England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		The Rolls Building, 7 Rolls Building, Fetter Lane, London, EC4A 1NL
		24 May 2017

(Please note that due to the poor standard of audio recording it has not been possible to produce a high quality transcript in this case)

1. JUDGE PURLE: In these proceedings the claimant, Tina Chantal Joseph (usually known as Chantal) sues a firm of solicitors, Farrer & Co LLP ("Farrers") in respect of a transaction which occurred in 2008.
2. The claimant and a Mr Peter Cundill were during Mr Cundill's lifetime close and intimate. He was much older than her and he became very close to her in his final years. He died in 2011 from a very rare illness which was incapable of effective treatment. Knowing of his relatively bleak future but much appreciating the companionship of the claimant, Mr Cundill, who was by the standards of any ordinary individual immensely wealthy ostensibly, wished to make financial provision for her and indeed did so to a considerable extent by buying her a flat with monies from a trust fund of which he was a discretionary beneficiary during his lifetime, and by way of other cash payments. Discussions took place between them and they approached the trustees of the discretionary trust for a substantial sum of the order of $10 million to secure her future.
3. The trustees were individuals known to Mr Cundill. At some stage (it matters not when) they were replaced by a trust company of which the directors were the same individuals, but I shall refer to those individuals as the trustees. There was also a protector who was also well known to Mr Cundill. The trust was a Bermudan trust. Mr Cundill, as I have said, was a member of the discretionary class and the claimant was not, though there was power within the trust to add to the discretionary class with the consent of the protector.
4. By 23 April 2008 Mr Cundill had asked the trustees for $10 million for the claimant, who co-signed the letter making that request. The trustees however refused the request, stating by fax instead the next day (24 April 2008):

"The Directors accepted that Ms Joseph's companionship is very important to you and agree that in order to secure that companionship it would not be inappropriate for distribution of a reasonable amount to be made to you in the knowledge that the funds may then be paid by you to Ms Joseph.

The Directors agreed that if a properly prepared financial settlement agreement was negotiated by the legal advisers of Ms Joseph and yourself of up to, say, GBP 1,000,000 per annum for a fixed period of time, the Trustee would be agreeable to make available sufficient funds to assist you in complying with any of your obligations under such an agreement."

5. By this stage Farrers were not acting for the claimant or for that matter Mr Cundill in relation to the proposed gift. Farrers had previously acted for the claimant in relation to her Will and estate planning, and were also currently involved in giving advice through a partner, Sarah Von Schmidt, relating to potential investments, principally it would appear in Nigeria. Sarah Von Schmidt had no continuing or other contact with this case when Farrers came to be instructed by Mr Cundill.
6. On 24 April 2008, as I have said, the trustees declined the request for an unconditional payment of $10 million, but instead contemplated making annual payments for a fixed period of time. The proposal which eventually emerged was that a total of £5 million should be gifted by Mr Cundill to the claimant in this way.
7. Richard Parry, who was a partner at Farrers, was in due course instructed to act for Mr Cundill (at least). A meeting took place at which Mr Cundill, the claimant and Mr Parry of Farrers were present. That meeting was on 28 April 2008. It is clear from Mr Parry's evidence, as well as from the billing notes that he made at the time, that he first met Mr Cundill and then, at Mr Cundill's request, explained to the claimant that what was proposed were a series of periodical payments, and not an outright unconditional single payment. On a fair reading of that note, though, he was advising Mr Cundill as his client and not the claimant. He became aware that his firm had acted or was acting in other respects for the claimant but saw no conflict of interest, as the claimant was simply to be the recipient of Mr Cundill's bounty and had no bargaining position of her own to advance. He did not however (though he became aware of his firm's having acted for the claimant) obtain written approval from her of his firm acting for Mr Cundill alone. It is clear however to my mind that that is what he did. This is reflected in two letters from Farrers dated 6 and 12 May 2008, together with Mr Cundill's letter of 9 May 2008. In the first letter of 6 May 2008 from Mr Parry to Mr Cundill, Mr Cundill is expressly referred to as the client. I will read the opening words of the second paragraph of that letter, which is addressed to Mr Cundill alone:

"I confirm that I have been instructed by you in relation to this matter."

That is to be contrasted with the next paragraph, which says:

"I have also seen the written request that you and CJ [the claimant] made on 23 April of some $10 million."

He then sets out various matters in relation to the financial largesse previously bestowed upon the claimant by Mr Cundill.

