Andrew Avison & Anor v Harold Bell Infields & Co (A Firm) [2025] EWHC 1787 (Ch)

[2025] EWHC 1787 (Ch)Case No BL-2024-001183IN THE HIGH COURT OF JUSTICEBUSINESS AND PROPERTY COURTS OF ENGLAND AND WALESBUSINESS LISTVenue Royal Courts of Justice, Rolls Building, Fetter Lane, London, EC4A 1NLDate 21/07/2025
Before
MASTER MCQUAIL
Between
(1) ANDREW AVISONClaimant(2) GINNY AVISONClaimantHAROLD BELL INFIELDS & Co (A Firm)Defendant
Anthony Pavlovich (instructed by Gardner Leader LLP) for ClaimantsImran Benson (instructed by Beale & Company Solicitors LLP) for DefendantHearing Hearing date: 1 May 2025
Approved JudgmentThis judgment was handed down remotely at 10.30am on [date] by circulation to the parties or their representatives by e-mail and by release to the National Archives..............................MASTER MCQUAIL
[1]In 2014 the claimants Andrew Avison (Mr Avison) and Ginny Avison (Mrs Avison), agreed to lend £210,000 at 40% interest for 120 days to Glenrick White (Mr White) and his business partner Claudia Emmanuel (Ms Emmanuel) on the intended security of a charge over Ms Emmanuel’s flat at 18 Bennett Park, Blackheath, London SE3 (the Flat). Mr White and Ms Emmanuel did not repay the loan and litigation ensued. Mr and Mrs Avison claim to have suffered an overall loss.[2]The present claim is against the defendant, Harold Bell Infields & Co, the solicitors who acted for Mr and Mrs Avison in connection with the loan. Mr and Mrs Avison say that the defendant should have taken further steps to verify and record the identity of those who signed the loan agreement and charge and should have included more onerous terms as to interest in the loan agreement. They say that this would have ensured that they were repaid including with a commercial rate of interest and would have avoided the litigation and associated costs.[3]The defendant denies the claim.[4]By an application dated 13 December 2024 the defendant seeks to:(i) strike-out the whole claim or be granted summary judgment on the whole claim; or(ii) strike out or be granted summary judgment on: (a) the claim for post default interest; (b) the claim for loss in connection with the mitigation steps taken in pursuing Mr White; and (c) the claim for loss in connection with the sale of Mr and Mrs Avison’s home.[5]The grounds upon which the application is advanced are that it is abusive to run in this claim issues on which the Avisons have failed in previous litigation, alternatively that the challenged heads of loss are unsustainable.[6]The application is supported by the witness statement of Katie Singleton of Beale & Company Solicitors LLP, solicitors for the defendant, dated 12 December 2024. Michelle Di Giola of Gardner Leader LLP, Mr and Mrs Avison’s solicitors, has filed a witness statement dated 31 January 2025 opposing the application.

