P&P Property Ltd v Owen White & Catlin LLP [2018] EWCA Civ 1082 (15 May 2018)

P&P Property Ltd v Owen White & Catlin LLP [2018] EWCA Civ 1082 (15 May 2018)

Where a solicitor or agent executes and exchanges a contract for sale of land on behalf of a person named as the owner, they warrant to the purchaser that they have authority from the true owner, not merely their client. Failure to verify the vendor's identity and compliance with AML obligations does not of itself...

Source-derived case information.

Citation
[2018] EWCA Civ 1082
Parties
Appellant/claimant: P&P Property Limited; Respondent/defendant: Owen White & Catlin LLP; Respondent/defendant: Crownvent Limited; Appellant/claimant/first Respondent: Dreamvar (UK) Limited; Appellant/defendant: Mishcon de Reya (a firm); Respondent/defendant: Mary Monson Solicitors Limited; Intervener: The Law Society
Jurisdiction
England and Wales
Judgment Date
15 May 2018
Procedural Posture
Civil Appeal / Court of Appeal Judgment on Appeals From High Court (chancery Division)
Outcome
Appeals allowed in part; findings of breach of warranty of authority and breach of trust against vendor's solicitors; relief under s.61 Trustee Act 1925 considered.
Legal Topics
Solicitors' Liability, Breach of Trust, Breach of Warranty of Authority, Negligence, Identity Fraud, Undertakings, Money Laundering Regulations, Relief Under Trustee Act 1925 S.61
Property Law Professional Negligence Trusts and Equity Contract Law Solicitors' Liability Breach of Trust Breach of Warranty of Authority Negligence +4 more

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Parties

P&P Property Limited

Appellant/claimant

Owen White & Catlin LLP

Respondent/defendant

Crownvent Limited

Respondent/defendant

Dreamvar (UK) Limited

Appellant/claimant/first Respondent

Mishcon de Reya (a firm)

Appellant/defendant

Mary Monson Solicitors Limited

Respondent/defendant

The Law Society

Intervener

Procedural Posture

Civil Appeal / Court of Appeal Judgment on Appeals From High Court (chancery Division)

Legal Issues

  1. 1 Whether solicitors and estate agents acting for a fraudulent vendor are liable to the purchaser for breach of warranty of authority, breach of trust, negligence, or breach of undertaking in property transactions involving identity fraud.
  2. 2 Whether the Money Laundering Regulations impose civil liability to third parties for failure to verify identity.
  3. 3 Whether relief under s.61 Trustee Act 1925 should be granted to solicitors in breach of trust.

Ratio Decidendi

Where a solicitor or agent executes and exchanges a contract for sale of land on behalf of a person named as the owner, they warrant to the purchaser that they have authority from the true owner, not merely their client. Failure to verify the vendor's identity and compliance with AML obligations does not of itself create civil liability to third parties, but breach of trust arises if purchase monies are released in a fraudulent transaction. Relief under s.61 Trustee Act 1925 is discretionary and depends on the reasonableness and honesty of the solicitor's conduct.

Court Disposition

Appeals allowed in part; findings of breach of warranty of authority and breach of trust against vendor's solicitors; relief under s.61 Trustee Act 1925 considered.

Orders

  • Vendor's solicitors held liable for breach of warranty of authority to purchaser.
  • Vendor's solicitors held liable for breach of trust in releasing purchase monies in fraudulent transactions.