Neutral Citation Number: [2002] EWHC 3170 (QB)
Case No: 01\TLQ\1600
IN THE HIGH COURT OF JUSTICE
QUEENS BENCH DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 17 September 2002

Before :

THE HONOURABLE MR JUSTICE GROSS

- - - - - - - - - - - - - - - - - - - - -
Between :

	DAWSON CORNWELL & CO	Claimant	
	- and -		
	C J NICHOLL & ASSOCIATES LTD (1)	Defendant	
	and		
	CHRISTOPHER JOHN NICHOLL (2)	Defendant	

- - - - - - - - - - - - - - - - - - - - -
- - - - - - - - - - - - - - - - - - - - -

Alistair Craig (instructed by Beachcroft Wansbroughs) for the  Claimant 
Mr C J Nicholl represented the Defendants in person
Hearing dates : 29.4.2002 – 13.5. 2002
- - - - - - - - - - - - - - - - - - - - -
JUDGMENT
Mr Justice Gross: 
1.	INTRODUCTION
1.       In this unfortunate litigation,  the Claimant firm of solicitors (“DC”) claims from the Defendants some £15,495 in unpaid legal fees, together with interest.  For  their part, the Defendants counterclaim damages in an amount in the region of or in excess of £2 million, again plus interest.   In  a nutshell, the Defendants allege that DC, the 3rd firm of solicitors retained by the First Defendant (“CJNA”), was negligent in the conduct of its claim for negligence against Penningtons (“PEN”), the 2nd firm of solicitors retained by CJNA, that claim in turn depending for its value on an assessment of CJNA’s claim for negligence against Bennetts (“BEN”), the 1st firm of solicitors retained by CJNA.    The matter has a long history;  the chapter concerning BEN covers (principally) 1983 to 1986;   PEN’s retainer lasted from 1986  to 1991;  DC’s alleged negligence arises out of the  preparation for and conduct of the trial of CJNA’s action against PEN, which took place before Knox,J.  in February 1993 and was compromised  on the 3rd March, 1993.  

2.	As to the present trial:

(1)	The Second Defendant (“CJN”) has represented the Defendants in person;   Mr. Alistair Craig has appeared on behalf of DC.
(2)	In  practical terms,  this trial  has been concerned throughout with the Defendants’ counterclaim rather than with the DC claim.
(3)	Against this background and with the agreement of CJN, the Defendants’ evidence was heard first.
(4)	After some argument, I ruled in favour of  the Defendants that there should be a single trial on liability and quantum, rather than a split trial, as contended for by DC. 

2.	      Dramatis Personae and abbreviations:    It is convenient to begin with a list of abbreviations and terms used:

No. 37:       refers to leasehold premises at No. 37 Brompton Road, London.

No. 35:       refers to the adjoining premises.

BP  refers to the BP pension fund which was (at the material times) the freehold owner of Nos. 35 and 37.

Hecuba refers to the mesne landlord of No. 37 which traded from the ground floor premises of No. 37 under the name of Yves Saint Laurent.

DTC  refers to Debenham Tewson & Chinnocks, the managing agents for BP

LP refers to Linklaters & Paines (as they then were), the solicitors for BP

Hobbs refers to the assignee of the unexpired term of Hecuba’s lease. The assignment took place in July 1987.

CJNA:         refers, as already noted, to the First Defendant.   CJNA carried on, during the 1980s, an advertising, design and public relations business from the 1st – 4th floors of No. 37.

CJN:          refers, as already noted, to the Second Defendant.  He was at all material times the Managing Director and controlling shareholder of CJNA.    In these proceedings, CJN is sued personally.    In broad terms,    CJN counterclaims both as assignee of CJNA and in his own right.

BEN:          refers, as already noted, to the firm of solicitors, Bennetts, originally retained by CJNA.

PEN:          refers, as already noted, to the second firm of solicitors, Penningtons, retained by CJNA to advise it (inter alia) in respect of proposed litigation against BEN for negligence, in the circumstances explained in more detail in the body of the judgment.

KL:           refers to Kim Lewison (as he then was), counsel retained by PEN on behalf of CJNA.

DC:           refers, as already noted, to the Claimant firm of solicitors, retained by CJNA,  in place of PEN.

JC:           refers to Mr. Cornwell, at the material time, the senior partner of DC.

TLC:          refers to Mr.  Timothy Lawson-Cruttenden, who was the litigation partner at DC and had conduct of the litigation between CJNA and PEN and, prior to that, had acted in the litigation between CJNA and BP.

GZ:           refers to Geoffrey Zelin, counsel retained by DC on behalf of CJNA.        Mr. Zelin is neither a Defendant in these proceedings nor are there any Part 20 contribution proceedings extant against him.

the action:   refers to an action brought by CJNA against PEN in which CJNA claimed damages against PEN for having permitted its action against BEN to become statute barred.   DC and GZ represented CJNA in this litigation.

the compromise:    refers, as already noted, to the compromise of the action,  on terms set out in more detail in the body of the judgment.

4.       In a nutshell, the action was compromised in the course of the trial, after CJNA’s legal team became concerned that  the answers given by CJN in cross-examination had fundamentally undermined  CJNA’s case.    GZ’s advice was that CJN’s evidence had been inconsistent (“the inconsistency”) with the instructions given to DC and GZ and the basis on which the CJNA claim in the action had been pleaded and advanced.  The inconsistency related to whether CJN had consented to the demolition of the staircase providing access to CJNA’s 1st – 4th floor premises at No.37. 

5.       Against this background, the following principal issues fall to be resolved in these proceedings (“the Issues”):

(I)	Whether DC was negligent in failing, prior to the trial, to take proper account of the risk of  the inconsistency materialising and, if so, was such negligence causative ? (“Issue (I): Inconsistency”)
(II)	Whether DC was negligent in advising or allowing CJNA to enter into the compromise rather than advising or allowing the trial to proceed to a final determination ?    (“Issue (II):  Compromise”)
(III)	What is the quantum of loss  suffered by  CJNA and/or CJN, resulting from any negligence on the part of  DC ?  (“Issue (III):   Quantum”).
I shall deal with these Issues in turn.  Before doing so, it is necessary to set out the facts and to summarise the rival cases.   When dealing with the facts, I shall first cover the documentary history – of particular importance given the age of the matter – before coming to the principal oral evidence on liability.   I shall defer all questions of quantum (including evidence and argument) until I come to deal with Issue (III).

2.	THE FACTS

 6.      The BEN chapter:     In 1983,  CJNA was the underlessee of the 1st – 4th floors of No. 37, with an unexpired term running until 1991.    As already noted, BP was the freeholder of both Nos. 35 and 37.    By about July 1983, the reversion immediately expectant on the term granted by CJNA’s underlease, had  become vested in Hecuba.    CJNA had been interested in expanding its existing office space into  the 1st floor premises at No. 35.     For reasons which are not presently material, CJNA’s negotiations to expand into No. 35 proved abortive.    However,  BP and/or Hecuba then put proposals to CJNA, expressed to be “subject to contract and without prejudice”, which involved CJNA having to surrender its exclusive entrance and staircase to No.37 (or part of it) in return for a shared access to No. 35 and the grant of a lease of the 1st floor of No. 35.    Hecuba was interested in expanding its ground floor premises at No. 37.    BP was interested in the development of its properties.   In short,  at least as it appears to me, all parties, that is BP, Hecuba and CJNA had an interest in this  proposed rationalisation or development of the premises at Nos. 35 and 37.     CJNA retained BEN to act for it in connection with this proposal. 

7.       A meeting took place on the 3rd August, 1983, attended by  all the interested parties or their agents, together with their legal representatives.  Heads of agreement were reached to facilitate the proposed scheme but the transaction remained “subject to contract”.    I find – the contrary was not or not seriously suggested in these proceedings – that no binding agreement was entered into at this meeting.    As already foreshadowed,  there was agreement in principle at the meeting for CJNA to relinquish its rights of access to No. 37;  in return, as recorded by the BEN attendance note dated 3rd August, 1983, “  [CJNA would obtain] … a shared access through the ground floor street entrance to the upper part of 35 and by knocking a hole through the partition … [CJNA] …  may go from the first floor entrance at 35 into the first floor entrance of 37.”   Plainly, were this agreement to proceed, amongst the works contemplated were (1) the construction of access between Nos. 35 and 37 at first floor level and (2) the demolition of CJNA’s entrance and staircase in No. 37.   Equally plainly,  CJNA would come to rely on entrance to its premises via No. 35.

8.       At all events, even though the agreement remained subject to contract,  Hecuba was keen to make progress with the works and an approach was made to CJNA in this regard.     It is clear to me, both on the documents and having heard and seen CJN give evidence, that CJN too was anxious for the works to proceed.    On the 9th August, 1983, CJN wrote to BEN, in the following terms:
“From our point of view, we are content that work should commence on the “knocking through” of the temporary access between No. 35 and No. 37 as soon as Debenhams are able to arrange the necessary rights of access via No. 35 and providing it is firmly understood that this access is purely a temporary main entrance, that the new permanent lobby and access to No. 37 is completed with the minimum delay (within three months from now?) and on the understanding that CJ Nicholl & Associates Ltd. are not responsible for any of the costs of these or associated alterations and additions.”
As the terms of this letter make plain,  the consent granted was limited;   it did not extend to the demolition of the CJNA staircase in No. 37.  Under cover of a letter of the 11th August, BEN copied this letter to DTC.
Meanwhile, as recorded by an attendance note on BEN’s file, dated 10th August, 1983,  “Apparently, initial works have already started on the premises.”     It follows that BEN were, by the 10th August, 1983, aware of the commencement of the works.

9.       I come next to the events of Friday 12th August, 1983 and the question of CJNA, through CJN, giving consent for the demolition of the staircase in No. 37.     For the moment, I confine myself to the facts;  I defer, until later,  consideration  and interpretation of the ramifications and the terms of the instructions given by CJN to DC and GZ in this regard.   As to the facts, I am satisfied that they are accurately summarised in a draft affidavit,  approved by CJN and prepared for his use (in circumstances to which I shall come) in about July 1987 (“the Foggin affidavit”):

“ 10.   … I was due to go on holiday and on the Friday evening before my departure on 12th August, 1983 a workman employed by …[Hecuba’s] … shopfitters approached me and asked me for the keys to the upper part of number 37.     He told me that he had received instructions to remove the staircase at number 37 that week-end.  I asked him whether or not “all the work” was going to go ahead and he acknowledged that, as far as he knew, it was and I therefore handed over the key.  I requested keys for my staff for the entrance to number 35 to enable them to gain access through number 35 with effect from the following Monday morning.”

I  am satisfied that, as a matter of fact,  by this conversation, CJNA, through CJN, gave consent to the demolition of the staircase, albeit on the understanding that all the works, which he thought were covered by the agreement in principle of 3rd August, would proceed.

10.      On the 5th September, 1983, CJN returned from his holiday.   He was not, of course, surprised that the staircase had been demolished.   He was, however, surprised that nothing or little else had happened.   He did not contact BEN at that stage.   Nor did he protest to anyone at the demolition of the staircase.  Instead, he pressed DTC to proceed with all the works and received assurances (from DTC) in that regard.
11.      On the 4th November, 1983,  CJN expressed his concern to DTC as to the entrance to Nos. 35 and Nos. 37.    The proposed doorway was “unacceptably narrow” and the stairs to the first floor were “unusually steep”.     

12.     Reverting to the demolition of the No. 37 entrance and staircase, it does not appear that CJNA informed BEN of these developments until some time in October or early November;  the difference is immaterial, so I do not take time over it.      What then happened is instructive.  On the 11th November, 1983,   BEN wrote to LP in the following terms:
“… our Clients are most concerned that their physical access to their upper floors at number 37 has been taken away without their prior, formal consent in the form of the documentation agreed in principle at the round-table meeting which took place on the 3rd August, 1983..”
The letter went on to summarise CJNA’s stance:
“    Our Clients have been extremely patient up until now and certainly do not wish to obstruct unnecessarily the implementation of Hecuba Limited’s scheme but they do require that the position be regularised now without delay along the lines discussed at the …. [ 3rd August] …meeting.”
On the 16th November, 1983, LP responded by saying that “we hope this matter can be conducted in a spirit of friendly cooperation on both sides”

13.	The remainder of the BEN chapter can be taken relatively briefly and summarised as follows:

(1)	By  22nd May, 1984 (as indicated by a letter of that date), CJNA’s  position had become that BEN should bring “all the legal pressure you can to bear” on one or other of the parties to complete the works, within a fixed time (there stated as one month);  in the same letter, CJN stated that “As understood since the outset, we can agree to no transfer or relinquishing of our rights over an exclusive entrance to No. 37 Brompton Road until such points are agreed and carried out.”
(2)	Progress plainly remained unsatisfactory so far as CJN was concerned and, on the 27th July, 1984, he wrote to BEN, seeking confirmation that CJNA would be entitled to demand reinstatement of the original facilities or to relinquish the lease and the premises without penalty and to claim damages from Hecuba and/or DTC and/or BP.      Beyond confirming these points amongst others, BEN was not required to take any action.
(3)	On the 7th August, 1984, BEN responded to CJN, remarking that 
“ … by acquiescing in the commencement of the work you may well to some extent have prejudiced your own position…”;   such acquiescence might impact on reinstatement which could otherwise be insisted on if negotiations were not satisfactorily concluded.   Given the question of acquiescence, however, if CJNA was to pursue its rights, then BEN proposed instructing junior counsel.   It was hoped that in practice the question of litigation would not arise “but the longer you acquiesce in an unsatisfactory situation the more difficult it will become for you to complain of it.”   BEN therefore recommended taking a firm attitude with LP and asked CJN for his instructions.
(4)	On the 16th August, 1984,  CJN responded;  he agreed with the idea of a firm letter to the parties;   going to counsel should be deferred until a response to that letter had been received.
(5)	Letters followed from BEN to LP;  on the 13th November, 1984, BEN demanded reinstatement.   By a letter to CJN of the same date, BEN reminded CJN that, by reason of acquiescence, it was unsure that CJNA was indeed entitled to reinstatement.
(6)	On the 18th April, 1985, BEN sent to Hecuba a letter before action, demanding immediate reinstatement of the premises.   
(7)	On the 24th April, 1985, Hecuba’s solicitors responded to BEN denying that CJNA was entitled to reinstatement or damages; the work had been carried out “with your client’s knowledge and agreement”.    The letter added this:  “The only matter that appears to be in dispute is the entrance at the bottom of the stairs up to 35/37 Brompton Road. Our client has no objection to the entrance way being enlarged but does object to paying for the cost of these works.”     Pausing there and looking back now, it seems most unfortunate that this last proposal was not seized upon but, in the event, it was not.
(8)	On the 20th May, 1985,  CJN wrote personally to Hecuba’s solicitors and, amongst other things, said this: “Without your Client advising us, the said stairs were removed on Saturday, 13th August 1983 while I was away on holiday. Only on my return three weeks later did the full extent of what had happened become clear.”    A few days earlier, on the 16th May, 1985,  CJN had written to surveyors conducting the rent review then taking place, in the following terms: “On Saturday 13th August, while I was away on holiday, without being advised by Hecuba and without any agreement having been reached, Hecuba’s shopfitters tore out our exclusive stairway so that the only access to 37 Brompton Road at 1st floor level was through a hole in the brickwork of the party wall.”    Regrettably, it is not easy to  reconcile either of these passages with the true facts as to what happened on the 12th August, 1983, as already summarised above.   
(9)	Reverting to the position as between CJNA or CJN and BEN, there were further exchanges during the course of  1985, in which BEN underlined that the CJNA position may have been prejudiced by acquiescence.   The details need not detain us here.  A number of points should, however, be noted.  First,  by letter dated 25th September, 1985,  CJN retorted  that he was “at a loss to understand why we were not originally advised by Bennetts that we should demand an immediate injunction to stop progress of the work until satisfactory terms had been agreed.”    In the same letter, however,  CJN added this:  “Remember too, that the exclusive stairway to 37 Brompton Road was removed while I was away on holiday.  On my return I contacted DT&C and was assured that all the agreed work was proceeding as agreed.”   Secondly, on  the 21st October, 1985, BEN now replied observing that CJN had not contacted them for several months seeking advice as to urgent steps which might be taken after the removal of the staircase.     In all the circumstances, the gravamen of BEN’s advice at this point was that CJNA should focus on such compensation as it could achieve by way of a rent review;  that by now it was inadvisable to take proceedings to seek reinstatement; but that if CJN did wish to take such proceedings, it was essential to obtain counsel’s advice.     Thirdly, it was unclear to me on the documents, whether CJN had, at any time, given BEN instructions as to the conversation with the workman on the 12th August and the knowledge that he then obtained that the staircase was to be demolished, all as summarised in paragraph 9 above. In his oral evidence,  with reference to another document containing the same facts, CJN said that he could no longer remember whether he had told BEN of this.    In all the circumstances, I do not propose to express any conclusion as to what CJN told BEN in this regard;   what ultimately matters in assessing the value of any claim against BEN is  the “true” position as distinct from BEN’s perception of it.    Fourthly, at a meeting on the 28th November, 1985,  BEN sought to explain the meaning of “acquiescence” to CJN and its relevance to the grant of equitable relief.   This is a matter of some significance, to which I shall return,  given the play which CJN has sought to make with his suggested understanding of the meaning of the wording “formal consent” (contained in the BEN letter of 11th November, 1983 to LP).
(10)	By letter dated 18th March, 1986, CJN on behalf of  CJNA terminated BEN’s retainer.   It is to be noted that, in this letter,  CJN made particular complaint of the notion that he should seek counsel’s advice at a cost of £1,500.  He was therefore going to retain another solicitor, offering, as he put it, an effective and less expensive approach.      PEN was thereupon retained.