History

[7]In 2014, Mr and Mrs Avison were friendly with Mr White and agreed in principle to lend him money to support a business venture in Guyana. It was represented by Mr White to Mr Avison that:
“The funds required are for proof of funds only and will be held in the contractor’s account until disbursement then returned to us, where we will return to you 20% interest. We will require possession of the funds for a period of no more than 60 days. As a measure of security we will offer the ability to affect a sale of my business partner’s property as below”
[8]At the time Ms Emmanuel lived and worked in Trinidad and was CEO of the Trinidad and Tobago Securities and Exchange Commission. She also owned the Flat in which there was c.£275,000 of equity. Mr and Mrs Avison and Ms Emmanuel never dealt directly with each other.[9]In late July and early August 2014, Mr and Mrs Avison instructed Mr David Steed (Mr Steed) of the defendant to draft loan documentation. They plead a summary of their financial circumstances at that time and plead that those circumstances were discussed with Mr Steed at a meeting on 31 July 2014. Mr Avison’s email instructions expressly referred to the importance of Ms Emmanuel and Mr White being bound to the agreement and that any chance of fraud was eliminated.[10]Mr Steed drafted a loan agreement and charge and sent them to Mr Avison. The loan agreement contained no provision for contractual interest after the repayment date. Mr Steed advised by email that Mr and Mrs Avison should sign the documents and then ask the borrowers to take the documents to a local solicitor who could explain them and witness the borrowers’ signatures.[11]Mr Avison gave the documents to Mr White and asked him to arrange for signature by Ms Emmanuel, in front of a solicitor. Mr White engaged the services of Peter Laverick (Mr Laverick), a notary public (and retired solicitor). Mr Laverick witnessed both Mr White and a person claiming to be Ms Emmanul sign the loan agreement and charge on 26 August 2014 in a branch of Costa Coffee in Worthing. The signed documents were provided to Mr Steed who emailed Mr Laverick asking him to confirm he had witnessed the signatures and advised the borrowers about the documents. Mr Laverick replied saying that he had.[12]The agreement was dated 2 September 2014, and on that day £210,000 was paid to Mr White. The charge was registered against the Flat on 5 September 2014. Repayment was due on 31 December 2014. No repayment was made. Mr and Mrs Avison plead that during post-default discussions with Mr White he agreed that he would pay post-default interest at the contractual rate.[13]A little later, Ms Emmanuel wanted to sell the Flat. It was her position that she discovered the registered charge only during the conveyancing process. In July 2016 she brought a claim seeking a declaration that her signatures on the loan agreement and charge were forged; that first claim was struck out. She brought a second claim which was tried in July 2018 before HHJ Hand QC.[14]HHJ Hand QC gave a written judgment which concluded that Ms Emmanuel had not discharged the burden of proof. Ms Emmanuel appealed including on the grounds that the trial judge was wrong to have resorted to the burden of proof and had erred in concluding that the burden of proof was on Ms Emmanuel. Mr and Mrs Avison supported the decision of the trial judge on the appeal. Birss J dismissed Ms Emmanuel’s appeal.[15]Mr and Mrs Avison then issued separate claims against Ms Emmanuel and Mr White. They recovered £250,000 from Ms Emmanuel in return for the removal of the charge.[16]The claim by Mr and Mrs Avison against Mr White was for the principal sum plus interest at 40% per 120 days. The claim succeeded but interest from the date of default was awarded only at 8.5% per annum. When Mr and Mrs Avison came to enforce it turned out that Mr White’s matrimonial home was held on trust for his wife and Mr and Mrs Avison’s challenge to the validity of the relevant trust deed failed.[17]Mr and Mrs Avison say they have been forced to sell their own home to fund the litigation that I have described.[18]Mr and Mrs Avison make various allegations of breach of duty which are all denied by the defendant.[19]The allegations are particularised as follows:(i) failed to include default interest of £700 per day until repayment;(ii) failed to include an entire agreement clause;(iii) failed to include a power of sale by receivers;(iv) failed to advise that the borrowers should be advised by a solicitor, in order to rebut any allegation the interest rate was penal;(v) failed to advise that evidence of ID documents be retained;(vi) failed to verify Mr Laverick’s ID check;(vii) incorrectly stated Mr Laverick was a conveyancer on Form AP1; and(viii) failed to comply with instructions.[20]It is Mr and Mrs Avison’s case that but for the defendant’s negligence, they would have(i) been straightforwardly able to enforce the loan against the Flat;(ii) recovered their money earlier;(iii) recovered interest at £700 per day from default;(iv) avoided Ms Emmanuel’s claims or would have recovered their costs of that litigation;(v) avoided needing to claim or enforce against Mr White; and(vi) not had to sell their home and incur associated costs.[21]The defendant denies all this.

Strike-out - no reasonable grounds

[22]CPR 3.4(2)(a) provides the court may strike out a statement of case if it appears:
“that the statement of case discloses no reasonable grounds for bringing… the claim.”
[23]CPR PD3A para 1.2(3) gives as examples of claims which may be within rule 3.4(2)(a) those: “which contain a coherent set of facts but those facts, even if true, do not disclose any legally recognisable claim against the defendant”.[24]The note at 3.4.2 in the White Book supports the following propositions concerning strike out applications:(i) the applicant is usually bound to accept the accuracy of the facts pleaded unless they are contradictory or obviously wrong;(ii) a statement of case is not suitable for striking out if it raises a serious issue of fact which can only be properly determined by hearing oral evidence;(iii) an application to strike out should not be granted unless the Court is certain that the claim is bound to fail; and (iv)where a statement of case is found to be defective, the court should consider whether that defect might be cured by amendment and, if it might be, the court should refrain from striking it out without first giving the party concerned an opportunity to amend.[25]CPR 16.4(1)(a) requires particulars of claim to set out “a concise statement of the facts on which the claimant relies”.

