The Gazette 1967/71

the possible

property without warning him of

ordinary conveyancing precaution before allow– ing their client to take a sub lease of finding out by inspection of the head lease what were the covenants restrictive of user or otherwise con– tained therein. This case raises serious implications for solici– tors. A lessee, in the absence of stipulation to the contrary, is not entitled to investigate the lessor's title, neither has it been common practice, on taking a lease for a short term, to require pro– duction of all superior leases to ascertain the existance or otherwise of restrictive covenants. The Council have taken the opinion of counsel who has advised that while the decision of the English Court of Appeal is special to the facts of the case under consideration as set out in the report, and while it is not possible to say that an Irish Court would arrive at precisely the same conclusion upon the same set of facts, it is highly probable that they would do so. It is the business of the tenant if he does not protect himself by an express warranty to satisfy himself that the premises are fit for the purpose for which he wants to use them, whether that fitness depends upon the state of their structure, the state of the law, or any other relevant cir– cumstances. Accordingly, on this view, there is no warranty or guarantee by the lessor or sub-lessor of the premises that there are no restrictive cov– enants which would prevent the lessee or sub– lessee from using the premises in the manner desired. As regards the position of the solicitor, having regard to the obiter dictum of Russell, L. J., counsel advises that it is the duty of the solicitor for an intending sub-lessee to acquaint himself with the purposes for which his client requies the property and to ensure that there are no defects of title or otherwise which would prevent his client from using it for the purpose for which he requires it. The discharge of this duty may require the solicitor for the intending sub-lessee to inspect, or make inquiry as to the existence and nature of any restrictive covenants under which the sub-lessor holds. If the solicitor for the lessee has an opportunity of negotiating the terms of the contract with the intending sub-lessor he should ensure that provision is made to enable him to obtain all appropriate and necessary infor– mation in the circumstances of the case. He would be negligent if he were to permit a client wishing to acquire and lay out money on a property to enter into a contract for a sub-lease which would preclude him from acquiring the appropriate in– formation, including, if necessary, an investigation of the lease under which the sub-lessor holds the

consequences. If the solicitor for the intending sub-lessor, on being asked by the solicitor for the intending sub-lessee as to the existence or otherwise of re– strictive covenants, should give a reckless and untrue answer he could be held liable for dam– ages, whether he gives an express warranty or not. This would appear to follow from the iccent English decision in Hedley Byrne v Heller and Company, where it was held that a bank issuing a reference for a customer being aware that the reference would be used for the purpose of ob– taining credit from a third party would be liable for any financial loss arising from the bank's negligence, in the absence of an express disclaimer. It appears to follow therefore, from the obiter dictum of Russell, L. J., and counsel's opinion thereon, that the sub-lessee's solicitor may be liable for negligence if he fails to make proper enquiries as to the existence of restrictive coven– ants in the head lease, and that the sub-lessor's solicitor may be liable for damages to the sub– lessee if he recklessly gives a false answer to an enquiry by the sub-lessee's solicitor. Counsel advises that if the information ob– tained as a result of enquiries by the sub-lessor's solicitor shows that the intended sub lease would be void the solicitor acting for the sub-lessee should inform his client and should not proceed with the transaction. If the information received shows that the intended lease, or sub lease, would be lieable to forfeiture because of breach of coven– ant by the intended sub lessor the sub-lessee's solicitor should explain this to his client, bearing in mind the possibility of getting a waiver or the covenant or relief against forfeiture. If, despite proper enquiries and information obtained, the client proceeds contrary to advice and thereby sustains damage he cannot hold his own solicitor liable. If the solicitor for the intending sub-lessee is unable, notwithstanding enquiry, to obtain any information as to the existence or otherwise of restrictive covenants in the superior lease, he should likewise inform the client of the risk which he takes in proceeding without information. If the client, having been properly advised as to the risk, proceeds on his own judgment the solicitor will not be liable for negligence. Having regard to the importance of the matter the Council brought it to the attention of the Commission on Landlord and Tenant Law. EXAMINATIONS First Law Examination, 4th and 5th September, last day for entry, 14th August. Second Law Examination, 5th September (after- 15