Pulvers (a firm) v Chan & Ors

The Claimant is a firm of solicitors, Pulvers. In the period relevant for the purposes of these proceedings, Pulvers was a firm with two partners, Mr Alan R Pulver and a Mr Goldman. Before and after the relevant period, the practice was that of a sole practitioner, Mr Pulver. Mr Pulver qualified as a solicitor in 1959 and commenced practice as a sole practitioner under the name Alan R Pulver & Co. In the late 1980s, he changed the name of the practice to its present name, Pulvers. At the times which are material to these proceedings, Pulvers practised from an address in Watford and later removed to another address in Watford. Mr Pulver has always undertaken conveyancing work, both residential and commercial. From time to time, he has employed others to run or manage the domestic conveyancing department of Pulvers.

The First Defendant is a Mr Nevil Chan. Mr Chan has been described as a mortgage broker. Mr Chan has been served with the proceedings but has taken no active part in them. Summary judgment was given against Mr Chan on the 18^th January 2006. I was told by Mary West (the Ninth Defendant) that Mr Chan did in fact attend the hearing by sitting in the public area of the court but he did not make himself known to the court and did not take any part in the proceedings.

The Second Defendant is Mr David Endean. Mr Endean served a defence and appeared in person at the trial.

The Third Defendant is a Mr John Farmer. The Claimant has been unable to locate Mr Farmer and accordingly he has not been served with these proceedings.

The Fourth Defendant is Miss Susan Hooker. Miss Hooker is the domestic partner of the Second Defendant, Mr Endean. Miss Hooker served a defence and Mr Endean appeared on her behalf at the hearing. Miss Hooker did not attend the hearing and did not give evidence.

The Fifth Defendant is Mr Paul Howell. Mr Howell served a defence and appeared at the hearing and gave evidence although he was not able to stay for the entirety of the hearing.

The Sixth Defendant is Mr John Rose. The Claimant could not locate Mr Rose and he has not been served.

The Seventh Defendant is a Mr John Sinclair. Mr Sinclair has been served with these proceedings but has not taken an active part in them. He is the subject of a summary judgment dated 18^th January 2006. As will be seen, Mr Sinclair either directly or through various companies which he controlled, or acting through the agency of others, has been principally responsible for the matters complained of by the Claimant in these proceedings.

The Eighth Defendant is a Mr Ronald St Leger. The Claimant could not locate Mr St Leger and he has not been served.

The Ninth Defendant is Mary West. Mary West has filed a defence and has appeared in person at the trial and has given evidence. At the material times, Miss West was an employee of the Claimant dealing with domestic conveyancing and has been involved in all of the matters now complained of by the Claimant in these proceedings.

The Tenth Defendant is Cavendish Finance Limited. This company has been served with the proceedings but has not taken an active part in them. It is the subject of a summary judgment dated 18^th January 2006. Cavendish Finance Limited was incorporated on the 15^th July 2002 and dissolved on the 5^th September 2006. It was wholly owned by Mr Sinclair. Mr Sinclair was the sole director of this company and the company secretary was Mr Howell.

The Eleventh Defendant is Cosec Facilities Limited. This company has been served but has not taken an active part in the proceedings. It is the subject of a summary judgment dated 18^th January 2006. This company was incorporated on 12^th January 2001 and dissolved on 11^th April 2006. The single issued share was owned, prior to September 2003, by Tracey Whale and from September 2003 by John Whale. The evidence at the trial was that John Whale was an alias for John Sinclair although I note that the various company documents give a date of birth for John Whale which is different from the date of birth for John Sinclair. Tracey Whale was the domestic partner of John Whale/John Sinclair. John Whale was a director of this company.

The Twelfth Defendant is Premium Finance Limited. This company has been served but has not taken an active part in the proceedings. It is the subject of a summary judgment dated 18^th January 2006. This company was incorporated on 20^th April 1999 and dissolved on 24^th April 2007. Mr Sinclair held all of the issued shares in the company. John Sinclair was a director of the company as was Mr Howell.

The Thirteenth Defendant is UK Direct Limited. This company has been served with these proceedings but has not taken an active part in them. An application for summary judgment was made against this company but was not pursued as it was dissolved prior to the hearing of that application. The company was incorporated on 23^rd February 2000 and dissolved on 22^nd November 2005. Cosec Facilities Limited owned all of the shares in this company. Mr Whale was a director of this company.

The Fourteenth Defendant is Jack Thomas Doughty. He was served with the proceedings but did not take any part in them until after the trial had begun. At that time, Mr Jack Thomas Doughty appears to have gone to a firm of solicitors for legal advice and during the hearing, those solicitors served an affidavit from Jack Thomas Doughty dated 13^th July 2007. The affidavit was served under cover of a letter stating that Jack Thomas Doughty would not attend the hearing and would not be represented at court. It was stated that he was “unable to attend at the hearing….due to personal reasons” but no indication was given as to what these reasons were.

The Fifteenth Defendant is James Doughty, who is the brother of Jack Thomas Doughty. James Doughty’s position in relation to procedural matters is the same in all respects as that of Jack Thomas Doughty. James Doughty’s affidavit is also dated 13^th July 2007.

The Sixteenth Defendant is James Knight. He has been served with the proceedings but not has taken any active part in them.

The Seventeenth Defendant is Deborah Pearman. She has not been served with the proceedings.

I ought now to describe the position of Mary West in a little more detail. Mary West is her maiden name and is the name by which she was known during the period she was employed by Pulvers. Miss West was at one time married to a Mr Francis and apparently used her married name, Mary Francis. For a short time, apparently for some limited purposes, she used the name Mary Laux, this surname being the maiden name of her mother. The marriage with Mr Francis was dissolved and Mary West married a Mr Langton. She used the name Mary Langton when she was employed by an earlier employer, Galbraith & Co. I understand that she remains married to Mr Langton but, as I have stated, whilst she was employed by Pulvers she used the name Mary West and that is the name used in these proceedings.

Mary West has been employed as a conveyancer for many years. Her C.V. refers to her employment in 1987 to 1994 by a firm of solicitors in Northwood when she appears to have dealt with all aspects of domestic conveyancing. Between 1994 to 1996, she worked for a firm of solicitors in Harrow dealing with all usual aspects of residential conveyancing. From 1996 to about 1998, she worked for Galbraith & Co in Pinner dealing with all forms of residential conveyancing. She also did a more limited amount of commercial conveyancing. From 1998 to 2001, Mary West worked as a conveyancer for Curry Popeck in Kenton. In March 2001, Mary West was engaged by Pulvers as a conveyancer. Her letter of appointment referred to her running Pulvers’ domestic conveyancing department. Miss West’s formal qualifications as a conveyancer are that she passed Part I of the Institute of Legal Executives examination on conveyancing and, apparently, took some of that Institute’s exams for Part II.

The evidence differed as to Miss West’s capabilities as a conveyancer. Mr Pulver’s evidence, at any rate as to the initial period, praised her abilities as a conveyancer. Miss West’s evidence tended to minimise her abilities as a conveyancer. Miss West stated that she needed to be supervised when she was at Pulvers although it is clear that she had acted as a conveyancer without any significant supervision for many years before joining Pulvers. Miss West’s evidence also emphasised her lack of discipline and commitment in carrying out her conveyancing duties and she described how her files were a mess most of the time.

In the first two years following Miss West’s employment, Mr Pulver appears to have been satisfied with Miss West’s work as a conveyancer. Then he began to receive complaints about her failure to return telephone calls from clients. These clients’ complaints led to a monitoring visit from the Law Society in February 2004. The Law Society identified some particular issues in relation to Miss West’s files. These included: a lack of attendance notes, a minimal amount of letters written to clients, complaints by clients about failure to return telephone calls, delays in dealing with post completion matters (including a failure to register a transaction), poor housekeeping, poor state of files, poor treatment of monies held in the client account and a lack of evidence on some files of identification checks. The Law Society recommended that Pulvers supervise Miss West to a much greater extent than had previously happened. Mr Pulver states that he took the advice of the Law Society seriously and he adopted the supervision procedures it had recommended. Miss West produced a number of memoranda from the period February 2004 to May 2004 which show that Mr Pulver was supervising Miss West’s work to some extent. The supervision dealt with outgoing mail and incoming mail and also unanswered telephone calls from clients. In May 2004, Mr Pulver sent to Miss West highly critical memoranda dealing with her work. On the 24^th May 2004, he wrote in one memorandum:

“I really cannot understand how you can work in such a muddle”.

In a second memorandum of the same day he referred to:

“A total lack of attention to detail and to your work generally”.

He also referred to the position fast becoming intolerable.

In June 2004, Miss West gave notice of her intention to leave Pulvers. Mr Pulver accepted her notice but asked if she would remain in her post until he found a replacement. Mr Pulver appointed a Miss Pollock to replace Miss West and Miss Pollock took up her employment with Pulvers on 18^th October 2004. Miss Pollock was a solicitor and was in charge of the domestic conveyancing department and Miss West continued to work under her. Mr Pulver said he continued personally to supervise Miss West’s work. He received complaints from building societies and banks which indicated that transactions had not been properly completed by registration at the Land Registry. Mr Pulver stated that it never crossed his mind that Mary West was guilty of any dishonesty or impropriety. He trusted her completely. However, in March 2005, his attention was drawn to a transaction (not one of the ones the subject of these proceedings) which alerted Mr Pulver to glaring omissions in Miss West’s work. He asked her to leave with effect from the 18^th April 2005 and in fact she left her employment with Pulvers on 1^st April 2005.

As will be seen, it is necessary to form a view about Mary West’s honesty in relation to the transactions with which she was involved and which are relevant to these proceedings. For that purpose, I will examine the relevant transactions and, in the course of doing so, I will indicate in each case what are my provisional conclusions as to the knowledge of, and the honesty of, Mary West in respect of them. However, it is also necessary to consider a number of more general considerations as to her honesty and it is not possible to do that as one goes through the detail of the many transactions. Accordingly, after I have reached my provisional conclusions about her involvement in relation to each transaction, it will be necessary to consider the more general matters which are relevant and then to stand back to consider the evidence in the round in order to reach a final conclusion.

The claims in this case arise out of alleged mortgage fraud. In more than 20 transactions, which I will have to examine below (not all of which are the subject of a formal claim), a building society or a bank advanced money to a borrower. In each case, the lender did so in the belief that repayment of the loan would be secured on a residential property which was worth comfortably more than the amount of the loan. In each case, the lender commissioned a valuation of the property being put forward as security. This was usually represented by the borrower to be a property which the borrower was proposing to buy with the assistance of the loan. In some cases, the borrower represented that he already owned the property but it was subject to a mortgage which he wished to redeem with the assistance of the new loan. In order for the lender to advance the money to a borrower, the lender would need to be satisfied that the borrower would have good title to the property which was the subject of the valuation and which would form the security for repayment of the loan. In order to protect its interests, the lender instructed a firm of solicitors to act for it and to certify the borrower’s proposed title (or actual title) to the property to be the subject of the security. In accordance with normal practice, the lender instructed the firm of solicitors who were acting for the borrower. The lender needed to have a certificate of title from the solicitors before paying the amount of the advance to those solicitors. In each case, the solicitors gave a certificate of title that satisfied the lender. The lender then advanced the amount of the loan to the solicitors to hold the same on trust for the lender and to be released for the benefit of the borrower (to assist with the purchase or the re-mortgage in question) upon the solicitors completing the transaction and, in particular, obtaining a valid charge over the property in question to secure the repayment of the loan.

