In the recent decision of Mansion Estates Ltd v Hayre & Co (a Firm) the High Court considered the issue of witness credibility when deciding whether the defendant firm of solicitors had acted negligently in respect of the purchase of land and the sub-sale of part of that land. 


In late 2006 the Defendant was instructed by the Claimant to act for him in the purchase of a £1.7m property in Bradford and in respect of the sub-sale of part of the property for £450,000. The transfer of the whole site was completed on 9 November 2007. Although the Claimant received the £450,000 from the sub-sale and handed the keys over to the purchaser on 9 November 2007, the actual transfer of the sub-sale was not registered until 9 April 2008. In respect of the sub-sale the Defendant acted for both the Claimant (as vendor) and the purchaser. When the Claimant tried to sell the retained land in 2009, investigations into title revealed that very limited access rights and no rights of way had been retained.

The Claimant alleged the Defendant's principal had attached and filed the wrong TP1 transfer form such that it diminished the value of the retained land due to loss of access rights. What sets this case apart is that the Claimant accused the Defendant's principal of fabricating a series of attendance notes and documents some 2 years later when the claim came to light. The Defendant denied that the wrong plan had been attached and asserted (supported by various attendance notes) that he had advised the Claimant that the plan would cause "blight" to the retained land but that the Claimant instructed him to proceed in any event. 

It was also alleged that the Claimant overpaid £18,000 in SDLT on the sub-sale because the Defendant failed to use the concession for SDLT available under s 45 of the Finance Act 2003 which allows reduced SDLT if the contract to purchase the whole site and the sale of part of it take place at the same time. The Defendant's positon was that the purchase and sub-sale were not simultaneous as the sub-sale completed on 9 April 2008.


The key issues for the Court to determine were:

  1. Which plan the Defendant was given and whether the Claimant was told that the terms of the sub-sale blighted the retained land? 
  2. Whether the purchase of the whole site and the sub-sale had been simultaneous.

Judgment was given to the Claimant for £211,000 (being the lost value of the retained land caused by filing the wrong plan) plus £18,000 in overpaid SDLT. The SDLT point was clear; the s45 concession is available not just on completion but also on "substantial performance" and the Judge considered that on any view the handing over of the purchase monies and the keys warranted substantial performance.

In relation to the allegations of fabrication the Judge made it clear that this was not a case where one party had "misremembered" events or made an "innocent error". The Judge accordingly had to make a finding as to which witness he preferred, with the consequence that the other witness was dishonest, which for the Defendant in particular had potentially far reaching professional consequences. Whilst there were aspects of the Claimant's evidence which the Judge found troubling (such as the Claimant's allegation of a conspiracy between the Defendant and the lender bank, HSBC, for which there was no evidence), the Judge found that the Defendant's evidence "troubled him even more". For example, the Defendant only released a copy of his files when threatened with a referral to the SRA. The Defendant sent a fax at the time his attendance note stated he was in a meeting with the Claimant; the Judge could find no credible explanation for this (save that either the fax machine showed the wrong time or the Defendant recorded the wrong time because he did not wear a watch). The Defendant did not help his credibility by asserting the Claimant had staged a burglary in which the only items taken were the original files relating to this matter. 


The Judgment very helpfully goes through the main factors to consider when determining whether a witness is lying and is useful guidance in assessing whose evidence is likely to be preferred at trial.

"Inherent improbability", and whether a solicitor or any other professional is more or less likely to mislead the Court than any other person, should be considered in context. Consistency is also key, not only in the witness's written and oral evidence but also in relation to other evidence. The presence of independent evidence also ranks high on the list of factors to consider but must be balanced against any motive the witness may have for misleading the court and whether the witness has engaged in "wild speculation or uncorroborated allegations of fabrication". 

Following Mumtaz Properties v Ahmed [2011} EWCA 610, the Judge agreed that the witness's credibility should be assessed not just from their "general demeanour" but the Court should also consider what other independent evidence was available. Contemporaneous written documentation is stated to be of "the greatest importance in assessing credibility" and is significant both in its presence and absence. However, in this case the Defendant's contemporaneous written documentation did not stand up to scrutiny. Further, the Defendant's assertion, some 8 years after the event, that he was able to recollect specific dates/times simply weakened his credibility. 

The Judge asked himself the question whether or not it was likely that a solicitor would possibly risk his career to avoid a finding of negligence. His response, a sad indictment as to the state of the professions, was that "it would be wrong to assume that it is inherently more improbable that a professional person will be dishonest than anyone else. If ever such a view validly had traction, I do not think it can do so in the modern world". 

The Judge, in finding for the Claimant, ultimately took a pragmatic approach in this case (no doubt influenced heavily by the Defendant's questionable conduct) and concluded it was hardly likely that the Claimant would have given the Defendant a plan that blighted his own retained land and then proceeded to ignore the advice given.