an action in tort if damage results from want of care and skill. (2) It is accepted that, here, there was a breach of contract, but it is well established that in cases of breach of contract time under the Limitation Act 1939 runs from the date of the breach, which is when the complete cause of action accrues, even if the damages which could be awarded at that date would be nominal only. (3) The breach of contract, and the only breach of contract, which could support an action is breach of a contract whether it be expressed as a contract to exercise care and skill or as a contract containing a specific term ,is immaterial - to effect registration within a reasonable time. Although it may be difficult to state with precision the specific date of breach, it certainly occurred before August 17, 1961, by which date a reasonable time for registration of the option had expired.

Mr. Harman makes a direct frontal assault on Mr. Gatehouse's first proposition. There is, he says, an alternative cause of action in tort which was not complete until the damage was sustained in August 1967, well within the period of six years before the issue of the writ in this action. He based this, first, on the proposition that there was no retainer - or, to put it more accurately, that, whatever the pleadings say, he has not proved a retainer. I must, he suggests, therefore approach the case on the footing that Mr. Aymere Stubbs gratuitously assumed to act for Geoffrey in a matter in which professional care and skill were required and that, accordingly, he became liable in tort for damage occasioned by his want of care and skill. Imperitia culpae adnumeratur. I have already said that, in my judgment, the evidence in this case does establish a retainer, but it seems to me that there may, in any event, be another answer to this contention. I am far from convinced that the giving by a solicitor of gratuitous advice to a friend could necessarily be said to be something done in the ordinary course of a partnership business. If Mr. Harman's contention were correct then it may be that the defendants should be, not the firm of Hett, Stubbs & Kemp, but Mr. Aymere Stubbs' personal representatives.

The second basis for Mr. Harman's attack is a more general one, and it is that the result of a recent authority in the Court of Appeal has been to destroy the validity of the view heretofore generally accepted that the solicitor's liability is contractual only. Mr. Harman's submission is, in essence, that since the recent decision of the Court of Appeal in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, there are two conflicting lines of authority of co-ordinate courts and that a judge of first instance is therefore given a choice which to follow and should follow that which appears to accord most with authority and common sense. But I think that ultimately it went further than that and amounted, if not in terms, at least in substance, to a submission that the effect of the House of Lords decision in Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964]

A.C. 465, taken in conjunction with other cases - and, in particular, the case just mentioned - has been, by necessary implication, to overrule the Court of Appeal's decision in Groom v. Crocker [1939] 1 K.B. 194 and the cases which followed it. The Esso case and the Hedley Byrne case formed the bedrock of Mr. Harman's submission.

(a) The doctrine of stare decisis

I have been led by counsel through a bewildering complex of authorities many of which are not easy to reconcile with the principles established in subsequent cases in superior courts or, in some cases, with one another. The task of a judge of first instance faced with this situation is not an easy one. Our system of courts is hierarchical and he must on the one hand follow and apply those principles of law which have been clearly laid down by higher authority whilst, at the same time, avoiding the risk of arrogating to himself a function which properly belongs only to a higher tribunal and which he has no power to exercise even where reason might tempt him to do so. Even the principles which he should follow when confronted by apparently conflicting decisions of superior courts are not always clear and, where they are clear, they are not always easy to apply, for their application may itself depend upon a disputable interpretation of a decision of a superior court. The principles so far as relevant to the present case appear to me to be these and I adopt them in my approach to Mr. Harman's submissions.

(1) A decision of the House of Lords resting upon or establishing a general doctrine binds all inferior courts and represents the law of the land until it is altered by legislation or, nowadays, departed from by the House itself: see Great Western Railway Co. v. S.S. Mostyn (Owners) [1928] A.C. 57, 82 and Wilkinson v. Sibley [1932] 1 K.B. 194, 200.

(2) A decision of an inferior court may be treated as having been overruled by a decision of a superior court with which it is shown to be inconsistent, although it has not been expressly so stated by those who concur in such a decision: Consett Industrial and Provident Society Ltd. v. Consett Iron Co. Ltd. [1922] 2 Ch. 135, 173, 174.

(3) An interpretation of a statute or of a decision of the House of Lords by the Court of Appeal is binding upon that court even if it subsequently regards the interpretation as erroneous: see Williams v. Glasbrook Brothers Ltd. [1947] 2 All E.R. 884 and Miliangos v. George Frank (Textiles) Ltd. [1976] A.C. 443, 479. A fortiori such interpretation binds an inferior court.

(4) Where there are conflicting decisions of the Court of Appeal, that court is free to choose which it will follow: Young v. Bristol Aeroplane Co. Ltd. [1946] A.C. 163. The position of a judge at first instance when faced with such a conflict is not clear. He must, I think, be equally free to choose unless it is to be suggested that he must follow that decision which is latest in point of time.

(b) Authorities leading up to Groom v. Crocker

Mr. Harman's submission seems, at first sight, a bold one, for there is a formidable and continuous line of cases, some of them decided since the Hedley Byrne case [1964] A.C. 465, which assert that a solicitor's relationship

ship with his client is a contractual one only and gives rise to no liability in tort. But boldness and wrongness are not synonyms and although justice is said to be blind, the doctrine of precedent does not prescribe that the court must blindly follow previous decisions without considering their rationale and the impact upon them of subsequent authority. In order to test Mr. Harman's submissions I must, I think, first seek to trace and analyse the genesis of the rule which found its expression in Groom v. Crocker [1939] 1 K.B. 194 and the cases which followed; then consider how, if at all, it was affected by what appeared, at the time, to be the revolutionary decision of the House of Lords in the Hedley Byrne case and finally I must look at the cases on solicitors' liability decided since the Hedley Byrne case and assess the effect upon them of Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 upon which Mr. Harman relies. In Clark v. Kirby-Smith [1964] Ch. 506 Plowman J. said that a line of cases going back for nearly 150 years showed that the client's action against his solicitor was in contract and not in tort, and he cited Howell v. Young (1826) 5 B. & C. 259.

Mr. Gatehouse has referred me to that case and a perusal of it raises, in my mind at least, a serious doubt whether it did in fact decide that a solicitor's sole liability was in contract. It has to be remembered that it was decided at a time when English law was still bedevilled by the technicalities of the forms of action and when the general concept of negligence as a separate tort was still developing. Lack of care and skill in the performance of their duties by those professing certain callings or offices had, since mediaeval times, been regarded by the law as wrongful and the duty to display ordinary care and skill had attached beyond the sphere of the so-called common callings to professions such as those of the apothecary. the surgeon and the attorney: see Winfield, Select Legal Essays (1952), pp. 74-77.

It was clearly established, however, that if a plaintiff sued in assumpsit, he was bound by that pleading to a reliance upon the contract which he alleged and time under the Statute of Limitation 1623 was treated, as one would expect, as running from the date of the breach alleged. In Battley v. Faulkner (1820) 3 B. & Ald. 288, for instance, Holroyd J. pointed out at p. 294 that subsequently sustained damage could not be considered as a substantive ground of action "in this form of action." Short v. M'Carthy (1820) 3 B. & Ald. 626 and Brown v. Howard (1820) 2 Brod. & B. 73 were both cases of actions against solicitors pleaded in assumpsit where the same consequence followed. Howell v. Young, 5 B. & C. 259, however, was an action on the case, but it was a case where the damage - the acceptance of a bad title to a mortgage security - had accrued at the same time as the negligent act which constituted the breach of duty although it did not then become apparent. The breach and the immediately consequent damage, therefore, had occurred simultaneously, as indeed they had in Short v. M'Carthy. 3 B. & Ald. 626 (as Bayley J. pointed out in that case) and the only question was whether the consequential special damage pleaded gave rise to a further and different cause of action.

Howell v. Young, 5 B. & C. 259, was a case which raised directly the question of when the cause of action accrued, the particular misconduct alleged being the defendant's negligent assurance as to the title to certain

properties upon the security of which the plaintiff had lent money, all of which had occurred over six years before the commencement of the proceedings, although it was not until later that default was made in payment of the interest and the lack of title came to light. It was held that the plaintiff's action was barred and that the special damage claimed - the loss of interest - did not give rise to a fresh cause of action. It is, however, far from clear that the court regarded the defendant's liability as an exclusively contractual one and that was certainly not decided in terms. Although it is true that, at p. 265, Bayley J. thought that the case was analogous to the earlier case of Short v. M'Carthy 3 B. & Ald. 626, he seems to have differentiated between a cause of action founded upon a promise and one founded upon what he called "breach of duty" although he held that the result was the same because "the breach of duty is substantially the cause of action": see p. 266. He does, it is fair to say, at one point say that an award of nominal damages could have been made if the action had been commenced in time, which might suggest that he regarded the action as a purely contractual one; but in another part of his judgment, at p. 264, he refers to the special damage pleaded as "part only" of the damage suffered.

Holroyd J. was even more equivocal. He too, at p. 266, employed the dichotomy of "breach of promise" and "breach of duty," and held that it made no difference which way the plaintiff elected to put his case, because, on the facts, in either event the cause of action accrued at the same moment. He does not, however, suggest that there was only one cause of action arising by virtue of a breach of contract. Indeed, he said expressly that the plaintiff could sue in either assumpsit or case and the final passage in his judgment suggests that an action in tort was equally appropriate for, having pointed out that if the plaintiff had sued immediately the security was given the jury would have been bound to award damages for the probable loss, he went on to say, at p. 268, that "therefore" the subsequent special damage pleaded did not constitute a fresh cause of action. Nor does the exclusively contractual nature of the solicitor's liability emerge from the subsequent case of Smith v. Fox (1848) 6 Hare 386, another negligence action where the plaintiff sued in case rather than assumpsit. This merely followed Howell v. Young, 5 B. & C. 259, without any discussion as to the basis of the cause of action.

It seems to me, therefore, to be open to doubt whether these early decisions really establish the proposition for which they were subsequently cited as authority. It does not appear to have been the view at least of Stuart V.-C. that they had this effect, for he is recorded as saying, in a case where a solicitor had wrongly conducted litigation in the name of a person from whom he had no instructions, that "the law of tort, as applied in Howell v. Young, 5 B. & C. 259, and Smith v. Fox, 6 Hare 386, was inapplicable to a case of this kind": In re Manby and Hawksford (1856) 26 L.J.Ch. 313, 317, and see also Sawyer v. Goodwin (1867) 36 L.J.Ch. 578, 582, where he clearly contemplated tort and contract as alternative causes of action.

But so far as the court of first instance was concerned the question became an academic one in 1885, for whether they did or did not have the effect referred to, they were accepted by the Court of Appeal as so

doing and the proposition was clearly established as a matter of direct decision in Bean v. Wade (1885) 2 T.L.R. 157. I have ventured to look at the underlying basis for that decision only because of Mr. Harman's submission that I am now faced with conflicting authorities of the Court of Appeal and am entitled to choose which I shall follow. The report of Bean v. Wade is not a particularly satisfactory one, it being, as was the custom with the Times Law Reports at the time, in oratio obliqua. On this point, however, it seems entirely unequivocal. Lindley L.J., who was sitting with Lord Esher M.R. and Cotton L.J., is recorded, in delivering the judgment of the court, as saying, at pp 158-159, that:

"... according to Howell v. Young, 5 B. & C. 259, Smith v. Fox, 6 Hare 386 and In re Hindmarsh (1860) 1 Drew. & Sm. 129..." - a case concerned with the different point of a solicitor's fiduciary liability - "... the right of action in cases of this kind was treated as arising from a breach of contract, and not from negligence apart from contract or from any breach of trust. Therefore, the statute began to run in favour of Mr. G. Wade from the date of his breach of his duty to his clients...."