14.      The PEN chapter:    At the outset here, one matter ought to be mentioned.     On the documents, it is not entirely clear that PEN’s retainer, extended from the start to a consideration of whether BEN had been negligent. I proceed, however, on the footing that  from the time when PEN was first instructed, its retainer did extend to a consideration of BEN’s negligence.    First, because, on balance, on the contemporaneous documentation I am satisfied that this was so;  were it otherwise, I would have expected some clear statement prior to the PEN pleadings in the action putting this matter in issue.  Secondly, because DC and GZ’s advice in and conduct of the action,  proceeded on the premise that PEN had indeed been instructed well before the expiry of any time limit, to consider BEN’s negligence;  nowhere, in the materials relating to the action did either DC or GZ cast doubt on this premise.  

15.      To begin with, however, the PEN focus lay elsewhere – not with BEN.     In about March 1986, PEN advised CJNA that pressure could be brought to bear on Hecuba by withholding rent.  Hecuba’s response was to institute proceedings for rent arrears;  for its part, CJNA counterclaimed damages.  At around the same time, Hecuba sought to assign its leasehold interest to Hobbs.  It was in this context that PEN took the advice of counsel, Ms. Erica Foggin and the Foggin affidavit (see paragraph 9 above) came to be drafted.     Consideration was given to CJNA seeking to restrain the assignment to Hobbs.   In the event,  disputes between CJNA and Hecuba and questions as to the assignment to Hobbs were resolved by agreement, dated 30th July, 1987, pursuant to which CJNA received £35,000.    Save that some further reference to the receipt of that £35,000 may be necessary and although there has been lingering dissatisfaction with PEN’s advice in  this area, nothing further turns on it for present purposes and I say no more about it.     

16.      By letter to CJNA dated 2nd November, 1987,  DTC  stated that consent would not be given to the joining (by knocking through) of the two offices on the 1st floor level of  Nos. 35 and 37. CJN now sought advice about taking legal action against  BP and/or DTC.  

17.      During 1988 – 1989 little or no satisfactory progress was made with the carrying out of works to Nos. 35 and 37 or the granting of a lease in respect of the 1st floor of No.35.    In August 1989, CJN informed PEN that CJNA had moved out of No.37;    thereafter, CJNA continued to operate from its office in Newbury.   On 23rd October, 1989, CJN informed PEN that he still wished to pursue proceedings against DTC, Hobbs and BEN.    In February 1990,  CJNA expressed concern about a lack of progress in this regard.

18.      Thus prompted,  PEN took a proof of evidence from CJN in March 1990 (“the PEN proof”).    With regard to the events of 12th August, 1983, the relevant paragraph was in the same terms as paragraph 10 of the Foggin affidavit (set out in paragraph 9 above).

19.      On the 21st May, 1990,  PEN held an initial conference with KL, who had been instructed on behalf of CJNA.   KL’s instructions included the PEN proof.   Thereafter, a meeting was held on the 25th May,1990, in which PEN reported to CJN on the conference with KL.   The attendance note of that meeting records that KL viewed any claim against BP and BEN as “speculative” and was cautious as to the amount of damages which could be claimed.    KL pointed out that CJNA could pursue BEN and/or BP but could not obtain double recovery.  There was, said KL, “.. a possibility that BEN may have been negligent but a claim against BP should be pursued first to establish the losses and any shortfall and if caused by the negligence be claimed from BEN made up.”   As recorded by the attendance note, discussion then followed between Susan Dixon (of PEN) and CJN about the matter generally.   In the course of that discussion, the events of 12th August, 1983 were dealt with in the following terms:

“On 12th August 1983 CJN was about to go on holiday.  During the early evening at the foreman’s request, he gave the foreman the key to no 37 on the understanding that work was to continue/ commence on the staircase (37) over the weekend….The workmen had already started knocking through upstairs from 37 to 35 before removing the staircase.  This took place over the weekend 13th/14th August 1983.  CJN had previously agreed to the knocking through on the assumption that the rest of the works were going ahead.  On his return on 5th September 1983, CJN was surprised that the staircase had been removed but that nothing else had happened.  CJN began to get nervous at this stage.”

Suffice to say that this note (“the Dixon attendance note”) deals with the events of 12th August, 1983 in materially the same terms as both the Foggin affidavit and the PEN proof.

20.      On the 8th June, 1990, a conference was held with KL, attended by both PEN and CJN.   What follows is taken from a PEN attendance note of that conference.       To begin with,  KL  is recorded as expressing the opinion that any agreement on the 3rd August, 1983 had been “subject to contract”;   there had been no binding agreement to carry out the works contemplated by CJN.    For his part, CJN apparently said that the consent given by CJNA was not “a gratuitous consent”;    the work went ahead without the plans being approved;  therefore the stairs were removed in the absence of an agreement and DTC did not have approval to remove them.    The attendance note continued: “KL said that it was unfortunate that the staircase was demolished before all the documentation was signed up and everything went wrong from there. CJN had given away or at least significantly eroded a commanding position”.    An action could  be maintained against BP for nuisance but any litigation would be “expensive and speculative”.   With particular reference to BEN,  the discussion concentrated on its  “failure to advise that work should not take place before the legal documentation was sewn up”.   KL is attributed with the view that an action could be maintained against BEN but that there was a 6 year time limit.    KL is also reported as saying that “BEN should have got an injunction to stop the staircase being demolished” – but the attendance note does not explain how BEN might have done that, given that (on the facts already set out here) it did not know in advance of the contemplated demolition.    As to damages which could be recovered from BEN, KL stated that the quantum would be around the same amount as that recoverable from BP;   there was, “only one pot of damages”.    He cautioned as to questions of remoteness.     Finally, this attendance note makes it clear, if it was not already clear, that CJN must have appreciated the difference between sums which could properly be claimed in a pleading and sums which CJNA’s  legal representatives believed he would be likely to recover.

21.      The question of what happened on the 12th August, 1983 recurs in correspondence and documents.   On the 6th July, 1990, in a letter to BP, CJN asserted that  the demolition of  staircase was a “trespass” – absent a legally enforceable agreement permitting it.  Continuing, he said this:
“Incidentally, the demolition of the staircase took place without my prior authorisation, and while I was on holiday.   I returned from my holiday to find a fait accompli.”     An attendance note of a meeting between PEN and CJN, on the 10th September, 1990, records that:  “… [CJN] .. was adamant that no approval had been given to remove the staircase…”.  Once again, it is not easy to reconcile these accounts with those contained in the Foggin affidavit, the PEN proof and the Dixon attendance note.

22.      By this time proceedings had been commenced by CJNA against BP.     On the 17th October, 1990,  KL  reiterated that the action was highly speculative and advised that CJNA should accept BP’s offer in settlement of £35,000;  on the assumption that the Hobbs settlement (see above) was in fact worth £45,000 to CJNA, it would then have recouped some £80,000.    CJN was not at all happy with this advice and went so far as to express his concern in writing (to PEN, on the next day, the 18th October, 1990);  the fact that both CJNA’s barrister (KL) and the barrister instructed by BP (Mr. Neuberger, as he then was) were in the same chambers might somehow lead to the interests of chambers being placed above those of the client.    At all events, this advice from KL was not accepted.

23.      An “Addendum to CJN’s Proof of Evidence”  (“the addendum”), dated both 30th October 1990 and January 1991,  reverted to the events of 12th August, 1983.    Here, the matter was dealt with as follows:

“I have been asked for further detail in connection with the meeting on 3rd August 1983….  I did not agree to the removal of the 37 entranceway, door and staircase, and was awaiting plans to be produced by DT&C and confirmation of what had been agreed at the 3rd August meeting…. I was aware that the first step was to knock through between 35 and 37 at first floor level.  See my 9th August 1983 letter.  I recall that it took about a week and a rough hole had been cut before I went on holiday on 12th August.  The hole in the wall at first floor level was therefore cut with my knowledge and with my consent but on the clear understanding that all other structural alterations would continue at the same pace.  ….. whilst I was content that that work would carry on, I did not consent by that letter to the removal of the no. 37 staircase.”

On any natural reading, the addendum presents a picture of  the events of 12th August, 1983 in a  very different light from that suggested by the Foggin affidavit, the PEN proof and the Dixon attendance note.

24.      A further conference was held on the 19th March, 1991 with KL, attended by PEN and CJN.     KL remained of the view that the claim against BP, necessarily in tort, was speculative.   The claim against Hobbs had been  compromised  by the settlement already referred to. The question of estoppel was ventilated.    The discussion then includes the following passage:

“… KL said normally they would not have been allowed to have started without having a binding agreement in place.  CJN said his solicitor had advised that he had acquiesced.  He gave access to workmen over the weekend. That is when it all went wrong.  KL: Assuming BEN were told in November, that is 2 months later, they should have then advised you to go for an injunction. CJN: They said I couldn’t.  KL: I think the initial fault lay at BEN’s door.  In the claim against BEN, CJNL can go back to July 1984.  So far as BEN were concerned, the longer it is left, the weaker a case an injunction becomes.  They should have sued for an injunction straightaway.  In 1984 they could have advised CJN to seek an injunction. By the injunction, an order would have been obtained requiring reinstatement of the staircase….. CJNL’s  bargaining weapon was the ability to stop the work on the shop and to get the staircase back.  CJN should have been told to sue to get the staircase back, for breach of covenant for quiet enjoyment, and then get the works in a contractual form.”

It is to be remembered that this is simply an attendance note;  understandably, given the nature of discussion in a conference, such attendance notes are often unclear.   Here, it is to be noted, first, that it is not altogether clear when the focus is the commencement of works without a binding agreement or when it is the demolition of the staircase.  Secondly, the attendance note does not clarify what it is that “BEN were told” in November 1984;   it is already apparent that CJN’s consent to this demolition features in some accounts of those events but not in others.  All that said, it is fair to say that KL contemplated a claim against BEN even though on some of the information before him, he must have been aware that CJN had consented (albeit on terms) to the demolition of the staircase.   However, it is also fair to observe that much of KL’s thinking appeared directed to criticism of BEN for permitting the works to begin in the first place – a different point.    At all events, as to BEN, KL put the matter this way:

“ There may be a problem with limitation.  KL was of the view that Bennetts handled the matter sufficiently badly to amount to negligence.  They should have taken pretty immediate action on hearing the facts in November 1983.  CJNL said that at that point the works were continuing.  KL advised that at that point he was in a position to insist on a binding agreement.  The outcome will depend on CJN’s instructions to BEN….”

It is plain that the conference dealt with quantum in some detail.   For the moment, I put that to one side though to keep a sense of perspective, it is to be noted that KL took the view that the overall claim was worth between £100,000 and £110,000, less the £45,000 (as he saw it) already received by way of the Hobbs settlement, plus interest and costs.

25.      A writ had been issued on 26th July,1990 commencing proceedings brought by CJNA against BEN.  On the 16th April, 1991, a Statement of Claim was served, settled by KL (“the KL SoC”).   Its terms are instructive;  it includes the following:

“        11.    On a day unknown to the Plaintiff, but between 12th August 1983 and 5th September 1983, and without the Plaintiff’s consent, the staircase was demolished.  The demolition of the staircase represented a trespass and/or a breach of covenant for quiet enjoyment and/or an inteference with the Plaintiff’s easements.
12.	The Plaintiff reported these events to the Defendants on or about 9th/10th November 1983.  ”

The emphasis here is placed on the demolition of the staircase, rather than a failure to advise that works should not be commenced in the first place.   The approach is not that any consent given by CJN was limited and therefore should not have told against BEN advising the bringing of proceedings.  Instead, the suggestion, as I read it, is that no consent had been given at all. 

26.      As has already been seen, KL had flagged a concern as to limitation, in connection with any claim against BEN.     Difficulties in this regard (if not already fatal) were compounded when, as set out in the Statement of Claim in the Action, the writ was not timeously served and such service as there had been was set aside by an order of the Court, made on the 2nd September, 1991.   By this time too,  CJNA was involved in legal proceedings against BP – also premised on the absence of any consent to the demolition of the staircase – and facing a claim from Hobbs for rent arrears and possession of the premises.    The PEN chapter was drawing to a close and the DC chapter was opening.  These events were helpfully summarised in Mr. Craig’s written closing submissions, as follows:

“        Following the refusal of PEN’s application to extend the validity of the writ and with it the action against BEN, PEN’s retainer was terminated by CJN and in June 1991 DC was retained to handle the taxation of PEN’s costs … It was not until 1st October 1991 that DC agreed to go on the record in the BP litigation.
… TLC immediately took conduct of the BP litigation and Hobbs litigation and negotiated a settlement in December 1991 for £100,000 of which £27,500 was paid directly to Hobbs ….  The settlement also involved the surrender to Hobbs of the Underlease ….
… Following the settlement of the BP litigation, consideration was given to the proposed claim against BEN….”

27.      The DC chapter:     On the 10th December, 1991,  CJN wrote to TLC, criticising the legal system in extravagant language while praising TLC and DC in fulsome terms, for their assistance in obtaining the £100,000 settlement from BP – a sum  substantially exceeding the level at which KL had thought it prudent to settle this claim (£35,000).  