Strike-out - abuse of process

[26]CPR 3.4(2)(b) provides that the court may strike-out a statement of case where:
“the statement of case is an abuse of the court’s process or is otherwise likely to obstruct the just disposal of the proceedings.”
[27]The note at 3.4.3 in the White Book again makes plain that striking out a valid claim should be the last option.

Summary Judgment

[28]CPR 24.3 provides:
“The court may give summary judgment against a claimant… on the whole of a claim or on an issue if – (a) it considers that party has no real prospect of succeeding on the claim… or issue; and (b) there is no other compelling reason why the case or issue should be disposed of at a trial.”
[29]The principles applicable to summary judgment applications are set out in Lewison J (as he then was)’s well known decision in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch) at [15]. The key points here are that for a respondent to resist an application it must show it has a real prospect of success, there must be no mini-trial on the basis of incomplete evidence, but a mere hope that some evidence will turn up at trial is not enough to demonstrate a real prospect . The burden of proof is on the applicant. Defendant’s submissions on the Application The Loan

Defendant’s submissions on the Application

[30]Mr Benson, for the defendant, submits that insofar as the claim turns on whether Ms Emmanuel was a party to the loan agreement and charge, it is abusive and/or liable to summary judgment. He says that for Mr and Mrs Avison to succeed it is necessary for them to persuade the Court at trial that Ms Emmanuel did sign without, apparently, deploying any new evidence and that would involve a collateral attack on HHJ Hand QC’s previous decision.[31]Mr Benson referred me to the judgment of Buxton LJ in Laing v Taylor Walton [2007] EWCA Civ 1146 where, after referring to Lord Diplock’s speech in Hunter v Chief Constable of the West Midlands Police [1982] AC 529 at p 536B describing abuse of process, it was said:
“12. The court therefore has to consider, by an intense focus on the facts of the particular case, whether in broad terms the proceedings that it is sought to strike out can be characterised as falling under one or other, or both, of the broad rubrics of unfairness or the bringing of the administration of justice into disrepute. Attempts to draw narrower rules applicable to particular categories of case (in the present instance, negligence claims against solicitors when an original action has been lost) are not likely to be helpful.”
[32]Mr Benson acknowledges that where the second case involves a new party, the approach to the second claim will typically be permissible and not abusive and that in solicitors’ negligence claims there are often challenges to previous judgments. An example is where a claimant sues her litigation solicitors for not adducing relevant evidence which could have changed the course of the first trial. He said that if there is no new evidence and the second claim is in reality an attempt to appeal the first, it will be abusive. He relied upon Marcus Smith J’s judgment in Allsop v Banner Jones [2021] EWCA Civ 7 at [44].[33]Mr Benson submits that:(i) Mr and Mrs Avison need to establish that Ms Emmanuel did sign the loan and charge. This is the same fact previously in dispute and which has been adjudicated upon;(ii) there is no new evidence in prospect based on the content of Mr and Mrs Avison’s pleading;(iii) evidence at a 2026 or 2027 trial will be significantly less reliable than the evidence heard at the 2018 trial and despite HHJ Hand QC’s difficulty in preparing his judgment he was better placed to determine the issues than any trial judge in the present claim;(iv) Mr and Mrs Avison should have appealed the trial judgment rather than support the judge’s finding on Ms Emmanuel’s appeal or pursued Ms Emmanuel to judgment rather than compromise that claim;(v) Mr and Mrs Avison’s claim asks another judge to go behind the trial judge’s findings which were upheld on appeal;(vi) the proper analysis is that this claim is an impermissible second appeal, in circumstances where there is no new evidence and previously available evidence is now unavailable;(vii) it is impermissible for Mr and Mrs Avison to advance a possible second counterfactual, that is that had the identity fraud been discovered, no loan would have been made. That is not pleaded and it is too late for it to be pleaded now;(viii) arguing that the “fair wind principle” deriving from Armory v Delamine (1722) 1 Stra. 505 means any doubt about whether Ms Emmanuel signed will be resolved in Mr and Mrs Avison’s favour misapplies a principle about the quantification of damage; and(ix) it is irrelevant to the merit of the claim that Ms Emmanuel paid £250,000 to settle the claim against her.[34]Accordingly the claim is abusive, there is no real prospect of Mr and Mrs Avison persuading the Court that Ms Emmanuel did sign and there is no other reason why the claim should proceed to trial.

