England and Wales High Court (Technology and Construction Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION TECHNOLOGY AND CONSTRUCTION COURT

		Royal Courts of Justice Strand, London, WC2A 2LL
		27th January 2012

 


Mr Justice Akenhead:

1. The Court returns to this case, having handed down its first judgement on 15 December 2011. The Court adjourned the Claimant's strike-out application on the basis that it needed a reasonable opportunity to consider, digest and respond to very late evidence submitted by the Defendants; there was also an order about a draft expert report referred to in that evidence to be disclosed, privilege thereto having been waived. Matters have moved on however and, save in relation to one particular area of the further draft Amended Defence and Counterclaim, the Claimant has indicated that it no longer wishes to pursue its application in the light of the Defendants evidence and of the draft expert report. However, costs issues remain and therefore it is, somewhat unfortunately, necessary to consider whether the Defence and Counterclaim, as amended or otherwise, would have been struck out by reason of the initial absence of any expert evidence supporting the professional negligence allegations made in the Defendants pleading.

The Background

2. The Overalls owned some land at Kiln Lane, Bourne End, Bucks for which they hoped to secure a planning permission. In 2008, he or they retained the Claimant to provide assistance in connection with it appears further planning applications and possibly any planning appeals in relation to this site. Mr Dale was the Claimant's Managing Director and apparently he has held a Diploma in Landscape Architecture and been an Associate Member of the Landscape Institute for 27 years; from 1997 he has become a Chartered Landscape Architect. The business of the Claimant is Landscape Architects.
3. There were two related planning applications which were ultimately to be pursued in relation to the site relating to the provision of a single three bedroom dwelling. Each involved a different access to the site, one off Kiln Lane and one via Grassy Lane. Both applications were turned down and Mr Overall appealed in 2010. By this stage, Mr Overall had a team, including the Claimant, experienced planning Counsel, a specialist planning solicitor (Mr Brearley) and a planning consultant.
4. Much of what is the subject matter of the Overalls' complaints relates to a report which Mr Dale produced for the planning appeals in 2010. It is said that he should have produced a full "Landscape and Visual Impact Assessment" ("LVIA") report. Although the report which Mr Dale apparently did produce was entitled Landscape and Visual Impact Assessment, and was attached apparently to his proof of evidence for the appeal, he now says that it was obvious that it was not a full LVIA report. The local authority produced a report from a Mr Etchells which was a full LVIA report which, in Mr Dale's statement for this application, he says was "a good document that had been prepared thoroughly and independently"; he formed the view that "any report prepared by a proper independent expert using the full GLVIA methodology would come to similar conclusions". He says that he believed that, if he had produced such a report, it would only have shown that both schemes "had an adverse impact on the local character in landscape". He therefore decided not to put in any such report. He says that he is sure that the other members of the team would have realised that his report was not a full LVIA.
5. It is said that, when the planning appeals were heard, and Mr Dale was cross-examined he had to make concessions about his report not being a full LVIA one.

The Proceedings

6. The Claimant issued against Mr Overall three County Court claims in the Swindon County Court in March 2011, the total sum claimed being £10,623.77. The composite Defence and Counterclaim, supported by a Statement of Truth from Mr Overall, initially pleaded that the contract was with Cookham Construction Ltd, albeit latterly it is now said that this was not correct and that the contract was with Mr and Mrs Overall. The pleading set out some of the background facts, partly as set out above, and asserted that by way of express or implied agreement the Claimant was required to undertake formal LVIAs but failed to provide them. Paragraph 13 pleaded the case in breach of contract and by way of negligence for the failure to prepare or supply reports compliant with the GLVIA methodology, the provision of reports which were lacking in a number of material respects, failure to amend reports beforehand, failure to advise that his reports and evidence contained various deficiencies and generally failing to exercise reasonable care and skill in the undertaking of preparatory work in relation to his evidence and reports for the planning appeals.
7. Paragraph 14 of the Defence pleads a total failure of consideration whilst the breach of contract and negligence are also relied upon in the Counterclaim. The causation case is identified along the lines that, if the Claimant had produced LVIA reports or identified deficiencies in the initial drafts, the Defendants would have succeeded on the planning appeals or at least had a significantly better chance of succeeding. It is said that Defendants would have developed the site so that eventually permission for five or six properties valued at £2.5 million each would have been obtained, leaving the site value at a level of at least £5 million. It was said that the site was now only worth £150,000 compared with the greater value that the "site would have attracted up to the Claimant's breach or following the further development of the site". Although a diminution in value and value of lost chance were identified, the quantum was identified as "£TBA". The prayer to the Counterclaim identifies a claim for damages "limited to £150,000, subject to precise quantification in due course on receipt of further evidence".
8. A Reply and Defence to Counterclaim was lodged which took issue with much of the complaints and between August and October 2011 there were various Requests for Further Information and Notices to Admit. As ordered, the Claimant served consolidated Amended Particulars of Claim which identified that the oral retainer was "to provide ecological, arboricultural and Landscape consultancy services on an ad hoc basis in connection with the intended development of the site located adjacent to Kiln Lane ..." Cookham Construction Limited was joined in as a defendant. Further Information provided by the Claimant on 11 October 2011 (at Response 24 stated):

