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Cite as: 2005 SCLR 222, [2004] ScotCS 161

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Woodhouse v. Johnston & Anor [2004] ScotCS 161 (02 July 2004)

OUTER HOUSE, COURT OF SESSION

A828/03

OPINION OF T G COUTTS, Q.C.,

(Sitting as a Temporary Judge)

in the cause

ELIZABETH MARY WOODHOUSE

Pursuer;

against

WRIGHT JOHNSTON & MACKENZIE

Defenders:

________________

Pursuers: McNeill; Archibald Campbell & Harley, W.S.

Defenders: Dunlop; Brechin Tindal Oatts

2 July 2004

[1] In this action the pursuer claims damages against a firm of solicitors for what she describes as a "lost opportunity to agree a larger figure for aliment for her child" as a result of her solicitor's advice. No general point was taken at procedure roll in relation to the relevance of such a lost opportunity claim. The argument was whether in the circumstances the pursuer had relevantly averred a breach of his duty of care by her solicitor arising out of his contract with her or through his negligence. A contention whether a decision of a Social Security Commissioner CSCS/5/97 1999 Fam.L.R.37 was sound was also raised. That decision is hereafter referred to as "the Isles decision".

The pursuer's factual case as pled
[2] The pursuer, who married Andrew James Woodhouse on 15 September 1988, separated from him on 6 July 1998. They have a child, Lisa, (born 14.6.93) who resides with the pursuer. The marriage was finally dissolved on 16 November 2001. The spouses entered into a Minute of Agreement dated 26 and 28 February and registered for preservation and execution in the Books of Council and Session on 29 March, all 1999. The Minute was extracted and in terms thereof aliment of £50 per month in relation to Lisa was to be paid by Mr Woodhouse to the pursuer. Other financial matters, (including cash payments by the pursuer to Mr Woodhouse) were also regulated by that agreement.

[3] The pursuer was advised by Mr Stephen of the defenders' firm. She expressed concern to him about possible ongoing difficulty in agreeing figures. Ultimately the figures in the Minute of Agreement were adopted. Prior thereto Mr Stephen, in a letter dated 23 November 1998, advised the pursuer that whatever was agreed at that stage in respect of the monthly payment of aliment could always be varied at a later stage to take account of any change of circumstances and that in any event if there should be other disagreement, the whole matter could be referred to the Child Support Agency who would make an assessment. The pursuer avers that at a meeting on 27 November 1998 Mr Stephen "was categorical in affirming to" the pursuer that if she and Mr Woodhouse ever fell out over the monthly amount which Mr Woodhouse should pay in relation to Lisa, the Child Support Agency would make a maintenance assessment. The pursuer goes on to aver that in reliance on the accuracy of that "unqualified factual assertion" she did not pursue a figure which was greater than £50. Therein the pursuer claims, was the lost opportunity.

[4] The pursuer goes on to aver that at the time of divorce she proposed that the payment for Lisa should be increased. The pursuer was unhappy about the sum paid or proposed and by June 2001 had submitted to the Child Support Agency an application for a maintenance assessment to be made. Within three weeks of submission of that application the Agency discontinued it on the basis that by virtue of section 4(10) of the 1991 Act it was deprived of jurisdiction to make a maintenance assessment on that application because the extract of the Minute of Agreement constituted a maintenance order for the purposes of the Act. The Child Support Agency has never made an assessment. The pursuer's averments continue:-

"Mr Stephen's factual assertion had been inaccurate".

The pursuer's averments of fault
[5] Cases were pled under breach of contract and negligence. Despite the prolixity of the pleading, the case made amounts to the simple assertion that Mr Stephen had failed to take the reasonable care of a solicitor of ordinary skill to ensure (sic) the accuracy of the said "unqualified factual assertion" that the Child Support Agency would make a maintenance assessment. The pursuer's averments are stated thus:

"Mr Stephen knew or ought to have known that any application by the pursuer for a child maintenance assessment in respect of Lisa would be under section 4 of the Child Support Act 1991. Section 4 of the 1991 Act is referred to for its terms. Mr Stephen knew or ought to have known that the CSA could not make a child maintenance assessment in respect of Lisa in circumstances where subsection (10)(a) of Section 4 of the 1991 Act had the effect in law that no Application for a child maintenance assessment in respect of Lisa could be made under Section 4. He knew or ought to have known that CSA might not make a child maintenance assessment in respect of Lisa in circumstances where the CSA considered under reference to Legal Advice or the decisions of Child Support Appeal Tribunals, Social Security and Child Support Commissioners or courts that Subsection (10)(a) of Section 4 of the 1991 Act had the effect in law that no application for a child maintenance assessment in respect of Lisa could be made under Section 4. He knew or ought to have known that Section 8(11) of the 1991 Act stated that in the 1991 Act 'maintenance order' [as referred to in Section 4(10)(a)] meant, in relation to any child, an order which requires the making or securing of periodical payments to or for the benefit of the child and which is made under any one of certain enactments either specified in Section 8(11), including the Family Law (Scotland) Act 1985, or prescribed for the purposes of Section 8(11). He knew or ought to have known that with effect from the commencement of the Family Law (Scotland) Act 1985 on 1^st September 1986, no subsequent Court Order for payment of aliment could be made other than under the Family Law (Scotland) Act 1985. He knew or ought to have known that a warranted extract of a Minute of Agreement, incorporating a clause of mutual consent to registration in the Books of the Lords of Council and Session for preservation and execution was a decree of the Court or at least that it was treated in law as of equivalent effect in Scotland to such a decree. Mr Stephen knew or ought to have known that the Inland Revenue had long treated such an extract as a Court Order for the purposes of application of income tax provisions. There were no reported Court decisions holding that the warranted extract of a Minute of Agreement registered in the Books of the Lords of Council and Session for preservation and execution and requiring one parent to pay a periodic sum to the other by way of aliment in relation to their child is not a 'maintenance order' in terms of Section 8(11) and therefore in Section 4(1)(a) of the 1991 Act. In these circumstances Mr Stephen, in making to the pursuer the unqualified factual assertion that in the event about which she was concerned the Child Support Agency would make a maintenance assessment, did not reasonably and carefully apply the knowledge of the statutory provisions and general Scots law that he had or ought to have had. Further Mr Stephen had not made or caused inquiry to be made of the Child Support Agency as to whether it was then making child maintenance assessments on applications under Section 4 of the Child Support Act 1991 in circumstances where a Minute of Agreement between the parents provided for the making of payments by way of aliment in relation to the child and had been registered for preservation and execution in accordance with a clause of consent to such registration and extracted. It would have been an easy exercise to make such enquiry. In June 1998 a Social Security and Child Support Commissioner, Mr W M Walker, issued his decision (Report Reference R(CS) 3/99) on an appeal (CSCS/5/97) to him from the Edinburgh Child Support Appeal Tribunal in a case that has subsequently become known as "the Isles case". In that decision Commissioner Walker held that the extract of a Minute of Agreement registered in the Books of the Lords of Council and Session for preservation and execution is an 'order' for the purposes of the 1991 Act. Prior to Commissioner Walker's decision in the Isles case it was the practice of the Child Support Officers of the Child Support Agency on the advice of the Agency's solicitors to make maintenance assessments on application under Section 4 of the 1991 Act even where a Minute of Agreement between the parents provided for the making of payments by way of aliment in relation to the child and had been registered for preservation and execution in accordance with a clause of consent to such registration and extracted. Following Commissioner Walker's decision in the Isles case the Child Support Agency's Officers ceased to make maintenance assessments in such circumstances on applications under Section 4 of the 1991 Act. The Hearing before Commissioner Walker in the Isles case took place over parts of three days. The relevant child support officer in the case was represented at the Hearing by Counsel instructed by the Solicitors in Scotland to the Department of Social Security. The pursuer therefore believes and avers that if Mr Stephen had made or caused enquiry to be made of the Child Support Agency in November 1998 he would have ascertained that having regard to Section 4(10) of the 1991 Act the Agency did not then consider itself to have jurisdiction to make a maintenance assessment on application under Section 4 of the 1991 Act where a Minute of Agreement had been entered into, registered and extracted as above referred to or at very least, that some doubt had arisen for the Child Support Agency as to whether it did have such jurisdiction in such circumstances. The defender, per Mr Stephen, had not taken reasonable care to ensure the accuracy of Mr Stephen's unqualified factual assertion to the pursuer that in the event, about which she was concerned the Child Support Agency would make a maintenance assessment. With reference to the defender's averments in answer, admitted that in Isles, Commissioner Walker also held that what he had held to be an "order" for the purposes of the 1991 Act was made by the Court of Session under the Court of Session Act 1868. Admitted that neither the Writs Execution (Scotland) Act 1877 nor the Debtors (Scotland) Act 1987 is an enactment prescribed for the purposes of Section 8(11) of the 1991 Act. Believed to be true that an annual Family Law Association Conference took place in November 1999. Believed to be true that no aspect of the Court of Session Act 1868 remained in force as at 28^th March 1999 that had any bearing on the registration of the Minute of Agreement dated 26^th and 28^th February 1999".

[6] The case in Condescendence 5 alleging negligence is in similar terms with the addition "Mr Stephen did not take reasonable care to ensure the accuracy of his unqualified factual assertions of the pursuer that ....the Child Support Agency would make a maintenance assessment".

