England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE No QBENF 1998/0388/1

IN THE COURT OF APPEAL (CIVIL DIVISION )

(Sitting as a High Court Judge)

Royal Courts of Justice

Strand

London WC2

Wednesday, 28th April 1999

B e f o r e:

LORD JUSTICE MORRITT

LORD JUSTICE MAY

LORD JUSTICE TUCKEY

ETRIDGE

Appellant

- v -

PRITCHARD ENGLEFIELD

(Merged with Robert Gore & Co )

Respondents

(Computer Aided Transcript of the Palantype Notes of

Smith Bernal Reporting Limited, 180 Fleet Street,

London EC4A 2HD

Tel: 0171 421 4040

Official Shorthand Writers to the Court)

MR R MAWREY QC and MR S WHEATLEY (Instructed by Collins of Watford Hertfordshire) appeared on behalf of the Appellant

MR J FENWICK QC and MR B HUBBLE (Instructed by Pinsent Curtis of London) appeared on behalf of the Respondent

J U D G M E N T

(As Approved by the Court )

(Crown Copyright)

LORD JUSTICE MORRITT: This is an appeal of Mrs Etridge from the judgment of His Honour Judge Behrens, sitting as a Deputy Judge of the Queen's Bench Division, given on 25th February 1998. He awarded her nominal damages only for breach of contract by the defendant solicitors in respect of their failure to advise her properly or at all in connection with the acquisition by her of The Old Rectory, Laverstoke, Hampshire with the assistance of loans from the Royal Bank of Scotland ("RBS") and the Trustees of the Ambetta Pension Fund which were charged on the property.

This is the third appeal brought by Mrs Etridge arising out of that transaction. In the first, Royal Bank of Scotland v Etridge [1997] 3 AER 628, she appealed successfully from summary orders for possession made against her in respect of the lenders' claims as mortgagees. In the second, Royal Bank of Scotland v Etridge (No 2 ) [1998] 4 AER 750, she appealed unsuccessfully against possession orders made against her by Judge Behrens after the trial. In this, the third appeal, she seeks damages from the solicitors who failed to advise her in respect of the charges in favour of the lenders. The facts of the matter are fully described in both reports to which I have referred, in particular in the second of them at pages 723 to 726. In the circumstances I will only relate those particularly relevant to the issues now before the court.

Mr and Mrs Etridge were married in 1970 when Mrs Etridge was 32 years of age. Mr Etridge had started life as a joiner, later becoming a property developer with interests in both this country and in Spain. Mrs Etridge was trained as a physiotherapist. For a time they ran a restaurant together. When Mrs Etridge started her family - and there are four children of the marriage born between 1971 and 1977 - she gave up such work.

On 26th October 1987 Mrs Etridge bought Harewood House, Longparish, Hampshire for the sum of £195,000 in her sole name with funds provided for that purpose by Mr Etridge. On 11th December 1987 she executed a charge over Harewood House in favour of RBS to secure £50,000 lent to Mr Etridge by the bank for the purpose of Mr Etridge's business. Mr and Mrs Etridge acknowledged having received advice from Memery Crystal in connection with it and to understanding the implications of it, although, in the case of Mrs Etridge, she had not read the document to that effect which she signed and denied any such understanding.

On 29th February 1988 Mrs Etridge apparently agreed to the increase of the loan - therefore of the amount secured - to the sum of

£100,000. Once again Mrs Etridge signed the documents giving effect to that agreement without reading them.

