Finlay v Murtagh
| Jurisdiction | Ireland |
| Judge | KENNYJ.:,Henchy J.,GRIFFIN J |
| Judgment Date | 21 November 1978 |
| Neutral Citation | 1978 WJSC-SC 244 |
| Date | 21 November 1978 |
| Docket Number | . |
| Court | Supreme Court |
1978 WJSC-SC 244
THE SUPREME COURT
O'Higgins C.J.
Henchy J.
Griffin J.
Kenny J.
Parke J.
Judgment of Henchy J.delivered the 21 November 1978
When a client complains that he has suffered loss because his solicitor has failed to show due care in the performance of his duty as solicitor, does the client's cause of action lie in contract or in the tort of negligence? Or has he a choice? That is the problem presented in this appeal. The plaintiff client has founded his claim against the defendant solicitor in negligence, his case being - and it has not been denied - that the solicitor did not, within the period fixed by the statute of limitations, bring an action for damages for personal injuries sustained by the client as a result of the alleged negligence of a third party. He has served notice of trial against the solicitor before a judge sitting with a jury, which he would be entitled to do if -his cause of action lies, as has been pleaded, in tort. But the solicitor contends that the cause of action is breach of contract, that is, breach of the implied term in the contract that he would carry out his duties as solicitor with due professional care and skill. If he is correct in that contention the notice of trial should have been for a judge sitting without a jury. So he has moved in the High Court for an order setting aside the notice of trial served. D'Arcy J. refused to make that order. He held that the client's action lies in the tort of negligence. It is from that refusal that the present appeal has been brought by the solicitor.
There has been no decision of this Court on the point at issue. We have been referred, however, to three decisions of the High Court. In McGrath v. Kiely and Another 1965 I.R. 497 the plaintiff client sued his solicitor for negligence and, alternatively, for breach of contract in failing to show due professional care in the preparation of an action for damages for personal injuries. The claim was pursued in court as one for breach of contract and no effort was made to pursue the claim in negligence. The parties agreed to treat thesolicitor's default as a breach of contract. That case, therefore, throws no light on the present problem. The second case, Liston v. Munster and Leinster Bank 1940 I.R. 77, was an action by the personal representative of a customer of the Bank against the Bank for damages for negligence, alternatively for conversion, and in further alternative, for money had and received. The issue being whether the entire cause of action arose out of a contract, in which case notice of trial by a judge without a jury would be appropriate, or whether it lay partly in tort, in which case the notice of trial that had been served, for a judge with a jury, would have been correct. In holding that the claim was partly for breach of contract and partly for conversion, O'Byrne J. applied the following test laid down by Greer L.J. in Jarvis v. Moy, Davies, Smith, Vandervell & Co. 1936 1 K.B.399, 405:
"The distinction in the modern view, for this purpose, between contract and tort may be put thus: where the breach of duty alleged arises out of a liability independently of the personal obligation undertaken by contract, it is tort, and it may be tort even though there may happen to be a contract between the parties, ifthe duty in fact arises independently of that contract. Breach of contract occurs where that which was complained of is a breach of duty arising out of the obligations undertaken by the contract".
The third High Court case to which we were referred is Somers v.Erskine 1943 I.R. 348. There the question was whether an action commenced by a client against a solicitor for negligence, and sought to be continued against the solicitor's personal representative, had abated with the solicitor's death, as being an action in tort, or whether it survived his death, as being an action in contract. Maguire P. in an unreserved judgment, applying the same test as was applied by O'Byrne J. in Liston v. Munster and Leinster Bank, held that the plaintiff's claim was essentially one in contract, rather than in tort, and therefore had survived the solicitor's death.
In my opinion, the conclusion in the latter case that an action by a client against a solicitor for damages for breach of his professional duty of care is necessarily and exclusively one in contractisincompatible with modern developments in the law of torts and should be overruled. The conclusion there reached, in my view, does not follow from a correct application of the test laid down by Greer L.J. in the Jarvis, case.