"The Claimant considered whether preparing a full formal LVIA would have been appropriate but decided it was not. The Claimant was of view that any properly independent full LVIA would reach similar conclusions to those reached by Mr Etchells, and that had the Claimant prepared a full LVIA it would [have] damaged (or at least, not improved) the Defendant's prospects of successfully appealing the planning decisions. In reaching this conclusion, the Claimant reasonably relied upon the fact that none of the Defendant's expert planning team (Ms Lambert, Mr Brearley or Dr Mynors) made any adverse comment on the Claimant's landscape and visual survey report."

9. The claims were then transferred to the TCC in London. On 13 October 2011, the Claimant issued an application for the complaints in the Defence and Counterclaim of breach of contract and negligence to be struck out on the grounds that they had no "reasonable grounds for being brought" it being said that the "counterclaim presents allegations of professional negligence unsupported by expert evidence and should be struck out pursuant to the guidance in Pantelli Associates v Corporate City Developments Number 2…" This application was supported by a witness statement of Ms Martineau which sets out the basis for the application. A witness statement from Mr Dale, accompanying the application went into the history in some detail.
10. Notwithstanding that 9 December 2011 was selected as the hearing date, and that the Defendants and their solicitors had had the application and the two supporting statements since mid-October 2011, it was not until a very late stage that the Defendants produced their evidence. The first witness statement of Mr Hitchen addresses in some detail what is described as "staggering" evidence and a "bolt out of the blue", namely the evidence from Mr Dale in effect that he privately acknowledged that a full LVIA report would have supported the local authority's position. Although he argued that no expert evidence was in fact required, it is clear that the Defendant had instructed Mr Clarke in late October or November 2011 as an appropriate expert and Mr Hitchen's statement went into some detail as to what his draft report said. As a result of all this, I ordered that privilege having been waived on this report it should be provided and that the strike out application and the related application by the Defendants to amend their Defence and Counterclaim should be adjourned until 25 January 2012.

The Correspondence

11. The parties have put before the Court not only open but also without prejudice correspondence to identify broadly what was going on in the months leading up to the application to strike out. Initially the Claimant was unrepresented and did not accept a suggestion from the Defendants' solicitors that proceedings should be deferred whilst they provided their clients with advice. In early April 2011, following the issue of proceedings in the County Court, those solicitors asked again for a stay to enable them to investigate the issues. By mid-May 2011, the Claimant was represented by solicitors and pleadings were nominally completed by late June 2011.
12. By mid September 2011 the solicitors had discussed the possibility of mediation but no agreement has been reached. By this stage also, it had become clear that the Defendants and their solicitors had not had retained or sought advice from an expert to support any of their allegations in the Defence and Counterclaim. Thus it was that the Claimant's solicitors wrote on 20 September 2011 referring to the case of Pantelli Associates Ltd v Corporate City Developments No.2 Ltd [2010] EWHC 3189 (TCC) and telling the Defendants' solicitors that "those parts of the amended Defence and Counterclaim that purport to be allegations of professional negligence should be struck out" because there was no independent expert evidence supporting any of them. The response dated 27 September 2011 was reasonably short. The Defendants' solicitors argue that "if you buy a tin of beans, and when you get home you find that you have a tin of soup, there is a breach of contract". Essentially, they were arguing that expert evidence was not required but they also added: "we are not actually at the stage when expert evidence is required". The Claimant's solicitors repeated the arguments in a letter dated 29 September 2011 responded to on 12 October 2011 by the Defendants' solicitors who took issue on the Pantelli case and stated that there was no requirement "that expert input be delivered at this stage".
13. It was in the context of this correspondence that the Claimant issued its strike out application.

