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Property transactions.

The editors of this section of the site are Peta Dollar, solicitor who works as a freelance lecturer, trainer and writer (peta@petadollar.co.uk) and Alex Troup, barrister at St John's Chambers Bristol.


There are two cases this month:
  • A firm of solicitors who acted for the buyer where a fraudster had impersonated the seller were held liable for their client’s loss.
  • A property owner was not entitled to rectification of the Register where their property was sold by a fraudster.


Solicitors’ negligence

Breach of trust

Dreamvar (UK) Ltd v Mishcon de Reya
[2016] EWHC 3316 (Ch)

A firm of solicitors who acted for the buyer in a transaction where a fraudster had impersonated the seller were held to be liable for the loss suffered by the buyer. Although the firm had not been negligent, it was in breach of trust (by virtue of paying the completion moneys to a firm which did not act for the true owner of the property) and were not entitled to relief under s61 of the Trustee Act 1925.

Relevant statutory provisions

Section 61 of the Trustee Act 1925, so far as relevant, provides:

“If it appears to the court that a trustee, whether appointed by the court or otherwise, is or may be personally liable for any breach of trust … but has acted honestly and reasonably and ought fairly to be excused for the breach of trust … then the court may relieve him either wholly or partly from personal liability for the same.”

Facts

H was the registered proprietor of a freehold residential house that was unoccupied and unmortgaged. A fraudster (F) impersonated H. A firm of estate agents, believing they had been instructed by H, informed a prospective buyer (B) that they had been instructed by the owner of the house to sell it quickly. A firm of solicitors (Bsol) were instructed to act for B on the purchase.

Solicitors who believed they were instructed by H (Ssol) had obtained copies of a driving licence and TV licence which had been verified by a solicitor and commissioner for oaths, and sent the contract pack to Bsol. After some ame ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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