UCB Home Loans Corporation Ltd v Soni & Anor

Mr Soni, the First Defendant, was a solicitor who took advantage of his position to defraud the Claimant lender, UCB. He borrowed £2.5 million from UCB, supposedly on the security of five mortgages of properties in his own name, but in fact he gave no security to UCB for any of the loans. He handled the conveyancing on each transaction himself, through a solicitor’s practice of which he was the sole proprietor. He had to overcome precautions on which UCB insisted in order to avoid being defrauded in such a situation. To do so he represented to UCB that the relevant solicitors’ practice was one which had two partners, and that the conveyancing was handled by the other partner. In addition to his sole practice, he had another practice in which he did have a partner, Ms Nasreen Kherdin. This carried on business from a different office and address, but under the same name. He told UCB that Ms Kherdin would deal with the conveyancing, and he forged her signature on the critical document in each case, a certificate of title. UCB has a worthless judgment against him for some £2.4 million. The issue in this appeal is whether Ms Kherdin is also liable to UCB for this loss, on the basis that she was held out to them as Mr Soni’s partner. His Honour Judge Dight, sitting as a judge of the Chancery Division, held that she was not. UCB appeals with permission granted by Lewison LJ.

The Partnership Act 1890 makes provision under which someone who is not, but is held out to be, a partner in a partnership may be liable as if he or she were a partner, to someone who relied on the representation. Among other things this depends on whether the person who is so represented (the apparent partner) made the representation or knowingly suffered it to be made. It also depends on what representation is made. That is complicated in the present case by the fact that there were several solicitors’ practices which carried on business under the same name, Soni & Co. It is therefore necessary to consider separately, first the underlying reality as regards the position of Mr Soni and Ms Kherdin, secondly the position as it was represented to UCB, and thirdly Ms Kherdin’s knowledge of the representations made.

For reasons which I set out below, I consider that the judge was correct in his decision, and I would dismiss the appeal, on the basis that Ms Kherdin did not know of, or suffer the making of, the representations which Mr Soni made to UCB, on which UCB relied to make the loans.

As below, Mr Nicholas Davidson Q.C. appeared for UCB, with Mr Timothy Polli, and Mr Michael Douglas Q.C. for Ms Kherdin, with Mr Hugh Evans. I am grateful to Counsel for their written and oral submissions. I express particular thanks to those who were responsible for preparing the appeal bundles, for which care had been taken to ensure that the documentation was reduced to no more than that which was really needed for the appeal.

The claim by UCB against Ms Kherdin turns on the provisions of section 14 of the 1890 Act, or on the common law principles which are reflected in that section. For present purposes it is not necessary to draw a distinction between the section and the common law. Section 14(1) is as follows:

“Everyone who by words spoken or written or by conduct represents himself, or who knowingly suffers himself to be represented, as a partner in a particular firm, is liable as a partner to any one who has on the faith of any such representation given credit to the firm, whether the representation has or has not been made or communicated to the person so giving credit by or with the knowledge of the apparent partner making the representation or suffering it to be made.”

Thus, it is necessary for UCB to show that a representation has been made that Ms Kherdin was a partner with Mr Soni in “a particular firm”, that the representation (not having been made by Ms Kherdin) was knowingly suffered by her to be made, and that on the faith of the representation it gave credit to the firm. If it can show that she knowingly suffered the representation to be made, it does not have to show that she knew that the representation was made or communicated to UCB itself. The 1890 Act uses the word “firm” to refer to persons who have entered into partnership together: section 4(1).

It is not in dispute that Mr Soni represented to UCB that Ms Kherdin was a partner with him in a practice carrying on business under the name Soni & Co, which was therefore represented as being a firm, nor that UCB acted in reliance on that representation, thereby giving credit to the firm, or the supposed firm, for the purposes of the section. It is not suggested that Ms Kherdin made the representation in question, or (except in one case, the subject of a separate ground of appeal) that she knew that it was made to UCB. The dispute has focussed on whether she knowingly suffered the representation to be made, and on what is meant by a representation that she was “a partner in a particular firm”, in the circumstances of this case.

One of UCB’s grounds of appeal challenges the judge’s findings on a specific issue of fact. That is of subordinate importance, and I will leave the details of it to later. At this stage I will summarise the facts relevant to the main issues. I start with the arrangements made by Mr Soni, and by him and Ms Kherdin, as regards the conduct of the solicitors’ practices.