28.      As TLC explained when giving evidence and as I accept,  the DC strategy was first to concentrate on the BP litigation and thereafter to focus on BEN.    With the BP settlement concluded in December, 1991, TLC turned his attention to PEN and BEN in early 1992.   Importantly, TLC came to the PEN/BEN litigation against the background of the BP litigation.   In that litigation, which (as already discussed) had concluded successfully, the underlying premise was that CJN had not given consent  for the demolition of the staircase;  it was not a question of giving consent on certain understandings;  no consent had been given at all.  The BP litigation matched the approach taken in the KL SoC (paragraph 25 above).

29.      In January 1992, TLC commenced taking CJN’s proof.  It went through a number of revisions,  evolving into its final form in or about December 1992 (“the DC proof”).    TLC said in evidence and I accept, that he took the proof by starting from scratch;  he did not use the PEN proof as a base or cross-refer to it.    Having observed CJN closely over the course of the trial and on all the evidence, I have no doubt whatsoever that he was closely involved in the development of the DC proof.  As to the events of 12th August, 1983, the DC proof said this:

“ 11.    …..  I .. replied to Bennetts on 9 August … In the interests of goodwill and cooperation, I confirmed that I was happy for the knocking through of a temporary access between Nos. 35 and 37 to begin, as  soon as DTC had arranged the necessary rights of access via No.35 and provided that all agreed that this access was a temporary entrance. It was of course my understanding  that no works would be carried out until all the legal documentation had been completed, save for the starting of work on temporary access. ….
12.      On this basis work immediately started within No. 35 on the temporary 1st floor access  through to No. 37.   This, however, was not completed by the time I went away on holiday on the evening of 12 August, 1983, having in the absence of any other keyholder that evening, released a key to workmen, employed either by Hecuba or DTC, who wished to have access via No. 37 over the weekend.   I assumed it was because they were required to continue work on the first floor joint access from the No. 37 side or, via that access, within No. 35, which they were perfectly entitled to do bearing in mind that my company had at that time no legal interest in No.35.  At no time, however, did I consent to the removal of the staircase at the entrance of No. 37.”

Accordingly, the DC proof is a further document presenting a picture of the events of 12th August, 1983 in a very different light from that suggested by the Foggin affidavit, the PEN proof and the Dixon attendance note.

30.     GZ was instructed in February 1983 and a conference was held with him on the 26th February, attended by CJN and a Mr. Coffey, an assistant at DC;   TLC was absent due to illness.  Drawing on the attendance note of that conference, it appears that GZ summarised the facts as he understood them, giving CJN the opportunity to correct any misunderstandings.   If the attendance note is at all accurate,  then, as might be expected, a dialogue ensued between GZ and CJN.    The attendance note includes the following passage as to the events of 12th August, 1983, again supporting the “no consent” account of those events:

“ In fact, within a day or two of this meeting work started in no. 35 to knock through from 35 to 37 at first floor level.  Since  CJN then had no legal interest in no.35, and since the works did not, to the extent that they were being carried out, directly affect his office in 37 he did not feel able to object….
CJN … said that up to and including Friday 12 August 1983, the staircase was intact…. As he left at approximately 6 to 6.30 pm that night, just prior to going on holiday, a workman asked CJN to lend him a key because everyone else had gone home and the workman required access over the weekend.   CJN did not ask him why he needed it, considering it an innocent request since work was proceeding in no.35.
….   When he returned from holiday on 5 September 1983 he found his front entrance and staircase gone….   His staff had noticed what was going on but had presumed that CJN had arranged and agreed to this before he went away.”

Thereafter,  CJN had spoken to DTC, who had reassured him that “everything was going ahead as agreed”.    For that, amongst other, reasons,   CJN  did not contact BEN until, on this account, about mid-October 1983.       GZ is recorded as expressing the view that  an interlocutory injunction could probably  have been obtained at any time up until Xmas 1983;     even if an injunction had not been granted, CJN could have recovered possession of the area where the original staircase had been, as any licence he had granted to BP and/or Hecuba had by this stage been withdrawn.   CJN might not have obtained reinstatement but he could have recovered damages, albeit that the basis  on which damages would have been assessed was difficult and uncertain.   GZ was critical of the rest of BEN’s involvement, apparently describing it as “attempts to push BP and DTC along without taking any real action to do so”.   GZ was further critical of PEN but it is unnecessary to recount the detail here. In GZ’s opinion, the conduct of both BEN and PEN had fallen “below an acceptable standard”.    As to quantum,  CJN emphasised the importance to his business of “amenable surroundings” and GZ expressed an initial view that  “ while demonstrable loss of business may be recoverable, the failure to obtain new business was probably too remote.”

31.      On the 20th March, 1992, the Statement of Claim was served in the action (see paragraph 3 above), settled by GZ (“the GZ SoC”).   It was later amended, on the 19th February, 1993, in the course of the trial.  Putting quantum to one side,  the GZ SoC, in its original form, included the following: 
“ 16.    On a date unknown to the Plaintiff (although thought to be over the weekend  of 13/14 August 1983) but certainly during the period of Mr. Nicholl’s absence [as already set out in the GZ SoC, a period covering the 12th August to the 5th September] Hecuba and/or BP or their contractors or other agents without the consent of the Plaintiff demolished and removed the passageway and staircase that had formed part of the demise under the Lease together with the wall dividing them from the remainder of the ground floor premises and laid a new floor within the Premises where the staircase had previously been ….
20.	Bennetts negligently and in breach of the terms of their retainer:
(i)	Failed to advise the Plaintiff that it had a remedy by way of injunction to restrain the carrying out of any further work on the Premises and to compel the reinstatement of the staircase, passageway and dividing wall;
(ii)	Failed to advise the Plaintiff to pursue its remedies against both BP and Hecuba and so to ensure that either the position prior to 12 August 1983 was restored or that a binding timetable for the completion of the works was established;
(iii)	Failed to advise the Plaintiff that acquiescence in what had happened and delay in the pursuit of its remedies might seriously jeopardise the Plaintiff’s position;
(iv)	Failed to advise or failed adequately to advise the Plaintiff as to how its position and its interests could best be protected;  and
(v)	Failed to take any or any adequate steps on the Plaintiff’s behalf for the protection of the Plaintiff’s interests.”

By amendment, the following was added (“the amended case”):
“   15A.      Negligently and in breach of the terms of their retainer Bennetts failed at any time prior to 12 August 1983 to advise the Plaintiff of the dangers of allowing any of the work to the Plaintiff’s premises being commenced before a detailed schedule and/or specification of works had been formally agreed together with a timetable for their completion and all necessary documentation in relation thereto had been completed so that there would  be a binding and enforceable agreement for the works.
15B.     Further or alternatively, Bennetts negligently and in breach of the terms of their retainer failed at any time prior to 12 August 1983 to take any steps whether by way of correspondence with BP, DTC, Hecuba or any other interested party or otherwise to ensure that no work was started until such documentation as was necessary to protect the Plaintiff’s position had been executed…..”

It may therefore be seen that the basis of  the original CJNA pleaded case in the action was that there had been no consent to the demolition of the staircase.    The amended case raised a different issue and went to BEN’s alleged failures prior to the 12th August 1983, relating to the commencement of any works at all.

32.      By an Opinion dated 6th April, 1992, GZ advised on quantum, remarking that he had already advised that CJNA had a “good arguable case” on liability.       For the moment at least, I continue to take quantum briefly but, again, with a view to maintaining perspective, it is right to record GZ’s view.    In summary, GZ advised that of  the  (considerably larger) claim for damages pleaded in the GZ SoC, some £145,000 was recoverable, comprised of £106,000 principal plus interest then running at £39,000.    As GZ accepted in his evidence at the trial that figure should be increased by £50,000 because the deduction he allowed in respect of the BP settlement had been over-stated by £50,000.

33.      On the 8th June, 1992, there is an attendance note recording a conversation between TLC and CJN’s bank manager (at the NatWest).  According to the attendance note, the purpose of TLC’s conversation  “was to ensure that the bank maintained its confidence in the Plaintiff”. TLC expressed the view that he was 80% sure that an order for costs would be made against PEN.     TLC “ … wanted him to know that this firm  [ie. DC] was committed to the Plaintiff’s case on the basis that it is only interim invoicing on a 2/3 basis and furthermore is giving the Plaintiff a long time in which to discharge its invoices.   Consequently, this firm is funding the Plaintiff’s action because it is confident, that the Plaintiff is likely to succeed.”    While success could not be guaranteed TLC was over 60% confident that CJNA  would obtain judgment for more than £100,000 and over 70% confident that CJNA would  obtain judgment for more than £70,000.    Further,  TLC informed the  bank manager that they were “after a lot more”  and that he would regard “the action as reasonably successful if we obtained damages which exceed the P’s overdraft liability.  That my realistic aim is to clear off the liability to the bank.  A very successful case will attract substantial damages.”   In evidence it emerged that the figure required to dispose of this overdraft liability was in excess of £200,000.

34.      PEN’s Defence in the action was served on the 16th June, 1992. 
Negligence was comprehensively denied, on the part of both BEN and PEN;   quantum was likewise challenged.  For present purposes,  it suffices to highlight the following passages in the pleading:

“  12.   …. CJNL [ie. CJNA] had (on or about the 8th or 9th August 1983) vacated part of No. 37 so as to enable the temporary access  of restricted height to be made between the staircase of No. 35 and No. 37 and that opening had already been made.  Mr. Nicholl had also provided Hecuba’s workmen with keys so that they could  obtain access to No. 37 for the purpose of demolishing the staircase and he had obtained … keys to the front door of No. 35 so that the staff of CJNL could use that staircase for the purpose of access to No. 37.  These arrangements were made directly between CJNL and DTC and/or the contractors engaged by Hecuba and Bennetts did not know of and were not involved in them.
13.      Paragraph 16 of the Claim is admitted save that it is denied that the work was done without the consent of CJNL….Mr. Nicholl knew of and (by his provision of keys) facilitated the intended demolition of the staircase at No. 37: and in his absence on holiday no other director or officer of CJNL protested that the work was unauthorised or undertaken without consent.
14       .…. It is averred that Mr. Nicholl had in fact consented to the works because he wished to appear reasonable and because he was anxious to obtain the first floor room at No. 35…”

Plainly, the issue of CJN’s consent to the demolition of the staircase was squarely in issue.    Equally plainly, it was now essential that CJN should inform his legal team (DC and GZ) of his answer to these allegations;  on the basis of information provided by CJN,  the legal team could be expected to formulate its strategy.   

35.      CJN  did indeed provide detailed written notes, dated 18th June, 1992, containing comments on the PEN Defence.     The key passages were these:

“10)   Mr. Nicholl denies providing keys for this purpose but did provide keys to permit work on 35/37 landing access to continue over weekend prior to removal of stairs and in belief that, by CJNL.BEN.DT&C letters 09.08.83/ 11.08.83, all legal rights were protected…. No keys would have been needed to demolish the entranceway and stairs at No.37.   N had no right to agree to or “permit” the removal of the stairs.  Keys were lent to facilitate the expedition of the temporary access at 1st Floor level – not exclusive removal of No. 37’s entranceway and stairs.
13)      No evidence exists that Mr. Nicholl gave consent.  It was not Mr. Nicholl’s to give and he denies any such statement.
15)      Mr. Nicholl at no time gave prior permission for or knew of the exclusive removal of the No. 37 stairs.  Again, if it was the intention to demolish the entranceway and stairs at No. 37,  it patently did not require the P’s office keys.  The borrowing of the keys, in fact, would suggest quite the opposite – that the builder required access for the purposes of continuing or completing the temporary access at  1st floor level (but only as instructed in the …. Letter dated 09.08.83) without further disturbing the structure of the building and prior to the later removal of the No.37 entranceway and stairs after legal agreement to the Deed of Variation…
17)	     Mr. Nicholl did not consent to the works – had no right to….”

36.      In around mid-1992 (the precise date does not matter), CJN also prepared a detailed chronology of events.   This document covered, by now, familiar ground.   Having set out the limited permission given by CJN’s letter of 9th August, 1983 (see paragraph 8 above), it continued as follows with reference to the events of 12th August, 1983:

“  Nowhere, at any time, either verbally or in writing, has CJNL discussed, agreed to, acquiesced or given permission to anyone for the exclusive removal of the entranceway and stairs to their offices at No. 37 Brompton Road…”

37.      Pausing there, the sense of both the notes on the PEN Defence and the chronology – documents prepared by CJN himself – was that he had not given consent to the removal of the stairs.     For my part, I would not expect  even a reasonably careful reader of these documents to have been so astute as to detect the significance which at the trial CJN  sought to attach to the word “exclusive” qualifying the removal of the stairs.      If CJN had wanted his legal representatives to understand that he had given consent to the removal of the staircase but only on terms, he could and should have said so.   In my judgment, these two documents did no such thing. 

38.      On the 27th July, 1992,  DC faxed CJN, informing him of PEN making a payment into court, in the amount of £72,000.   By a subsequent (undated) fax,  TLC reported to GZ that CJN would not accept the payment in but that TLC had outlined the risks to him.  TLC added the comment “Do you like gambling?”.    Looking on ahead a little, it appears that the subject of the payment in was discussed further at a meeting between TLC and CJN on the 30th September, 1992.    At that meeting, TLC expressed the opinion that PEN was likely to make a further payment in, in or about December 1992, bringing the total to about £100,000.    In the event,  PEN at no stage increased its payment into court.

39.      Given the importance attached to it by CJN, it is next appropriate to refer to an aide memoire prepared by TLC and which became known as the “mountain tops” document.  In its updated version, it was dated 17th August, 1992.    The pleaded issues were considered.  As to whether CJN had consented to the removal of the staircase, the document said this:

“This issue is broadly contained in paragraph 12 of the Defence and relates to the purpose for which CJN provided the keys to 37.   Subsidiary issues are whether he had keys to 35 prior to  his holiday in August 1983 and the reason why no-one complained about the works in his absence.”

Later the document said this:
“(v)   Paragraph 22 of the Statement of Claim is admitted.   Bennetts wrote to CJN on 7th August 1984 advising that CJN may have prejudiced its position by acquiescence.  Their pleaded case in paragraph 23 of the Defence goes back to the “old chestnut”  of acquiescence in the commencement of the work.  Any other acquiescence is difficult for them to justify, bearing in mind their failure to advise about an injunction.”

I shall return to this “mountain tops” document later.

40.      On the 7th  December, 1992,  DC delivered the brief and provisional trial bundle to GZ.   At the same time, Mr. Nicholas Stewart QC was instructed, in the event, essentially to advise on quantum.  A consultation was held with Mr. Stewart QC on the 13th January, 1993.   By this time, Mr. Hyde (who gave evidence at the trial before me) had been retained as an expert on quantum and had produced a report.    In broad terms, it appears that Mr. Stewart QC assessed the claim as worth about £250,000.

41.      The trial of the action began on the 15th February, 1993, before Knox, J.      At or shortly after the commencement of the trial, leave was given for the GZ SoC to be amended so as to introduce the amended case (paragraph 31 above).     By the 24th February, 1993, the stage had been reached when CJN was being cross-examined.  It is now time to turn to CJN’s answers, which are said to give rise to the inconsistency (paragraphs 4 and 5 above).

