Lloyds TSB Bank Plc v Markandan & Uddin (A Firm)

Lloyds TSB Bank Plc v Markandan & Uddin (A Firm)

M&U committed a breach of trust by releasing the mortgage advance without genuine completion or valid undertakings, contrary to the lender's instructions and the CML Handbook. The transaction was a nullity due to fraud, and M&U's actions were not reasonable so as to merit relief under section 61 of the Trustee Act. The loss to the lender was caused by the breach of trust.

Parties
Claimant/respondent: Lloyds TSB Bank PLC; Defendant/appellant: Markandan & Uddin (a firm)
Jurisdiction
England and Wales
Judgment Date
09 February 2012
Procedural Posture
Civil Appeal / Appeal From High Court Judgment on Preliminary Issues
Outcome
appeal dismissed
Legal Topics
Breach of Trust by Solicitors, Mortgage Fraud, Relief Under Trustee Act, Causation in Breach of Trust, Solicitor's Undertakings
Trust Law Banking Law Professional Negligence Breach of Trust by Solicitors Mortgage Fraud Relief Under Trustee Act Causation in Breach of Trust Solicitor's Undertakings

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Parties

Lloyds TSB Bank PLC

Claimant/respondent

Markandan & Uddin (a firm)

Defendant/appellant

Procedural Posture

Civil Appeal / Appeal From High Court Judgment on Preliminary Issues

Legal Issues

  1. 1 Whether the solicitors (M&U) committed a breach of trust by releasing mortgage funds in a fraudulent transaction
  2. 2 Whether M&U were entitled to relief under section 61 of the Trustee Act 1925
  3. 3 Whether M&U's breach of trust caused loss to the lender (C&G/Lloyds)

Ratio Decidendi

M&U committed a breach of trust by releasing the mortgage advance without genuine completion or valid undertakings, contrary to the lender's instructions and the CML Handbook. The transaction was a nullity due to fraud, and M&U's actions were not reasonable so as to merit relief under section 61 of the Trustee Act. The loss to the lender was caused by the breach of trust.

Court Disposition

appeal dismissed

Orders

  • Judgment for Lloyds TSB Bank PLC against Markandan & Uddin for £742,500 plus interest at 3% from 31 August 2007 until payment, compounded annually