8. It is said on the part of the claimant that on any realistic and objective assessment of the situation, looking at the entirety of the facts, I should find that there was at least an implied if not an express retainer to which the claimant was a party. In my judgment that proposition does not bear serious examination. It is unambiguously stated in the letter of 6 May, which the claimant saw at the time, that Mr Parry was acting for Mr Cundill. There is no scope for implying that he was acting also for the claimant. The same letter advises:

"I explained to you that you owe no legal obligation to CJ. It is not thus because under English law a cohabitee (and CJ is not a full-time cohabitee) acquires no rights at present. A moral obligation can of course be owed to somebody in CJ's position, but my view is that the payments you have already made will be sufficient to discharge any moral obligation."

9. That gives the flavour and the nature of the debate. Mr Parry was looking at the matter from the outset from the perspective of Mr Cundill and looking to see what were his legal (and moral) obligations and what was in his interests, whilst having full regard to Mr Cundill's wish to benefit the claimant.
10. There is then the letter of 9 May, which is the reply from Mr Cundill which states in terms, "I note your confirmation that you have been instructed by me", and goes on to say, "However, it seems to me that you are also advising the trustees". This was not in fact the case, though there was indeed a close relationship between the trustees and Mr Parry, but he did not act for them. The same letter goes on to express Mr Cundill's preference for a single payment and that his agreeing to a gift in five annual instalments was "to accommodate the trustees". That letter therefore proceeds on the basis (erroneous as it was, as it happens) that Mr Parry was acting for the trustees as well. There is no hint that he was also acting for the claimant, who was someone who had in Mr Parry's eyes no legal claim against Mr Cundill and was at the mercy of his and indeed the trustees' sense of moral obligation.
11. The formal retainer letter was dated 12 May 2008 and was addressed to Mr Cundill alone. The claimant saw it at some stage (it is not entirely clear when). It starts by saying:

"I am required to write you a formal letter in relation to you requesting me to advise you.

Thank you for instructing my firm to advise in relation to your proposed gifts to [the claimant]."

12. The scope of the work is later explained as:

"… to seek advice from me in relation to all aspects of your proposed gifts to [the claimant]. I propose to consider these gifts against the background of your relationship with [the claimant]. Although I will take account of any views expressed by your trustees, I confirm that I am acting for you and not the trustees in this matter and will give you advice based upon what I consider to be in your best interests.

I propose to liaise with Jenny Bingham [a trustee] and Fiona Driscoll [who worked with her] in order to obtain background information and any relevant financial information."

The rest consists of formal matters required to be in a retainer letter.