In each case which is the subject of the claim in these proceedings, Pulvers were the solicitors instructed by the lender. In each case, the transaction was handled by Mary West. In each case, the draft certificate of title was prepared by Mary West and in most cases signed by her. In each case, the lender advanced the money which was paid into Pulvers’ client account. In each case, the lender did not get the security which it had been represented to the lender it would get. In most (but not all) cases, the lender eventually obtained a charge but the property charged was not the entirety of the property which it had been represented would be secured. In the worst cases, the charge ultimately granted was of a small part only of the property intended to be secured and was of limited value.

In each case, it is said that the lender was deceived. In each case, the lender has intimated an intention to claim compensation for its losses from Pulvers. Pulvers (or, more accurately, its insurers) accepts that it is liable to compensate the lenders. The lenders have not yet brought any proceedings against Pulvers. The amount of compensation payable to the lenders has not been agreed or determined.

Pulvers has now brought these proceedings against the Defendants referred to above. Pulvers’ claim is put on various grounds. The claim on the facts is that the various Defendants were parties to the various acts of deceit practised on the lenders. It is said that Mr Sinclair was behind each of the frauds. It is said that Mary West was involved in each of the frauds and that she conspired with Mr Sinclair to commit the frauds. It is said that this conspiracy injured Pulvers as well as the lenders and Pulvers can directly sue Mr Sinclair and Mary West. As regards the other Defendants, the claims against them are confined to the transactions in which they participated.

It is also said that the monies advanced by the lenders which were paid out by Pulvers to various recipients were paid out by reason of Pulvers’ mistaken belief that the recipients were entitled to the monies, when they were not entitled. It is said that the monies so received are now recoverable by Pulvers as money had and received by the recipient. It is also said that the monies in Pulvers’ client account were trust monies and Pulvers was the trustee. The monies were paid out in breach of trust. The recipient of the monies is liable in equity by reason of his knowing receipt of monies paid in breach of trust. Others who did not receive monies in this way are liable for dishonestly procuring or assisting the breach of trust. It is said that the claims in equity for knowing receipt or dishonest assistance can be brought by Pulvers as trustee.

It is also said that the various lenders have claims against the various Defendants for the tortious conspiracy and in equity for knowing receipt of trust monies and dishonest assistance in a breach of trust. As Pulvers and the various Defendants are all liable to the various lenders, then Pulvers has a claim to a contribution or indemnity from the various Defendants under the Civil Liability (Contribution) Act 1978.

The circumstances in which a conveyancer can act for both the lender and the borrower in the same transaction are the subject of rule 6 of the Solicitors’ Practice Rules 1990. In many cases, it is not contrary to those Practice Rules for a solicitor to act for both lender and borrower. Rule 6 also deals with the form of the certificate of title which is to be provided by the solicitor to the lender. The appendix to the rule sets out the long form certificate. The certificate relates to a number of specific matters. One concerns the identity of the borrower where the conveyancer is to certify that he has checked the identity of the borrower, if instructed to do so. The conveyancer is also to certify that he has investigated the title to the property and that the borrower will have a good and marketable title free from prior mortgages or charges and from onerous encumbrances. The conveyancer also has to certify that he has compared the extent of the property with the extent of the property in any valuations supplied to the conveyancer and that there are no material discrepancies. The certificate also concerns the existence of buildings insurance arranged on behalf of the borrower. The conveyancer also undertakes to obtain a duly executed mortgage prior to the mortgage advance being used to pay the seller or any earlier lender whose charge has been redeemed. The conveyancer also undertakes to complete the mortgage and arrange for registration at the Land Registry within the period of protection afforded by the relevant Land Registry searches. The conveyancer undertakes that he will not part with the mortgage advance if it comes to his notice prior to completion that a property will at completion be occupied in whole or in part otherwise than in accordance with the lender’s instructions. The conveyancer also undertakes that he will not use the mortgage advance until satisfied that all existing mortgages on the relevant property are discharged and, indeed, other mortgages on other identified properties have been discharged.

In 1991, the Law Society issued a “Green Card” by way of a warning as to property fraud. The Green Card was revised in January 1996 and updated in February 1999. The Green Card lists a number of signs that a solicitor should watch out for to enable him to spot a potential property fraud. These include borrowers introduced by a broker or estate agent not known to the solicitor, the remission of the proceeds of sale to someone other than the seller, the misrepresentation of the amount of the purchase price and other unusual transactions. Unusual transactions include the case of a client with a current mortgage on two or more properties, a client using an alias and a client reselling property at a substantial profit for which no explanation has been provided. The Green Card gives advice as to the steps which might be taken to minimise the risk of fraud. These include checks as to the identity and bona fides of the client and firms of solicitors not known to the conveyancer. The Green Card advises that the conveyancer should not witness pre-signed documentation.

The Council of Mortgage Lenders sends to conveyancers the CML Lenders’ Handbook. The Handbook was prepared in July 1999 and revised in October 2003. For present purposes, it is sufficient to refer to the 1999 version. The Handbook provides solicitors and licensed conveyancers with comprehensive instructions setting out what lenders expect conveyancers to do when acting for them. The Handbook states that it complies with rule 6(3) of the Solicitors’ Practice Rules 1990. The Handbook was prepared by seven major lenders together with the CML, in close consultation with the Law Society. The Handbook is divided into two parts. Part I sets out the main instructions and guidance which must be followed by conveyancers. Part II details each lender’s specific requirements which arise from those instructions. The Handbook requires the conveyancer to follow the guidance in the Law Society’s Green Card. The Handbook deals with the requirements to be met by the conveyancer in relation to identification of the signatory of any document and, indeed, the solicitors or licensed conveyancers acting for the other party to the transaction. If the conveyancer is sent, or is required to obtain, a copy of a valuation report provided to the lender, then the conveyancer must take reasonable steps to verify that there are no discrepancies between the description of the property as valued and the title and other documents which a reasonably competent conveyancer should obtain. The conveyancer is required to tell the lender if the owner or registered proprietor of the property has been registered for less than six months, save in specified cases. The Handbook deals with the searches and reports which are to be carried out by the conveyancer. The Handbook requires the title to any property to be a good and marketable title vested in the borrower. The Handbook states that the borrower is to obtain the first legal charge and the conveyancer is to ask the borrower how the balance of the purchase price is being provided with consequential duties to the lender. The Handbook states that the loan to the borrower will not be made until the lender has received the conveyancer’s certificate of title. The boundaries of the property must accord with the information given in the valuation report, if this is provided to the conveyancer. The purchase price for the property must be the same as set out in the instructions to the conveyancer. The submission by the conveyancer of the certificate of title will be treated as a request for the lender to release the mortgage advance to the conveyancer. The monies released to the conveyancer are held on trust for the lender until completion. The conveyancer is only authorised to release the monies when the conveyancer holds sufficient funds to complete the purchase of the property and to pay all fees in order to perfect the securities first legal mortgage. The conveyancer must register the mortgage at the Land Registry within the relevant priority period for doing so.

It is necessary to describe the sources of the documents which are before the court relating to the transactions which need to be considered. If the court had the whole of Pulvers’ file relating to a transaction, then it would normally be possible to come to a confident conclusion as to the various steps taken in that transaction and as to the information which Miss West in particular had at various stages in the transaction. However, in nearly every case, the Pulvers’ file is not available in a complete form. In some cases, when Pulvers began to investigate these matters, it found that there was no relevant file; in other cases it found that the file existed but appeared to be missing many documents which one would have expected to find. Since that time, Pulvers have obtained many more documents relating to the individual transactions either by obtaining them from the Land Registry or from the files of the lenders involved in the individual transactions. Even where Pulvers have obtained documents from the Land Registry or from the lenders, it has not necessarily been the case that Pulvers have been able to reconstitute the original file as it would have appeared in the hands of Miss West when she was handling the transaction. The result is that the court does not always have a complete picture as to the transaction as it unfolded. Further, the court cannot assume just because a document is not in the file that that document never existed; for example, just because the documents as presented to the court do not include certain searches, it does not necessarily follow that the searches were not carried out.

One class of document which does exist in relation to each transaction which falls to be examined is Pulvers’ ledger which shows the state of the client account relating to the transaction in question. It will be necessary in due course to describe the contents of the various ledger accounts. Before doing so, it may be useful to describe one’s expectations of what would appear in a ledger account for a typical purchase transaction and for a typical re-mortgage transaction.

With a typical purchase transaction, where the purchaser is borrowing part of the purchase price, one would expect to see that the first entry or an early entry in the ledger is money paid by the client to the firm on account of fees and disbursements. Next one would expect to see various disbursements for searches etc. In a typical case, one would expect to see a deposit paid on exchange of contracts with the result that the monies to be used for the deposit would be provided by the client to the firm and those monies would then be paid out to the seller’s conveyancer by way of deposit. As one got nearer to the time for completion, one would expect to see the completion monies arriving in the account. In a typical case, these monies would come from two sources; one source would be the client and the other would be the monies to be advanced on mortgage by the lender. One would then expect to see the completion monies paid out to the seller’s conveyancer.

In the case of a re-mortgage transaction, one would expect to see, at an early stage, the receipt by the firm of monies from the client on account of fees and disbursements. Next the account would show various disbursements on searches etc. There would be no deposit monies as there would not have been a contract. The re-mortgage would involve monies coming in from the new lender and paid out to the former lender a way of redemption of the former charge.

The allegations made by Pulvers against the various defendants are serious and include allegations of fraud and dishonesty. I have borne in mind the guidance given by Lord Nicholls in Re: H (minors) [1996] A C 563 at 586 to 587. The standard of proof in the present case is the usual civil standard, namely, that facts are to be proved on the balance of probabilities. The balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind, as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence. Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation. This does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event is itself a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established. This approach provides a means by which the balance of probability standard can accommodate an instinctive feeling that even in civil proceedings a court should be more sure before finding serious allegations proved than when deciding less serious or trivial matters.

The first transaction I will deal with concerns 23 Nelmes Road, Emerson Park, Hornchurch, Essex and, in particular, the advance made by the Halifax Building Society to Tracey Whale in relation to that property. The property at 23 Nelmes Road was registered at the Land Registry under title number NGL113835. The property was a substantial detached house and, in particular, included two garages which appeared to have an access to the side of the property in Herbert Road. In 1999 and until 25^th August 2000, title number NGL113835 included the house and grounds and, in particular, the two garages with the side entrance. Tracey Whale and John Whale were registered as proprietors of title number NGL113835 in March 1999. Also in March 1999, Tracey Whale and John Whale had granted a charge of the property in favour of Cheltenham & Gloucester Plc. The documents suggest that this charge secured two advances made by Cheltenham & Gloucester to Tracey Whale and John Whale the first being for the sum of £228,000 and the second being for the sum of £65,000.