42.      First, I come to the passage dealing with CJN’s alleged consent to the demolition of the staircase.    At the trial before me,  CJN expressed some unhappiness with the notes of the questions and answers taken by GZ;    instead, or in addition, CJN invited reference to notes of the proceedings, prepared on his own behalf.     Having considered both versions, I am bound to say that I can find no difference of any significance between them.   I am, however, content, certainly here, to have regard to CJN’s preferred version, which proceeds as follows:  (CJN is referred to as “CN”;  he is being cross-examined by Mr. Alastair Norris, as he then was, referred to as “AN”):

“  AN:     That is very “refined” permission which I suggest you have thought about over the years.  At the time the workman asked for the key to demolish the staircase and you gave him a key, didn’t you ?
CN:        No, I did not.  The key wasn’t for that purpose.  It was quite clear in my mind that the first time the “giving of the key” was in question was a year later when Bennetts referred to “acquiescence”. Until then,  I had no idea I had given any kind of permission whatsoever to do anything.
I have not changed my opinion one iota since that date…..”
Mr. Norris then turned to paragraph 10 of the Foggin affidavit (paragraph 9 above):

“        AN: … That is accurate is it not ?
CN:        Yes.
AN:         You were asked for keys in order that stairs could be demolished?  And you gave keys in order that the staircase could be demolished ?
CN:        My Lord, I make the point that all the works were to go ahead together and that my intent was not to inconvenience the workman or shopkeeper during my 2 week absence.
Judge interrupts … Yes but the answer to the question is “Yes” isn’t it ?
CN:        It forms part of it …
Judge interrupts again … Yes.  Nobody is suggesting, I think that the only thing that was going to happen was that the staircase was going to be demolished. ….  What he [ie., Mr. Norris] is suggesting to you is that it was for the purpose of demolishing the staircase.  And I think your answer is “Yes it was – but that was only part of all the other things to go on at the same time.”
CN:      Yes … except I repeat that the keys were irrelevant to the demolishing of the stairs.   I did not make any comment about whether or not the stairs were to be removed except “does that mean that all works are to proceed ?”  It is clear that this was confirmation of the original (3rd August meeting) understanding.  Everybody  believed those works were all to continue as fast as possible.  I did not see – and do not see – that the keys were “permission” to remove the stairs.  I was in no position to give such permission.
Access was already restricted …
… I was concerned that my staff should have access because of the hoardings.
AN:        But you do understand that, after you had given the keys to the workman in order that  the staircase be demolished, everyone treated that as your having given your consent ?
CN:        Until  my return from holiday … that was not a consent.  It was an acceptance of the fact that it was going to go ahead  whether or not I said anything.  I could do nothing to stop it.
J:  [ie., Knox,J.]    Yes, but the point that was put to you was that everybody concerned thereafter treated you as having consented to the demolition of the staircase.
CN:        But that was without my having written or said that I had given my consent.  It was an assumption on their part as much as it was an assumption on mine that (legal) approval had been given (for the removal of the stairs) by them if the works were proceeding.  And, on my return, DTC were immediately aware – and I was assured yet again – that all the works were proceeding as discussed.”

As it seems to me, CJN’s answers here were (1) consistent with those documents in which CJN had agreed that he gave consent to the demolition of the staircase but on terms that other works as discussed on the 3rd August, would proceed;  but  (2) inconsistent, with those documents in which CJN denied having given any consent to the demolition of the staircase.    The ramifications of this conclusion are best explored later.

43.      I come next (for reasons to be explained) to those passages in CJN’s cross-examination relevant to the question of whether CJN would have agreed to CJNA bringing proceedings for an injunction in late 1983, even had BEN advised him to do so.    Here, the notes are those taken by GZ.

“  AN:     You not prepared start any action if you yourself had pay costs
CJN:       If I could avoid having to pay costs as I’d been led to believe by earlier agreements.  I was prepared to start litigating but I was doing my best to say wouldn’t pay.
J-K  [ie., Knox,J.]   You wouldn’t start litigation unless not pay costs.
CJN:       That my stance, yes…..

AN:         Again, you not want go counsel
CJN:       Yes…
AN:        What you wanted was one more chance to negotiate
CJN:       I believed 99% way there because of DTC’s agreement to carry through works, yes….

AN:        Your attitude negotiate not litigate 
CJN:       Yes. I understood once litigation commenced, everything stalled.  Achieved lot of agreement – appeared works go through – if I indulged in litigation everything would stall until outcome protracted litigation. 
AN:        As well as practical problem works stop – concerned risk costs litigation
CJN:       Yes …”

It is convenient to defer, for the moment, consideration of the significance of these answers.

44.      The answers given by CJN in cross-examination on Thursday 24th February, 1993 had an immediate impact on his legal team.   GZ indicated to TLC that there was a crisis and  that certain of the matters elicited in the course of CJN’s cross-examination had caused him to reappraise CJNA’s prospects of success.  As CJN remained under cross-examination, the matter could not then be discussed with him.     

45.      On Friday 25th February, 1993,  the Court was apparently not sitting and TLC prepared a note, entitled “Damage Limitation”.   Its purpose was:
 
“ …      to see whether we are able to limit the damage rendered to the case by the cross-examination of CJN yesterday.
We are particularly concerned with his admissions that, when he handed over the key to the workman on the weekend of 13/14 August 1983 he did so knowing that they might carry out the works contemplated by the 3 August 1983 agreement….”

TLC was anxious to preserve the argument that giving the key (to the workman) did not, in the circumstances, amount to acquiescence.  Reviewing the factual materials, TLC raised the question as to why BEN had not cautioned CJN prior to the 12th August (essentially, the amended case) and why, on learning of the demolition of the staircase in November 1983, BEN had not then sought immediate injunctive relief.   TLC hoped that there were “respectable arguments remaining in our armoury to limit the damage caused by his cross-examination and to “turnaround” the situation by placing the onus not on CJN, but on Bennetts…”.  TLC concluded by saying that “the idea is to make the “big” look insignificant. Will it work ?”

46.      By a written Opinion, dated 25th February, 1993,  GZ confirmed his view that, in effect, cross-examination of CJN had proved fatal to CJNA’s prospects in the action.    To begin with, GZ summarised the facts which emerged from the cross-examination as representing the true position in the BEN period, as follows:

“ (1)    Bennetts were not consulted when the question of starting the works for the removal of the staircase was raised on 12 August;
(2)      Mr. Nicholl did (contrary to all the instructions he has given in the past) realise and expect that the works of demolition would be carried out over that weekend, and that he agreed  that the work should be done. It is fair to note that he certainly regarded the consent as qualified, but it was nevertheless a consent.
(3)      That even after he became concerned at the progress (or lack of it) in completing the works, he did not want to sue anyone.  At one point … he said that litigation would stall things.
(4)      That the fact that he would have had to pay costs probably meant that he would not have litigated even if he had been advised to.”
 
GZ’s reasoning proceeded as follows.  Hitherto, in accordance with CJN’s instructions, he had approached the case on the basis that CJN had not given consent to the demolition of the staircase;  its demolition therefore disclosed a clear case of trespass;  in November 1983, he had a good and relatively straightforward case for reinstatement;  had he then been advised of that right, he would have sought to enforce it by proceedings, giving him at the least negotiating leverage.   BEN’s main failing had been its failure to give such advice.  On that basis GZ had advised that the BEN action thrown away by PEN had been a good one so that the action (against PEN) was essentially concerned with quantum – liability being fairly clear.   In the light of CJN’s answers in evidence, in particular the qualified consent to the demolition of the staircase, it was far from clear that BEN had been negligent;  moreover, it was now far from clear that CJN would have litigated,  even had BEN advised him to do so;   the BEN action was accordingly worthless, having no more than a nuisance value, with the result that the claim against PEN fell to the ground.    GZ then turned to consider the amended case and concluded that while it was not “entirely unarguable”, he had little confidence in it succeeding.    Various other complaints against PEN added nothing of substance to CJNA’s claim in the action.      GZ concluded his opinion in the following terms:

“        To summarise, I have come to the view that by undermining the claim against Bennetts, Mr. Nicholl has entirely removed the whole foundation of his case, and I cannot advise that there is any longer any serious prospect of success, unless it is possible to substantially reverse the position in re-examination.”

47.      On Tuesday 2nd March, 1993,  CJN’s evidence concluded, a little after 15.00.     He was at once seen by TLC and returned to DC’s offices for a meeting with Mrs. Nicholl and TLC alone.  There are no minutes of that meeting.    Shortly after 17.00,  CJN, Mrs. Nicholl, TLC and a Mr. Coffey of DC met GZ for a conference, at GZ’s chambers.   The background to the conference included not only CJN’s evidence but also an offer to settle from PEN (or its underwriters) which had been “on the table” since the 1st March.   GZ reviewed the position which had been reached.   As to the amended case, given that CJN had said that he would not permit works to happen without an agreement, there was no need for BEN to tell CJN what he already knew.   As to the case overall, GZ’s advice, summarised by TLC was as follows:
“We had lost the removal without consent, we had lost the possibility of reinstatement which meant that Bennetts could not have injuncted, we had lost the trespass action and we had lost the works agreed in principle.  We had given conditional consent, we did not consult Bennetts about it and we therefore could not blame them.”
In essence, GZ’s advice, echoed by TLC, was to settle the case;   that advice was accepted by CJN.   On the 3rd March, 1993, the compromise was entered into;    pursuant to the compromise, CJNA received £30,000 net  plus costs up until the date of the payment into court, taxed at £16,500; the balance of the payment into court was paid out to PEN.

48.      Perhaps understandably, intense feeling surrounds the conference held on the 2nd March, 1993;  the depth of that feeling is illustrated by the fact that CJN has annotated the DC conference note with more than 50 suggested corrections.    I do not dwell on such matters here because they do not assist in addressing the Issues to be resolved in these proceedings.    If CJNA is otherwise entitled to succeed on Issue (I):  Inconsistency or Issue (II): Compromise, then it does not need the detail of what transpired at this 2nd March, 1993 conference;    if, conversely, CJNA would otherwise fail on Issues (I) and (II), then its case will not be saved by anything which happened at this conference.   Additionally, although in the “uncorrected” notes of the conference remarks are attributed to CJN apparently absolving  DC (and GZ) from blame, to my mind nothing turns on them (even if they were said).  Given the undoubted pressures on CJN at the time,  any such remarks could not assist DC if it was otherwise negligent;  rightly,  Mr. Craig placed no reliance on those remarks in this trial.   For the avoidance of doubt, it is convenient to add only this, thereby avoiding the need to return to it later.   One of CJN’s complaints as to this conference is that he should have been given more time to consider his position.   I do not think that there is any substance in this complaint.  If the decision was going to be made to settle and to take advantage of PEN’s offer it had to be made promptly.   Whether that decision was otherwise negligent is another matter and, of course, forms the substance of Issue (II). 

49.      On the 26th April, 1993, a further meeting took place, attended by CJN, Mrs. Nicholl, Mrs. Zundel (then CJN’s PA and a witness in this trial),  TLC and Mr. Coffey, to discuss the collapse of the action.   No useful purpose would be served by dwelling on any recriminations ventilated at this meeting.  For present purposes, all that needs to be recorded is a debate as to whether CJN had told TLC about the conversation with the workman and the handing over of the keys.  CJN asserted that he had given all the details to TLC;  TLC denied being told about the conversation.     TLC then said this:
“ [He] Had assumed the statement (about keys/conversation with workman) as reported by Penningtons was not correct.”
Instead, TLC’s understanding was derived from the basis on which CJNA’s claim against BP had been advanced.   In his final submissions Mr. Craig made reference to this passage;  he had not raised it earlier with either CJN or TLC when each was giving evidence.  I shall return to consider it later.

50.      On the 24th May, 1993, DC commenced the present action.  Subsequently, the Defendants counterclaimed damages for negligence, as already outlined.     For various reasons (the detail of which does not matter), no limitation issue arises.

51.        Before leaving the documentary history, it should be recorded that CJN subsequently raised with Knox,J. his unhappiness with the compromise.   Naturally, Knox,J. could not enter into dicussion of the litigation but in a response of exceptional kindness and courtesy, dated 18th January, 1994, that learned Judge said this:
“There never was in all my forty years experience of the law a more unfortunate case of a cloud no greater than a man’s hand turning into a devastating hurricane in economic terms.”

52.      The oral evidence:       CJN’s evidence:     Inevitably, CJN’s evidence ranged widely;  the summary here  is confined to CJN’s evidence on the central Issues in dispute.

53.      First, as to the question of CJN having given consent to the demolition of the staircase, his evidence, as I understood it,  was to the following effect:
(1)	As a sub-lessee, he (or CJNA) was not in a position to give consent.  It was not his permission to give. 
(2)	In any event, he did not give consent.  Consent meant “formal consent”;  by letter dated 11th November, 1983, BEN had denied that any formal consent had been given (paragraph 12 above).
(3)	He noted what he was told by the workman on 12th August, 1983 without objection;   as he understood it,  the works they contemplated doing formed part of the agreement in principle entered into on the 3rd August, 1983.   In this regard, he was the innocent bystander, caught between two large parties (BP and Hecuba); his permission was irrelevant; had it been refused it would not have stopped what happened.
(4)	The keys were irrelevant to the staircase and entranceway;   the keys were only relevant to the work of knocking through between Nos. 37 and 35.
(5)	Overall,  CJN said that he did not appreciate the importance attached to this topic.   He did not think  that there was any inconsistency in what he had said on this topic.  If there was, he had not been told of it before the trial.  All that he had said or written on this topic had been made available or explained to TLC and GZ.

54.      I regret that I regard the picture sought to be painted by this evidence as confused, inaccurate and incomplete.  Following the numbering contained in paragraph 53:
(1)	It was true that CJN and/or CJNA could not give permission for the works to proceed without the consent of BP and/or Hecuba.  It is not correct to say that CJN (on behalf of CJNA) could not have refused consent to the demolition of his access to No. 37.
(2)	I reject CJN’s evidence insofar as he said that he thought that “consent” meant “formal consent”.     Having observed CJN closely over the course of the trial,  I am satisfied that CJN is both intelligent and articulate.   Simply because BEN in a letter in 1983 denied that “formal consent” had been given, I do not accept that CJN thereafter and throughout genuinely believed that consent was not consent unless it was “formal consent”, whatever that meant.   First, this topic was addressed and explained by BEN at a meeting in November 1985 (paragraph 13(9) above).   Secondly, the question of consent was plainly visited and revisited in the course  of the PEN chapter, in the conferences with KL and not least in the addendum (paragraphs 19 – 23 above).   In any event,  CJN, in my judgment, fully understood the ordinary English meaning of “consent”.     In the same way,  I am unable to accept that when CJN used the words “exclusive removal” in his notes on the PEN Defence and in his Chronology (paragraphs 35-37 above), he failed to appreciate that he would create the impression that he had simply not consented to the removal of the entranceway and staircase.   I return to this matter later, after considering the rival cases.
(3)	As to CJN being an innocent bystander whose permission was irrelevant, I have already indicated that I am unable to accept this; had he refused consent, the works could not properly have proceeded.     As to the works forming part of an agreement reached on the 3rd August, 1983,  this is difficult to reconcile with CJN’s own letter of  9th August, 1983  (paragraph 8 above) and the fact that only a very limited consent was  granted thereby.   In any event, what happened here was a consent, albeit a consent on the basis of CJN’s understanding that other works were to take place;  I cannot, with respect, improve on Knox, J.’s formulation of the matter in the course of hearing the evidence in the action (paragraph 42 above).
(4)	This was or may have been true as far as it goes but does not begin to grapple with the fact that CJN knew, when he went away on holiday, that the staircase and entranceway would be demolished.  Doubtless, such knowledge explains his lack of complaint on his return (as to the works of demolition) but renders his later protestations rather more troubling (see, for example, the letters set out in paragraph 13(8) above).
(5)	These matters are best dealt with when reviewing the arguments advanced on Issue (I).

