English v English & Anor

Forgery prevents contractual liability initially, but a person may later ratify a transaction made purportedly on their behalf. Ratification requires full knowledge of the material facts and clear voluntary conduct accepting the transaction. Payment or other acts which the person had no choice but to perform are insufficient. However, arranging redemption of a charge on sale, without protest or seeking advice, may amount to positive acceptance. A solicitor’s certificate does not itself define the solicitor’s duties to the borrower. The solicitor may amend the certificate and proceed on the client’s instructions, provided the client receives sufficient advice to understand the transaction’s essential risks.

The claimant alleged that her son forged her signatures on loan agreements and a legal charge over her bungalow. She claimed damages for professional negligence against the solicitors who signed a solicitor’s verification certificate, and restitution from the lender of sums paid to redeem the charge.

The court found that the claimant had not signed the disputed documents. It nevertheless found that she later knew of the loans and charge, made payments, and caused the charge to be redeemed on sale without objection. The issues were whether the solicitors were negligent and whether the claimant’s subsequent conduct made the loans and charge binding.

1. Claim against the solicitors. The solicitor’s verification certificate did not define the scope of his duties to the claimant. He had no prior retainer with the lender and was free to accept or decline the request for advice and certification. A solicitor may owe a client a duty to refuse instructions where the circumstances prevent the client from understanding the risks, but that threshold was not reached here.
2. The solicitor had seen the claimant alone, found no undue influence, and gave general advice about the effect of the legal charge, including its “all monies” character. The advice did not require inspection of the detailed loan documents. He was therefore not in breach of duty. The claim against the second defendant was dismissed.
3. Ratification. The forged loan agreements and charge were transactions purportedly entered into on the claimant’s behalf and were capable in principle of ratification. Ratification requires full knowledge of the material facts and clear voluntary conduct, or acquiescence equivalent to such conduct. Acts which the principal has no choice but to perform do not, by themselves, amount to ratification.
4. The claimant’s promises and payments concerning arrears were not, by themselves, sufficiently clear. Her later instruction to conveyancing solicitors about the loans and charge, and her payment of the redemption sum without protest or seeking advice, went beyond acquiescence. Those acts positively accepted the binding effect of the transactions. Ratification retrospectively constituted Colin as her agent, so the loans and charge became binding despite the forged signatures.
5. The lender’s estoppel case would also have succeeded. The claimant’s conduct represented that the documents were valid, and the lender relied on that representation by releasing its charge and losing the opportunity to seek an indemnity from the Land Registrar. Payment was made voluntarily rather than under a mistake of fact, so no restitutionary remedy or remedial constructive trust arose. The settled-account argument failed because no account existed before ratification or adoption.
6. The claim against the third defendant was dismissed.

First-instance decision. The judgment does not state that any earlier decision in the same proceedings was appealed.