On the 12^th June 2000, Tracey Whale applied to the Halifax for a mortgage. She gave her present address as 58 Herbert Road and the property to be the subject of the mortgage was described as 23 Nelmes Road. Tracey Whale stated that she did not currently own or occupy 23 Nelmes Road but that she would personally use 23 Nelmes Road for residential purposes after she entered into the mortgage. The property at 23 Nelmes Road was described as being a detached bungalow with three garages. The three garages included, therefore, the two garages with a side entry from Herbert Road. The application stated that the intended purchase price was £480,000 and that Tracey Whale wished to borrow £280,000 with the balance coming from the sale of Tracey Whale’s existing property. The application stated that Tracey Whale’s solicitors were Curry Popeck with the person acting being Mary Langton, that is, Mary West.

The Halifax obtained a valuer’s report and valuation for mortgage purposes. The report is dated 26^th June 2000. The report describes the property as being the detached house and garden with three garages at 23 Nelmes Road. The property was valued at £480,000. The Halifax was prepared to lend £280,000 to Tracey Whale to enable her to purchase 23 Nelmes Road for £480,000. On 28^th June 2000, the Halifax instructed Curry Popeck to act for it in relation to the proposed mortgage of 23 Nelmes Road. The person acting was Mary Langton/Mary West. The letter of instruction referred to the Lenders’ Handbook. The property was described as being the freehold bungalow and three garages at 23 Nelmes Road for a purchase price of £480,000 with a mortgage advance of £280,000. The mortgage instructions contain special conditions relating to the sale of other property and the insurance of the property intended to be mortgaged. The conveyancer was asked to use the form of certificate of title provided by the Halifax. The Halifax stated that the conveyancer must not release the mortgage advance unless the conveyancer was holding the mortgage deed properly executed by the borrower and unless the conveyancer complied with all the instructions including the obligations in the Lenders’ Handbook.

On the 29^th June 2000, the Halifax sent to Curry Popeck (for the attention of Mary Langton/Mary West) the valuation report of 26^th June 2000. Curry Popeck were asked to check that the valuer’s assumptions were correct.

On the 30^th June 2000, Mary Langton/Mary West wrote to Tracey Whale confirming her instructions to act on the purchase of 23 Nelmes Road for £480,000. On the same day, Curry Popeck sent Tracey Whale a client care letter stating that the conveyancer at Curry Popeck would be Mary Langton.

The Curry Popeck ledger relating to this transaction describes the transaction as the purchase of 23 Nelmes Road. The first entry in the ledger is dated 5^th July 2000 which shows the mortgage monies from the Halifax in the sum of £280,000 arriving in the client account. There is no sign of Tracey Whale paying anything on account of fees and disbursements although the client care letter had asked for £250 for this purpose. Before the Halifax paid £280,000 into the client account, there must have been a certificate of title provided by Curry Popeck but no copy was available to be put in evidence. The ledger shows small sums being disbursed although it was not clear what these small sums were for. However, a sum in excess of £272,000 was paid to Cubitt Hammond on 6^th July 2000. No explanation was given as to who Cubitt Hammond were. The documents include a form DS1 whereby Cheltenham & Gloucester acknowledged that its charge on 23 Nelmes Road had been discharged. It is possible that the Cheltenham & Gloucester charge was discharged out of the monies advanced by the Halifax on the 5^th July 2000. The ledger shows that whatever the transaction was, it was not a purchase by Tracey Whale of 23 Nelmes Road for £480,000. No money was paid into the client account apart from the mortgage advance of £280,000. It seems that Tracey Whale did execute a mortgage in favour of the Halifax. The documents include a copy of such a mortgage which bears the date 5^th July 2000. The property is described as 23 Nelmes Road which is said to be described in more detail in the document transferring it to Tracey Whale. The title number is given as EGL411650. This was not the title number of 23 Nelmes Road which was NGL113835 and, indeed, title number EGL411650 did not come into existence until later. It seems likely that the mortgage in favour of the Halifax did not have the title number EGL411650 written upon it on the 5^th July 2000 when the Halifax made its advance of £280,000.

On 24^th August 2000, John Whale and Tracey Whale as registered proprietors of NGL113835 (i.e. the whole of 23 Nelmes Road) executed a TP1, that is, a transfer of part of the registered title. The part of the registered title was described as “Fairlawns, 23 Nelmes Road”, as shown on the attached plan. The attached plan shows the strip of land including one garage with the side access to Herbert Road. The TP1 named the transferee as Tracey Whale. On the 24^th August 2000, licensed conveyancers acting for Tracey Whale applied to register this TP1. However, the conveyancers acting acting were not the solicitors, Curry Popeck, but licensed conveyancers, Reeve Fisher & Sands of Hornchurch, Essex. Tracey Whale was in due course registered as proprietor of the strip of land including the garage under title number EGL411650. The registration was with effect from 25^th August 2000 although that, in the normal way, was retrospective to the date of application for registration. It is clear from correspondence on 1^st September 2000 that Reeve, Fisher & Sands were still discussing with the Land Registry the proposed registration. The title number EGL411650 appears to have come into existence by 1^st September 2000.

On the 25^th September 2000, another firm of solicitors, Christi & Co applied to register a charge, which appears to be the charge in favour of the Halifax, over title number EGL411650. This application was received by the Land Registry on the 27^th September 2000 and in due course the Halifax charge was registered with effect from that date.

The result of the above was that the Halifax advanced £280,000 to Tracey Whale for the purpose of purchasing the freehold of a detached house and garden and three garages at a purchase price of £480,000 and the Halifax ended up with a charge over a strip of land including a single garage under title number EGL411650.

Tracey Whale deliberately deceived the Halifax as to the nature of the transaction. On the face of the documents, John Whale was involved in the transaction in that he executed the TP1. The evidence before me is to the effect that John Whale is the same person as John Sinclair. The evidence before me from Mary West, Mr Endean and Mr Howell and from the documents relating to the other transactions indicates that John Sinclair is likely to have been the moving force behind the deceit of the Halifax carried out by Tracey Whale.

An interpretation of Mary West’s involvement in this transaction is complicated by the fact that, for some reason, Tracey Whale used a different firm, the licensed conveyancers, Reeve Fisher & Sands, to split the title to the strip of land including the garage away from the main property and, apparently, used a further firm of solicitors, Christi & Co, to register the Halifax charge over the strip of land. Nonetheless, Mary Langton/Mary West had considerable material to show that the transaction was not as it was described to the Halifax. If Miss West had investigated the title to 23 Nelmes Road for the purpose of giving a certificate of title, she would have seen that the registered proprietors were John Whale and Tracey Whale. Further, the Curry Popeck ledger shows that the usual features of a purchase were absent. Curry Popeck never received any money from anyone other than the mortgage advance of £280,000. Further, when a solicitor at Curry Popeck investigated the Curry Popeck file relating to this transaction in October 2000, he was unable to find any searches having been carried out by Miss West on behalf of Tracey Whale’s purchaser and the Halifax as mortgagee.

In August and September 2002, there was a second transaction relating to 23 Nelmes Road. By this time, there were three registered titles relating to parts of 23 Nelmes Road. The original title, NGL113835 related to 23 Nelmes Road comprising the house and garden but omitting the two garages at the rear with the side entrance to Herbert Road. As already described, one of these garages had been transferred to Tracey Whale and she was registered as proprietor of that garage under title number EGL411650. At the same time as that had occurred, the solicitors acting for Tracey Whale, Reeve, Fisher & Sands, had dealt with a transfer and subsequent registration of a second strip of land including a garage in favour of John Sinclair who became registered with title number EGL411645.

On the 20^th August 2002, Cosec Facilities Limited, a company controlled by John Sinclair, wrote to Mary West now at Pulvers. The letter referred to 23 Nelmes Road and to Cosec’s clients as being John Whale and Tracey Whale. The letter instructed Mary West to act for John Whale and Tracey Whale in relation to a proposed sale to Mr Sinclair. Mary West said that she did not know at this stage that Mr Whale and Mr Sinclair were the same person but she later found this out. Cosec’s letter enclosed a draft contract, office copy entries, a seller’s property information form and a fixtures and fittings list. In the documents there are two forms of the contract. The forms are the same save that the purchase price in one is stated at £500,000 and in the other is stated at £200,000. The property being sold was described as having title number NGL113835. The office copy entries which were supplied related to NGL113835 and that land comprised the house and garden but excluding the two garages at the rear. The office copy entries showed that the charge in favour of Cheltenham & Gloucester was still registered as at 9^th August 2002 which suggests that the money which Tracey Whale received from the Halifax in July 2000 had not been used to pay off Cheltenham & Gloucester. The seller’s property information form and the fixtures and fittings list were filled in in some detail which would give the impression that this was a genuine sale of a house to Mr Sinclair.

Mr Sinclair approached Verso (the trading name of Mortgage Agency Services Number Two Limited) for a mortgage advance. Verso obtained a valuation dated 20^th August 2002. This described the property as having one garage and was appropriate for the land then included in title number NGL113835. The property was valued at £650,000. The valuer added a note to his report to the effect that the vendor was a business associate/friend of the purchaser and the purchase price was less than market value.

On the 23^rd August 2002, Verso made an offer of an advance to Mr Sinclair. The purchase price was stated to be £500,000 and the advance was to be £377,128.

Also on 23^rd August 2002, Verso wrote to Pulvers giving instructions to Pulvers to act for Verso as well as for Mr Sinclair. The mortgage instructions took the form of specific instructions in accordance with Part II of the CML Lenders’ Handbook. The instructions stated that Verso had adopted the Lenders’ Handbook. The instructions stated that Verso supplied the valuation report to the conveyancer. The instructions required the conveyancer to send to Verso after completion the charge certificate with the lender’s details attached, together with the result of various searches.

On the 29^th August 2002, Mr Alan Pulver (and not Mary West) signed a certificate of title in relation to 23 Nelmes Road having title number NGL113835. The mortgage advance was stated to be £377,128 and the price stated in the transfer was said to be £500,000. The general practice within Pulvers was that Mary West would have prepared the certificate of title for Mr Pulver to sign and Mr Pulver would have signed it in reliance upon Mary West.

On 30^th August 2002, Verso sent to Pulvers a completion statement showing that after deductions, the amount of the advance of £377,128 was reduced to £375,000. On the 2^nd September 2002, Verso transferred £375,000 to Pulvers’ client account. The Pulvers’ ledger for this transaction describes it as a re-mortgage of 23 Nelmes Road whereas the matter had been represented to Verso on the basis that Mr Sinclair was purchasing the property albeit at less than its full value for £500,000.

The Pulvers’ ledger is not in the form one would expect for a purchase transaction. The ledger shows the mortgage advance coming in from Verso and the next day being paid out in full save for monies used to pay fees and disbursements. Altogether approximately £373,000 was paid out to Cosec Facilities as “redemption monies”. Mary West would have known from the valuation report that the transaction had been represented to Verso as a purchase but she did not tell Verso that there was no transfer and that the existing registered proprietors, Tracey Whale and John Whale, were simply re-mortgaging. It may be that the monies advanced by Verso, or some of them, were used to discharge the Cheltenham and Gloucester charge over title number NGL113835 but the position is not clear. The completion statement drawn up by Mary West for Mr Sinclair also described the transaction as being a re-mortgage. Mary West must have realised that John Whale and John Sinclair were the same person in order for her to describe the transaction in that way.