I can start in 2004. Mr Soni had practised as a solicitor under the name of Anderson Macrae at 23 Ansdell Street, London W8. For a short time early in 2004 Ms Kherdin was a partner of Mr Soni in that practice, but by April she was only a consultant. In July 2004 Anderson Macrae ceased to trade and Mr Soni then practised at Ansdell Street under the name Soni & Co. He also had an office at 10 Fenchurch Avenue, EC3, which he used for the same practice. In the course of 2005 he suggested to Ms Kherdin that they should start a partnership under the name Soni & Co at a new office in East London. The new office was at 381 Eastern Avenue, Gants Hill, Ilford, Essex. It opened for business in late April 2006. Mr Soni and Ms Kherdin entered into a partnership agreement on 30 June 2006, recording that the partnership business had begun on 24 April 2006.

Under the partnership agreement Ms Kherdin was obliged to devote her full time and attention to the partnership business during normal working hours. Mr Soni was to devote only such time as he thought fit to the partnership business and was to be free to engage in other solicitors’ or notaries’ practices (under the same or a similar name or otherwise) and was not required to account for any profits of any such business. Ms Kherdin was the only solicitor who worked at the Gants Hill office; she was assisted by Ms Nora Louzado who had previously been Mr Soni’s legal assistant at Ansdell Street between 2000 and 2003. The business carried on at the Gants Hill office was kept distinct from all other businesses in which Mr Soni was involved, with its own bank accounts, its own records, its own files and file procedures. There was no overlap between that business and those carried on at other offices under the name Soni & Co.

At about the same time (the details do not matter) Mr Soni also set up a separate partnership with a Ms Canarapen at another office, in Staines, also in the name Soni & Co.

Mr Soni had borrowed money from UCB on four previous occasions. In 1999 he and his wife obtained a loan from UCB secured on a mortgage of premises in Loughton. In 2003 they borrowed further money from UCB on a mortgage of 14A Campden Hill Court. In November 2003 he borrowed again from UCB on a mortgage of 15E Stafford Terrace, Kensington. Anderson Macrae had dealt with the conveyancing for the second and third loans. In August 2005 he borrowed again from UCB on a mortgage of 89 Sherbourne Court, in London. The conveyancing was done by Soni & Co of 23 Ansdell Street. Ms Kherdin, then a consultant with the firm, signed the documents addressed to UCB on this transaction, as did Mr Soni.

UCB was a centralised lender, with no branches. It specialised in self-certified residential mortgage lending. Its processes required compliance with various procedures, but they involved little human contact between borrower and lender. Central to its requirements was the role of the solicitor acting for UCB on the transaction who had to certify compliance with UCB’s requirements. The solicitor had to sign a certificate of title and send it to UCB with a covering letter. If the borrower was a solicitor and his practice was acting on the transaction, UCB required that the practice should be that of a partnership, and that the conveyancing work be carried out, and the certificate of title signed, by a partner other than the borrower. The practice had to be one which was on UCB’s panel of authorised firms.

Because of the earlier transactions with Mr Soni, Anderson Macrae had been on the panel and Soni & Co was on the panel, with the address 23 Ansdell Street and with its own unique panel reference number. However, the practice carried on at that address was that of Mr Soni as sole proprietor, not that of a firm with Mr Soni and one or more others as partners. The UCB panel did not include any other practice under the name Soni & Co, nor did it include either the Staines office address or the Gants Hill office address. If Mr Soni had nominated Soni & Co at the Gants Hill office to act for UCB in a transaction, UCB would not have accepted that without further enquiry.

The first of the five fraudulent transactions took place in May 2006. Mr Soni applied for a loan of £360,000 to assist with the purchase of Flat 6, 12 Egerton Gardens for £450,000. UCB agreed to lend £340,470 and instructed Soni & Co, at the Ansdell Street address, to act for it. On 18 May 2006 a letter was sent to UCB using a letterhead showing Soni & Co, with two addresses: 23 Ansdell Street and 10 Fenchurch Avenue, and two named partners, Mr Soni and Ms Kherdin. The accompanying certificate of title gave as the conveyancer’s name and address Soni & Co, at 23 Ansdell Street, and gave the name of Ms Kherdin as the authorised signatory, representing her as having signed the document. In fact Mr Soni forged her signature. In reliance on the letter and this certificate, UCB transferred £340,470 to a bank account in the name of Soni & Co, being one over which Mr Soni had sole control. No mortgage was executed in favour of UCB. The property was later mortgaged to another lender.

