England and Wales High Court (Queen's Bench Division) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION

		Royal Courts of Justice Strand, London, WC2A 2LL
		20/12/2006

Mr Justice Nelson :

1. The Claimants seek to set aside a consent order of 11 March 2005 recording the terms of settlement of the action between the parties, reached in a telephone call at 1140 a.m. on 25 February 2005, on the grounds that the Defendant is estopped from asserting the validity of the consent order by reason of the unconscionable conduct of his solicitors, or alternatively on the grounds that the settlement was vitiated by unilateral mistake on the part of the Claimants, that mistake being contributed to by the conduct of the Defendant's solicitors. Whether the case is pu t on the basis of mistake, estoppel or unconscionable conduct, at its heart lies the assertion that the Defendant's solicitor was under a duty to inform the Claimant's solicitor of an earlier offer to settle the matter which she had sent by fax at 10.41 a.m. on 25 February 2005, but which the Claimant's solicitors had not received and knew nothing of during the settlement discussions at 11.40 a.m. on the same day. As an alternative to setting aside the consent order a declaration is sought by the Claimants.

The Facts

2. Michael Adams suffered exceptionally grave injuries in the Ladbroke Grove rail crash on 5 October 1999. He was then a 36 year old successful American businessman who had recently started a job in the United Kingdom. He commenced proceedings against the Claimant train companies to whom I shall hereafter refer as Thames Trains, on 20 January 2003. Judgment on liability was entered by consent on 21 February 2003. The assessment of damages was fixed to commence on Monday 28 February 2005 with a time estimate of 15 days. Discussions had taken place between the parties in an attempt to settle the matter but no settlement had been achieved. Substantial interim payments had been made (the amount of which could not be agreed) together with Part 36 payments, firstly on the basis of a structured settlement, and then on the basis of a lump sum award. As at Friday 25 February 2005 the sum of US$9.3M net of interim payments was in court. The notice of 7 February 2005 resulting in that amount in Court stated that the exact amount of interim payments made, remained to be agreed.
3. At about 9.45 a.m. on 25 February 2005 Ms Louise Christian of Christian Khan, Mr Adams's solicitor, telephoned Mr Rae-Reeves of Halliwells, Thames Trains' solicitors. She sought an increase on the US$9.3M in court, explaining that Mr Adams had been told by his investment advisor that he needed a minimum of $10M to invest for him. Mr Rae-Reeves informed her that there were no further monies available and that the trial would therefore proceed.
4. In accordance with her instructions from Mr Adams, Louise Christian agreed with her partner, Nicola Bould, that she should send a fax to Thames Trains' solicitors explaining that Mr Adams was prepared to accept the US$9.3M in court, subject to three conditions. The fax was sent to Halliwells at 10.41 a.m. on 25 February 2005, in the following terms:-

"Dear Sirs

Re: Michael Adams v Thames Trains Ltd (1) and Railtrack plc (2)

The Claimant is prepared to settle his claim by accepting the Defendants' payment into Court. This settlement is on the basis that interim payments made to the Claimant are deemed to write off past loss so that the Claimant will receive a cash sum of the US$9.3M which has been paid into Court by the Defendants.

The Defendants are to pay the Claimant's costs on the standard basis to be assessed if not agreed. There are to be no deductions from damages in respect of interim payments made on account of costs or disbursements. The interim payments made on account of costs and disbursements by the Defendants will be deducted from the final total of costs to be paid to the Claimant.

Please confirm by return of fax that the terms of settlement are agreed so that we can notify the Court and all witnesses."