The Contractual Interest Claim

[35]The defendant challenges Mr and Mrs Avison’s claim to be compensated for a sum of £511,000 that represents post-default interest from the defendant. That is the amount which they say would have been recovered from Ms Emmanuel from the default date up to a notional repayment date of 31 December 2016.[36]Mr Benson submits that it is clear from the judgment in the claim against Mr White that Mr White did not agree to paying post-default interest at such a rate and by implication that Ms Emmanuel also did not do so. This head of loss is premised upon Ms Emmanuel having agreed to pay interest at £700 per day, if asked. There is no particularised basis for this position, which is implausible, and this head of loss should therefore be disposed of summarily.

The Costs of Pursuing Mr White

[37]The defendant also challenges Mr and Mrs Avison’s claim to be compensated for the almost £220,000 expended on the costs of litigation and enforcement against Mr White.[38]Mr Benson submits that scope of a solicitor’s duty does not extend to warranting the creditworthiness of a client’s counter-party and losses arising from counter-party impecuniosity will not usually be recoverable even if the solicitor has been negligent since there is an insufficient connection between the loss and the duty. In this respect Mr Benson referred me to the well-known cases of BPE Solicitors v Gabriel [2017] UKSC 21 and Grant Thornton v Manchester BS [2021] UKSC 20 concerning scope of duty and the Privy Council’s decision in Pickersgill v Riley [2004] UKPC 14, [2004] PNLR 31 as authority for the proposition that a solicitor is under no duty to advise a business client as to the financial wisdom of a contemplated transaction.[39]Mr Benson acknowledges that where mitigation steps, such as making the claim against Mr White, result in greater loss than if the steps had not been taken that will not be counted against the victim. However, he says, mitigation is still an aspect of causation of damages as explained in Thai Airways v KI Holdings [2015] EWHC 1250, [2016] 1 All ER (Comm) 675 [31-38]. From that passage I note the following points:(i) “Legal rules are required to distinguish between effects on the claimant’s financial position which are to be regarded as caused by the defendant’s breach of contract and for which damages can therefore be recovered and effects which are attributed to the claimant’s own action or inaction in response to the breach and for which the defendant is not liable. Drawing this distinction is the function of the doctrine of mitigation.”(ii) “Mitigation is often said to comprise three rules, but it is better expressed using just one: damages are assessed as if the claimant acted reasonably, if in fact it did not act reasonably”;(iii) “Mitigation is not in truth a duty but an assumption: damages are calculated on the assumption that the claimant has taken reasonable steps in mitigation whether it has in fact done so or not.” He submitted that mitigation losses must pass the scope of duty filter as explained in BPE and Grant Thornton and that these losses were outside that scope. Again he says that this head of loss should be disposed of summarily, there being no real prospect of it being recovered at trial. The Costs of Selling Mr and Mrs Avison’s Home[40]Mr Benson says that it was not reasonably foreseeable that Mr and Mrs Avison would have to sell their home to raise funds to pay for the litigation and the losses claimed in this respect are outside the scope of the defendant’s duty.[41]Mr Benson submits that the only facts relied on are that Mr and Mrs Avison depended on savings and a state pension and had plans to refurbish a development property. That is insufficient to make this head of loss foreseeable or recoverable. Mr and Mrs Avison were retired businesspeople lending large amounts of money at a high rate of interest to support an international commercial transaction. If damages are eventually payable to the Avisons then they would be likely to be awarded interest, but there is nothing to justify expanding an ordinary claim to interest to a claim for the losses connected with selling a home. There is no real prospect of recovering this loss and it should be disposed of now. Claimant’s Submissions on the Application The Loan

