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Solicitors Negligence ClaimMay 25, 2012
In the solicitors negligence claim of Platform Funding Ltd –v- Miller Parris Solicitors the Defendant’s solicitors firm acted for the Claimant and the borrower. The Judge awarded the lender summary judgment for breach of contract and breach of duty against the solicitors. The application was as to whether the Defendant could show that they had a defence with a realistic prospect of success where they had not reported to the Claimant on a restriction on occupation of a property.
The solicitors had reviewed the Lease and found there was no provision which imposed a material restriction on the occupation or the effect of which might influence the Claimant’s decision to lend.
The Borrower fell into arrears. He sub-let the premises to a tenant whose behaviour caused the Freeholder to make a claim alleging that sub-letting breached a covenant of the Lease.
The Land Valuation Tribunal found the Borrower was in breach of a restrictive covenant by allowing the flat to be occupied by persons who were neither family nor members of his household.
Platform was then forced to pay off the arrears to protect its security and then issue a solicitors negligence claim against the solicitors claiming that they were in breach of contract and then seeking to recover those sums that had been paid to the landlord.
The Claimant applied for Summary Judgment against the solicitors and the Court found in its favour.
The Court found that the correct construction of the covenant was that the property could be sub-let to any person for any period for shorter than the term but only for use as a private residence by the sole occupation of the sub-tenant or members of that person’s family or household. The Court stated that the test was whether a competent solicitor exercising reasonable care and skill would recognise that the covenant might reasonably be imposing a material restriction. The Court found that that test was satisfied and the solicitors had no real prospect of succeeding at Trial.
The matter now proceeds to trial on causation as the judge felt that the Defendants had a real chance of succeeding on this point..
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