13. By this stage, as has been noted, the initial meeting had already taken place on 28 April. The claimant's evidence was understandably hazy about that meeting. She in truth recollected nothing significant in terms of detail. It is however clear, as I have said, that an explanation was given to her of what Mr Cundill proposed to do by Mr Parry at Mr Cundill's request.
14. One of the features of this case (and I digress momentarily to say this, but it is something which runs through the whole history) is that there was an uneasy relationship between the trustees, in particular Jenny Bingham, and the claimant, occasioned by Ms Bingham's distrust of the claimant, whom she appears to have thought was greedy and undeserving. Mr Cundill (who though unwell had full capacity) was fully aware of the different ways in which he was pulled by on the one hand the claimant and on the other hand by the trustees seeking to exercise restraint. The refusal to make an outright, unconditional gift of $10 million is only an example of the strains that the relationship gave rise to. Accordingly, one finds on many occasions Mr Cundill apparently agreeing with one advisor or another that this, that or the other is the appropriate way to conduct his affairs, only then for a volte face to occur after he has discussed matters with the claimant. That related not simply to the example I have mentioned (the proposal that the payment should be in instalments rather than one large payment up front) but also on matters such as personal care. The long term personal care of Mr Cundill was put in place through the office, as I understand it, of the trustees, and was buttressed by a lasting power of attorney given to Ms Bingham and one other not connected to the claimant. In addition, a strong-minded housekeeper was engaged for Mr Cundill through a service company (funded no doubt by the trust).
15. What one sees throughout the history of this matter starting in April 2008, right through to February 2009 and beyond, are contradictory statements from Mr Cundill depending upon whom he has most recently spoken to. That, on one view of the matter (and certainly on the view portrayed by counsel for the claimant) gave the impression of the professionals taking sides against the claimant. There is no doubt, as I have said, that there was no love lost between the trustees and the claimant. Nevertheless, the trustees were conscious of the importance of Mr Cundill's wishes and tried to accommodate them without either sacrificing his interests needlessly or acting in breach of duties they were conscious that they owed to other beneficiaries, whose interests would need to be accommodated after Mr Cundill's death. Mr Cundill under the trust instrument as it then stood (and as far as I know still stands) was the only beneficiary who could benefit from distributions from the trust fund during his lifetime. But there were other beneficiaries, children of his who would benefit after his death, and of course there was the possibility of changing the class of beneficiaries, which would accommodate the claimant potentially if Mr Cundill should die before the proposed periodical payments were all made.
16. Thus the family dynamic involved the relationship between Mr Cundill, the claimant, the trustees, and those responsible for Mr Cundill's personal care. In addition, the interests of other beneficiaries was a matter requiring consideration. This dynamic reflected the approach of Mr Parry: he would often need to take instructions (as he regularly did) from Mr Cundill after having first spoken to one or other of the trustees or their representatives; there were some matters which Mr Cundill wished in turn to be raised with the claimant and some matters which he did not. An example of that is that concerns started to emerge (among the trustees and Mr Parry) as to the extent to which the claimant was interfering and might continue to interfere in the care arrangements which the trustees placed particular importance on. There were discussions between Mr Parry and Mr Cundill as to whether the wording of the letter of request which was to be submitted to the trustees should embody a limitation on what the claimant might or might not do in that regard. In the end, at the request of Mr Cundill, Mr Parry did not include such a clause, the reason, I infer, being that it was too contentious a subject for Mr Cundill to deal with as between himself and the claimant.
17. It is said that as what Farrers were instructed to do was to ensure that the proposed gift to the claimant should take place, they therefore owed a contractual duty to the claimant or, if not contractual, a tortious duty. The contractual duty is said to be reinforced by the fact that Farrers had previously acted for the claimant, which they had in relation to her Will and estate planning, and were (on a matter entirely unrelated to the proposed gift) acting for her again. Indeed, in July 2008 Farrers billed the claimant for some further fees said to be referable to a proposed gift which, read naturally, would appear to relate to this proposed gift. However, I heard from the partner involved, Sarah Von Schmidt, who confirmed that she had nothing whatsoever to do with this proposed gift. She was dealing with monies which had already been given previously and the potential investment of those monies. It is said that Farrers had confidential information which precluded them from acting for Mr Cundill alone. It would have been better if Farrers had obtained an unequivocal statement in writing from the claimant, as best practice and the solicitors' Code of Conduct would indicate as desirable, but they did not. Mr Parry was however informed by a financial advisor (Mr Cave) of the claimant that she had no objection to his firm acting and manifestly she did not object to their acting because, as I have mentioned, she met and spoke to Mr Parry on the occasion of the first visit paid to Mr Cundill on 28 April.
18. I do not think any of that, even taken with other matters to which I shall refer, comes close to establishing an implied (still less an express) retainer. The claimant was seen rightly, as I have said, as the mere beneficiary of proposed bounty. This was not a commercial negotiation. She had no bargaining position. That is something which Mr Parry recognised from the outset. She did not have a legal leg to stand on when it came to bargaining for a better result. She must have known this, as must Mr Cundill. The point was obvious and they both saw, as I have said, Mr Parry's letter of 6 May which expressly made that point.
19. None of the information that was made available to Mr Parry relating to previous gifts made to the claimant came from information which had been disclosed to his firm previously in confidence. All that information came from the trustees to Mr Parry direct and this was all that Mr Parry needed to know. Accordingly, there was no need for the claimant to be a party to the retainer and every need for Mr Cundill alone to be a party to the retainer, so that uninhibited advice to the effect that I have already mentioned, namely "You owe no legal obligations to CJ", could be given without any suggestion of disloyalty towards one of the parties to the retainer.
20. The claimant points to other meetings with Mr Parry and others, which undoubtedly did occur, at which she was present, as well as Mr Cundill. It is not surprising that someone who was as close to Mr Cundill (as the claimant clearly was) should be present at meetings which discussed the terms upon which a gift was to be made to her. That is not the same as being a party to a retainer. Some reliance was placed also upon internal billing notes of Farrers which, in referring to a third party financial advisor, Mr Cave, as "your" advisor, suggested, as the only relevant person he (Mr Cave) ever advised was the claimant, that the claimant was a client. That is strictly accurate as a matter of literal meaning of language. I do not however consider that language of that nature in internal billing notes should be read with the precision that would otherwise be accorded to a letter written under more formal circumstances. It is clear from Mr Parry's attendance notes as well as his written notes that he routinely refers to the client in the second person singular, and one can see how a mistake like that might be made. Looking however at the relationship overall, it is clear to me that Mr Parry acted for Mr Cundill alone.
21. I was referred in this context to the decision of Dean v Allin & Watts [2001] EWCA Civ 758, a decision of the Court of Appeal. Lightman J sitting as an additional judge of the Court of Appeal said at paragraph 22 when dealing with a contract of a retainer that it was necessary to look at all the circumstances of the case and that an implied retainer could arise, in the words of Mr Phillip Mott QC in Searles v Cann and Hallett [1993] PNLR 494, "only where an objective consideration of all the circumstances make it so clear an implication that [the solicitor himself] ought to have appreciated it". Then the judgment goes on:

"'All the circumstances' include the fact, if such be the case (as it is here), that the party in question is not liable for the solicitors fees and did not directly instruct the solicitors."

22. In this case, there is no doubt who was liable for Farrers' fees (Mr Cundill) and that the instructions were given, as a result of an introduction made through Mr Cundill's trustees, by Mr Cundill and confirmed by Mr Parry in the two letters to which I have referred. The quote goes on:

"These are circumstances to be taken into account, but are not conclusive. Other circumstances to be taken into account include whether such a contractual relationship has existed in the past, for where it has, the court may be readier to assume that the parties intended to resume that relationship, and where there has been such a previous relationship the failure of the solicitor to advise the former client to obtain independent legal advice may be indicative that such advice is not necessary because the solicitor is so acting: see e.g. Madley v. Cousins Combe & Mustoe [1997] EGC 63. There was no such previous relationship in this case. Looking at the circumstances to which I have referred, the broad picture is not indicative of any implied retainer in this case."

23. Just pausing there, here there was a previous contractual relationship regarding the claimant, and I have therefore taken into account that it might be easier to assume that the parties intended to resume that relationship. However superficially attractive that might be, a more detailed examination of the circumstances contradicts that. The claimant had no previous relationship with Mr Parry, and Ms Von Schmidt had no involvement in the proposed further gift. Further, as I have said, it is clear from the letters who the solicitor considered his client to be, and the reason why the parties would not be intending to resume that relationship is quite simply that, as Mr Parry was correct to point out at the outset, Mr Cundill owed no legal obligation to make any gift or other equivalent provision to the claimant. No amount of independent legal advice would ever have changed that. The reason therefore that independent advice was not necessary in this case is that the claimant had nothing to be advised upon. She was the prospective beneficiary of substantial sums, but that did not give her any negotiating clout or, more importantly, any legal interest of her own to protect. Of course, the claimant would have preferred an out-and-out gift to have been made. That had already been ruled out by the trustees, and this sort of money was not going to come from any other source. Accordingly, looking at all the circumstances of this case, the indications are all against a retainer.
24. Similar factors also in my judgment point against the assumption of a duty of care, which is the alternative way in which the case is put.
25. Because Mr Parry made it clear that he saw himself in my judgment as acting for someone against whom no legal obligation could be raised, he gave advice as to the gift from the perspective of Mr Cundill's best interests. This was moreover not a simple case of giving someone x pounds; this was a complicated case of persuading trustees to exercise their discretion in a way which was legitimate for the trustees, and which would achieve the objective that Mr Cundill had of securing the future of the claimant. There were concerns on the trustees' side that it was not appropriate to part with large sums of money if the claimant might then terminate the relationship; hence the proposal emerged for a payment over a period of time. Given however that it was known that Mr Cundill was terminally ill (though it was not known for how long he would live; as it happens he lived until January 2011), it was desirable, as the trustees recognised, to continue to provide for the claimant even after Mr Cundill's death, assuming the relationship continued that long. That would have been possible had they wished to exercise their discretion in that way because there was also power with the consent of the protector to enlarge the class of beneficiaries, which could easily have been done had Mr Cundill predeceased the claimant, which he did, and had the trustees not changed their mind, which, for reasons I shall come to, they did. The protector himself acted in close liaison with the trustees when considering the periodical payments, and shared their viewpoint.
26. Eventually a letter of wishes was prepared which, having gone through various drafts, was signed by Mr Cundill and the claimant. The letter of wishes would of course have been sufficient if coming from Mr Cundill alone. I will read it in full. It is addressed to the trustees from Peter Cundill. It is dated 23 June 2008:

"1. This is a request to make payments of £500,000 from me every six months commencing 1 July 2008 with a final payment being made on 1 January 2013. The purpose behind these payments is to enable me to transfer these sums to Chantal Joseph by way of a gift.