Claimant’s Submissions on the Application

[42]Mr Pavlovich, for the claimant, points out that it must be assumed for the purposes of the defendant’s application that the defendant was negligent and in considering the defendant’s application the question that must be asked is what would have happened but for that negligence.[43]Mr Pavlovich submits that in the counterfactual scenario where there was no negligence there would have been evidence of Ms Emmanuel’s identity and the loan agreement would have contained provision for post-default interest. He says it does not lie in the mouth of the defendant to seek to defeat the claim on the basis of a lack of evidence caused by its own negligence. There is an alternative counterfactual, as referred to in Ms Di Gioia’s witness statement, in which the identity fraud was discovered and the loan would not have been made at all. It will be for the court at trial to determine the correct counterfactual position and decide which of the heads of loss claimed should be allowed.[44]Mr Pavlovich acknowledges that collateral attacks on earlier decisions can amount to an abuse of process and referred to the discussion in the notes at 3.4.9 to 3.4.12 of the White Book. He referred to the section of [44] in Allsop where this was said:
“In civil proceedings, generally speaking, for an issue to be the same, it will arise as between the same parties (or their privies). That is why, in such cases, the doctrine of res judicata estoppel comes into play. The abuse doctrine will only arise where one of the parties to the earlier litigation sues a stranger to that litigation. In such a case, the claim will typically be permissible and not abusive, and that will generally be because the case is not one of relitigation at all. Rather, the stranger to the earlier litigation will be the subject of the later claim because that person has done or failed to do something which (had that person behaved as he or she should) affected the terms or nature of the anterior decision. Why or how that earlier decision was affected will depend on the individual circumstances. It may be that the later claimant’s former legal advisers failed properly to prepare the case… or failed, in an appeal, to deploy or consider a potentially winning point…. In all of these cases, what is being focussed on is “the impugned conduct of the lawyer [which is] independent of the...conclusions of the court” in the anterior decision.”
[45]He submitted that a claim may be struck out on the basis that it is a collateral attack on an earlier decision, and an abuse of process, only if the new proceedings(1) would be manifestly unfair to a party or(2) would bring the administration of justice into disrepute in reliance upon [44-45] of Allsop. Relitigation will only occur where the same issue arises between the same parties. As is clear from Allsop at [37], no abuse arises from the mere fact that the Court must ask in a professional negligence case “What would have happened to the (earlier) judgment, if the defendant had behaved as he or she should have done?”.[46]Mr Pavlovich went on to distinguish Laing v Taylor Walton. There, Mr Laing sued his solicitors for negligence in failing accurately to reduce an oral agreement to writing. The claim was struck out as a collateral attack on an earlier decision, in a claim by Mr Laing against the counterparty, that rejected Mr Laing’s account of the oral agreement. The reason was that in the second claim Mr Laing had to establish that the underlying oral agreements were as he alleged and in the first claim the judge had already decided that point against him. Exactly the same point arose in the two claims and so the second claim was abusive and no more than an attempt to appeal the earlier decision. There was no need to consider what would have happened at the first trial but for a defendant’s alleged negligence.[47]Mr Pavlovich says that the defendant mischaracterises the premise of Mr and Mrs Avison’s claim as being that Ms Emmanuel was a party to the loan agreement and charge, and that this issue has been litigated twice already and cannot be proved. He says that the relevant inquiry is whether, if the defendant had not been negligent, it would have been possible to prove Ms Emmanuel agreed to the loan and could be identified as the signatory in the counterfactual world which is not the same as proving that, in the actual world, she signed the documents at the meeting at Costa Coffee.[48]As to Ms Emmanuel’s agreement to the loan terms it is relevant to consider that when she was sent the draft loan agreement and legal charge, her main objection as set out in a quotation from her email of 17 August 2014 at [32] in the judgment of HHJ Hand QC concerned the administrative burden of removing the charge on repayment not to the terms proposed. Although her evidence at trial was that she did not accept a subsequent change to the drafting, there was no contemporaneous written evidence to that effect or of any other objection to the terms. In the counterfactual world further negotiation of terms might have met her objection. This is a factual question for trial.[49]So far as concerns the evidence available to aid enforcement of the loan against Ms Emmanuel in the counterfactual world, without the identity problem that arose in the actual world, the essence of Mr and Mrs Avison’s claim is that the lack of evidence was as a result of the defendant’s negligence. There is no dispute that Mr Avison specifically asked the defendant to ensure that the identities were verified.[50]Mr Pavlovich disputes the suggestion that the evidence available at trial was the best evidence supports a submission that the present claim would bring the administration of justice into disrepute. The identity question was not finally decided at trial, nevertheless Ms Emmanuel settled with Mr and Mrs Avison for £250,000. It is not and could not be suggested that the claim is manifestly unfair to the defendant.[51]Mr Pavlovich submits also that the “fair wind principle” would assist Mr and Mrs Avison at trial. He relied upon Keefe v Isle of Man Steam Packet Co [2010] ECA Civ 683 by way of analogy. In that case adverse inferences were drawn in circumstances where evidence was unavailable because of the defendant’s own breach of duty. Mr Pavlovich submits that in assessing the evidence not only will the Court be answering a different question, but it will also be inclined to give Mr and Mrs Avison the benefit of any doubt created by the defendant’s negligence. In particular, the failure to retain evidence of identity creates uncertainty that should not have existed in the counterfactual world.[52]Mr Pavlovich says that strike-out does not follow from concluding that Ms Emmanuel would not have agreed to the loan. In the counterfactual world if she had not agreed to the loan then the loan would not have been made and Mr and Mrs Avison would not have lost the loan advance. Ms Emmanuel would not have brought two claims against them and they would not have needed to take enforcement action or sell their home. The essential difference to their claimed losses would be statutory interest as opposed to contractual interest.[53]Mr Pavlovich says that the strike out application is premised on what is essentially a pleading point rather than any fundamental flaw in the claimant’s claim. Notwithstanding the lack of a plea of an alternative counterfactual scenario in which no loan was made the Court can conclude at trial that Mr and Mrs Avison’s loss should be assessed on that basis. The relevant factual issues are all clear on the face of the pleadings.[54]Mr Pavlovich points out that the defendant itself has pleaded the relevant alternatives:(i) implicit in the plea that it is “wrong to allege that [Ms Emmanuel] was a party [to the loan agreement]” the defendant is positing the case that Ms Emmanuel would not have agreed to the loan;(ii) the defendant also pleads “When analysing the hypothetical actions of third parties, the correct approach is loss of a chance.” If the Court concludes that there is no substantial chance that Ms Emmanuel would have agreed to the loan there would be no need for a loss of a chance. Alternatively the analysis is a middle course between the parties’ primary positions, and would allow the award of part contractual and part statutory interest weighted to reflect the probability of the possible outcomes.[55]At worst Mr and Mrs Avison should be afforded an opportunity to amend their claim to set out the alternatives.