At that date the Gants Hill office was already in operation, but Ms Kherdin knew nothing about this transaction. The office at Ansdell Street was still in operation, under Mr Soni’s sole control. In July 2006 Mr Soni closed the Ansdell Street office and moved his sole practice to 4-5 Inverness Mews, London W2. It seems that the premises at Ansdell Street remained vacant for some time until they were re-let in February 2007 to a different business. Even after that Mr Soni was able to, and did, collect any post that came there for his solicitor’s business.

In August 2006 the second mortgage fraud took place. The pattern was identical and the documents were identical in all material respects. Soni & Co at 23 Ansdell Street was identified as the conveyancer and Ms Kherdin as the individual responsible. The certificate of title was in the same form except that it identified Ms Kherdin twice rather than only once, and it gave a DX address rather than a postal address for the practice. The covering letter was in the same form and on the same letterhead, despite the move from 23 Ansdell Street. The loan was £750,000.

In December 2006 the same process led to a loan of £400,000 in respect of Flat A, Stone House, 9 Weymouth Street, London W1. In February 2007 the process was repeated for a loan of £273,360 in respect of Flat B, Southwell House, 34 and 36 Egerton Gardens, London SW3, and in May 2007, in turn, for a loan of £432,000 in respect of Flat M, Stone House, 9 Weymouth Street. It is in relation to this last transaction that UCB’s separate ground of appeal on fact arises.

The judge held that a contract was formed, in each of the five cases, between UCB and Mr Soni, carrying on business as a sole practitioner, under the name Soni & Co, at 23 Ansdell Street. That was the reality of the position, but UCB did not understand it to be so, because they were told that the practice of Soni & Co at 23 Ansdell Street was not a sole practice but rather a partnership, consisting of Mr Soni and Ms Kherdin.

Ms Kherdin knew nothing of the representations made by Mr Soni to UCB that she was a partner with him in the practice at 23 Ansdell Street, nor that she was carrying out the conveyancing work and that she had signed the certificates of title.

From this summary it is easy to see that some of the requirements of section 14 are satisfied. Mr Soni did represent to UCB that Ms Kherdin was his partner in a partnership carrying on business under the name Soni & Co at 23 Ansdell Street. UCB relied on that representation, since if it had not been made they would not have dealt with Soni & Co and would not have made the loans. However, Ms Kherdin did not know of the actual representation made by Mr Soni to UCB (leaving aside the separate factual appeal), so it is necessary to show that she knowingly suffered herself to be represented as a partner in the “particular firm” of Soni & Co carrying on business at 23 Ansdell Street. I define the particular firm in that way because that is the firm that UCB thought it was dealing with, and the only firm with which, without more, it was willing to deal. (I will revert to that point more fully below.) Of course there was no such firm, in the sense of a partnership; there was only Mr Soni’s sole practice. But it is clear that the section can apply where there is no real partnership at all, but two or more persons are represented as carrying on business in partnership together, just as it can if there is a real partnership consisting of A and B, but C is held out as being one of the partners in that partnership.

In its Reply UCB specified the representations on which it relied as being made in the succession of five certificates of title, together with the covering letter in each case. It asserted that Ms Kherdin allowed herself to be represented as a partner in the “Soni & Co” with which UCB dealt. It asserted that the representations made by the letters and the certificates of title were that “Ms Kherdin was a partner in “Soni & Co” (and therefore in the “Soni & Co” with which [UCB] were dealing)”. As regards what she knew of and allowed to happen, it alleged that Ms Kherdin “customarily represented, or allowed to be represented, to all with whom she and any Soni & Co practice with which she was concerned [dealt], and particularly to mortgage lenders, that Soni & Co was the name of a partnership, which partnership practised from several offices and had [herself] and Mr Soni as partners”.

UCB was able to make good that last assertion to some extent. The disclosed documents included examples of letters written by Ms Kherdin to some parties (including one mortgage lender) on letterhead for Soni & Co which specified several offices including both 4-5 Inverness Mews and Gants Hill, and identified herself as well as Mr Soni as partners. The heading has the name Soni & Co at the top and under it the word “notaries”. Below that there are five printed lines. The first gives an 0845 telephone number, a website address, a fax number and an email address for enquiries. It seems that these served all the Soni & Co practices and offices. The second identified the “Bayswater Office” and stated the 4-5 Inverness Mews address, with its own DX address. The third specified the “City of London Office” at Fenchurch Avenue, with a separate DX address. The fourth identified the “Gants Hill Office” giving its address but no DX number. The last line gave the “Heathrow Office” with the address in Staines and again no stated DX number. At the bottom of the paper was a list of names, headed by “Partners” naming Mr Soni and Ms Kherdin.