2.  All the ten payments should be made unless my relationship with CJ has terminated, in which case no further payments are to be made. However, if the relationship terminates only because of my premature death or because I have become so incapacitated that I am no longer able to have a continuing relationship with CJ, the payments should be made up to 1 January 2013.

3.  CJ hereby undertakes not to request any further payments from me save that the monthly payments of £10,000 will continue together with any small additional payments that I consider appropriate.

4.  CJ and I confirm that we are fully satisfied by the terms of this agreement, which we both regard as fair and reasonable."

27. That of course achieved nothing in terms of legal obligation, but it is the conventional way in which discretionary trusts function. Discretionary trusts do not function upon the instructions of one or more beneficiaries, because if they are allowed to function in that way, that may imperil the efficacy of the tax structure, which is often behind their creation, and the trust may in an extreme case be demonstrated as a sham. Moreover, from the perspective of other beneficiaries, if some document is entered into which compels the trustees to exercise their discretion in a particular way, that may leave them open to claims of breach of trust by surrendering their discretion and not exercising it in the light of the appropriate circumstances at the time payments come to be made. As therefore with any substantial discretionary trust, the efficacy of the arrangements that Mr Parry helped to put in place by this Letter of Wishes was dependent upon the continued good will of the trustees.
28. In the events which happened, two payments of £500,000 each were made in July 2008 and January 2009. The second one was delayed for a short while because of concerns that had been expressed over other payments over and above the £10,000 (referred to as the monthly payments in paragraph 3 of the letter of request) to or for the benefit of the claimant and because of what were perceived to be attempts by the claimant to interfere with Mr Cundill's care arrangements including the suggestion that Mr Cundill might revoke an existing Lasting Power of Attorney. But the January 2009 payment was restored after Mr Cundill had given his word of honour to Ms Bingham one of the trustees that he would not alter his care arrangements and that the excess payments would be stopped.
29. Subsequently, not long afterwards, Mr Cundill dismissed his housekeeper, apparently with the encouragement or at the insistence of the claimant, and there was prepared for him (likewise presumed to be insisted or encouraged) a new document revoking his Lasting Power of Attorney. This came to the attention of the trustees, who saw it as the last straw and decided in February 2009 to stop all further payments, which they communicated to Mr Cundill. There had been in that connection a considerable ongoing debate between the trustees and Mr Parry. Mr Parry, it is undoubtedly the case, took sides with the trustees against the claimant. This was because both the trustees and Mr Parry thought genuinely that the care arrangements should be left undisturbed and that the claimant was interfering too much in his general life as well as having too much money spent on her.
30. On 25 February 2009 there was a conference call, preceded by a discussion between Mr Cundill, Mr Parry and Ms Bingham. In attendance at the conference call were the trustees, the protector, Mr Cundill and Mr Parry. I read from the attendance note of that conference call and preceding discussion:

"The purpose of the call was to advise Peter that due to their deep concern that his companion, Chantal Joseph, was continuing to attempt to force Peter to dismantle the structures that he has put in place over the years to protect his wellbeing during his fading years following the breakdown of his health, they will be bringing to an end the payments the trust was making to Peter as the beneficiary, which in turn he was paying on to Chantal Joseph, this despite a letter written to Peter stating concern and a subsequent meeting whereby the trustees said that payments would be cancelled unless the situation was corrected.

Jenny Bingham and Richard Parry met with Peter for 15 minutes before the call took place. Peter asked for a briefing of the reason for this call. Richard explained to Peter that he was attending the meeting as Peter's lawyer. However, he explained that while he was acting for Peter, it was clear that everyone -- the trustees, the protector, and he -- were all acting in the best interests of Peter. Richard referred to the ongoing efforts by Chantal Joseph to take control in the most persistent and aggressive manner of Peter's life, in particular persuading him to cancel his Lasting Power of Attorney and to fire his carer. Neither acts Peter wanted to do. We have constantly confirmed his wishes on many occasions. However, Richard stated to Peter as soon as he was in the presence of Chantal and under her influence, he made 180-degree turns.

Richard set out for Peter why the situation had reached a crisis despite two attempts by the trustees to normalise it, firstly that the arrangement between Peter and Chantal Joseph was that of a business arrangement as requested by Chantal. She had required a substantial sum of money from Peter to be his kind and loving companion. Peter had in turn to request funds as a beneficiary of the trust."

