The High Court, in a recent case – Walter & anor v Crossan [2014] IEHC 377, Hogan J, 24 July 2014 struck out a claim for damages for upset, distress and inconvenience (falling short of nervous shock and psychiatric injury) allegedly caused by professional negligence on the part of a firm of solicitors.

Facts

In July 2006, the plaintiffs entered into an agreement with the first defendant to purchase lands and premises. This incorporated an agreement for the construction of a house, to be built by the second defendant, in accordance with a particular planning permission. The third, fourth, fifth and sixth defendants were a firm of solicitors who acted for the first and second defendants in connection with the sale and building agreement.

A condition in the planning permission provided that a sum of almost €33,000 be paid to the local authority for the provision of roads, water, sewerage and recreational amenities.

The conditions of sale required that the vendor provide written confirmation of compliance with all conditions involving financial contributions.  The first defendant in his capacity as a director of the second defendants certified in writing that the levies specified in the planning permission had been paid. The plaintiffs then paid over the funds for the house purchase and those funds were released by the defendants' solicitors prior to formal confirmation from the local authority either that the terms of the condition had been complied with or the production of any receipts from the local authority. The sale closed at the end of July 2006 and it appeared that the local authority wrote to the solicitors on 4 August 2006 stating that the payment was still outstanding.

In March, 2011, the plaintiffs received notification from the local authority that the financial contribution had not been paid and that the sum of some €36,000 was now due and owing by them.  The notification also contained an implied threat of future criminal prosecution.

On 9 August 2011 a formal letter of demand was sent to the plaintiffs requiring the payment of this sum within a period of fourteen days. That letter also threatened injunction proceedings against the plaintiffs and the first and second defendants.

In March, 2013 the second defendant paid the local authority the sum owing. 

Decision

The plaintiffs claimed damages for distress, upset and inconvenience.  All defendants were sued in both contract and negligence however the judge accepted that there was no contractual relationship between the plaintiffs and the solicitor defendants. He did, however, accept that the relationship between the solicitors and the plaintiffs was sufficiently close as to give rise to a duty of care.

Accordingly, the question before the court was whether the nature of the loss and injury suffered by the plaintiffs was cognisable in an action for negligence as distinct to an action for breach of contract.

The judge acknowledged that the communication from the local authority came entirely out of the blue and must have been extremely upsetting and distressing for the plaintiffs. He readily accepted that the plaintiffs suffered acute distress and upset as a result of these demands and threats which unfairly hung over them in the period from March 2011 to March 2013.

The judge analysed the case law relating to damages for distress and inconvenience in building cases, and held that the award of damages for inconvenience in these cases was to represent the loss of expectation in respect of the performance of the contract brought about by the negligence and breach of contract on the part of the defendant. Where there was no such contractual relationship it was clear from the case-law that damages for inconvenience and upset of this nature were not recoverable.

In the circumstances, the judge felt compelled to strike out the case as against the solicitor defendants.