Cheshire Mortgage Corporation Ltd & Anor v. Grandison & Ors [2011] ScotCS CSOH_157 (23 September 2011)

Cheshire Mortgage Corporation Ltd & Anor v. Grandison & Ors [2011] ScotCS CSOH_157 (23 September 2011)

Solicitors acting for borrowers in mortgage transactions do not impliedly warrant the identity of their clients to lenders; the implied warranty of authority is limited to authority from the persons already known to the lender and does not extend to their identity or ownership of property.

Citation
[2011] ScotCS CSOH_157
Parties
Pursuer: Cheshire Mortgage Corporation Ltd; Pursuer: Blemain Finance Limited; Defender: Morna Grandison (Judicial Factor on the estate of Longmuir & Co); Defender: Balfour + Manson LLP
Jurisdiction
Scotland
Judgment Date
23 September 2011
Procedural Posture
Commercial Action / Judgment After Proof
Outcome
claims dismissed
Legal Topics
Implied Warranty of Authority, Solicitor Liability, Mortgage Fraud, Collateral Contract, Scope of Warranty
Contract Law Agency Law Professional Negligence Implied Warranty of Authority Solicitor Liability Mortgage Fraud Collateral Contract Scope of Warranty

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Parties

Cheshire Mortgage Corporation Ltd

Pursuer

Blemain Finance Limited

Pursuer

Morna Grandison (Judicial Factor on the estate of Longmuir & Co)

Defender

Balfour + Manson LLP

Defender

Procedural Posture

Commercial Action / Judgment After Proof

Legal Issues

  1. 1 Whether solicitors acting for borrowers in mortgage transactions impliedly warrant the identity of their clients to lenders
  2. 2 Scope of implied warranty of authority in agency context
  3. 3 Liability of solicitors for breach of warranty of authority when acting for fraudsters

Ratio Decidendi

Solicitors acting for borrowers in mortgage transactions do not impliedly warrant the identity of their clients to lenders; the implied warranty of authority is limited to authority from the persons already known to the lender and does not extend to their identity or ownership of property.

Court Disposition

claims dismissed

Orders

  • No damages awarded to pursuers
  • No liability found against defenders for breach of warranty of authority