Cherney & Ors v Neuman & Ors [2011] EWHC 2156 (Ch) (05 August 2011)

Cherney & Ors v Neuman & Ors [2011] EWHC 2156 (Ch) (05 August 2011)

The Firm breached its duty of care and fiduciary duty to the claimants by failing to ensure proper documentation and control over trust assets in the relevant property transactions. Mr Neuman acted as agent for the claimants in certain transactions, but the Firm could not rely solely on his instructions without...

Source-derived case information.

Citation
[2011] EWHC 2156 (Ch)
Parties
Claimants: Michael Cherney & Others; Defendants: Frank Neuman & Others; Third Party: Frank Neuman
Jurisdiction
England and Wales
Judgment Date
05 August 2011
Procedural Posture
Civil Professional Negligence / High Court Trial Judgment
Outcome
Judgment for the claimants against the Firm; contribution claim by the Firm against Mr Neuman considered in light of settlement and indemnities.
Legal Topics
Solicitors' Duties, Breach of Fiduciary Duty, Breach of Trust, Contribution and Indemnity, Agency, Damages
Professional Negligence Trusts and Equity Property Law Solicitors' Duties Breach of Fiduciary Duty Breach of Trust Contribution and Indemnity Agency +1 more

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Parties

Michael Cherney & Others

Claimants

Frank Neuman & Others

Defendants

Frank Neuman

Third Party

Procedural Posture

Civil Professional Negligence / High Court Trial Judgment

Legal Issues

  1. 1 Whether the Firm (Pettman Smith/Child & Child) was professionally negligent in its conduct of property transactions for the claimants
  2. 2 Whether the Firm breached fiduciary duties and/or duties of trust owed to the claimants
  3. 3 Whether Mr Neuman acted as agent for Mr Cherney in the relevant transactions

Ratio Decidendi

The Firm breached its duty of care and fiduciary duty to the claimants by failing to ensure proper documentation and control over trust assets in the relevant property transactions. Mr Neuman acted as agent for the claimants in certain transactions, but the Firm could not rely solely on his instructions without adequate safeguards. The cross-indemnities and settlement between the claimants and Mr Neuman do not absolve the Firm of liability to the claimants, but do affect the extent of contribution or indemnity recoverable between the Firm and Mr Neuman.

Court Disposition

Judgment for the claimants against the Firm; contribution claim by the Firm against Mr Neuman considered in light of settlement and indemnities.

Orders

  • The Firm is liable to the claimants for damages for professional negligence and breach of fiduciary duty/trust.
  • Quantum of damages to be assessed.