In the summer of 1988 Mr Etridge decided that they should sell Harewood House and buy The Old Rectory, an altogether more substantial property. For that purpose, by the latest 5th August 1988, Mr Etridge had instructed the firm of solicitors, Robert Gore & Co, to act on the purchase of The Old Rectory. On 25th August contracts were exchanged at a price of £505,000 for completion on 30th September 1988. Mr Etridge paid a deposit of £50,500 on the signing of the contract. The following day, on 26th August, contracts for the sale of Harewood House by Mrs Etridge for £240,000 were exchanged for completion on 30th September. A deposit of £15,000 was paid by the purchaser to Mrs Etridge. Mr

Etridge instructed a different firm of solicitors, Memery Crystal, to act in connection with the sale. On 13th September Mrs Etridge returned to Robert Gore & Co, duly executed by her, a transfer of The Old Rectory to her as the purchaser. The finance for completion of the purchase had not by then been arranged. Indeed, Mr Etridge did not appear to start to make such arrangements until 20th September. On 27th September both the trustees of the Ambetta Pension Fund and RBS, no doubt mindful of the problems lenders might experience when taking security over a matrimonial home, instructed Robert Gore & Co that they would require Mrs Etridge to be separately advised.

On 30th September 1988 the sale of Harewood House was completed. Mr and Mrs Etridge remained in occupation as licensees and were entitled so to do until midday on 5th October. £221,728 was

received in respect of the net proceeds of sale but subject to the charge in favour of RBS, the balance being due to Mrs Etridge. Subsequently, it was agreed that the value of the equity of redemption due to Mrs Etridge from the proceeds of sale was £131,978.

On 3rd October the £221,728 received from the purchaser of Harewood House was paid into Mrs Etridge's account at RBS and £222,000 was paid by her from that account to the credit of Mr Etridge's account with the same bank. The effect was to pay off his overdraft and leave a credit balance of £132,250. On the same day notice to complete was served by the seller with regard to the purchase of The Old Rectory. Various conveyancing documents were executed including the two legal charges on which Mr Ellis, a solicitor employed by Robert Gore & Co, completed certificates to the effect that he had explained the document and its effect to Mrs Etridge. Those certificates were untrue to the knowledge of Mr Ellis.

On 4th October the purchase of The Old Rectory was completed with payments from Mr Etridge's account with RBS, some £200,000 from the trustees of the Ambetta Pension Fund and the balance from RBS. Charges were executed in favour of RBS and the trustees of the Ambetta Pension Fund. The charge in favour of the trustees of the pension fund included not only the £200,000 advanced to assist in the purchase of The Old Rectory but also the sum of £195,000 previously lent by them to Mr Etridge for the purpose of his business. RBS and the trustees entered into a deal of priority, limiting the priority of RBS to the sum of £100,000.

On 16th February 1990 Mrs Etridge signed a promissory note in favour of Brian Parsons for £41,516 in respect of her husband's debts. The promissory note was not paid. On 16th July 1991 a bankruptcy order was made against her in respect of the obligation undertaken by it.

The proceedings for possession were commenced on 31st October 1991 by the trustees of the Ambetta Pension Fund, and on 19th August 1993 by RBS. Summary orders for possession were made by the

district judge on 15th April 1996. This action was commenced by Mrs Etridge against Robert Gore & Co by a writ issued on 9th June 1996. Robert Gore & Co have since merged with the defendant, Pritchard Englefield. The summary possession orders were set aside by this court on 14th February 1997. Thereafter, on 22nd January 1998 the defendant solicitors amended their defence to admit, as Mrs Etridge had always contended, that they had not advised Mrs Etridge as to the contents or workings of the two charges.

