AIB Group (UK) Plc v Mark Redler & Co Solicitors

AIB Group (UK) Plc v Mark Redler & Co Solicitors

MRC committed a breach of trust by releasing the mortgage advance before completion, as completion required receipt of a redemption statement and undertaking from Barclays to discharge the prior charge. The breach was not limited to the sum paid to the borrowers but encompassed the unauthorised release of the advance pre-completion. Equitable compensation is limited to the actual loss suffered, being the value of security lost, not the entire advance.

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 on Consolidated Appeals From Preliminary Issues
Outcome
AIB's appeal against the judge's order of 25th January 2012 allowed; appeal against 8th March 2012 order dismissed; Defendant's appeal dismissed.
Legal Topics
Breach of Trust by Solicitors, Remortgage Transactions, Equitable Compensation, Authority to Release Client Funds, Completion in Conveyancing, CML Handbook Interpretation
Trusts Equity Professional Negligence Banking Law Breach of Trust by Solicitors Remortgage Transactions Equitable Compensation Authority to Release Client Funds +2 more

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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 on Consolidated Appeals From Preliminary Issues

Legal Issues

  1. 1 Did the Defendant act in breach of trust in releasing the Advance Monies?
  2. 2 What remedy is the Claimant entitled to for breach of trust?
  3. 3 Was the breach of trust limited to part of the advance or the whole?

Ratio Decidendi

MRC committed a breach of trust by releasing the mortgage advance before completion, as completion required receipt of a redemption statement and undertaking from Barclays to discharge the prior charge. The breach was not limited to the sum paid to the borrowers but encompassed the unauthorised release of the advance pre-completion. Equitable compensation is limited to the actual loss suffered, being the value of security lost, not the entire advance.

Court Disposition

AIB's appeal against the judge's order of 25th January 2012 allowed; appeal against 8th March 2012 order dismissed; Defendant's appeal dismissed.

Orders

  • MRC found in breach of trust as alleged in paragraph 22 of particulars of claim by releasing Advance Monies in August 2006.
  • Equitable compensation awarded to AIB in the sum of £323,501.38, including interest.