5. Whilst Ms Bould and Ms Christian were dealing with and sending the 10.41 a.m. fax, Mr Rae-Reeves, in spite of saying that no further monies were available, was consulting with his insurer clients to establish whether they would be willing to pay any more money to attempt settlement of the trial. He obtained such instructions and phoned Ms Christian again at 11.40 a.m. He had not by that time received the 10.41 a.m. fax from Christian Khan and was therefore wholly unaware of its existence or content. When he spoke to Louise Christian again at 11.40 a.m. he offered a further $500,000. She told him that she had sufficient instructions from her client to say immediately that such a sum was acceptable. They discussed and resolved between them the issues as to interim payments writing off past loss, the payment of the Claimant's costs on a standard basis, and no deductions from damages in respect of interim payments made on account of costs or disbursements. At no time during the telephone conversation did Louise Christian inform Mr Rae-Reeves of the 10.41 a.m. fax or its content. She did not know whether Ms Bould had sent it but in any event she formed the view that she had no duty to inform Thames Trains' solicitors of the offer to settle contained in that fax. It did however become clear to her during the course of the conversation with Mr Rae-Reeves that he clearly had not received it.
6. After accepting Mr Rae-Reeves' offer Ms Christian spoke to Nicola Bould, and asked her whether the fax had been sent. Nicola Bould spoke to her secretary who confirmed to her and Ms Christian that a fax transaction report said that the letter had been sent. She also asked Ms Bould to send a second fax confirming in writing the terms of the agreement which had been reached during the 11.40 a.m. telephone call and withdrawing the 10.41 a.m. fax which had not been answered. That second fax confirmed the settlement agreement reached on the 11.40 a.m. telephone call between Ms Christian and Mr Rae-Reeves. It accurately recorded the terms agreed on the telephone save that it omitted a reference to the agreement that no deductions would be made from the Claimant's damages in respect of interim payments of costs. The consent order which was signed by both parties on 3 March 2005 corrected this omission. The final sentence of this second fax states that it "supercedes the earlier fax which was sent in error". It should have stated that the first fax was withdrawn. Ms Christian describes this erroneous statement as being her personal responsibility. It is said in Nicola Bould's statement that they needed to withdraw the first fax as quickly as possible as it appeared that Halliwells had not received it. The time when the second fax was sent is not known but it can be inferred that it was sent soon after the telephone discussion starting at 11.40 a.m. had concluded. There is no evidence as to when this second fax arrived at Halliwells.
7. The 10.41 a.m. fax was received by Mr Rae-Reeves' assistant on her computer at 1331 on 3 March 2005. Halliwells had a system at their offices whereby fa xes could be sent directly to an individual personal computer and appeared contained in an e-mail. There was however a systems error at the material time which meant that although faxes were leaving the sender's location showing a successful transmission, they were not arriving on the recipient's personal computer.
8. When the fax of 10.41 a.m. on 25 February 2005 was received by Mr Rae-Reeves on 3 March 2005 he concluded that it was an acceptance of the initial offer of US$9.3M plus interim payments and costs which were the same terms that had been offered by the Claimants at the meeting between the parties on 1 February 2005. There was in his opinion a concluded contract at that time, and any further purported agreement at 11.40 a.m. offering a further $500,000 was based on a mistake, namely ignorance of the fact that the previous offer had already been accepted by the Defendant's solicitor's first fax at 10.41 a.m. Alternatively, ha d the Defendant's solicitors' fax of 10.41 a.m. constituted an offer and had it been brought to his attention he would have accepted it.
9. Thames Trains sought to set aside the consent order which had been signed in ignorance of the Defendant's solicitor's fax of 10.41 a.m., but a sealed consent order cannot be set aside without the agreement of the parties except in a fresh action commenced for that purpose. No such consent was forthcoming and the application was dismissed. As a consequence the proceedings before me were issued in May 2005.
10. The application to set aside the sealed consent order made in the main action was based solely upon the contention that the 10.41 a.m. fax constituted an acceptance of the Part 36 payment. In the proceedings before me it was initially asserted that the 10.41 a.m. fax was an acceptance of the money in Court on terms already agreed at a meeting on 1^st February 2005 and that there was no consideration for the additional $500,000 which the Claimants were not therefore liable to pay. This contention was abandoned by letter dated 15 March 2006 so that the issues before me are estoppel, mistake, and unconscionable conduct by the Defendant's solicitor, arising out of her failure to inform Mr Rae-Reeves of the 10.41 a.m. fax when, as the Claimants contend, she was under a duty to do so.

The evidence.

11. Mr Rae-Re eves and Ms Christian both gave evidence. They confirmed the facts set out above. Mr Rae-Reeves sought to state what he would have done if placed in a similar situation to that of Louise Christian but an objection was made to the adducing of this evidence and the line of questioning was not pursued. Ms Christian said that on 25 February 2005 her client, Mr Adams, was in the United States. She said that she would not answer the question put to her by Mr William Stevenson QC on behalf of the Thames Trains as to whether Mr Adams had made arrangements to fly to England for the trial. That was privileged she said. It was put to her that he had no plans to travel to the UK to which she replied, "I remain silent". It was put to her that had she been in Mr Rae-Reeves' position she would have expected him to tell her of the 10.41 a.m. fax and its content. She replied that she would have been very upset that the letter had not reached her, not with him, but with her office. She said that a solicitor in such a situation has an overriding duty to his client and must act in accordance with that duty. She rejected the word 'unconscionable' as a description of her conduct. She acted in accordance with her duty to her client whose overriding interest would be to have the extra $500,000. She repeated that she would have been very upset with her office, not with Mr Rae-Reeves, if he had been in her position and failed to tell her about the first fax.

The submissions.