There is no sign of Mary West arranging for a charge to be executed in favour of Verso over 23 Nelmes Road before she released the mortgage monies on 3^rd September 2002. Verso wrote on many occasions from 2^nd December 2002 to January 2004 chasing the relevant documents. Mary West did not reply to the first four chasing letters and she replied to the fifth, the reply being 12^th August 2003, stating that the charge certificate would be provided within 7 days. Verso wrote again in September 2003 and on the 18^th September 2003, Mary West promised the documents within the course of the next few days. Mary West does not appear to have replied to the next three letters from Verso sent in the period November 2003 to January 2004.

In the end, Mr Sinclair became registered in relation to title number NGL113835 on the 2^nd July 2004 and Mortgage Agency Services Number Two Limited (i.e. Verso) became registered as chargee on the same date. The registered charge was stated as being dated 18^th December 2002. Based on that information, it seems that what must have happened was that John Whale and Tracey Whale did execute a transfer of this title to John Sinclair and John Sinclair did execute a charge in favour of Verso on 18^th December 2002 even though the mortgage monies had been released by Pulvers to Cosec Facilities on 3^rd September 2002.

Mr Sinclair deceived Verso as to the nature of the transaction. The transaction was not a purchase by him for £500,000.

In connection with this transaction, Mary West must have appreciated that the transaction as described to Verso (a purchase by Mr Sinclair for £500,000) was different from the way in which she described the transaction in Pulvers’ ledger and in the completion statement of Mr Sinclair (a re-mortgage by Mr Sinclair.) Further, as she described the transaction as a re-mortgage, Mary West must have appreciated that Mr Sinclair and Mr Whale were the same person. Further, the office copy entries for NGL113835 states that the transfer to John Sinclair of 18^th December 2002 stated the price at £200,000.

Before the transfer of title number NGL113835 to Mr Sinclair on 18^th December 2002 and before the charge to Verso of the same date, there was a third transaction in relation to 23 Nelmes Road.

On 28^th October 2002, Mr Sinclair applied to Bank of Scotland for a mortgage advance. The application stated that Mr Sinclair lived at 23 Nelmes Road, that he had an existing mortgage in favour of Verso where the amount outstanding was £377,000 and that he wished to borrow £475,000 from Bank of Scotland for the purpose of purchasing a second home. The application stated that the estimated current value of 23 Nelmes Road was £650,000. The application was not filled in by Mr Sinclair himself but was completed by Mr Howell.

On 27^th November 2002, the Bank of Scotland made an offer of a mortgage advance of £377,000 approximately to Mr Sinclair.

The Bank of Scotland obtained a valuation of 23 Nelmes Road and the valuer turned out to be the same valuer as had valued the property for Verso. He valued the property again in the sum of £650,000. He described the property as a detached property with one garage which was consistent with the land in the title NGL113835 at that time.

The certificate of title which was supplied to the Bank of Scotland is dated 18^th December 2002. It professes to be signed by Mr Pulver but Mary West accepted in evidence that she had signed Mr Pulver’s name on the certificate. The title being certified is stated as title number EGL411645. That title related to a strip of land with a garage at the back of the main property and had been created on the application of Reeve, Fisher & Sands in around August 2000. It is not clear whether the original registered proprietor of EGL411645 was Tracey Whale or John Whale or John Sinclair.

On the 18^th December 2002, Mr Sinclair executed a charge over EGL411645 in favour of the Bank of Scotland. Although the Bank of Scotland thought that it was to receive a charge over a house and garden worth some £650,000, this charge related to a strip of land with a garage upon it. It will be remembered that on the same day, 18^th December 2002, Mr Sinclair took a transfer of the house and garden at 23 Nelmes Road where the price stated for the transfer was £200,000 and charged that property to Verso to secure a loan of some £377,000. Mary West was acting in both transactions.

The Bank of Scotland advanced approximately £377,000 to Pulvers’ client account on 20^th December 2002. The bulk of this money was immediately paid out to Cavendish Finance and the client account stated that this was for the purpose of “mortgage redemption”. The client account for this transaction with Bank of Scotland was the same client account as for the transaction with Verso.

It follows from the above that the two charges were executed by Mr Sinclair on the same day, namely, 18^th December 2002. One charge related to NGL113835 and was in favour of Verso whilst the other related to EGL411645 and was in favour of the Bank of Scotland. Mary West appears to have been acting in relation to both matters.

The Bank of Scotland thought it was getting a charge over a house and garage worth £650,000. In fact, it obtained a charge over a strip of land with a garage upon it.

Mr Sinclair deceived the Bank of Scotland as to the nature of the transaction and as to the charge which was being granted.

Mary West must have appreciated that the charge in favour of the Bank of Scotland was not a charge of a house and garden valued at £650,000 but was of a strip of land with a garage upon it.

The documents include a TR1 dated 24^th September 2003 in relation to EGL411645 by which John Whale transferred that title to John Sinclair. That suggests that John Sinclair had not been the registered proprietor of EGL411645 on 18^th December 2002 when he executed a charge of that property to the bank of Scotland nor on the 16^th December 2002 when Mary West (in the name of Mr Pulver) signed a certificate of title in respect of John Sinclair and EGL411645. A different firm of solicitors, Christi & Co applied to the Land Registry on the 18^th December 2003 to register the transfer to Mr Sinclair of EGL411645 and this application was received by the Land Registry on the 26^th January 2004. The official copy of registered entries for this title shows Mr Sinclair as the registered proprietor with an entry date of 26^th January 2004. On 14^th March 2005, Pulvers applied to the Land Registry to register the charge in favour of Bank of Scotland in respect of title EGL411645. That charge was duly registered on 15^th March 2005.

The next property to be dealt with is the property, or properties, at 58 Herbert Road. Before the transactions referred to below, there were two separate registered titles relating to property at or adjoining 58 Herbert Road. The first property was a house and garden having the address 58 Herbert Road and registered under title number EGL299061. This was initially registered in the name of Tracey Whale and was subject to a charge dated 27^th February 1996 in favour of the Halifax.

The second property which is relevant in this context was a plot adjoining the house and garden at 58 Herbert Road. This was registered under title number EGL300324 in the name of John Whale and Tracey Whale and was subject to a charge dated 10^th February 1999 in favour of Bank of Scotland.

The first transaction concerning one or other of these properties was what seems to have been a straight forward sale by Tracey Whale to David Endean (the Second Defendant). On 25^th September 2000, Tracey Whale executed a transfer of title EGL299061 in favour of Mr Endean for a purchase price of £150,000. Mr Endean granted a mortgage over that property to Cheltenham & Gloucester. The firm of Reeve, Fisher & Sands appear to have acted on this transaction. The earlier mortgage which Tracey Whale had granted to Halifax was discharged and Mr Endean as transferee and Cheltenham & Gloucester as chargee were duly registered in respect of title EGL299061.

It seems that Mr Endean wanted to extend the house at 58 Herbert Road onto the plot at the side. For this purpose, he, or someone connected with him, would need to acquire the plot and to obtain further finance by way of mortgage. I understand that Mr Endean did apply for mortgage finance in his own name but was refused. Mr Endean was living with Susan Hooker (the Fourth Defendant) and their children at 58 Herbert Road. Accordingly, the decision was made for Miss Hooker to apply for a loan.

On 27^th March 2003, Susan Hooker applied to Bank of Scotland for a loan. Her application was completed by Paul Howell of Premium Finance acting on her behalf. The application stated that Miss Hooker lived at an address in Chestnut Avenue whereas in truth she lived at the house at 58 Herbert Road. The application referred to a purchase price of 58 Herbert Road for £595,000 coupled with the sale by Miss Hooker of her present property resulting in Miss Hooker wishing to have a loan from Bank of Scotland of £350,000. The name of the present owner of 58 Herbert Road was given as “Mr Wyle” which may well have been inspired as a version of “Mr Whale”. Although the existing house and garden at 58 Herbert Road were already owned by Mr Endean subject to a mortgage in favour of Cheltenham & Gloucester, and although the new property being acquired by Miss Hooker was a building plot, her mortgage application described the property at 58 Herbert Road as a detached house. The application gave Mary West as Miss Hooker’s solicitor.

Bank of Scotland obtained a valuation in connection with this application. The valuation described the property as 58 Herbert Road. The valuer plainly thought he was valuing the house but it is not clear whether he was valuing the house and the building plot or the house alone. His valuation of the property which he considered relevant was £595,000.

On the 19^th April 2003, the Bank of Scotland made a mortgage offer of £350,000 to Miss Hooker. The offer stated that the property of which the mortgage security would be taken was 58 Herbert Road and that the purchase price/valuation in question was £595,000. The mortgage offer stated that Miss Hooker should have been in receipt of the valuation report and if she had not received it she should contact the bank.

The Bank of Scotland obviously instructed Mary West and Pulvers to act on its behalf in connection with the proposed mortgage to be granted by Miss Hooker. The instructions to Pulvers are not in the documents. However, Mary West later signed a certificate of title on the Bank of Scotland’s standard form and this stated that the date of the instructions was 19^th April 2003.

On the 2^nd May 2003, Miss West signed a certificate of title addressed to the Bank of Scotland. It described the borrower as Miss Hooker and the property as 58 Herbert Road. The box for the title number of the property was left blank. The mortgage advance was stated to be £350,000 and the price stated in the transfer (if applicable) was stated to be £595,000.

On the 7^th May 2003, Miss Hooker executed a legal charge in favour of the Bank of Scotland. However, the documents she executed did not identify her by name nor identify the property to be charged nor the title number of that property.

Although Miss West was acting for Miss Hooker and for the Bank of Scotland, she appears to have written to the Bank of Scotland as mortgagee in relation to title number EGL300324 where the borrowers were John Whale and Tracey Whale. Mary West wrote to the Bank of Scotland asking for a redemption figure for the mortgage granted by John Whale and Tracey Whale. The Bank of Scotland gave a redemption figure of some £193,000.

Pulvers had a ledger account relating to this transaction. Instead of the ledger describing the transaction as a purchase by Miss Hooker of an identified property, it described the transaction as a re-mortgage by Miss Hooker of 58 Herbert Road. In fact, Miss Hooker did not own any interest in 58 Herbert Road and had no prior mortgage in relation to 58 Herbert Road. The ledger shows the sum of approximately £350,000 arriving from the Bank of Scotland on the 6^th May 2003. Some £193,000 was paid out to the Bank of Scotland by way of redemption on John Whale and Tracey Whale’s mortgage over the land in title number EGL300324. Some £137,000 was paid to Cavendish Finance, a company controlled by Mr Sinclair. £15,000 was paid to Mr Endean. The ledger is not consistent with the purchase of a property for £595,000 with £350,000 being advanced by the Bank of Scotland and the remainder of the purchase price being provided by a purchaser, Susan Hooker.

On the 7^th May 2003, John Whale and Tracey Whale executed a transfer of the building plot (title number EGL300324) described at 58 Herbert Road in favour of Susan Hooker. The transfer stated that the purchase price was £195,000, a figure which is just above the figure of £193,000 needed to redeem John Whale and Tracey Whale’s mortgage on this plot. Mary West does not appear to have applied to register this transfer or the mortgage by Susan Hooker in favour of the Bank of Scotland for sometime. Eventually on the 21^st January 2004, Pulvers applied to register the discharge of John Whale and Tracey Whale’s mortgage on EGL300324 and the transfer to Miss Hooker and the grant of the mortgage by Miss Hooker to Bank of Scotland.

