Woolwich Plc v Jones-Dunross & Anor

There is before me a Part 20 claim by Maureen Ombull (“Miss Ombull”) against Sherrards (a firm of solicitors) for damages for negligence arising out of a purported and invalid transfer and remortgage by her former husband Charles Jones-Dunross (“the Husband”) of their home Flat 8, 66 Oxford Gardens, Ladbrooke Grove, London W10 5HN (“the Property”). Miss Ombull was legally represented on this claim until on the 27^th May 2005 when she filed notice of acting in person.

In determining what are the relevant facts I have the benefit of the contemporary documents and witness statements of Miss Ombull and her oral evidence under cross-examination, the witness statement evidence under cross-examination of a valuer Mr Christopher Grove (“Mr Grove”) called by Sherrards and the two witness statements and the evidence under cross-examination of Mr John Brian (“Mr Brian”), a partner in Sherrards. I did not find Miss Ombull a satisfactory witness. The deep sense of injustice which she feels that she has suffered principally at the hands of the Husband has plainly affected both her judgment and her recollection. She freely blamed the solicitors who previously acted for her for any passage in her witness statements which did not assist her case or from which she wished to depart. I found both Mr Grove and Mr Brian totally credible and reliable witnesses.

Miss Ombull (who is now aged 67) met the Husband (who is now aged 53) in May 1991 and they married on the 25^th July 1992. The Husband’s name was Mustoo and the Claimant’s name accordingly became Mrs Mustoo. Prior to her marriage on the 7^th June 1990 Miss Ombull was granted a tenancy of the Property. After her marriage on the 3^rd August 1992 she surrendered that tenancy and a joint tenancy was granted in its place to the Husband and Miss Ombull.

On the 27^th November 1995 the Husband and Mr Ombull under the “Right to Buy Scheme” purchased the Property which was transferred to them to hold in law and equity as joint tenants. The full purchase price of £43,000 was advanced by the Abbey National Building Society (“the Abbey”) on the security of a first mortgage (“the Abbey Mortgage”).

In October 1997 the Husband and Miss Ombull separated and the Husband went to live with his parents at his parents’ home. They remained on friendly terms. In December 2000 discussions were pursued at the Property between Miss Ombull and the Husband about the possibility of carrying out improvements to the Property with monies raised on a mortgage of the Property and then selling the Property and dividing the proceeds between them, or possibly letting the Property and sharing the net rent received, and going their own ways.

On the 31^st January 2001 the Husband executed a statutory declaration changing his name from Mustoo to Jones-Dunross.

The Husband instructed Mr John Charcol (“Mr Charcol”) as mortgage broker to obtain the necessary funder for the commercial venture and Mr Charcol found the Woolwich Plc (“the Woolwich”) (which is the claimant in the action). On the 31^st January 2001 the Husband applied to the Woolwich for a “Buy to Let” mortgage of £120,000 to repay the Abbey Mortgage and to pay for refurbishment. On the 20^th February 2001 the Husband stayed at the Property and on the morning of the 21^st February 2001 on the instructions of Mr Charcol, a valuer Mr Christopher Grove (“Mr Grove”) attended at the Property to make a valuation for the Woolwich. Miss Ombull in her evidence says that the visit took place on the 28^th and not the 21^st February 2001, but this is contradicted by Mr Grove who produced his contemporary notes. I have no doubt that the visit took place on the 21^st February 2001. Miss Ombull in her evidence to me says that she knew nothing of any arrangements for the visit and only learnt of the visit when by chance she saw Mr Grove when he was leaving after he had been let in by the Husband. But in paragraph 14 of her first witness statement dated the 21^st July 2003 she said that on the night before the visit the Husband told her that the valuer was coming the following morning. I am fully satisfied that Miss Ombull knew prior to the visit that the valuer was coming to value the Property for the purpose of a loan to be secured on the Property to finance the improvements and she was in agreement that the visit should take place. She knew on the occasion of the visit, if not before, that the valuation was being made for the Woolwich, for she says so in the same paragraph of her first witness statement. On the 23^rd February 2003 Mr Grove made a valuation of the Property at £250,000.

By the 28^th February 2001, Miss Ombull became anxious about the financial arrangements that the Husband might make without reference to her. She accordingly wrote to the Abbey informing it of the fact that her husband had changed his name by deed poll to his present name and was carrying on correspondence regarding the proposed remortgage from his parents’ home and she required the Abbey to be party to no financial transaction with him without reference to her.

On the 13^th March 2001 the Woolwich made a mortgage offer of £120,000 to the Husband in his new name and retained Sherrards as its solicitors on the transaction. By letters to the Husband dated the 16^th March and the 3^rd April 2001 Sherrards made plain to the Husband that they only acted on the transaction for the Woolwich. Sherrards on the 19^th April 2001 made their report on title to the Woolwich.

The transaction required and involved the transfer of the Property from the Claimant and the Husband to the Husband alone, a mortgage executed by the Husband to the Woolwich and a Letter of Consent consenting to the transfer signed by the Claimant. The Woolwich sent the forms of each for execution to the Husband. The Husband provided to Sherrards the Transfer executed by the Husband with the forged signature of the Claimant purportedly witnessed by a chartered accountant, the mortgage to the Woolwich executed by the Husband (“the Woolwich Mortgage”) and the Letter of Consent with the forged consent of the Claimant in the name of Jones-Dunross.