1. Thames Trains.

12. Mr William Stevenson QC submitted on behalf of Thames Trains that Ms Christian was under a duty to inform Mr Rae-Reeves of the 10.41 a.m. fax. It was her failure to speak to Mr Rae-Reeves of which complaint was made, as the Claimants were not saying that Ms Christian had said or done anything, apart from remain silent, which encouraged Mr Rae-Reeves to believe that Mr Adams would not accept the money in Court. The duty of a solicitor is regulated by the Solicitors Act 1974, the Solicitors Practice Rules 1990, the CPR and common law. As an officer of the Court, a solicitor is required to maintain a high level of professional conduct. Accordingly the duty of a solicitor is different and higher than a litigant in person.
13. Practice Rule 1.01 of the Solicitors Practice Rules includes the duty to act in the best interests of the client but equal weight under the Rule is given to the solicitor's independence and integrity, his good repute and the profession's good repute and the solicitor's duty to the Court. Where there is a conflict, the Guidance Notes under 1.02.6 state that the public interest in the administration of justice must take precedence. Mr Stevenson submits that any conduct which is opportunistic or amounts to sharp practice is not in the interests of the administration of justice, that the law should support commercial and professional probity, that solicitors should be able to rely upon their fellow members to act fairly and in a frank and straight forward manner, and that the best interests of litigants are best promoted by a transparent and fa ir negotiation process. Thus the statutory duty of a solicitor to his lay client is not absolute, but qualified by considerations of public policy.
14. CPR Rule 1.3 requires a party and hence the solicitor acting for him, to 'help the Court to further the overriding objective'. A solicitor has therefore to assist in ensuring that cases are dealt with justly, that parties are put on an equal footing and that costs are saved. Solicitors, as officers of the Court have to be truthful, cite all relevant authorities and co-operate in the proper administration of justice.
15. Rule 19 of the Solicitors Practice Rules, which Mr Stevenson emphasises are statutory, requires that a solicitor must act towards other solicitors with 'frankness and good faith consistent with his or her overriding duty to the client'. A solicitor must not engage in deceitful conduct towards another solicitor. Thames Trains submit that Ms Christian was not frank and that her silence could properly be described as deceitful as she knew that the fax offering to accept the US$9.3M in Court was intended to provide a platform for the settlement of the action, that US$9.3M net of interim payments was a fair and just settlement which she had express instructions to accept, that if Mr Rae-Reeves had received and read that fax the action would have been settled for US$9.3M as a lump sum rather than US$9.8M, that Mr Rae-Reeves had not received or read her fax, and that Mr Rae-Reeves had concluded the agreement to pay the additional $500,000 because of a misapprehension on his part, namely that Mr Adams would not accept the lump sum of US$9.3M in Court. Ms Christian's refusal to say whether Mr Adams had made any plans to travel to London to attend the trial on 28 February gave rise to the inevitable inference that no such plans had been made and Ms Christian knew it. That is why she knew that she would conclude a final settlement on 25 February. It was however accepted on behalf of Thames Trains that Ms Christian was under no duty to inform Mr Rae-Reeves of her client's travelling plans. What she should have told Mr Rae-Reeves was that a decision to accept the US$9.3M in Court, subject to the three other conditions being satisfied, had been made and communicated by the 10.41 a.m. fax. The fact that Mr Adams was prepared to accept the US$9.3M in Court was the essential determinant to reaching a compromise. The other issues were subsidiary and capable of resolution.
16. During the course of argument Mr Colin McCaul QC on behalf the Defendant submitted that there was no duty on Ms Christian to inform Mr Rae-Reeves of the 10.41 a.m. fax, but conceded that she would have had a duty if a specific direct question, such as, 'Are you going to reject the Part 36 payment?' was asked. Mr Stevenson submits that this concession shows illogicality of the Defendant's position. If there is a duty to give information it is surprising that it only arises if the person who does not have the information happens to ask a question about it.
