Duty Of Care & The Case Of Ashraf v Lester Dominic Solicitors & Ors

The principle of duty of care spans across many professional settings and is something that most are either aware of or perhaps heard of.

Broadly speaking, it refers to the obligations placed on an individual to provide adherence to a standard of reasonable care and to limit the risk of harm.

It is not uncommon for people to feel that they have been let down by a professional and have been subjected to professional negligence. However, we must not forget that the first, key issue to establish is whether a duty of care existed in the first place.

Ashraf v Lester Dominic Solicitors & Ors

Ashraf v Lester Dominic Solicitors & Ors is a longstanding litigation action brought by Mr Syed Ul Haq (now deceased). Mr Ul Haq’s Estate continued the action after his death.

The case is complex with a total of seven defendants being sued for negligence.

This blog focuses only on the recent 2023 Court of Appeal ruling which considered the claim for damages brought by the Estate against the seventh defendant, the firm of solicitors, Rees Page.

Background

Mr Ul Haq, the registered proprietor of a property in London, claimed to have the misfortune of being a victim of two successive frauds.

Briefly, in 2008 FLP Solicitors were instructed by:

Although it is alleged that contracts for sale were exchanged, there were concerns as to whether legal completion ever took place. The sale proceeds/mortgage monies (over £1.2million) were misappropriated by a member of FLP’s staff, who was eventually convicted and given a substantial custodial sentence, and the Transfer (TR1) executed by Mr Ul Haq was not witnessed, rendering it void.

Bank of Scotland instructed solicitors firm, Rees Page, to deal with the incomplete registration and in 2010, two years later, they made the decision that legal completion did take place in 2008 and asked both Mr Ul Haq and Mr Attarian to sign new documents, executing them with the original date of completion.

Rees Page received the signed paperwork in the post but had reservations about the legitimacy of the signatures and verification of identity. Neither Mr Ul Haq nor Mr Attarian was a client of Rees Page, their client was the Bank of Scotland.

In 2011, after pressure from the Bank of Scotland to register their interest, Rees Page submitted the application to HM Land Registry using Form AP1.

In Panel 13(1) of the AP1, Rees Page confirmed that each party was represented by a conveyancer and listed FLP Solicitors for Mr Ul Haq, even though by that time, FLP Solicitors had been intervened in.

It is worth noting that Panel 13 of the AP1 is to enable HM Land Registry to rely on the fact that the conveyancer listed would have taken steps to verify the identity of their client.

The application was completed, and Mr Attarian was registered as the legal owner, but in 2013 Bank of Scotland exercised its powers of sale and sold the property to Mr & Mrs Niijan, the fourth defendants in this case.

The claim against Rees Page

The claim brought by the Estate was for an alleged breach of duty of care owed by Rees Page to Mr Ul Haq, even though he was never their client.

The Estate claim that at the time that Rees Page submitted the documents for registration, they owed Mr Ul Haq as the then registered proprietor, ‘a duty to take reasonable care to establish that the transfer had been properly executed by Mr Ul Haq’.

Rees Page applied to the Court for summary judgement on the grounds that the Estate had no real prospect of succeeding with the claim. The summary judgement was granted on the basis that upon review of the facts, it was clear that no duty of care was owed to someone that is not their client. The Estate appealed this decision.

The appeal was heard in March 2022 and the appeal was dismissed again as it was found that there was nothing in the case to suggest that this case was one that could deviate from the usual rule that the solicitor does not owe a duty of care to a third party.

The most recent appeal is the one that we are discussing in this blog, and which allowed Lord Justice Nugee to provide an interesting decision on the matter of duty of care owed to third parties.

Decision

The Court of Appeal found that although it was:

The Court proceeded to confirm that it was correct that Rees Page owed no duty of care to Mr Ul Haq up to the date that they completed and submitted the application to HM Land Registry.

However, Lord Justice Nugee concluded that bank solicitors may have owed the seller of the property a duty of care at the point that they filled out HM Land Registry documents to change the register.

But why?

Lord Justice Nugee relied on the principles in the case of Al-Kandari, and whilst the facts of each case differ, he argued that:

Lord Justice Nugee continued with specific reference to Panel 13 of the AP1, making clear that although Rees Page submitted the AP1 as acting solicitor for the bank when they completed Panel 13, ‘he was giving confirmations to the Land Registry in relation not just to the bank but to each of the other parties (Mr Ul Haq and Mr Attarian)”. He referred to the specific, important purpose of Panel 13, as discussed above.

He stated:

The Court decided against ruling whether a duty was owed but the Court allowed the appeal to the extent of setting aside the summary judgment and permitted the claim against Rees Page to go forward to trial.