31. There is then a manuscript alteration which is difficult to read. The note goes on to say:

"With the agreement of Peter and Chantal that no further financial or personal demands were made on Peter in the future, a sum of £5 million would be paid in ten six-monthly instalments. This arrangement and its terms have been well and truly breached. Secondly, Peter is not 40 but 70 years of age with a progressive and debilitating illness. His wellbeing and care are of paramount importance. He is surrounded by a loyal and qualified staff and colleagues, and to have this dismantled due to Chantal's whims is totally unacceptable.

Peter agreed completely. He said he was very besotted with Chantal and that she was helpful with his dressing and general care. However, he did not wish his current status to be changed and he did particularly not wish to marry Chantal.

The conference call commenced with the above background. John Talbot on behalf of the trustees advised Peter that the remaining payments of half a million pounds half yearly were ceased and the situation was non-negotiable. If it ended, Peter would be given sufficient funding by way of distribution for his own personal needs.

There was a discussion on the importance for Peter to have proper arrangements in place for his current and future care including the benefits of a Lasting Power of Attorney.

The attendees all reconfirmed to Peter their deep concern and care for his wellbeing, which was paramount in their various duties to him and to the trust. Peter thanked and said he deeply appreciated all the efforts.

The meeting concluded."

32. That was recorded as an attendance note by Ms Bingham. Its accuracy is not challenged. It has to be said though that it was not strictly accurate to say that the agreement of Mr Cunliffe and the claimant was that "no further financial or personal demands were made". As I have mentioned earlier, the wording in relation to the claimant's involvement in Mr Cundill's personal care was taken out of the proposed letter of request at Mr Cundill's request. Nonetheless, that does not affect the legal rights and wrongs. What this all shows is that despite the fact that the claimant as a mere potential beneficiary had no legal status to promote, it would have been impossible for Mr Parry to have acted for her as well as acting for Mr Cundill because his and her objectives often diverged. Whereas, as I have mentioned, Mr Cundill, as the note records, could make 180-degree turns, he would agree eventually to what his advisors were putting to him, so far as they could tell. For Mr Parry to have accepted instructions (which I am satisfied he did not) on behalf of the claimant as well as on behalf of Mr Cundill would in fact have led to a continuing state of conflict because of the opposing demands in assessing what was in the best interests of the claimant and what was in the best interests of Mr Cundill. Their requirements did not always coincide.
33. I also have no doubt that the note accurately records the complete agreement at this time of Mr Cundill to what his trustees were proposing, including the fact that the payments were now coming to an end. The discussion was followed up by a letter of 3 March 2009 from Conyers Dill & Pearman on behalf of the trustees to Mr Parry acting for Mr Cundill formally recording the trustees' decision to cease making payments of the half a million pounds semi-annually.
34. It is said on behalf of the claimant that Farrers should not have allowed that state of affairs to come about. Had they negotiated a proper commitment, this could not have come about, and had they told her as they should have done of the concerns that were being entertained regarding the care arrangements with which she was supposedly interfering, she would have conducted herself otherwise. Had she conducted herself otherwise timeously, then it is a fair inference both from the correspondence and from the evidence I heard (including that of Ms Bingham) that the trustees would not have taken this step but would in fact have honoured the arrangement throughout the five years, if necessary changing the class of beneficiaries after the death.
35. In my judgment, however, he claimant was not, for the reasons I have given, a party to the contract of retainer; nor, given the potential for conflicts emerging as a result of the differing interests of the claimant and Mr Cundill, would it be appropriate to approach this matter on the basis that Mr Parry assumed or for any other reason owed a duty of care to the claimant. He assumed and owed no such duty of care by acting for Mr Cundill. Even if, however, contrary to that view any duty arose, it can have gone no further than to ensure that the letter of request was in a proper form (a matter I shall return to) and coincided with the instructions of Mr Cundill, the client (which it did). It does not seem to me that there would on any proper view of the prospective scope of a duty of care be a continuing duty to monitor the management of the arrangements under the letter of request thereafter so as to ensure that it was operated in the claimant's favour if there were genuine concerns (as there were here) that certain activities of the claimant (or for that matter of Mr Cundill) were not in fact in Mr Cundill's best interests.
36. I was referred to certain authorities on duty of care. The first is Dean v Allin & Watts, which I have already referred to. Paragraph 33 of that case reads as follows:

"In a situation such as the present where (to the knowledge of both parties) a solicitor is retained by one party and there is a conflict of interest between the client and the other party to a transaction, the court should be slow to find that the solicitor has assumed a duty of care to the other party to the transaction, for such an assumption is ordinarily improbable. But the special circumstances of a particular case may require a different conclusion to be reached. The observations of Neill LJ in Bank of Credit and Commerce International (Overseas) Ltd v. Price Waterhouse No. 2 [1998] PNLR 564 at 582 provide helpful guidance:

'An examination of the cases discloses that the courts have been searching for a principle or test by which the existence or presence of liability in any particular circumstances can be tested.... It seems that the search for a principle or test has followed three separate but parallel paths.