The Contractual Interest Claim

[56]Mr Pavlovich says that the defendant’s argument that there was in fact no agreement for post-default interest conflates the actual and the counterfactual worlds. If Ms Emmanuel would have agreed to the loan there is a further question whether she would have agreed to a provision for post-default interest at the same rate as pre-default interest.[57]Mr and Mrs Avison’s evidence and pleading is that Mr White did agree to this, albeit after default. Ms Emmanuel wished to obtain the loan and would be likely to have agreed to a provision for post-default interest. It would have been commercially usual for the agreement to provide that interest should continue at the same rate after default, which is what Mr and Mrs Avison claim. This is a factual question for trial.[58]There is at least a real prospect of establishing that the borrowers would have agreed to a provision for post-default interest.

The Costs of Pursuing Mr White

[59]Mr Pavlovich says that the defendant’s argument that the losses incurred in pursuing Mr White result from the risk that he would be a man of straw, which is outside the scope of their duty, not from the risk that Mr and Mrs Avison would be unable to enforce against Ms Emmanuel, is wrong.[60]He says that the losses resulted from both risks. In the absence of negligence, Mr and Mrs Avison would have been able to enforce in full against Ms Emmanuel but, because they could not do that, they had to enforce against Mr White.[61]On a proper analysis of the pleadings these amounts are claimed as mitigation costs not by way of damages; accordingly, scope of duty is irrelevant. The proper question is whether the mitigation was reasonable. That question depends on facts to be established at trial. With the benefit of hindsight the defendant says Mr and Mrs Avison should have taken a different course. That does not mean that the course taken can be said now to be so unreasonable that the issue should not go to trial.

The Costs of Selling Mr and Mrs Avison’s Home

[62]Mr Pavlovich points out that Mr and Mrs Avison have pleaded their financial circumstances, including their rental property, and pleaded what was discussed of their financial means and requirements at the initial meeting with the defendant. He says that is enough to dispose of the suggestion that the losses are too remote. On Mr and Mrs Avison’s pleaded case they were clearly foreseeable.[63]Mr Pavlovich further submits that the losses were within the reasonable contemplation of the parties. Mr and Mrs Avison were not engaged in “very substantial international commerce”. They were both retired and living off their savings and Mrs Avison’s state pension. It is natural, and it would have been obvious to the defendant, that they would not have sufficient cash resources to fund extensive litigation.[64]He says that it is difficult for the defendant to succeed on an argument that these losses were outside the scope of its duty, where Mr Avison’s concern to protect their financial interests was made clear to the defendant and the loan was a purely financial arrangement.[65]Mr Pavlovich submits that these are all points for trial. They concern factual questions as to Mr and Mrs Avison’s financial circumstances and the defendant’s knowledge of those circumstances.

