20 / 364
passed and was made for the protection of option
rights in respect of the shares transferred. C., Ltd.,
orally exercised the option on 8th November, 1957.
The transfers were assessed to
ad valorem
stamp duty
under s. i of Sched. i to the Stamp Act, 1891, as
conveyances on sale ;
alternatively, the agreement
was adjudicated liable to
ad valorem
duty under 5.59
(i) as an agreement for the sale of an equitable
interest. C., Ltd., appealed, contending that the
transfers were liable to ics. duty under the head
" conveyance or transfer of any kind not herein–
before described " and that the duty on the agreement
was £2 only.
Pennycuick,
].,
said that the liability of an instru–
ment to duty must be determined according to its
terms and effect at the date of the execution ;
accordingly, as there was no subsisting contract for
sale when the transfers were executed, nor did the
transfers themselves effect a sale, they did not con–
stitute conveyances on sale within the 1891 Act.
The words of the definition of" conveyance on sale "
in s. 54 were not apt to denote a conveyance made
with a view to carrying out a contract of sale which
the parties intended to make in the future, so that the
existence on ist November, 1957, of a common in–
tention that the vendors should sell and C., Ltd.,
should buy was insufficient to bring the transfers
within the definition. The option agreement dated
ist November, 1957, represented no more than an
offer to sell, irrevocable for a specified period, and
was not a contract for the sale of the shares.
It
followed, therefore, that it was not an agreement for
the sale of the equitable interest in the shares within
s. 59 of the 1891 Act. Appeal allowed.
(i 964)-(i W.L.R. 529).
Negligence in Contract or Tort.
In a recent case in the Chancery Division of the
High Court in England Clark and Another
v.
Kirby-Smith, the question of solicitors' negligence
was dealt with. Mr. Justice Plowman in this action
by Frank Leonard Clark and Frederick Bertie Mills,
for damages for breach of contract and/or negligence
by the defendant, Gerald Kirby-Smith, when acting
as their solicitor, held that damages against a solicitor
for negligence were recoverable in contract and not
in tort. Accordingly the plaintiff's were not entitled
to damages recoverable in tort, and, there being
insufficient evidence on which damages for breach
of contract could be assessed, the plaintiffs were
entitled to nominal damages of 405. The Plaintiffs
were represented but the defendant solicitor did not
appear and was not represented.
His Lordship said that the plaintiffs were formerly
in partnership as motor engineers. They were the
assignees of a lease dated December 22nd, 1960, of
some property in Kent. The lease was for three
years, expiring on December 3ist, 1962, and con–
taining options to renew. On October ijth, 1962,
the options having expired, the lessor served a notice
on the plaintiffs under the Landlord and Tenant Act,
1954, stating that he would not oppose an application
by the plaintiffs to the court for the grant of a new
tenancy.
The plaintiff's took the notice to their
solicitor, the defendant, and instructed him to apply
for a new tenancy in accordance with the directions
in the notice. This involved the giving of a notice
by the plaintiffs to the lessor not later than December
i jth, 1962. The defendant failed to give that notice,
and it was this negligence which was relied on by the
plaintiff's, and in respect of which there was a claim
for damages.
The writ was issued on July 26th, 1963, the defend–
ant failed to enter an appearance, and on August
6th, 1963 the plaintiffs obtained judgment against
the defendant for damages to be assessed.
The
plaintiffs said that in consequence of the defendant's
failure to apply for a new lease the plaintiff's had to
leave the property, and had had to face a claim by the
lessor for dilapidations of £120. In negotiating the
settlement of this claim they had incurred costs of
£30. The plaintiffs claimed to recover both these
sums from the defendant on the basis that this was
an action founded in tort.
It was argued for the
plaintiff's that the effect of Hedley Byrne & Co. Ltd.
v.
Heller & Partners Ltd. (1963) (3 W.L.R. 101:
The
Times,
May 29, 1963) was that there was a remedy
in tort for negligence whether it arose out of mis-
statement made by a person not under contract, or
whether, as here, it arose out of the contractual
relationship of solicitor and client.
His Lordship did not accept that Hedley Byrne
& Co. Ltd.
v.
Heller & Partners Ltd. was an authority
for saying that a solicitor was liable to his client in
tort. There was a line of cases going back for nearly
150 years showing that the client's cause of action
was in contract, not in tort. Nor were the two sums
recoverable as damages for breach of contract; in
any event sums payable for dilapidation and costs
had fallen on the plaintiffs as a result of their own
breach of their contract with the lessor.
The plaintiffs also claimed damages for the loss
of the new lease to which they would have been
entitled under the Landlord and Tenant Act. The
question arose whether it was possible to value the
chance of obtaining a new lease from the Court under
the Landlord and Tenant Act, or more accurately,
the new
lease which the plaintiffs might have
obtained. His Lordship had no idea what the new
lease would have been. The Act referred to the
" open market", so it did not follow that the new
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