The first path has led to the adoption of what has been called 'the threefold test'. This was succinctly stated by Lord Griffiths in Smith v. Eric S Bush [1990] 1 AC 831 as follows at 864H:

'....In what circumstances should a duty of care be owed by the adviser to those who act upon his advice? I would answer — only if it is foreseeable that if the advice is negligent the recipient is likely to suffer damage, and there is a sufficiently proximate relationship between the parties and that it is just and reasonable to impose the liability.'

...The second path which has been followed in decided cases uses an 'assumption of responsibility' test.

...The third path which has been followed in the authorities has been to adopt an incremental approach ...

The fact that all these approaches have been used and approved by the House of Lords in recent years suggests:

(a) that is may be useful to look at any new set of facts by using each of the three approaches in turn, though it may be noted that in some cases, such as Henderson (supra), the use of the incremental approach may be sufficient to show that responsibility has been undertaken.

(b) that if the facts are properly analysed and the policy considerations are correctly evaluated the several approaches will yield the same result.

The threefold test and the assumption of responsibility test indicate the criteria which have to be satisfied if liability is to attach. But the authorities also provide some guidance as to the factors which are to be taken into account in deciding whether these criteria are met. These factors will include:

(a) the precise relationship between (to use convenient terms) the adviser and the advisee. This may be a general relationship or a special relationship which has come into existence for the purpose of a particular transaction. But in my opinion ... there may be an important difference between the cases where the adviser and the advisee are dealing at arm's length and cases where they are acting 'on the same side of the fence'.

(b) the precise circumstances in which the advice or information or other material came into existence. Any contract or other relationship with a third party will be relevant.

(c) the precise circumstances in which the advice or information or other material was communicated to the advisee, and for what purpose or purposes, and whether the communication was made by the adviser or by a third party. It will be necessary to consider the purpose or purposes of the communication both as seen by the adviser and as seen by the advisee, and the degree of reliance which the adviser intended or should reasonably have anticipated would be placed on its accuracy by the advisee, and the reliance in fact placed on it.

(d) the presence or absence of other advisers on whom the advisee would or could rely. This factor is analogous to the likelihood of intermediate examination in product liability cases.

(e) the opportunity, if any, given to the adviser to issue a disclaimer.'"

37. More pertinent to me is the decision of the House of Lords in White v Jones [1995] 2 AC 207. That case concerned whether a mere beneficiary could ever be owed a duty of care, and it was held by a majority of three to two that a duty was owed by a solicitor to disappointed beneficiaries in preparing a will. The relevant factors were set out in the speech of Lord Browne-Wilkinson at 276:

"Further, negligence in the preparation and execution of a will has certain unique features. First, there can be no conflict of interest between the solicitor and client (the testator) and the intended beneficiary. There is therefore no objection to imposing on a solicitor a duty towards a third party there being no possible conflict of interest. Second, in transactions inter vivos the transaction takes immediate effect and the consequences of solicitors' negligence are immediately apparent. When discovered, they can either be rectified (by the panics) or damages recovered by the client. But in the case of a negligently drawn will, the will has no effect at all until the death. It will have been put away in the deed box not to surface again until the testator either wishes to vary it or dies. In the majority of cases the negligence will lie hidden until it takes effect on the death of the testator, i.e. at the very point in time when normally the error will become incapable of remedy.

In all these circumstances, I would hold that by accepting instructions to draw a will, a solicitor does come into a special relationship with those intended to benefit under it in consequence of which the law imposes a duty to the intended beneficiary to act with due expedition and care in relation to the task on which he has entered."

38. He then went on to agree also with the reasons given by Lord Goff of Chievely. The relevant part of Lord Goff's judgment speech is at page 268. Having dealt with the well-known case of Ross v Caunters [1980] Ch 297 and Linden Gardens Trust Ltd v Lenesta Sludge Disposals Ltd [1994] AC 85, he went on to say this:

"The present case is, if anything, a fortiori, since the nature

of the transaction was such that, if the solicitors were negligent and their negligence did not come to light until after the death of the testator, there would be no remedy for the ensuing loss unless the intended beneficiary could claim. In my opinion, therefore, your Lordships' House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the solicitor's negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor. Such liability will not of course arise in cases in which the defect in the will comes to light before the death of the testator, and the testator either leaves the will as it is or otherwise continues to exclude the previously intended beneficiary from the relevant benefit."

