MIDLAND BANK PLC v MESSRS COX MCQUEEN (A FIRM)

A solicitor’s retainer to obtain a person’s signature to a mortgage is ordinarily a contract for professional services requiring reasonable care and skill. It does not make the solicitor an insurer against an impersonation or forgery which proper care could not detect, unless clear and compelling language imposes that absolute responsibility.

Construction depends on the retainer’s text in its commercial and professional setting. A certificate that the signatory understood and signed voluntarily is construed consistently with the retainer. It will not ordinarily create a separate warranty that the signature is genuine.

The bank retained the defendant solicitors to obtain the signatures required for an all-monies mortgage over a house owned by the borrower’s wife. The solicitors returned a mortgage apparently signed and witnessed, with a certificate that its contents had been explained and that the wife had signed freely.

The signature was made by an employee of the borrower impersonating his wife. When the borrower later defaulted, the bank could not enforce the mortgage. The judge dismissed the bank’s claims against the solicitors.

On appeal, the bank no longer challenged the dismissal of its negligence, implied-term and warranty-of-authority claims. It contended that the solicitors had failed to perform an absolute contractual obligation to obtain the wife’s signature, or had breached a warranty in the certificate.

1. The appeal was dismissed unanimously. Lord Woolf MR held that the retainer did not impose an absolute obligation on the solicitors to procure the genuine signature of the borrower’s wife. Lord Justice Mummery and Lord Justice Mantell agreed.

2. The letter had to be construed objectively in its full setting. It retained solicitors to provide professional advisory and ministerial services in relation to security for a loan which the bank had chosen to make to its customer. In that context, the ordinary obligation was to exercise the care and skill of a competent solicitor, not to guarantee against fraud by the customer which careful performance could not expose.

3. The words requiring the solicitors to obtain the signatures did not compel a different result. They could not be literally absolute, since refusal, incapacity or death of a proposed signatory would not make the solicitors liable. The accompanying obligation to explain the mortgage also required professional judgment and was naturally one of reasonable care.

4. Barclays Bank Plc Weeks Legg & Dean [1998] 3 WLR 656 was consistent with that approach. Zwebner v Mortgage Corporation (unreported), 18 June 1988 did not govern this retainer. Its express undertaking that documents would be properly executed, and its different contractual setting, materially differed from a request to obtain signatures accompanied by a certificate. That decision should not be given a wide application.

5. The certificate formed part of the same retainer. Having construed the retainer as not guaranteeing the authenticity of the signature, there was no basis to construe the certificate as a conflicting collateral warranty. The bank’s claim therefore failed, with costs; leave to appeal to the House of Lords was refused.

• Court of Appeal (Civil Division): Appeal dismissed with costs. Leave to appeal to the House of Lords refused.

• Queen’s Bench Division, Mercantile List: His Honour Judge Perrett QC, sitting as a Deputy High Court Judge, dismissed the bank’s claim on 28 November 1997.