The trial of the two possession actions and the claim by Mrs Etridge against the solicitors came before Judge Behrens. He gave judgment on 26th February. So far as now relevant, his conclusions were the following. First, there was no actual undue influence exercised by Mr Etridge over Mrs Etridge, but there was presumed undue influence within class 2 B of the categorisation explained by Lord Browne-Wilkinson in Barclays Bank v O'Brien . Second, there was manifest disadvantage to Mrs Etridge in the transaction respecting the charge to the Ambetta Pension Fund because £195,000 of the £395,000 thereby secured had already been lent to Mr Etridge; but there was no such manifest disadvantage in relation to the charge in favour of RBS. Third, he concluded that the admitted negligence and breach of duty of the solicitors occurred on 3rd October 1988 and not earlier. Fourth, he considered that on the balance of probability it had not been established that Mrs Etridge would not have signed the legal charges if the solicitors "had given the appropriate advice as to their effect and content on 3rd October 1988". Fifth, he thought that if causation had been proved the measure of Mrs Etridge's loss was the value of the equity of redemption after satisfaction of the RBS charge which had been agreed at £131,978, but without interest, and the net costs paid in resisting the possession applications, in the latter case on the footing that they were costs reasonably incurred in an unsuccessful attempt to mitigate her loss.

The notice of appeal was given by Mrs Etridge in respect of a judgment against the solicitors in May 1998.

In July 1998 there came before this court a series of appeals of which Mrs Etridge's appeal against possession orders was one. There were a number of others raising the same or similar issues. The judgment of the Court of Appeal on thee possession claims was given on 31st July 1998. It included a section on the duty of a solicitor to advise one who is or may be exposed to undue influence whether actual or presumed. In paragraph 19 in the general section of the judgment the court said:

"A solicitor who is instructed to advise a person who may be subject to the undue influence of another must bear in mind that is not sufficient that she understands the nature and effect of the transaction if she is so affected by the influence of the other that she cannot make an independent decision of her own. It is not sufficient to explain the documentation to ensure that she understands the nature of the transaction and wishes to carry it out: see Powell v Powell [1900] 1 Ch 243 at 257, approved in Wright v Carter ). His duty is to satisfy himself that his client is free from improper influence, and the first step must be to ascertain whether it is one into which she could sensibly be advised to enter if free from such influence. If he is not so satisfied it is his duty to advise her not to enter into it, and to refuse to act further for her in the implementation of the transaction if she persists. In this event, while the contents of his advice must remain confidential, he should inform the other parties (including the bank) that he has seen his client and given her certain advice, and that as a result he has declined to act for her any further. He must in any event advise her that she is under no obligation to enter into the transaction at all and, if she still wishes to do so, that she is not bound to accept the terms of any document which has been put before her: (see Credit Lyonnais Bank Nederland NV v Burch [1997] 1 All ER 144.)"

Leave to appeal was refused by the House of Lords on 11th November 1998.

On 12th April 1999 a revised skeleton argument was served by

counsel for Mrs Etridge seeking to raise a case based on what, he suggested, was a wider duty on the solicitor as found in Etridge (No 2 ) than had previously been thought. The solicitors for the

defendants, whilst objecting to the revised skeleton argument, served another one themselves on 23rd April 1999.

When the hearing of the appeal commenced on 27th April 1999

the first matter which we had to consider was an application by Mrs Etridge for permission to amend her statement of claim and notice of appeal to raise the new points foreshadowed in the skeleton argument served by her counsel.

In these circumstances the first issue for our consideration is whether or not such permission should be given. Having heard argument on the point we indicated that we refused the application and we would give our reasons later. What follows are my reasons. The case, so far as relevant, as originally pleaded, which was

denied by the solicitors, was contained in paragraphs 7 to 10

inclusive of the original statement of claim in the following terms:

"7 In the premises, it was an implied term of the said contract and/or it was the duty of the ..... defendants to ensure that they, their servants or agents would exercise skill, care and diligence in taking all necessary steps to give independent legal advice to protect the plaintiff's interests in the property.

8 On 3rd October 1988 the plaintiff attended the offices of Robert Gore & Company and met Peter Ellis, a servant or agent of the ..... defendants.

9 Negligently, and in breach of the said term and of the duty of care owed to the plaintiff the defendants, their servants or agents failed to give any advice whatsoever. On 3rd October 1988 the plaintiff was shown into an office by Peter Ellis, and given the documentation related to paragraph 3 above, and asked to sign those documents. The plaintiff did so, and then left the office.