Costs of Strike-out Application

14. In the interests of proportionality, I will not reiterate all the arguments which have been made because ultimately I have been asked only to form a view as to what I would have decided if the strike-out application had had to be pursued through to judgement. This is only necessary to enable the Court to address the issue of costs. The argument has taken some two hours in any event, simply dealing with costs. I indicated to the parties that my decision was that the costs of and occasioned by the application to strike out should be the Claimant's costs in the case, so that if it loses the case it will not have to pay the Defendants' costs of the application. These costs are to exclude costs of and occasioned by the preparation of Mr Dale's, Mr Brearley and Mr Overall's (first) witness statements because it is absolutely clear that in substance they are or will form the basis of the substantive witness statements for trial; these are to be costs in the case generally. My reasons otherwise are as follows:

(a) The application to strike out related to Paragraphs 9 to 18 and 20 of the Defence and Counterclaim, without qualification.

(b) However, this application would never have succeeded in full because the Defendants, apart from pleading the case in negligence were also pleading the case based on breach of an express term (Paragraph 9) that the Claimant would, amongst other things, produce "reports that included formal" LVIAs. This was amplified in the Defendants Reply to the Claimant's Part 18 Request for Further Information Responses 9 and 4 which refer to an oral agreement to this effect. Thus, the case based, in part as it was, on breach of this express term was always viable, obviously subject to proof; this part of the case did not necessarily need expert evidence because if the provision of an LVIA report was agreed the failure to provide it was simply a breach of that agreement and could be proved as a matter of ordinary fact. Similar considerations apply with regard to the plea relating to the total failure of consideration; if there was an express term that such a report should be provided and it was not, it is at least arguable that there has been a failure, if not total, of consideration.

(c) This is a case in which the Defendants were making it clear that they did not believe that they needed expert evidence; that is tolerably clear from the correspondence referred to above and their solicitors did not in reality suggest that they were intending to secure such evidence. I do not accept that this was anything other than an honest view but as appear below it was simply wrong. It was therefore legitimate for the Claimant to bring this matter to the attention of the Court by one means or another. It is also clear that it was only belatedly that, at the very least from a belt and braces point of view, the Defendants and their advisers did decide that expert evidence was required to support many of the allegations. However, this only arose at the 11th hour before the December 2011 hearing.

(d) However, the case was also put by the Defendants on the basis of a want of reasonable care on the part of the Claimant and it seems to me inevitable that, to succeed on this part of the case, expert evidence would be required to prove the case and without it the Defendants case could not readily be proved. I take two examples. It is said that the exercise of all due reasonable care, skill and diligence would necessarily involve the provision of a full LVIA report by the Claimant; if the Court was un-persuaded as a matter of fact that there was any express term about this, it would be realistically impossible for the Court to infer that such reports should have been provided simply as a matter of due care, without the assistance of experts in the field in question. Secondly, the causation case relied upon in the Counterclaim is predicated upon what would have happened if an LVIA report had been produced; again, the Court could not readily infer that an LVIA report could have been produced which would have persuaded or stood a reasonable chance of persuading the planning inspector to reach a different view. Expert evidence would have to be produced which showed that such a report could have been presented which would be that good.