The decision does not seem to have achieved a great notoriety, possibly because it never got into the official Law Reports. A similar question arose in the following year in Hughes v. Twisden (1886) 55 L.J.Ch. 481, and it was not cited, the court merely contenting itself with saying that the facts came to the same as in Howell v. Young, 5 B. & C. 259. And in 1890 in Blyth v. Fladgate [1891] 1 Ch. 337, 366, Stirling J. was still evidently of the view that there were alternative liabilities which could be asserted either in tort or in contract. Again in Davies v. Hood (1903) 88 L.T. 19 Ridley J. considered that the action might be either in contract or in tort.

Perhaps even more significantly we find no less an authority than Viscount Haldane L.C. saying in Nocton v. Lord Ashburton [1914] A.C. 932, 956:

"My Lords, the solicitor contracts with his client to be skilful and careful. For failure to perform his obligation he may be made liable at law in contract or even in tort, for negligence in breach of a duty imposed on him. In the early history of the action of assumpsit this liability was indeed treated as one for tort."

It should be added, perhaps, that Lord Dunedin, at p. 964 of the same case, put the liability in contract.

Even if, however, the point remained open at all after Bean v. Wade, 2 T.L.R. 157, in any court below the House of Lords, it was conclusively determined again by a unanimous Court of Appeal over 50 years later in Groom v. Crocker [1939] 1 K.B. 194. The question at issue was whether damages for injured feelings and reputation - which clearly could not then be claimed in contract as a result of the House of Lords' decision in Addis v. Gramophone Co. Ltd. [1909] A.C. 488 - were nevertheless claimable in tort.

Sir Wilfrid Greene M.R. in Groom v. Crocker [1939] 1 K.B. 194, 205 said:

"In my opinion, the cause of action is in contract and not in tort. The duty of the appellants was to conduct the case properly on behalf of the respondent as their client, subject to any proper exercise by the insurers of the right of control conferred upon them by the policy. The relationship of solicitor and client is a contractual one: Davies v. Lock (1844) 3 L.T.O.S. 125; Bean v. Wade, 2 T.L.R. 157. It was by virtue of that relationship that the duty arose, and it had no existence apart from that relationship."

Scott L.J. concurred. He said, at p. 222:

"Mr. Pritt argued for the respondent that he had a cause of action in tort for breach of duty. I do not think so. A solicitor, as a professional man, is employed by a client just as much as a doctor, an architect, or a stockbroker, and the mutual rights and duties of the two are regulated entirely by the contract of employment. The cases of Bean v. Wade, 2 T.L.R. 157 and Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399 cited to us, both recognise this basic principle.... The retainer when given puts into operation the normal terms of the contractual relationship, including in particular the duty of the solicitor to protect the client's interest and carry out his instructions in the matters in which the retainer relates, by all proper means. It is an incident of that duty that the solicitor should consult with his client on all questions of doubt which do not fall within the express or implied discretion left him, and should keep the client informed to such an extent as may be reasonably necessary according to the same criteria. But in all these aspects the tie between the two is contractual. There is today no common law duty similar to that which survives in the case of a bailee or carrier, and no action lies in tort for the breach of the above duties, unless, of course, particular circumstances disclose such a case - fraud, for instance."

MacKinnon L.J.'s view was expressed much more shortly, at p. 229:

"Next as to the £1,000 damages for breach of duty. I am clear that this is a claim for damages for breach of contract, and that the plaintiff can only recover the pecuniary loss that he can show he has suffered."

Apart from Bean v. Wade, 2 T.L.R. 157, the only other authority referred to by Sir Wilfrid Greene M.R. was an elderly case of Davies v. Lock which was partially heard before the Court of Queen's Bench in May 1844. It is reported in 3 L.T.O.S., on its first hearing, at p. 100, when the court suggested to counsel that they should dispose of the matter by entering a non-suit by consent, and again at p. 125 where there is a report of an adjourned hearing. But the case can hardly be called an authority, and such guidance as it gives is provided not by the court but by the reporter who expressed the view in the headnote that the liability of a solicitor is a contractual one and preceded his view with the word "semble."

It was an action for negligence against partners in which the jury had found a verdict against one defendant and not against others and the submission being made was that, inasmuch as partners are jointly liable

on the firm's contractual obligations, the verdict should have been against all or against none. There appears to have been no argument on the point and certainly no decision. Counsel for the plaintiff conceded that the liability was ex contractu, and the court simply suspended the argument to enable counsel to make an application to the trial judge to amend the verdict.

The only other authority relied upon was that referred to in the judgment of Scott L.J., namely Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399 in which Greer L.J. said, at p. 405:

"The distinction in the modern view, for this purpose, between contract and tort may be put thus: where the breach of duty alleged arises out of a liability independently of the personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, if the duty in fact arises independently of that contract. Breach of contract occurs where that which is complained of is a breach of duty arising out of the obligations undertaken by the contract."

But that was a case which was concerned with the question of whether an action was one "founded on a contract" or "founded on a tort" for the purposes of section 11 of the County Courts Act 1919 - a question in regard to which it was well established that what had to be regarded was the substance of the matter even though there might be alternative liabilities (see, for instance, Sachs v. Henderson [1902] 1 K.B. 612 and Edwards v. Mallan [1908] 1 K.B. 1002) and in saying what he did Greer L.J. was merely applying the principle which had been expressed by A. L. Smith L.J. in Turner v. Stallibrass [1898] 1 Q.B. 56. 58, as follows:

"The rule of law on the subject, as I understand it, is that, if in order to make out a cause of action it is not necessary for the plaintiff to rely on a contract, the action is one founded on tort; but. on the other hand, if, in order successfully to maintain his action, it is necessary for him to rely upon and prove a contract, the action is one founded upon contract."

That, of course, is quite different from saying that there cannot be overlapping liabilities both in contract and tort. Indeed, it appears to me to be saying the opposite. It is true that in Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399 the Court of Appeal held that it was necessary, in order to found the cause of action there, to rely on the contract, but that is scarcely surprising on the facts of the case, for it had not been pleaded as a claim in negligence resting upon any breach of a general duty, but upon a disregard of the plaintiff's specific instructions: see, for instance, the judgment of Slesser L.J. at p. 406.

Now it is fair to say that the duties alleged in the statement of claim in Groom v. Crocker [1939] 1 K.B. 194 and set out in the judgment of Scott L.J., went rather beyond any implied general duty to exercise reasonable care and skill. Nevertheless there can be no doubt that the decision proceeded on the basis that there was no liability beyond and apart from liability for duties imposed by the contract. And that, subject to Mr.

Harman's contention as to the effect of Esso Petroleum Co. Ltd v. Mardon [1976] Q.B. 801, has been treated as the law ever since. Groom v. Crocker [1939] 1 K.B. 194 has consistently been followed and applied. In Lake v. Bushby [1949] 2 All E.R. 964, 968 Pritchard J. said that the authorities showed "beyond doubt that the duty which a solicitor owes to his client arises ex contractu," and that "apart from the contract between him and his client the duty does not exist at all." In Bailey v. Bullock [1950] 2 All E.R. 1167, 1169, Barry J. likewise described the proposition as "beyond doubt." It was applied too by Hodson L.J. in Hall v. Meyrick [1957] 2 Q.B. 455. 478.

(c) The decision in Hedley Byrne

Now if there was, in the House of Lords' decision in Hedley Byrne [1964] A.C. 465, anything that was inconsistent with and destroyed the reasoning upon which Groom v. Crocker [1939] 1 K.B. 194 was based, I should not, I apprehend, be any longer bound by it nor bound to follow those subsequent cases at first instance which nevertheless applied it - and that would include even a case carrying the high authority of Diplock L.J., who, in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, was sitting as an additional judge of the Queen's Bench Division. I have to confess that, unassisted by prior authority, I think that I should have felt myself compelled to the conclusion that the ratio of Groom v. Crocker [1939] 1 K.B. 94 - which, of course, was decided before the doctrine of tortious negligence arising from special relationships enunciated in the Hedley Byrne case had been fully developed - could not stand alongside that overriding decision of the House of Lords.

The principle was stated by Lord Morris of Borth-y-Gest as a perfectly general one and it is difficult to see why it should be excluded by the fact that the relationship of dependence and reliance between the parties is a contractual one rather than one gratuitously assumed, in the absence, of course, of contractual terms excluding or restricting the general duties which the law implies. Logically, as it seems to me, this could be so only if there is read into every contract not only an implied term to employ reasonable care and skill in the performance of the contract, but a further term to the effect that the contract shall be the conclusive and exclusive source of all duties owed by one party to the other to the exclusion of any further or more extensive duties which the general law would otherwise impose. Lord Morris of Borth-y-Gest expressed the principle when he said, at pp. 502-503:

"My Lords, I consider that it follows and that it should now be regarded as settled that if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise. The fact that the service is to be given by means of or by the instrumentality of words can make no difference. Furthermore, if in a sphere in which a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, a person takes it upon himself to give information or advice to, or allows his information or advice to be passed

on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."

Now this was a perfectly general statement of principle and even if it be treated as qualified to the extent indicated in the majority view of the Board in Mutual Life & Citizens' Assurance Co. Ltd. v. Evatt [1971] A.C. 793 there seems to me to be no ground for confining its operation to non-contractual relationships. Indeed, the exposition of the principle in the majority judgment of Lord Diplock in that case at pp. 801-803, suggests just the contrary, for Lord Diplock there ascribes the origin of the principle to the duty imposed by the law by reason merely of the carrying on of particular professions or trades and summarised in the maxim "spondet peritiam artis et imperitia culpae adnumeratur."