10 Had the plaintiff been given legal advice on the effect and ramification of signing the documents she would not have signed the documents."

Shortly before the trial the solicitors admitted the allegation made by Mrs Etridge to the effect that she had received no advice at all. In consequence Mrs Etridge amended her statement of claim, in particular in paragraphs 9 and 10 so as to make the following allegations. I quote those paragraphs as amended:

"9 Negligently, and in breach of the said term of the duty of care owed to the plaintiff the defendants, their servants or agents failed to give any advice whatsoever. On 3rd October 1998 the plaintiff was shown into an office by Peter Ellis, given the documentation related to paragraph 3 above, and asked to sign those documents. The plaintiff did so, and then left the office. The plaintiff will rely upon the admissions contained in the amended defence to the effect that:

(a) the defendants failed to explain the contents and workings of the Bank's charge and Ambetta mortgage;

(b) in so failing, the defendants were negligent and in breach of contract.

10 Had the plaintiff been given legal advice on the effect and ramification of signing the documents she would not have signed the documents. The plaintiff accepts and avers that, as set out in the paragraph 16 (1) of the amended defence, if she had been properly advised, she would not have agreed to the sale of Harewood House, the purchase of the property and the execution of the Bank's charge and Ambetta's mortgage. Consequently she would have remained owner and occupier of Harewood House as aforesaid."

As indicated in the amended statement of claim those allegations were admitted by the solicitors in their amended defence. It is necessary, I think, to quote the admissions in terms. I quote from paragraphs 12, 13 and 16 (1):

"12 It is admitted that the first second third fourth fifth sixth seventh and eighth defendants herein acted negligently and/or in breach of contract failing to explain to the plaintiff the contents of the workings of the Royal Bank of Scotland's legal charge dated 4th October 1988 and the Ambetta Pension Fund's legal mortgage of even date. Save as aforesaid, paragraph 9 is denied.

13 Paragraph 10 is denied. It is denied, in any event, that any such proper advice would have resulted in the plaintiff not signing the said documents.

.....

16 As to paragraph 19,

(1) the claim to loss and damage is denied. It is averred that if the plaintiff had not signed the said documents and so had remained at her existing property, Harewood House, which property was subject to a first legal charge in favour to the Royal Bank of Scotland plc, she would not have been in any better position; Further and/or alternatively, it is averred that the plaintiff must give credit to reflect her (and her family's) occupation of property herein."

The proposed amendment sought to raise allegations corresponding to the passage in Etridge (No 2 ) which I have already quoted. Some of them were not new, but those that were are contained in paragraphs 7 A (d) to (h), 10, 10 A and 10 B. They are as follows:

"7 A In particular the defendants owed the plaintiff the following duties:

(d) ´to ascertain whether [the transactions are ones] into which she could sensibly be advised to enter if free from such influence';

(e) ´if [they were] not so satisfied ..... to advise her not to enter into [the transactions];

(f) ´to refuse to act further for her in the implementation of the transaction[s] if she persists';

(g) to ´inform the other parties (including the bank [and Ambetta] that he has seen his client and given her certain advice, and that as a result he has declined and given her certain advice, and that as a result he has declined to act for her further';

(h) to ´advise her that she is under no obligation to enter into the transaction[s] at all and, if she still wishes to do so, that she is not bound to accept the terms of any document which has been put before her.'

10 The plaintiff's case is that the only proper advice which could have been given by the defendants consistent with their duties as set out in paragraphs 5-7 B hereof would have been that she should not execute the documents relating to the said transactions or any of them.

10 A Had the plaintiff been given such legal advice she would not have signed the documents. The plaintiff accepts and avers that, as set out in paragraph 16 (1) of the amended defence, if she had been properly advised, she would not have agreed to the sale of Harewood House, the purchase of the property and the execution of the bank's charge and Ambetta's mortgage. Consequently, she would have remained owner and occupier of Harewood House as aforesaid.

