Purrunsing v A’Court and Co (A Firm) and Another: ChD 14 Apr 2016

The claimant had paid money for a property, but the seller was a fraudster and no money or title was recovered. The claimant sued both his conveyancers and the solicitors who had acted for the fraudster, in each case innocently. The defendants each sought relief under section 61 of the 1925 Act.
Held: The claim succeeded. The reasonableness test which was to be applied to a legal professional who parted with completion moneys without obtaining completion, was of necessity a high hurdle. Section 61 was to be applied in a manner which was consistent with the high expectation of a trustee discharging fiduciary obligations under the rules of equity.
The second defendant conveyancers had failed to discharge the burden of proving that it acted reasonably applying the test established by the case law referred to above and thus was not entitled to rely on s.61 of the Trustee Act 1925. Similarly, the first defendant solicitors had failed to discharge the burden resting on them to establish that they acted reasonably in the circumstances and thus they were not entitled to the benefit of s.61 of the Trustee Act 1925. The two firms were to bear the loss equally.
Pelling QC HHJ
[2016] EWHC 789 (Ch), [2016] WLR(D) 193, [2016] 4 WLR 81, [2016] WTLR 1027, [2016] 2 P and CR DG14, [2016] PNLR 26, [2016] Lloyd’s Rep FC 310
Bailii, WLRD
Trustee Act 1925 61, Money Laundering Regulations 2007, Civil Liability (Contribution) Act 1978 1
England and Wales
CitedLloyds TSB Bank Plc v Markandan and Uddin (A Firm) CA 9-Feb-2012
The defendant solicitors appealed against judgment. They and the lenders had been subject to a mortgage fraud. Fraudsters had set up a false branch office of a firm of solicitors, and secured payment of a mortgage advance. . .
CitedSantander UK Plc v RA Legal Solicitors CA 24-Feb-2014
. .
CitedDavisons Solicitors (A Firm) v Nationwide Building Society CA 12-Dec-2012
. .
CitedTarget Holdings Ltd v Redferns (A Firm) and Another HL 21-Jul-1995
The defendant solicitors had acted for a purchaser, Crowngate, which had agreed to buy a property from a company called Mirage for andpound;775,000. Crowngate had arranged however that the property would first be passed through a chain of two . .
CitedAIB Group (UK) Plc v Mark Redler and Co Solicitors SC 5-Nov-2014
Bank not to recover more than its losses
The court was asked as to the remedy available to the appellant bank against the respondent, a firm of solicitors, for breach of the solicitors’ custodial duties in respect of money entrusted to them for the purpose of completing a loan which was to . .

Cited by:
Main JudgmentPurrunsing v A’Court and Co (A Firm) and Another ChD 1-Jul-2016
Post judgment hearing of the remaining costs issues . .
CitedP and P Property Ltd v Owen White and Catlin Llp and Another ChD 30-Sep-2016
Solicitors’ liability for client’s fraud
The claimant had purchased a property, but having discovered the sale to be fraudulent, he now claimed against the solicitors and estate agents acting in the sale.
Held: The claim failed. Neither the solicitor nor the estate agent could be . .

These lists may be incomplete.
Updated: 11 June 2021; Ref: scu.562028