A conveyancing firm will not have to pay damages of £299,800, a judge has ruled, despite having made a “limited” breach of service in failing to advise an investor that deposits paid up-front on a property development had no meaningful security or protection.
Niprose Investments Limited brought the claim against Vincents Solicitors after an attempted purchase of eight units in a partly buyer-funded off-plan residential development scheme failed to reach completion, resulting in the claimant losing a 50% deposit.
His Honour Judge Hodge KC, sitting in the Business and Property Courts in Manchester (pictured), ruled that despite the “limited” breach, no “extensive breach” was established, and the firm is not liable to pay damages.
The claim arose following the attempted purchase of the eight-unit residential development, for which the claimant had paid a non-refundable reservation fee of £5,000 per unit before retaining Vincents as conveyancing solicitor in the purchase.
On exchange of contracts in April 2018, the claimant paid a further deposit of £37,475 for each of the eight units, representing 50% of the balance of the purchase price.
The development was never completed, “apparently because the finance company (Amicus Finance Plc) that had been partly funding the development fell into administration in December 2018”, the court heard.
The claimant alleged that the loss of the deposits “was the result of Vincents’ breaches of duty in failing properly to advise the claimant of the risks of investing in this development”, and submitted there had been sufficient red flags about the transaction for the the solicitors to have intervened in the failed purchase.
It was also submitted there had been a “serious mismatch” between the security promised in the marketing material and the purchase contract.
Niprose Investments paid over £299,800 to the seller’s solicitors for the failed purchase, as well as £3,796 in fees to Vincents. The claimant had sought the whole value of the deposits from Vincents, along with refund of fees paid to the solicitors and damages for the breach of duty.
Simon Wilton KC, for Vincents Solicitors, submitted the firm had drawn the claimant’s attention to risks “within its sphere of responsibility”, and had identified additional issues in respect of which the claimant might wish to seek its own advice.
Judge Hodge noted: “There is no basis for saying that Vincents knew, or should have realised, that the development would inevitably fail; nor has the claimant adduced any cogent evidence that could have suggested at the time that this development was ‘doomed’ to failure. Having been warned of the risks, it was a matter for the claimant to assess whether these were worth running, bearing in mind the potential upside. That was what the claimant did: its desire to make a profit outweighed any concerns about potential downside risks. It is to attribute an unrealistic, and exorbitant, responsibility to Vincents to contend that it should have advised the claimant not to proceed with the transaction. Vincents did not have the information, or the expertise, to make a commercial judgment of that kind.”
He added:“To the limited extent that Vincents failed to advise the claimant about the true meaning and effect of the mechanism for the release of the deposits contained within Schedule 2 to the Agreement for Sale, and the limited protection that this afforded to contracting purchasers, such as the claimant, I find that Vincents is in breach of the duties it owed to the claimant in failing to advise that the deposits had no meaningful security or protection.”
But, he said, “the claimant has not established any more extensive breach of any duty owed to the claimant” and had “failed to establish the necessary legal connection between anything Vincents got wrong and the loss of the claimant’s deposits.
“The claimant has not established that the loss of its deposits represents the coming to fruition of any particular risk in respect of which inadequate advice was given. The duty nexus question therefore falls to be answered in Vincents’ favour; and that is a bar to any recovery of damages by the claimant. This finding would not seem to me to depend upon any particular characteristics, attributes, or appetite for risk of this individual claimant.”
Judge Hodge reached this conclusion “with regret”, he said, noting Mrs Nickoll “was an impressive, and patently honest witness, and a thoroughly deserving individual, whose company has clearly suffered a substantial loss as a result of the failure of this development, for which she is in no way responsible”.
“She deserves to succeed on this claim”, he added. “Had it been open to me to do so, I would have wished to compensate this claimant for its loss. Sadly, the law constrains me to dismiss this claim.”
Niprose Investments Limited v Vincents Solicitors Limited [2026] EWHC 2320 (Ch)