17. The duty also arises as a matter of public policy as Mr Justice Walker, as he then was, said in Ernst & Young v Butte Mining plc [1996] 1 WLR 1605. He there said that whilst solicitors do not owe each other duties to be friendly, chivalrous or sportsmanlike they must be scrupulously fair and not take unfair advantage of obvious mistakes.
18. The duty upon Ms Christian also gives rise to estoppel by acquiescence or representation as defined by Lord Wilberforce in Moorgate Mercantile Co Ltd v Twitchings [1977] AC 890. See also The Henrik Sif [1982]1 Lloyds Reports 456 and The Stolt Loyalty [1993] 2 Lloyds Law Reports 281. The Defendant is estopped from establishing a case at variance with the offer to accept the US$9.3M in Court and seek agreement on other aspects of the claim. Mr Stevenson submitted that the estoppel could be put in a number of ways. Thus it could be said that Mr Adams was estopped from asserting that the compromise and sealed consent order represented the true intention of the parties, or that Mr Adams was estopped from asserting that the action was settled by a payment of the extra $500,000, or that Mr Adams was estopped from denying that the Part 36 offer of US$9.3M was acceptable as the lump sum element of the agreement, or that Mr Adams was estopped from denying that if Mr Rae-Reeves had known of the fax of 10.41 a.m. he would not have offered the additional $500,000, or that Mr Adams is estopped from denying that the Claimants entered into the subsequent agreement at 11.40 a.m. on a mistaken basis, or that it was the conduct of his solicitors which engendered the mistake on the part of the Claimants. Mr Stevenson submitted that the parties were never at idem as to the additional $500,000 and as the consent order did not represent the agreed intention of the parties it should be set aside.
19. In oral submissions Mr Stevenson said that the nature of the estoppel was that Mr Adams was estopped from asserting that there was a concluded agreement at US$9.8M because Ms Christian had a duty to speak but was silent, and it would be unconscionable to hold the Claimants to the bargain when that was based on a misapprehension and ignorance of the fact that Ms Christian had instructions to, and did formally offer to take the money in Court. This should be contrasted with the Defendant's assertion that estoppel did not arise here as the only issue which was estopped was 'that Adams had in fact despatched an earlier lower offer'. Mr Stevenson submitted that that approach was inappropriate as it ignored the contents of the fax and the consequences that arose from it. No agreement would ever have been made on the eventual terms had the fax been received. An empty estoppel devoid of any value, as Mr McCaul submitted, was inappropriate when Thames Trains had been clearly misled and suffered detriment as a consequence.
20. Furthermore, it was submitted on behalf of Thames Trains, the agreement to pay the additional US$500,000 was founded upon a unilateral mistake of fact, namely ignorance on the part of Thames Trains and their solicitors of the 10.41 a.m. fax. This mistake, although not induced by the concealment of Mr Adams' solicitors as it had already been made, was nevertheless encouraged by their silence during the telephone conversation at 11.40 a.m. If there was a duty to speak, the failure to mention the previous offer in the 10.41 a.m. fax amounted to silence leading Thames Trains up the garden path.
21. Mr Stevenson also relied upon the more general doctrine of unconscionability referred to in Mohamed v Farah [2004] NSWSC 482 and the emerging doctrine of mistake and unconscionability set out in Chitty on Contract 29^th Edition at paragraphs 5-012 and 7-111.
22. It was common ground between the parties that when Mr Rae-Reeves made his offer at 11.40 a.m. and it was accepted, any other offer lapsed. The 10.41 a.m. offer was not withdrawn but when the US$9.8M offer was put forward it amounted to a counter offer and rejection of the earlier offer. The offer of US$9.3M then fell away.