The claim made by the plaintiff in the Jarvis case was one by a client against stockbrokers "for damages for breach of contract arising out of the defendants' relationship with the plaintiff as stockbrokers and client". It is clear, therefore, that, at least in form, the action was one for breach of contract. But the particulars given in the writ show that the substance of the complaint was that the stockbrokers had departed from the specific instructions given by the plaintiff. The cause of action therefore arose from breach of a particular binding provision created by the parties, and not from any general obligation of care arising from the relationship of stockbroker and client. The nub of the matter was that the stockbrokers had defaulted on a special personal obligation imposed by the contract. They could not have been made liable other than in contract and the court correctly held that the claim was,in the words of the statute which was being applied, "founded on contract". The test adumbrated by Greer L.J., which commended itself to O'Byrne J. in Liston v. Munster and Leinster Bank and to Maguire P. in Somers v. Erskine, correctly draws a distinction between a claim arising out of an obligation deriving from, and owing its existence to, a personal obligation undertaken by the contract (in which case it is an action in contract) and a claim arising out of a liability arising independently of the contract and not deriving from any special obligation imposed by the contract (in which case an action lies in tort). The action in tort derives from an obligation imposed by the general law applicable to all persons in such a relationship. The action in contract is founded on the special law which was created by the contract and which was designed to fit the particular relationship. As I understand it, therefore, the test propounded by Greer L.J. does not support the conclusion reached by Maguire P. that, because the contract of retainer implies a duty of professional care and skill, and because a defaul in that duty has occurred, thecause of action lies exclusively in contract.
It has to be conceded that for over a hundred years there has been a divergence of judicial opinion as to whether a client who has engaged a solicitor to act for him, and who claims that the solicitor failed to show due professionl care and skill, may sue in tort, or whether he is confined to an action in contract. In Somers v. Erskine (and in some English cases), it was held that the sole cause of action was the solicitor's failure to observe the implied term in the contract of retainer that he would show due professional skill and care. It is undeniable that the client is entitled to sue in contract for breach of that implied term. But it does not follow that, because there is privity of contract between them, and because the client may sue the solicitor for breach of the contract, he is debarred from suing also for the tort of negligence. Since the decision of the House of Lords in HedleyByrne & Co. Ltd. v. Heller & Partners Ltd. 1964 A.C. 465and the cases following in its wake, it is clear that, whether a contractual relationship exists or not, once the circumstancesaresuch that the defendant undertakes to show professional care and skill towards a person who may be expected to rely on such care and skill, and in fact does so rely, then that person may sue the defendant in the tort of negligence for failure to show such care and skill, if he has been damnified by such default. For the purpose of such an action, the existence of a contract is merely an incident of the relationship. If, on the one side, there is a proximity of relationship creating a general duty and, on the other, a reliance on that duty, it matters not whether the parties are bound together in contract. For instance, in the present case if the solicitor had not been retained for reward, but had merely volunteered his services to the plaintiff, his liability in negligence would be the same as if he was to be paid for his services. The coincidence that the solicitor's conduct amounts to a breach of contract cannot affect either the duty of care or the common law liability for its breach, for it is the general relationship, and not any particular manifestation such as a contract, that gives rise to the tortious liability in such a case: seeper Lord Devlin in the Hedley Byrne case, at p. 530.
A comprehensive survey of the law governing the liability of a solicitor to his client in negligence is to be found in the judgment of Oliver J. in Midland Bank v. Hett, Stubbs and Kemp 1978 3 W.L.R. 167, in which it was held that the solicitor's liability in tort exists independently of any liability in contract. That conclusion which was reached at first instance, and with which I agree, may be said to be reinforced by dicta in the judgments of the Court of Appeal in Battyv. Metropolitan Property Realizations Ltd. 1978 2 All E.R. 445 and Photo Productions Ltd. v. Securicor 1978 3 All E.R. 146.
On a consideration of those cases and of the authorities referred to in them, I am satisfied that the general duty of care created by the relationship of solicitor and client entitles the client to sue in...
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