The two examples of the use of this paper by Ms Kherdin had also (perhaps added as part of the word-processing of the particular letter) the words “Please reply to” giving a DX number of the Gants Hill office and separate telephone and fax numbers for it, as well as an email address for Ms Kherdin (at notary-soni.com, which was the pattern for the Soni & Co practices and the website address). At the end of each letter the signature was given as “Soni & Co Ilford Office”. The earliest example of this form of letter has the date 31 October 2006. UCB never received a letter in this form.

The judge considered this form of letter at paragraph 75 of his judgment. He said:

“75.

The clear impression created by the header and the footer is that there was one firm called Soni & Co which practised from a number of different addresses. There is nothing in the header, footer or body of the document to suggest that there was a number of different firms in existence. It seems to me that by that letter Ms Kherdin held herself out, or knowingly suffered herself to be held out, as a partner in either a single entity called Soni & Co or a number of different businesses operating from the addresses contained in that letter.”

I agree with that assessment. He went on at paragraph 76 to explain why this did not assist UCB, quite apart from their not having seen any such letter:

“76.

However, the fact that this may have amounted to a holding out in that particular instance does not persuade me that Ms Kherdin knew that Mr Soni was holding her out to the claimant as a partner in his sole practice. In this instance Ms Kherdin took care to ensure that her personal address and contact details were on the letter. She thereby sought to point the reader directly to her and her practice at Gants Hill. That is quite different from the notepaper used by Mr Soni in the fraudulent transactions in which he sought to conceal the existence of Gants Hill and the separate practice. I do not infer from this evidence that Ms Kherdin generally knew or authorised Mr Soni to hold her out to the outside world in general and the claimant in particular as a partner in his firm in Kensington.”

The evidence was unclear as to whether letters in the form which Ms Kherdin used from Gants Hill were also sent from the Bayswater office or any other office of Soni & Co. The judge made no finding on that. He did say that other forms of letterhead also existed, some of which did not show Ms Kherdin as a partner: see his paragraph 39. But the existence of this general form of letterhead would have made it, at least, possible that letters in that form could be sent to third parties from the other offices named, with appropriate added text to show to which address any reply should be sent. It did not, of course, allow for its use from 23 Ansdell Street, possibly because it may not have come into existence until after the move from Ansdell Street to 4-5 Inverness Mews. Subject to that point, it can be said that Ms Kherdin made the representation identified by the judge at the end of his paragraph 75, quoted at paragraph [25] above, and knew that others, including those practising at any of the other identified offices, might make the corresponding representation, to those to whom letters were sent using this form.

For UCB Mr Davidson submitted that this is sufficient. It shows that Ms Kherdin knowingly suffered herself to be represented to the outside world as a partner with Mr Soni “in either a single entity called Soni & Co or a number of different businesses operating from the addresses contained in that letter”. He argued that it matters not that UCB thought it was dealing with Soni & Co at 23 Ansdell Street, and that this address did not feature in this letterhead. In his contention, a solicitors’ practice is identified by its name, and its address is incidental and unnecessary for identification purposes, though it is necessary, of course, for purposes of communication.

As he put it, UCB was led to believe that there was a single business carried on under the name Soni & Co, by a firm consisting of Mr Soni and Ms Kherdin, and that this was the firm with which it was dealing. He relied on the letterhead which showed the addresses of four offices as a representation to the effect that there was such a business and such a firm, as the judge held. He also relied on evidence from Ms Kherdin that the use of the single name for the separate businesses was intended (at any rate by Mr Soni) so that each business might benefit indirectly from whatever goodwill might attach to the other businesses carried on under the same name: see paragraph 29 of the judgment. He argued that whereas UCB had to show what representation it relied on, and could not for that purpose use a representation which was not made to it (i.e. the use of a different letterhead), nevertheless the use of that other letterhead was relevant to what representations Ms Kherdin knowingly suffered to be made about her status. For that purpose, he said, the particular address or addresses were not material.