Eventually on the 22^nd January 2004 Miss Hooker was registered as the proprietor of EGL300324 subject to a charge in favour of the Bank of Scotland. The official copy of registered entries stated that the price stated to have been paid on 7^th May 2003 was £195,000.

The Bank of Scotland thought that it was lending £350,000 for a purchase of a house and garden for £595,000. Instead, it obtained a charge over a building plot.

Miss Hooker deceived the Bank of Scotland as to the nature of the transaction and as to the security being granted to the Bank.

Mr Sinclair (also known as John Whale) benefited from this transaction as he was able to redeem the mortgage granted by him and Tracey Whale. His company, Cavendish Finance, also benefited by receiving some £137,000 for no obvious reason. The evidence from Mary West and from Mr Endean and Mr Howell was to the effect that the acts of deception of lenders were in general Mr Sinclair’s idea.

Mr Endean benefited from the transaction to the extent of receiving £15,000. He and Miss Hooker were living together at 58 Herbert Road. Miss Hooker’s application for a loan was only made when he had tried unsuccessfully to obtain a loan in his own name. He must have known of Miss Hooker’s deception of the Bank of Scotland in relation to this transaction.

There are difficulties in establishing Mary West’s understanding of the transaction because the file is not complete. However, it is much more likely than not that her instructions from the Bank of Scotland would have described the transaction in the way it had been represented to the Bank. Mary West was processing what was obviously a different transaction, namely, a transfer to Miss Hooker for £195,000 with a view to the redemption of the mortgage which John Whale and Tracey Whale had with the Bank of Scotland. Mary West’s involvement in the transaction contains a number of suspicious circumstances. Why was the title number not stated in her certificate of title? Why was she acting for John Whale and Tracey Whale for the purpose of obtaining a redemption of their mortgage to the Bank of Scotland?

The next transaction concerning 58 Herbert Road began in around August 2004. At that time, an on-line application was made to the Halifax for mortgage finance. The applicant was a Mr Ron St Leger who is the Eighth Defendant in these proceedings but who has not been served with the proceedings. The documents in support of the mortgage application include a photocopy of a passport of Mr Ron St Leger and the copy has been certified by Mr Howell of Premium Finance. Other documents suggest that Mr Ron St Leger did at one time exist. The on-line application in August 2004 was made by Mr Howell of Premium Finance purportedly acting for Mr Ron St Leger. Mr St Leger gave his existing address as 10 Beaumont Close where he said he had lived since 1992. There was also reference to the electoral roll showing his presence at that address for a number of years. The application was made in connection with a purchase of 58 Herbert Road for £650,000 with the assistance of the loan of £350,000 from the Halifax. The property was described as being a detached house built in 1919. The application stated that payments in relation to the mortgage would be made by Mr St Leger out of an account at Cater Allen Private Bank. The account number given was the number of an account of Worldzone.Co.UK.Ltd (“Worldzone”). The shares in Worldzone were owned by Mr Endean and Mr Endean and Miss Hooker were from time to time either director or secretary of Worldzone.

The Halifax obtained a valuation of property at 58 Herbert Road. The present condition value was stated to be £650,000 and the value after improvements was stated to be £800,000. The valuation referred to extension work being carried out and the property being in a “shell” form. The number of rooms in the property were then described on the basis of the original property together with the extension. The reference to the property being in a shell form initially was of concern to the Halifax but their internal notes show that they raised the matter with the valuer and were satisfied that the value of the existing house even without the extension justified making the loan. The Halifax’s notes referred to the customer being honest and needing the money to finish the works to the extension. It is not clear whether anyone at the Halifax or the valuer had spoken to someone at the property about the extension and, if so, to whom the Halifax or valuer had spoken.

On the 8^th September 2004, the Halifax made a mortgage offer to Mr St Leger of £350,000. Also on the 8^th September 2004, the Halifax instructed Pulvers, for the attention of Mary West, to act for the Halifax in connection with the proposed mortgage of 58 Herbert Road. These instructions referred to the CML Lenders’ Handbook including the part II instructions specific to the Halifax. The instructions stated that the purchase price was to be £650,000. The conveyancer was told that the mortgage advance should not be released unless the details of the property in the title document agreed substantially with those in the mortgage instruction, unless the conveyancer was holding the mortgage deed duly executed by the borrower and unless the conveyancer had complied with the instructions and the obligations in the Lenders’ Handbook.

On the 14^th September 2004, Mary West signed a certificate of title addressed to the Halifax. The property was described as 58 Herbert Road but the title number was left blank. The price stated in the transfer was said to be £650,000 and the borrower was Mr Ron St Leger.

There does not appear to have been any transfer of any part of 58 Herbert Road to Ron St Leger. Ron St Leger does not appear to have executed any charge over 58 Herbert Road.

Pulvers’ ledger relating to this transaction gives Mr St Leger’s address as 27 Billet Lane. The transaction is described as the re-mortgage of Billet Lane. Mr Pulver has written in manuscript on the ledger “should be 58 Herbert Road”. The ledger shows the mortgage advance from the Halifax arriving in the sum of £350,000 on 20^th September 2004. On the same day, that money is paid out to four recipients. Cavendish Finance received some £261,000 said to be “mortgage redemption”. Cavendish Finance is a company controlled by Mr Sinclair. UK Direct received some £82,000 also said to be by way of “mortgage redemption”. UK Direct is a company controlled by Mr Sinclair. Premium Finance received “broker’s fees” of some £3,500. Finally, a sum of approximately £2,800 was paid to Mr St Leger as “balance due to client”.

The Halifax thought that it was advancing £350,000 to assist Mr St Leger to buy 58 Herbert Road, which was worth £650,000 before completion of the building works and would be worth £800,000 on completion of those works. Mr St Leger never had any title to any part of 58 Herbert Road and never acquired such title. No charge over 58 Herbert Road was ever granted in favour of the Halifax.

It is clear that the Halifax was deceived. There does not appear to have ever been any intention on the part of Mr St Leger to buy 58 Herbert Road. After all, 58 Herbert Road was owned by Mr Endean (as to the principal part of the house) and by Miss Hooker (as to the extension on what was the building plot) and was the subject of two mortgages in favour of Cheltenham and Gloucester and the Bank of Scotland. There is no suggestion that Mr Endean and Miss Hooker ever intended to sell any part of this property to Mr St Leger. It is not even clear that Mr St Leger ever existed. It is however clear that Mr Sinclair benefited from this deception practised on the Halifax. Three of Mr Sinclair’s companies received, between them, a substantial sum of money for no obvious reason. In my judgment, Mr Sinclair caused this deception to be practised on the Halifax.

Mary West knew the nature of the transaction which had been described to the Halifax. She knew that the Halifax obtained nothing in return for its advance of £350,000. She also knew that the bulk of this advance was paid over to Mr Sinclair’s companies. Her certificate of title is suspicious in that it did not contain any title number. She must have known that her actions enabled the Halifax to be cheated out of £350,000.

The next series of transactions concerns the property at 51 Medlar Drive, South Ockendon. That property was a detached house with a garden and a garage. The title was registered at the Land Registry under title number EX6115682. In 1999, that title was transferred to a Miss Leanne Jane Severn and she granted a mortgage to Woolwich Plc.

On 30^th September 2002, Gary Rosier applied to the Bank of Scotland for a mortgage advance. He stated that he was a tenant at 51 Medlar Drive and the mortgage advance was to enable him to buy the property from Miss Severn for £190,000 for which purpose he needed to borrow £120,000.

On 23^rd October 2002, the bank obtained a valuation of the property in the sum of £250,000.

On 4^th November 2002, the Bank of Scotland made a mortgage offer to Mr Rosier of £120,000 towards a purchase price of £190,000.

Also on 4^th November 2002, the Bank of Scotland instructed Pulvers to act for it in relation to the proposed mortgage. The letter of instruction referred to the CML Lenders’ Handbook and in particular the part II instructions dealing specifically with the Bank of Scotland.

On the 5^th November 2002, Mr Rosier signed to acknowledge receipt of a client care letter from Pulvers stating that Mary West would carry out most of the work in relation to his purchase.

On 25^th November 2002, Cosec Facilities wrote to Mary West on behalf of “their client”, Miss Severn. The letter referred to the proposed sale to Mr Rosier and enclosed a draft contract, office copy entries, a seller’s property information form and a fixtures and fittings list. The letter referred to a proposed early completion of the purchase. The documents include an agreement for sale signed by, apparently, Miss Severn. The contract refers to a sale of the whole of the property in title number EX615682 to Mr Rosier for £190,000. The seller’s property information form and the fixtures and fittings list have been completed in detail and give the impression of there being a genuine sale by Miss Severn to Mr Rosier.

On the 28^th November 2002, Mary West wrote to Cosec Facilities stating that she would aim to exchange contracts and complete during the course of the coming week. Also on the 28^th November 2002, Mary West wrote to the Bank of Scotland stating that contracts had been exchanged with completion on 2^nd December. It is not clear whether contracts were indeed exchanged on the 28^th November 2002 after the letter to Cosec Facilities but before the letter to the Bank of Scotland.

Mary West’s letter of 28^th November 2002 enclosed the certificate for title also dated 28^th November 2002. This had been prepared by Mary West for signature by Mr Pulver and was duly signed by Mr Pulver. The certificate of title refers to a sale of all of title number EX615682 for a price of £190,000 with a mortgage advance of £120,000.

Pulvers’ ledger in relation to this transaction describes the transaction as a purchase of 51 Medlar Drive. On 29^th November 2002, the mortgage advance of some £120,000 arrived from Bank of Scotland in Pulvers’ client account. On the 3^rd December 2002, the greater part of this money, namely, some £117,000 was paid to Cosec Facilities. The ledger is not in the form one would expect for a genuine purchase. One would have expected Mr Rosier to have paid something on account of fees and disbursements. More importantly, one would have expected the balance of £70,000 to be added to the mortgage advance of £120,000 to make up the purchase price of £190,000 to arrive in the client account and to be paid out to the seller.

On the 3^rd December 2002 Mary West wrote to Mr Rosier and to the Bank of Scotland stating that completion of the purchase and of the mortgage had taken place and that stamping and registration matters were in hand. The file does not include any transfer to Mr Rosier nor any charge to the Bank of Scotland.

There was correspondence between Mary West and Cosec Facilities in the period January to June 2003 in relation to a discharge of a mortgage on the property. It is not clear what that mortgage was. The mortgage in favour of Woolwich Plc appears to have remained in existence until 29^th October 2004 when it was discharged electronically.

The documents enclose an undated letter from the Land Registry to Pulvers referring to 51 Medlar Drive and the registered proprietor as Gary Rosier. The letter states that an application lodged on 9^th December 2003 had been completed. This document is puzzling. Miss Severn remained the registered proprietor in the edition of the register dated 18^th October 2004 as shown by an official copy of register entry dated 17^th May 2005.

In January 2005, Mary West sent a sum of £310 to Mr Rosier stating that this was money which had not been required for Land Registry fees.

On 4^th November 2005, solicitors apparently acting for Mr Rosier complained that their client had never been registered as the proprietor of 51 Medlar Drive and as a consequence had suffered loss, damage and inconvenience and threatened to claim damages from Pulvers accordingly.

Before making findings as to what appears to have happened in this transaction involving Mr Rosier, I will go on to recount later dealings with 51 Medlar Drive.

