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Gabriel v Little & Ors [2013] EWCA Civ 1513 - 22/11/13


The claimant had made a loan to a company which had been established as a SPV to develop property. The company failed to repay the money and a sale of the property purchased did not cover the costs of sale. A claim was made for fraudulent misrepresentation against the individual associate with the SPV as to the use to which the loan money was to be put. He also claimed against the lawyers who acted for him in the transaction on the grounds of breach of trust or breach of duty. The trial judge dismissed the claims save for the claim of breach of duty against the solicitors in drawing up the facility letter and for failing to inform the claimant of the intended utilisation of the loan since the solicitor knew that 75% of the loan was to be paid to acquire a property and discharge a bank's mortgage.

The Court of Appeal rejected the appeal by the claimant on the issues of deceit and the Quistclose trust. While the solicitors were in breach of duty, that duty was a duty to inform and not to advise on a course of action and accordingly the losses suffered did not fall within the scope of the solicitors' duty and in any event the loan had always been highly speculative and the losses suffered from the foreseeable commercial risks taken by the claimant for which the solicitors were not responsible.