2. Mr Adams' submissions.

23. There was no duty on Ms Christian to inform Mr Rae-Reeves either that the 10.41 a.m. fax had been sent or of its contents. A party to litigation is not obliged to be the nursemaid of his opponent and it is only in very rare cases that the law imposes a burden upon lawyers to help their opponent's case. A solicitor's overriding duty is to act in the best interests of his client.
24. The cases such as The Henrik Sif and The Stolt Loyalty, where a duty to assist an opponent's case has been found, are examples of situations where one party has effectively led the other up the garden path. Here, there is no question of Thames Trains' solicitors having set out on a particular course and Mr Adams' solicitors going along with it or encouraging it. All that occurred was that Thames Trains made an offer to settle and Mr Adams' solicitors accepted that offer.
25. There is, Mr Colin McCaul QC submitted on behalf of the Mr Adams, no duty to disclose such an offer unless the express question "Are you going to reject the Part 36 payment?" was asked. Silence therefore rules: if the question is not asked no disclosure has to be made. Mr McCaul's submissions were forcefully deployed. He gave examples which, he submitted, demonstrated that the Claimants' proposition that there was a duty to inform in these circumstances was absurd. Thus for example if A despatches an offer by first class post to B which does not arrive and B telephones in ignorance of the letter and makes a better offer which is accepted, that agreement is binding in the circumstances. The same applies, Mr McCaul submits, to a letter sent by courier who gets lost and in the meantime the other party phones a better offer which is accepted. The same would also apply in a case where A and B were standing on other sides of a canyon. A shouts across an offer to settle the dispute but a gust of wind carries his words away and B does not hear them. B then shouts across an offer to A which is more beneficial to A than the offer that he has just shouted.
26. In all those situations it would be absurd, Mr McCaul submitted, to state that an agreement has not been finalised by the later offer being accepted. It is the acceptance which crystallises the matter in the law of contract. When a further offer is made all other offers have no value and fall by the wayside. Offer and acceptance is the way of the world. Thus if A makes an offer to B to sell shares on a rising market and the letter is delayed and the shares dive, B, who would have accepted the shares at the first price, is now able to buy them at a lower price. That, Mr McCaul submits, is 'the way the cookie crumbles'.
27. There would equally be no duty to disclose a lower offer which had not been transmitted in oral negotiation. Thus if junior counsel is despatched to make an offer to the other side but pauses on his way to answer his mobile telephone and in the meantime the other side come up to leading counsel and make a higher offer there is no duty upon leading counsel or his solicitor to disclose the fact that the junior had been instructed to make a lower offer which had not reached them. Mr Stevenson submitted that in all the examples given by Mr McCaul there would be a duty to speak, though this was, he said, less clear in the case of counsel and solicitor oral negotiations.
28. There was no unconscionable or deceitful conduct here and if there is no duty then there is no possibility of civil proceedings arising out of paragraph 19.01.1 of the Solicitors Rules. Even if an act of professional misconduct had occurred, it would not in itself confer a cause of action on Thames Trains. The conduct of Ms Christian could not be said to be unconscionable where, as here, she didn't know whether the fax had been sent or not when she received Mr Rae-Reeves' telephone call. There cannot be a duty to tell him of a fax which she doesn't know has been sent. If it had not been sent it would be wrong for her to have told him of her client's instructions. Had she done so she would have been in breach of the rules herself by giving Mr Rae-Reeves privileged information.
29. Estoppel could not arise where there was no duty to disclose but in any event Thames Trains' argument was ill-conceived. By not mentioning the 10.41 a.m. fax either Mr Adams represented that no such offer was in existence which would be estoppel by representation or acquiescence, or Thames Trains' better offer carried with it the assumption on Thames Trains part that no lower offer had been despatched by Mr Adams and that his failure to correct that assumption meant there was a shared assumption that no lower offer had been despatched, which is estoppel by convention. In either of these cases, Mr McCaul submitted, the only estoppel which arose was that Mr Adams would be estopped from asserting that he had actually despatched an earlier lower offer. It would therefore have no impact whatsoever on the 11.40 a.m. agreement. Furthermore it was the Claimant's own equipment failure, namely their fax system, which caused them to make the offer of a further US$500,000. In such circumstances the Claimants could not have relied upon any conduct by Mr Adams' solicitors in making their offer. Nor could there be any detriment as if Ms Christian should have responded to the enhanced offer by stating that she had despatched her earlier offer, all she would have to say was that was that she withdrew her earlier offer and accepted Thames Trains increased offer.
30. In both The Henrik Sif and The Stolt Loyalty the parties were estopped from asserting something different from that which their assertions or conduct had led the other side to believe. This does not arise here, the offer was already in existence and no representation about it was made.
31. There was no unconscionable conduct which promoted any mistake which could lead the Court to say that the agreement was avoided. The Court should beware falling into the trap that Barret J did in Mohamed v Farah where a general concept of unconscionability arising from an inherent jurisdiction was relied upon. The English courts have not followed the route of saying that if it seems unjust a remedy must be found.
32. In both The Henrik Sif and The Stolt Loyalty one party deliberately encouraged the other in its mistaken belief. The same was also true in the Ernst & Young case where the solicitor's conduct was a major contributing cause of the mistake. The facts here should be contrasted. There is no mistake which needs to be corrected but an alleged duty to inform. There is no 'leading up the garden path' in this case such as existed in The Henrik Sif and The Stolt Loyalty and Ernst & Young. There is no entering into a contract under a self induced misapprehension and hence no mistake. (Chitty paragraph 5-013.)
33. The doctrine of mistake and unconscionability only applied in extreme cases where special disability applied. This was not the case here. Mr McCaul submitted the law of business could not work if a party had to disclose every offer made if sent, but not received. There was nothing unconscionable about failing to disclose the contents of an offer which never gets delivered because it is stuck in the post room of the sender.

The Law.

34. A solicitor's overriding duty is to his or her client. The Solicitors Rules, which are statutory, impose a duty of good faith upon the solicitor so that he must act towards other solicitors with frankness and good faith consistent with his or her overriding duty to the client. (Practice Rule 19.1)
35. A solicitor is an officer of the court and accordingly owes a duty to act honestly and with integrity in the proper administration of justice. CPR Rule 1.3 requires a party, and hence the solicitor appearing for it, to help the court to 'further the overriding objective'. A solicitor must therefore deal with cases justly and assist the court, for example, by citing all relevant authorities even those which are against his client's interest.
36. It is clear that a solicitor's duty to the cour t may bring him or her in conflict with his or her duty to act in the best interests of the client. The basic principles applicable to a solicitor include under Rule 1.01 of the Practice Rules 1990, the solicitor's independence or integrity, the solicitor's duty to act in the best interests of the client, and the solicitor's duty to the court. The conflict between these principles is recognised in the Guidance Notes (The Guide to the Professional Conduct of Solicitors 1999) where in 1.02.6 it is said:-

"Whe re two or more of the principles in Practice Rule 1 come into conflict, the determining factor in deciding which principle should take precedence must be the public interest, and especially the public interest in the administration of justice."