On 15^th October 2003, a Mr Farmer applied to the Halifax for a mortgage advance. Mr Farmer is named as the 3^rd Defendant in these proceedings but the proceedings have not been served upon him.

In connection with Mr Farmer’s application for a mortgage advance, the Halifax obtained a valuation of a property described as Heatherwood, 51 Medlar Drive. The name “Heatherwood” does not appear to have been a name previously used to describe 51 Medlar Drive. The valuation is in terms which show that it was a valuation of the entire house and garden and a garage and not simply a part of the house. The property was valued at £280,000.

On 19^th November 2003, the Halifax made a mortgage offer to Mr Farmer of £210,000, to be secured on Heatherwood, 51 Medlar Drive.

Also on 19^th November 2003 the Halifax instructed Pulvers (for the attention of Mary West) to act for it in connection with the mortgage. The instructions from the Halifax were in accordance with its standard terms of instructions. The instructions stated that the mortgage advance was £210,000 and the intended purchase price was £280,000. The instructions stated that the conveyancer should not release the mortgage advance unless the detail of the property in the title documents agreed substantially with those in the instructions and unless the conveyancer was holding a duly completed mortgage deed and had complied with the terms of the Lenders’ Handbook and these instructions.

Pulvers maintained a ledger in relation to this transaction. Although the matter appears to have been described to the Halifax as a purchase for £280,000, the ledger describes the transaction as a re-mortgage of a property described as “Heathmoor” which seems to be a version of Heatherwood, Medlar Drive. Further, the transaction cannot have been a re-mortgage by Mr Farmer as Mr Farmer had no interest in any part of 51 Medlar Drive. The ledger shows that the mortgage advance from the Halifax in the sum of approximately £210,000 arrived in Pulvers’ client account on 12^th December 2003. On the same day the greater part of this advance approaching £200,000 was paid out to Cavendish Finance as an alleged “mortgage redemption”. Also on the 12^th December 2003, Mr Rosier was paid a sum in excess of £5,000.

The documents do not include any certificate of title prepared by Mary West. However, there must have been a certificate of title from Mary West to have brought about the result that the Halifax had paid over the mortgage advance. When Mary West caused a greater part of the mortgage advance to be paid out to Cavendish Finance on the 12^th December 2003, there does not appear to have been any transfer executed by Miss Severn or, for that matter, by Mr Rosier to Mr Farmer nor was there any mortgage apparently executed by Mr Farmer in favour of the Halifax.

Nothing seems to have happened for some time after 12^th December 2003. On the 6^th August 2004, Miss Severn executed a transfer of part of the land in title number EX615682 namely the part known as Heatherwood, 51 Medlar Drive. It will be remembered that the land in title EX615682 consisted of a single undivided house and garden and garage. The plan attached to the transfer of part of this registered title showed the left hand side of the house but this left hand side was not self contained or separate from the right hand side. The transfer of 6^th August 2004 was in favour of John Farmer and gave the purchase price as £144,800. As will be seen later, Miss Severn executed a similar transfer at this time relating to the right hand side of the house in favour of a Mr Rose for a purchase price of £118,000. These two prices together amounted to some £262,800. It is not possible to conclude whether Mary West was involved with the drawing up of the transfer dated 6^th August 2004 in relation to Heatherwood, 51 Medlar Drive.

On the 8^th September 2004, the Inland Revenue wrote to UK Direct in relation to this transfer and UK Direct applied on 14^th October 2004 to the Land Registry for registration of the transfer of Heatherwood, 51 Medlar Drive. It is possible, therefore, that even in August 2004, UK Direct was responsible for preparing the transfer of Heatherwood rather than Mary West. UK Direct was a company controlled by Mr Sinclair.

On the 18^th October 2004, the Land Registry wrote to UK Direct referring to the fact that the charge dated 26^th March 1999 in favour of Woolwich Plc (now Barclays Bank Plc) had not been discharged. This letter may have been the first time that a separate title number, EX735974, was identified in respect of Heatherwood 51 Medlar Drive.

On 18^th October 2004, John Farmer executed a charge of Heatherwood 51 Medlar Drive having title number EX735974 in favour of the Halifax. Mr Farmer’s signature was witnessed by Mr Howell.

On 29^th October 2004, the charge in favour of Barclays Bank (formerly Woolwich Plc) was electronically discharged. Although UK Direct appeared to be dealing with the discharge of the Barclays/Woolwich charge on 29^th October 2004, Mary West appears to have come back into the transaction on 28^th October 2004 because on that date she applied to the Land Registry to register a charge in favour of the Halifax in respect of title number EX735974. Her involvement around that time is also shown by a letter she wrote to the Land Registry on 2^nd November 2004 about a mix up in the use of the name Bank of Scotland for Halifax.

Thereafter, Mr Farmer was registered as proprietor of Heatherwood 51 Medlar Drive under title number EX735974 and this title was subject to a charge in favour of the Halifax.

The Halifax believed that it was advancing £210,000 to Mr Farmer to enable him to buy the detached house at 51 Medlar Drive for £280,000. Instead, on the face of the documents, Mr Farmer bought a non self contained half of this house for £144,800 and charged that property to the Halifax.

The third transaction concerning 51 Medlar Drive began in and around July 2004, that is, while the second transaction in favour of Mr Farmer was still being carried out.

On 12^th July 2004, UCB Home Loans obtained a valuation on a property described as The Elms 51 Medlar Drive. The name “The Elms” does not appear to have been used in relation to 51 Medlar Drive before this time. The valuation report makes it clear that the property being valued was the entire property of 51 Medlar Drive and not just a part of it. The property was valued at £268,000 against a proposed advance of £200,000. The applicant for the mortgage was described as Mr J Rose. Mr Rose is the 6^th Defendant in these proceedings but the proceedings have not been served upon him.

On the 16^th August 2004, UCB Home Loans made a mortgage offer to Mr Rose of some £200,000 in relation to a proposed purchase by Mr Rose of The Elms 51 Medlar Drive for £268,000.

The documents do not include the instructions from UCB Home Loans to Pulvers. However, on 23^rd August 2004, Mary West signed a certificate of title in relation to this transaction on the standard form issued by UCB Home Loans. The certificate stated that The Elms, 51 Medlar Drive had title number EX615682. It will be remembered that this registered title related to the whole of the house and garden at 51 Medlar Drive and not just to a part of it. The certificate stated that the price stated in the transfer was £268,000.

Pulvers maintained a ledger in relation to this transaction. Although the transaction had been described to UCB Home Loans as a purchase by Mr Rose of the property, the Pulvers’ ledger card described the transaction as a re-mortgage of The Elms Medlar Drive. Mr Rose did not have any interest in The Elms Medlar Drive or any previous mortgage in relation to that property. The mortgage advance of some £200,000 is shown as coming into the Pulvers client account on the 27^th August 2004. On the 30^th August 2004, the greater part of this advance, some £196,000 was paid out to Cavendish Finance. A sum of money was paid to Mr Rose and the sum was said to be “balance due to client”. The sum due to be paid to Mr Rose was initially some £3,271 then was reduced to £271 then was reduced to £71 with the other part, £3,200, being paid to Premium Finance allegedly at Mr Rose’s request. The ledger card is not consistent with a purchase by Mr Rose of any part of Medlar Drive for £280,000, not least because the ledger card does not show the balance of the purchase monies over and above the mortgage advance coming in ready for completion of such a purchase.

Although Mary West called for the mortgage monies to be paid out on the 30^th August 2004 there does not appear to have been a transfer of any property to Mr Rose by that date nor any charge by Mr Rose in favour of UCB Home Loans prior to that date.

On 10^th October 2004, Miss Severn executed a transfer of part of title number EX615682, being described as The Elms 51 Medlar Drive to Mr Rose for a stated purchase price of £118,000. A plan accompanying the transfer shows the property in question was the right hand side of the property being a non self contained part of a detached house 51 Medlar Drive.

On the 27^th October 2004 Mr Rose executed a mortgage of The Elms 51 Medlar Drive having title number EX736407 in favour of UCB Home Loans. This is the first time that one sees that title number in relation to a part of the original title EX615682.

As with the transaction in relation to Heatherwood, 51 Medlar Drive, some of the conveyancing appears to have been taken up by UK Direct rather than by Mary West. On the 10^th October 2004, UK Direct applied to register the transfer of The Elms, 51 Medlar Drive to Mr Rose. That application was received by the Land Registry on the 25^th October 2004. Also in October 2004, the Inland Revenue wrote to UK Direct about the transfer of The Elms. On the 2^nd November 2004, UK Direct applied to the Land Registry to register the charge in favour of UCB Home Loans. That application was received by the Land Registry on the 3^rd November 2004. In due course, John Rose was registered as proprietor of The Elms, 51 Medlar Drive under title number EX736407 and the charge in favour of UCB Home Loans was registered against that title.

The only involvement of Mary West in relation to this transaction after the release of the mortgage monies on the 30^th August 2004 appears from Pulvers’ ledger. This shows that fees were paid to the Land Registry on the 27^th October 2004 and payments were made to Mr Rose and Premium Finance in November and December 2004 with a final payment to Mr Rose of £30 in February 2005.

It is clear that the Bank of Scotland was deceived in relation to the transaction involving Mr Rosier, that the Halifax was deceived in relation to the transaction concerning Mr Farmer and that UCB Home Loans were deceived in relation to the transaction concerning Mr Rose. The principal person to benefit from these deceits was Mr Sinclair through Cosec Facilities in relation to the Bank of Scotland, through Cavendish Finance in relation to the Halifax and through Cavendish Finance again in relation to UCB Home Loans. I find that Mr Sinclair caused these deceits to be committed.

As to Mary West, she knew how the transactions were described to the Bank of Scotland, the Halifax and to UCB Home Loans. She knew that the Pulvers’ ledger for the supposed purchase by Mr Rosier was not consistent with a genuine purchase by Mr Rosier. She knew that the Pulvers’ ledger for the supposed remortgage by Mr Farmer was inconsistent with the transaction as described to the Halifax. She also knew that the Pulvers’ ledger for the supposed remortgage by Mr Rose was inconsistent with the transaction as described to UCB Home Loans. She knew that her actions in preparing a certificate of title or herself certifying title for the supposed purchasers assisted Mr Sinclair to cheat the lenders.

It is next convenient to refer to the transaction concerning Flat B, 11 San Remo Parade, Westcliffe on Sea. There is no claim for relief in relation to this transaction but the facts of the transaction throw light upon the actions of Mr Sinclair, Miss West and Mr Endean in relation to matters which are the subject of this claim.

Flat B, 11 San Remo Parade was owned, leasehold, by Mr Joseph and his title was registered at the Land Registry under title number EX449031 subject to a charge in favour of Halifax Plc.

On 7^th April 2003, the Halifax wrote to Pulvers stating that they had received a mortgage application from Mr Endean in relation to this property and the Halifax understood that Pulvers would be acting on Mr Endean’s purchase of the same.

About two weeks later, on the 22^nd April 2003, Global Estates, a firm of estate agents, wrote to Pulvers for the attention of Miss West relating to a sale of the flat. Global Estates referred to the vendor as Mr Joseph and the purchaser as a Miss Major. The purchase price was to be £115,000. Mr Joseph’s address was given as 27 Billet Lane which was the address of various companies controlled by Mr Sinclair. Global Estates understood that Miss West was to act on behalf of Mr Joseph in connection with his sale of the flat. Miss West confirmed that she did indeed act and that there was a substantial file relating to her acting for Mr Joseph from 22^nd April 2003 onward in connection with his sale.