That there is no such restriction is, I think, clear not only from the speech of Lord Morris of Borth-y-Gest but from other speeches as well. Lord Pearce in Hedley Byrne [1964] A.C. 465, 538 for instance, adopted and approved the dissenting judgment of Denning L.J. in Candler v. Crane, Christmas & Co. [1951] 2 K.B. 164, 179-180. Denning L.J. said:

"Let me now be constructive and suggest the circumstances in which I say that a duty to use care in statement does exist apart from a contract in that behalf. First, what persons are under such duty? My answer is those persons such as accountants, surveyors, valuers and analysts, whose profession and occupation it is to examine books, accounts, and other things, and to make reports on which other people - other than their clients - rely in the ordinary course of business. Their duty is not merely a duty to use care in their reports. They have also a duty to use care in their work which results in their reports. Herein lies the difference between these professional men and other persons who have been held to be under no duty to use care in their statements, such as promoters who issue a prospectus: Derry v. Peek (1889) 14 App.Cas. 337 (now altered by statute), and trustees who answer inquiries about the trust funds: Low v. Bouverie [1891] 3 Ch. 82. Those persons do not bring, and are not expected to bring, any professional knowledge or skill into the preparation of their statements: they can only be made responsible by the law affecting persons generally, such as contract, estoppel, innocent misrepresentation or fraud. But it is very different with persons who engage in a calling which requires special knowledge and skill. From very early times it has been held that they owe a duty of care to those who are closely and directly affected by their work, apart altogether from any contract or undertaking in that behalf. Thus Fitzherbert, in his new Natura Brevium (1534) 94D, says that: 'if a smith prick my horse with a nail..., I shall have my action upon the case against him, without any warranty by the smith to do it well'; and he supports it with an excellent reason: 'for it is the duty of every artificer to exercise his art rightly and truly as he ought.' This reasoning has been treated as applicable not only to shoeing smiths, surgeons and barbers, who work with hammers, knives and scissors, but also to shipbrokers and clerks in the custom house who work with figures and make entries in books, 'because their situation and employment

necessarily imply a competent degree of knowledge in making such entries': see Shiels v. Blackburne (1789) 1 H.Bl. 158, 162, per Lord Loughborough, which was not referred to by Devlin J., in Heskell v. Continental Express Ltd. [1950] 1 All E.R. 1033, 1042, The same reasoning has been applied to medical men who make reports on the sanity of others: see Everett v. Griffiths [1920] 3 K.B. 163, 182, 217. It is, I think, also applicable to professional accountants."

Now, in that passage, I think that it is abundantly clear that Denning L.J. was seeking to enunciate a general principle of liability arising from the relationship created by the assumption of a particular work or responsibility, quite regardless of how the relationship arose. In the case of Fitzherbert's Smith, Anon, Year Book 46 Edw. III Trin. 19, the relationship was contractual. In Everett v. Griffiths [1920] 3 K.B. 163 it arose out of the performance of a statutory function.

The inquiry upon which the court is to embark is "what is the relationship between plaintiff and defendant?" not "how did the relationship, if any, arise?" That this is so appears, I think, with complete clarity from subsequent cases.

Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223 was concerned with the negligent performance of the statutory duty of a local authority to answer inquiries about charges in the local land charges register. Undoubtedly, in addition to any statutory duty, there must, I think, have been a contractual duty to the inquirer who paid the fee for the service. The actual question at issue was as to liability to a third party injured by a negligent answer. The Court of Appeal found such liability but it is interesting to note that they assumed that exactly the same duty was owed to the inquirer. And the case is a clear authority that the principle in the Hedley Byrne case [1964] A.C. 465 is one which in no way depends upon the voluntary assumption of the relationship which gives rise to the duty.

Fisher J. in Ministry of Housing and Local Government v. Sharp said, at p. 243:

"Legal responsibility... can arise either from the voluntary making of a particular statement, or the voluntary entry into a continuing relationship which involves the making of such statements, or the voluntary assumption of an office or appointment which involves the making of such statements."

There he was quoting from the submission which counsel had made to him. He rejected that in these terms on the same page:

"As I see it, the emphasis on the voluntary nature of the representation in Hedley Byrne [1964] A.C. 465, was dictated by the facts of that case, and the limitations in the statements of principle were not intended to be universally applicable...."

On the following page Fisher J. quoted from the speech of Lord Pearce saying:

"Another principle is to be discerned in the speeches, and in cases cited with approval therein, namely, that 'persons who hold themselves

out as possessing a special skill are under a duty to exercise it with reasonable care': see, for instance, Lord Hodson, at p. 505, and Lord Pearce, at p. 538. Lord Pearce said: 'In those cases there was no dichotomy between negligence in act and in word, nor between physical and economic loss. The basis underlying them is that if persons holding themselves out in a calling or situation or profession take on a task within that calling or situation or profession, they have a duty of skill and care. In terms of proximity one might say that they are in particularly close proximity to those who, as they know, are relying on their skill and care although the proximity is not contractual.'"

Although Fisher J.'s decision was reversed in the Court of Appeal, his expression of opinion about the ambit of the Hedley Byrne principle was affirmed by all three members of the court. Lord Denning M.R. said, at p. 268:

"I have no doubt that the clerk is liable. He was under a duty at common law to use due care. That was a duty which he owed to any person - incumbrancer or purchaser - whom he knew, or ought to have known, might be injured if he made a mistake."

A little further on, Lord Denning M.R. continued:

"Mr. Hunter submitted to us, however, that the correct principle did not go to that length. He said that a duty to use due care (where there was no contract) only arose when there was a voluntary assumption of responsibility. I do not agree. He relied particularly on the words of Lord Reid in Hedley Byrne's case [1964] A.C. 465, 487, and of Lord Devlin at p. 529. I think they used those words because of the special circumstances of that case (where the bank disclaimed responsibility). But they did not in any way mean to limit the general principle. In my opinion the duty to use due care in a statement arises, not from any voluntary assumption of responsibility, but from the fact that the person making it knows, or ought to know, that others, being his neighbours in this regard, would act on the faith of the statement being accurate. That is enough to bring the duty into being. It is owed, of course, to the person to whom the certificate is issued and whom he knows is going to act on it."

Salmon L.J. said, at p. 279:

"It has been argued, in the present case, that since the council did not voluntarily make the search or prepare the certificate for their clerk's signature they did not voluntarily assume responsibility for the accuracy of the certificate and accordingly owed no duty of care to the Minister. I do not accept that, in all cases, the obligation to take reasonable care necessarily depends upon a voluntary assumption of responsibility."

Finally, Cross L.J. said, at p. 291:

"Again I do not think that the fact that the searcher did not undertake the function of making the statement in question 'voluntarily'

- except in the sense that he could have refused to accept employment in so potentially hazardous an occupation - is relevant to the problem in hand. It is true that the phrase 'voluntary assumption of risk' occurs frequently in the speeches in the Hedley Byrne case [1964] A.C. 465, but I agree with the judge that that case did not purport to lay down any metes and bounds within which legal liability in tort for false statements, on which the parties to whom they are made rely, has to be confined: see in particular per Lord Devlin, at pp. 530-531. I see no sufficient reason why in an appropriate case the liability should not extend to cases in which the defendant is obliged to make the statement which proves to be false."

Lord Denning M.R. spoke to the same effect in Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373, 394-395, where he said:

"Nowadays since Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465 it is clear that a professional man who gives guidance to others owes a duty of care, not only to the client who employs him, but also to another who he knows is relying on his skill to save him from harm. It is certain that a banker or accountant is under such a duty. And I see no reason why a solicitor is not likewise. The essence of this proposition, however, is the reliance. In Hedley Byrne v. Heller it was stressed by Lord Reid at p. 486, by Lord Morris of Borth-y-Gest at pp. 502-503, and by Lord Hodson at p. 514. The professional man must know that the other is relyingon his skill and the other must in fact rely on it."

This seems to me to be quite inconsistent with the restrictive view of a solicitor's liability enunciated in Groom v. Crocker [1939] 1 K.B. 194 and to be expounding a basis of liability which was not contemplated in that case either in the argument or the judgments. I do not think that in the speech of Lord Morris of Borth-y-Gest in the Hedley Byrne case the words, at p. 502, "quite irrespective of contract" can legitimately be read as "only where there is no contract." That seems to me to be putting a wholly unwarranted gloss on the decision and to be out of line with the subsequent authorities in which the doctrine has been expounded and, to some extent, expanded. The matter becomes, in my judgment, even clearer when one looks at the speech of Lord Devlin in the Hedley Byrne case [1964] A.C. 465, for he treats the existence of a contractual relationship as very good evidence of the general tortious duty which he is there discussing. He said, at pp. 528-529:

"I think, therefore, that there is ample authority to justify your Lordships in saying now that the categories of special relationships which may give rise to a duty to take care in word as well as in deed are not limited to contractual relationships or to relationships of fiduciary duty, but include also relationships which in the words of Lord Shaw in Nocton v. Lord Ashburton [1914] A.C. 932, 972 are 'equivalent to contract,' that is, where there is an assumption of responsibility in circumstances in which, but for the absence of consideration, there would be a contract. Where there is an express undertaking, an express warranty as distinct from mere representation,

there can be little difficulty. The difficulty arises in discerning those cases in which the undertaking is to be implied. In this respect the absence of consideration is not irrelevant. Payment for information or advice is very good evidence that it is being relied upon and that the informer or adviser knows that it is. Where there is no consideration, it will be necessary to exercise greater care in distinguishing between social and professional relationships and between those which are of a contractual character and those which are not."

A little further down he seems to have had in mind the very case of a solicitor as a typical example of the type of situation in which the duty arises, Lord Devlin said, at p. 259:

"I do not understand any of your Lordships to hold that it is a responsibility imposed by law upon certain types of persons or in certain sorts of situations. It is a responsibility that is voluntarily accepted or undertaken, either generally where a general relationship, such as that of a solicitor and client or banker and customer, is created, or specifically in relation to a particular transaction."

Again, Lord Devlin said, at p. 530:

"I shall therefore content myself with the proposition that wherever there is a relationship equivalent to contract, there is a duty of care. Such a relationship may be either general or particular. Examples of a general relationship are those of solicitor and client and of banker and customer. For the former Nocton v. Lord Ashburton [1914] A.C. 932 has long stood as the authority and for the latter there is the decision of Salmon J. in Woods v. Martins Bank Ltd. [1959] 1 Q.B. 55 which I respectfully approve. There may well be others yet to be established. Where there is a general relationship of this sort, it is unnecessary to do more than prove its existence and the duty follows."

Nor, as I read the decision, can its operation be confined to cases where the service undertaken takes the form of a representation or of a statement of fact, opinion, or advice. It must logically, I think, apply where the service involves some other positive action such as the giving of a notice as in Bean v. Wade, 2 T.L.R. 157. Once the duty is established it cannot, in my judgment, matter whether the breach takes the form of malfeasance or nonfeasance: see, for instance, Barnett v. Chelsea and Kensington Hospital Management Committee [1969] 1 Q.B. 428.

Nor, if I may respectfully say so, do I follow the argument advanced by counsel in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, 200, that the cause of action there was necessarily in contract alone because the architects in that case had "failed to do the very thing which they contracted to do." Well, so they had, but the form of the breach cannot affect the nature of the duty, nor does an obligation imposed by law become an obligation different in quality simply because the obligee agrees to accept money for its performance.

If an accountant gratuitously undertakes to render a careful and accurate report on company's affairs to one who, as he knows, is relying

and will act upon it, and he renders a careless and inaccurate report, he has failed to do the very thing that he undertook to do. But that is merely a description of his failure, not an analysis of his duty.