55.      It is convenient at this stage to pull the threads together on the true position concerning CJN, CJNA and the demolition of the staircase:
(1)	As a sub-lessee, CJNA could not by itself authorise the works to be done;  BP’s and Hecuba’s consents were necessary.  That said, CJNA could refuse consent to the demolition of its entranceway and staircase.
(2)	Neither any agreement in principle on the 3rd August, 1983, nor CJN’s letter of the 9th August, 1983, gave consent to the demolition of the staircase.  As to the 9th August letter, it only gave consent for the knock-through works between Nos. 37 and 35  and then on a very limited basis.   If I entertained any doubt on this topic, it would have been in any event dispelled by the terms of the addendum (paragraph 23 above).
(3)	By his conversation with the workman on Friday 12th August, 1983, CJN did consent to the demolition of the staircase.  This has been referred to as “the keys” conversation but it is  neither here nor there whether the keys themselves were relevant to the knock-through works or to the demolition work.
(4)	CJN’s consent was given on his understanding that the works he thought encompassed by the 3rd August, 1983 agreement in principle, would proceed in the relatively near future.
(5)	On his return from holiday on the 5th September, 1983, CJN of course noticed that the staircase and entranceway had been demolished.   He did not tell BEN about it until October or November.  Instead, he pressed DTC to proceed with all the works.  See, paragraphs 10 – 12 above.   His attitude at the time was that he wanted the works (ie., all the works) to proceed;  he appreciated that litigation would stall the progress of the works (see, for instance, paragraph 43 above).
(6)	Subsequently, the fact that CJN did consent to the demolition of the staircase may be seen from the following documents:  (a) the Foggin affidavit (paragraph 9 above);  (b)  the PEN proof (paragraph 18 above);   (c) the Dixon attendance note (paragraph 19 above).
(7)	In my judgment, such consent is denied or at all events does not emerge clearly or at all,  in the following documents:   (a)  various letters written in 1985  (paragraph 13(8) above);    (b)  a 6th July, 1990 letter to BP and a PEN attendance note of 10th September, 1990 (paragraph 21 above);    (c)   the addendum (paragraph 23 above);   (d)  the Statement of Claim served on 16th April, 1991, in the action brought by CJNA against BEN, settled by KL (paragraph 25 above);   (e)   the DC proof (paragraph 29 above);   (f) the attendance note of the conference with GZ, held on the 26th February, 1992 (paragraph 30 above);   (g) the GZ SoC (paragraph 31 above);    (h)   CJN’s notes on the PEN Defence in the action (paragraph 35 above) ;  (I)  CJN’s chronology (paragraph 36 above).

56.      The next question which arose and which at one stage loomed large under Issue (I):  Inconsistency, went to whether CJN would have agreed to CJNA bringing proceedings for an injunction in late 1983 had BEN advised such a course.   It will be recalled that GZ, in his Opinion of 25th February, 1993, attached considerable importance to a suggested inconsistency in this regard in coming to his conclusion that CJNA’s prospects of success in the action had effectively gone (paragraph 46 above).    For reasons to be explained in a moment, the importance of this question has, in the event, diminished.     In considering the evidence as to whether there was any such inconsistency,  I do not, however, lose sight of what would have been the real issue here, namely whether GZ’s advice, that there was such an inconsistency, could properly be relied on by TLC. 

57.      The reason why this question has diminished in importance is that GZ’s 25th February Opinion (paragraph 46 above) dealt with the situation as it stood after cross-examination and subject to the position being improved in re-examination.  As GZ pointed out in his oral evidence,  he managed to restore one point in re-examination at the trial of the action – namely that costs were not determinative of whether CJN would have agreed to injunctive proceedings.    In the light of this evidence,  any inconsistency here becomes largely academic, as evidenced by the fact that this topic was hardly if at all touched upon in the conference on 2nd March, 1993 (paragraph 47 above).    In fairness to CJN and although, to my mind, this question essentially turned on more contemporaneous documentary materials, in his evidence before me, CJN denied any inconsistency and sought to explain his answers given at the trial of the action (paragraph 43 above).   As a matter of inconsistency, the short answer in my judgment is that, properly considered, there was no substantial inconsistency between what CJN said under cross-examination and what had gone before;  the emphasis may have differed, sufficiently to give his legal team cause for concern as to his answers (set out in paragraph 43 above)  but I do not think that it can fairly be said that there was here a real, substantive independent inconsistency.   As the documents make clear,  CJN was  cost averse so far as legal matters were concerned:  see, for instance, paragraph 13 (3), (4) and (10) above. Likewise, CJN was plainly very anxious as to the costs of undertaking the works:  paragraph 13(7) above. Still further, as already summarised,  CJN’s preference in late 1983 was for the works to proceed rather than to proceed to litigation with the risk of an impasse and consequential delay. All that said,  I accept CJN’s evidence that, had he been advised that the appropriate course was for CJNA to seek an injunction in late 1983 to obtain leverage with a view to bringing matters to a head and thereby to encourage progress in the completion of the works, he would have accepted such advice.   I see neither reason to doubt his answers in this regard nor an inconsistency between his reluctance to incur costs and his preparedness to act on  advice if the taking of such legal proceedings (for an injunction) was unavoidable.  Here, with respect, I think (at least with the benefit of time to consider the matter), that point (4) in GZ’s Opinion of 25th February, 1993 (paragraph 46 above)  is over-stated.   In the event, however, nothing turned on any such over-statement.  

58.      Importantly, however, the facts that (1)  CJN was reluctant to incur legal costs and (2) CJN’s preference was for the works to proceed, are additional matters to be taken into account in considering the viability of any claim against BEN in the context of CJN’s consent to the demolition of the staircase.    In this respect, these matters remain of importance. The profile suggested by all this evidence, is that of a client who would not have been attracted to speculative litigation.  It thus reinforces the importance of evaluating the true strength of CJN’s claim against BP or Hecuba in the light of his consent to the demolition of the staircase.   It is one thing to  consider whether BEN was negligent in not advising the commencement of proceedings on the assumption that CJNA had an “open and shut” claim to an injunction;  it is quite another, if the relevant assumption is that CJNA had, at most, a difficult and somewhat speculative claim.     

59.      For reasons which will become apparent, the next matter of potential importance is whether, had DC (and/or GZ) advised CJN that CJNA should accept the £72,000 PEN payment into court to settle the case, he would have accepted such advice (assuming for the moment that the test in law is a balance of probabilities).   The background was that CJN at the time plainly regarded his loss as considerably exceeding that sum.      It certainly cannot be assumed that CJN would have accepted any such advice without question.   In the context of the proceedings against BP, it will be recalled that CJN had not followed KL’s advice to settle and had gone on and done better with the help of TLC (paragraphs 22, 26 and 27 above);   moreover, his reaction to KL’s advice was not confined to simple disagreement but extended to the groundless and unwarranted comments noted above (paragraph 22 above).    In the event, as to whether CJN would have followed advice to accept the payment into court,   CJN answered the question, fairly, it might be thought;  the question was hypothetical; the advice he actually received was not to that effect (paragraph 38 above);  he could not now be sure as to what he would have done if given adamant advice to settle for £72,000.   I shall have to weigh that answer when it comes to considering the rival cases. 

60.      Finally, here, for reasons which I have already set out (paragraph 48 above), it is unnecessary to record CJN’s evidence as to the advice to compromise the action or otherwise as to the meeting and conference held on Tuesday 2nd March, 1993. 

61.      GZ’s evidence:      GZ was called to the Bar in 1984 and commenced practice in 1985.   To the extent that the question was touched upon,  I see no reason to doubt that GZ was sufficiently experienced to undertake the action.   Turning to his evidence, in my judgment, it was fairly given.   His reasoning was straightforward.  I return to its ramifications later.   GZ’s evidence on liability may be summarised as follows:    
(1)      GZ’s instructions were clear;   CJN had not consented to the removal of the stairs.    Initially,  GZ’s understanding was based on the account given to him, by CJN, in CJN’s own words, in the conference held on the 26th February, 1992 (paragraph 30 above).   In response to questioning from GZ, CJN gave the account set out in the attendance note.    GZ’s impression based on the initial conference was fortified  subsequently by CJN’s comments on the PEN Defence and the DC proof – what GZ termed a “continuous line of instructions ultimately finding expression in [CJN’s] witness statement”.
(2)      Although, as indicated by the attendance note of that initial conference, there was a mention of a conversation about the keys, GZ told me – and I accept – that he formed the clear impression that CJN had gone away on holiday with no expectation that the stairs would be removed;   further, GZ understood that when CJN had returned from holiday, he was horrified to find the stairs removed.    In this sense, the giving of the keys was not the important point;  what was important was that CJN had not given consent to the demolition of the staircase.
(3)      GZ was unaware that when CJN spoke of “formal consent” or “exclusive removal” he was attaching any particular or special meaning to the words “formal” and “exclusive”;  GZ understood CJN to be speaking of “consent” and “removal”. 
(4)      As GZ put it in evidence, it now transpired that CJN had been giving “parallel accounts” of the events of 12th August, 1983. (See paragraph 56(6) and (7) above).
(5)      As to the Foggin affidavit, the PEN proof and the Dixon attendance note:  (a)   GZ did not see the Foggin affidavit until the trial;  (b)  GZ did see the Dixon attendance note from the outset;    (c)  given that the PEN proof was in the trial bundles, GZ must have seen it but had no recollection of it at all.
(6)      GZ appreciated that the Dixon attendance note was inconsistent with the account CJN was giving to him.     GZ did not “cross-examine” CJN on this document;  instead, he asked CJN to tell him what had happened in his own words and relied on what CJN told him, namely, that there was no conversation in which he had given his consent to the demolition of the staircase.   
(7)      In these circumstances, the PEN proof (which was in materially the same terms as the Dixon attendance note) added nothing.    GZ was satisfied from all that CJN had said and written that the version of events contained in the PEN proof was not one he thought CJN wanted to advance;    GZ expected CJN to give evidence “in line with what he told us”. 
(8)      GZ’s approach had been this:   on the version of events given to him by CJN, the demolition of the staircase took place without CJN’s consent.  Absent such consent, CJNA had a straightforward claim in trespass and a straightforward claim for an injunction, which it was negligent of BEN not to pursue.     There  could not have been a claim for an injunction to compel the works to be done;   there was and remained uncertainty as to the detail of the works, including as to the width of the doorway, a matter of the first importance to CJN;  moreover, there had only been an agreement in principle and there was no possibility of obtaining specific performance.   That said, absent CJN’s consent to the demolition of the staircase, BEN could and should have sought an injunction claiming reinstatement;  although what CJN wanted was for the works to be done rather than reinstatement, the aim of the injunction would have been to force something to be done.
(9)      The evidence that CJN had consented to the demolition of the staircase differed fundamentally from GZ’s instructions and the pleaded case.   On this footing,  again there could be no question of specific performance (as already explained);   an injunction could have been applied for but it was not at all clear that the application would have succeeded.  While it would still not have been improper for BEN to apply for an injunction, it could not be said that BEN was negligent in not applying.   The fact that the route of negotiations followed by BEN ultimately led to unhappy results did not, on this hypothesis, mean that it was a negligent course to have followed.
(10)      CJNA’s case as to the injunction remained arguable  but GZ no longer had confidence in it;  likewise, the amended case was arguable but unlikely to succeed.  
(11)     Overall,  CJN’s answers in cross-examination as to the inconsistency had led to GZ  (and, he thought, TLC) losing confidence in the success of the action.  Other evidence could not save CJNA’s case; nor, save as to the question of costs not being determinative of CJN’s attitude to litigation, did re-examination restore his case.  Against this background,  GZ gave the advice which he did that the action should be compromised.   Had CJN proceeded with the action, he would have been at risk of the offer being withdrawn.   GZ had thought that the outcome would leave CJN no worse off than if he had not started the action but in the event DC’s costs were higher than GZ anticipated. 

62.      TLC’s evidence:     At the trial before me, many allegations were levelled by CJN (and witnesses called by him) against TLC and DC.   A number of these, while potentially highly prejudicial, were simply irrelevant to liability or, at best, peripheral but not causally relevant.  Those matters, together with questions of quantum, I defer for the moment.  They merit a brief mention, later.    Here, I summarise TLC’s evidence on the central questions going to liability.

(1)	As TLC put it,  CJN was a client with high expectations;  he was obsessive and neglected his business in consequence.    TLC, for his part, looked at the case from “the bottom up” – he was concerned about costs and beating the payment in.
(2)	In a nutshell, TLC’s evidence was that he relied on what he had been told by CJN.   When CJN suggested in cross-examination that TLC should have gone back to the source,  TLC, not inappropriately it might be thought, answered “you were the source”.
(3)	In terms of strategy, TLC’s approach was to deal with the claim against BP before turning to the claim against PEN/BEN.   
(4)	Moreover, when TLC did turn his mind to the claim against PEN/ BEN, his mindset was based on the BP claim – premised as that was on CJN not having consented to the demolition of the staircase. TLC simply did not contemplate that there was some other basis on which the claim against PEN/BEN could be put.
(5)	When proofing CJN, TLC said in evidence that he avoided the “lazy” way of annotating a previous proof;  instead, he started afresh with a view to producing the definitive proof.  In that exercise, CJN was himself closely involved.
(6)	Although TLC accepted that it was part of a solicitor’s duty to check a draft proof against available contemporaneous material,  he was not sure when or whether he had seen the PEN proof.   It was possible that he had not seen it amongst the papers originally available, not least as PEN had been exercising a lien on the documents.  He could not remember whether he had seen it later.  With (but only with) the benefit of hindsight, TLC said that there had been a hurry to get to the trial but denied that there had been any oversight whatever difficulties were attributable to speed.
(7)	Had TLC seen the PEN proof (and, therefore, the inconsistency), he would have dealt with it.  He would have expected CJN to follow the (later) account which he had been giving to TLC and GZ.   If not, there would have been, as he put it, a “serious credibility issue”.  
(8)	Had TLC come to know of a “grey area” (ie. CJN consenting to the demolition of the staircase), he would “unreservedly” have given advice to accept the payment in. 
(9)	TLC does not appear to have seen the Foggin affidavit until the trial.
(10)	TLC did not remember the Dixon attendance note – which must have been in the papers, given that GZ confirmed that he had it from the outset.
(11)	TLC denied that CJN had informed him that consent to the demolition of the staircase had been given and denied that the “mountain tops” document (paragraph 39 above) evidenced that he had been told.   I interpose here to say that I was unable to follow why the “mountain tops” documents was said to assist CJN’s case;  that document did no more than track the PEN Defence;  it does not assist on the question of what CJN said as to that Defence.  Indeed, as is apparent, in his notes on the PEN Defence (paragraphs 35 and 37 above), CJN, as I have concluded, denied giving any such consent.
(12)	TLC did remember discussing the “keys” but only in the context of the knock-through work between Nos. 35 and 37, rather than with reference to the demolition of the staircase.   When asking CJN (his client) what had happened, he expected a straightforward answer; he did not expect subtleties such as “formal consent” or “exclusive removal” to be introduced. 
(13)	TLC was asked as to what it was in CJN’s cross-examination which had caused the case to collapse.  He answered that, to the best of his recollection, it was CJN’s answer that he gave the keys to the workman knowing that the staircase would be removed. Until then, TLC had thought that the keys were given for knock-through purposes only.   TLC then formed the impression that what CJN had said in evidence was totally different from what he had hitherto been told.