On the 29^th April 2003, the Halifax wrote again to Pulvers this time with instructions to Pulvers to act on behalf of Halifax on the grant of a mortgage by Mr Endean to the Halifax in relation to the flat. The Halifax stated they would lend £114,000 against a purchase price of £120,000. The mortgage instructions referred to the CML Lenders’ Handbook and the specific part II instructions relating to the Halifax. The instructions stated that the conveyancer should not release the mortgage advance unless the details of the property in the title documents agreed with those in the instructions and the conveyancer was holding a mortgage deed properly executed and the conveyancer had complied with the Lenders’ Handbook and the mortgage instructions.

On the 29^th April 2003, the Halifax wrote again to Pulvers for the attention of Mary West referring to the mortgage offer having been made to Mr Endean in connection with his purchase of the flat.

On the 14^th May 2003, Mary West signed a certificate of title addressed to the Halifax. It referred to a price stated in the transfer of £120,000 and a mortgage advance of £114,000 with the borrower being Mr Endean.

Pulvers maintained a ledger account in relation to Mr Endean’s proposed transaction. Although the transaction had been described to the Halifax as a purchase by Mr Endean, the ledger account referred to it as a re-mortgage transaction. However, Mr Endean did not have any prior interest in the flat and did not have a prior mortgage over the lease of the flat. The mortgage advance of £114,000 arrived in the Pulvers account on 15^th May 2003 and on the 16^th May 2003, some £110,000 was paid to Cosec Facilities Limited and described as a “mortgage redemption”.

There was no sign that Mr Joseph ever executed a transfer of his title to Mr Endean nor that Mr Endean granted a charge over the title in favour of the Halifax. It seems most improbable that Mr Joseph would have executed a transfer of the title in favour of Mr Endean as he was in the process of selling the title to Miss Major. The sale to Miss Major proceeded and on the 14^th August 2003, the title was transferred to Miss Major for £115,000. The Pulvers’ ledger in relation to the sale by Mr Joseph to Miss Major describes the transaction, correctly, as a sale of the flat. The ledger shows the completion monies coming in from the purchaser’s solicitors on the 14^th August 2003 and the bulk of the purchase monies being paid out on the 15^th August 2003. The ledger in relation to the sale by Mr Joseph to Miss Major shows that payment on account was made at the outset by Cosec Facilities and the bulk of the purchase monies were paid out to Cavendish Finance. Although Mr Joseph’s registered title was subject to a charge in favour of the Halifax it seems that only some £4,500 needed to be paid from the purchase monies to the Halifax.

Mr Endean was aware that a transaction was being carried out in his name. He agreed, when cross examined, that his involvement in the transaction was dishonest, although he claimed that he was naïve at the time and had placed too much trust in Mr Sinclair whom he wanted to assist.

Miss West acknowledged that she was handling both the purported transaction for the benefit of Mr Endean and the Halifax and also the genuine sale of the property on behalf of Mr Joseph. She gave evidence that she mistakenly believed that the transactions concerned two different properties. That seems surprising because of the distinctive name of the property in question. Further, even if there had not been a contemporaneous sale by Mr Joseph to Miss Major, there does not appear to have been any material upon which Miss West could have genuinely believed that her certificate of title of 14^th May 2003 was accurate. Mr Endean was not purchasing the flat and Mr Endean had no title right or interest in the flat.

It is not clear what connection there was between Mr Joseph and Cosec Facilities and Cavendish Finance, in other words with Mr Sinclair. However, Mr Sinclair seems to have used what knowledge he had gained as to the existence of this property to put the property forward as the basis of a fraud on the Halifax to obtain a mortgage advance of £114,000 from the Halifax.

The next property to be considered is 31 Billet Lane. 31 Billet Lane comprised a detached two storey two bedroom house with a double garage and a number of parking spaces. It was initially owned by Mr and Mrs Cary and their title was registered at the Land Registry under title number EGL24820.

In around November 2002, Mr Howell applied to Verso for a mortgage advance in relation to 31 Billet Lane. Mr Howell gave evidence that the reason for buying 31 Billet Lane was in connection with a possible future development of a site comprising 27, 29 and 31 Billet Lane. Mr Sinclair’s companies had offices at 27 Billet Lane. Mr Howell stated that Mr Sinclair asked him if Mr Sinclair could put 31 Billet Lane in Mr Howell’s name. Mr Howell stated that if and when the development proceeded, he would get one of the flats to sell to make a lot of money for himself.

On 18^th October 2002, Verso made a mortgage offer to Mr Howell of an advance of £245,611 towards a purchase price for 31 Billet Lane of £300,000.

Also on 18^th November 2002, Verso instructed Pulvers to act for it in connection with the proposed mortgage of 31 Billet Lane. The instructions referred to the CML Lenders’ Handbook and specific part II instructions relating to Verso.

On 19^th November 2002, Mr Howell signed a client care letter from Pulvers stating that Mary West would carry out most of the work in relation to the transaction. Mr Howell supplied to Mary West a copy of his passport by way of identification. He stated that he had not met Mary West by this stage although he did meet her later.

On 19^th November 2002, Mr Howell signed a mortgage questionnaire which had been supplied to him by Pulvers. In answer to the question: “do you intend to use the property for your own use and occupation?”, Mr Howell answered “yes”. Mr Howell accepted in cross examination that he knew that this answer was untrue.

The documents include a contract for sale between Mr and Mrs Cary as seller and Mr Howell as buyer. The contract has been signed by both the seller and the buyer. The contract is in a form, which exists elsewhere in the documents, which was provided by Cosec Facilities for clients of that company. Although Verso’s offer of a mortgage advance had referred to a purchase price of £300,000 (with a loan of approximately £245,000), the purchase price in the contract was £250,000. The documents which have survived do not reveal whether Mary West was aware that Verso believed the purchase price was £300,000. There is no indication that Mary West told Verso the amount of the true purchase price.

The documents include part of a certificate of title addressed to Verso and dated 28^th November 2002. The certificate bears the name of Mr Pulver but Mary West accepted that she had signed the certificate in his name.

This transaction appeared to be a genuine sale by Mr and Mrs Cary for £250,000. The net figure being provided by Verso was £242,250 so it was necessary for the balance of the purchase price, and a sum of money to pay stamp duty and fee, to come from another source. Mary West prepared a completion statement showing that the necessary balance was some £11,000.

On 4^th December 2002, Mr and Mrs Cary transferred 31 Billet Lane, having title number EGL24820, to Mr Howell for £250,000.

Pulvers maintained a ledger account for this transaction. The transaction is described, apparently correctly, as the purchase of 31 Billet Lane. The ledger shows that the mortgage advance of £242,250 arrived in Pulvers’ client account on 3^rd December 2002. The balance needed to complete the purchase came from Cosec Facilities on 4^th December 2002 and the purchase was completed that day. The purchase price of £250,000 was transferred to Cosec Facilities. This is consistent with Cosec Facilities acting for the sellers, Mr and Mrs Cary, and consistent with the fact that the form of contract used in this case was a form conventionally used by Cosec Facilities for its clients.

The documents do not include any charge granted by Mr Howell in favour of Verso.

In due course, Mr Howell became registered in relation to 31 Billet Lane under title number EGL24820. His registration appears to have taken effect on the 5^th May 2004 but on that date part of the land originally in that title was removed from that title. The parts removed were registered under two new title numbers namely EGL470270 and EGL470271. Thus, Mr Howell only became the owner of part of the land sold by Mr and Mrs Cary on 4^th December 2002. There is no sign that any charge, if one existed, in favour of Verso was ever registered against EGL24820. In the end, this did not matter because, as will be seen, the Verso charge was later redeemed. Nonetheless, the transaction is revealing in so far as it shows that Mr Howell was prepared to make a statement to Verso, about his intended use of the property, which he knew to be untrue.

The second transaction in relation to 31 Billet Lane began in around July 2003. On 11^th July 2003, Mr Endean applied to the Bank of Scotland for a mortgage advance in relation to 31 Billet Lane. Mr Howell of Premium Finance Limited acted for Mr Endean in relation to this mortgage application. Mr Endean’s address was given as Flat B, 11 San Remo Parade but this was not his true address. The detail of the property to be mortgaged referred to “The Vines” 31 Billet Lane. The name, “The Vines”, had not been used in connection with 31 Billet Lane prior to this time. The mortgage application described the property as a two bedroom detached property. The application stated that Mr Endean’s solicitors were Pulvers with the person acting being Mary West. The application was accompanied by a completed direct debit in favour of Bank of Scotland. The account in which the direct debit was drawn was that of Cavendish Finance and not Mr Endean personally.

On 19^th September 2003, Bank of Scotland made a mortgage offer to Mr Endean of a loan of £245,000 in relation to a property described as Classie Chassis 31 Billet Lane. There must have been a communication with the Bank of Scotland describing the property this way and not as “The Vines” as was the case with the mortgage application.

Also on 19^th September 2003, the Bank of Scotland sent mortgage instructions to Pulvers for the attention of Mary West. The mortgage instructions referred to the CML Lenders’ Handbook and the specific part II instructions relating to the Bank of Scotland. The mortgage instructions stated that the loan would be £245,000 towards a purchase price of £300,000. The property was described as Classie Chassis, 31 Billet Lane.

The Bank of Scotland had obtained a valuation of Classie Chassis, 31 Billet Lane in the sum of £300,000. The valuers report appears to refer to the entirety of 31 Billet Lane although, in the absence of a plan, one cannot be entirely sure whether the property included or excluded the property which was later registered under two separate titles EGL470270 and EGL470271. However, what is clear is that the valuation did not confine itself to those separate titles but included the main house.

On 29^th September 2003, Mary West signed a certificate of title addressed to the Bank of Scotland. The certificate of title referred to the property as Classie Chassis, 31 Billet Lane as having title number EGL24820. It will be remembered that this title number at that date was the whole of the detached house and the land behind.

The documents do not show what draft documents were in existence as at the date of the certificate of title, 30^th September 2003, to show the intended transaction between Mr Howell and Mr Endean. In due course, Mr Howell appears to have executed a transfer of part of EGL24820 namely a part said to be known as Classie Chassis, 31 Billet Lane and shown on a plan attached to the transfer. The land in the transfer did not include the house at 31 Billet Lane but was restricted to a strip of land on the right hand side of the plot and what appears to have been a piece of open ground or garden towards the rear. The transfer of part is not dated but it was submitted to the Inland Revenue for stamping on 27^th April 2004. One cannot tell whether the transfer of part was prepared by Mary West or someone else.

On 30^th September 2003, Mr Endean granted a charge of Classie Chassis, 31 Billet Lane in favour of the Bank of Scotland. The charge bears the date 30^th September 2003 but it also bears the title number EGL470271 which does not appear to have come into existence until May 2004.

For some reason, another firm of solicitors, Christi & Co applied to the Land Registry on the 4^th May 2004 to register the transfer which had been entered into apparently on the 27^th April 2004. That transfer showed a purchase price of £115,000.

