Woolwich Plc v Jones-Dunross & Anor

A solicitor acting solely for a lender in a property transaction owes no duty of care to a co-owner whose signature appears validly on the transfer and consent documents, absent circumstances justifying the imposition of such a duty. A claim also fails where the transaction has not affected the claimant’s legal or equitable interest in the property and the alleged loss consists only of costs arising from unsuccessful litigation or a wholly unrealised loss of a chance. The court must assess loss by reference to the claimant’s actual arrangements and intentions at the relevant time.

The claimant, Maureen Ombull, brought a Part 20 claim against Sherrards, solicitors acting for Woolwich Plc, concerning a forged transfer and remortgage of the former matrimonial home. The claimant alleged that Sherrards acted negligently by completing and registering the transaction and advancing the mortgage funds.

The Woolwich transaction was accepted to be void against the claimant, while the Woolwich pursued subrogation and security rights against the former husband. Master Bowman had previously upheld those rights. The central issues were whether Sherrards owed the claimant a duty of care, whether that duty had been breached, and whether the claimant had suffered recoverable loss.

1. Claim dismissed. Sherrards acted for the Woolwich alone. The documents presented appeared to contain the claimant’s duly executed and witnessed transfer and consent. The circumstances did not justify imposing a duty of care to the claimant, and there was no breach of duty.
2. The claimant suffered no loss attributable to the transaction. The transfer and mortgage did not affect any legal or equitable interest she held in the Property. The Woolwich had accepted that position from the outset, and the earlier judgment had upheld it.
3. The claimant’s costs and liabilities in the earlier proceedings were caused by her unsuccessful contentions concerning the husband’s beneficial interest, the effect of the charge and the possession order. They were not loss caused by Sherrards’ conduct.
4. The alleged loss of a chance to obtain the husband’s entire equitable interest free from the Woolwich’s charge in divorce ancillary relief proceedings was unreal. The claimant had not commenced divorce proceedings at the relevant time, had no such claim in mind, and had instead arranged with the husband to sell the Property and divide the net proceeds equally. Following the fraud, the husband transferred his half interest to her despite her having no entitlement to it.
5. Although the claimant had been seriously wronged by the husband, she had no claim against Sherrards.

The judgment records that Master Bowman gave judgment on 6 April 2004 in favour of Woolwich Plc against the husband and the claimant, upholding Woolwich’s entitlement by way of subrogation to the Abbey mortgage, a charge over the husband’s beneficial half interest and possession. The present court determined the claimant’s subsequent Part 20 claim against Sherrards.