39. And then further down he says:

"1. There is no unacceptable circumvention of established principles of the law of contract.

2. No problem arises by reason of the loss being of a purely economic character.

3. Such assumption of responsibility will of course be subject to any term of the contract between the solicitor and the testator …

4. Since the Hedley Byrne principle is founded upon an assumption of responsibility, the solicitor may be liable for negligent omissions as well as negligent acts of commission …"

40. It will be noted that the case before the House of Lords concerned a will, and that both Lord Goff of Chievely and Lord Browne-Wilkinson recognised the position would or might be different in the case of inter vivos gifts or if the mistake became evident before the death of the testator and the testator left his will unamended. It seems to me, therefore, that the extension of the law in White v Jones is not something which should be regarded as extending to imposing a duty in relation to inter vivos gifts. So far as the present transaction is concerned, it was of course the trustees who changed their minds for reasons which seemed to them to be sufficient. That was why what was originally intended as a gift failed after payment of the first 2 instalments.
41. I do not consider that Farrers owed any duty of care towards the claimant in relation to the work they did. It seems to me that it would run counter to the authorities as far as they go presently, and I can see no good reason for extending the authorities to a case such as the present where there were in my judgment sufficient tensions between the interests of the claimant and the interests of Mr Cundill to burden Mr Parry with a duty to act in both their interests. On a superficial level, as Mr Parry himself recognised in his oral evidence, there was no conflict of interest because both Mr Cundill and the claimant wished to achieve the same result. But in terms of how far Mr Parry should press the trustees in obtaining as close as he could get to a commitment, there were differing interests of the claimant and Mr Cundill. Initially, this was because the claimant wanted an immediate payment from Mr Cundill, though agreeing reluctantly to the periodical payments proposal, which protected Mr Cundill in the event of a change of circumstances. Later, Mr Cundill told both his lawyers and the trustees that he was happy with his living and care arrangements and would not alter them, but also wished to appease the claimant by changing them. This tension, as I have said, makes it inappropriate for any duty to be imposed.
42. If there were such a duty (and I can see that a narrow duty might have arisen in relation to the preparation of the letter of wishes alone), in my judgment there was no breach of that duty. The letter of wishes was a completely common-or-garden document so far as trust practitioners are concerned. It did not however expressly deal with how the payment to the claimant would be affected in the event of Mr Cundill's premature death, which happened. That however does not matter in the light of the fact that there was a clear power to enlarge the class of beneficiaries if the trustees were minded to exercise a discretion in the claimant's favour. On the evidence I have read and heard, they would have been content to exercise their discretion in the claimant's favour had they been happy (which they were not) with the way in which the financial and personal arrangements were carried into effect. I have no doubt that, following Mr Cundill's death, they would also have exercised the discretion in her favour, obtaining the consent of the protector to enlarge the class of beneficiaries. That was mechanics and was not an obstacle. The obstacle was the existence of the discretion, which meant that the trustees could change their mind. There was no getting away from that. That is of the essence in a discretionary trust.
43. In all those circumstances, it seems to me that there is no sustainable claim for negligence against Farrers. Indeed, it is impossible not to read the many reams of paper that have been put before me without feeling a great deal of admiration for the obvious conscientiousness towards the interests of his client, Mr Cundill, that Mr Parry showed and the delicate balance that he sought to achieve between giving effect to his client's wishes and ensuring that he was not the victim of his own folly.
44. It is of course an amazing thing for those of us who do not have access to vast wealth to contemplate being given substantial sums of the order which we are talking about in this case. For all that, this particular sum of £5 million was a drop in the ocean for Mr Cundill, whose trust fund was worth over $300 million. I bear in mind therefore that we are not talking about, from Mr Cundill's perspective, life-changing amounts, but from the claimant's perspective of course these were very significant amounts. She was however only ever to be the recipient of a gift. It was a gift where the donor was to be a trust fund. Having determined that it was not prepared to make an outright gift upfront, the donor was entitled to review its decision before it came to approve the gifts which technically were during his lifetime to be made to Mr Cundill, but knowing he was going to make a gift of the sums in question to the claimant. The claimant ran the risk of the donors, being the trustees, changing their minds, and there was no duty on Mr Parry or his firm to prevent that state of affairs from coming about. Accordingly, the claim must be dismissed.
45. I need not in those circumstances consider the defence of limitation which is also raised.