On the 19^th April 2001 Sherrards wrote to the Abbey asking for a redemption figure. The Abbey provided the figure, but notwithstanding the Claimant’s letter dated the 28^th February 2001 gave no indication to Sherrards that anything was amiss. In the belief that the Claimant had indeed duly executed the Transfer and signed the Letter of Consent on the 25^th April 2001, the Woolwich (by Sherrards) completed the transaction registering the Transfer and the Woolwich Mortgage at HM Land Registry and made the advance of £120,000 out of which the £43,308 due to the Abbey under the Abbey Mortgage was repaid to the Abbey and the sum of £76,757 (representing the balance less costs) was paid to the Husband’s account with the Woolwich.

The Husband first told the Claimant that he had completed the Woolwich Mortgage forging her signature on the 5^th May 2001. The Claimant objected and complained to Sherrards on the 8^th May 2001. In a note of the telephone conversation Mr Brian recorded the Claimant as saying that the valuer had told her that Mr Charcol was arranging a Woolwich mortgage. Sherrards immediately contacted the Woolwich Fraud Department. The Woolwich managed to freeze £69,353.92 of the advance made, which was still in the Husband’s account with the Woolwich, for the Husband had only withdrawn £7,340.92 from that account. On the 9^th May 2001 Mr Brian sent an internal memorandum to a partner as follows:

“It is clear that on the negligence front we did not obtain either (a) evidence of identity of Mrs Mustoo nor (b) evidence of her change of name to Jones-Dunross. Perhaps we could have a word regarding reporting this matter to our insurers.”

The Claimant reported the Husband’s forgery to the police and a prosecution was launched and the criminal trial was due to take place on the 25^th March 2002 at which the Claimant was to be the prosecution’s key witness. But on or about the 21^st March 2002 (as is plain though it is not accepted by the Claimant) a deal was done under which the Husband agreed to transfer (and executed a transfer of) his half beneficial interest in the Property to the Claimant and the Claimant declined to give evidence at the criminal trial. The criminal trial was aborted.

On the 20^th May 2003 the Woolwich commenced proceedings against the Husband and the Claimant. The Woolwich accepted that the Transfer of the Property to the Husband was void and that the Woolwich Mortgage was void as against the Claimant, but the Woolwich maintained entitlement by way of subrogation to the Abbey Mortgage and to a charge on the Husband’s beneficial half interest in the Property to secure the balance of the loan made to the Husband. The Woolwich also sought (in right of its entitlement to the Abbey Mortgage) possession for the purposes of the sale of the Property. The Claimant challenged this entitlement.

On the 12^th September 2003 in the course of the interlocutory stages in the action the Claimant made the Part 20 Claim against Sherrards which is now before me.

On the 7^th January 2004 the Claimant obtained a decree nisi against the Husband which was made absolute on the 12^th March 2004.

On the 6^th April 2004 Master Bowman gave judgment against the Husband and the Claimant in favour of the Woolwich upholding its entitlement by way of subrogation to the Abbey Mortgage, the charge on the Husband’s beneficial half interest and possession and his order giving effect to his judgment is dated the 18^th May 2004.

Miss Ombull’s claim is that Sherrards acted negligently and in breach of duty to her in proceeding with registering the Transfer of the Property from the Husband and the Claimant to the Husband and the Woolwich Mortgage and thereby occasioned loss and damages to the Claimant.

In my judgment, notwithstanding the suggestion to the contrary in a letter dated the 17^th October 2001 written by the Abbey (which did not know the facts) to the Claimant, Sherrards was at all times acting for the Woolwich alone. In acting as they did , they had no reason to believe that anything was otherwise than it appeared to be. The Transfer appeared to be duly executed and witnessed and likewise the Letter of Consent appeared to be duly signed. The circumstances can justify no imposition of a duty of care to Miss Ombull or any finding of any breach of such duty. The cautionary note dated the 9^th May 2001 displayed a sensible concern on this score, but can establish neither duty nor breach.

In any event Miss Ombull suffered no loss. The transaction with the Woolwich in no way affected any interest, legal or equitable, of hers in the Property. Both remained as before. That was accepted by the Woolwich from the beginning and held by Master Bowman. So far as she incurred costs and liability for costs in the proceedings before Master Bowman, that was because she maintained unsuccessful claims in those proceedings that her husband only had a 28% beneficial interest (and not a 50% beneficial interest) and that the Husband’s beneficial interest was transferred to her free from any charge to the Woolwich and that an order for possession should not be made.

The Claimant’s lawyers in drafting her claim recognised the difficulties facing her in proving damage or loss and accordingly framed her claim as for the loss of a chance to obtain an order in ancillary proceedings on a divorce for the transfer to her of the Husband’s full equitable interest free from any charge. But this is totally unreal. The Claimant never did commence divorce proceedings until long after the date of transaction. At that date she had in mind no such claim and nor reasonably could Sherrards What she and the Husband had arranged and had in mind at all times was a sale of the Property with equal division of the net proceeds of sale. This is what occurred. Indeed after the fraud and because of the fraud, the Husband gave the Claimant his half interest to which she had no entitlement.

In my judgment, whilst no doubt the Claimant was sorely wronged by the Husband, she has no claim against Sherrards and this claim must be dismissed.