Judgment: 2021-10-20 · Court archive

Court of Appeal rules solicitor negligence claim over Leitrim home purchase was out of time

The court allowed the solicitors’ appeal, finding the alleged planning-title defect caused actionable damage when the purchase closed in July 2006.

The Court of Appeal · [2021] IECA 268

Who, what, where, when and why

Who
  • Mark Smith (Plaintiff)
  • Maurice Collins (Judge)
What

The court allowed the solicitors’ appeal, finding the alleged planning-title defect caused actionable damage when the purchase closed in July 2006.

Where

Places mentioned in the report

  • Gubadorish
  • Leitrim County Council
  • Drumlish
  • County Leitrim
When

Judgment:

Other dates in the report
  • 26 May 2014

    When Smith and his wife agreed to sell the property in 2008, Leitrim County Council told the solicitors acting for the intended purchasers that a planning condition had not been complied with and the development was considered unauthorised. The planned sale did not proceed. Retention permission was granted in November 2008, but the judgment records that the property did not sell. Smith’s proceedings began on 26 May 2014.

Why

Reasons reported in the judgment

The Court of Appeal has allowed an appeal by solicitors and declared that Mark Smith’s negligence claim against them was statute-barred. The court held that any actionable damage from the alleged failure to secure good marketable title arose when the purchase of a newly built home in County Leitrim completed in July 2006—not when a later sale fell through in 2008.

The Court of Appeal has allowed an appeal by solicitors and declared that Mark Smith’s negligence claim against them was statute-barred. The court held that any actionable damage from the alleged failure to secure good marketable title arose when the purchase of a newly built home in County Leitrim completed in July 2006—not when a later sale fell through in 2008.

The ruling overturns a High Court decision that the claim was not out of time. The Court of Appeal judgment, delivered by Mr Justice Maurice Collins on 20 October 2021, records that Whelan and Ní Raifeartaigh JJ agreed with it.

Smith and his then wife bought the house at Gubadorish, Drumlish, for €240,000. The purchase was financed by a mortgage. The judgment says planning permission for the development included conditions that had not been met, and that an engineer retained by the vendors had certified substantial compliance. The solicitors deny wrongdoing and had pleaded that they were entitled to rely on the certificate and information supplied by the vendors’ solicitors.

When Smith and his wife agreed to sell the property in 2008, Leitrim County Council told the solicitors acting for the intended purchasers that a planning condition had not been complied with and the development was considered unauthorised. The planned sale did not proceed. Retention permission was granted in November 2008, but the judgment records that the property did not sell. Smith’s proceedings began on 26 May 2014.

The High Court had treated the loss from the failed sale in October 2008 as the point when the negligence claim accrued. On appeal, the solicitors argued that the property’s alleged title defect had already reduced its value when the purchase closed. Smith argued that any earlier loss was contingent and that damage arose only when the sale was rescinded.

The Court of Appeal concluded that the alleged non-compliance with planning permission was an immediate defect in title with adverse implications for marketability and value. It said the property acquired was worth less than the planning-compliant property for which Smith and his wife had contracted. The later loss of sale aggravated that damage but was a downstream consequence, the judgment said. Because the claim accrued in July 2006 and the proceedings were not started until 2014, the six-year limitation period had expired. The judgment noted no suggestion of disability, concealment or mistake affecting the running of time.

The court also set aside the High Court costs order in Smith’s favour. It proposed awarding the solicitors their costs of the proceedings against them, including the High Court motion and appeal. Smith was given 14 days to apply for a brief further hearing on costs. The court’s decision resolved the preliminary limitation issue; it did not determine whether the solicitors were negligent at trial.

Read the original court judgment

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