BL-2025-000402 - [2025] EWHC 2974 (Ch)

Powis retained W&S as its solicitors in relation to claims against Cradick and Wallace for professional negligence during the negotiation, drafting and finalisation of the Dagmar Contract.

W&S advised Powis in relation to those claims and engaged in pre-action correspondence with both Cradick and Wallace.

On 1 August 2017, Powis sent letters of claim to Wallace and Cradick. The letter to Wallace recorded that Powis had decided to bring a claim against Wallace for the inclusion by Wallace of an Overage Period without instructions from Powis. The letter to Cradick asserted that it was liable for not questioning Wallace’s inclusion of an Overage Period in the Dagmar Contract.

On 15 August 2017, W&S issued a claim form against Cradick and Wallace. Following this date, W&S continued to advise Powis in relation to those claims and continued to engage in correspondence with the solicitors of both Cradick and Wallace.

On 10 November 2017, Kennedys Law LLP (“Kennedys”) provided a letter of response (“the Kennedys LoR”) to the letter of claim sent to Cradick. As part of that response Kennedys said that Cradick “do not give instructions on behalf of clients in relation to material matters without authority from those clients” and

“3.1

The Heads of Terms dated 19 May 2011 did not expressly provide that there would be any time-limit on the payment of overage. However, [Cradick] considers that any buyer would have been highly unlikely to agree to unlimited overage.

3.2

In any event, unlimited overage was plainly not accepted by Dagmar, which is why Wallace appear to have included a 5 year overage period in their first draft of the Sale Agreement”.

On 13 December 2017, Clyde & Co LLP (“Clyde”) provided a letter of response (“the Clyde LoR”) on behalf of Wallace. Clyde stated that, as evident from the communications in the files of Wallace and Cradick, the primary contact of Wallace for reporting and instructions was Cradick; and “On or around 25 May 2011, Jackie Boot [of Wallace] had a telephone conversation with Cradick about the terms of the Dagmar contract, including the overage, and it was agreed that it would have a period of five years.”

Mr Pilling is an experienced barrister who is a specialist in professional negligence litigation and is King’s Counsel. In February 2018, W&S on behalf of Powis instructed Mr Pilling to advise as to the merits, and generally, and to prepare draft particulars of claim.

The detailed 47-page instructions were supported by 6 files of documents, which included a complete set of chronological documents based on the files of Cradick and Wallace, and the letters of claim and response. The instructions identified four heads of claim, the first of which related to the inclusion of the Overage Period. W&S said:

“Wallace appear to have unilaterally included the [Overage Period] despite the parties having made no provision for it in [the heads of terms] and without having received any instructions from [Powis] or any request from Dagmar to do so”.

W&S noted the alleged conversation between Jackie Boot and Cradick referred to in the Clyde LoR but noted that no file note or evidence of this conversation had been provided.

On 1 and 6 March 2018, there were lengthy telephone calls between Mr Pilling and W&S in relation to the case. Mr Pilling advised in consultation on 7 March 2018. The notes in relation to that consultation indicate that Mr Pilling advised that the case against Wallace was stronger than the case against Cradick and that Mr Pilling’s assessment was that the conversation alleged by Wallace between Jackie Boot and Cradick seemed highly unlikely to have taken place.

On 13 April 2018, W&S provided further instructions to Mr Pilling to finalise the Particulars of Claim. The documents accompanying the instructions included detailed questionnaires completed by amongst others Mr Khalastchi and Mr Barnett as to relevant events (“the Questionnaires”).

It is clear from these documents that none of the representatives of Powis, and in particular Mr Khalastchi who was Cradick’s primary point of contact, had any recollection of any discussion of an Overage Period in relation to the Dagmar Contract.

The further instructions explained the further researches which had been conducted by W&S and concluded in relation to the Overage Period that there was “no evidence of communication within the documents between any of Wallace, Cradick, [Powis’ representatives] or any of the individuals acting for the buyers of 138-152 suggesting the inclusion of a 5-year time limit, or any time limit, for the overage period.”

The Underlying PoC prepared by Mr Pilling spanned a number of different areas, including a claim against Cradick to the effect that it had negligently prepared the plans which were attached to the Dagmar Contract. The result was that Powis could not sell the neighbouring property, 132-136; and it ended up in a dispute with Laxcon over the title to part of 138-152.

In relation to the inclusion of the Overage Period Mr Pilling pleaded (at paragraph 16) that Wallace did not consult Powis about the inclusion of this provision. He noted the alleged conversation between Ms Boot and Mr Cradick and pleaded that Powis had no direct knowledge of any such conversation. This was the factual foundation of the claim against Wallace (at paragraph 37.1) that Wallace had negligently included the Overage Period voluntarily, without any request from the purchasers to do so, and without any instructions from Powis.

In relation to Cradick, Mr Pilling pleaded a claim as follows:

“37.2

… Wallace has asserted that Ms Boot [of Wallace] discussed the terms of the draft contract with Mr Cradick [of Cradick], and that they agreed that there should be a five year overage period. As to this:

37.2.1

If this assertion is correct, Cradick was negligent in failing to point out to Wallace that the heads of terms simply provided for overage to be paid, without any time limit on when it fell to be paid; and that by volunteering a time limit Powis would be conceding a significant commercial advantage where it was under no pressure to do so. Cradick ought also to have pointed out that it did not have authority to agree to such a concession on Powis’s behalf, and that such a concession should not be volunteered without advising Powis of the options open to it, and obtaining instructions as to how to proceed.

37.2.2

If this assertion is incorrect, Cradick was negligent in not pointing out to Powis and / or Wallace that there was a significant and commercially important disparity (to Powis’s disadvantage) between the agreement as to overage reflected in the heads of terms, and the agreement as to overage reflected in the first draft contract prepared by Wallace”.

The Particulars of Claim were served on 19 April 2018.