I cannot accept the proposition that addresses were irrelevant. For one thing it does not fit with UCB’s own attitude and procedures. It insisted on dealing only with practices which were on its panel of authorised conveyancers, and these were identified both by name and by address. Of course, a given practice might be authorised by reference to more than one address – maybe Soni & Co was authorised not only at 23 Ansdell Street but also at 10 Fenchurch Avenue. But UCB did not know of the Gants Hill address. If it had been asked to instruct Soni & Co at Gants Hill, it would have carried out enquiries to satisfy itself that it was appropriate to add that practice to its authorised list before giving such instructions.

No such issue arose, of course, because it was essential for Mr Soni, while holding Ms Kherdin out as being his partner at 23 Ansdell Street, to do all he could to avoid any contact between UCB and Ms Kherdin. Otherwise his fraud might be discovered before he had been able to obtain the loan from UCB. Accordingly, UCB was deliberately not told about the existence of the Gants Hill office.

Nor can I accept the argument that the representation which was made to UCB and on the faith of which they acted need not match the representation made, or knowingly suffered to be made, by Ms Kherdin. The section speaks of giving credit to the firm “on the faith of any such representation”, which takes one straight back to the representation referred to earlier in the section, namely that the apparent partner is a partner in the particular firm.

Thus, the representation made by Mr Soni to UCB was that Mr Soni and Ms Kherdin were partners together in a firm called Soni & Co practising at 23 Ansdell Street (and Fenchurch Avenue). The question is whether Ms Kherdin knowingly suffered that representation to be made. The judge identified the question correctly, in my view, when he said at paragraph 16 that UCB had to show that there was a representation to it that Ms Kherdin “was a partner in a particular firm, namely the firm that was instructed by” UCB. Mr Davidson submitted that this was wrong and that to include the words from “namely” was unjustified. I do not accept that contention. The representation has to be that the apparent partner is a partner in a firm, and the claimant has to give credit to that firm (or, as here, supposed firm) on the faith of that representation. It follows that the representation and the reliance must match one another. Since the claimant intends to deal with a particular firm, the representation has to be that the apparent partner is a partner in that firm.

For the reasons that I have given, in my judgment the “particular firm” in this case was a supposed (though non-existent) firm carrying on business under the name Soni & Co at 23 Ansdell Street, and consisting of Mr Soni and Ms Kherdin. Mr Soni’s representation to UCB was that Ms Kherdin was a partner in such a firm. So the question is whether she knowingly suffered that representation to be made.

Mr Davidson placed a good deal of reliance on the last words of section 14(1), from which it is clear that, so long as the apparent partner made or authorised or knowingly suffered the making of the representation in question, it is not necessary that he or she knew to whom it was made or communicated. In general terms that would be relevant if, for example, the apparent partner knew that he or she was shown as a partner on the firm’s letterhead. He or she would not have to be shown to have known to whom letters were sent using that letterhead. This might have been relevant in Nationwide Building Society v Lewis [1998] Ch 482, but for the fact that the society could not prove that it had relied on the form of the letterhead, on which an employee, described as a “salaried partner”, was shown as being a partner along with the man who was in truth the sole principal of the business.

Since Ms Kherdin did not know of or authorise the use of the particular form of letterhead that Mr Soni used for his letters to UCB in connection with the fraudulent transactions, this point does not assist UCB in the present case.

Mr Davidson also criticised the judge for asking the question whether Ms Kherdin authorised the making of the relevant representation, rather than whether she knowingly suffered it to be made. It seems to me that this is a semantic point of no substance. I am content to go on the basis that knowingly suffering a representation to be made, in this context, requires that the apparent partner knows of the making of the representation and, being able to prevent it being made or to correct it, does not do so. But, leaving aside the events of May 2007, there is nothing to show that Ms Kherdin knew of the making of the representations to UCB. In practice, therefore, for the judge to pose the question as whether she knew and authorised the making of the representations to UCB (as he did at paragraph 14) was not wrong on the facts of this case.