The case of a layman consulting a solicitor for advice seems to me to be as typical a case as one could find of the sort of relationship in which the duty of care described in the Hedley Byrne case [1964] A.C. 465 exists; and if I am free to do so in the instant case, I would, therefore, hold that the relationship of solicitor and client gave rise to a duty in the defendants under the general law to exercise that care and skill upon which they must have known perfectly well that their client relied. To put it another way, their common law duty was not to injure their client by failing to do that which they had undertaken to do and which, at their invitation, he relied upon them to do. That duty was broken, but no cause of action in tort arose until the damage occurred; and none did occur until August 17, 1967. I would regard it as wholly immaterial that their duty arose because they accepted a retainer which entitled them, if they chose to do so, to send a bill to their client. And, if I felt free so to hold, it would encourage me to find that my decision was in line with the law which has been applied in another part of the United Kingdom. A similar point to that which arises in the instant case fell for decision in Scotland after the decision of the House of Lords in the Hedley Byrne case [1964] A.C. 465. In Robertson v. Bannigan, S.L.T. 318 it was held that time under the Limitation Act 1939 ran from the accrual of the damage and not from the date of the breach of the contractual duty imposed by the retainer. Lord Hunter observed, at p. 319:

"But, in any event, I am unable to accept the proposition that a client does not have a remedy in delict against a negligent solicitor in addition to such remedy as may be available to him in contract."

I would respectfully arrive at the same conclusion in this case.

It is - as has been said recently - certainly no part of the function of a puisne judge to criticise decisions of higher courts and I do not venture to do so. He does, however, have to analyse their effect and the effect upon them of general doctrines subsequently established by yet higher courts. The question which I am called upon to answer is whether the principle in the Hedley Byrne case [1964] A.C. 465, as it has since been interpreted and applied, not only in the Court of Appeal but in the House of Lords itself, so destroys the only reasoning upon which Groom v. Crocker [1939] 1 K.B. 194 rested and has since stood that I can no longer be bound, or indeed entitled, to follow it but must apply what I conceive to be the overriding principle.

The effect of the authorities, if Mr. Gatehouse is correct in saying that the law is still represented by Groom v. Crocker in a case where a retainer exists, is a curious one. The solicitor who gratuitously assumes to advise a relative and does it negligently remains liable to suit at any time with,in six years of damage occurring. The solicitor who charges a substantial fee to a client who retains his services in the normal way escapes any liability at all if the damage does not occur or is not

discovered until six years has elapsed from the date on which the negligent advice is given.

As Lord Devlin has said [1964] A.C. 465, 516: "The common law is tolerant of much illogicality, especially on the surface; but no system of law can be workable if it has not got logic at the root of it." On the other hand, Lord Reid remarked that "the life blood of the law is not logic but common sense." Both the logic and the common sense of this position may be apparent to lawyers, but I doubt whether they would be readily discernible by the man on the Clapham omnibus or even, I venture to think, by the man in the company car.

(d) Decisions since Hedley Byrne

It is, however, Mr. Gatehouse's submission that even if, which I think he would contest, the reasoning which has led me to the conclusion which I have expressed above is sound, that conclusion is not open to me because of the current of authority since. The impact of the Hedley Byrne principle upon a solicitor and client relationship came directly in question very shortly after the decision of the House of Lords in the Hedley Byrne case. In Clark v. Kirby-Smith [1964] Ch. 506, a solicitor whose express instructions were to give a notice under the Landlord and Tenant Act 1954 failed to do so, so that his client lost his right of renewal. The basis of the solicitor's liability arose in connection with the measure of damages. Plowman J. followed Groom v. Crocker [1939] 1 K.B. 194 and rejected the argument that the effect of the Hedley Byrne case [1964] A.C. 465 was to create, in the case of a solicitor and his client, any liability for the tort of negligence.

Plowman J. pointed out that Howell v. Young, 5 B. & C. 259 had, only in the previous year, been recognised and applied by the House of Lords in Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758. That was so, but the approval was not on the point for which he was citing it as authority, but on the point that, where damage is suffered as a result of negligence but remains undetected, the occurrence of subsequently emerging damage does not ground a fresh cause of action so as to give rise to a further period of limitation. That proposition itself has been recently reconsidered in Anns v. Merton London Borough Council [1978] A.C. 728. Furthermore, it looks very much, from the context, as if Lord Pearce, who delivered the leading speech in Cartledge v. E. Jopling & Sons Ltd. [1963] A.C. 758, was treating the case as one of tortious negligence, for he said, at pp. 782-783:

"It was held that his cause of action accrued at the time when the solicitor was negligent (and the plaintiff was damaged by receiving inadequate security) although the plaintiff was then unaware of any negligence or damage." (The emphasis is mine.)

Now in the light of the very specific references in the speech of Lord Devlin in the Hedley Byrne case [1964] A.C. 465 to the very relationship of solicitor and client, the question arises how Clark v. Kirby-Smith [1964] Ch. 506 can be justified. What was there, apart from the bare fact of the decision in Groom v. Crocker [1939] 1 K.B. 194 - a case

decided at a time when it was conceived that there was no liability for negligent misstatement apart from contract - to dictate that the general Hedley Byrne duty did not apply where the services of a solicitor were retained by a client? Plainly Plowman J. considered that there was nothing in Groom v. Crocker [1939] 1 K.B. 194 which was inconsistent with the Hedley Byrne case [1964] A.C. 465 or he would not and could not have followed it. But if there was no inconsistency, that can - so far as I can see - have been for only one or more of four possible reasons. First, it might be because Groom v. Crocker [1939] 1 K.B. 194 established some doctrine peculiar either (i) to the profession of solicitors or (ii) to professional men generally which absolved them from a duty affecting every other relationship of the type described in the Hedley Byrne case [1964] A.C. 465 as giving rise to a duty of care. Secondly, it might be because there falls to be implied in the retainer of every solicitor some term to the effect that any duty which would otherwise arise under the general law is excluded. Thirdly, it might be because of some general principle of law that a plaintiff who has rights against a defendant both in contract and in tort is bound to rely upon his contractual rights alone. And, fourthly, it might be because the doctrine of the Hedley Byrne case applies only, and the duty arising under that doctrine attaches only, to relationships gratuitously - or at least non-contractually - assumed and does not and cannot apply where the relationship between the parties out of which the duty is alleged to arise is a contractual relationship. Standing Groom v. Crocker [1939] 1 K.B. 194 and the Hedley Byrne case [1964] A.C. 465 side by side, I can see no other way beyond one or more of these four in which they can be reconciled.

The first ground cannot, in my judgment, be seriously arguable. In the first place, apart from the fact that it would be wholly irrational, it is noticeable that, in Groom v. Crocker [1939] 1 K.B. 194, both Sir Wilfrid Greene M.R. and Scott L.J. treat the solicitor as being in the same position as a doctor. Scott L.J. relied upon Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399 as establishing the basic principle for his decision, and that was a case of a stockbroker. And in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, Diplock L.J. followed Clark v. Kirby-Smith [1964] Ch. 506 and applied the same principle to an architect. As Harman J. put it in Simmons v. Pennington & Son: "I do not think I need deal at any great length with the question of a solicitor's liability for negligence. It is the same as anybody else's liability..."; and that was approved and adopted by Hodson L.J. in the Court of Appeal [1955] 1 W.L.R. 183, 188-189. Nor is it a tenable proposition that there is something about what may be termed loosely "professional activity" generally which excludes the general duty of care in tort. Cases of tortious liability in the professions of medicine, dentistry, surgery and accountancy are legion.

The second ground to which I have referred seems to me equally unsustainable. Contractual relationships are a matter of agreement in individual cases and, apart from statute, I know of no authority for

importing into contracts some universal term which applies whether the parties could be contemplated as intending it or not.

Nor does the third ground bear examination. There is not and never has been any rule of law that a person having alternative claims must frame his action in one or the other. If I have a contract with my dentist to extract a tooth, I am not thereby precluded from suing him in tort if he negligently shatters my jaw: Edwards v. Mallan [1908] 1 K.B. 1002; nor does the contractual duty assumed by a local authority to answer inquiries prevent its being sued both in tort and in contract if it does so carelessly: Coats Paton (Retail) Ltd. v. Birmingham Corporation (1971) 69 L.G.R. 356. I am left, therefore, with the fourth ground, namely, that the Hedley Byrne duty either never arises at all where the relationship existing between the parties, although otherwise such as would give rise to it, is a relationship created by a contract between them or alternatively, that if such a relationship did exist before or independently of a contract being made, it is totally excluded by or merges in the contractual relationship assumed.

This seems in fact to be the reasoning behind Groom v. Crocker [1939] 1 K.B. 194. That most clearly emerges from the judgment of Scott L.J. when he said, at p. 222, "the mutual rights and duties of the two are regulated entirely by the contract of employment." I confess that I find this difficult to understand in the context. Scott L.J. was referring here not only to solicitors but to doctors, architects, stockbrokers and others in a like situation. But there has never, so far as I know, been any doubt of the tortious liability of a medical man even though he may be in a contractual relationship with his patient; see Edwards v. Mallan [1908] 1 K.B. 1002; and the distinction between the case of a medical man and some other profession cannot, I think, lie simply in the type of damage which arises - which, in the case of the medical man, normally takes the form of direct physical injury. Any distinction based on that ground was firmly rejected in Ministry of Housing and Local Government v. Sharp [1970] 2 Q.B. 223: see, for example, Salmon L.J. at p. 278.

That the mere fact that the relationship is contractual is the ground for excluding the case of, inter alios, the solicitor from the ambit of the Hedley Byrne principle appears, I think, clearly from the judgment of Diplock L.J. in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197. That was a case in which the plaintiff sued for damage arising from the alleged neglect of his architects to supervise properly the laying of drains to his property. The architects' retainer had expired more than six years before the damage became apparent. Diplock L.J. held that the action was barred by the Limitation Act 1939, and in doing so followed Clark v. Kirby-Smith [1964] Ch. 506. He said, at p. 204:

"It seems to me that, in this case, the relationship which created the duty of exercising reasonable skill and care by the architects to their clients arose out of the contract and not otherwise. The complaint that is made against them is of a failure to do the very thing which they contracted to do. That was the relationship which gave rise to the duty which was broken. It was a contractual relationship, a

contractual duty, and any action brought for failure to comply with that duty is, in my view, an action founded on contract. It is also, in my view, an action founded upon contract alone."

He expressed the view that the only relationships where a contractual duty to take care continued to subsist alongside a common law duty were those cases where the law, in the old days, recognised something in the nature of a public calling - such as the common carrier, or an innkeeper - or cases of master and servant. As to the argument that there subsisted a liability on the principle of the Hedley Byrne case [1964] A.C. 465, he dismissed this by simply quoting from and adopting the judgment of Plowman J. in Clark v. Kirby-Smith [1964] Ch. 506. The same principle, he said, applied not only to solicitors but to other professional relationships such as the one in the case before him where someone undertakes to exercise by contract his professional skill in relation to the matter.

The relevant principle of law was, he held, that expressed by Greer L.J. in Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399. But as I have mentioned, that case must, in my judgment, be looked at in the context of the question which there fell for decision, namely, that of the costs recoverable under the County Courts Act 1919. I have already referred to Turner v. Stallibrass [1898] 1 Q.B. 56 but the same distinction occurs again in Kelly v. Metropolitan Railway Co. [1895] 1 Q.B. 944, another case in the Court of Appeal. A. L. Smith L.J. said, at p. 947:

"The distinction is this - if the cause of complaint be for an act of omission or nonfeasance which without proof of a contract to do what has been left undone would not give rise to any cause of action (because no duty apart from contract to do what is complained of exists), then the action is founded upon contract and not upon tort. If, on the other hand, the relation of the plaintiff and the defendants be such that a duty arises from that relationship, irrespective of contract, to take due care, and the defendants are negligent, then the action is one of tort, and as regards the County Court Acts and costs this is what was laid down in the above-mentioned case."