3.	THE RIVAL CASES IN OUTLINE

63.      The CJNA case:      As was to be expected, the CJNA case closely mirrored CJN’s evidence.    Although wide-ranging and including allegations against GZ (who is not a Defendant or party in these proceedings), its essence as against DC/TLC can be shortly summarised:

(1)      As to the alleged inconsistency, there was none.   If so much importance attached to the keys conversation, it was negligent of DC not to warn CJN appropriately.   TLC knew of the facts contained in the PEN proof and the Dixon attendance note (even if the Foggin affidavit was not seen until trial).   Those versions of events had never been hidden or denied.   Moreover, when discussing the “mountain tops” document, CJN had told TLC about the conversation.   If that was wrong, then TLC ought in any event to have been aware of the PEN proof and the Dixon attendance note, had he read the documents.  If  he  had simply failed to read the documents, that was negligent;  if speed caused the oversight, that was no defence.   TLC’s evidence was in any event to be approached with caution;  various “memory lapses”,  though themselves not causative (they went to peripheral or prejudicial matters) cast doubt on his recollection of events.    

(2)        Accordingly, late discovery of the alleged inconsistency was not a good reason for DC allowing or advising CJNA to enter into the compromise.   It was negligent of DC/TLC to allow or advise CJNA to enter into the compromise rather than to pursue the trial of the action to a successful conclusion.    Undue importance had been attached to a 10 second conversation held by CJN with a workman in 1983.    With knowledge of that conversation,  KL had advised that proceedings could be pursued against BEN.    If the problem lay with a shortfall of evidence or proof, then it was negligent not to have called other witnesses to make good the deficiency.    These witnesses were said to be Mr. Blake and Mr. Perham (from DTC),  Mr. Blackwell an accountant and, not least, KL.

(3)      If the true position was that the (alleged) inconsistency meant that CJNA could not or was unlikely to succeed in the action, then CJN should have been advised accordingly, well in advance of the trial of the action.    For the reasons set out in (1) above, it was negligent of DC/TLC to fail to take proper account of the inconsistency, if inconsistency there was.   On this hypothesis, CJN should have been advised to accept the PEN payment into court, thereby saving very substantial further costs.    
(4)      As CJN put it in his final written submissions, CJNA’s case was not “a counsel of perfection but a counsel of the blindingly obvious”. 

64.      The DC case:        In its final form, the DC case was rather more elaborate.    I venture to summarise it as follows:

(1)      The fundamental issue was this:   in assessing the prospects of the action, were DC/TLC professionally negligent in failing to take proper account of the inconsistency ?   To that question, DC invited the answer, “no”.

(2)      An important theme running through the DC case was the reliance placed by TLC, as he was entitled to do, on counsel, GZ.

(3)      As to the PEN proof, it was not negligent of TLC not to read it initially.    He received many documents at this time;   the proof may not even have been part of them, given PEN’s exercise of a lien.

(4)      Subsequently, if (which is not admitted by reason of the attendance note of the 26th April, 1993 meeting,  paragraph 49 above) TLC failed to read the PEN proof, it was not negligent of him to fail to do so.  By this time, he had taken a full proof from CJN and had discussed the matter intensely with CJN.   There was no obligation to cross-check what he was being told with an earlier proof, unless “warning bells” were ringing.

(5)      At no time before the trial were there any such warning bells.  Counsel, GZ,  had read the relevant material, at least in the form of the Dixon attendance note. 
(6)      Even if there was negligence on the part of TLC in failing to read the PEN proof (or the Dixon attendance note), such negligence was not causative:   (a)    Counsel, GZ, who had read the Dixon attendance note discounted it, in the light of the instructions consistently received from CJN;   there was accordingly no basis for concluding or assuming that it would have been negligent of TLC to take some different view.  Further, it was not negligent of GZ to discount the inconsistency but even if it was,  TLC was entitled to rely on him.    (b)   It does not follow, even had TLC been sufficiently concerned as to the inconsistency not to discount it, that the action would have been stopped before reaching trial.   First, CJN would have been unwilling to accept the payment in.   Secondly, KL (with knowledge of the inconsistency) had advised that proceedings should be commenced against BEN.    A similar view might have prevailed or GZ might even have been replaced.

(7)      However analysed, the true cause of the action not settling prior to trial and/or the  collapse of the trial was CJN’s failure to provide accurate information to his legal representatives.  CJN knew the full truth;  he failed to impart it to his legal team.    Essentially, CJNA’s case came to this:  a client was suing his professional advisers on the basis that he had misled them and they were negligent in believing him.  Such a claim was untenable.

(8)      If CJN’s failure to provide accurate information to his legal representatives  was not the sole cause of the action not settling prior to trial and/or the collapse of the trial, there was in any event the most significant contributory negligence on his part so that any award of damages should be extinguished or very substantially reduced.
(9)      In any event, as to the compromise,  GZ was of the opinion that it was necessary or right to enter into it.  GZ was not negligent in so advising;  but even if he was, it was not negligent for TLC to rely on him.

4.	DISCUSSION

5.	ISSUE (I):    INCONSISTENCY

65.      As it seems to me, this Issue is most conveniently considered under the following headings:
 
(1)	What duty is owed by a solicitor to his client ?
(2)	Was there an inconsistency ?
(3)	Did  CJN inform TLC of the facts giving rise to the inconsistency?
(4)	Should TLC have read the materials which disclosed that CJN had consented to the demolition of the staircase and his entranceway to No. 37 (“the demolition”) ?
(5)	What consequences would have followed from TLC reading the materials which disclosed that CJN had consented to the demolition ?

66.      (1)  What duty is owed by a solicitor to his client?    For present purposes,  the solicitor’s duty to his client may be summarised as follows:

(1)	The solicitor is required to exercise reasonable care and skill;  the standard is that of the reasonably competent practitioner.
(2)	In the realm of liability, the burden of proof rests on a claimant to prove a breach of duty and the causative consequences which flow therefrom at least as to what he himself would have done, to a standard of  proof  of a balance of probabilities:   Jackson & Powell on Professional Negligence (5th ed.), at paras. 10-257 and 10-262 (albeit that these paragraphs appear in the section dealing with damages, where separate considerations may arise).
(3)	An allegation of professional negligence  is a serious matter;  hindsight is to be excluded;   an error of judgment may but need not amount to professional negligence.
(4)	At least generally, a solicitor cannot be criticised where he acts on the advice of counsel, properly instructed.   The solicitor is not, however, entitled to rely blindly on counsel’s advice nor to abdicate his professional responsibility.  The solicitor must exercise his own independent judgment so that if he reasonably thinks that counsel’s advice is obviously or glaringly wrong, it is his duty to reject it.    See:   Jackson & Powell (op. cit), at paras. 10-116 and following and Hall v Simons [2000] 3 WLR 543.
(5)	Generally, a solicitor is entitled and bound to act on his client’s instructions.  Subject therefore to the solicitor giving adequate advice  (so that the instructions themselves are not the result of inadequate advice), it  is  (generally) a defence to a charge of professional negligence that the solicitor was acting on his client’s instructions:  Jackson & Powell (op. cit.), at paras. 10-123 – 124.  By way of elaboration:   (a)   There can be no doubting the importance, sometimes centrality, of the client’s instructions in the relationship between solicitor and client;  (b) Plainly, there are limits to this proposition; by way of simple example, a solicitor is neither bound nor entitled to comply with his instructions if they require him to do something illegal or unethical;    (c)   At least generally,  the entitlement and duty to act on a client’s instructions do not involve the solicitor  approaching  his instructions uncritically;  this is an aspect of the solicitor’s  duty to exercise reasonable skill and care and to bring an independent professional judgment to bear;  for the same reasons, it is unlikely to be prudent for a solicitor to have regard only to his client's instructions and to disregard other materials available and relevant to the matter in issue;     (d)    There will be cases where the solicitor’s duty (to exercise reasonable skill and care)  requires him, in effect, to save the client from himself;     (e)   The balance to be struck between these various factors is inevitably  fact sensitive and likely to hinge on the facts of the particular case;   again by way of simple example, the weight a solicitor is entitled to place on his client’s instructions will very likely vary, depending on whether the client is or appears to be articulate, intelligent and well-informed as to the facts, or otherwise.

67.      This summary provides the framework for addressing questions of  
duty, (alleged) breach of duty and causation, in the context of Issue (I).   So far as DC is concerned, the relevant inquiry is whether TLC was negligent.     Plainly, the relevant duty was owed by DC, through TLC, to CJNA.   I did not detect any, or any serious, suggestion that the solicitor’s duty was not owed to CJN as well, though, of course, any recovery could not be duplicated.

68.      (2)  Was there an inconsistency ?       I am amply satisfied that there was an inconsistency between, on the one hand, that which CJN said under cross-examination at the trial of the action as to his giving consent to the demolition of the staircase and his entranceway to No.37 and, on the other hand, his instructions to DC and GZ and the basis on which the CJNA claim in the action had been pleaded and advanced.   This matter has already been canvassed in detail in a discussion which need not be repeated here:   see, especially, paragraphs  29-31, 35-37, 42, 46,  53-55 and 61-62 above.    For my part, I accept, as apt, GZ’s description of this difference, or inconsistency, as fundamental:  paragraph 61(9) above.

69.      (3)  Did CJN inform TLC of the facts giving rise to the inconsistency?   CJN linked this argument to the “mountain tops” document and his discussion of it with TLC.    As already foreshadowed, I am unable to accept either that CJN informed TLC of the fact that he had given consent (albeit qualified consent) to the demolition of the staircase and the entranceway or that the “mountain tops” document evidences that he imparted this information to TLC:   see, paragraphs 39, 49 and 62(11) above.    In this regard, I accept TLC’s evidence and prefer it to that of CJN.     It follows that unless TLC ought to have been aware of the inconsistency from some source other than via direct oral instructions from CJN, then this charge of professional negligence must fail.

70.      (4)  Should TLC have read the materials which disclosed that CJN had consented to the demolition ?    As will already be apparent, the relevant materials disclosing CJN’s consent to the demolition of the staircase and entranceway are (a) the Foggin affidavit  (b) the PEN proof and (c) the Dixon attendance note  (see, paragraph 55(6) above).     It appears that the Foggin affidavit was not in the papers which came to TLC (when DC took over the conduct of the action) nor was it disclosed by PEN prior to the trial of the action.    It follows that no criticism can be made of TLC for not having read the Foggin affidavit before the trial.   What remains are the PEN proof and the Dixon attendance note. 

71.      On the basis of TLC’s evidence (summarised in paragraph 62 above), I conclude that TLC did not read either the PEN proof or the Dixon attendance note;  in simple terms, he overlooked them.  Taking these documents in turn:
(1)      As to the PEN proof,  I do not conclude that it was available to be read by TLC from the outset.   There is insufficient material available on which to reach any such conclusion.  That said, I am satisfied that it was available to TLC to be read and considered well in advance of the trial;  suffice to say that I accept GZ’s evidence (which I have no reason to doubt) that the PEN proof was in the trial bundles (paragraph 61 above).
(2)     As to the Dixon attendance note, I conclude that it was contained in the papers which originally came to TLC;  I accept GZ’s evidence to the effect that he had it available from the outset (paragraph 61 above).

72.      Pausing here, I reject the suggestion advanced by Mr. Craig in his closing submissions – but not explored in the evidence – that TLC had read the PEN proof but had discounted it (paragraph 49 above).   That suggestion was based on the entry (there set out) in the attendance note of the meeting of 26th April, 1993.    Leaving aside all other difficulties with this submission, I do not think that the conclusion for which Mr. Craig contended was supported by the attendance note.   As it seemed to me, the attendance note, more likely than not,  was referring to the PEN pleaded case – rather than to the PEN proof.    I therefore proceed to consider the ramifications of TLC having failed to read the PEN proof and the Dixon attendance note.

73.      As has been seen (paragraph 64 above), Mr. Craig here sought to contend that TLC was not in breach of duty in failing to read these documents or either of them.   I  am unable to accept this submission.
Understandable as it is that a solicitor, operating perhaps under time pressure, may miss a document, it seems inescapable that his duty to exercise reasonable skill and care extends to reading the materials given to him or coming into his possession in connection with a matter of which he has conduct.   No doubt there are exceptional circumstances (for example, a case of extreme urgency, where an injunction is sought while the materials are still being absorbed);    no such circumstances apply here.    If the solicitor fails to read relevant materials, his advice will or may be based on an inadequate foundation.   It is, to my mind, as simple as that.   As to the particular submissions developed by Mr. Craig:

(1)      No criticism can be made of TLC for seeking to take a “definitive” proof, rather than simply annotating a previous proof.   As far as it goes, that seems not only acceptable but in certain respects praiseworthy.  However, as and when the PEN proof  came into TLC’s possession, it was incumbent on him to check his draft against the previous version.  In his evidence, TLC – rightly and inevitably -  accepted that it was incumbent on a solicitor to check a draft proof against available contemporaneous material.    It seems to me no more than an application of this more general aspect of a solicitor’s duty, that previous proofs should be read.    I do not think that it can sensibly be said that the duty to do so only arises if there have previously been “warning bells”.   See, generally, paragraph 66(1) and (5) above.

(2)      I do not think that a failure to read such documents can possibly be defended by reliance on silence from counsel as to those documents.    As already underlined,  the solicitor’s entitlement to rely on counsel’s advice does not involve him abdicating his own professional judgment or responsibility:  paragraph 66(4) above.  But if the solicitor has not read the materials, he cannot, or may not, be able to form  any proper judgment.   

(3)      I reject the submission that these conclusions in any way turn on hindsight:   paragraph 66(3) above.   Further, I cannot accept that any question of professional judgment is engaged in this regard.   With respect and understanding, this was an unfortunate and simple slip-up.    Still further, whatever might be said of the PEN proof,  there was no or no good reason for not reading the Dixon attendance note.

I turn next to the question of what would probably have happened, had TLC read the PEN proof or the Dixon attendance note.

74.      (5)  What consequences would have followed from TLC reading the materials which disclosed that CJN had consented to the demolition ?     Had TLC performed his duty  and read the PEN proof and/or the Dixon attendance note (“the relevant materials”) , what would have happened ?     Mr. Craig’s submission was that it would have made no difference;  even if TLC was negligent (in not reading the relevant materials), such negligence was not in any sense causative.  That is the question which next arises.   If Mr. Craig is right, then this charge of professional negligence goes nowhere and must fail.

75.       The immediate inquiry is whether the inconsistency between (what GZ termed) the “parallel accounts” of the events of 12th August, 1983,  would (1) have been brushed aside by CJN and discounted (without negligence)  by TLC  or (2) whether such inconsistency would have been acknowledged by CJN, so that it would have had to be addressed by TLC (and, in due course, re-addressed by GZ). 

76.      As already seen (paragraph 63 above), CJN’s case was that the existence of the “parallel accounts” was never hidden.   Not least, CJN alluded, with some force, to the readiness with which he acknowledged the correctness of the Foggin affidavit when cross-examined upon it.   TLC (and for that matter, GZ) ought to have been aware of CJN’s account of events given in the PEN proof and Dixon attendance note.  It ought not to have come as a surprise to them at trial;  instead, they should have addressed it.  For his part, CJN followed legal advice when given.

