Agreement: Couple claims law firm should have done more
A Surrey law firm has failed to strike out a negligence claim brought by a married couple who claim they were forced to sell their home to fund litigation over a loan that was not repaid.
Master McQuail said she did not accept the argument of Harold Bell Infields & Co that a trial would be abusive.
“It would not be unfair for that trial of issues of what would have happened had the negligence not occurred to take place between Mr and Mrs Avison and the defendant. Nor would it bring the administration of justice into disrepute.
“On the assumption made for present purposes that the defendant was negligent there are reasonable grounds for bringing the claim and there is a real prospect of it succeeding.”
The High Court heard that Andrew and Ginny Avison agreed in principle to lend a friend, Glenrick White, £210,000 to support a business venture in Guyana.
The loan, at 40% interest for 120 days, was secured on a flat owned by Mr White’s business partner, Claudia Emmanuel, who lived and worked in Trinidad and at the time was CEO of the Trinidad and Tobago Securities and Exchange Commission.
The Avisons and Ms Emmanuel never dealt directly with each other.
The couple instructed the law firm in summer 2014. The loan agreement was executed in September and the £210,000 paid to Mr White, with the charge registered over Ms Emmanuel’s flat. Repayment was due on the last day of December 2014, but nothing was paid.
Ms Emmanuel brought a claim in 2016, when she wanted to sell her flat, for a declaration that her signatures on the loan agreement and charge were forged. Her arguments were rejected by His Honour Judge Hand QC and Mr Justice Birss, as he then was, on appeal.
The Avisons launched proceedings against Ms Emmanuel and recovered £250,000 from her in return for removing the charge.
They also issued proceedings against Mr White and succeeded in their claim but were only awarded interest at 8.5% pa from the date of default – the loan agreement contained no provision for contractual interest after the repayment date.
“When Mr and Mrs Avison came to enforce it turned out that Mr White’s matrimonial home was held on trust for his wife and Mr and Mrs Avison’s challenge to the validity of the relevant trust deed failed.”
The Avisons said they were forced to sell their own home to fund the litigation.
The couple argued that the law firm should have taken further steps to verify and record the identity of those who signed the loan agreement and charge, and should have included more onerous terms as to interest.
“They say that this would have ensured that they were repaid including with a commercial rate of interest and would have avoided the litigation and associated costs.”
Their case was that, but for the law firm’s negligence, they would have been “straightforwardly able to enforce the loan against the flat”, recovered their money earlier, recovered interest at £700 per day from default, avoided Ms Emmanuel’s claims or would have recovered their costs of that litigation, avoided needing to claim or enforce against Mr White, and not had to sell their home and incur associated costs.
Harold Bell denies all the claims and applied to strike out the whole or parts of the claim, including the claim for loss over the sale of the Avisons’ home.
Master McQuail rejected its argument that the negligence claim should be struck out “as an abusive collateral attack on the judgment of HHJ Hand QC or for there being no reasonable grounds for it being brought or summary judgment be awarded because it carries no reasonable prospect of success”.
She also dismissed the argument that some of the claimants’ losses “should be eliminated at this stage because there is no reasonable ground for them being claimed or they carry no reasonable prospect of success”.
The master said: “The court hearing the professional negligence claim will need to consider not what happened in the real world but what would have happened in a world in which Mr and Mrs Avison either had available cast iron evidence that Ms Emmanuel signed the loan documentation or would never have lent money as they did.
“It will be a matter for the judge at trial to draw inferences where evidence is not available because of the defendant’s fault.”
Leave a Comment