10 B Alternatively, if contrary to the plaintiff's primary contention she had been induced to persist in an intention to go through with the transactions, it would have been the defendants' duty to refuse to act further for her and to inform the bank and Ambetta accordingly. Had that happened, the consequences would have been either

(a) the bank and Ambetta would have refused to continue with the transactions or

(b) the bank and Ambetta would have persisted in the transactions well knowing that the plaintiff had refused to follow advice and that the defendants had terminated their retainer accordingly in which case the plaintiff would have succeeded in her claim to set aside the charges in their favour."

Mr Mawrey QC accepted that these amendments raised new points but he contended that that is no reason to refuse permission to amend. He submitted that insofar as they were points of law as reflecting what the court said in Etridge (No 2 ) about the duty of the solicitor in the circumstances then Mrs Etridge is entitled to rely on them and no evidence is required. Insofar as the previous admissions were an admission of breach of duty, it now covers the wider duty he seeks to rely on for it is accepted that Mr Ellis gave Mrs Etridge no advice at all. Insofar as the issue of causation is one of fact he disclaimed any desire or request for a

new trial and accepted that if the judge made no relevant findings, and the existing evidence was insufficient to enable this court to do so, then his appeal will fail.

I do not accept this argument. It is apparent from paragraph 10 of the proposed amended statement of claim that questions of fact are involved on which the judge has made no findings at all. What was "the only proper advice" depended on the facts of the case and the circumstances in which Mr and Mrs Etridge found themselves at the relevant time. This, in turn, would have led to the question of the consequence of such advice as pleaded in paragraphs 10 A and 10 B. Questions of causation are questions of fact too. It is open to the solicitors to prove that they did not cause or contribute to the damage claimed. (See, eg, Karak Rubber Co Limited v Burden [1972] 1 WLR 602, 631 and the case there cited.) The fact that Mrs Etridge does not seek a new trial or to adduce any further evidence is not the end of the matter for the solicitors might well wish to do so and might well have cross-examined Mrs Etridge differently at the trial had these new issues been raised in time.

Mr Mawrey's submissions proceeded on the assumption that it was obvious that Mrs Etridge would not have proceeded to sign the charges had she been advised in the terms of the proposed re-amended pleading. But I do not consider that this was as straightforward a matter as Mr Mawrey assumed. Factual questions as to the availability or otherwise of other sources of funds; or the Ambetta trustees' willingness or otherwise to exclude the £195,000 from their second charge; or, importantly, as to the truth or otherwise of Mr Etridge's reported assertion that he had ample funds offshore; and other matters could all have been relevant. These were not raised on the unamended pleading, which did not allege that the solicitors should have given Mrs Etridge advice about the wisdom of the proposed transactions, and the judge's findings of fact scarcely touch them.

In short, the application should be refused on the well recognised basis, as valid under the new procedure rules as the old, that if the amendments were allowed they would permit to be raised in this

court issues not raised in the court below on which the judge made no relevant findings and on which further evidence might well have been adduced had the point been raised at the proper time.

On the question of time I would refer also to the suggestion made by Mr Mawrey more than once, namely, that the statement as to the solicitor's duty in the passage in Etridge (No 2 ), which I have quoted, went beyond what had previously been thought to be the law and could not reasonably have been anticipated by Mr Etridge or her advisers. I do not accept that submission. The passage in question accurately reflects the principles established by Mr Justice Farwell in Powell v Powell [1900] 1 Ch 243, approved by the Court of Appeal in Wright v Carter [1903] 1 Ch 27, and again as recently as 1997 in Credit Lyonnais Bank Nederland NV v Burch [1997] 1 AER 144. The last mentioned case had been reported before the trial of the action before Judge Behrens and should have been sufficient to bring the point to the attention of those unfamiliar with the first two authorities to which I have referred.