Modification of the pleadings by way of admission
[7] The defender lodged a notice to admit (No.10 of process) which was responded to by the document entitled "Notice of Partial Non-Admission". The effect of the exchange of documents is that the pursuer admits that the Isles decision was not generally reported until April 1999.

[8] To the proposition that a solicitor of ordinary competence acting with ordinary care would not have been expected to be aware of the Isles decision until April 1999 the pursuer responded by not admitting that matter as stated but continuing thus "admitted subject to the qualification that between June 1998 and April 1999 particular circumstances in which a solicitor was acting might have been such that in acting with ordinary care he might have had a duty to make inquiries which would have resulted in his becoming aware of the Isles decision prior to April 1999". It is stated in the Notice of Partial Non-Admission "believed to be the case that the Isles decision is erroneous in law so far as holding the order to have been made under the Court of Session Act 1868".

[9] However qualified the pursuer's attitude is, as disclosed in that exchange of documents, the result so far as the procedure roll is concerned is that parties agreed that the basis of the decision in the Isles case was erroneous in law. I deal with matters on that footing, thereby making no decision about the competence of an Outer House judge to overrule a decision of the Social Security Commissioner.

Arguments for defender
[10] The defenders argued three matters. First that there were no relevant averments of a breach of contract or of the duty owed by a solicitor to a client. In the second place they attacked the use of the term "believed and averred" in the case of fault and thirdly argued that since the Isles decision was demonstrably wrong, there was no failure properly to advise the pursuer.

[11] There is no duty, it was argued, to "take reasonable care to ensure the accuracy" of advice. No averments were made that a reasonably competent practitioner would either have been aware of the Isles decision or been able to advise in the light thereof in November 1998 and no averment pled of the standard and accepted practice of ordinary competent solicitors in relation to the alleged failures. The duty on a solicitor is not to tender advice which no solicitor of ordinary skill would tender if acting with ordinary care. The defenders unsurprisingly founded upon Hunter v Hanley 1955 S.C.200. At page 205 professional negligence of law agents is discussed and there it is stated that mere errors in interpreting the law or lack of knowledge of the law are not treated as constituting negligence and professional men are not to be liable to errors in judgment whether in matters of law or discretion. At page 206 it is said to be of crucial importance that the course adopted was one which no professional man of ordinary skill would have taken if he had been acting with ordinary care. Thus the test is not to ensure that one tenders correct advice, but not to tender advice which no solicitor of ordinary care would tender. That proposition is further reinforced in Wilshire v Essex Area Health Authority 1987 1 Q.B.730 expressly at page 747 where Mustill L.J. said:-

"What the Courts can do however is to bear constantly in mind within those situations that call for the exercise of judgment, the fact that in retrospect the choice actually made can be shown to have turned out badly is not in itself a proof of negligence; and to remember that the duty of care is not a warranty of a perfect result".

Reference was also made to the Opinion of Bingham L.J. in Eckersley v Binnie 1988 18 Con.L.R. 1 at pages 79 to 80.

[12] In relation to the averments preceded by "believed and averred" following Brown v Redpath Brown 1963 S.L.T.219 it is essential to provide known facts from which the inference can be drawn. It would have been a simple matter for the pursuer to ascertain what the result of a call to the Child Support Agency in November 1998 would have been had there been any duty on the part of the defenders to check advice tendered by them with the Agency.

[13] The third contention was that the fundamental basis of the pursuer's case was that the Isles decision was correct. That decision is wrong and that being the case the advice tendered by the defenders in fact was correct. There was accordingly no basis in law for the attitude adopted by the CSA and equally no basis for assertions that the advice given was incorrect. The case must fail.

[14] The defenders accepted that an extract of a document recorded in the Books of Council and Session can be an order of the Court but argued that such a document is not a maintenance order in terms of the relevant legislation. The relevant legislation, the Family Law (Scotland) Act 1985, is fundamental and no order for aliment can be made except under the provisions of that Act. The Family Law (Scotland) Act 1985 repealed the Conjugal Rights Act 1861. The purpose of including a reference to the Court of Session Act 1868, the presence of which reference led the Commissioner into error, was not to create a maintenance order in terms of the legislation. It was necessary to have the 1868 Act referred to because any order under the then newly repealed 1861 Conjugal Rights Act could have been in existence.

[15] The Minute of Agreement in the present case is governed by the 1985 Act but registration, which makes it an order of the Court does not make it an Order under any "prescribed enactment". Accordingly maintenance agreements such as that included in the present Minute of Agreement are reviewable in terms of the Child Support Act by the authority making an assessment.