77.      Notwithstanding some attractiveness at first blush, I find CJN’s case in this regard unconvincing.  Unsatisfyingly, it sidesteps  his own responsibility for the emergence of the inconsistency at the trial of the action.   More than that, it is a case outweighed by the cogency of the contrary arguments, turning as they largely do on the evidence yielded by contemporaneous events.      The burden of proof here rests on CJNA (paragraph 66 above) but my conclusion does not hinge on the burden or standard of proof.    These arguments persuade me that, even had TLC read the relevant materials,  the probabilities are that the fact of CJN having consented to the demolition of the staircase  would not have been accepted by him;  instead that version of events (contained in the relevant materials) would  likely have been brushed aside by CJN  and discounted (without negligence) by TLC.   It is indeed, no more than speculative that CJN would have acknowledged the consent which he gave.   My reasons are these:

(1)      I start with the PEN chapter.   Interestingly, it appears that KL had addressed the question of CJN’s consent in the conference of the 8th June, 1990 (paragraph 20 above) and the difficulties to which it gave rise.   KL was, or must have been, aware of the Foggin affidavit, PEN proof and Dixon attendance note all of which ante-dated  this conference.  Assuming the correctness of the attendance note of the 8th June conference, KL alluded to CJN having “given away or at least significantly eroded a commanding position”.  What followed, was the preparation of the addendum (paragraph 23 above).   As already observed, the addendum did not acknowledge and explain CJN’s consent;   in simple terms, the addendum sought to deny that any such consent had been given.   The premise of the pleading settled thereafter by KL (paragraph 25 above) was that the staircase had been demolished without CJN’s consent.   In short, it is noteworthy that  the documentary materials prepared during the PEN chapter and after the 8th June 1990 conference, proceeded on the basis that consent had not been given.  Put another way, the fact that the question of CJN’s consent had been raised by a legal adviser, did not prompt the development of a case based on admitting but explaining that consent in the context of the qualifications subject to which it was, allegedly, given.  To the contrary, the emphasis thereafter came to be placed on a case denying consent. The question must be posed:   had TLC read the relevant materials and raised the question of CJN’s consent,  why would the outcome have been any different?  

(2)      Turning to the DC chapter,  I cannot avoid remarking at once on the number of opportunities available to CJN to mention and therefore bring to TLC’s attention, the consent which he had given to the demolition of the staircase.   Strikingly, CJN did not do so.     It will be appreciated that CJN was a client with a very much “hands on” approach to litigation;  he worked very closely with TLC;  he was immersed in the detail of the case.     At the outset, TLC could not have known about CJN’s consent to the demolition;    TLC, it will be recollected,  inherited and successfully pursued a case against BP, premised on CJN not having consented to the demolition of the staircase and entranceway.    The DC proof, evolving as it did with the close involvement of CJN, emphatically denied consent (paragraph 29 above). The GZ SoC was premised upon CJN not having consented to the demolition (paragraph 31 above).   The chronology prepared by CJN (paragraphs 36 and 37 above), by way of further example, repeated the denial of consent.  The CJNA case here involves saying that if only TLC had raised the question of  consent, CJN would have been forthcoming on this matter, notwithstanding the fact that on all these other occasions over the course of 1992, he was not.   

(3)      Next, CJN’s  dealings with GZ are important and instructive.   At the conference with GZ in February, 1993, GZ – who was alive to the Dixon attendance note -  asked CJN to tell him, in his own words, what had happened (paragraphs 30 and 61 above).    GZ was satisfied that CJN was not advancing the version of events contained in the Dixon attendance note (or, as they were in materially the same terms, the PEN proof).  He therefore discounted that version of events.    GZ is not a defendant or a party of any description in these proceedings.  In such circumstances, I would in any event be slow to conclude that he had been negligent in allowing himself to be persuaded by CJN and in discounting the Dixon attendance note.   I would, however, go considerably further.   Having observed and listened to CJN over the course of this trial, I can well understand how GZ  was persuaded by him – until the absence of consent came to be accepted as the underlying premise of the case to be advanced;    my reaction is, accordingly, that GZ was not at fault at all in this regard.  He had asked the client for his version of events and had doubtless been given an articulate account.   Any counsel would (and should) have been understandably anxious not to put words into CJN’s mouth.     Should GZ have gone on to cross-examine CJN in terms on the contents of the Dixon attendance note ?   I do not think it can be said that he was under a duty to do so.   The highest it can be put is that some counsel with some clients might have done so.  With a client of CJN’s apparent intelligence and mastery of the detail,  I could not begin to say that GZ was at fault for leaving CJN to tell the story in his own words, without such cross-examination.     

(4)      The matter does not end there.     Still further and most strikingly, when giving instructions on  the PEN Defence (paragraphs 35 and 37 above),  CJN was confronted with  allegations in terms that he had consented to the demolition of the staircase.    It follows that this very topic was raised by (or via) TLC with CJN.   As has been seen, CJN’s reaction was to deny consent – rather than to admit it but explain the qualifications which he had attached to it.    This reaction, to my mind, decisively belies the notion that “if only” TLC had raised the selfsame topic on some other occasion and with reference to the relevant materials, the giving of consent would have been acknowledged by CJN, thereby resulting in TLC and GZ having to deal with it and take it into account in advance of the trial of the action.   

(5)      In my judgment,  CJN’s reaction to PEN’s Defence, illuminates how unacceptably far CJNA’s case needs to go.    In short, CJNA’s  case needs to posit a duty on TLC, not only to have read the relevant materials but to have cross-examined CJN in terms on them.   Anything less would not do, there being no good explanation as to why CJN should have given some different answer to TLC from that which he gave when commenting on the PEN Defence.    However, for reasons already given with regard to GZ (see (3) above), it would not be right to proceed on the basis that TLC was under a duty to cross-examine his own client, still less in any particular fashion;  nothing in the general run of solicitor’s duties goes so far (see, generally, paragraph 66 above).  Certainly, I am satisfied that no such duty rested on TLC with regard to a client possessing CJN’s attributes.

(6)      Reverting to CJN’s evidence on this topic, I have already expressed my inability to accept CJN’s account of the facts and his understanding of them:  paragraphs 53-55 above.  To my mind, CJN was well aware of the importance of consent, whether from 1985 (paragraph 54(2) above) or from 1990.  I further do not think that he was unaware that he had said different things on different occasions in this regard.  I do not go so far as to say that he deliberately set out to mislead  DC/TLC and GZ;  such a conclusion would sit uncomfortably with his  acceptance of the truth of the Foggin affidavit under cross-examination.  I do, however, conclude that by the time of the DC chapter,  CJN had persuaded himself that he had not consented to the demolition of the staircase and, asked for his account of events, persuasively advanced an account which denied consent.     I should indicate, not least from having observed and listened to CJN over the course of this hearing,  that CJN was more than capable of expressing in plain English what had happened;  most unfortunately, as it appeared to me,  he became so absorbed by his own analysis of those events, that he failed to do so.   Importantly however, on no view would it have appeared to TLC or GZ that CJN was labouring under any misunderstandings in this regard.

(7)      Pulling the threads together:  had TLC read the Dixon attendance note (or the PEN proof), then I accept that, as he said in evidence (paragraph 62 above), he would have raised the version of events found there with CJN.    He would have expected (again as he said in evidence) CJN to stick to the account which he had consistently given to TLC and GZ.     For the reasons already set out, there is no good reason to suppose that CJN would not have done so.     TLC would then, like GZ, have discounted the Dixon attendance note (and/or the PEN proof) and the matter would have proceeded to trial (as it in fact did) on the premise that CJN had not consented to the demolition of the staircase.  If this be right, then TLC’s failure to read the relevant materials had no causative consequences.      

(8)      If it matters, which I doubt,  the conclusion can be expressed either in terms of negligence or causation.  On one analysis,  though TLC was at fault in not reading the relevant materials, it cannot be said that he was negligent in failing to take proper account of the risk of  the inconsistency materialising.  On another analysis, which I tend to prefer, though TLC was in breach of duty in not reading the relevant materials, such negligence was not in any sense causative;  had he read the materials, it would, for the reasons already given, have made no difference.    

78.      It follows from these conclusions that CJNA’s and CJN’s charge of negligence, based on DC’s failure, prior to the trial, to take proper account of the risk of the inconsistency materialising, must fail.    Noone listening to CJN’s account of his various misfortunes over nearly 20 years will be without some sympathy with him.   I fear, however, that such sympathy must be limited.    In failing to give his legal representatives, DC and GZ, an accurate account of the events of the 12th August, 1983 and the consent he gave on that occasion, despite  personal knowledge as to the true version of those events together with the ability and repeated opportunities to do so,  he has been in this respect the author of his own misfortune.  Looked at in the round, there is something deeply unattractive in a claim for professional negligence brought by a client, based on the alleged fault of his legal representatives in believing his own inaccurate account of events;  at all events, I am satisfied that, on the facts of this case, even taking fully into account TLC’s failure to read the relevant materials, such a claim is unsustainable.
79.      What if TLC was negligent or causatively negligent ?    If I am wrong in concluding that either TLC was not negligent in relation to Issue (I), or that his failure to read the relevant materials had no causative effect, then it would be necessary to consider the position on the assumption that had TLC read the relevant materials,  the fact of CJN having given consent to the demolition would have been accepted by him and would have come to be dealt with by TLC and GZ.   Given the conclusion already reached, this topic is academic and I therefore take it more briefly than would otherwise have been the case.  In a nutshell, on this (academic) hypothesis,  I would have concluded that CJN would have received and would have accepted advice to take the PEN payment in;   CJNA’s loss  would therefore have been measured in terms of having lost the opportunity to accept the PEN payment into court well in advance of the trial of the action;  the damages otherwise recoverable would, however, have been very substantially reduced by reason of CJNA’s contributory negligence. My reasons are these:

(1)      I accept TLC’s evidence (paragraph 62 above) that had he read the PEN proof or the Dixon affidavit,  (a) he would have  dealt with the inconsistency disclosed therein (b)  that if  CJN had acknowledged that he had given consent to the demolition of the staircase, then TLC would have advised CJN to accept the payment in.  

(2)     I accept GZ’s evidence that he would have viewed the CJNA case in the action very differently had he been aware that CJN had consented to the demolition of the staircase (paragraph 61 above).

(3)      In my judgment, GZ’s view of the strength of the CJNA case (paragraphs 46, 47 and 61 above), on the footing that CJN did give consent to the demolition of the staircase,  was either a correct view or at least an opinion that was and could be held without negligence on his part.    To recap, in his view, such consent meant that the claim against BEN was or bordered on the worthless so that the claim against PEN fell to the ground.      CJN’s (conditional) consent had been given without consultation with BEN;  BEN had not even been informed of the demolition of the staircase for months after the event.  Had BEN advised proceedings for an injunction, the charge that the staircase had been removed would have been met (as it was by Hecuba, paragraph 13(7) above) by the defence that the works were carried out with CJNA’s consent.    Whether an injunction would have been granted in those circumstances would have been, at best, questionable.    Given CJN’s reluctance to incur costs and his preference for the works to proceed rather than to become stalled through litigation (paragraph 58 above),  it was hardly negligent of BEN not to launch speculative litigation.    The fact that, in the event, the route of negotiations  pursued by BEN proved unsatisfactory was, plainly, neither here nor there. 

(4)      I do not think that the reasonableness of GZ’s view is undermined by any of the views attributed to KL.   It is true that KL appeared to contemplate proceedings against BEN even though he was or must have been aware of  CJN’s consent to the demolition of the staircase (paragraph 24 above).     Even so and without remotely suggesting that KL was mistaken,  I do not think that any such opinion held by KL assists CJNA here.  First,  as already discussed,  the attendance notes of the KL conferences veer between the issues raised by the alleged consent to the demolition of the staircase and those covered by the amended case in the action (namely,  BEN failing to advise CJNA not to permit any works to begin before a binding and enforceable agreement had been concluded as to the works);  much of the time, it would appear that KL focussed on the latter;  I deal with the amended case when coming (presently) to Issue (II).  Secondly, it is a feature of the pleading settled by KL that it was premised on CJN not having consented to the demolition of the staircase (paragraph 25 above);   when read in combination with KL’s earlier views as to the unfortunate consequences flowing from CJN having given such consent together with his focus on the amended case, it certainly suggests that KL was himself mindful of the difficulties in this regard.   Thirdly,   the fact,  even if it be the fact, that KL was more “bullish” than GZ on the question of CJN’s consent, would not, without more, serve to render GZ’s view unreasonable or negligent;  still less would it mean that TLC would have been negligent in relying on GZ’s view.      Fourthly, KL’s views (such as they were) related to the commencement of proceedings;   there was no occasion for KL to express any view as to the prudence of  accepting a payment into court rather than proceeding to trial, in respect of a claim against BEN.   Fifthly,  to address a further point made by CJN,  with respect,  no useful purpose would have been served by calling KL as a witness at the trial of the action.

(5)      It follows from the above that had TLC read the relevant materials and had CJN acknowledged the consent he had given to the demolition, the strong likelihood is that he would have received advice from GZ and TLC to take the payment in.      Would such advice have been accepted by CJN ?   As already foreshadowed (paragraph 59 above), this is not a question which admits of an obvious answer.   Very much on balance, I conclude that CJN, however grudgingly, would likely have accepted that advice given by a legal team in which, at the time and on this hypothesis, he had confidence;  I do not think that CJN’s fair answer in evidence  (that he could not now be sure) stands in the way of this conclusion.   

(6)      It follows that, on the present (academic) hypothesis, CJNA could have claimed damages on the basis that  DC/ TLC’s negligence resulted in the PEN payment into Court not being accepted. 

(7)      I reject as speculative the notion, with respect, somewhat curiously advanced by Mr. Craig, that a different view might have prevailed with CJNA’s legal representatives, namely that the action should have been proceeded with in any event, or that GZ might have been replaced  so as to encourage the adoption of that course.    It follows that even on the present (academic) hypothesis, CJNA would not be entitled to claim damages on the basis that the action would have continued to a final determination and succeeded;  that basis for claiming damages simply would not have arisen in consequence of any relevant negligence on the part of  TLC.   

(8)      I return to the basis on which damages could, on the present hypothesis, have been claimed by CJNA.   For the sake of clarity (if at the risk of repetition) this basis may be re-stated as follows:  (a) TLC was negligent in not reading the relevant materials;  (b) had TLC read those materials and raised the inconsistent previous version of events with CJN,  that inconsistency would have been acknowledged by CJN;  (the key to the present hypothesis is that, contrary to my earlier conclusion,  that inconsistency would not have been brushed aside and discounted;)    (c)    CJN would then have received and accepted advice from GZ and TLC to accept the PEN payment into court well in advance of the trial of the action;   (d)  accordingly, CJNA has suffered damage by reason of not accepting the PEN payment into court.    On this basis, plainly TLC’s fault was a cause of the damage suffered by CJNA.  Was it, however, the sole cause?   I do not think it was.   I think that such damage as was suffered by reason of not accepting the PEN payment into court would have been suffered by reason of a combination of (a)  TLC’s failure to read the relevant materials and (b) CJN’s repeated failures to give an accurate account of the events of 12th August, 1983 despite ample opportunity to do so.  For example, had CJN given an accurate acount of those events when commenting on the PEN Defence,  he would have received advice from GZ and TLC to accept the PEN payment into court and (assuming such advice was accepted) would have avoided this loss. 