This appears to me to be a clear recognition that the mere existence of a contractual duty of care does not exclude a similar independent duty which arises from the relationship of proximity between the parties. Nevertheless the effect of Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 is that any duty in tort is excluded in the case of any professional relationship involving the exercise of care and skill which is undertaken as a result of a contract between the parties. But I ask again: what about the dentist? No one has suggested that his is a common calling. But the Court of Appeal had held quite unequivocally that he could be sued in tort for breach of the duty to take care. I quote from the judgment of Vaughan Williams L.J. in Edwards v. Mallan [1908] 1 K.B. 1002, 1005:

"As I understand the law, if there is either a special contract or an implied contract arising from the relation of dentist and patient, and

an action is brought upon the contract for a breach of the duty arising out of that relation, then, in either case, if the plaintiff substantially does not rely upon any special term in the special contract, and only relies (so far as the implied contract is concerned) upon a contract the implication of which depends solely upon the relation of dentist and patient, in neither case would it be right that the action should necessarily be treated as one of contract" (the emphasis is mine).

That case was followed by Lynskey J. in Fish v. Kapur [1948] 2 All E.R. 176. He held in terms that the action was an action in tort.

So I find myself faced with what appear to me to be conflicting lines of authority - one which would exclude all contractual professional relationships from the ambit of the Hedley Byrne principle and another which would, if followed logically, bring them in.

Nor can the restrictive view of the Hedley Byrne duty be logically confined to the exclusion simply of contractual professionalrelationships, if that adjective is used to differentiate those relationships from relationships entered into in the course of carrying on a trade or business. There is nothing magical which distinguishes a "professional" contract in that sense from any other commercial contract. So that the underlying basis of Clark v. Kirby-Smith [1964] Ch. 506 and Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 must, I think, be that the duty of care which would otherwise arise from a relationship of the sort described in the Hedley Byrne case [1964] A.C. 465 has no existence where that relationship is a contractual one.

And here again, the authorities are not easy to reconcile. The contractual obligations of a window-cleaner include an obligation to exercise reasonable care in carrying out his work. But if he is engaged to clean my chandelier and, in doing so, he negligently shatters it, it is clear that, whilst no doubt he can be sued in contract, there is an independent and co-existing liability in tort. That was what happened in Jackson v. Mayfair Window Cleaning Co. Ltd. [1952] 1 All E.R. 215. That is an instructive case, both because of Barry J.'s approach to the question and also for the interpretation which he placed on Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399, one of the cases relied on by Mr. Gatehouse and forming part of the foundation of the reasoning in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197. It is quite clear that Barry J. did not regard Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399 as establishing that the only duty lay in contract, but merely as an application of the test established in Turner v. Stallibrass [1898] 1 Q.B. 56 for whether an action is to be treated as substantially in tort or substantially in contract for the purposes of the County Courts Act 1919. Having referred to the judgment of Greer L.J. in Jarvis v. Moy, Davies, Smith, Vandervell & Co. [1936] 1 K.B. 399, Barry J. said [1952] 1 All E.R. 215, 217-218:

"That there was a contract between the plaintiff and the first defendants is, of course, not in dispute. Moreover, the acts complained of might well have been pleaded as a breach of that contract. What I have to ask myself, however, is whether, in essence, the plaintiff

must rely on that contract in order to establish her claim or whether she can properly treat the contract as a mere matter of history, explaining the presence of the defendants' workman in her flat, and establish a breach of duty independent of any obligations undertaken by the defendants to her under that contract. In my judgment, the present claim falls within the latter category. The plaintiff does not complain of mere nonfeasance, nor does she say that the defendants failed to clean her chandelier at the time or in the manner stipulated by their contract. Her case is based on a broader duty, independent of any contractual obligation undertaken by the defendants. She says that if the defendants, through their workmen, interfere with her property - whether with or without her permission and whether in pursuance of a contract or otherwise - they are under an obligation not to damage that property as a result of their negligence, or, in other words, they are bound to take reasonable care to keep it safe. This is, I think, the true foundation of the plaintiff's claim.

"I reach that conclusion largely because I am satisfied that, on the evidence in this case, the plaintiff would have been equally entitled to recover damages had the defendants carried out this work gratuitously or had the contract for cleaning been made by some third party, not her agent, on which contract she could found no right of action. In either of those hypothetical cases the defendants would, I think, owe a duty to the plaintiff - independently of contract - to take due care not to damage her property. Any breach of this duty would render them liable to an action for negligence."

Another case of liability under a duty of care both in contract and in tort, where the same question arose as to the substance of the action for the purposes of the County Courts Act 1919, is Sachs v. Henderson [1902] 1 K.B. 612, another decision of the Court of Appeal. Collins M.R., referring to Turner v. Stallibrass [1898] 1 Q.B. 56, said, at p. 616:

"I agree that the distinction between tort and contract is not a logical one, and that it is sometimes difficult to say whether a particular thing is a wrong or a breach of contract. If the claim of the plaintiff had been set out at large pointing to some particular stipulation in the contract, which stipulation had been broken, the action would be founded on contract; but where it is only necessary to refer to the contract to establish a relationship between the parties, and the claim goes on to aver a breach of duty arising out of that relationship, the action is one of tort."

But wherever logic may lead me - or wherever I think that it may lead me - it is suggested that I am bound to follow Clark v. Kirby-Smith [1964] Ch. 506 and Bagot v. stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 by the decision of the Court of Appeal in Cook v. Swinfen [1967] 1 W.L.R. 457. I say "it is suggested" but, in fact, the reference to the case was passed to me by Mr. Gatehouse, with Mr. Harman's permission, after the conclusion of the argument - neither side desiring the case to be restored for further argument - and, in so saying, I am merely voicing what I think would have been Mr. Gatehouse's submission if the case had been available in court during the argument.

The case was one which raised, as did Groom v. Crocker [1939] 1 K.B. 194, a question of the correct measure of damages in an action against a solicitor for negligence in conducting the client's affairs. The defendant had badly misadvised the plaintiff in relation to divorce proceedings so that a decree was granted to her husband on his undefended petition whereas she could have cross-petitioned on the ground of his adultery. The defendant had also failed to make an application for maintenance of the child of the marriage. The plaintiff claimed, inter alia, damages for loss of earnings attributable to a breakdown in health as a result of the mishandled proceedings and the question arose whether this was a recoverable head of damage. Lawton J. held that the damages claimed were too remote because the claim was one in contract. In so holding he merely followed and applied Groom v. Crocker [1939] 1 K.B. 194.

The plaintiff appealed to the Court of Appeal and the only judgment is that of Lord Denning M.R. The court upheld the result at which Lawton J. had arrived because on the facts they did not regard the damage claimed as a foreseeable consequence of the negligence. It was therefore too remote but not for the reason that Lawton J. had given. He had arrived at that result because the action was one in contract. The Court of Appeal considered the damage too remote however the claim was put, because the measure in both tort and contract was the same and depended simply on foreseeability. The significance of the case, however, is that Lord Denning M.R. dealt with the claim as if it were a solely contractual claim. He said, at p. 461:

"The cause of action, it must be remembered, is one for breach of contract. An action against a solicitor is always one for breach of contract, as was held in Groom v. Crocker [1939] 1 K.B. 194"; and after discussing the test of foreseeability he continued "In these circumstances I think that, just as in the law of tort, so also in the law of contract, damages can be recovered for nervous shock or anxiety state if it is a reasonably foreseeable consequence."

So here, Mr. Gatehouse would say, is a decision of a unanimous Court of Appeal after the Hedley Byrne case [1964] A.C. 465, affirming yet again the exclusively contractual nature of the solicitor's liability. But was it dictum or decision? I do not find this an easy question to answer.

Contractual liability certainly formed the underlying assumption upon which the decision at first instance was based and this was equally assumed in the Court of Appeal. It was not, however, so far as I can see, argued in either court that the liability was a tortious liability and the question was how far the underlying assumption limited the damages recoverable. The decision was that the claim was too remote, but the ratio in the Court of Appeal was that that result ensued, not because the claim was a contractual claim - although they averred that it was - but because it failed to satisfy a universal test of foreseeability. In my view the observations of Lord Denning M.R. on the exclusively contractual nature of the claim were obiter and formed no essential part of the decision, for which they were strictly unnecessary.

The line of authority directly concerned with solicitor's liability does

not, however, end there. In November 1975, very shortly before Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, the question of remoteness of damage again came before the Court of Appeal in Heywood v. Wellers [1976] Q.B. 446. Here the plaintiff claimed damages for an anxiety state arising from molestation by a man to whom she had lent money, and the basis of her claim was that the defendants, her solicitors, had negligently failed to advise her to take steps to enforce an injunction which she had obtained. Counsel for the defendants relied upon Groom v. Crocker [1939] 1 K.B. 194 and Cook v. Swinfen [1967] 1 W.L.R. 457. His contention was rejected, and Lord Denning M.R. remarked, at p. 459, that those cases might have to be reconsidered.

James L.J., at p. 461, approached the case on the assumption that the action was indeed one in contract only, which he described as "well known and settled law." Bridge L.J. expressed no view on this point. The court was unanimous in holding that damages were recoverable under the head claimed, on the ground that, as Bridge L.J. put it, they were not merely an incidental consequence of the solicitor's mishandling of litigation but the direct and inevitable consequence of his negligent failure to secure the relief which was the whole purpose of the litigation. As a matter of decision, therefore, this case carries the matter no further. The plaintiff was in person and the argument was, therefore, necessarily of a rather limited order. The case does, however, contain a dictum of James L.J. in favour of Mr. Gatehouse's proposition and a, perhaps rather tentative, hint of doubt on the part of Lord Denning M.R. - a doubt which was to find much more forceful expression in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 where the underlying proposition upon which Groom v. Crocker [1939] 1 K.B. 194 was based formed part of the plaintiff's argument. Before I come to Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, however, it is worth noting, in passing, that at the end of 1975 - in fact only two days before the decision in Heywood v. Wellers [1976] Q.B. 446 - the House of Lords had delivered judgment in Arenson v. Arenson [1977] A.C. 405, which concerned the liability of a firm of accountants. The case is not directly in point here because the point which the House was called upon to decide was whether a third party brought in to value property and valuing it negligently, could claim immunity from suit on the ground that he was exercising a judicial or quasi-judicial function. But what clearly emerges from the speeches of all their Lordships - apart from that of Lord Fraser of Tullybelton who does not deal with the point - is that the doctrine of the Hedley Byrne case applies wherever the necessary relationship of confidence and reliance exists. It depends upon the relationship not upon how the relationship has been brought into being. Lord Simon of Glaisdale said, at p. 419:

"There is a primary and anterior consideration of public policy, which should be the starting point. This is that, where there is a duty to act with care with regard to another person and there is a breach of such duty causing damage to the other person, public policy in general demands that such damage should be made good to the party to whom the duty is owed by the person owing the duty. There may be a supervening and secondary public policy which demands, nevertheless,

immunity from suit in the particular circumstances.... But that the former public policy is primary can be seen from the jealousy with which the law allows any derogation from it."