37. There is however no general duty upon one party to litigation or potential litigation to point out the mistakes of another party or his legal advisors. Each situation must be judged in the light of its particular circumstances. (The Stolt Loyalty [1993] 2 Lloyds Reports at 290.) In the Court of Appeal decision in the Republic of India and the Government of the Republic of India (Ministry of Defence) v India Steamship Co. Limited (The "Indian Grace")(No.2) 2 Lloyds Reports 12 case Lord Justice Staughton said:-

"As Mr Rokison put it, a party to litigation is not obliged to be the nursemaid of his opponent, at any rate if the opponent is not an untutored individual but as well acquainted with commercial litigation as the Government of India. The law does sometimes impose a burden on solicitors and counsel to help their opponent's case; but the burden should only be imposed when it is truly necessary as otherwise, to quote Griffiths LJ in Paal Wilson & Co A/S v Partenreederei Hannah Blumenthal [1983] 1 AC 854, the client will be tempted to ask 'Whose side are you on'. "

38. In Ernst & Young Mr Justice Walker said:-

"Heavy, hostile commercial litigation is a serious business. It is not a form of indoor sport and litigation solicitors do not owe each other duties to be friendly (so far as that goes beyond politeness) or to be chivalrous or sportsmanlike (so far as that goes beyond being fair). Nevertheless, even in the most hostile litigation (indeed, especially in the most hostile litigation) solicitors must be scrupulously fair and not take unfair advantage of obvious mistakes…. The duty not to take unfair advantage of an obvious mistake is intensified if the solicitor in question has been a major contributing cause of the mistake."

39. On the facts of that case the court held that misleading conduct on the part of the plaintiff's solicitor had been the major cause of the Defendant's solicitors mistaken belief that the plaintiff was not about to serve notice of discontinuance when in fact it was, and that therefore the service of the notice was an abuse of process and would be set aside. In the course of his judgment Mr Justice Walker did not criticise the plaintiff's solicitor for failing to mention Ernst & Young's intention to discontinue as she did not want to alert the opposition to the idea. The judge described that as 'plainly unexceptionable' and noted that the opposing solicitor also deliberately did not refer to discontinuance. Nevertheless the duty stated was the duty not to take unfair advantage of an obvious mistake, a duty which would exist even if the solicitor had not been a major contributing cause of the mistake.
40. The solicitor's duty to be scrupulously fair must apply in all cases whether he is dealing with a solicitor opponent or a litigant in person. The difference lies in what a solicitor can properly expect an experienced solicitor opponent to be aware of compared with that which a litigant in person might know. Whether or not a solicitor has taken unfair advantage of an opponent must be judged upon the facts, and relevant to that determination will be the experience and knowledge of his opponent.
41. I am satisfied that a breach of the rules of professional conduct will not in itself give rise to a cause of action, though consideration of the duties and responsibilities of a solicitor will illuminate and assist in the determination of whether estoppel or mistake prevent the Defendant from relying upon the agreement made at 11.40 a.m.
42. The underlying basis of equitable estoppel in cases such as this is clearly set out in The Henrik Sif by Mr Justice Webster. Relying upon the dictum of Lord Wilberforce in Moorgate Mercantile Co Ltd Mr Justice Webster said:-

"..the duty necessary to found an estoppel by silence or acquiescence arises where 'a reasonable man would expect' the person against whom the estoppel is raised 'acting honestly and responsibly' to bring the true facts to the attention of the other party known by him to be under a mistake as to their respective rights and obligations."

43. In The Stolt Loyalty Mr Justice Clarke, as he then was, cited the above passage from The Henrik Sif and Lord Wilberforce's dictum in Moorgate Mercantile Co Ltd in determining the circumstances in which a person may be held to be under a legal duty to take action of some kind rather than remain silent or inactive. He stated that the underlying basis for the existence of all equitable estoppel was that it must be unconscionable to allow the party estopped to deny that which he had allowed the other party to assume to be true.
44. The estoppel which arises in cases where it is said there is a duty to speak is often described as estoppel by acquiescence. Estoppel by convention may also however arise in similar circumstances. In Republic of India it was said by Lord Steyn that estoppel by convention may arise where parties to a transaction act on an assumed state of facts or law, the assumption being either shared by them both, or made by one and acquiesced in by the other. Its effect was to preclude a party from denying the assumed facts or law if it would be unjust to allow him to go back on the assumption. The House of Lords in The Republic of India considered whether estoppel by convention and estoppel by acquiescence were but aspects of one overarching principle but did not so restate the law. It is however the case that both estoppel by convention and estoppel by acquiescence and general equitable estoppel are founded upon concepts of unconscionability, honesty and responsibility, the expectations of a reasonable man, and detriment to the party making the mistaken assumption. Although Mr Stevenson on behalf of the Claimants says this is solely a case of estoppel by acquiescence it seems to me that estoppel by convention also falls for consideration.
45. The more general doctrine of mistake and unconscionability referred to in Chitty on Contract para 5-012 is in my judgment properly restricted to cases of 'special disability' such as poverty, ignorance or lack of advice none of which apply here. Nor would I accept a general inherent jurisdiction in the court to set aside a compromise which it regards as unjust as Mr Justice Barret did in the Australian case of Mohamed v Farah. I do not consider that the English courts have espoused such a broad general inherent jurisdiction. My approach is therefore guided by the approach of the courts set out in The Henrik Sif, The Stolt Loyalty and Ernst & Young.
46. Mistake is a narrower doctrine than the forms of equitable estoppel being considered here. A unilateral mistake which does not relate to the terms of the contract will not render that contract void. Chitty para 5-065. There is however an overlap between mistake or misapprehension in the broader sense and the doctrine of estoppel as the case of O T Africa Line Ltd v Vickers plc [1996] 1 Lloyds Law Reports 700 demonstrates. In that case Mr Justice Mance, as he then was, proceeded on the basis that the party who had made a mistake between pounds and dollars in a figure offered in settlement, would not be bound if they could show that the other party or those acting fo r it either knew or ought to reasonably to have known that there had been such a mistake. It is I think implicit in his judgment that a duty to speak rather than remain silent arose in those circumstances. On the facts of that particular case he found that there was nothing in the conduct of the party who had not made the mistake which made it inequitable for them to hold the other party to the apparent bargain.
47. I accept the agreement of Thames Trains and Mr Adams that when Mr Rae-Reeves made his offer at 11.40 a.m. the earlier offer lapsed. Alternatively it was withdrawn by the process of negotiations and agreement at 11.40 a.m. and by the second fax sent after that discussion.

