Royal Courts of Justice, London

The High Court has ordered listed firm Gateley to pay damages of more than £221,000 after being found to have acted negligently in advising a client, in a case that cautions against the dangers of conducting a professional relationship on "casual" terms.

The case concerned a property transaction negotiated between 2010 and 2015 by British Virgin Islands-incorporated company Moda International Brands – the claimant in the matter – and property developer Mortar Developments Nottingham.

The parties had attempted to transform a £3.7 million two-premises Odeon cinema site in Nottingham into a residential block. Property dealer Richard Wilkinson instructed Gateley on behalf of Moda.

The ruling, handed down on May 23, described how Wilkinson and the Gateley partner involved, Austin Moore, were "close personal friends" who often holidayed together. But it added: "This dispute and the ensuing litigation have brought an end to the friendship."

Central to the dispute was an agreement between Wilkinson/Moda and Mortar, which dealt with issues including: who was to own what and in what proportions; how to divide the revenue stream; and how bank debts were to be dealt with. What was finally agreed and who had sight of successive amendments before they were approved became a key part to the litigation.

Disagreement arose regarding the profits generated from a large part of the premises – the cinema's foyer – which in 2012 were projected at about £2.8 million. The profits from this part of the premises were not included in key definitions and sections of the final agreement.

High Court judge Mr Justice Freedman held that, among other things, Wilkinson "did not give instructions to Moore that the profit from the [foyer] would be excluded" and that Moore "did not advise Wilkinson the agreement had been amended to exclude the profit" from this part of the premises.

The judge said Moore was "hampered by his failure to take detailed attendance notes" and described his evidence as "unreliable" and based partly on "false recall".

He added: "It was apparent that he did not deliver to the standards that were desirable in the context of the instant transaction.

"A solicitor in the position of Mr Moore should have been expected to… negotiate forcefully for his client Moda."

The judge also said Moore was "a little casual in his communications" and that "the quality of his recollection outside the documents was not good".

The judge agreed with Wilkinson's stance that "the mixing of work and pleasure did not diminish [Wilkinson's] expectation" to receive "a professional service".

Siding with the claimant, the judge calculated damages to the tune of £221,209 based on a loss of chance.

Gateley and Austin Moore declined to comment.