Lord Wheatley said, at p. 426:

"Since Hedley Byrne... it is clear, if it ever was in doubt, that all persons who express an opinion which is negligent are liable for that negligence to persons who are within a relationship which is recognised by the law and who have suffered as a result thereof."

Lord Kilbrandon said, at pp. 429-430:

"My Lords, I entirely agree that it would be absurd if the situation were that, where an expert is asked by one customer to value a picture, he is liable in damages if he is shown to have done so negligently, but that if two customers had jointly asked him to value the same picture he would have been immune from suit. The latter is precisely the situation displayed here, leaving out what I think is not relevant at this stage, that the formal request was made by a third party (the company) on behalf of the customers. Two people wanted to know, for reasons which are immaterial, the value of a parcel of shares. They had contracted with one another that in such a situation a particular expert should be asked to give his opinion, which opinion they were bound to accept as final in accordance with their contract. This is just the same as two customers employing a valuer. It does not matter whether there has arisen between the customers and the valuer a relation of 'neighbourhood' which fixes on the latter an obligation to act with reasonable care, or whether - and more rationally as I would have thought - one holds that the contract between them and the valuer includes an implied term that he will exercise proper skill and care. The formality that the secretary of the company made the contract on behalf of the 'customers' (shareholders) is of no significance. He made it for the shareholders, not for the company. It is not a case of looking for a cause of action in the shareholders on a contract between the valuer and a third party. The result, whether in tort or contract, is the same - a liability in damages arising out of negligence - and conceptual subtleties, however edifying, are not helpful. I do not think there can be much doubt as to the nature of the relationship from which such liability, at least in a case like the present, must be held to arise. It is seen in a wider range of activities, and can by no means be confined today to the relation between a professional man and his client. If I engage a man to exercise his expertise on my behalf, and it matters not whether he is to prepare a conveyance of land or to drive a straight furrow across it, then spondet peritiam artis, et imperitia culpae adnumeratur."

Finally Lord Salmon was quite unequivocal about this. He said, at p. 434:

"We do not know whether the respondents were asked to make the valuation on behalf of the company (which presumably was interested in the value of its own shares) or on behalf of Mr. Archy Arenson and the appellant, nor do we know whether the respondents charged any

fee for this valuation and, if so, to whom, or whether they made their valuation as part of their ordinary duties as the company's auditors. Nor do I think that this matters because since the decision of this House in Hedley Byrne... it is clear that quite apart from any contractual obligation, the respondents must have owed a duty both to Mr. Archy Arenson and to the appellant to use reasonable care and skill in making their valuation."

Beyond this, there is an implicit rejection of the notion that the duties created by contractual relationships exclude the general duty in tort in the judgments both of Lord Denning M.R. and Sachs L.J. in Dutton v. Bognor Regis Urban District Council [1972] 1 Q.B. 373. There, at p. 393, Lord Denning M.R. expressly disapproved the rule laid down in Bottomley v. Bannister [1932] 1 K.B. 458 and applied in Otto v. Bolton and Norris [1936] 2 K.B. 46 that there was no liability, apart from contract, for the letting or selling of a defective house, even though the defects were the result of negligent construction by the defendant himself. This was, perhaps, only indirectly in issue because the claim against the builder in that case had been compromised Nevertheless, Lord Denning M.R. [1972] 1 Q.B. 373, 394, said in the clearest terms that the liability of a man who builds on his own land, whether to his purchaser or to a third party, is exactly the same as the liability of a contractor who builds on someone else's land. The fact that the defendant is the vendor, so that the relationship between him and the purchaser is a contractual one, clearly does not here exclude a parallel lialbility in tort.

Lord Denning M.R.'s view has since been expressly approved by the House of Lords in Anns v. Merton London Borough Council [1978] A.C. 728. That again was not a case concerned directly with a contractual liability but it is worth noting the very general terms in which, again, the duty of care was expressed by Lord Wilberforce. He said, at p. 1032:

"Through the trilogy of cases in this House - Donoghue v. Stevenson [1932] A.C. 562, Hedley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465 and Dorset Yacht Co. Ltd. v. Home Office [1970] A.C. 1004, the position has now been reached that in order to establish that a duty of care arises in a particular situation, it is not necessary to bring the facts of that situation within those of previous situations in which a duty of care has been held to exist. Rather the question has to be approached in two stages. First one has to ask whether, as between the alleged wrongdoer and the person who has suffered damage there is a sufficient relationship of proximity or neighbourhood such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter - in which case a prima facie duty of care arises."

Subsequently, in referring to East Suffolk Rivers Catchment Board v. Kent [1941] A.C. 74, he said, at p. 1037:

"My Lords, I believe that the conception of a general duty of care, not limited to particular accepted situations, but extending generally over all relations of sufficient proximity, and even pervading the

sphere of statutory functions of public bodies, had not at that time become fully recognised."

It remains true, however, that although, as it seems to me, this is really implicit in the Hedley Byrne case itself [1964] A.C. 465 and in the other cases in which the principle has been applied and expounded since, there was no case prior to Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 - at any rate at the level of the Court of Appeal and above - which expressly decided that the Hedley Byrne duty and a co-extensive contractual duty were not mutually exclusive and none in which anything but the most tentative doubt had been expressed with regard to the basis or the continuing validity of the Court of Appeal's decision in Groom v. Crocker [1939] 1 K.B. 194.

(e) Esso Petroleum Co. Ltd. v. Mardon

I turn therefore to the Esso case [1976] Q.B. 801. This was a case, it will be remembered, where the plaintiffs had treated with the defendant with a view to his taking from them a tenancy of a garage. In the course of the negotiations they had provided him with certain estimates of annual throughput which it was found as a fact were prepared negligently. In reliance on those estimates he entered into the contract with them and suffered very severe loss, for which, when sued by the plaintiffs for the price of petrol supplied, he counterclaimed.

The claim was put both in tort, on the basis of the Hedley Byrne case [1964] A.C. 465, and in contract, on the footing that there was a warranty that the estimates were correct. At first instance, Lawson J. found that the negotiations had created a special relationship of the type envisaged in the Hedley Byrne case and that the plaintiffs were, therefore, liable in tort. He rejected the claim based on contract. The defendant appealed and the Court of Appeal unanimously held that the facts did give rise to a contractual liability. There was, they held, a warranty, not that the estimates were correct, but that they were made with reasonable care and skill. That had been broken and therefore the defendant was entitled to recover damages for the breach of that contract.

The noticeable feature of this, in the present context, is that the contractual duty found by the Court of Appeal not only covered the same ground as, but was, in practical terms, identical and co-terminous with, the duty arising from a special relationship of the Hedley Byrne type.

The Court of Appeal went on to find that, in addition to and quite apart from the contractual liability referred to above, the plaintiffs were liable to the defendant in tort under the Hedley Byrne doctrine. Now this was no unconsidered view. It had been specifically argued on behalf of the plaintiffs that the two duties, contractual and tortious, could not subsist together and that Groom v. Crocker [1939] 1 K.B. 194 and the cases which followed it were authority for the proposition that any duty in tort which might otherwise exist was merged and extinguished in the contract between the parties which must then be considered as the conclusive and exclusive source of the rights between them. That argument was rejected, and rejected unanimously; and Lord Denning M.R., in a passage at p. 819 which I will read in a moment and upon which Mr.

Harman heavily relies, explicitly disapproved and declined to follow the Groom v. Crocker line of cases which he said were wrong and contrary to previous authority. The other members of the court did not expressly mention those cases, but it is suggested that the conclusion is inescapable that the unanimous decision cannot stand with them, for it amounts to a clear rejection by a court of co-ordinate jurisdiction of the fundamental reasoning upon which - so far as I can see at any rate - Groom v. Crocker [1939] 1 K.B. 194 and its successors are based.

Ormrod L.J. said, [1976] Q.B. 801, 827-828:

"Had I taken the same view as Lawson J. on the warranty point I would certainly have held, with him, that Mr. Mardon had proved his case in negligence. The parties were in the kind of relationship which is sufficient to give rise to a duty on the part of the plaintiffs. There is no magic in the phrase 'special relationship'; it means no more than a relationship the nature of which is such that one party, for a variety of possible reasons, will be regarded by the law as under a duty of care to the other."

Shaw L.J. was, perhaps, less explicit, because he dealt with the case on the footing of alternative liabilities. But there is nothing in his judgment to suggest that he regarded the remedies in contract and in tort as mutually exclusive, except where this was expressly or by necessary implication a term of the contract, and, as I read his judgment, its effect is that he upheld the trial judge's decision on the Hedley Byrne liability quite regardless of any contractual liability. Shaw L.J. said, at pp. 832-833:

"In this regard I would differ from the finding of the judge below in holding as he did that no warranty was given by Esso. Lawson J. did, however, decide that Esso owed Mr. Mardon a duty to take care in relation to the statement made to him as to the potential of the filling station and that they were in breach of that duty. I agree entirely with the reasons and conclusions of the judge on this part of the case. Thus, even if it were right that Esso did not give a warranty to Mr. Mardon, they would be liable to him in negligence, following the principle enunciated in Medley Byrne & Co. Ltd. v. Heller & Partners Ltd. [1964] A.C. 465, unless a further argument advanced by Mr. Ross-Munro stood in the way.

"He contended that where the negotiations between the parties concerned actually culminate in a contract between them they cannot look outside that contract in the assertion of any claim by one against the other which is founded on the subject matter of the negotiations and of the contract. To such a situation, Mr. Ross-Munro submitted, the Hedley Byrne principle had no application. It would follow that, notwithstanding the fact that one party to the negotiations induced the other by a negligent misrepresentation to enter into the contract, the other would have no remedy unless one were available under the Misrepresentation Act 1967. As the matters of which Mr. Mardon complained occurred in 1963, his only available means of redress would be such as his contract with Esso afforded: so that if there were no warranty he would have no remedy at all.

"It is difficult to see why, in principle, a right to claim damages for negligent misrepresentation which has arisen in favour of a party to a negotiation should not survive the event of the making of a contract as the outcome of that negotiation. It may, of course, be that the contract ultimately made shows either expressly or by implication that, once it has been entered into, the rights and liabilities of the parties are to be those and only those which have their origin in the contract itself.

"In any other case there is no valid argument, apart from legal technicality, for the proposition that a subsequent contract vitiates a cause of action in negligence which had previously arisen in the course of negotiation."