(e) What concerns me however is that the approach of seeking to strike out was or at least might be considered as a somewhat heavy-handed and costly way of proceeding. What I would have hoped would be done would be simply that the Claimant would bring on the first Case Management Conference in the TCC and raise the point, as it often is, on that occasion. It would be raised not at that stage as a contentious matter but as one upon which the parties would welcome the Court's observations. I have little doubt that the relevant TCC judge would without any great effort have expressed the view that it would be prudent for such expert evidence to be provided. If the Defendants then did not accept that observation, provision could be made for the Court to decide the issue. I strongly suspect however that the Defendant would have acknowledged the Court's "nod". Thus, the costs of the strike-out application would have been avoided.

(f) I say this without being over-critical of the Claimant because it was not an idea suggested by the Defendants or their solicitors either before or after the application was issued. However, it is an idea which sensibly might and indeed should have occurred to both parties to come to some more cost-effective solution to the issue which they faced.

(g) However, the Claimant would to a significant extent have been successful if the application had had to be pursued through to judgment. By reason of that factor, but bearing in mind that the strike-out approach was not the most cost-effective and the application would not have been wholly successful, an order that the Claimant should have its costs in the case strikes me as giving a reasonable balance.

(h) I also have regard to the observations I make in relation to the Pantelli case below.

15. I now turn to the Pantelli decision and the ramifications of it. As is clear from the decision itself, Mr Justice Coulson struck out the Defendant's Defence and Counterclaim because the Defendant had failed without excuse to comply with an "unless" order (see Paragraph 19 of the judgment). Other relevant parts of the judgment are:

"16. There is a second, separate reason why I am in no doubt that those parts of this Amended Defence and Counterclaim that purport to be allegations of professional negligence should be struck out. That is because, even though the work that is now the subject of these purported allegations was carried out three years ago, there is no expert evidence of any kind to suggest that that work was carried out inadequately, or was in some way below the standard to be expected of an ordinarily competent quantity surveyor. Not only is it simply not good enough to turn a positive contractual obligation into an allegation of professional negligence by adding the words "failing to" to the obligation, but it is also wholly inappropriate to do so in circumstances where there is no expert input to allow CCD to make such an allegation in the first place.

17. Save in cases of solicitors' negligence where the Court of Appeal has said that it is unnecessary (see Brown v Gould & Swayne [1996] 1 PNLR 130) and the sort of exceptional case summarised at paragraph 6-009 – 6-011 of Jackson & Powell, Sixth Edition, which does not arise here, it is standard practice that, where an allegation of professional negligence is to be pleaded, that allegation must be supported (in writing) by a relevant professional with the necessary expertise. That is a matter of common sense: how can it be asserted that act x was something that an ordinary professional would and should not have done, if no professional in the same field had expressed such a view? CPR Part 35 would be unworkable if an allegation of professional negligence did not have, at its root, a statement of expert opinion to that effect.

18. On a related point, also referred to during the course of argument, I note that the Code of Conduct at paragraph 704 prevents a barrister from drafting any document which contains "any statement or fact or contention which is not supported by the lay client or by his instructions [or] any contention which he does not consider to be properly arguable". Since an allegation that a professional fell below the standard to be expected of his profession is not a matter which can be supported by a lay client, and since a barrister pleading a case in professional negligence without expert input cannot know whether the allegations are properly arguable or not, I consider that paragraph 704 of the Code is entirely consistent with the usual practice which I have set out in paragraphs 16 and 17 above.

19. In the present case, although this is a claim that has been in existence for some years, CCD have chosen not to avail themselves of any expert input to support their allegations of negligence. There is no explanation for that failure. It is wrong in law and practice to make such unsupported allegations in this way, and I regret that they were ever made. In the light of the terms of the agreed unless order, they must be struck out."

16. A number of comments can be legitimately made about these observations:

(a) They are not expressed to and do not lay down an immutable rule of practice that in those circumstances no pleading can be put forward which pleads professional negligence unless and until the party pleading has secured supporting expert evidence. One only has to consider the practical example of a Claim for fees which is issued and served and, in accordance with the CPR, a Defence has to be served within 28 days, failing which judgement in default can be entered; it would be contrary to principles requiring a fair trial that the Defendant would in effect be barred from presenting a Defence and Counterclaim which raised legitimate defences including some based on allegations of professional negligence against the Claimant.