Conclusions.

48. By 25 February 2005, one working day before the commencement of the trial on quantum, the parties had been engaged in many months of settlement discussions.
49. Whatever the prior differences had been between the parties they had been moving closer if not inexorably towards a settlement of Mr Adams' claim. Once Ms Christian had been informed by Mr Rae-Reeves that there were no further monies available she obtained instructions to settle the matter on the terms set out in the 10.41 a.m. fax. The fact that she declined to answer questions about Mr Adams' travelling plans from the USA to the UK for the trial on quantum suggests that Mr Adams did not intend to travel to the United Kingdom for the beginning of the trial. It is reasonable in such circumstances to infer that Ms Christian expected to be able to conclude a final settlement of the action before the trial commenced. In other words she was confident that a reasonable compromise would be reached in relation to the three issues set out in the 10.41 a.m. fax to which the acceptance of the US$9.3M in Court was subject. Mr Rae-Reeves on the other hand, although prepared to inform Ms Christian that no further monies were available, felt it appropriate to find out from his clients whether they would in fact pay any more to settle the claim.
50. The trigger for Ms Christian communicating her client's preparedness to accept the money in Court, subject to the three conditions, was Mr Rae-Reeves' statement that no further monies were available. It turned out to be an inaccurate statement though I am content to accept that Mr Rae-Reeves believed it to be correct at the time he made it.
51. The reason why the fax was not received by Mr Rae-Reeves was entirely due to the systems error in his office. Had he received the 10.41 a.m. fax it is probable that a settlement would have been reached upon t he terms therein set out and no further payment would have been offered.
52. Ms Christian clearly became aware as soon as Mr Rae-Reeves made the increased offer of the additional US$500,000 that her fax could not have been received but I am satisfied that she did not know at that time whether this was because it had not been sent, or whether it had been sent, but had simply not been brought to Mr Rae-Reeves' attention. The fax had in fact been sent but Ms Christian was not to know this until she had confirmed with Nicola Bould and her secretary that a successful transmission report had been obtained in relation to that fax. As that fax contained an offer to accept the money in Court, not an acceptance of the money in Court, Ms Christian was entitled to withdraw that offer at any stage before acceptance. In such circumstances and by whatever test her conduct is assessed, it cannot properly be concluded that she owed any duty to inform Mr Rae-Reeves of the 10.41 a.m. fax or its contents until she had checked whether it had been sent. If it transpired that it had not been sent and she had informed Mr Rae-Reeves of its content she would have been in breach of her duty to her client in the passing on of privileged information, namely his instructions to her. Her conduct in not informing Mr Rae-Reeves of the fax or its content at that stage cannot in my judgment be described as unconscionable, unfair or taking advantage of her opponent.
53. Should she however, given her duties as a solicitor, and knowing that the fax had not been received, ha ve continued with the conversation and entered into negotiations with Mr Rae-Reeves as if the fax had never been sent? I have considered whether a reasonable man would expect Ms Christian, acting honestly and responsibly, to bring to Mr Rae-Reeves attention the existence and content of the offer in the 10.41 a.m. fax. I have also considered whether her conduct in not doing so can properly be described in all the circumstances as unconscionable or 'deceitful' or 'sharp practice' or taking an unfair advantage of an obvious mistake. The relevant factors which brought the parties to this situation are in my judgment as follows:-

1. Mr Adams and Thames Trains were both prepared to settle at or around the money in Court.

2. Mr Rae-Reeves said to Ms Christian that no further monies were available beyond the money in Court

3. Ms Christian's accepted that, and consequently sent the 10.41 a.m. fax offering to take the money in Court subject to the three conditions.

