The claimant advanced money for the purchase of various properties. These were paid by the defendant solicitors (acting for the claimant) to the account of ‘McGraths’ which the defendant thought was a firm of solicitors, and against undertakings given by ‘McGraths’ for completion of the purchase transactions. In fact the whole transaction was a fraud, the owners of the properties had never agreed to sell them, there was no such firm as McGraths, the undertakings were therefore not undertakings by a solicitor and had no value. It was common ground that the solicitors had been obliged to hold the funds until ‘completion’ of the transaction.
Held: The Court considered the two cases put by the claimant, the primary case being that insofar as ‘completion’ of a transaction involved accepting a solicitor’s undertaking, it must be truly an undertaking given by a solicitor.
Alternatively, it was said, it must be from someone who is reasonably and honestly believed to be a solicitor. The defendant accepted the second proposition, and the judge, as I read his decision, founded it mainly on his finding that the solicitor had no reasonable grounds for believing that ‘McGraths’ were a firm of solicitors. He dealt briefly with the primary case however, saying that if necessary he would have accepted that only a genuine solicitor’s undertaking would suffice.
Judges:
John Randall QC J
Citations:
[2011] EWHC 3037 (Ch)
Jurisdiction:
England and Wales
Cited by:
Cited – UCB Loans v Grace and others 2011
The solicitors paid out the mortgage advance without having received a mortgage document executed by the borrower at all. It was conceded that such payment was made without authority.
Held: The solicitors had acted in breach of trust. No . .
Lists of cited by and citing cases may be incomplete.
Professional Negligence
Updated: 19 July 2022; Ref: scu.450475