P – Professional negligence in taking security
3/11/15
TITAN EUROPE 2006-3 PLC v COLLIERS INTERNATIONAL UK PLC [2015] EWCA Civ 1083
The defendant valued security for a lender. The lender securitised the loan and transferred it and the security to the claimant. The claimant administered the loan for the benefit of note holders. In a claim against the defendant for over-valuing the security, the court rejected a submissions that the claimant had no title to sue and suffered no loss. The defendant had accepted responsibility to any purchaser or transferee of the loan in its valuation report. Even if the claimant had passed on any risk to noteholders, it had property in the loans and security and could therefore sue. If the price paid for the loans and securities had been too high (because of the over-valuation) the claimant had suffered loss. But on the facts the defendant’s valuation had been within a 15% margin for error so the claim failed.
16/7/13
PADDEN v BEVAN ASHFORD [2013] EWCA Civ 824
The claimant’s husband had misappropriated client money. The claimant charged her assets in order to settle a client’s claim, in the hope that this would avoid her husband being prosecuted. The solicitors advising the claimant at the time the transaction was executed were held to have been negligent in failing to advise her that there was little chance of her husband avoiding prosecution. The trial judge had been entitled to find that the claimant would not have signed if such advice had been given, and it was not sufficient that advice to that effect had been given by the firm at an earlier stage when only the outline of the transaction had been discussed.
8/2/13
AIB GROUP (UK) PLC v MARK REDLER & CO SOLICITORS [2013] EWCA Civ 45
Solicitors had committed a breach of trust in relation to a remortgage advance by releasing the funds without the necessary third party undertakings to discharge an existing charge, so completion could not be said to have taken place. The breach of trust was committed in relation to the entirety of the remortgage funds, not just the sum wrongly paid to the borrower which should also have been applied in discharge of the existing charge. But in calculating equitable compensation it was right to take into account the fact the lender had obtained a second mortgage and the sum awarded to the lender was rightly limited to the sum wrongly paid to the borrower.
12/12/12
DAVIDSONS SOLICITORS v NATIONWIDE BUILDING SOCIETY [2012] EWCA Civ 1626
A solicitor acted in breach of trust by handing over a mortgage advance to a bogus solicitor purporting to act for the seller before completion. Although the purchaser was registered as proprietor, an existing charge was not discharged so the new mortgage could not be registered. But the solicitor was relieved from liability under s 61 Trustee Act 1925 because he had acted honestly and reasonably in checking the vendor’s solicitor’s details on the Law Society website and accepting an undertaking from him. The loss had been caused by the fraud of the bogus solicitor. The lender’s instruction requiring existing charges to be redeemed was not to be construed as imposing an absolute obligation, only one requiring the solicitors to exercise reasonable care and skill.
9/2/12
LLOYDS TSB BANK PLC v MARKANDAN & UDDIN [2012] EWCA Civ 65
Solicitors were liable to a mortgage lender for breach of trust in having released the mortgage monies before receiving the completed transfer and other documents necessary to obtain and register title, or the undertaking of the vendor’s solicitors to provide them. The solicitors had not been entitled to rely on a purported undertaking from a person running a bogus firm.
23/1/12
AIB GROUP (UK) PLC v MARK REDLER & CO [2012] EWHC 35 (Ch)
Solicitors who received mortgage monies, intended to be secured by a first charge, and failed to pay out sufficient to redeem an existing charge, had acted in breach of trust but only to the extent of the additional sum which should have been paid to redeem the existing charge, not in respect of the entire mortgage advance. They were therefore only required to reconstitute the trust by repaying the additional sum with interest and charges by way of equitable compensation.
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