Clydesdale Bank Plc v Workman & Ors [2013] EWHC B38 (Ch) (12 December 2013)

Clydesdale Bank Plc v Workman & Ors [2013] EWHC B38 (Ch) (12 December 2013)

The court found that although Mr Denslow and Mr Murphy were incompetent and failed to meet the standard of reasonably competent solicitors, there was insufficient evidence to establish dishonesty as required for knowing assistance liability. Their conduct was not dishonest by the standards set out in the authorities, and their failings were due to incompetence and lack of sophistication rather than an intention to assist in a fraudulent breach of trust.

Citation
[2013] EWHC B38 (Ch)
Parties
Defendant/claimant (as Assignee): BPE Solicitors LLP; Third Party/defendant to Claim for Contribution: Cobbetts LLP; Claimant (original, Assigned Rights): Clydesdale Bank Plc trading as Yorkshire Bank; Registered Owner/company: Lord Edward Developments (Beechwood) Limited
Jurisdiction
England and Wales
Judgment Date
12 December 2013
Procedural Posture
Civil Claim for Equitable Compensation/damages and Contribution / Trial Judgment
Outcome
Claim for knowing assistance dismissed; no liability for dishonesty established against the Third Party.
Legal Topics
Knowing Assistance in Breach of Trust, Dishonesty Standard, Solicitors' Duties, Civil Liability (contribution) Act 1978, Registration of Charges, Fraudulent Schemes
Equity and Trusts Professional Negligence Banking Law Knowing Assistance in Breach of Trust Dishonesty Standard Solicitors' Duties Civil Liability (contribution) Act 1978 Registration of Charges +1 more

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Parties

BPE Solicitors LLP

Defendant/claimant (as Assignee)

Cobbetts LLP

Third Party/defendant to Claim for Contribution

Clydesdale Bank Plc trading as Yorkshire Bank

Claimant (original, Assigned Rights)

Lord Edward Developments (Beechwood) Limited

Registered Owner/company

Procedural Posture

Civil Claim for Equitable Compensation/damages and Contribution / Trial Judgment

Legal Issues

  1. 1 Whether the Third Party (Cobbetts LLP, acting by Mr Denslow and Mr Murphy) was liable for knowing assistance in a breach of trust by dishonestly assisting the company's breach of trust in paying away proceeds of sale contrary to the bank's equitable interest.
  2. 2 Whether the conduct of Mr Denslow and Mr Murphy amounted to dishonesty as required for knowing assistance liability.
  3. 3 Whether BPE is entitled to equitable compensation or contribution from the Third Party.

Ratio Decidendi

The court found that although Mr Denslow and Mr Murphy were incompetent and failed to meet the standard of reasonably competent solicitors, there was insufficient evidence to establish dishonesty as required for knowing assistance liability. Their conduct was not dishonest by the standards set out in the authorities, and their failings were due to incompetence and lack of sophistication rather than an intention to assist in a fraudulent breach of trust.

Court Disposition

Claim for knowing assistance dismissed; no liability for dishonesty established against the Third Party.

Orders

  • Claim for equitable compensation or damages for knowing assistance dismissed.
  • No order for contribution under the Civil Liability (Contribution) Act 1978.