4. Mr Rae-Reeves office fax system failed to deliver the fax to him

5. Ms Christian failed to inform Mr Rae-Reeves of the 10.41 a.m. and its contents

6. Mr Rae-Reeves made an increased offer at 11.40 a.m.

7. Ms Christian accepted that offer.

54. All these factors were relevant to what ultimately happened. The acts or omissions of each side were responsible for the events which occurred. Thus if Mr Rae-Reeves had not informed Ms Christian that no further monies were available, but simply said that he would take further instructions, the 10.41 a.m. fax would not have been sent. What Mr Rae-Reeves said to Ms Christian about no further monies being available was inaccurate, even though I accept he thought it to be true when he told her. If Mr Rae-Reeves had known of the existence and content of the fax of 10.41 a.m. he would not have made the increased offer. But there were two causes of his lack of knowledge, firstly his own office fax system had failed to deliver the fax to him and secondly, Ms Christian did not inform him of the fax or its existence.
55. Ms Christian was entitled to withdraw the offer at any time. It is accepted by the parties that it did indeed lapse when Mr Rae-Reeves made his increased offer. This either constituted a counter-offer, even though he had no knowledge of the original offer, or the original offer simply lapsed as soon as another offer was made. For my part I would add that the negotiation and the acceptance of the 11.40 a.m. offer also amounted to a withdrawal of the original offer as did the contents of the second fax accepting the 11.40 a.m. offer and stating that the first fax was superceded. The fact that this second fax was ambiguously stated does not prevent it operating as a withdrawal of the original offer, if that had not already lapsed. It is important to note that Mr Adams was entitled to change his mind at any time and withdraw the offer before it was accepted, whatever prompted his change of mind.
56. In these circumstances I do not consider that a reasonable man would expect Ms Christian, acting honestly and responsibly, to have informed Mr Rae-Reeves of her earlier offer. Her conduct was not unconscionable, nor deceitful, nor sharp practice, nor was she taking unfair advantage of Mr Rae-Reeves ignorance of her offer, given, in particular, that it had only been made as a result of him inaccurately informing her that no further monies were available, and that he had failed to receive it because of systems failures within his own office. She was not therefore, in my judgment, on the particular facts of this case under any duty to speak. She was entitled to stay silent, act in her client's best interests and accept the increased offer. Had she been asked a specific question she may have been required to answer it depending on its terms, but she was not. As Thames Trains conceded she did nothing to encourage Mr Rae-Reeves 'mistake' save by her silence.
57. It follows that if she was under no duty to inform Mr Rae-Reeves of the 10.41 a.m. fax and its content during the telephone call at 11.40 a.m. she was under no duty to inform him of the offer later, after she had discovered that the fax had in fact been sent. Courtesy may well have dictated that she should have informed him that the offer had been sent but was now withdrawn, but she was not, as a solicitor and officer of the court, under a duty to so inform him.
58. She could, for example, as a matter of courtesy, have said to Mr Rae-Reeves, as soon as she realised in the 11.40 a.m. conversation that he was proposing to offer more money, that she had sent a written offer to accept the US$9.3M in Court subject to conditions after she had been informed by him at 9.45 a.m. that no further money was available, but now that she appreciated that more money was in fact available that offer was withdrawn. She was not however under any duty to so inform Mr Rae-Reeves during the 11.40 a.m. telephone conversation.
59. I therefore conclude that no estoppel arises here. Had I found that a duty to speak did exist in this case I would not have construed the doctrine of equitable estoppel in such a narrow and convoluted way as Mr McCaul submitted I should. Had there been a duty to speak, Ms Christian would have been estopped from asserting that the matter had been settled at US$9.8M, or from asserting that more money than US$9.3M was needed to achieve settlement of the claim. Estoppel is an equitable doctrine and not one which works in such a mechanistic way as Mr McCaul's submission suggests. Nevertheless the issue does not arise as I am satisfied for the reasons I have given that no duty to speak existed on the facts in this particular case. Each case is fact sensitive. It will depend upon the state of negotiations and what is said and done by and between the parties. In general terms there would in my judgment be no duty to speak in the examples which Mr McCaul put forward, that is the undelivered letter, the lost voice across the canyon, the lost courier and the mobile phone using junior counsel. Each case will depend however upon its own individual facts.
60. The concept of unilateral mistake is difficult to apply to the facts of this case as there was not a self induced mistake but only ignorance of an earlier offer which there was no duty to disclose. The doctrine of mistake in circumstances such as these however operates in a very similar manner to the doctrine of estoppel and as there is no duty to speak, Thames Trains cannot found their case upon mistake.
61. The conclusion I have reached is one which in some ways is counterintuitive in that one would wish the utmost frankness to be used by all solicitors in their dealings with each other and other litigants. Nevertheless I am satisfied that the particular circumstances here as I have analysed above did not require Ms Christian to inform Mr Rae-Reeves of the existence of the earlier offer or its contents and that her duty as a solicitor including her duty to the proper administration of justice, did not require her to give him this information. The claim therefore fails on duty, estoppel, mistake and unconscionable conduct and must accordingly be dismissed.