The second issue for our determination arises on the appeal without those amendments having been made. It is the question of causation. Although the major part of the argument before the judge was concerned with questions of undue influence and whether any right to set aside the transaction or any part of it was exercisable by Mrs Etridge against the lenders because they had notice of the undue influence actual or presumed of her husband, the case against the solicitors is a straightforward solicitors negligence action in which such issues do not directly arise. The concern of the lenders with the possibility of undue influence

explains why it was that the solicitors were asked to advise Mrs

Etridge in the first place and the nature of the advice they were required to give, but goes no further.

Mrs Etridge claimed that the solicitors owed her a duty of care in both contract and tort to give her independent advice and, as was eventually admitted, that they were in breach of that duty because no advice had been given at all. Whether or not the solicitors are liable to the lenders in deceit for the certificate their employee gave is not relevant to the remaining question relevant to Mrs Etridge's claim, namely, did the negligence of the solicitors cause or contribute to any loss sustained by Mrs Etridge.

Mr Mawrey submitted that if a solicitor is engaged to give advice to a client and gives none then it should be presumed that the solicitor would have given the correct advice and that the client would have accepted the advice and acted on it. He did not, in the end, go so far as to submit that the presumption was irrebuttable, but he did suggest that it caused the burden of proving the contrary to pass to the solicitors. He suggested that if the law were otherwise then the worse the undue influence the harder it would be to bring home to negligent solicitors the consequences of their wrongdoing.

As is apparent from the passage in Karak to which I have already referred, questions of causation are questions of fact to be determined on evidence like any other. The legal onus rests on the claimant, though in the course of the trial it may, in practice, pass to the defendant. But there can be no presumption what the advice would have been, nor that it would necessarily have discharged the solicitors' duty of care. Mrs Etridge might have had cause for complaint if the judge had found that it would have made no difference what advice the solicitors gave because the influence of her husband was so strong; but, as I shall demonstrate shortly, he did not. His conclusion was based on the exigencies of the situation which may well provide a powerful stimulus to enter into the impugned transaction but

do not constitute undue influence. (see Royal Bank of Scotland v Etridge (No2 ) [1998] 4 AER 705, 713 B-D, 715 and 746 J).

Mr Mawrey also complained that, though Mrs Etridge had been found to have been right all along in her contention that she had been given no advice at all, she had been given no "credit" for it. By "credit", as counsel explained, he meant that the judge should have been more ready to accept and should in fact have accepted the

evidence of Mrs Etridge as to what she would have done had the

solicitors properly explained to her the contents and working of the two legal charges. But the question what somebody would have done in circumstances which did not arise is hypothetical. To reject the answer to such a question is no reflection on the credibility or reliability of the witness. In those circumstances the fact that Mrs Etridge was right about the factual question whether she had been given any advice is irrelevant to the hypothetical question what she would have done had the facts been different. That was a question for the judge; the answer could only be ascertained by inference from all the circumstances.

For these reasons I would reject the two specific complaints made by Mr Mawrey. The question then remains whether the judge's conclusion on causation is one with which this court should interfere. In my view it is not.

The judge considered carefully the point of time at which he should consider the issue of causation. He concluded (see page 21 of the judgment lines 1-8) that the proper time was 3rd October 1998. There is no appeal from that finding and, in any event, I consider that the judge was obviously right both because of the way the case had been pleaded and because of the surrounding circumstances as shown in the evidence. By 3rd October Harewood House had been sold and the Etridges, including their four children then aged between 11 and 17, remained in occupation as licensees only until midday on 5th October. A deposit of £50,505 had been paid in respect of the purchase of The Old Rectory which would be lost if the sale did not proceed on time. The evidence suggested that, whether true or not, Mr Etridge would, if asked, have told his wife that he had the money necessary to pay the whole of the purchase price outside the jurisdiction but was reluctant, for tax reasons, to use it in the

purchase of The Old Rectory. These and the other submissions made to him by counsel for the solicitors were fully and accurately rehearsed by the judge. His summary of the submissions made by counsel for Mrs Etridge and his conclusion was:

"Mr Mawrey sought to rely on Mrs Etridge's evidence and the grounds she gave for not signing that I have set out above. In particular it affected the security of her home and the size of the mortgage instalments. He further submitted that Mr Etridge might have had funds offshore and might have found alternate finance for The Old Rectory. In my view that was a wholly unrealistic submission. All of the evidence points to the fact that Mr Etridge had no other funds immediately available. He was not able to bring funds from abroad to reduce the Ambetta borrowing which he promised to do to RBS. The inference is that he did not have the financial means to do so. If that inference is not fair then Mrs Etridge has only herself to blame. Mr Etridge was not called to give evidence to explain what financial means he actually had. He is, as I understand it, still living under the same roof as Mrs Etridge.

I am very conscious of the warning given to me at the beginning of Mr Mawrey's closing submissions that if both Mr Briggs and Mr Gibson [counsel for the defendants] were right Mrs Etridge would be left with nothing despite the disgraceful conduct of Mr Ellis and that no layman would see that as a fair result. Despite this warning I am driven to the conclusion that Mr Gibson's submissions are to be preferred to those of Mr Mawrey. In the circumstances I am not satisfied on balance of probabilities that Mrs Etridge would not have signed the Legal Charges if Mr Ellis had given appropriate advice as to their effect and content on 3rd October 1988."

In my view that was a conclusion the judge was fully entitled to reach. By 3rd October the transactions had proceeded too far for a withdrawal to be acceptable. If the purchase did not proceed not only would the deposit be forfeited but Mrs Etridge and her four teenage children would have been homeless. It is clear, as the judge found, that Mr Etridge did not have funds immediately

available with which to complete the purchase.

But as Mr Etridge did not give evidence it was unclear whether and if so when he might realise his other property interests so as to repay, in particular, the earlier loan from the pension fund trustees of £195,000, and redeem the charge for the amount which had the effect of extinguishing Mrs Etridge's equity of redemption carried over from Harewood House.

In my view the judge reached the correct conclusion on causation. This disposes of the appeal, which I would dismiss.

I should record that Mr Mawrey also suggested that the judge was wrong in his assessment of the amount of the loss for which Mrs Etridge should have been compensated had he arrived at a different conclusion on causation. The judge's finding was that damages should have been assessed by reference to the value of the equity of redemption in Harewood House which the parties agreed to be £131,978. This is not disputed. But, in his discretion, he declined to award interest on that sum from 3rd October 1988 until judgment because "it [£131,978] would have been used in some way in obtaining alternative accommodation".

Mr Mawrey contended that the judge was wrong in that regard. He asserted that the need for and cost of alternative accommodation was an irrelevant consideration. I do not accept that submission; but in view of our conclusion on the issue of causation we did not hear any argument from counsel for the solicitors on the issue of damages. It may be, and I put it no higher than that, that the effect of the judge's disallowance of any interest involved an element of double counting. As I understand it, Mrs Etridge has remained in occupation of The Old Rectory throughout these proceedings and, presumably, interest on the debt has continued to accrue. The debt includes the value of the equity of redemption. Thus it may be that the effect of the disallowance of interest on the damages, computed by reference to the value of the equity of redemption, together with the continued accrual of interest on the debt means that Mrs Etridge has had to bear the assumed cost of alternative accommodation twice.

I reach no conclusion to that effect because we did not hear argument from counsel for the solicitors. I merely record the point.

In conclusion, therefore, for the reasons I have given, I refused

the application for permission to amend, and in respect of the issue of causation, I would dismiss this appeal.

LORD JUSTICE MAY: I agree.

LORD JUSTICE TUCKEY: I also agree.

Order: Appeal dismissed with costs - re Section 18 Legal Aid Act.