Conclusions

[66]In issue on this application are the following:(i) should the claim be struck out as an abusive collateral attack on the judgment of HHJ Hand QC or for there being no reasonable grounds for it being brought or summary judgment be awarded because it carries no reasonable prospect of success; and(ii) whether any of the claimed losses identified in the defendant’s application should be eliminated at this stage because there is no reasonable ground for them being claimed or they carry no reasonable prospect of success.[67]If negligence is established at trial, the question will arise: what loss have Mr and Mrs Avison suffered as a result? That question must be answered in the counterfactual world in which the alleged negligence did not occur. Mr and Mrs Avison say that in that world either it would have been possible to establish that Ms Emmanuel was the person who signed the loan documentation or (and it is accepted that this is not presently specifically pleaded) Mr and Mrs Avison would not have lent money to Mr White and Ms Emmanuel.[68]The Court hearing the professional negligence claim will need to consider not what happened in the real world but what would have happened in a world in which Mr and Mrs Avison either had available cast iron evidence that Ms Emmanuel signed the loan documentation or would never have lent money as they did. It will be a matter for the judge at trial to draw inferences where evidence is not available because of the defendant’s fault.[69]The fact that the alternative counterfactual is not specifically pleaded where the outcomes in the counterfactual world were the transaction in question, with good identification evidence of the counterparty or no transaction (a possibility which the defendant’s pleadings recognise) is in my judgment not problematic. The alternative counterfactual is raised in the defendant’s pleading. It might be otherwise if it was suggested that in the counterfactual world an alternative outcome was a different transaction, it would then be incumbent on Mr and Mrs Avison to plead with proper particularity that different transaction.[70]As Mr Pavlovich explained in distinguishing Laing v Taylor Walton the professional negligence trial will not be a re-run of the trial before HHJ Hand QC. It will be a trial at which the different question of what would have happened at such a trial (if matters ever reached trial), had the defendant not been negligent, will need to be answered. It is not a trial of an issue on which a court has already adjudicated and would not amount to an attack on or disguised appeal against the decision of HHJ Hand QC.[71]I do not accept the defendant’s submission that such a trial would be abusive. It would not be unfair for that trial of issues of what would have happened had the negligence not occurred to take place between Mr and Mrs Avison and the defendant. Nor would it bring the administration of justice into disrepute.[72]On the assumption made for present purposes that the defendant was negligent there are reasonable grounds for bringing the claim and there is a real prospect of it succeeding.[73]So far as concerns Ms Emmanuel’s agreement to take out the loan on the terms of the loan documentation or those terms together with post-default interest, this question is to be answered in the counterfactual world. There is no contemporaneous evidence to suggest that Ms Emmanuel would not have agreed to a loan under which there was provision for post-default interest at, at least, the rate of pre-default interest and such a provision would have been expected in a commercial agreement. The email evidencing Ms Emmanuel’s reaction to the terms of the loan agreement does not suggest fundamental disagreement to the loan or the rate of interest for the loan period. That Ms Emmanuel would have agreed the loan and the interest provision as contended for by Mr and Mrs Avison are issues upon which Mr and Mrs Avison have real prospects of success and which should go to trial.[74]I do not accept that mitigation losses must be foreseeable or within the scope of duty as Mr Benson submitted and do not consider that the Thai Airways case supports that submission. I agree with Mr Pavlovich that the right question for the trial judge is whether it was reasonable for Mr and Mrs Avison to have taken the mitigating steps that they did in pursuing Mr White. That Mr White turned out to have no assets against which the judgment against him could be enforced may be something that should have been considered before the mitigation costs claimed in this respect were incurred and may therefore inform the trial judge’s determination of reasonableness. That there was no duty to protect Mr and Mrs Avison from lending to a man of straw does not necessarily mean that expending costs on enforcing against Mr White was unreasonable. The question of the reasonableness of the steps taken in mitigation is one for trial.[75]Mr and Mrs Avison have pleaded what they told the defendant about their financial circumstances and their pleading is that those circumstances were such that they were forced to sell their home and incur costs as a result. The questions whether such losses were within the scope of the defendant’s duty and were foreseeable are not suitable for summary determination but are ones on which Mr and Mrs Avison have real prospects of success and are for trial.[76]I will dismiss the defendant’s application.