AIB Group (UK) Plc v Mark Redler & Co Solicitors [2013] EWCA Civ 45 (08 February 2013)

AIB Group (UK) Plc v Mark Redler & Co Solicitors [2013] EWCA Civ 45 (08 February 2013)

The defendant solicitors were not authorised to release the mortgage advance until they had obtained undertakings or documents guaranteeing redemption of the prior charge. Completion had not occurred within the meaning of the CML Handbook, and the breach of trust extended to the entire advance released without authority, not merely the sum not used to discharge the prior mortgage.

Citation
[2013] EWCA Civ 45
Parties
Claimant/appellant and Respondent to the Cross Appeal: AIB Group (UK) plc; Defendant/respondent and Appellant on Cross Appeal: Mark Redler & Co Solicitors
Jurisdiction
England and Wales
Judgment Date
08 February 2013
Procedural Posture
Civil Appeal / Court of Appeal Judgment
Outcome
Appeal allowed in part; breach of trust found in respect of entire advance released without authority.
Legal Topics
Breach of Trust by Solicitors, Remortgage Transactions, Equitable Compensation, Authority to Release Client Funds, Completion in Conveyancing
Trusts Professional Negligence Banking Law Breach of Trust by Solicitors Remortgage Transactions Equitable Compensation Authority to Release Client Funds Completion in Conveyancing

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Parties

AIB Group (UK) plc

Claimant/appellant and Respondent to the Cross Appeal

Mark Redler & Co Solicitors

Defendant/respondent and Appellant on Cross Appeal

Procedural Posture

Civil Appeal / Court of Appeal Judgment

Legal Issues

  1. 1 Did the defendant solicitors act in breach of trust in releasing the mortgage advance prior to completion?
  2. 2 Was the breach of trust limited to the sum not used to discharge the prior mortgage or did it extend to the entire advance?
  3. 3 What remedy is the claimant entitled to for breach of trust?

Ratio Decidendi

The defendant solicitors were not authorised to release the mortgage advance until they had obtained undertakings or documents guaranteeing redemption of the prior charge. Completion had not occurred within the meaning of the CML Handbook, and the breach of trust extended to the entire advance released without authority, not merely the sum not used to discharge the prior mortgage.

Court Disposition

Appeal allowed in part; breach of trust found in respect of entire advance released without authority.

Orders

  • Defendant liable to pay equitable compensation to claimant for loss resulting from breach of trust.
  • Relief under s.61 Trustee Act 1925 denied.