The pursuer's response
[16] The pursuer argued that the communication which Mr Stephen made to her in relation to the reviewability of the maintenance agreement was an assertion of fact and as such required to be regarded in the light of the dicta in Banque Bruxelles SA v Eagle Star 1997 A.C.191 per Lord Hoffman at page 214. There his Lordship distinguished between a duty to provide information for the purpose of enabling someone else to decide on a course of action and a duty to advise someone as to what course of action he should take. If the duty was only to supply information he must take reasonable care to ensure that the information is correct and if he is negligent will be responsible for all the foreseeable consequences of the information being wrong.

[17] Accordingly, argued the pursuer, since Mr Stephen was making a factual assertion he required to take reasonable care to ensure that this was correct. He took no steps to do so and the pursuer further avers that inquiries could have been made but were not. It is not necessary to have averments about standard practice. The matter is tested simply upon the actings of the defenders, and it was not necessary to aver what other competent solicitors would have done in like circumstances.

[18] "Believed and averred" was correctly used in accordance with the Opinions in Brown v Redpath Brown. Counsel also referred me to a decision of my own, reported only in Green's Weekly Digest, DGS Retail Ltd v Poundstretcher Ltd 2004 G.W.D.1-8 where I had held in the circumstances of that particular case that there were sufficient averments to entitle the pursuer to a proof before answer having regard to the matters of fact pled.

[19] In relation to the Isles decision that decision still stood, although it had been rendered empty because of changes in legislation. An application for aliment could only be made under the Family Law (Scotland) Act and that did not disable the procedure for decree being extracted. That ought to have been the decision in Isles and as the law then stood the Social Security Commissioner would have arrived at the same decision.

Decision on the pleadings in relation to the charge of professional negligence
[20] It appears to me to be plain that what Mr Stephen was doing in relation to the consultation about the pursuer's concerns about her financial claims in relation to her daughter was tendering advice. His advice was that which was deemed to be appropriate at the time and which, but for the Isles decision, would have remained appropriate, namely that the maintenance agreement which had been made was not an order in terms of the legislation and could be revisited by the Child Support Agency.

[21] There is in my view nothing whatsoever in what it is averred that Mr Stephen did which takes it outwith the normal principles which apply in cases alleging professional negligence.

[22] Mr Stephen was engaged in advising the pursuer about her legal position in relation to her alimentary claims. That events turned out differently neither did nor does not render that advice negligent. It is admitted that the Isles decision was not reported at the time that the advice was tendered and there are no averments that there was any obligation on a professional adviser to check whether the CSA was going to divert from its normal and usual practice. There is nothing averred which would or should put a reasonable solicitor on his guard about that matter. It is asserting far too high a duty to claim that every piece of advice given on a reasonable understanding of the state of the law, required to be checked. In short I reject the approach advanced by the pursuer that what was said by Mr Stephen was an unqualified factual assertion. It was not. It was legal advice. The attempt to elevate the duty of the solicitor into a different category so as to withdraw it from the salutary principles set out in Hunter v Hanley and universally adopted is unsound and must fail.

[23] The matter, however, does not end there. Even if this was an unqualified factual assertion the duty can only be to exercise reasonable care to see that it is correct not to ensure that it is correct. That much is, I think, apparent from Lord Hoffman's Opinion in Banque Bruxelle. That then poses the question of what is the reasonable care which is required. In the light of the authorities it must be that care which an ordinarily competent solicitor would exercise. Failing any averment that no competent solicitor would have failed so to ensure, also renders the case pled irrelevant.

[24] In relation to the averments preceded by "believed and averred", there is, in my view, considerable force in the defenders' argument. Here it is the pursuer who is making or should be making an "unqualified factual assertion" as to the conduct of the CSA in November 1988. It is in my view illegitimate to provide a guess on that matter when it is readily ascertainable. There are no averments which show or tend to show what the Agency's attitude would have been at that point if an inquiry had been made.

[25] Finally, in relation to the status of an extracted registered agreement, it is in my view plain that such a document cannot be regarded as a maintenance order unless made in terms of the statute. I was wholly convinced by the defenders' argument that there was no statutory warrant for elevating into an order what was plainly an agreement. I accept the concessions of counsel that the foundation of the Isles decision is erroneous in law and do not consider that it can be rescued by invoking, as the pursuer attempted, other potential interpretations. These interpretations I do not accept. The only reason why the CSA did not make an assessment when requested was that they considered themselves bound by the erroneous decision in Isles which they did not appeal. No averments were made by the pursuer to assert, relevantly, that but for the Isles decision the CSA would otherwise have adopted the attitude that the extracted registered agreement precluded them from making an assessment.

[26] For all these reasons the pursuer's case is irrelevant and I sustain the defenders' second plea-in-law to the relevance of the action and shall dismiss it.