The defendant firm of solicitors had acted in a matter involving a fraud. One partner was involved in the fraud. The claimants sought to recover from the partnership.
Held: ‘The issue is not how the transaction ought properly to be described, or whether, without distortion of language, it can be given the label of a transaction in which solicitors ordinarily engage. Rather, it is necessary to examine the substance of the transaction to see whether, viewed fairly and properly, it is the kind of transaction which forms part of the ordinary business of a solicitor.’ This transaction, promising huge returns could not be seen in this way. Appeal dismissed.
Judges:
Lord Justice Peter Gibson, Lord Justice Dyson And Lord Justice Longmore
Citations:
[2003] EWCA Civ 1057, Times 26-Aug-2003, Gazette 02-Oct-2003, [2007] Lloyd’s Rep PN 25
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Dubai Aluminium Company Limited v Salaam and Others HL 5-Dec-2002
Partners Liable for Dishonest Act of Solicitor
A solicitor had been alleged to have acted dishonestly, having assisted in a fraudulent breach of trust by drafting certain documents. Contributions to the damages were sought from his partners.
Held: The acts complained of were so close to . .
Cited – Lloyd v Grace, Smith and Co HL 1912
Mrs Lloyd delivered the title deeds of her cottages at Ellesmere Port to the solicitors’ managing clerk, who defrauded her.
Held: Vicarious liability can extend to fraudulent acts or omissions if those were carried out in the course of the . .
Cited – United Bank of Kuwait Ltd v Hammond and Others CA 1988
It will only be in the ordinary course of business of the firm for a solicitor to do an act where there was an underlying transaction of a kind which was part of the usual business of a solicitor. ‘On the facts represented to the [third party] would . .
Cited – Hirst v Etherington and Another CA 21-Jul-1999
A solicitor, who re-assured a lender that his guarantee of a borrower’s loan, was given by him in the normal course of business, was not in fact so acting. The lender, if wanting to rely upon that re-assurance to claim against the solicitor’s . .
Cited – Uxbridge Permanent Building Society v Pickard CA 1939
It is not within the actual authority of a solicitor’s clerk to commit a fraud. But it is within his ostensible authority to perform acts of the class which solicitors would normally carry out: ‘so long as he is acting within the scope of that class . .
Cited – Langley Holdings v Seakens QBD 19-Oct-2000
The claimant sought recovery from one of two partners in a solicitors’ firm of solicitors of sums paid to the firm and misappropriated by the partner, who had conspired with others to offer a fraudulent investment. The claimant admitted that the . .
Cited – Kooragang Investments Pty Ltd v Richardson and Wrench Ltd PC 27-Jul-1981
(New South Wales) An employee of the defendants was authorised to carry out valuations, but he negligently carried out an unauthorised private valuation.
Held: In doing so he was not acting as an employee of the defendant company. The company . .
Cited – Snook v London and West Riding Investments Ltd CA 1967
Sham requires common intent to create other result
The court considered a claim by a hire-purchase company for the return of a vehicle. The bailee said the agreement was a sham.
Held: The word ‘sham’ should only be used to describe an act or document where the parties have a common intention . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Company
Updated: 07 June 2022; Ref: scu.184826