(b) There is under the CPR the requirement that pleadings should be supported by a Statement of Truth (CPR Part 22 generally). CPR PD 22 Paragraph 2.1 requires the statement of truth verifying a statement of case (including a Defence) to say:

"I believe that the facts stated in this [document being verified] are true".

One can envisage circumstances in which a defendant or claimant may legitimately or at least not dishonestly believe that the facts stated in his or her pleading are true, even where they involve allegations of professional negligence against the other party and where no expert evidence has yet been retained. Obviously, there must be sufficient for the maker of the statement to make it.

(c) As Mr Justice Coulson says above, there are obviously some cases of professional negligence in which expert evidence is not required.

(d) Where there are explanations as to why the party pleading professional negligence has not or has not yet acquired expert corroboration for its allegations of professional negligence, the Court can look at those reasons in making up its mind as to what is an appropriate course. Thus, it may be legitimate for the Court to bear in mind that it is disproportionate, costs-wise, for expert evidence to be secured at a very early stage in the case, particularly where the amounts in issue may be small or where there is a sensible prospect of mediation or other amicable resolution. This, in my judgement, gives effect to the overriding objective.

(e) Matters may however be different in circumstances in which a party relying on professional negligence allegations makes it clear that it does not need expert evidence, gives a clear impression that it has no intention of securing expert evidence or, as in the Pantelli case that party without good reason has proceeded for a long time during the litigation without securing such evidence. The other party in those circumstances can then take steps, in an extreme case by way of a striking out application or by other more cost effective means, to bring this to the attention of the Court. It is open to the Court to strike out allegations of professional negligence which in its judgement would have to be supported by expert evidence to stand any realistic prospect of success in circumstances in which the party making such allegations makes it clear that it has no intention of obtaining such evidence. Another fairer course open to the Court, having established that the party making the allegations would need such evidence, would be to give that party a reasonable opportunity to obtain such evidence. Obviously, that may depend upon the stage at which the point arises and, for instance, that may be inappropriate at a very late stage in the proceedings or even during the trial.

The Amendments to the Defence and Counterclaim

17. Only limited parts of the final draft of the proposed Amended Defence and Counterclaim are now objected to by the Claimant and these relate to an additional claim for loss and damage which is not as such related to a diminution in value of the land arising from the limited planning application not being secured. There is added a claim, in effect of over £5 million, which is based on assertions that the Defendants would have later sought and obtained further planning permission either for a much larger house or, indeed, for an additional five or six houses. This argument is predicated upon the "foot in the door" approach, such that, if there is a successful planning appeal which allows even limited housing development on a plot of land and the principle is established that housing development on the land is acceptable, then it becomes easier to seek and obtain an expanded permission.
18. It is accepted by the Claimant's Counsel that sufficient is pleaded by the Defendants and supported by evidence at least to assert that the Defendants' intention was to secure the limited planning permission as a first stage before then seeking to go on to obtain the wider alternative permissions and that this was communicated to the Claimant at the time of entering into the professional retainer and, indeed, thereafter.
19. In essence, the Claimant's objection to the amendments which seek the additional loss associated with the lost ability of the Defendants, following the dismissal of its planning appeal in 2010, to go on to the second stage, is that this head of loss is demonstrably outside the scope of that retainer as pleaded and is irrecoverable primarily on principles enunciated in the well-known House of Lords case South Australia Asset Management Corporation v Youk Montague Ltd [1997] AC 191. In that case, Lord Hoffmann (with whom the other Law Lords agreed), said this:

"14. A duty of care such as the valuer owes does not however exist in the abstract. A plaintiff who sues for breach of a duty imposed by the law (whether in contract or tort or under statute) must do more than prove that the defendant has failed to comply. He must show that the duty was owed to him and that it was a duty in respect of the kind of loss which he has suffered. Both of these requirements are illustrated by Caparo Industries Plc. v. Dickman [1990] 2 AC 605… As Lord Bridge of Harwich said, at p. 627:

"It is never sufficient to ask simply whether A owes B a duty of care. It is always necessary to determine the scope of the duty by reference to the kind of damage from which A must take care to save B harmless."