This, as it seems to me, necessarily implies a rejection of the argument which had been founded by counsel on Groom v. Crocker [1939] 1 K.B. 194. Lord Denning M.R., in rejecting that argument, expressly disapproved Groom v. Crocker and the cases which followed it. I had better read the whole passage from his judgment because Mr. Harman strongly relies on it. Lord Denning M.R. said, at p. 819:

"In arguing this point, Mr. Ross-Munro took his stand in this way. He submitted that when the negotiations between two parties resulted in a contract between them, their rights and duties were governed by the law of contract and not by the law of tort. There was, therefore, no place in their relationship for Hedley Byrne [1964] A.C. 465 which was solely on liability in tort. He relied particularly on Clark v. Kirby-Smith [1964] Ch. 506 where Plowman J. held that the liability of a solicitor for negligence was liability in contract and not in tort, following the observations of Sir Wilfrid Greene M.R. in Groom v. Crocker [1939] 1 K.B. 194, 206. Mr. Ross-Munro might also have cited Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197, about an architect; and other cases too. But I venture to suggest that those cases are in conflict with other decisions of high authority which were not cited in them. These decisions show that, in the case of a professional man, the duty to use reasonable care arises not only in contract, but is also imposed by the law apart from contract, and is therefore actionable in tort. It is comparable to the duty of reasonable care which is owed by a master to his servant, or vice versa. It can be put either in contract or in tort: see Lister v. Romford Ice and Cold Storage Co. Ltd. [1957] A.C. 555, 587 by Lord Radcliffe and Matthews v. Kuwait Bechtel Corporation [1959] 2 Q.B. 57. The position was stated by Tindal C.J., delivering the judgment of the Court of Exchequer Chamber in Boorman v. Brown (1842) 3 Q.B. 511, 525-526: 'That there is a large class of cases in which the foundation of the action springs out of privity of contract between the parties, but in which, nevertheless, the remedy for the breach, or non-performance, is indifferently either assumpsit or case upon tort, is not disputed. Such are actions against attorneys, surgeons, and other professional men, for want of competent skill or proper care in the service they undertake to render:... The principle in all these cases would seem to be that the contract creates a duty,

and the neglect to perform that duty, or the nonfeasance, is a ground of action upon a tort.' That decision was affirmed in the House of Lords in (1844) 11 Cl. & Fin. 1, when Lord Campbell, giving the one speech, said, at p. 44: '... wherever there is a contract, and something to be done in the course of the employment which is the subject of that contract, if there is a breach of duty in the course of that employment, the plaintiff may either recover in tort or in contract.' To this there is to be added the high authority of Viscount Haldane L.C., in Nocton v. Lord Ashburton [1914] A.C. 932, 956"

- and then there is quoted the passage to which I have already made reference. Lord Denning M.R. continued, at p. 820:

"That seems to me right. A professional man may give advice under a contract for reward; or without a contract, in pursuance of a voluntary assumption of responsibility, gratuitously without reward. In either case he is under one and the same duty to use reasonable care:... In the one case it is by reason of a term implied by law. In the other, it is by reason of a duty imposed by law. For a breach of that duty he is liable in damages...."

There seem to be three possible approaches to the case as an authority. The first is that it is authority only for the proposition that there was, on the facts, a liability for breach of warranty and that everything else is dictum. That I do not think is tenable. The court was unanimous in upholding the trial judge's decision on the Hedley Byrne liability and clearly put that forward as an alternative ground of decision. And where a superior court gives two reasons for its decision I am, I apprehend, bound by both of them. Secondly, it may be said that the Court of Appeal was advancing two alternative, but mutually exclusive, heads of liability and that a decision that the plaintiffs were liable under one or the other head is not irreconcilable with those cases which decide that a contractual and a tortious liability cannot co-exist. On this view, the case is authority only for the proposition that a supervening contract does not, in the absence of express or implied term, supersede or extinguish a duty which has already arisen from a relationship formed prior to contract. It does not, so the argument would run, touch the case where the duty did not pre-exist but arose from the contract itself. The third view is that the case demonstrates that there are co-existing duties in both contract and tort.

The second view might seem superficially to derive some support from the introductory words of Lord Denning M.R. at p. 818: "Assuming there was no warranty, the question arises...", from Ormrod L.J.'s statement at p. 827: "Had I taken the same view as Lawson J. on the warranty point..."; and from Shaw L.J.'s words at p. 832: "... even if it were right that Esso did not give a warranty...." I do not, however, think that this really bears examination. Despite the opening words referred to above, Lord Denning M.R. made it perfectly clear, as his references to Boorman v. Brown, 3 Q.B. 511 show, that he regarded the duties in contract and tort as interchangeable and co-existing. It is clear, I think, also that Ormrod L.J. and Shaw L.J. were of the same

view, for they both emphasised that the critical factor was the nature of the relationship not the manner of its origin.

The judgments are really only explicable on the footing that the Court of Appeal regarded the duties as cumulative and that they did not regard the contractual right arising from the warranties which they found as the sole and exclusive source of his claim, for on no other footing would it have been necessary even to consider the question of Hedley Byrne liability. It would have been concluded once and for all by the finding of the warranty. Not only is there not a hint of this in any of the judgments, but they lead in fact to a contrary conclusion.

As I read the case it is authority for the proposition that the existence of a contractual duty of care - in that case created by the warranty which the court found - does not preclude a parallel claim in tort under the Hedley Byrne principle. It seems to me that it is an authoritative interpretation of the Hedley Byrne decision in a way which is in line with what was said by their Lordships in Arenson v. Arenson [1977] A.C. 405 and which is, on analysis, irreconcilable with Groom v. Crocker [1939] 1 K.B. 194 and Clark v. Kirby-Smith [1964] Ch. 506.

To summarise:

(1) In my judgment the Hedley Byrne case [1964] A.C. 465 establishes a general duty arising by law from a relationship of the type therein described however that relationship is created. It is therefore in my view inconsistent with the underlying reasoning of Groom v. Crocker [1939] 1 K.B. 194 and the cases which followed.

(2) On the view I take and in the light of the opinions expressed in Arenson v. Arenson [1977] A.C. 405, and particularly that of Lord Salmon, I would, with the greatest deference, not follow Clark v. Kirby-Smith [1964] Ch. 506 and Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197.

(3) I do not think that Cook v. Swinfen [1967] 1 W.L.R. 457 and Heywood v. Wellers [1976] Q.B. 446 so compel me, because the references there to the contractual nature of the liability formed no necessary part of the rationes decidendi.

(4) Even if I am wrong about that, those cases are, so far as they pass on that point, in my judgment in conflict with the Court of Appeal's interpretation in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 by which I am bound.

(5) If I am not so bound, there is at least a conflict between decisions of the Court of Appeal and I must, I conceive, elect which to follow or, if I am not free to elect, I must follow the later decision.

I would respectfully follow what was said by Lord Denning M.R. in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801, save that, again respectfully, I would have some reservations about the very wide statement of Lord Campbell in Boorman v. Brown, 3 Q.B. 511. As Mr. Gatehouse has pointed out, the actual decision in that case was in the very narrow point of whether, after verdict, a judgment could be arrested on the ground that the cause of action had been wrongly stated in the declaration. I think, incidentally, that Lord Denning M.R. must

have been misreported in his reference to Lord Campbell in Brown v. Boorman, 11 Cl. & Fin. 1, giving "the one speech." In fact there were speeches also from Lord Brougham and Lord Cottenham. Mr. Gatehouse, in the course of his argument, described the passage which I have quoted from the judgment of Lord Denning M.R. as "heretical." For my part I think that, if there was heresy at all, it lay in the extraction from the earlier authorities, in Bean v. Wade, 2 T.L.R. 157, of a rule of law that they did not really support, a rule which has been productive of anomaly if not of injustice and which subsequent authority has shown cannot be supported. But if I am wrong, I have at least the consolation of knowing that I shall have distinguished company at the stake.

In my judgment, the instant case is one in which there was clearly between the defendant firm and Geoffrey a relationship of the sort which gave rise to a duty of care under the Hedley Byrne principle. And, in my judgment, the interpretation of that principle by the Court of Appeal in Esso Petroleum Co. Ltd. v. Mardon [1976] Q.B. 801 leads to the conclusion that there was here a liability in tort which arose when the damage occurred on August 17, 1967. Accordingly, the claim in my view is not barred by the Limitation Act 1939. I am, of course, conscious that, in reaching the conclusion to which I have felt compelled, I am departing from what has long been considered a firm and settled rule of law. It is for that reason and because the point is obviously one of considerable importance both to clients and solicitors and to their insurers, that I have felt it right to set out my reasoning in extenso. I ought, perhaps, to add that since writing this judgment my attention has been drawn by counsel to a very recent decision of the Court of Appeal in Batty v. Metropolitan Property Realisations Ltd. [1978] Q.B. 554, in which judgment was given on November 8, 1977. No report of that decision is yet available. I have been able to obtain a transcript of the judgment but since it has not yet been corrected and approved I ought not, I think, to refer to it, beyond saying that I can find nothing in it which would cause me to revise or alter the conclusion at which I have arrived.

I turn to the final point which arises.

3. Are the defendants liable in contract?

Let me, however, assume that I am wrong in the conclusion at which I have arrived on Mr. Harman's first submission, and that the obligation owed by the defendant firm to Geoffrey was a contractual one only. I must then consider Mr. Gatehouse's third proposition. What was the contractual duty which was broken and when was it broken? An action is barred by the Limitation Act 1939 after the expiration of the appropriate period from the accrual of the cause of action, that is to say from the occurrence of every fact which it would be necessary to prove, if traversed, in order to support his right to the judgment of the court.

It is perhaps a truism to say that what those facts are can be ascertained only by reference to the right asserted, or, to put it another

way, in the case of an action for breach of contract, by reference to the particular contractual duty the breach of which is asserted as the ground for the claim. Mr. Gatehouse says that there was only one duty in this case, namely, a duty to register the option within a reasonable time and that was broken once and for all when a reasonable time had elapsed. It was, therefore, then that the cause of action accrued. If that is right, it must conclude any claim in contract. Mr. Harman, however, says that that simply is not the failure of which he complains and upon which the action is based. The breach of contract which gave rise to the action was the non-performance of the defendants' obligation to register before a third party acquired an interest. That was the obligation which the defendants assumed, and it was an obligation which continued to bind them until August 17, 1967. This submission was advanced at a very late stage in the case and it involved a withdrawal of Mr. Harman's disclaimer of a reliance upon a continuing duty. I took the view, however, that it would not be right to shut out the submission so long as Mr. Gatehouse was afforded an opportunity to answer it.

Unassisted by authority, I would again favour Mr. Harman's submission. The reality is that the plaintiffs' complaint is not that the option was not registered within a reasonable time - which caused no conceivable loss to anyone - but that it was not registered at all. The defendants simply did not perform their contract and if their continued failure constituted a repudiation it was not one which was known to Geoffrey and, not being accepted, gave rise to no cause of action until events put it out of their power any longer to perform. Indeed, I asked Mr. Kenneth Stubbs whether, when he registered the option in September 1967 without informing his client or seeking his instructions, he conceived that he was doing anything more than seeking to fulfil, rather belatedly, the contractual obligation which his firm has assumed to Geoffrey. His answer was a quite unequivocal negative. The classical formulation of the claim in this sort of case as "damages for negligence and breach of professional duty" tends to be a mesmeric phrase. It concentrates attention on the implied obligation to devote to the client's business that reasonable care and skill to be expected from a normally competent and careful practitioner as if that obligation were not only a compendious. but also an exhaustive, definition of all the duties assumed under the contract created by the retainer and its acceptance. But, of course, it is not. A contract gives rise to a complex of rights and duties of which the duty to exercise reasonable care and skill is but one.

