Appeal court: judge’s ruling wrong on several counts
The Court of Appeal has again allowed an appeal against a ruling giving a firm of solicitors summary judgment, this time in relation to a claim for non-payment of fees and a counter-claim of negligence against them.
The appeal court overturned [1] the ruling by Mr Justice Arnold in the High Court in favour of City firm Hughmans, but at the same time refused an application by the other party for summary judgment.
Yesterday we reported [2] on the court overturning summary judgment in favour of a law firm that had disposed of a £4m professional negligence claim.
Arnold J gave summary judgment for £187,593, including interest, on Hughmans’ claim against its former client for outstanding fees and dismissed her application for summary judgment on seven issues relating to her defence and counterclaim. He also gave summary judgment for Hughmans dismissing the counterclaim, and dismissed her application to amend the defence and counterclaim.
The client had instructed Hughmans in a complex ancillary relief dispute after her relationship broke down in 2000. Part of the case’s complexity related to allegations that her former husband, a property developer, had failed to disclose assets in 2003, when consent orders were agreed.
The client, a litigant-in-person in the appeal and litigation friend to her counter-claimant 16-year-old son – and also advancing claims against Hughmans on behalf of her two adult children – counterclaimed for, among other things, damages for negligence in breach of the contract of retainer and in breach of duty of care, damages for misrepresentation, and compensation for breach of fiduciary duty. She had already paid the firm almost £65,000 in fees.
The appeal court, consisting of Master of the Rolls, Sir Terence Etherton, Sir Ernest Ryder and Lady Justice Macur, found that Arnold J’s judgment was “a model of clarity and conscientiousness”.
But though he had correctly cited the applicable principles on applications by defendants for summary judgment, the court said: “Contrary to those principles, however, he conducted a mini-trial in reaching conclusions on matters central to the success of the defence and counterclaim, which have a real prospect of success if allowed to proceed to a trial following disclosure and with the opportunity for oral evidence, including cross-examination.”
The judge was also “wrong to conclude that there was not a real prospect that, at a trial, a court would find that Hughmans owed duties to advise the children or at least to advise [the client] about their rights.”
Specifically, Hughmans had not advised her, among other things, that her children ought to be separately represented. This and other “considerations are sufficient to justify the extent of the retainer being left for determination at a trial”, the court said.
The court went on that the judge was wrong to conclude that, even if the client had a real prospect of establishing a breach of duty on the part of Hughmans, she had no real prospect of establishing that it caused her loss and damage, on the grounds that her pleaded case was “incoherent” and had other shortcomings.
The court addressed the client’s counterclaim, which alleged several heads of loss and damage suffered by the children as a result of Hughmans’ breach of contract and duties. All, it said, “have a real prospect of success and many cannot properly be resolved without further inquiry, disclosure of documents and cross-examination”.
But the court rejected the client’s application for summary judgment: “The judge considered that it was right to leave [disputed issues] to trial. It is impossible to say that his decision was outside the range of a proper exercise of judicial discretion,” it said.
Concluding, the court said: “The appeal against summary judgment for Hughmans on the claim and on the defence and counterclaim and dismissing the application to amend the defence and counterclaim is allowed.”