In the present case, there is no dispute that the duty was owed to the lenders. The real question in this case is the kind of loss in respect of which the duty was owed.

15. How is the scope of the duty determined? In the case of a statutory duty, the question is answered by deducing the purpose of the duty from the language and context of the statute: Gorris v. Scott (1874) L.R. 9 Ex. 125. In the case of tort, it will similarly depend upon the purpose of the rule imposing the duty. Most of the judgments in the Caparo case are occupied in examining the Companies Act 1985 to ascertain the purpose of the auditor"s duty to take care that the statutory accounts comply with the Act. In the case of an implied contractual duty, the nature and extent of the liability is defined by the term which the law implies. As in the case of any implied term, the process is one of construction of the agreement as a whole in its commercial setting. The contractual duty to provide a valuation and the known purpose of that valuation compel the conclusion that the contract includes a duty of care. The scope of the duty, in the sense of the consequences for which the valuer is responsible, is that which the law regards as best giving effect to the express obligations assumed by the valuer: neither cutting them down so that the lender obtains less than he was reasonably entitled to expect, nor extending them so as to impose on the valuer a liability greater than he could reasonably have thought he was undertaking.

16. What therefore should be the extent of the valuer's liability? The Court of Appeal said that he should be liable for the loss which would not have occurred if he had given the correct advice. The lender having, in reliance on the valuation, embarked upon a transaction which he would not otherwise have undertaken, the valuer should bear all the risks of that transaction, subject only to the limitation that the damage should have been within the reasonable contemplation of the parties.

17. There is no reason in principle why the law should not penalise wrongful conduct by shifting on to the wrongdoer the whole risk of consequences which would not have happened but for the wrongful act. Hart and Honoré, in Causation in the Law, 2nd ed. (1985), p. 120, say that it would, for example, be perfectly intelligible to have a rule by which an unlicensed driver was responsible for all the consequences of his having driven, even if they were unconnected with his not having a licence. One might adopt such a rule in the interests of deterring unlicensed driving. But that is not the normal rule. One may compare, for example, The Empire Jamaica [1955] P. 259, in which a collision was caused by a "blunder in seamanship of…a somewhat serious and startling character" (Sir Raymond Evershed M.R., at p. 264) by an uncertificated second mate. Although the owners knew that the mate was not certificated and it was certainly the case that the collision would not have happened if he had not been employed, it was held in limitation proceedings that the damage took place without the employers' "actual fault or privity" (section 503 of the Merchant Shipping Act 1894) because the mate was in fact experienced and (subject to this one aberration) competent. The collision was not therefore attributable to his not having a certificate. The owners were not treated as responsible for all the consequences of having employed an uncertificated mate but only for the consequences of his having been uncertificated.

18. Rules which make the wrongdoer liable for all the consequences of his wrongful conduct are exceptional and need to be justified by some special policy. Normally the law limits liability to those consequences which are attributable to that which made the act wrongful. In the case of liability in negligence for providing inaccurate information, this would mean liability for the consequences of the information being inaccurate.

19. I can illustrate the difference between the ordinary principle and that adopted by the Court of Appeal by an example. A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.

20. On the Court of Appeal"s principle, the doctor is responsible for the injury suffered by the mountaineer because it is damage which would not have occurred if he had been given correct information about his knee. He would not have gone on the expedition and would have suffered no injury. On what I have suggested is the more usual principle, the doctor is not liable. The injury has not been caused by the doctor's bad advice because it would have occurred even if the advice had been correct."

20. There is no difference between Counsel that the principles enunciated above are applicable and, in this case, as elsewhere, one needs to look at the scope of the duty or duties undertaken by the professional person to determine the scope or types of loss which are recoverable. The editors of Professional Negligence and Liability (Simpson and others) say at Paragraph 1.01 that these principles "are now central to an understanding of the law of professional negligence"; I agree.
21. One therefore needs to turn to what the parties have pleaded in relation to the professional retainer and there is a large measure of agreement. The Claimant pleads at Paragraph 3 of the Amended Particulars of Claim:

