Stevenson & Anor v Singh & Ors

Liability for conspiracy to use unlawful means requires awareness of the intended means, awareness that those means are unlawful, and agreement to their use. The agreement will ordinarily be inferred from overt acts and the explanations given for them.

Dishonest assistance requires a trust or fiduciary obligation, a breach, assistance, and dishonesty assessed objectively in light of the assister’s actual knowledge. A solicitor’s warranty of authority does not ordinarily guarantee the client’s identity or title. Where no contract was purportedly made on behalf of the principal, damages ordinarily exclude loss of bargain.

The claimants paid £1,250,000 for a property whose registered owner had not authorised its sale. An impersonator instructed solicitors to transfer parts of the purchase money to several defendants. The claimants alleged conspiracy to defraud, dishonest assistance in breach of trust, and restitutionary liability.

By trial, repayments and settlements had restored more than the purchase price. The court considered whether Singh and Zammit were conspirators, whether Freedex dishonestly assisted a breach of trust, and whether any recoverable loss remained after crediting the settlements.

1. Conspiracy. A participant in a conspiracy to use unlawful means must know the intended means, know that their use is unlawful, and agree to their use. Direct evidence of agreement is rarely available. The court should examine the overt acts and then the explanations offered. An implausible explanation may reinforce the inference of conspiracy.
2. Dishonest assistance. The purchase money was held on a Quistclose trust because it was paid solely to acquire the property. Assistance liability required dishonesty assessed by reference to what the defendant actually knew, against the standard of an honest person. Deliberately avoiding inquiry may amount to dishonesty.
3. Damages. The claimants’ loss included the purchase price and wasted transaction costs. The repayments and the £1,200,000 settlement payment had to be credited. The remaining loss was extinguished.
4. Warranty of authority. A solicitor does not ordinarily warrant the client’s identity, title or other attributes. If any warranty existed, it was at most that the solicitors acted for a person using the relevant name. Where the solicitor did not purport to bind the principal to a contract, damages were limited to loss caused by entering the ineffective transaction and did not include loss of bargain.
5. Disposition. Singh and Zammit were liable for conspiracy and Freedex for dishonest assistance, but the absence of recoverable loss required dismissal of the claims. Costs were reserved.

First-instance decision. No prior appellate decision is stated in the judgment.