If I employ a carpenter to supply and put up a good quality oak shelf for me. the acceptance by him of that employment involves the assumption of a number of contractual duties. He must supply wood of an adequate quality and it must be oak. He must fix the shelf. And he must carry out the fashioning and fixing with the reasonable care and skill which I am entitled to expect of a skilled craftsman. If he fixes the brackets but fails to supply the shelf or if he supplies and fixes a shelf of unseasoned pine, my complaint against him is not that he has failed to exercise reasonable care and skill in carrying out the work but that he has failed to supply what was contracted for. He may fix the

brackets and then go away for six months, but unless and until I accept that conduct as a repudiation, his obligation to complete the work remains.

It is, I think, important in the instant case to note that it is not a case of the giving of wrong and negligent advice - where the breach of contract necessarily occurs at a fixed point of time - but of simple non-feasance. If one were to seek to write out in longhand the obligations which Mr. Stubbs senior assumed when he engaged to act in the matter of the grant of the option, they were (1) to draw and have completed a proper and enforceable option agreement which would bind the parties; (2) to take such steps as were necessary and practicable to ensure that it was binding on the land into whosesoever hands it might come before any third party acquired a legal estate, and (3) to carry out his work with the care and skill which a normally competent practitioner would bring to it.

So far as the client is concerned, it is a matter of total indifference to him at what date the solicitor chooses to fulfil his contractual obligation under (2) above so long as it is effectively fulfilled. No doubt a normally careful practitioner would fulfil that obligation as soon as is reasonably practicable. In an appropriate case he might give a priority notice. But if he fails to do so and an effective registration can still be and is effected, his client can have no complaint except the purely technical one that he has been a bit careless and might have done it sooner. He has, no doubt, exhibited a failure to show the normal competence and care for his client's affairs by carelessly allowing a period to elapse during which a third party might have, but has not in fact, acquired an interest. But such a failure cannot, I should have thought, affect, much less discharge, the primary obligation to effect registration timeously, which continues until it is performed or becomes impossible of performance or until the client elects to treat the continued non-performance as a repudiation of the contract.

Suppose that Mr. Stubbs had woken up to the fact that he had failed to register the option in, say, May 1961 and had then registered it. And suppose that, four years later, Geoffrey had caused a search to be made and had discovered that the charge had not been registered until two months after the date of the option? Could Geoffrey have successfully sued the firm for breach of contract on alleging those facts? Mr. Gatehouse says yes. There would he says have been a technical cause of action for breach of the duty to exercise reasonable care and skill which would have entitled Geoffrey to nominal damages. I think that the action would have been struck out as an abuse of the process of the court.

I find Mr. Gatehouse's argument from authority, however, more convincing. The point is, he submits, concluded against Mr. Harman's submissions by Bean v. Wade, 2 T.L.R. 157, to which reference has already been made. In order to appreciate this argument it is necessary to state the facts of that case, at least in outline. A husband, having an interest in certain trust funds, had assigned his interest to the trustee of his marriage settlement. No notice was given to the trustees of the fund of this assignment. Proceedings were started by the wife for the removal of the trustee of the marriage settlement and the appointment of the

plaintiffs in their place, and the defendants acted as her solicitors in those proceedings. An order was obtained for the appointment of the plaintiffs and directions were given for the preparation and execution of a deed of assignment from the former trustee to them and for the payment by the plaintiffs of the defendants' fees out of the fund. That was effected and the matter concluded in 1875, but the defendants, apparently assuming that notice of the marriage settlement had already been given to the trustees of the head settlement, omitted to give any notice to them of the assignment to the plaintiffs so as to preserve their priority under the rule in Dearle v. Hall (1828) 3 Russ. 1.

In February 1879 the husband executed a mortgage of his interest under the head settlement in favour of a mortgagee who took without notice of the prior assignment to the plaintiffs. On April 9, 1879, notice of the mortgagee's interest was given to the trustees of the head settlement and, in the result, he gained priority and there was a loss of interest and a deficiency in capital which the plaintiffs had to make good to the widow. They sued the defendants, but as regards one of the partners, Mr. G. Wade, he did not become a party to the action until 1883. He pleaded the Statute of Limitation 1623.

Cave J. (1885) 1 T.L.R. 404, 405, at first instance said that he found the cases unhelpful because in all of them there had been a definite time at which the act out of which the damage had arisen had been done. He held the defendants, including Mr. G. Wade, liable on the ground, so far as that defendant was concerned, that the "act" - which I think must have meant the omission to act - had been done on April 8, 1879, and that time, therefore, started to run only from that date. It is evident, therefore, that he considered the defendants as having a duty to give notice which continued up to the date upon which it could no longer be effective to preserve priority.

The Court of Appeal reversed this on the ground that more than seven years had elapsed between the date of the assignment to the plaintiffs and the commencement of the action against Mr. G. Wade and therefore more than six years had elapsed between the time when notice should have been given and the commencement of the action. The instant case, Mr. Gatehouse submits, is substantially indistinguishable. The terms of a retainer are, of course, a question of fact and no decision on fact is binding, but the decision of the court involved, on substantially indistinguishable facts, a conclusion of law, namely, that the solicitors' retainer involved an obligation to give notice within a reasonable time, and there was no separate or co-existing continuing duty upon which the action could be founded. That conclusion of law formed the ground for the court's reversal of the decision below and is, Mr. Gatehouse submits binding upon me. If the facts of Bean v. Wade, 2 T.L.R. 157, and the claim made in that case are in substance indistinguishable from the instant case, then I think that must be right.

As Scrutton L.J. said in Newsholme Brothers v. Road Transport and General Insurance Co. Ltd. [1929] 2 K.B. 356, 375:

"The decision of the Court of Appeal on fact is not binding on any other court, except as between the same parties. When the

decision is that from certain facts legal consequences follow, the decision is, I think, binding on the Court of Appeal in any case raising substantially similar facts."

At the same time, one must be careful of deducing wide general propositions from expressions of opinion on particular circumstances and that must, I think, particularly be the case where the particular facts supporting the expression are not fully or satisfactorily set out in the report. A fortiori is this the case where the report does not set out the ipsissima verba of the court or give any clue as to the arguments put before it. I approach the problem, therefore, having in mind the caution uttered by the Earl of Halsbury L.C. in Quinn v. Leathem [1901] A.C. 495, 496:

"... there are two observations of a general character which I wish to make, and one is to repeat what I have very often said before, that every judgment must be read as applicable to the particular facts proved, or assumed to be proved, since the generality of the expressions which may be found there are not intended to be expositions of the whole law, but governed and qualified by the particular facts of the case in which such expressions are to be found. The other is that a case is only an authority for what it actually decides. I entirely deny that it can be quoted for a proposition that may seem to follow logically from it. Such a mode of reasoning assumes that the law is necessarily a logical code, whereas every lawyer must acknowledge that the law is not always logical at all."

The duties of a solicitor depend upon the particular retainer and upon the particular circumstances of each individual case. In Bean v. Wade, 2 T.L.R. 157, the retainer was not in fact from the plaintiffs in the first instance but from a proposed incumbrancer of the husband's interest and the next friend of the beneficiary widow. The reported judgment of Cave J., 1 T.L.R. 404, 405, states:

"It was shown by the result rather than by any express instructions that the defendants had been employed to file a bill in Chancery against Mr. Cooper and to see that the trust property was duly conveyed to the plaintiffs."

For that, they were paid out of the trust funds, but there is no indication in the report whether or not they continued to act thereafter. It looks as if they were treated as functi officio once the assignment to the plaintiffs was concluded, for the judgment continues at p. 405: "In a letter by one of the defendants to one of the plaintiffs asking him to execute the conveyance, it was distinctly said that that would complete the matter." How far these matters were considered as significant by the court it is not easy to see from the report, but obviously the case bears a very striking resemblance to the instant case. There, as here, there was brought into being a document which was perfectly valid and effective inter partes but which required a further step to be taken in order to protect it against claims by third parties. There, as here, the requirement was a perfectly well known one. There, as here, the solicitor failed

to take the necessary step. Nevertheless, the decision in one case on one set of facts cannot necessarily be treated as a decision on similar, though not identical facts, in another case, because the matter may very well depend, not simply on the facts, but upon what is alleged and pleaded.

It is, I think, important to note what the question was that was being raised for decision in Bean v. Wade, 2 T.L.R. 157 - at any rate so far as it can be gleaned from the report. The note of the facts states that the plaintiff trustees had paid interest on the sum lost to the widow and claimed to recover this and the principal lost by the first charge (see 1 T.L.R. 405) "... on the ground that its loss had been due to their negligence in having failed to have given notice within a reasonable time of their (the plaintiffs') appointment as trustees." It appears, therefore, that the only breach of duty being alleged by the plaintiffs was the failure to give notice "within a reasonable time" and the court, having decided that the only claim lay in contract, was concerned solely with the question of when that breach occurred, or, in other words, at what point a reasonable time could be said to have expired. In my judgment Bean v. Wade, 2 T.L.R. 157, is not conclusive of the question in the instant case.

It is perhaps worth noting that in Bagot v. Stevens Scanlan & Co. Ltd. [1966] 1 Q.B. 197 the time was treated as running not from the date of the failure, which, presumably, was when the drains to the property were laid and covered in, but from the date when the architects had completed, whether adequately or not, their work under the retainer.

The defendants here never treated themselves as functi officio in relation to the option. They kept the document on Geoffrey's behalf in their strongroom. They opened a file relating to the matter. They were consulted about it at intervals over the next 6½ years. In my judgment the obligation to register which they assumed when they were first consulted continued to bind them. It was an obligation to protect the interest from third parties by registration and without their client's knowledge they failed to perform it until it ceased to be effectively capable of performance on August 17, 1967. It seems to me that it was then that the contract was broken once and for all.

Take, for instance, the analogous case of a solicitor engaged in litigation. Suppose that he is so dilatory in taking out a summons for directions that the action goes to sleep for six years and is then struck out for want of prosecution. Is it then to be said that the client's action against him for negligence is barred because he ought to have taken out a summons "within a reasonable time" of the close of pleadings, so that the longer his default the better off he is? If that were right then the client in Allen v. Sir Alfred McAlpine & Sons Ltd. [1968] 2 Q.B. 229, where the defence was delivered in January 1961 and the action was struck out in May 1967, would have had no remedy. Yet both Diplock L.J. and Salmon L.J. considered that she clearly would have (see pp. 256, 262, 272) and that could only be on the basis of a continuing duty.

In my judgment the breach of contract on which this action is based occurred on August 17, 1967, and the defence of limitation fails under this head also. In the circumstances, the plaintiffs' claim succeeds and I

must give judgment for an inquiry as to the damages and I will discuss with counsel the form of that order. Before parting with the case, I ought to say how indebted I am to counsel for the lengthy submissions which they put before me.

Solicitors: Sidney Torrance & Co. for J. Levi & Co., Leeds; Park Nelson, Dennes, Redfern & Co.

T. C. C. B.