HIGHWAYMEN, EVIDENCE AND DAMAGES ALL ON THE MENU.
There are some interesting observations in the judgment of Mr Recorder Acton David QC in Luffeorm Limited -v- Kitsons LLP [2015] EWHC B10(QB). This illustrates some important issues in relation to evidence and the need to prove damages.
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“The Highwayman’s Haunt is a public house on the Old Exeter Road in Chudleigh, Devon. A public house has stood on the site since the 13thcentury: the highwayman concerned was Jack Witherington who used the premises as his hide-out until he was captured on 1st April 1691 whilst hiding in the main chimney breast of the house. I take that summary of the history of the building from the menu prepared by the Claimant at[Bundle 2/853].”
THE CASE
The claimant’s brought an action against their former solicitors alleging negligence in failing to advise them to obtain a restrictive covenant against the vendor of a business they had purchased. The vendor had subsequently set up a competing hostelry in a neighbouring village and the claimant alleged that this had led to their business suffering losses.
THE FINDINGS
The Recorder found that:
- There was negligence in failing to explain the significance of a restrictive covenant.
- However that negligence made no difference, the claimant would have purchased the business in any event.
- The alleged losses were not proven.
THE EVIDENTIAL MATTERS: “BELIEF “THAT ADVICE WAS GIVEN IS NOT PROOF
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By the Defence it is denied at paragraph 10 that “it fell within the scope of the duty of commercial conveyancing solicitors to advise on the business component of any transaction and save that the Claimant is required to prove that it was ‘in accordance with usual commercial conveyancing practice’ for a solicitor acting for a buyer
(a) to point out that there was no covenant in a draft contract profit by the Seller against competing or
(b) to advise that such a covenant should be requested…”.
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It is admitted at paragraph 10 of the Defence that no such advice was given.
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However, Mr Boyne’s witness statement says, at paragraph 16 [1/58]:
“…I ran through the terms of the Sale and Purchase Agreement with Jane Coles. I highlighted to her what was included and what was not included. I explained to her that the Contract had been drafted by the Vendors’ solicitors and I believe that I explained to her at the time that it did not contain any restrictive covenant or restraint of trade provisions. My explanation to Jane Coles in this regard was that there were other provisions that might be addressed in a Sale and Purchase Agreement including such a provision but Jane Coles made it clear that in view of the pressures to time and difficulties in dealing with the Sellers she wanted to proceed on the basis of the documentation in front of us and issues relating to dilapidations were not addressing any such matters with the Sellers’ solicitors.”
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By letter dated 17th October 2014 [1/25A] Bond Dickinson who represent the Defendants said “you have recently asked us to prepare an amended Defence to reflect the stance taken in Mr Boyne’s witness statement where he makes a positive assertion as to the advice given to Mrs Coles. We accept that paragraph 10 of our Client’s Defence simply puts your Client to proof in this regard and therefore needs to be amended if this issue is to be progressed. However, after having further discussions with our Client, our Client has taken the view that it is willing to accept, for the purposes of this case that it is likely it will be found that no such advice was given (sic) the lack of attendance note.”
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When Mr Boyne gave evidence he accepted the case should proceed on the basis that no advice was given despite the contents of his witness statement.”
What makes this case interesting is the wholly realistic approach taken by the defendant to the quality of their own evidence. A “belief” that advice was given, it was accepted, does not amount to proof. This shows:-
- The importance of attendance notes.
- The fact that the claimant was aware of the difference between the non-admission in the pleading and the positive case put forward in the witness statement. The claimant was right to ask for the case to be pleaded properly.
- The sensible decision by the defendant not to push this issue. Evidence based on a “belief” is always going to have some difficulties.
EVIDENCE OF LOSS
The case has an interesting review of the evidence in relation to damages. The claimant alleged that it was the vendor opening up a competing business that led to a reduction in trade.
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The Claimants produced a business plan for Greene King which showed what they hoped to do [1/252 ff]. In particular as opposed to the current clientele which were described by the Claimants as “older people on a day out, local couples, Round Table, families, day-trippers and holidaymakers” they hoped to attract “business people, families, “foodies” and young people” together with “music lovers”. They described the Vendors’ menu as “boring” and the atmosphere as “drab and boring”. They wanted to introduce a new head chef with new ideas, a better thought out wine list, fresh homemade dishes together with what might be generally described as upmarket drinks and food.
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The menu available at the Highwayman’s Haunt under the Claimants’ stewardship is at [2/853 and ff], At [2/845 and ff] is the menu available at the Claycutters Arms under the stewardship of the Elliotts. The Highwayman’s Haunt offer in respect of both food and drink is broadly considerably upmarket from that at the Claycutters. Mrs Coles accepted that to be so in evidence. It is in any event consistent with what she intended to do.
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Further evidence of the difference between the food offers, between the Highwayman’s Haunt under the Claimant and the Claycutters under Mr and Mrs Elliot, emerges from the Chartered Surveyor’s report served on behalf of the Claimants prepared by Mr. David Morgan. At paragraph 5.5.2[1/71] Mr Morgan says: