Adams & Ors v Atlas International Property Services Ltd & Ors

Introduction and Parties

The Claimants were purchasers of properties in Spain who paid the purchase price, but did not acquire title to their properties. They now sue the English agents and the Spanish lawyers who were involved in the purchases, alleging negligence, breach of fiduciary duty and unlawful means conspiracy.

These two actions concern 10 apartments or chalets (“the Properties”) at three developments (“the Developments”) near Torrevieja, near Alicante, in Spain which were among those carried out by a Spanish development company called Desarrollo y Tecnologia de Centros Vacacionales SL (“Desarrollo”).

The Properties were marketed in the United Kingdom by two English companies, Atlas International Property Services Limited (“Atlas”) and Iberian International Limited (“Iberian”). Atlas and Iberian (“the Agents”) acted as agents of Desarrollo, received the initial instalments of the purchase price from the Claimants, and also provided services to the Claimants. They are now in liquidation. Save for making and then abandoning a jurisdictional challenge, they have played no part in these proceedings.

The Claimants are 14 individuals, and the personal representatives of 2 more individuals, who on various dates between 2003 and 2005 contracted to buy the Properties from Desarrollo. (In the case of Mr. & Mrs. Frost, their contract was initially with another company, Promociones Internacionales Immobiliaria Zenisol SL, but it was agreed that nothing turns on that.) The Claimants are (in alphabetical order):

Between April 2002 and July 2005, the Claimants each paid the purchase price for their Property in instalments. On payment of the final instalment (which was referred to as “completion”), the Claimants received the keys to their Properties and began to occupy them. But Desarrollo did not execute transfers of the Properties to the Claimants.

The Properties turned out to be subject to mortgages in favour of certain banks (“the Banks”), which prevented the execution of clean transfers and the subsequent registration of the Claimants’ title. Proceedings were brought against Desarrollo, but Desarrollo did not redeem the mortgages or execute transfers. Instead, Desarrollo became insolvent. The Banks began steps to repossess the Properties, and most of the Claimants gave up possession. Mr. & Mrs. Hope and Mr. & Mrs. Whyte repaid the mortgage debt themselves and so obtained good title to their Properties.

By these two actions, commenced on 26 July 2013 and 1 July 2014, the Claimants bring various claims against the following 5 Defendants:

For limitation purposes:

The Claimants’ case against Aroca became more focused as the trial progressed. It can be summarised as follows:

Aroca denies liability and asserts that the Claimants were guilty of contributory negligence.

The contracts between the Claimants and Desarrollo (“the Purchase Contracts”) were for the sale of immovable property in Spain and were governed by Spanish law.

However, there was no express choice of the law governing the relationship between the Claimants and Aroca. The parties were content to proceed on the basis that I should apply English law to this relationship, either on the basis that English law was the applicable law or on the basis that there was no evidence that Spanish law was different in any material respect from English law.

There was a substantial amount of agreement between the parties’ expert witnesses of Spanish law. It was common ground that:

The experts also agreed that:

The following witnesses gave evidence at trial:

In addition, the Claimants relied on a witness statement made by Mrs. Cartwright, who was not required to attend Court for cross-examination.

I confirm that, as I was invited to do by Aroca, I have, in assessing the evidence of the witnesses of fact, and all of the other evidence, had regard both to the observations of Lord Nicholls in Re H (Minors) [1996] A.C.563, 586, and to the matters set out by Leggatt J. in Gestmin SGPS SA v Credit Suisse (UK) Ltd [2013] EWHC 3560 at [15] to [22]. This is a case where serious allegations are made against the Defendants in respect of events which took place between 11 and 14 years ago.

Moreover, as one might expect in such a case, there were gaps in the disclosure on both sides. In particular:

I have no doubt that the Claimants and their witnesses of fact were the sort of people who would need professional guidance in buying property in Spain and who would trust the professionals who assisted them in that process. Their honesty as witnesses was not challenged. They all gave the impression in the witness box that they were doing their best to answer the questions asked. As I have said, Mr. Frost found the experience difficult, perhaps in part because of emotion, but the others did not display much emotion. They accepted that there were things which they could not remember and things which they had got wrong in their statements. Understandably, their memory of events and what people said was better than their memory of the contents of documents or their understanding of the contents of documents.

The Claimants were asked a number of hypothetical questions as to what they would have done if they had been given certain advice. For obvious reasons, the answers which they gave to such question were of little evidential value.

Sr. Aroca was an unsatisfactory witness.

Sr. Martini gave evidence with the assistance of an interpreter, and I make allowance for that. (It was clear that he had sufficient understanding of English to be able to answer some questions before they were translated into Spanish, but that does not mean that he did not need an interpreter.) He had made one, short witness statement, which was in fairly general terms. However, when asked about it in detail, he said that it had been prepared over the telephone, that it may contain errors, that it was not exact and that it was not properly written. He seemed unfamiliar with at least one part of his statement (i.e. his claim that Aroca’s promotional letters contained a typographical error when they referred to Iberian International SL instead of Iberian International Limited) and sought, in effect, to retreat from it. He also sought to retreat from his statement that most of the estate agents who were selling Spanish property at the relevant time were domiciled abroad. I did not find his evidence to be of any assistance, save insofar as his statement or his answers contained matters which the Claimants accepted were correct.

I now set out the principal relevant events, including both the “generic” facts and those specific to individual Claimants.

The Agents advertised the Properties for sale in the United Kingdom, and their marketing was targeted at United Kingdom residents. The Claimants were among those who responded to the Agents’ advertisements, on various dates between June 2002 and February 2004.

I was shown examples of the brochures which the Agents produced. On the whole (but with some exceptions), the Claimants did not contend in their witness statements that they relied on these brochures. On the whole, the Claimants tended to rely on what they were told by the Agents’ representatives. However, the sample brochures were relied on at trial as indicating the sort of way in which the Properties were being sold by the Agents. I accept that they were helpful in corroborating to some extent the Claimants’ largely unchallenged evidence of what they were told by the Agents’ representatives, i.e. that:

Thus, a 2003 Atlas brochure stated, inter alia, as follows:

It is worth noting that the first paragraph of the “Solicitor’s notes” in this brochure presented it as normal and standard practice for the Escritura de Compraventa to be executed after the purchaser had paid the whole of the purchase price. This was consistent with the impression given by the Agents to the Claimants throughout.

As for Iberian, Mr. Hope’s unchallenged evidence was that the main reason they chose Iberian was because Iberian “had stated in their brochure that they would take care of everything during the purchase from choosing the house, to solicitors, to furniture and the after sales process.”

Mr. & Mrs. Williamson produced the Iberian brochure which was given to them. This had on its front page the names and addresses not only of Iberian but also of Costablanca Baleares Promociones SL (“Costablanca Baleares”), a Spanish company which acted as Iberian’s agent in Spain.

Sr. Aroca said as follows:

“The person who is close to the buyers are the agents, … , who have the same nationality as the people who buy. They are the people who are the masters of the advice that is given to the buyers and they take great care with the choice of the election of who to give, you know, for advice, for legal advice, who to take their clients to, but that election, that choice, is only theirs and these are people who are in charge of hundreds of people and these are people who wish to maintain their good name and reputation of their company. It is them, the ones who decide in total freedom where to send their clients.”

The Agents each used the services of a local agent in Spain to do such things as: man their customer service centre; look after visiting clients; make arrangements for meetings in Spain; and deal with people such as Desarrollo, Bankinter (with whom the Agents opened accounts for each of the Claimants) and Aroca. Atlas’s local agent was Atlas Mediterraneo SL and, as I have said, Iberian’s local agent was Costablanca Baleares.

The Agents and/or their local agents charged a commission on each purchase to Desarrollo. One invoice was disclosed for such commission. It was dated 8 April 2003 and was issued by Atlas Mediterraneo SL to Desarrollo for commission on Mr. & Mrs. Frost’s purchase. The amount of the commission was €28,038, which was about 26% of the purchase price (€107,585) stated in their Purchase Contract.

Atlastax was incorporated in 1988. Its original name was Aroca Chapapria Asociados SL. Its shares were held in three equal shares by: (i) Sr. Aroca; (ii) Sr. Vicente Chapapria, a lawyer; and (iii) Mr. Bernardus Anthonius Van Elmpt, a Dutch national and an old friend of Sr. Aroca, whom Sr. Aroca had known since he was 19 years old. Mr. Van Elmpt was not a lawyer. He had provided an office for Atlastax to work from.

Prior to the formation of Atlastax, Mr. Van Elmpt worked for a company called Masa Internacional, of which Mr. Van Elmpt became managing director in either 1980 or 1991. In the 1980s Sr. Aroca had worked in the deeds department of a related company, Masa Promotoria. The two Masa companies dealt with the sale of properties and Masa Internacional became a big property agency

Sr. Chapapria left in about 1990, and his shares were transferred to Sr. Aroca and Mr. Van Elmpt. Since then:

Following the departure of Sr. Chapapria, on 9 April 1991 Atlastax changed its name from Aroca Chapapria Asociados SL to Atlastax Internacional SL. Its name did not change again until 2010, when it changed to its present name, Aroca Seiquer & Asociados SL.

Aroca initially received client referrals from, amongst others, Masa Internacional. Aroca had what Sr. Aroca called “a self created system”, which many people had tried to imitate. By the time of the transactions to which these actions relate, Aroca had a substantial business, providing services, inter alia, to people of many different nationalities who were purchasers and owners of properties in Spain. There were about 55 employees, some of whom were English nationals or spoke English, and a large number of clients. Sr. Aroca said that no other lawyers’ company had so many employees belonging to so many different nationalities. He estimated that at the height they were signing about 2,000 Escrituras de Compraventa per annum. Sr. Martini’s estimate was about 200 per month.

Aroca made most of its money from providing annual tax services to its clients. Sr. Martini said that they were billing ten times more for their tax clients than any other things, such as sales or purchases. Aroca’s principal interest in people like the Claimants was as potential clients for its tax services.

There was an element of common ownership between various of the companies referred to in the Atlas and Iberian brochures. In particular:

Over a period of a few years Atlas Mediterraneo SL gradually replaced Masa Internacional as a referrer of clients to Aroca. Indeed, Sr. Aroca said, and I accept, that:

By 2002 Aroca was receiving a large number of referrals from Atlas and Iberian. Sr. Aroca said that most of the clients from Atlas were English, and I find that this was true of Atlas and Iberian. The list of clients attached to Atlas Mediterraneo SL’s invoice dated 20 December 2002 indicates that Atlas Mediterraneo SL referred over 150 clients to Aroca in October 2002 alone. The list of clients attached to Atlas Mediterraneo SL’s invoice for 31 March 2005 suggests that Mr. & Mrs. Whyte’s purchase was one of 9 which “completed” on the same day (9 February 2005) and where the purchasers were clients of Aroca.

These figures indicate that Atlas must have been by some way Aroca’s most important source of clients in the period 2002 to 2005, accounting for well over half of the estimated 2,000 to 2,400 Escrituras de Compraventa signed by Aroca in each year.

Atlastax paid Atlas Mediterraneo SL when it successfully referred clients to Aroca. Atlastax disclosed 6 invoices issued by Atlas Mediterraneo SL to Atlastax for such payments, dating from December 2002 to March 2007. Each invoice described the payment as “comisiones,” but this word does not necessarily translate as “commission” rather than, say, “fee”. Each invoice was accompanied by a list of the clients to whom it related, which had been carefully checked by Aroca’s accounts department. As I have said, for some months there were as many as 150 clients. The earlier invoices showed that the payment was calculated at the rate of 25,000 pesetas (or sometimes 20,000 pesetas), or about €150 (or €120), per client. In the case of the later invoices, the payment was calculated at the rate of €150 per client.

Thus, for example, the invoice dated 31 March 2005 was accompanied by a list of over 100 of Atlas’ clients, including some of the present Claimants (Mr. Adams, Mr, Dunning, Mr. Whyte and Mr. Winter), together with dates (ranging from 2 to 24 February 2005) which appear to have been “completion” dates. Aroca’s accounts department checked these lists and ticked those (numbering 116) who were clients of Aroca and had paid Aroca’s fee.

Sr. Aroca said that the use of the word “comisiones” in the invoices was inaccurate and inappropriate. He said that there came a time when Atlas Mediterraneo SL was having financial difficulties, and David Sempere of Atlas Internacional SL came to him and asked Aroca to pay for the costs of transporting clients to Aroca’s offices, so that the invoice should refer to the service of transporting clients. On each of the cheques from Atlastax to Atlas Mediterraneo SL (which were signed by Sr. Aroca) someone had written the word “Transporte” and the relevant month(s).

However, the amount of the payment does not bear any relation to the likely cost of transporting clients (who were in any event being taken to Desarrollo’s offices in Torrevieja) to Aroca’s offices. Indeed, Sr. Aroca’s evidence was that he and Mr. Sempere did not discuss the amount of the payments. This is unlikely if Sr. Aroca had in truth been asked to pay for a service. (In addition, as I have already said, Sr. Aroca initially said that Aroca only paid monthly invoices of this nature over a short period of time, which he estimated at 2 to 3 months, but this was falsified by Aroca’s own disclosure.) Moreover, it is significant that the payment was not made in the case of every person who was transported to Aroca’s office, but was only made if the individual signed up with Aroca and paid Aroca’s fees.

One of Sr. Aroca’s answers disclosed the real reason why he agreed to pay what over the years amounted to very large sums of money to Atlas:

“Obviously I can’t refuse a company that brings me clients. I had 56 families to feed at that time, so I couldn’t say: “No, no, don’t bring me the clients.”

While I accept that these payments were described at the time as transport costs, I find that they were in substance commissions paid in return for the successful introduction of clients.

Aroca also did work for Atlas Mediterraneo SL in relation to properties being developed by Desarrollo. For example, on 23 October and 12 November 2003 Sr. Aroca sent “planning reports” to Mr. Sempere in relation to developments at Colinas de Campoamor II and Triana III respectively. The planning reports identified matters which were missing from Desarrollo’s standard form purchase contract, including:

In each case, the Claimants went to Spain for an inspection trip and, either then or shortly afterwards, the Claimants decided to buy one (or, in Mrs. Stubington’s case, two) of the Properties and:

Reservation Forms were not disclosed by Mr. Dunning, Mrs. Stubington and Mr. & Mrs. Winter, but I find that the usual practice was followed in their cases and that they signed Reservation Forms.

The Reservation Form contained details of the relevant Claimant(s), the relevant Property and the instalments of the purchase price. It stated:

“This reservation will be cancelled in favour of the contract and in any case cancelled by date [and a date could be, and usually was, inserted]

This reservation is made on behalf of the builder and [Atlas/Iberian] remains exempt from any responsibility.

The deposit is not refundable but will be held to your credit on an alternative property with [Atlas/Iberian] should you cancel this purchase, for a period of 2 years.

Having read the above, the parties sign in agreement”

The Reservation Form was signed by the relevant Claimant(s) and by a representative of the relevant Agent (acting as agent for Desarrollo). It was common ground that the Reservation Form constituted a contract between the relevant Claimant(s) and Desarrollo and that it was, under Spanish law, a private contract and a reservation agreement.

Most of the Claimants signed the relevant Purchase Contract on the day on which they signed the Reservation Form. Other Claimants (such as Mr. & Mrs. Hope) were sent the Purchase Contract later by the relevant Agent. The Purchase Contracts were dated as follows:

In each case, the Purchase Contract was in Spanish and followed a standard form. When it was sent to them, the Claimants were sent two copies (and asked to sign and return one) and also an English translation of the standard form of contract. Mr. & Mrs. Hope and Mr. & Mrs. Williamson also received an English translation of their Purchase Contract. Although the Claimants signed the Purchase Contracts, they were not given copies signed by Desarrollo and it seems that Desarrollo did not sign them.

It is common ground that the Purchase Contracts were private contracts and were contracts of “arras”. The Purchase Contracts provided for the purchase price to be paid in 4 instalments, of 10%, 40%, 25% and 25% of the whole. The Second Clause in the English translation of the standard form contract stated that the final instalment of the purchase price was payable on “Sale and granting of Deed of Sale.”

In the case of Mr. & Mrs. Williamson, the Second Clause of the English version of their contract also stated:

“In the event that THE VENDOR would proceed to constitute a mortgage, considered as optional, on the properties object of this contract, the expenses and taxes generated by this mortgage loan shall be paid by THE VENDOR. For that purpose, THE PURCHASER hereby authorizes THE VENDOR to sign all the necessary documents for the formalization of the mortgage loan. In this case, THE PURCHASER shall subrogate to the mortgage loan on the date of execution of the public Deed of Sale.”

Mr. & Mrs. Adams’ and Mr. & Mrs. Winter’s Purchase Contract contained the same provision in Spanish.

The Sixth Clause of the Purchase Contracts provided that, in the event of non-payment of the total purchase price by the Claimants, Desarrollo could terminate the contract and retain all payments made to date. The Fourteenth Clause was to similar effect.

The Purchase Contracts did not contain the provisions which were required by paragraphs (a) and (b) of the second article of Law 57/1968 of 27 July, i.e. provisions which made reference to the bank guarantee (or insurance contract) required by that law. Aroca was aware of this defect in Desarrollo’s standard form purchase contract, because it had been referred to in the planning reports sent to Atlas Mediterraneo SL on 23 October and 12 November 2003.

In addition, the Purchase Contracts were not accompanied by the documentary proof of the bank guarantee (or insurance contract) required by the final paragraph of the second article of Law 57/1968. Sr. Aroca accepted that Desarrollo did not obtain such a bank guarantee (or insurance contract) for any of the Properties.

The Agents remained in contact with the Claimants between signature of the Purchase Contracts and the trips which the Claimants made to Spain for the “completion” of their purchases (“the completion trips”). The Agents received all of the instalments of the purchase price except the final one. (The Appendix hereto sets out the amount and date of all payments made by the Claimants to the Agents, Desarrollo and Aroca.) In addition, the Agents continued to provide advice and assistance the Claimants in connection with their purchases, and continued to recommend that the Claimants use Aroca as their lawyers.

Several of the Claimants received standard form letters from the Agents, congratulating them on their purchase and advising them of the next steps. Thus, for example, Mr. & Mrs. Frost, who were the first of the Claimants to sign a Reservation Form and a Purchase Contract, received a letter dated 25 April 2002 from Julia Norton of Atlas, who signed herself as “After-Sales Advisor”, and wrote in the following terms:

“Congratulations on the purchase of your new home.

As an [Atlas] customer, it is our wish to make the purchase of your property as stress free as possible.

This is just a short note to introduce myself as your personal After-Sales advisor. I am here throughout the purchase of the property. Please find below an informative outline of the [sic] some of the services that we offer at Atlas International.

I would like to take this opportunity to remind you that all clients will require a bank account to be opened, this can be arranged through myself. …

Should you need us to arrange a mortgage on your behalf, Atlas International in Spain will provide this service. For more information please contact me.

In regard to the legal aspects of your purchase, a letter with full details will be sent to you directly from your solicitors in due course. The letter will be from Aroca Seiquer & Asociados, although they have been instructed on your behalf you will need to confirm this instruction in writing to them. (you can send the letter of instruction via our office in Dorking.)

Your next payment of 40% should be due within the next month. …

Within the next two months you will be receiving an Atlas International Administration charge. This charge is part of the additional 10% costs included in the information sheet you received within your brochure. This is a one off charge and the only payment of this kind that needs to be paid before your completion. This administration charge will cover various administrative duties that [Atlas/Iberian] will perform your behalf.

Assuring you of our best attention at all times.”

Mr. & Mrs. Frost also received a letter dated 29 May 2002 addressed from the Atlas International Client Service Centre in Torrevieja, which read:

“We would like to take this opportunity to congratulate you on the purchase of your new property, and thank you for the confidence you have displayed in ATLAS INTERNATIONAL in having elected to make your purchase with us. We can assure you that our team of professionals will continue working with the aim of assuring that everything runs smoothly during the purchase of your property.

We would also like to take this opportunity to inform you that your after sales representative in Spain is Juan Carlos Rubio.

E-mail: aftersales.helen.nl@atlasmediterraneo.com

To provide you with the appropriate service we ask you to always address the contact person mentioned for any doubts or queries you may have on your property.

…

Please do not hesitate to contact your representative should you require any further information or advice.”

Mr. & Mrs. Frost received a letter dated 27 June 2002 from Atlas which stated, inter alia, as follows:

“We would like to take this opportunity to provide you with information on the other independent companies within the ATLAS Group who are also at your service should you require any information or advice regarding your company.

•

ATLAS SOS – Provides all types of extras to your property, …

•

ATLAS Insurance …

•

ATLAS Tax – Founded in Torrevieja and specialising in legal and fiscal representation of home owners, resident and non-resident.

•

ATLAS Property Management …

•

ARCA Furniture …

Our Client Service Center can offer help to obtain quotations and follow up all the extras that your property requires. …

…

Also so that your moving in process runs smoothly could you please complete the enclosed form asking for personal and bank details. This is required by the solicitor to ensure they have all the correct details on file so that they can prepare the relevant documentation for title deeds etc. It is also required for tax purposes. With this form we also require two passport photographs and another copy of your passport. …”

Mr. & Mrs. Forrester received a letter in the same terms, dated 20 August 2002, and it is likely that Mr. & Mrs. Whyte also received such a letter, as they completed the enclosed form.

Mr. & Mrs. Forrester also received a letter dated 22 July 2002 from Atlas which stated:

“Firstly, I would like to congratulate you on the purchase of your new home.

As an [Atlas] customer, it is our wish to make the purchase of your property as stress free as possible.

This is just a short note to provide you with helpful information with regard to your initial payments and contracts.

If you have not paid your deposit payment yet, this payment should be made as follows:

[There followed details for making payment to Atlas.]

Please find below, an informative outline of the (sic) some of the services that we offer at [Atlas].

Atlas have a fully operational Client Service Centre, which is the largest overseas property centre in Europe. Here, they have implemented a large team of friendly, helpful and professional staff to answer any queries you have during the purchase process.

…

In regard to the legal aspects of your purchase, an informative introduction letter from Aroca Seiquer, a solicitors based in Torrevieja, Spain, will be sent to you directly. If you wish to use their services, you will have to send a letter of instruction to confirm your interest in their services, making sure to include your property details. You can them contact them directly with any further queries you would like them to handle. (The letter of instruction can be sent via our office in Dorking and we will forward it to Spain on your behalf.)

Solicitor contact details: Aroca Seiquer & Asociados (Abogados/Solicitors)

[etc.]

Your next stage payment (of 40%) should be due within the next month. …

Within the next two months you will be receiving an [Atlas/Iberian] International Administration charge. This charge is part of the additional 10% costs included in the information sheet you received within your brochure. This is a one off charge and the only payment of this kind that needs to be paid before your completion. This administration charge will cover various administrative duties that [Atlas/Iberian] will perform your behalf.

Assuring you of our best attention at all times.”

Mrs. Stubington received a letter in substantially the same terms, dated 5 March 2003, and Mr. Dunning received one dated 18 August 2003, although in his case the paragraph which referred to Aroca was replaced with a paragraph which read:

“In regard to the legal aspects of your purchase, we can recommend the solicitors based in Torrevieja, Spain, called Aroca Seiquer. If you wish to use their services, (or make further inquiries to them), you should send a letter of instruction to them confirming your interest in their services, making sure to include your property details. (The letter of instruction can be sent via our office here in Dorking and we will forward it to Spain on your behalf.)”

Mr. & Mr. Adams gave evidence of a conversation to similar effect. He said:

“We were told by Atlas to make contact with Aroca to engage their services for the legal aspects of our purchase.”

Mr. & Mrs. Forrester also received a letter addressed from the Atlas International Client Service Centre in Torrevieja It was dated 23 July 2002 and addressed many of the issues to be dealt with before “completion”, stating:

“We would also like to take this opportunity to inform you that the Client Service Center in Spain will be more than happy to help you should you require any further information or advice. Please do not hesitate to contact us at clientcenter@atlasmediterraneo.com, …”

Mr. & Mrs. Forrester received a letter dated 8 August 2002 from Atlas which stated as follows:

“Further to your request for written confirmation about the bank guarantees for your payments I can confirm that after paying 50% (1^st and 2^nd payment) you will receive a bank guarantee either from the builder or Atlas International.”

Mr. & Mrs. Williamson received a letter dated 26 February 2003 from Iberian which stated as follows:

“We would like to take this opportunity to congratulate you on the purchase of your new property, …, and to thank you for choosing the services of [Iberian] to help with the purchase of your new property.

Customer Care

We would also like to take this opportunity to inform you that the Customer Care in Spain will be more than happy to help should you require any further information or advice. ..”

Mr. & Mrs. Hope received a letter in the same terms dated 9 August 2003.

The other Claimants (i.e. Mr. & Mrs. Adams, Mr. & Mrs. Hope and Mr. & Mrs. Winter) are likely to have received a letter from their Agent congratulating them on their purchase, but it is not known which form it was in.

Meanwhile, Desarrollo mortgaged each of the Properties to one of the Banks. These mortgages were registered between May 2003 and July 2004, as follows:

This was done without the Claimants’ knowledge or approval (save perhaps insofar as Mr. & Mrs. Adams, Mr. & Mrs. Williamson and Mr. & Mrs. Winter might be taken to have given such approval by the terms of the Second Clause of their Purchase Contracts). It appeared to be Sr. Aroca’s evidence that this involved criminal activity on the part of Desarrollo and the Banks, although his evidence was not entirely clear on this point and was not confirmed by the expert witnesses.

Sr. Aroca claimed that he did not know the terms of the Claimants’ Purchase Contracts. However, it is clear from the planning reports to which I have referred that Aroca had seen and commented on Desarrollo’s standard form contracts. There was no evidence to suggest that Aroca had any reason to believe that Desarrollo had used different contracts in the case of these Claimants. Accordingly, I find that Aroca knew that the Claimants’ Purchase Contracts were most likely to be in Desarrollo’s standard form and that Aroca knew what that standard form contained.

Aroca also knew that many of the purchasers referred to Aroca by the Agents were paying the entire purchase price without obtaining an Escritura de Compraventa. Aroca knew this because Aroca was subsequently seeking to obtain Escrituras de Compraventa for these purchasers.

Aroca also knew from before January 2004 that there were delays in obtaining Escrituras de Compraventa from Desarrollo. In his fifth witness statement, Sr. Aroca said as follows:

“13.

In my experience, it is common practice for developers in Spain to finance the cost of building by mortgaging the overall plot of land where the properties are to be erected. …

14.

If, generally speaking, there are significant delays of several weeks or months on the developer’s part in granting title deeds, any experienced Spanish lawyer specialised in conveyancing would suspect that either (a) there has been some difficulty when obtaining the certificate issued by the Town Hall stating that the properties are in full compliance with building regulations, preventing the above-mentioned deed to be signed, or (b) that the developer is having some degree of financial difficulty.

15.

As far as I am aware, the properties which the Claimants ultimately acquired were built in full compliance with building regulations.”

In his third witness statement, Sr. Aroca said as follows:

“26.

Once the provisions of funds and the power of attorney were received, the developer was contacted by [Aroca] to determine a mutually convenient date to execute the purchase agreement free of charges and encumbrances before a notary. … Time passed and the developer did not reply to our request to set a date for the signing. As time passed, my concern increased. Normally, a delay of one month was not unusual due to both notaries’ and developers’ workload.

27.

From January 2004 I began to worry even more, since the developer was signing very few deeds. I was especially concerned that the properties met all the requirements of the Spanish land laws and developers still seemed unable to proceed with the redemption of mortgages. I spoke several times by e-mail with Daniel Sanchez and Emilio Martin de las Mulas, of [Desarrollo].”

It is apparent from his statements that Sr. Aroca was worried before January 2004 and that he became even more worried in January 2004. In January 2004, only Mr. & Mrs. Forrester had “completed” their purchase. The remaining Claimants did so between July 2004 and February 2005.

The Claimants relied on a number of documents dating from 2004 and 2005 which they submitted showed that Sr. Aroca and Atlastax were aware of ongoing problems with getting Desarrollo to execute Escrituras de Compraventa for their clients in relation to various of its developments.

These documents were as follows:

In his fifth witness statement, Sr. Aroca acknowledged that there had been delays by Desarrollo in signing Escrituras de Compraventa from early 2004. He said as follows:

“17.

As the date of the signature was repeatedly postponed by [Desarrollo], and as we eventually stopped receiving responses to our queries (as evidenced, for example, by [a fax of 30 March 2005] …), I became suspicious that the developer might have some financial difficulties and I informed the clients later that year.

18.

This was an assumption on my part, which I made based on my experience. [Atlastax] did not have the Land Registry entry numbers of the Claimants’ properties until approximately 2012, … Therefore [Atlastax] was unable before that date to check whether these specific properties were subject to a mortgage or not.

19.

I had around 160 clients due to complete the purchase of their properties on different developments owned by [Desarrollo] between 2003 and 2006. When the moment came to sign certain deeds and there seemed to be delays, I spoke to the builder who said that there were administrative problems which were delaying the deeds (which is a common reason for the delay of the signing of the deeds), but as the delays continued and I was not given specific reasons as to why, I started suspecting that the reasons were financial …”

I find that both Sr. Aroca and Atlastax knew from before January 2004 that Desarrollo had mortgaged at least some of the properties which it had contracted to sell and that Desarrollo was experiencing financial difficulties which meant that it was experiencing difficulty in repaying these mortgages in time to execute the relevant Escrituras de Compraventa when it should have done. I find also that both Sr. Aroca and Atlastax were worried by this from before January 2004 because they realised that there was a real risk that people who had agreed to buy properties from Desarrollo and paid the purchase price might not receive legal title to their properties and that those properties might turn out to be subject to mortgages which Desarrollo could not repay.

Nevertheless, Aroca did not tell any of its (existing or new) clients about these matters until late in 2005, after the present Claimants had “completed” their purchases. I find, however, that Sr. Aroca did consider whether they should be told, and decided that they should not. He effectively accepted that he had taken such a decision when, in paragraph 29 of his third witness statement, he gave his account of the reasons for his decision, as follows:

“I wanted to avoid creating unfounded concerns among those clients who had instructed me to sign the deeds, ….”

I do not accept this account of the reasons for his decision. It is clear from Sr. Aroca’s own witness statement that he himself had genuine concerns and that they had a real foundation in Desarrollo’s delay in signing Escrituras de Compraventa. These were not “unfounded concerns.”

No other legitimate explanation was proposed for Sr. Aroca’s decision that Aroca’s clients should not be told about those concerns or the reasons for them. The real explanation is clear. As put to Sr. Aroca in cross-examination, it was that telling Aroca’s clients that there were mortgages and that these were causing a problem with obtaining the title deeds would damage Atlas’ and Iberian’s interests in trying to get more clients to buy from the same builder or from different builders. In other words, Sr. Aroca did not want to “rock the boat.” He did not want to disrupt the “scheme” which the Agents were operating and which was resulting in commission for the Agents and the referral of clients to Aroca. He did not want to upset the Agents or be seen to criticise them or do anything which might harm their income stream from commissions from Desarrollo. Meanwhile, he no doubt hoped that things would improve for Desarrollo and turn out alright for his increasing number of clients without Escrituras de Compraventa, but he was taking the risk that they would not.

It is striking that Sr. Aroca was prepared to sign the statement dated 19 February 2004 at a time when, by his own admission, he had growing worries because Desarrollo was signing so few deeds:

I find that Sr. Aroca first took this decision by January 2004 and, having regard to what I have said about the list attached to his email of 15 January 2004, before the “completion” of Mr. & Mrs. Forrester’s purchase on 17 October 2003.

Moreover, Sr. Aroca took this decision in the knowledge that Aroca ought to have told its clients about his concerns and the reasons for them. He acknowledged in his cross-examination that it would have been contrary to his professional duty not to tell his clients, if he knew it, that the problem with the deeds was that there was a mortgage on the property:

“Q. … You deliberately did not tell the clients that the problem with the deeds was that there was a mortgage on the property, right?

A. It’s not true. What you are saying is not true. I would be infringing my professional capacity.”

Sr. Aroca also said at one stage:

“If I knew what the problem was I would have told them straightaway.”

But, as I have found, he did know what the problem was from the end of 2003. Yet he chose not to tell Aroca’s clients until late 2005.

Shortly after they signed their Purchase Contracts, each of the Claimants received a 3- or 4-page letter, addressed to “Dear Client,” on headed notepaper, from “Aroca Seiquer & Asociados”. Aroca knew to write to the Claimants because it had received their details from the Agents, who sent lists of their clients to Aroca.

This letter (“the Dear Client letter”), which was in many cases undated and unsigned, read as follows:

“Thank you for your recent correspondence, the contents of which we note.

AROCA Seiquer & Asociados have been established in Torrevieja since 1989.

Our aim is to protect, serve and provide you with security as a non-resident in our Country. In order to do this we have bi-lingual personnel to enable you to communicate in your own language thereby ensuring that your conveyancing transaction is dealt with efficiently and effectively from start to finish. AROCA Seiquer & Asociados are proud to act for approximately 7,000 clients in their fiscal obligations in Spain and will be pleased to represent you also.

To help clear up any queries you may have in respect of the system here in Spain, please find below a more detailed description of the services we provide:

* Conveyancing

* Litigation

* Taxes

* Accounts

So far as Conveyancing is concerned, all non-residents who purchase a property here in Spain have certain queries due to the difference in the conveyancing procedure from that of the UK.

Many question arise when purchasing a Spanish property, two of the most common are:

Q. Who protects me in the said purchase?

A. There is no obligation by the Spanish Government for a qualified person to carry out the conveyancing. However, we strongly recommend Solicitors should be used for your own protection.

Q. What are the total costs incurred in the transaction?

A.

Notary Fees

Transfer Tax (known as Stamp Duty in the UK)

Land Registry Fees

Plus Valia Tax payable to the Town Hall

Conveyancing fees to AROCA Seiquer & Asociados

Administration charges

Assuming the value of the property is 120,000 Euros or above the percentage of the total costs payable is calculated at 4%

If the value of the property is 120,000 Euros or below, the percentage of total costs payable is calculated between 4% and 5%.

Prior to Completion of the House Purchase AROCA:-

* contact the builder to make an appointment to meet with both yourselves and the Notary in order that he can prepare the public document of purchase (the Title Deeds) following both the builder’s and our instructions.

* contact the bank or intermediary to obtain the Certificate of Foreign Currency which records the purchase price and has to accompany the Title Deeds:

* conduct a search of the Land Register to check that:-

* the Seller owns the property;

* it is free from any mortgage;

* it is free of any charges or cautions.

The Title Deeds

Having signed a private Contract for the purchase of your property and

Having then paid the completion monies, you will need to sign the “Escritura de Compra Venta” (known in the UK as title deeds)

All Spanish Title deeds consist of:

* the date

* name of the Notary

* the Protocol Number (the number appointed to the property by the Notary)

* The Seller’s name and address;

* The buyer’s name and address;

* Address of the property;

* Charges section – this is where the Seller states that the property is free from a mortgage or caution

* Local rates information.

The Escritura de Compra Venta is signed in the presence of yourself, the Seller and the Notary. The document then needs to be signed by the Municipal Administration as well as the Tax Authorities.

The deeds are then registered at the “Registro de la Propiedad” (known in the UK as the Land Registry).

The full process of registration in Spain takes around 6-8 months.

You will be notified once the Title Deeds are returned to these offices. The said document may then be collected together with a copy of a full breakdown of disbursements. In order to carry out this registration we do require the provision of funds due to cover our legal costs.

Once registered, the original copy of the Title Deeds is held in the Book of Protocol of the Notary.

You are provided with the first authorised copy – you may either keep it yourselves or lodge it with us at AROCA for safekeeping on your behalf.

…

Assuring you of your best attention at all times

Yours faithfully

AROCA Seiquer & Asociados”

It was accepted that all of the Claimants received the “Dear Client” letter except for:

Sr. Aroca said that this letter was drafted when Atlastax was first set up and would have been sent to clients referred by Masa Internacional. He said that it was in some respects out of date by the time it was sent to the Claimants. It was drafted for foreign nationals who spoke English.

Contrary to Mr. Turner’s written submissions, the “Dear Client” letter did not (save in the case of Mr. & Mrs. Adams, to which I will return) give an indication as to the fees which would be charged by Aroca. The figure of 4% or 4 to 5% of the purchase price referred to in the letter was not a figure for Aroca’s fees, but for the total costs including transfer tax and other items. No separate figure was given for Aroca’s fees.

Other than receiving the “Dear Client” letters, the Claimants had limited contact with Aroca prior to their completion trips:

Other than arranging the execution of Mr. Whyte’s power of attorney, Aroca did not perform any services for the Claimants prior to “completion”. In particular, Aroca did not take any of the steps listed in that part of the “Dear Client” letter which was headed “Prior to Completion of the House Purchase AROCA:-” Nor did Aroca advise the Claimants:

Sr. Aroca’s evidence was that Aroca did not regard the Claimants (or anyone else in their position) as clients until they had paid their fees to Aroca. However, this is contradicted by what happened in the case of Mr. Dawkins. He received the short “Dear Client” letter. He responded by writing to Aroca on 9 May 2003, saying that he and his wife wanted Aroca to act on their behalf concerning all legal matters regarding their purchase. He enclosed a copy of his contract (which was in the same form as the Claimants’ contracts) and said that he would be grateful if Aroca would confirm that it was appropriate for him and his wife to sign “having checked that the vendor has title and right to sell.”

Aroca replied on 14 May 2003, stating:

“This confirms that the contract does fulfil all legal requirements and is okay to sign and return.”

This letter was signed by Valerie Guerrier. Sr. Aroca said that she was a secretary from the United States, not a legal secretary, and that “She does not know anything.” However, he later said that he looked at the Dawkins’ contract “to see if the contract met the required conditions” and I find that he did so before this letter was sent and that the advice in this letter emanated from him. He was, therefore, prepared to advise Mr. & Mrs. Dawkins before they paid Aroca’s fee.

Sr. Aroca accepted that Mr. & Mrs. Dawkins’ contract did not contain the matters which it was required to contain by paragraphs (a) and (b) the second article of Law 57/1968. In addition, it was not accompanied by the documentary proof of the guarantee required by the final paragraph of that article.

Once the Properties were built, the Agents notified the Claimants and made arrangements for them to visit Spain to “complete” their purchases, telling them what they needed to bring with them and so forth. A number of the Claimants received from their Agent a letter in standard form which informed them that their property was ready for completion and invited them to contact the Agent and make arrangements to visit Spain for completion (“the Pre-Completion Letter”).

The Pre-Completion Letter, stated, inter alia, as follows:

“… The solicitor will require a set of two passport size photos and two photocopies of all persons named in the contract.

Please be aware that all persons named in the contract must sign the Title Deeds. If any of the persons named on the contract are unable to attend for the signature, they must then arrange with their Spanish Solicitor to provide Power of Attorney.

Please note that if you are using the services of any solicitor other than Aroca Seiquer & Asociados, you must contact them direct and advise them of your completion date and arrangements.”

This was an indication that, if the Claimants were using Aroca, then the Agents would contact Aroca on their behalf to advise Aroca that the Claimants wished to use Aroca’s services in connection with their purchase. I find that the Agents did contact Aroca in this way in each case and scheduled meetings. I have already referred to the evidence of this contact in the case of Mr. & Mrs. Hope and Mr. & Mrs. Williamson.

On various dates between October 2003 and February 2005, each of the Claimants travelled to Spain to “complete” their purchase. During these trips (“the completion trips”), they were escorted by representatives of the Agents, often (in the case of Atlas clients) being driven in vans marked with the name of Atlas Mediterraneo SL. A document disclosed by Mr. Forrester showed how the Atlas representatives set out for them what they needed for their meetings.

The following statement made by Mrs. Stubington at trial was typical of the Claimants’ approach during the completion trips:

“… I totally trusted Atlas and then their recommendation of Aroca and I just thought the whole thing would go ahead and everything would work out accordingly.”

During the completion trips, amongst other things, the Claimants (not necessarily in this order):

Mr. Frost said in his witness statement that when they were taken to Desarrollo’s offices they asked why they were not taken to the notary’s offices and the Atlas representative replied, “This is the way it’s done in Spain – different to England!” I accept this evidence and find that it was typical of the way in which the Agents reassured the Claimants and encouraged them to pay the balance of the purchase price without receiving Escrituras de Compraventa.

The dates on which each of the Claimants paid the final instalment of the purchase price and received the keys of their Property were as follows:

An issue which arose at trial, but which had not been pleaded in the parties’ statements of case, was whether certificates of habitability were issued for the Properties before Desarrollo handed over the keys. With the exception of Mr. & Mrs. Forrester’s original property, which was replaced, there was no suggestion that there were any building defects in the Properties or any reason why a certificate of habitability could not have been issued. No certificates were disclosed by the parties, but it does not necessarily follow that Desarrollo did not obtain them. During trial, Aroca attempted to explore the records at the local Town Hall, but I was told that the relevant records were not retained after this length of time.

Although each of the Purchase Contracts provided for the Escritura de Compraventa to be executed by both parties when the final instalment of the purchase price was paid, this did not happen. The Claimants were present and ready to execute the Escritura de Compraventa. (Mr. Whyte was not present, but had provided a power of attorney to Sr. Aroca.) It was Desarrollo who was unwilling to execute the Escritura de Compraventa. The only explanation from Desarrollo for this is that set out in Sr. Aroca’s fax of 21 January 2004, when he explained the reasons for Desarrollo’s delay in executing Escrituras de Compraventa as follows:

“The problem arises from the fact that the houses are mortgaged and the mortgages must be cancelled in advance.”

No other explanation was offered, and I find that the reason why these Claimants did not receive Escrituras de Compraventa when they paid the final instalment of the purchase price was that the Properties were mortgaged and Desarrollo’s financial circumstances meant that it was experiencing difficulties in clearing the mortgages off the Properties in time.

During their completion trip, the Claimants (other than Mr. Whyte) each attended at Aroca’s offices on one or two occasions. The Claimants did not request any particular legal advice at their initial meetings with Aroca. They did not meet Sr. Aroca or any other lawyer. Indeed, Sr. Aroca’s office was in a different building, some distance away. Instead of a lawyer, the Claimants met a member of Aroca’s secretarial or administrative staff. Sr. Aroca said that this was because there was no legal action required from him.

Consequently, the Claimants did not receive any legal advice during their meeting with Aroca. In particular, they were not told that:

A number of documents were given to the Claimants at their meeting(s) with Aroca. These included:

In several cases there was an issue as to whether the meeting in Aroca’s offices took place before or after the Claimants had paid the final instalment of the purchase price to Desarrollo. I consider each of the Claimants in turn:

In each case, the Claimants paid the fees requested by Aroca. Each of the Claimants was then taken to see a notary. Often, several clients were taken together to the notary’s office. Mr. Forrester described them as being “herded down like elephants down the main road to the notary public.” Even Mr. Turner described it in one of his questions as “a fairly industrial process.”

A number of the Claimants were asked whether they thought that they were going to the notary’s office to sign the title deeds. They were in a foreign country, dealing with documents in Spanish which were to take effect under Spanish law, and being escorted by representatives of their Spanish lawyers. Mr. Turner suggested to Mr. Hope, and he agreed, that it was “all a bit bewildering.” I find that that applied to all of the Claimants.

In April 2004 defects appeared at Mr. & Mrs. Forrester’s original Property and after some discussions they agreed to exchange it for another Property. They signed a contract with Desarrollo dated Friday 23 April 2004 (“the Exchange Contract”).

It was common ground that Mr. & Mrs. Forrester spoke to Aroca about this issue, but there was a dispute as to whether they did so before or after signing the Exchange Contract:

On balance, therefore, I find that (save for his claim that he met Aroca on 21 April 2004) Mr. Forrester’s evidence of his dealings with Aroca is not inconsistent with the contemporary records and I accept it. I find that he did inform Aroca of, and seek their advice on, the proposed exchange before it took place.

The last of the Claimants to “complete” their purchase were Mr. & Mrs. Winter, on 23 February 2005. Aroca continued to experience delays in trying to obtain signed Escrituras de Compraventa for the Claimants and others in their situation. I have already referred to some of Aroca’s correspondence with Desarrollo in 2004 and 2005. More followed in 2005:

By the end of 2005, Aroca had instructed litigation specialists, Manresa & Rivas, and either instituted, or was preparing to institute, proceedings against Desarrollo on behalf of some of the Claimants and others in their position. Aroca sought powers of attorney from its clients for this purpose, and used the funds which the Claimants had paid to Aroca to pay for the litigation. I need not recite the details of the litigation which was conducted between 2005 and 2012, with the involvement of another Spanish law firm, J & A Garrigues (“Garrigues Legal”). It did not result for these Claimants in the desired outcome, i.e. the execution of Escrituras de Compraventa.

There were a number of false dawns along the way:

Aroca did not at any stage advise any of the Claimants either to pursue, or to take advice about, potential claims against the Agents or Aroca. So far as I am aware, there was only one instance of purchasers bringing proceedings against one of the Agents. A Mr. & Mrs. MacMahon and two others commenced an action in Spain on 19 February 2009 against Desarrollo and Atlas, seeking an order that Desarrollo and Atlas repay the mortgage on their properties. Atlas resisted the claim against them and the claim was dismissed in a judgment dated 27 October 2010.

The Claimants contacted Aroca from time to time in 2005 and subsequent years to enquire about progress. For instance, at a meeting with Aroca in November 2005 Mr. & Mrs. Forrester first learnt that there was a debt against their Property. This was the first time any of the Claimants were told this.

From time to time various of the Claimants expressed frustration and anger and requested information and advice from Aroca. For example:

None of the Claimants in fact instructed other lawyers until 2011 or 2012, although on 1 December 2009 Mr. Stubington sent an email to Aroca in which she authorised a Mr. Paul Galway to collect her files from Aroca, because at that time she was thinking of instructing another lawyer, having lost confidence in Aroca. A friend of hers, Roy Owen, who was in the same position, had instructed another lawyer. She spoke to this lawyer, but did not take it further.

Although insolvency proceedings in relation to the Agents did not begin until 2014, their financial situation was precarious from a much earlier stage. The Claimants accepted that there came a point in time (which the Claimants put as the end of 2008, although Aroca contended that it was earlier) when a judgment against the Agents would have been likely to go unsatisfied.

Thus, Atlas’s accounts for the year ending 31 December 2008 showed net assets of only £296,169, as against a (restated) figure of £6,619,993 for the year ending 31 January 2007. Moreover, a closer look at those accounts showed that:

According to Iberian’s accounts, its liabilities exceeded its assets as at 31 December 2006 and at each succeeding year end.

Mrs. Stubington was aware by 13 June 2011 (when she wrote to Atlas) that the relevant Bank might arrange for her Property to be auctioned. In February 2012 Mrs. O’Hara became aware that a Bank was taking proceedings for the repossession of an apartment at Bosque de Las Lomas III. She informed a local journalist and they informed other affected owners, including many of the Claimants. Other than Mr. & Mrs. Hope and Mr. & Mrs. Whyte, each of the Claimants gave up possession of their Property:

Mrs. O’Hara’s evidence, which was based on her conversations with affected and interested people, and which was not challenged, was that the only owners at the Developments who experienced such problems were: (a) cash buyers; (b) who bought through Atlas or Iberian; and (c) who used Aroca as their lawyers. Others who bought properties as Bosque de Las Lomas obtained registered title (in her case within a month of completion)

Not everyone who bought with cash through Atlas using Aroca failed to get registered title to their properties. Mr. Hope explained that friends of his has gone through the same process as him, but had obtained registered title. Desarrollo did sign some Escrituras de Compraventa, but sadly not those relating to the Claimants’ Properties.

The Claimants pleaded a number of causes of action against the Agents. However, it is unnecessary for me to address all of them, as I accept what is perhaps the simplest way in which the Claimants put their case, namely that:

The Agents have not pleaded a limitation defence to this claim. Accordingly, I will give judgment against the relevant Agents for:

In each case, four issues arose in relation to Aroca’s retainer by the relevant Claimant(s). They were:

I address each of these issues in turn.

It was common ground that in each case: (a) Aroca was retained by the relevant Claimant(s); but (b) Aroca was under no obligation to advise the Claimants until the contract of retainer was formed. There was no pleaded allegation that Spanish law applied to the question of when and how these contracts were formed. Accordingly, I apply English law to this question. The references at trial to the Spanish law on this issue did not assist me.

Aroca invoked the rules of English law that an agreement, in order to be binding, must be both complete and sufficiently certain. However, the application of those rules in the present case was significantly tempered by the fact that, if a lawyer agrees to act for a property purchaser, both his obligation to exercise reasonable skill and care and the client’s obligation to pay a reasonable fee can be implied. Moreover, each of the Claimants received the “Dear Client” letter, which indicated the nature of the conveyancing service which Aroca had proposed to provide to them.

It appeared at one stage that it would be contended on behalf of Aroca that Aroca was under no obligation to any of the Claimants until Aroca’s fees were paid. However, Aroca never communicated to any of the Claimants that payment of Aroca’s fees in advance was a precondition to its agreeing to act, and Mr. Turner did not seek to rely on this in his closing submissions. (There was a sentence in the “Dear Client” letter to the effect that Aroca required the provision of funds to cover Aroca’s legal costs before it carried out registration, but registration was only part of the service which Aroca offered by that letter to provide, and the reference to Aroca’s legal costs was to the taxes and other costs which Aroca would have to meet if it was to effect registration.)

The Claimants’ primary case was that in each case a contract of retainer was formed when the relevant Agent, acting as agent for the relevant Claimant(s), contacted Aroca shortly after the relevant Purchase Contract was signed, and that when Aroca then sent the “Dear Client” letter, this was evidence of that contract. The Claimants did not contend that the “Dear Client” letter itself constituted an acceptance of an offer such as to give rise to a contract. Viewed on its own, the “Dear Client” letter was an offer which required acceptance.

An obstacle to the Claimants’ analysis is that in some cases it appeared that Atlas did not regard itself at this stage as having concluded a contract on the relevant Claimant(s)’ behalf. In particular:

However, as I have found, the Agents, acting on behalf of the Claimants, also contacted Aroca again in advance of the completion trips to arrange meetings for the Claimants with Aroca. This contact was made after Aroca had sent the “Dear Client” letter and was an indication to Aroca that the Claimants, having received the “Dear Client” letter, wished to use Aroca’s services. In contractual terms, this was an acceptance of Aroca’s offer to provide a conveyancing service to the Claimants (if the contract of retainer had not already been formed by that stage)

One has to look separately at the circumstances of each of the individual Claimant(s):

Accordingly, I find that each of the Claimants retained Aroca before their “completion” meeting.

Aroca argued that the services which they agreed to provide to the Claimants were limited to seeking to get the Escrituras de Compraventa executed and registered. I do not accept this argument:

I find that in each case Aroca was retained to provide a conveyancing service to the Claimants in connection with their proposed purchase from Desarrollo.

In a brief judgment given on 28 October 2016 ([2016] EWHC 2680 (QB)) I decided that it was for the Claimants to elect before I gave this judgment whether they sought judgment against Sr. Aroca or against Atlastax. On 4 November 2016 Mr. Knox indicated that the Claimants elected to seek judgment against Sr. Aroca. (He added a caveat, to the effect that the Claimants would instead seek judgment against Atlastax on any claim which I found to be statute-barred against Sr. Aroca. In the circumstances, I need say nothing about the validity or effect of this caveat.)

The question of who contracted with whom is also a question of English law, since it is part of the question of how the contract of retainer was formed. Given my findings as to how the contract was made in each case, it is clear that the most important document is the “Dear Client” letter. That letter indicated that it was written by and on behalf of “Aroca Seiquer & Asociados.” There was no legal or natural person with that name.

Mr. Knox referred to the decision in Muneer Hamid v. Francis Bradshaw Partnership [2013] EWCA Civ. 470 as authority for the proposition that “where a person signs a contractual document, he is the contracting party unless (a) the document makes clear that he is signing as agent for a sufficiently identified principal; or (b) extrinsic evidence establishes that both parties knew he was signing as agent or company officer.”

This proposition, however, is not relevant to the facts of the present case, because Sr. Aroca did not sign the “Dear Client” letter. The name printed below the space for signature was “AROCA Seiquer & Asociados.” Usually, there was no actual signature. The signature on Mr. & Mrs. Adams’ copy of the “Dear Client” letter was not that of Sr. Aroca. So this is a case in which the “Dear Client” letter was “signed” in a name which was not that of any legal or natural person, but which must have been the trading name of a legal or natural person.

Sr. Aroca’s evidence was that “Aroca Seiquer & Asociados” was a trading name used by Atlatax and not by him. However, the documents presented to the Claimants at their meetings with Aroca show that the position was far from straightforward:

Aroca drafted these documents, and cannot complain of any confusion created thereby. However, the Fiscal Services Contracts provide strong evidence that, at the relevant time, when one contracted with “Aroca Seiquer & Asociados”, one was contracting with Sr. Aroca.

In all the circumstances, I find that it was Sr. Aroca who contracted with the Claimants to provide conveyancing services.

Mr. Knox argued that Aroca was bound to exercise the degree of skill and care which would be exercised by a reasonably competent English solicitor. I do not agree. Although the Spanish word “abogados” was sometimes translated as “solicitor”, neither Sr. Aroca nor Atlastax were English solicitors. They were Spanish lawyers who professed to be specialist both in property transactions and in providing their services to English-speaking clients who were not resident in Spain.

Accordingly, Aroca were obliged to exercise the degree of skill and care which was ordinarily exercised by reasonably competent Spanish lawyers who professed to be specialist both in property transactions and in providing their services to English-speaking clients who were not resident in Spain.

I add, for the avoidance of doubt, that it was not open to Aroca to reduce that standard of care by arranging for meetings to be conducted (or, as in the case of Mr. & Mrs. Dawkins, letters to be written) by non-lawyers. Sr. Aroca sought to rely on the fact that a lawyer did not attend the initial meetings with the Claimants, but Aroca’s decision not to send a lawyer to those meetings cannot be relied on by Aroca as somehow relieving Aroca of its obligation to advise the Claimants.

I turn now to the questions: (a) whether, in the period before “completion,” Aroca was in breach of its contractual obligation to exercise reasonable skill and care; (b) if so, what loss was suffered as a result; and (c) whether the Claimants’ claim in this respect is statute-barred. I use the terms “negligence” and “negligent” as shorthand for a breach, or to describe someone who has committed a breach, of the contractual obligation to exercise reasonable skill and care.

It was very risky to pay the whole of the purchase price for a property in Spain without carrying out checks to see that the vendor would definitely be able to pass good title. Sr. Aroca acknowledged this. He also accepted that it was particularly risky for a purchaser to do so if there was no certainty that he would get title and no bank guarantee in place to guarantee the return of his money if he didn’t get title. That was the position of many purchasers referred to Aroca by the Agents, and Aroca had no reason to believe otherwise in the case of these particular Claimants.

Aroca’s expert witness, Sr. Canizares, also accepted that it was risky to pay the whole of the purchase price before receiving the Escritura de Compraventa. I have already set out the agreed expert evidence as to the advice which a competent Spanish lawyer would have given if he knew that his client was proposing to pay over (but had not yet paid over) the final balance of monies before the sales deeds were ready for signing/notarisation.

The experts’ evidence was of general application, but in the particular circumstances of this case Aroca had a particular reason to advise the Claimants. That is because, as I have found, from at least October 2003 Aroca knew that there was a real risk that people who had agreed to buy properties from Desarrollo and paid the purchase price might not receive legal title to their properties and that those properties might turn out to be subject to mortgages which Desarrollo could not repay.

Moreover, Aroca did provide some advice to the Claimants as to when they could expect to receive title to their Properties. Aroca did this by the document headed “Important Information for our Clients” and by the “Provision of Funds” document. However, neither of these documents indicated that there was any risk that the Claimants would not receive title to their Properties.

In the light of that evidence, and in all the circumstances, it is clear that Aroca was negligent in failing to give any advice to the Claimants after they retained Aroca prior to “completion” of the risks which they faced. In particular, as pleaded, Aroca was negligent in:

There was an opportunity for Aroca to give this advice to each of the Claimants before they paid over the final instalment of the purchase price, and Aroca ought to have appreciated the importance of giving that advice before the final instalment as paid. Even in the case of Mr. & Mrs. Williamson, it was open to Aroca either when making an appointment to see them, or when Mr. & Mrs. Williamson first visited their offices and were told to come back later, to say that in the meanwhile Mr. & Mrs. Williamson should not hand over any money until they had spoken properly to Aroca.

Aroca’s negligence in relation to the bank guarantee required by Law 57/1968 of 27 July did not have any causative effect. The purpose of the guarantee was to protect against non-completion of the building. That was not an issue in these cases. Any bank guarantee would have been cancelled when the certificate of habitability was issued, and it is likely that such certificates were issued in each case.

There was an issue between the parties as to what the consequence would have been if Aroca had advised them not to pay anything in the absence of proof that Desarrollo could pass an unencumbered title. The Claimants claimed as damages the whole of the purchase price. But they had each paid at least some of the purchase price, and often 75%, before they retained Aroca. So they cannot say that Aroca’s negligence caused them to pay that money. Moreover, if they had simply stopped paying, then under the terms of the Purchase Contract they might have forfeited that money.

I agree with Mr Turner’s submission that the likelihood is that what each of the Claimants would have been advised to do, and would have done, was to insist that the Purchase Contract was carried out in accordance with its terms and that the Escritura de Compraventa was executed when the last instalment of the purchase price was paid. Mrs. O’Hara’s evidence indicates that purchasers who did that (usually prompted by their own mortgage lender) received Escrituras de Compraventa.

I find, therefore, that what the Claimants lost as a result of Aroca’s negligence before “completion” was good title to the relevant Properties. In financial terms, the amount of their loss was the value of the relevant Property, which (as discussed at trial) can be the subject of assessment. Mr. Turner indicated that there may be an issue whether this value should be assessed as at the date of “completion” or at some other date. If there is such an issue, it can be dealt with on the assessment of damages.

Mr. & Mrs. Hope and Mr. & Mrs. Whyte mitigated their loss, and so the primary measure of their loss is the amount which they had to pay to secure title to their Property. In addition, each of the Claimants lost the money which they paid to Aroca, which was spent in reasonable attempts to mitigate their loss by pursuing Desarrollo.

The primary limitation period for Aroca’s negligence claims was 6 years from the date of “completion.” In each case, that period expired long before these actions were commenced.

The Claimants relied on section 32 of the Limitation Act 1980, subsections (1) and (2) of which provide as follows:

“(1)

… , where in the case of any action for which a period of limitation is prescribed by this Act, either—

(a)

… ; or

(b)

any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant; or

(c)

… ;

the period of limitation shall not begin to run until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it.

References in this subsection to the defendant include references to the defendant's agent and to any person through whom the defendant claims and his agent.

(2)

For the purposes of subsection (1) above, deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty.”

In order to rely on section 32(1)(b) of the Limitation Act 1980, the Claimants need to prove that there was deliberate concealment of “any fact relevant to [their] right of action” and that they did not discover it, or could not reasonably have discovered it, until:

The meaning of the phrase “any fact relevant to a plaintiff’s right of action” is as set out by Rix LJ in AIC Limited v ITS Testing Services (UK) Limited (The Kriti Palm) [2006] EWCA Civ 1601; [2007] 1 All E.R. (Comm) 667; [2007] 1 Lloyd's Rep. 555, at [323]-[324]:

“323 … it is clear from authority that the statutory words “any fact relevant to a plaintiff's right of action” are to be given a narrow rather than a wide interpretation. Thus in Johnson v. Chief Constable of Surrey (CA, unreported, 19 October 1992), where the claim was in false imprisonment and the police had deliberately concealed facts relevant to the absence of reasonable cause, this court accepted the defendant's submission that “the relevant fact must be a fact without which the cause of action is incomplete”, contrasting a fact relevant to an action and to a right of action (5A, 6C). Thus Rose LJ said “Facts which improve prospects of success are not, it seems to me, facts relevant to his right of action” (at 6E). He accepted that the interpretation was a narrow one (at 6G). Russell LJ agreed, saying (at 7E): “Accordingly, whilst I acknowledge that the new facts might make the plaintiff's case stronger or his right to damages more readily capable of proof they do not in my view bite upon the “right of action” itself.” And Neill LJ emphasised that although absence of reasonable cause was an element in the tort of false imprisonment, the “gist of the action” is in the imprisonment itself, which establishes a prima facie case and puts the burden of proving justification on the defendant. Therefore the statutory words “must mean any fact which the plaintiff has to prove to establish a prima facie case” (at 8E/H).

324 Moreover, in C v. Mirror Group Newspapers [1997] 1 WLR 131 (CA) , where the same words fell to be applied, this time as found in section 32A of the 1980 Act, this court again applied the narrow test determined in Johnson . Neill LJ, with whom Morritt and Pill LJJ agreed, said “The relevant facts are those which the plaintiff has to prove to establish a prima facie case” (at 138H). He again contrasted such facts with evidence which relates “to the proving of the case rather than the existence of the right of action”, citing as further authority (at 138D) a dictum of Sir John Donaldson MR in Frisby v. Theodore Goddard & Co (CA, unreported, 7 March 1984).”

Looking at the facts which the Claimants had to prove to establish a prima facie case of negligence, the Claimants cannot allege that Aroca concealed: (a) the fact that the Claimants retained Aroca; (b) the advice which was or was not given to them by Aroca; or (c) the fact that they paid the purchase price in full but did not obtain Escrituras de Compraventa.

That leaves the fact that Aroca was under a duty to warn the Claimants that there was no proof that Desarrollo was able to pass on an unencumbered title and to advise the Claimants not to pay anything in the absence of such proof. I find that this fact was deliberately concealed from the Claimants, because the failure so to advise was the consequence of Sr. Aroca’s deliberate decision that Aroca’s clients should not be told, as he knew they should have been, of his concerns and the reasons for them. In terms of section 32(2), there was a deliberate commission of a breach of duty in circumstances in which it was unlikely to be discovered for some time, which amounts to a deliberate concealment. There was also a continuing deliberate concealment in terms of section 32(1), since Sr. Aroca’s decision that Aroca would not tell its clients, when it should have done, about his concerns and the reasons for them included not telling those clients that Aroca ought to have told them about his concerns and the reasons for them.

Aroca contended that the reason why it did not advise the Claimants before “completion” was that it did not regard them as its clients until they had paid the money requested by Aroca. I do not accept this contention, for a number of reasons:

The Claimants could not with reasonable diligence have discovered the concealment (i.e. of the fact that Aroca was under a duty to warn the Claimants that there was no proof that Desarrollo was able to pass on an unencumbered title and to advise the Claimants not to pay anything in the absence of such proof) until after 1 July 2008, because Aroca was continuing to represent them throughout that period, advising them as to what steps they should take and reassuring them from time to time, but never advising them that Aroca had been negligent or in breach of fiduciary duty in the period before “completion,” or that they should seek independent advice.

Mr. Turner referred to the statement by Millett L.J. in Paragon Finance v DB Thakerar & Co. [1999] 1 All ER 400, at 418:

“The question is not whether the Plaintiffs should have discovered the fraud sooner; but whether they could with reasonable diligence have done so. The burden of proof is on them. They must establish that they could not have discovered the fraud without exceptional measures which they could not reasonably have been expected to take.”

He argued that the Claimants could have discovered the concealment in this case if they had instructed independent lawyers. However, in my judgment that would have been, for lay consumers such as these Claimants who already had a lawyer acting for them, an exceptional measure which they could not reasonably have been expected to take. I note that none of these Claimants in fact instructed independent lawyers until 2011, and the only evidence I have seen of others in their position instructing independent lawyers before that date was that Mr. Owens did so in late 2009, less than 6 years before these actions were commenced.

Aroca relied on correspondence such as Mr. Forrester’s email to Aroca of 1 December 2005 and Mr. Hope’s email to Aroca of 11 March 2008 as indicating that the Claimants could with reasonable diligence have discovered the concealed fact more than 6 years before the action were commenced. However, this was correspondence addressed to their lawyer, Aroca, in which they sought information and advice. Even when Mr. Hope expressed the view in general terms that he had not been represented properly, this did not prompt a response from Aroca which advised him that Aroca had been negligent or that he should seek independent advice. No-one else received that advice. With Aroca’s encouragement, the Claimants continued to rely on Aroca as their lawyer to look after their interests. They could not reasonably have been expected to do otherwise.

Accordingly, I conclude that the Claimants’ claims in negligence in respect of the period before “completion” are not statute-barred.

The Claimants alleged that Aroca was in breach of fiduciary duty in the period before “completion” because its failure to advise the Claimants as it should have done was the result of Aroca actually preferring the Agents’ or Desarrollo’s interests to the Claimants’ interests, or allowing the Agents’ or Desarrollo’s interests to influence the performance of its duties to the Claimants.

It is relevant in this context to note that, although it was conceded that the common shareholdings in Atlastax and the various other companies to which I have referred did not in themselves create an improper conflict of interest, the planning reports produced by Aroca for Atlas show that Aroca was acting for Atlas in connection with transactions involving Desarrollo at the same time as it was acting for purchasers who were buying properties from Desarrollo through Atlas.

Given my finding as to why Sr. Aroca decided that Aroca would not tell its clients about its concern or the reasons for them, it follows that I find that Aroca was in breach of fiduciary duty in the manner alleged.

The loss caused by this breach of fiduciary duty is the same as the loss caused by Aroca’s negligence.

The claim for compensation for breach of fiduciary duty is not statute-barred because there was deliberate concealment of both:

In summary, the Claimants allege that Aroca was negligent and in breach of fiduciary duty in failing to advise them after “completion”:

I deal with these three matters in turn.

By “completing” their purchase without obtaining an Escritura de Compraventa, each of the Claimants took a very risky step. I have already set out the agreed expert evidence as to the advice which a competent Spanish lawyer would have given if he knew (as Aroca did) that his client had paid over the final balance of monies before the sales deeds were ready for signing/notarisation. I find that Aroca was also negligent in failing to advise the Claimants on “completion” of the risk which they were running and that, as pleaded, Aroca was negligent:

However, the Claimants had by this stage already paid over the whole of the purchase price. Thus, they cannot say that Aroca’s negligence at this stage caused them to pay over any part of the purchase price. Moreover, by paying the last instalment of the purchase price, they had lost the leverage which had previously been available to them. If they had been advised by Aroca after “completion” that what they had done was very risky, they would have been in the same very risky position that they in fact found themselves in. As I have said, no complaint was made of the manner in which Aroca tried to obtain Escrituras de Compraventa for the Claimants after “completion.”

It follows that the Claimants’ pleaded case that they lost the amount of the purchase price as a result of Aroca’s negligence cannot succeed in respect of this aspect of Aroca’s negligence after “completion.”

The Claimants each allege that:

Since the Agents are English companies, and their relationship with the Claimants is governed by English law, Aroca argued that they, as Spanish lawyers, could not be expected to have given advice on the prospects of success of a claim against the Agents. Recognising some force in this point, Mr. Knox asked questions of the Claimants when they gave evidence in chief which indicated that he was presenting this aspect of the Claimants’ case on the basis that Aroca ought to have advised the Claimants that they might have a claim against the Agents, and that in response to that advice the Claimants would have instructed English solicitors, who would have advised them to issue proceedings against the Agents.

As originally pleaded, the Claimants’ case was that, if they had been properly advised, they would have issued proceedings against the Agents within 6 years of their first payment (i.e. by February 2008 in the case of Mr. & Mrs. Frost and later in the case of other Claimants) and that, insofar as their claims against the Agents are now statute-barred, they have lost the amount which they would have recovered if they had sued the Agents within the primary limitation period. By trial, however, it was apparent that:

Consequently, Mr. Knox prepared a re-re-amendment to the relevant paragraphs of Particulars of Claim, so that they would read as follows:

“57.

As a result of Aroca’s further breaches of contract, fiduciary duty and negligence, the Claimants suffered loss and damage ( … ), in that they did not issue proceedings against Atlas, Iberian or Aroca for its breaches of duty and trust … by early 2006 or thereabouts, or within the primary limitation period for their (non-dishonest) breaches, which expired on various dates from February 2008 onwards.”

58.

Accordingly, Aroca is liable to the Claimants in the sum of all the amounts which they have lost by reason of any inability Atlas or Iberian would have had, by the end of 2008 to satisfy any judgment against them, or if and to the extent any part of their claim against Atlas and Iberian or itself is statute barred or otherwise barred by lapse of time; alternatively, it is liable for the loss of the opportunity to pursue such claims without such bar or time problem.”

It is not now expected that the judgments which I am to give against the Agents will be satisfied, and the proposed re-re-amendment proceeds on the basis that the Agents might have been unable by the end of 2008 to satisfy any judgment against them. In the light of the evidence as to the Agents’ financial positions, I find that any judgment obtained against the Agents in 2008 or later would have gone unsatisfied. I make no finding at this stage about whether an earlier judgment would have been satisfied.

Mr. Turner indicated that Aroca would resist an application for permission to re-re-amend made at trial, both on the grounds that it was made too late and on the grounds that it was doomed to fail. Rather than taking up time at trial with a contested application to re-re-amend, as a pragmatic way forward the parties invited me to make relevant findings of fact, in the light of which the Claimants could decide whether or not they still wished to pursue the application for permission to amend.

My findings are that:

As to the date on which the Claimants would have issued proceedings against the Agents, Mr. Turner rightly pointed out that the Claimants’ primary claim was, and would have remained, their claim against Desarrollo for execution of the Escrituras de Compraventa. That claim was being pursued in Spain until 2012. Any claim against the Agents would have been a fall-back. Consequently, the advice which the Claimants would have been likely to receive from solicitors in 2006, 2007 or 2008 would have been to wait and see how the claim against Desarrollo went and not to commence proceedings unless and until necessary to do so to preserve their position in respect of limitation, i.e. from the beginning of 2008 onwards. As Mr. Knox said in his opening submissions:

“Any sensible person, given the correct advice, would at least have protected himself by the issue of a claim form, pending the attempt to resolve problems with the vendor.”

I am not persuaded that the Claimants would have been advised to do, or would have done, more than this. But this would not have resulted in judgments before 2008, and so would not have resulted in judgments which would have been satisfied.

One of the ways in which the Claimants sought to overcome the difficulties created for them by the fact that these actions were commenced more than 6 years after “completion” was by alleging that Aroca was negligent in the period which was both:

For these purposes, the relevant period is from 26 July 2007 (in the case of claims against Atlastax) or 1 July 2008 (in the case of claims against Sr. Aroca) until the following dates in respect of each of the Claimants:

Throughout this period, Aroca continued to act for the Claimants in connection with the Properties. Aroca did not advise the Claimants that Aroca had been negligent or in breach of fiduciary duty in the period before “completion” or advise the Claimants to seek independent advice.

Aroca denied that it was under a duty so to advise the Claimants. Aroca relied in particular on the judgment of Neuberger J. in Gold v. Mincoff Science & Gold [2001] Lloyd’s Rep. PN 423, in which he said, at [98] and [99]:

“98.

Mr Davidson rightly warns against the court being too easily persuaded by the claimant that he has a fresh cause of action against his solicitor on the basis that the solicitor failed to advise, at some point after his initial negligence, that he had been negligent. If such an argument were too readily accepted, it would have two unsatisfactory consequences. First, it would enable the provisions of the 1980 Act to be evaded in many cases in an artificial way. Secondly, it would effectively impose on a solicitor some sort of implied general retainer. Accordingly, I would accept that it would be a relatively exceptional case where the court would be prepared to hold that a solicitor's negligence claim that was otherwise Statute-barred could, albeit in a slightly different guise, be resurrected on the basis that, at a time within the limitation period and less than six years before the issue of proceedings, the solicitor failed to advise that he had been negligent. Only if the facts clearly warrant such a conclusion should the court adopt it, in my view.

99.

It is clear that a solicitor “who … has acted negligently [does not come] under a continuing duty to take care to remind himself of the negligence of which, ex hypothesis, he is unaware” — per Oliver J in Midland Bank Trust Co Ltd -v- Hett Stubbs and Kemp [1979] Ch at 403C. It is also true, in my opinion, that the mere fact that, following his negligence and within the limitation period, the solicitor is instructed in the same matter by the same client, does not itself put the solicitor under a duty to discover, or advise as to, his negligence on the earlier occasion. As was said by Oliver J in Midland at 403A, the Court must be careful of imposing a duty on a solicitor which involves going beyond his specific instruction. Nonetheless, if the subsequent instruction was also negligently implemented by the solicitor, and, this later negligence concealed the earlier negligence then, subject to normal questions such as causation and remoteness, if the earlier negligence only comes to light outside the limitation period, the loss of the right to sue in respect of it can properly be the subject of a claim based on the later negligence. I derive support for this proposition from Costa -v- Georgiou (2nd May 1984, CA Transcript 15G–17D, 18H–19G). See also Liverpool [2000] Lloyds LRPN 836 at paragraphs 11 and 27.”

I was also referred to the judgment of Asplin J. in Mathiesen v. Clintons [2013] EWHC 3056 (Ch) at [182]:

“In the circumstances, it is unnecessary to decide whether the principle in Gold v Mincoff applies where both the solicitor had actual knowledge of his previous error and in circumstances in which he ought to have appreciated that he had been negligent previously. Were it necessary, I would have decided that it is consistent both with Neuberger J's articulation of the principle itself in Gold v Mincoff and the extract from the speech of Lord Millett in Cave v Robinson to which I have referred, that the principle should be restricted to circumstances in which there is actual knowledge of the previous error. As I have found that Mr Seigal did not possess such actual knowledge in my judgment, the principle would not have applied in this case in any event.”

The present case is one where Aroca knew of its previous breach of duty because, as I have found, that breach of duty was committed deliberately. Accordingly, I find that Aroca was under a duty throughout the period from 2005 to 2012 to advise the Claimants that Aroca had been negligent or in breach of fiduciary duty in the period before “completion,” or at the very least to alert the Claimants to this possibility and to advise the Claimants to seek independent advice.

If, contrary to my earlier decision in relation to section 32 of the Limitation Act 1980, the Claimants’ claims for negligence and breach of fiduciary duty committed in the period before “completion” are now statute-barred, then the Claimants have suffered loss as a result of Aroca’s negligence committed after “completion” in that they have lost the value of their statute-barred claims.

In the light of my findings so far, the Claimants’ pleaded case that Aroca was acting in breach of fiduciary duty after “completion” does not add anything, and I need not consider it in detail. However, it follows from my earlier findings that Aroca remained in breach of fiduciary duty after as well as before “completion.”

The Claimants pleaded a claim against Aroca in unlawful means conspiracy. As stated in Clerk & Lindsell on Torts, 21^st Edn., para. 24-98:

“This form of the tort is committed where two or more persons combine and take action which is unlawful in itself with the intention of causing damage to a third party who does incur the intended damage. It is not necessary for the injured party to prove that causing him damage was the main or predominant purpose of the combination but that purpose must be part of the combiners' intentions.”

I consider in turn the issues of combination, unlawful means, intention and causation.

Mr. Knox alleged, having regard to all of the connections between them, that an agreement must have been made at an early stage by Sr. Aroca with Mr. Stockdale and/or Mr. Van Elmpt that the Agents and Aroca would deliberately operate what Mr. Knox called the “scheme” in such a way that purchasers were encouraged to pay for their properties before they received Escrituras de Compraventa and without being advised of the risks that they were running.

I am not persuaded that there was such an agreement. It was not an essential feature of the proposed business of selling properties that purchasers should not receive their Escrituras de Compraventa when they paid the final instalment. Indeed, Mrs. O’Hara’s evidence was that some purchasers from Desarrollo did receive their Escrituras de Compraventa at this stage.

What Mr. Knox called the “scheme” may have had in its origins in the manner of business carried on by Masa Internacional and Atlastax. In any event, it seems to me to be more likely that the “scheme” evolved gradually, without any conscious thought being given to the implications for purchasers.

That changed, as I have found, at the end of 2003, when Desarrollo’s delays meant that Sr. Aroca did give consideration to this issue. Moreover, his and Sr. Martini’s correspondence shows that they discussed this issue with individuals at Atlas. From that point on there is evidence, notably in the form of Sr. Aroca’s statement of 19 February 2004, that Aroca acted in combination with Atlas at least to some extent in relation to what was said to the Claimants about title deeds. By that statement, they certainly combined to reassure Atlas’s clients and potential clients that they would receive title to their properties if they bought through Atlas.

It is obviously important in the case of an allegation of unlawful means conspiracy to identify the unlawful means which it is alleged that the Defendants combined to use:

Mr Knox did not accept this last proposition. He contended, in effect, that, if there is a conspiracy to use unlawful means, the conspirators will be liable for any damage caused by any act carried out pursuant to the conspiracy, even if that act is not in itself unlawful. I do not agree, as this seems to me to elide the distinction between unlawful means conspiracy and conspiracy to injure.

The Claimants’ only pleaded case was that the unlawful means which Aroca and the Agents conspired to use consisted of negligence or breach of fiduciary duty by Aroca. Mr. Knox disputed this, but it seems to me to be clear from the terms of the Amended Particulars of Claim in each action. These are in all material respects identical. Using the numbering from the Amended Particulars of Claim in the first action:

Insofar as it was alleged that there was a conspiracy between Aroca and the Agents that Aroca would act wrongfully, it was incumbent on the Claimants to prove that both Aroca and the Agents intended that Aroca would do an unlawful act. I have found that Aroca knew that what it was doing was wrong, but there was little or no evidence as to the Agents’ state of mind on this question. I am not persuaded that I can infer that English estate agents would know that it was unlawful for Spanish lawyers to act as Aroca did.

Equally, even if it were pleaded that Aroca conspired with the Agents that the Agents would commit unlawful acts, I am not persuaded that Aroca knew that what the Agents were doing was unlawful. I say this for substantially the same reasons as I gave for rejecting the claim that Aroca was under a duty to advise the Claimants that they had a claim against the Agents.

What I have said so far is sufficient to dispose of the claim in conspiracy. It follows that I do not need to decide the issue raised by Mr. Turner as to whether the pleaded intention was sufficient for the purposes of the tort of unlawful means conspiracy. I will confine myself, therefore, to saying that it seems to me that a conspiracy whose object was that a lawyer’s client would not be given certain advice which he should have been given and therefore would remain exposed to the risk of loss which that advice was supposed to warn him against would involve sufficient intent to injure for the purposes of the tort.

Again, I do not have to decide the issues on causation which would have arisen if I had found that there was an actionable conspiracy. Those issues arose because the Claimants were seeking to use the claim in conspiracy as a means of recovering all of their payments to Desarrollo, even though, as I have found, several of those payments were made before there was any negligence by Aroca in the case of the relevant Claimant(s).

First, Mr. Knox argued that, even if the only unlawful means agreed on was negligence or breach of fiduciary duty by Aroca, what was said (or not said) to the Claimants by the Agents was part of that conspiracy, and so the Claimants suffered loss as soon as the Agents persuaded them to part with the first instalment of the purchase price. I have already explained why I do not accept this argument, which seems to me to elide the boundary between the torts of unlawful means conspiracy and conspiracy to injure.

Secondly, Mr. Knox argued that, even if the unlawful means agreed on was negligence or breach of fiduciary duty by Aroca, the conspiracy was not against individual Claimants, but against the class of purchasers or potential purchasers in the position of the Claimants, and so one could consider the effect of Aroca’s negligence or breach of duty as against other potential purchasers (and, especially, those whose purchases pre-dated these Claimants’ purchases) in ascertaining the effect of the conspiracy on this Claimants. I make no decision on this point, but express my doubts about it.

Mr. Turner did not dispute that, if I held Aroca liable, I should award damages (or compensation) for distress, inconvenience and loss of amenity. The prolonged uncertainty over, and then the experience of losing, a holiday home in which they had invested both time and money and which was (as Aroca must have been aware) intended to be a source of pleasure to the Claimants was obviously distressing to the Claimants. I bear in mind that these were holiday homes and not the Claimants’ main residences. On the other hand, the experience went on for many years.

The assessment of such damages (or compensation) is necessarily a rough and ready exercise and the Court of Appeal has said that the amount of such damages will be modest. Taking account of all of the circumstances of the case, I assess the damages (or compensation) for distress, inconvenience and loss of amenity for each individual Claimant in the amount of £1,000, save that in the cases of Mr. & Mrs. Hope and Mr. & Mrs. Whyte I assess their damages at £500 each.

Aroca alleged in their Defences that the Claimants were guilty of contributory negligence in a number of respects, although it was not put in terms to the Claimants in cross-examination that they had been at fault. Mr. Turner focused on two allegations of contributory negligence in his closing submissions.

The first was that the Claimants were at fault in paying the purchase price in full without receiving proof of Desarrollo’s ability to pass legal title and without requesting legal advice from any source. I am not persuaded that the Claimants were at fault in this respect, having regard, in particular, to: (a) what they were told by the Agents; (b) what Aroca had said in the “Dear Client” letter; (c) the fact (as I have found) that they did all retain Aroca before they paid the final instalment; and (d) the fact that they all believed that they had a lawyer, not least because a lawyer had written to them as “Dear Client”.

The second was that the Claimants were at fault in failing to sue Aroca within the extended limitation period provided for in section 14A of the Limitation Act 1980. This issue would only arise if I were wrong on the issue of deliberate concealment. Even then, however, I am not persuaded that the Claimants were at fault during the period of the primary limitation period, given that they continued to retain and be advised by Aroca throughout.

I was not persuaded by the other pleaded allegations of contributory negligence and so I find that there should be no reduction in the sums recovered by the Claimants on account of contributory negligence.

For the reasons which I have given:

I will hear further submissions on all matters consequential on this judgment.

Finally, I express my gratitude to solicitors and counsel on both sides for the helpful and efficient way in which the case was prepared and presented, which has made my task that much easier.

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