Thus, even though Ms Kherdin did make a representation, and knowingly suffered it to be made, such as the judge described at the end of his paragraph 75, namely that she was a partner with Mr Soni in either a single entity called Soni & Co or a number of different businesses operating from the four addresses identified in the general letterhead (not including 23 Ansdell Street), no such representation was made to UCB, and the representation that was made to UCB by Mr Soni was that she was a partner with him in a firm carrying on business as solicitors at 23 Ansdell Street under the name Soni & Co, and Fenchurch Avenue, but not anywhere else. That was not within the scope of the representation made and suffered to be made by Ms Kherdin, for at least two reasons. The first is that 23 Ansdell Street was not an address mentioned in the general letterhead – for good reason, namely that it had ceased to be used by Mr Soni for his sole practice by then. Secondly, the letterhead used for the fraudulent communications to UCB did not mention Gants Hill at all. Whatever else Ms Kherdin might be taken to have agreed to, or knowingly to have suffered, she did not accept, and would not have accepted, the use of a letterhead that referred to an obsolete address and that did not refer to her own office address at Gants Hill.

It follows that UCB did not give credit to Mr Soni (or to the supposed firm of Soni & Co at 23 Ansdell Street) on the faith of the representation which Ms Kherdin made, or authorised or knowingly suffered to be made, which was the representation in the form of the general letterhead (first used, so far as we know, in late October 2006), discussed by the judge at his paragraph 75. The representation on the faith of which it did give credit to Mr Soni, or to the supposed firm of Soni & Co at Ansdell Street, was the one which Mr Soni made, by the forged certificates of title and the covering letters, but those representations were not made, authorised or knowingly suffered by Ms Kherdin, and were different from those which she did make or knowingly suffer to be made. The requirements of section 14 are therefore not satisfied.

I turn to the distinct appeal on a question of fact. This concerns the last of the five transactions, the loan being made on 16 May 2007. UCB’s argument is that the judge was wrong to hold that Ms Kherdin did not know, on that day or the previous day, that Mr Soni had held her out to UCB as being his partner and as carrying out the conveyancing work on the transaction concerning Flat M, Stone House. It is said that, if she did know this, she had the opportunity to correct that misrepresentation directly to UCB before they parted with the advance to Mr Soni, and that therefore she knowingly suffered the making of the actual misrepresentation in that one instance.

The judge dealt with the facts in this regard at paragraphs 69 to 73 of his judgment. I can summarise them briefly. Mr Soni had given the reference NK for the conveyancing work on the transaction. UCB evidently knew of the 0845 telephone number which was used by Soni & Co generally, though not of the specific number for the Gants Hill office. In the afternoon of 15 May 2007 a Ms Wendy Jolley of UCB telephoned that number and asked to speak to “your reference NK”. The call was received and answered at the Fenchurch Avenue office. The telephonist knew who NK was and also knew, as it happens, that Ms Kherdin was unavailable because she had been at the Fenchurch Avenue office and was on her way back to Gants Hill. She took some details with a view to someone calling back to Ms Jolley later. It was explained as relating to an urgent completion, the name of the property being given and UCB’s reference for the transaction, as well as Mr Soni being identified as the borrower. UCB needed confirmation that an indemnity was in place before the loan was made the following day. The telephonist took Ms Jolley’s telephone number.

Next Emma Street, of Soni & Co at Fenchurch Avenue, sent a brief email addressed to Ms Kherdin, copied to Nora Louzado: “Wendy called from UCB Loan Homes they are releasing the funds for you for 16^th. Could you please call urgently”, giving the phone number. It was headed with the details of the property and UCB’s reference number. The copy in the appeal bundle was opened by Ms Louzado.

At the end of the sequence there is another email, the following day, from Ms Louzado to Mr Soni, with a copy to Ms Kherdin, headed “Your purchase” and details of the property: “Hi Pritesh. UCB have released monies to you today. UCB want from us a fax stating that suitable indemnity has been put in place.” UCB’s fax number is then given, the fax to be marked FOA Wendy and giving “your mortgage account number”.

None of that shows that Ms Kherdin took any part in the sequence of events. It can be inferred that someone from the Gants Hill office spoke to Ms Jolley at UCB at least once, after the first email and before the second, to identify what it was that was needed, so as to be able to pass it on to Mr Soni, with the relevant fax number.

Mr Davidson argued that Ms Kherdin must have become aware of the first email, and that from this enquiry she became aware that Mr Soni had held her out to UCB as acting on the conveyancing transaction for this loan. If she did become aware of that, she had the opportunity of telling UCB (Ms Jolley, on the stated phone number) that this was not correct. If she had done so, before UCB had released the loan money, it would not have parted with the money. This is only relevant to the last transaction.

