The Gazette 1967/71

be appointed by the Master of the Rolls from solicitors

who are present or past members of the Council and its

procedures

are

primarily

the

concern

the

Disciplinary Committee itself. These matters therefore

are not within the control of The Law Society alone.

The Council have, however, considered that composi

tion of

the Disciplinary Committee and believe

that

consideration should be given to the qualifications for

appointment to

the Disciplinary Committee being en

larged to include all solicitors of a certain seniority and

also persons who are not solicitors. The Council have

been

informed

that the Disciplinary Committee have

been reviewing their constitution and procedures and

will shortly be bringing forward proposals for certain

changes. Because the Disciplinary Committee is created

under

statute

any

these

changes will

require

legislation."

— (The New Law Journal. 19 March, 1970)

PROFESSIONAL NEGLIGENCE IN ADVISING ON

LEASES—AN IMPORTANT APPEAL

The decision of

e Co

urt of Appeal

(Harman,

Salmon and Karminsky

.JJ. in Sykes and o/hers v. The

Midland Bank Executor v. Trustee Co. Ltd.

(The

Times, March 14 1970)

is of importance to solicitors

because it deals with their liability in negligence, arising

out of failure to explain legal documents to clients, and

because it overrules

in part, the much dicussed decision

of Paull T- T19691 2 all E.R. 1238.

That d

ecision was considered in an article published

N.LJ.

Mav 15, 1969, p.454, and the facts of the case

there

reported, were that the plaintiffs, a firm of

architects and quantity surveyors, claimed damages for

professional negligence against a solicitor

(who had

since died)

in respect of his failure to explain certain

provisions of an underlease of office premises occupied

by the plaintiffs. When the agreement was negotiated, it

was known to all concerned that the plaintiffs might

wish to assign or sublet the premises if their business

requirements changed. The

lease contained provisions

dealing on the one hand, with assignment and under

letting (cl. 2 (xiii)) and, on the other hand, with user

(cl. 2 (xi)).

Clause 2

(xiii) provided that the'plaintiffs were not

to assign "without first obtaining the written consent

of the lessors and superior lessors, such consent not to

be unreasonably withheld" in relation to respectable and

responsible persons. But cl. 2

(xi) provided that apart

from

the business of architects and

surveyors,

the

premises were only to be used "as offices and showrooms

connection with

any other business

for which

permission in writing of the lessors and the superior

lessors had first been obtained, such permission by the

lessors not to be unreasonably withheld."

Clause 2 (xi) was described by the trial judge as "a

trap-" If, in pursuance of cl. 2

(xi) consent to a pro

posed user was withheld b- r

the superior lessors, as it

could be.

even unreasonably,

this would

effect

prevent an assignment,

even

though consent

assignment itself was not to be withheld other

than

reasonably;

this was not a position which a

layman

would be likely to appreciate unless it were expressly

and clearly explained to him.

In 1965, two years after the plaintiffs had gone into

possession, they sought to underlet part of the premises

to a firm of engineering importers and exporters. The

superior landlords refused their consent to the proposed

change of user. Then an underletting to a firm of solici

tors was proposed and again consent was refused. It was

in these circumstances that the plaintiffs claimed damages,

on the ground that the solicitor who had advised them

had been negligent in not explaining the effect of cl. 2

(xi) to them.

Ppull J. held the defendants

(the executors of the

solicitor who had acted for

the plaintiffs) guilty of

negligence, on the basis that cl. 2

(xi) was "unusual"

and as such ought to have been explained, for although

the plaintiffs wore professional men themselves, used to

property

transactions,

the effect of

the wording of

leases was not within

the scope of their professional

competence. Where there were several clients, as in the

present case there were several members of the partner

ship the needs of each must be separatelv considered,

unless one was acting as sole agent for the others.

Harman L.J., giving the judgment of Court of Appeal,

said that in general where a solicitor was asked to advise

leasehold title, it was ^is d'ltv to drnv/

," H'ent' 1;

attention to any provision in a lease which was in an

unusual

form

and which might

affect

the

client's

interests. In the present case cl. 2 (xi) was unusual and

did affect the respondents' interests. The solicitor should

have warned them of the effcts it might have for them

in the event of their wishing to assign and lie had been

in breach of his professional dutv in not doing so. The

trial judge had constructed a code of conduct governing

what a solicitor should do when advising a partnership

in such circumstances; the extent of that duty \vouk!

however vary from case to case.

The trial judge had been wrong in holding that the

duty to advise extended to everv individual member of

a partnership. Clearly that would hf-

impracticable in

the case of a large partnership, and it was sufficient

that a solicitor communicated his advice to the partner

dealing with the matter as representative of the firm.

The negligence of the solicitor in the present case had

not been shown to have caused any damage. Both the

solicitor and the senior partner of the plaintiffs had died

before the trial, but the trial judge had pressed the only

witness for the plaintiffs as to the consequences which

competent advice might have had; the witness had said

that he did not know whether if the trap in cl. 2

(xi)

had been properly explained

them, the plaintifls

would have taken the underlease in spite of it, either

at all or at the same rent. The probability was

his

Lordship held, that such a warning would have had no

impact at all on

the plaintiffs and accordingly no

damage flowed from the solicitor's negligent failure to

give it. The trial judge's award ot £y,UUO damages

would be set aside and nominal damages of £2 sub

mitted.

To sum up. At the end of the day, rather less

established by

the Sykes case than might have been

hoped for at the outset. Certainly, it is clear that a

solicitor has a duty to draw attention to and to explain

any "unusual" clause in a lease. But what is an "un

usual" clause ? The test is a subjective one. dependent

upon the needs of the individual client in the circum

stances of the particular case. Ordinarily a solicitor's

duty does not require arivice to be given to each member

of a partnership, but only to one partner acting on

behalf of the other. Where negligence

is pro\eu,

i,,e

client will be entitled to more than nominal damages

only if it is shown that the client would have heeded

advice if it had been given :

this, rather than that the

damages will be of full amount unless it is shown that