(9)      In the situation postulated in (8) above, as it seems to me, the question of contributory negligence, pursuant to s. 1(1) of the Law Reform (Contributory Negligence) Act 1945,  would have arisen.  Moreover, the context would not have involved a lay client being called upon to second-guess professional advice;  to the contrary, here,  the failure on the part of the client to give accurate information to the professional, when accurate information was within the client’s own knowledge and control, would have been a contributory cause - of the first importance – of the professional’s failure to give proper advice.   In these circumstances, had they arisen, I would have thought it right to reduce the damages otherwise recoverable by CJNA by reason of its own contributory negligence, through CJN’s  fault as already described.   Having regard to both causative potency and culpability, I would have concluded that the preponderance of blame rested with CJNA, so that any damages otherwise recoverable would  have been very substantially reduced.   Academic or hypothetical apportionment is, of course, invidious but my inclination is that I would have decided on a reduction of  2/3 of the damages otherwise recoverable; ie.,  DC/TLC would only have been held to be 1/3 liable.
ISSUE (II):   COMPROMISE

80.      It will be recollected that this Issue is concerned with whether DC was negligent in advising or allowing CJNA to enter into the compromise rather than advising or allowing the trial to proceed to a final determination.   At the outset, it is important to clarify the relevant premise on which this Issue falls to be considered.  I say this because some different consideration of the compromise might  have been called for had CJN’s consent to the demolition of the staircase formed an acknowledged part of CJNA’s case throughout.   However, any such approach involves wholly unsatisfactory speculation, not least given my conclusion that even had CJNA (hypothetically) succeeded on Issue (I), the upshot would not have been a differently prepared trial but the acceptance of the PEN payment into court in advance of the trial of the action (paragraph 79 above).     To my mind, therefore, Issue (II) is to be considered on the basis that  (as already concluded) CJNA has failed on Issue (I), so that GZ and TLC (without negligence on the part of either)  were confronted during the  course of the trial with the startling emergence of the inconsistency.  On this footing, I can take Issue (II) very shortly indeed;  in my judgment, this charge of professional negligence lacks substance.

81.      As to the facts  (paragraphs 44-47 above), it seems clear that CJN’s answers under cross-examination triggered a crisis of confidence among his legal representatives;   thereafter, GZ,  if anything more than TLC, took the leading role in advising as to the desirability of  settlement.

82.      It follows that the first hurdle to be overcome by CJNA under this Issue, is to make good a submission that GZ was negligent in advising in favour of the compromise.  In my judgment, CJNA fails to make this charge good, so that its case under Issue (II) falls at the outset.

(1)      For reasons which by now need no repetition, the fact that CJN had consented to the demolition of the staircase emerged under cross-examination to the very considerable surprise of his legal representatives.  GZ was therefore faced with an evidential development which fundamentally undermined the CJNA case as it had been pleaded and advanced;   viewed in this light,  for my part, I can well understand GZ’s reaction and his pessimistic reappraisal of CJNA’s prospects, so far as they related to its claim as originally pleaded.     Quite simply, I do not think there is any conceivable basis for alleging that GZ was negligent in this regard.

(2)      Turning to the amended case, GZ’s view was that it remained arguable  but was unlikely to succeed  (paragraphs 46 and 61 above). The essence of the amended case involved BEN being negligent in not advising CJN of the dangers of letting any  works proceed without a binding and enforceable agreement against the background of (a) a client who wished the works to proceed  and (b) CJN’s letter of 9th August, 1983 (paragraph 8 above), which appeared to indicate a firm grasp of the situation and set out the very limited consent which had (so far) been given.    For my part, I  very much doubt that any warning or advice was called for from BEN in these circumstances.   However, even if views might differ as to the strength of the amended case, I cannot say that GZ’s view was unreasonable.   This point is, if anything, strengthened, when regard is had to the fact that GZ was very much alive to the standing of the case before the trial Judge, as appears from a reading in full of his Opinion of 25th February, 1993 (paragraph 46 above). 

83.      CJNA’s difficulties do not end there.  Even had GZ been negligent in advising in favour of settlement,  TLC would have been entitled to rely on GZ’s advice in this regard unless it was glaringly or obviously wrong: paragraph 66(4) above.   Suffice to say that there is no foundation for any such suggestion.    On this ground alone,  CJNA’s case on Issue (II) must fail. 

6.	ISSUE (III):  QUANTUM

84.      Given my conclusions thus far, the entire Issue of Quantum is academic.    I propose therefore to deal with it summarily.

85.       Loss suffered by not accepting the PEN payment into court: Had I concluded that CJNA was entitled to recover damages based on the loss suffered by not accepting the PEN payment into court:

(1)      The correct analysis would have been to value CJNA’s lost opportunity of accepting the PEN payment into court:   Kitchen v Royal Air Force Association [1958] 1 WLR 563;   Allied Maples v Simmons & Simmons [1995] 1 WLR 1602.    In the particular circumstances, I do not think that any “discount” would have been called for;  in other words, the actual figures would have been used.

(2)      By the end of the hearing before me, those figures (as figures) were helpfully agreed or were not in dispute;  CJNA’s loss would have been calculated as follows (putting to one side any adjustment needed for the precise calculation of interest up to the date of judgment):

	£	£	
Billed to end of June 1992	14,788		
Payment into court	72,000	86,788	
			
Less recovered from payment			
into court	30,000		
plus costs	16,500	46,500	
		40,288	
			
Total fees billed	102,037		
Less those already billed	14,788	87,249	
		127,537	
			
Interest @ 8% from June 1992			
10 years @  £10,202	102,029		
	229,567		

(3)      For reasons already given (paragraph 79 above), this figure of £229,567 would have fallen to be substantially reduced on account of CJNA’s contributory negligence.

86.      Loss suffered by reason of the action not proceeding to a successful conclusion:      A not inconsiderable amount of time was spent at the hearing on the quantum of CJNA’s and/or CJN’s loss (so far as it was to be separately calculated) on the basis that the action had continued to a successful conclusion.    In summary, the thrust of the quantum claim in the action went to CJNA’s need (as an advertising agency) for suitable premises, the loss of management time attributable to the prolonged continuation of the disturbance and the unsatisfactory conditions at the premises,  plus the loss of profits and business which were said to flow therefrom.   Sundry further losses were claimed as well, including CJNA being forced to move from the premises.    As already observed, the total claim was in the region of or in excess of £2 million, depending on its precise calculation.   As to oral evidence in this regard, I heard from CJN, Mr. Morgan (a former employee of CJNA),  Mr. Baines (a former customer or client of CJNA),  Mr. Cross (likewise a former customer or client) and Mr. Hyde (an expert, called by CJN).

87.      Had it been necessary or appropriate to do so, this basis of claim would have had to be valued  in terms of the value of a lost opportunity: paragraph 85(1) above.   However, given, as already explained  the wholly hypothetical nature of this exercise, I propose to say no more of this basis of claim than that it was, in my judgment,  massively exaggerated.   By way of examples, it included:  (1)   substantial amounts which were irrecoverable as too remote or as insufficiently causally connected with the alleged negligence (for instance lost custom in a competitive market years after the alleged negligence);  (2)  more management time apparently and curiously  lost over the period of the litigation of the action after rather than before  the movement from the London premises (not least, if an accurate claim, serving to undermine the notion that the disruption of the building works distracted CJN from giving proper attention to clients);   (3)   troubling discrepancies between the charge-out rates for CJN’s time advanced in different documents, though the source of the information relied on was CJN himself.   Taking these matters into account, not to mention questions going to mitigation likely to have been raised by PEN (such as, why if conditions were as bad as alleged by CJN,  CJNA had not moved premises earlier or why Hecuba’s suggestion (paragraph 13(7) above) that CJNA should meet the cost of enlarging the entrance had not been pursued),  I do not think that the claim on this basis could properly have been valued in excess of £200 - £250,000 principal;  such a valuation involves a large-scale rejection of CJN’s views and Mr. Hyde’s evidence (in fairness to whom, it should be recognised that his proper role was to explain the context rather than to perform any detailed factual calculation);  it comfortably exceeds the value given to the claim by KL (paragraph 24 above) but  substantially accords with the views of GZ and Nicholas Stewart QC (paragraphs 32 and 40 above).

88.      This valuation of £200-250,000 does not, of course,  conclude the analysis.    This base figure goes no further than the value to be placed on the claim in the action had it succeeded;   from this base figure, there falls to be made a discount, reflecting the risk that it would not have succeeded.     In my view, that discount would have been very substantial indeed.    I express no conclusion,  as it would be wholly academic but such a discount  would certainly have exceeded 50% and could have reached 75% to 100% had I come to share (what I have categorised as) GZ’s reasonable view that the action had no more than a nuisance value in the light of the fact of CJN’s consent to the demolition of the staircase.  Additionally, it  would have been necessary to take account of any further reduction required by reason of contributory negligence (paragraph 79 above). 

MISCELLANEOUS MATTERS

89.      It is convenient here to pick up certain miscellaneous matters which arose.  First, it will be recalled that CJN complained that additional witnesses should have been called at the trial of the action (paragraph 63(2) above).    I have already dealt with KL not being called (paragraph 79 above).    There is equally no substance in the allegation as to the other witnesses.  I confess that I still fail to understand what messrs. Perham and Blackwell might have added.    Mr. Blake was called at the hearing before me;  by then, he had no recollection of the events in question, independent of such recall as was prompted by the documents.  Assuming in his and CJNA’s favour that his memory in 1993 would have been better, I still do not follow what he could helpfully have added to that which was already contained in the documents.

90.      Secondly,  I have earlier touched upon the fact that various prejudicial matters were alleged against TLC and DC and observed, in effect, that they did not appear to advance the debate on the Issues requiring resolution (paragraph 62 above).      These allegations were, in some instances, supported by the evidence of Mrs. Nicholl and/or Mrs. Zundel.   As these charges were advanced, it is right that I record those not withdrawn by the conclusion of the hearing – and my views thereupon – in a matter of a very few sentences:

(1)      Complaint was made that DC, here through JC (its then senior partner), caused  CJN and, in particular, Mrs. Nicholl  anguish by the pressure applied to obtain security for DC’s  costs (including counsel’s costs).   In the course of the hearing before me it was in due course accepted by CJN that, even if made good, this allegation was not causative (in terms of the Issues).    I need say no more than this:  even though I accept that JC’s approach  (having heard his evidence) may well have caused Mrs. Nicholl some anguish,  I can understand his concern that DC should not be left out of pocket, in particular, in respect of outlays to third parties (including counsel).  
 
(2)      Complaint was made, supported by Mrs. Nicholl and Mrs. Zundel that TLC’s  “Damage Limitation” note (paragraph 45 above) was faxed on or about the 25th February, 1993 to CJN’s home, with “encouragement” that CJN should be made aware of it, even though he had not concluded giving evidence.     Plainly,  this allegation, if made good,  would give rise to a concern as to grave professional misconduct on the part of TLC.     Mr. Craig did not (or not seriously) challenge that such a fax had been sent to CJN’s home.    TLC, for his part, denied any knowledge of the fax having been sent and pointed to the fact that this allegation has emerged relatively late in the day.  It was possible that all this had come about through misplaced enthusiasm or confusion on the part of his secretary.    I found this allegation disturbing.    Given its seriousness, however, I do not think it would be right to find against TLC unless his involvement was distinctly proved.   With some misgiving, I find the allegation unproved as to its central content;  the fax was sent but TLC’s personal involvement in it being sent to CJN’s home with the encouragement that it be brought to CJN’s attention was not established.    

(3)      Complaint was made,  again supported by Mrs. Nicholl, that during the discussion with TLC after court on the 2nd March, 1993 but before the conference with GZ (paragraph 47 above),  TLC said  words to the effect that if the case did not settle the Judge would stop the trial.   TLC denied saying anything of the kind at that stage but admitted (as the attendance note records) that he did say “Judge would have stopped trial” during the meeting on 26th April, 1993 (paragraph 49 above).    I am bound to say that, whenever these words were said, it was not easy to follow what TLC meant by them;  in fairness to TLC, he acknowledged in evidence that they were not meant literally and that what he was trying to convey was that CJN’s answers in cross-examination had been fatal to the action.    For my part, I think that the wording used by TLC was unfortunate;  no question of the Judge stopping the trial arose.  That said,  I accept TLC’s evidence that he did not say any such thing on the 2nd March, 1993 before the conference with GZ.   At the time, the inherent probabilities are that TLC would have been waiting to hear what GZ had to say in conference before committing himself in any such fashion.  Accordingly, this complaint goes and can go nowhere.   

(4)      Finally, there was the unusual complaint that CJN had been asked by TLC, by letter dated 15th March, 1993, to make a payment directly to TLC’s secretary and that this was “extremely confidential”.   The essential facts were not denied by TLC.      As I understood his explanation in evidence, TLC said that he was “trying to circumvent the system”.   On the face of it, this incident does not reflect well on how TLC then ran his practice or on DC as a firm.  That said, the complaint, though made good, has nothing to do with the Issues in this case and I leave it there.

91.      I confess that, certainly cumulatively, these complaints leave me with a sense of unease about aspects of TLC’s and DC’s conduct.  However that may be,  I remain of the view that even taken at their highest, they do not have a bearing on the Issues which determine the outcome of this litigation.

a)	OVERALL CONCLUSION AND OBSERVATIONS

92.      For the reasons already given,  CJNA’s and CJN’s counterclaim must fail and is dismissed.  In the circumstances,  as I do not understand there to be any independent defence to DC's claim for outstanding fees, it must succeed and is allowed accordingly.   I shall seek the assistance of the parties and in particular counsel (Mr. Craig) in respect of the terms of the appropriate order.    I reserve all questions of costs until hearing the parties in this regard.

93.      As already recorded, I have some sympathy for CJN and, for that matter, Mrs. Nicholl;    CJN’s advisers’ initial optimism in the action ultimately turned sour;   more generally his business has not prospered. Given, however,  CJN’s tendency to blame others and the legal system for his misfortunes, it is appropriate to record certain observations as to how these have come about and as to the matter overall:

(1)      On the 12th August, 1983, CJN, of his own accord, gravely weakened his and CJNA’s position, by giving consent to the demolition of the staircase and his entranceway.    When giving such consent, he did not consult BEN.  When he became aware of these works of demolition, he did not report it to BEN for a period of months. 

(2)      In the course of 1992-1993,  CJN failed to give his legal representatives, DC/TLC and GZ, an accurate account of the above consent, despite ample opportunities to do so.   In the event, the fact that such consent had been given emerged in cross-examination at trial, thereby fundamentally undermining CJNA’s case in the action.  At least generally, a client who imparts inaccurate information (within his own knowledge and control) to his legal representatives cannot complain if he is believed by them and suffers detriment in consequence.

(3)      Contrary to one of CJN’s themes, the law does not shrink from awarding damages by way of compensation for proved business losses or for loss of opportunities.   The law, however, requires more than mere assertion before awarding damages and further requires, for very good reason,  a sufficient connection (both in terms of causation and remoteness) between the alleged wrong and the alleged loss before making such an award.  Such considerations explain why on no view was this a £2 million claim or  anything like it;  even had all other issues been resolved in its favour,  realistically, CJNA stood to recover no more than a fraction of this sum. 

(4)      In all this, it should not be thought that CJNA was left with no compensation.  To the contrary and even leaving the compromise (of the action)  out of account,  CJNA received the not insubstantial sums of £35,000 and £100,000 from the Hobbs and BP settlements, respectively. Such recoveries ought to have cushioned CJNA in coping with or recovering from the disruption at No. 37.