Both Ms Kherdin and Ms Louzado gave evidence. We have their witness statements and the transcript of their cross-examination. Neither could remember the events, so what they had to say was limited to evidence of their normal practice and to reconstruction. The judge held, at paragraph 71, that Ms Louzado “took, or was given, responsibility for dealing with the email and took instructions concerning it from Mr Soni”. He said this at paragraph 70:

“I accept that Ms Kherdin would have remembered this exchange of emails if they had come to her attention because it appeared to concern personal transactions on the part of Mr Soni which she would have known that her office was not dealing with. I find that she did not become aware as a result of this email that Mr Soni had held her out to the claimant as a partner in the practice which had been retained by the claimant on this transaction or that she was the solicitor who would be conducting this transaction on the part of the claimant.”

In the course of paragraph 73 the judge recorded Ms Louzado’s evidence as being that she thought she would have mentioned the email to Ms Kherdin, would then have contacted Mr Soni and as a result of his instructions she would have contacted the claimant and found out their requirements for release of the funds which were being advanced. At the end of that paragraph he said:

“I find that this exchange did not lead Ms Kherdin to believe that she had been held out as being a partner in Mr Soni’s own practice or as handling the conveyancing transaction on behalf of the claimant. While the initial request to speak to “NK” raises concerns it is not [enough] of itself to satisfy me of the claimant’s case on this point.”

Of course, the only person to whom the request to speak to “reference NK” was made was the telephonist at Fenchurch Avenue. There is no basis for supposing that this was passed on to Ms Louzado or to Ms Kherdin. I can see that if Ms Kherdin had known that UCB had been given a reference NK in connection with the transaction, that could have rung an alarm bell in her mind. But she did not know of this aspect of the conversation between Ms Jolley and the telephonist.

Mr Davidson’s submission was that the judge’s factual findings as to what happened between the two emails are inconsistent with the evidence given to him. Ms Louzado said that she would have told Ms Kherdin of the first email, and Ms Kherdin accepted that, as the only solicitor in the office, it was for her to deal with such emails, from which it followed that she probably had read the incoming email. From the proposition that she had seen that email, he proceeded to the absence of any surprise at it on Ms Kherdin’s part, which itself is supported, he argued, by the fact that she did not recall it as such. Putting those points together he submitted that the right conclusion is not that which the judge drew (namely that the exchange had not come to her attention) but rather that this was consistent with her expectations, and therefore that she was content that her name should have been given to UCB as responsible for the conveyancing on the transaction.

This is an elaborate construct on a flimsy and insecure base. Given that Ms Kherdin had no reason to know that UCB had been given a reference NK as acting on the conveyancing, what is it in the email in from Emma Street that might put Ms Kherdin on notice that she has been held out to UCB as a partner of Mr Soni in what was in fact his sole practice, or that she was the person carrying out the conveyancing on behalf of UCB? As it seems to me there was nothing in the message, or its context, which is inconsistent with the judge’s conclusion that Ms Louzado opened the email (probably because Ms Kherdin had not yet got back to the office) and reported on it to her, possibly after having first spoken to Mr Soni about it. There is no reason to suppose that Ms Kherdin herself spoke to anyone at UCB. Therefore what she had to go on was only the incoming email and whatever (if anything) Ms Louzado passed on to her about her own communications with UCB and with Mr Soni.

Nothing in this gives me any reason to suppose that the judge’s conclusion was not fully justified as to what happened. Moreover it seems to me clear that this sequence of events did not give Ms Kherdin any reason to suppose that Mr Soni had made any false representations to UCB as to her status as his partner in the supposed Ansdell Street practice, or as to her responsibility for the conduct of the conveyancing.

In my judgment the judge’s conclusion on this aspect of the case is unimpeachable.

Those, therefore, are the reasons why I would dismiss the appeal both on the general point and on the separate factual point.

I agree. Mr Soni represented to UCB that he was practising at 23 Ansdell Street in partnership with Ms Kherdin, and that as his partner in the practice she had responsibility for the relevant conveyancing transactions. In truth, he was in sole practice at that address; and, on the judge’s findings, Ms Kherdin never suffered him to represent to UCB (or to a category including UCB) that she was his partner in the conduct of that practice. Despite Mr Davidson’s elegant presentation, his argument breaks down on the facts for the reasons more fully set out in the judgment of Lloyd LJ with which I entirely agree.

I also agree.