"By an oral contract concluded between [the parties] the Claimant was retained by the [Defendants] to provide ecological, arboricultural and landscape consultancy services on an ad hoc basis in connection with the intended development of the site located adjacent to Kiln Lane…Two possible development schemes were considered, one involving access via Kiln Lane… and the other involving access via Grassy Lane…"

This was or is admitted in the proposed Amended Defence and Counterclaim at Paragraph 4:

"The oral contract alleged in paragraph 3 between [the parties] as pleaded and defined in paragraph 3 are both admitted the purposes of this action.…Further and without prejudice to the foregoing, it is averred that the Retainer included the provision of expert landscape and visual impact assessment reports in respect of the Site…It is that work to which the invoices the subject of the Amended Particulars of Claim relate…"

22. It is absolutely clear from this wording and indeed the whole context of the pleadings generally (and the statements which have been submitted) that both parties accept that the retainer of the Claimant related to the two alternative applications for the three bed-roomed house at the site; the applications were only different because they provided different access from different roads. Indeed, it is common ground that the services provided by the Claimant related only to those two applications. It follows from the above that the scope of the retainer is in relation to the applications for a small and modest house. Part of the context of this scope is said by the Defendants to be that their communicated intention was, if they secured the planning permission for this limited development, they would or might go on later to submit further and expanded planning applications for the same site, once they had their "foot in the door".
23. The consequence of all this is that damages must be limited to the consequences in effect of the scope of the retainer not being realised. Thus, if by reason of any established negligence on the part of the Claimant, the planning appeal was unsuccessful, the consequence would be (subject to proof) that the site would be worth less than it would if that planning appeal had been successful. I can see that it is arguable that the value of the plot with the planning permission for a modest house might reflect the potential to secure a bigger or better planning permission in the future and a plea for any loss based on that approach would not merit striking out or refusing permission to amend.
24. In line with the expressed reservation in the South Australia case about rules which make the wrongdoer responsible for the all the consequences of his or her default, there is something logically wrong with a counterclaim for over £5 million relating to a retainer (itself only for a few thousand pounds worth of fees) where the loss claimed relates not to the value potentially enhanced by the services to which the retainer directly relates but to a value which might be enhanced over the following years if yet more services were provided either by the Claimant or by someone like it. An example was given by Mr Wright of the negligent solicitor or barrister who is asked to advise or indeed appear on a case which to his or her knowledge might establish (if decided in a certain way) a precedent favourable to the client; whilst the lawyer might be liable for the consequences of failure of the specific case, it would be unlikely that he or she would be liable for the losses flowing to the client in relation to all the other potential cases, when the first case (as a result of negligence of the lawyer) goes against the client.
25. It follows from the above that it is not realistically arguable that the separate claim in Paragraph 29 of the proposed amended pleading set out below can succeed:

"Further, for the reasons set out above, they also lost the opportunity to seek and enhance permission once the means of access to the Site had been identified and secure and fast lost the chance of owning a Site value at c£5.3M, alternatively c£1.25M, instead of only £75,000 or £500,000."

I indicated to Counsel for the Defendants that the "primary" damages claim based on the direct consequences of there being negligence on the part of the Claimant in relation to the planning appeals in question could still stand; these, arithmetically stands somewhere between £255,000 (60% of the value of the site with the planning permissions being sought at the appeals in 2010) and £127,500 (being 30%), these percentages being based on the asserted prospect of success on the two appeals.

26. Other grounds for refusal were advanced by Claimant's Counsel. It was said that there was a lack of evidence to support the Defendants' case in relation to this enhanced claim but there clearly is some evidence to support the Defendants' position but for the reasons set out above such evidence does not assist the Defendants. It is said that the accepted fact that the Defendants have not re-applied for planning permission, supported by an appropriate LVIA, militates against the Defendants' case for the enhanced value; however, I do not think that that point is specific to the enhanced value claim. I can see that it might give rise to an arguably good causation or failure to mitigate point which remains to be taken in any Amended Reply and Defence to Counterclaim but it would be wrong for the Court to speculate at this stage, if ever, about that.

Costs

27. I dealt with all other questions of costs at the hearing, giving what I hope were sufficient reasons.