Although Miss West does not appear to have been dealing with the application to register the transfer of Classie Chassis, Pulvers did act in connection with the application to register the charge over Classie Chassis. Pulvers made this application on the 12^th May 2004 and used the new title number EGL470271 which was, of course, a part only of title number EGL24820, which was the title number used in the certificate of title of 30^th September 2003.

Pulvers maintained a ledger card in relation to this transaction which described it as a purchase by Mr Endean of 31 Billet Lane, The mortgage monies of approximately £245,000 arrived in Pulvers’ client account on the 30^th September 2003 and on the 1^st October 2003 some £170,000 of these monies was paid out to Cavendish Finance. On the 2^nd October 2003 £60,000 was paid to what appears to be a recipient in Spain; Mr Sinclair had a property in Spain. The ledger card is inconsistent with Mr Endean buying 31 Billet Lane for £300,000. There is no sign of any monies coming in to complete the purchase price of £300,000. Indeed, the reverse is the case in that over £10,000 were paid out of the mortgage advance to Mr Endean who was the purchaser and not the seller. Nor is the ledger card consistent with a transfer of a part of 31 Billet Lane for £115,000 as all of the mortgage advance of £245,000 approximately was paid out.

In due course, on about the 5^th May 2004, Mr Endean became the registered proprietor of Classie Chassis, 31 Billet Lane under title number EGL470271. This title did not relate to the whole of 31 Billet Lane but was the strip of land to the side and the piece of land at the rear as shown on the transfer of part of registered title EGL24820. The Bank of Scotland’s charge was registered against EGL470271 and not EGL24820.

It is clear that the Bank of Scotland was deceived in relation to this transaction. It thought that it was making a loan of £245,000 to Mr Endean to enable him to buy the house at 31 Billet Lane for £300,000. In fact, what was transferred to Mr Endean was a piece of land without a house and this was charged to the Bank of Scotland.

The principal beneficiary from the deceit practised on the Bank of Scotland was Mr Sinclair as a result of the sums paid out of the Pulvers’s client account to Cavendish Finance. In my judgement, Mr Sinclair caused the Bank of Scotland to be cheated in this way.

Mr Endean accepted that his involvement in this transaction was dishonest.

Mary West knew how the transaction had been described to the Bank of Scotland. She also knew that the Pulvers’ ledger described the matter in an inconsistent way. She also knew that the way the transaction proceeded was inconsistent with a purchase of 31 Billet Lane by Mr Endean. She also must have known that whereas she had certified Mr Endean as having good title to the whole of 31 Billet Lane, when she applied to register the charge in favour of the Bank of Scotland, the charge related to a piece of land only and not the whole of 31 Billet Lane. She must have known that she was assisting Mr Sinclair to cheat the Bank of Scotland.

The third transaction concerning 31 Billet Lane began in around October 2003. It is significant that Mary West was dealing with this third transaction and knew the detailed terms of the transaction in the period between her certificate of title of 30^th September 2003 in favour of the Bank of Scotland and her application dated 12^th May 2004 to register the Bank of Scotland in relation to part only of 31 Billet Lane but yet Mary West did not do anything to inform the Bank of Scotland that it was not getting the title which was the subject of her earlier certificate.

On 15^th October 2003, Mr Chan, the First Defendant in these proceedings, applied to the Halifax for a mortgage advance in relation to 31 Billet Lane. Mr Howell acted on Mr Chan’s behalf.

On 31^st October 2003, the Halifax obtained a valuation of a property described as Firndale, 31 Billet Lane. That address must have been supplied on behalf of Mr Chan to the Halifax. The valuation valued the relevant property in the sum of £300,000. The valuation makes clear that it relates to the whole of the detached house and not just a strip of land to the side and a piece of land at the rear.

On 12^th November 2003, the Halifax made an offer to Mr Chan of a loan of £225,000 in relation to Firndale, 31 Billet Lane.

Also on the 12^th November 2003, the Halifax instructed Pulvers, for the attention of Mary West, to act for it in relation to the mortgage to be granted by Mr Chan. The instructions were in the Halifax’s standard form. The property was described as Firndale, 31 Billet Lane. The instructions referred to a loan of £225,000 towards a purchase price of £300,000.

On the 14^th November 2003, Mary West signed a certificate of title addressed to the Halifax. The property was described as Firndale, 31 Billet Lane but the title number was left blank. The certificate referred to a mortgage advance of £225,000 and a price stated in the transfer of £300,000. Pulvers maintained a ledger card in relation to this transaction. The nature of the transaction was not described on the ledger card. The ledger shows the mortgage monies of approximately £225,000 arriving in Pulvers’ client account on the 18^th November 2003. On the same day a sum of approximately £190,000 was paid out to Cavendish Finance allegedly as “redemption monies” and approximately £31,000 was paid to Mr Howell. There is no sign of any of the so called redemption monies being paid to discharge the mortgage which Mr Howell had over 31 Billet Lane in favour of Verso.

The documents do not include the form of transfer executed by Mr Howell in favour of Mr Chan but one must have been executed at some stage because of the subsequent application to register it.

On the 17^th November 2003, Mr Chan executed a mortgage of Firndale, 31 Billet Lane in favour of the Halifax. The form of mortgage gave the title number of the property as EGL470270 but that title number did not come into existence until May 2004.

For some reason, Christi & Co applied to the Land Registry to register the transfer to Mr Chan. The application shows that the land in question was not all of the land in title number EGL24820 but was only land to the rear of 31 Billet Lane. The application shows that the amount stated in the transfer as the purchase price was £118,000.

Although Christi & Co had applied to register the transfer to Mr Chan, Pulvers applied, on the 30^th July 2004, to register the charge in favour of the Halifax. The application uses title number EGL470270 which related to a strip of land on the left hand side of 31 Billet Lane and land to the rear.

In due course, on or about the 5^th May 2004, Mr Chan became registered under title number EGL470270 in relation to Firndale, 31 Billet Lane and on 4^th August 2004, the charge in favour of the Halifax was registered against this title.

The Halifax believed that it was advancing £225,000 to Mr Chan to enable him to buy a two bedroom house for £300,000. In fact, Mr Chan acquired a strip of land and a parcel of land to the rear of 31 Billet Lane pursuant to a transfer which stated the purchase price was £118,000 and the Halifax’s charge only related to this land.

It is clear that the Halifax was deceived. The principal beneficiary of the deceit was Mr Sinclair through the monies received by Cavendish Finance. In my judgment, Mr Sinclair caused this deceit to be practised on the Halifax.

Mary West knew how the transaction was described to the Halifax. She also knew that the Pulvers’ ledger made it clear that the transaction did not take the form of a purchase by Mr Chan for £300,000. She also knew from her involvement in the second transaction in relation to 31 Billet Lane that the house at 31 Billet Lane was purportedly being sold twice, to two different buyers, Mr Endean and Mr Chan. Her certificate of title, which omitted the title number, is suspicious. She also applied on 30^th July 2004 to register the charge in favour of the Halifax over a piece of land and not the house at 31 Billet Lane when she knew that the Halifax was expecting to obtain security over the house.

Mr Chan knew that he was applying to the Halifax on the basis that he needed a loan of £225,000 to assist him with the purchase of the house at 31 Billet Lane for £300,000 when in fact he did not put in any balance of the purchase price, he did not buy the house but took a transfer of a piece of land only and granted a charge in favour of the Halifax over that piece of land only. He must have known that he was assisting Mr Sinclair to cheat the Halifax.

This third transaction also throws light on Mr Howell’s honesty. He had taken title to 31 Billet Lane in his own name, subject to a mortgage to Verso. He had then acted for Mr Endean when Mr Endean purported to purchase the house at 31 Billet Lane and obtained a loan from the Bank of Scotland, on that basis, although the transfer by Mr Howell to Mr Endean only related to a piece of land, and not the house, at 31 Billet Lane. Now, in connection with the third transaction, Mr Howell acted for Mr Chan when he purported to purchase the house at 31 Billet Lane and obtained a loan from the Halifax on that basis but in circumstances where Mr Howell only executed a transfer of a piece of land, and not the house, to Mr Chan. This was clearly dishonest behaviour on the part of Mr Howell. Mr Howell also benefited in that he received £31,000 from the third transaction in relation to 31 Billet Lane.

Although 31 Billet Lane was subject to a mortgage in favour of Verso under which Mr Howell owed Verso some £250,000 and although one part of the title was transferred to Mr Endean and another part of the title was transferred to Mr Chan, it does not seem that any of this money was used to discharge the Verso charge or reduce Mr Howell’s debt of £250,000. Instead what happened was that on the 31^st December 2003, Mr Howell applied to Birmingham Midshires for a mortgage advance. Mr Howell gave his current address as a house at 31 Billet Lane. The house was said to be called Parkview.

In February 2004, Birmingham Midshires obtained a valuation of 31 Billet Lane. The property was described as a two storey double bayed detached house with two bedrooms. The garden was said to be included in the property. There was no suggestion that the property that one could see at 31 Billet Lane was being sold without two strips of land one on the left side and one on the right side and without part of the land to the rear of the plot. The property was valued at £305,000.

On 2^nd March 2004, Birmingham Midshires made an offer to Mr Howell of a mortgage advance of some £250,000.

Also on the 2^nd March 2004 Birmingham Midshires sent mortgage instructions to Pulvers to act for it in connection with the mortgage to be granted by Mr Howell of 31 Billet Lane. The instructions referred to the CML Lenders’ Handbook. The instruction included a copy of the offer to Mr Howell referring to an advance of some £250,000 in relation to 31 Billet Lane. By this stage, the 2^nd March 2004, Miss West had been dealing with two sales of 31 Billet Lane one to Mr Endean and one to Mr Chan and also dealing with two mortgages of 31 Billet Lane one by Mr Endean to the Bank of Scotland and one by Mr Chan to the Halifax. There is no indication that Miss West raised any difficulties as a result of these transactions or that she explained any of this to Birmingham Midshires.

The mortgage instructions from Birmingham Midshires referred to Mr Howell’s existing mortgage with Verso and stated that that mortgage was to be redeemed on or before completion. The instructions also stated that if the conveyancer was aware of any mortgages other than those specified then full details of these must be provided to Birmingham Midshires. The Pulvers’ ledger account for this property gave Mr Howell’s address as 182 Suttons Lane which was his genuine address and in relation to which Mr Howell had a mortgage. There is no sign of Miss West raising any question with Mr Howell about such a mortgage nor informing Birmingham Midshires of such a mortgage. The mortgage instructions also said that the conveyancer was to ensure that he or she had sight of the valuation report.

On 9^th March 2004, Mary West signed a certificate of title addressed to the Halifax. The Halifax and Birmingham Midshires were associated companies and it seems that the transaction was taken over by the Halifax and the mortgage was in due course granted to the Halifax. The certificate of title referred to 31 Billet Lane but the title number was left blank.

Pulvers had a ledger card in relation to this transaction. The ledger described the transaction as a re-mortgage of Billet Lane. On the 11^th March 2004, the ledger card showed the mortgage advance of some £250,000 arriving in Pulvers’ client account. On the same day, a sum approaching £247,000 was paid to Verso to redeem Mr Howell’s mortgage in favour of Verso. A sum of approximately £2,500 was also on the same day paid to Mr Howell.

On the 11^th March 2004, Mr Howell executed a charge of 31 Billet Lane in favour of Birmingham Midshires. His signature was witnessed by Mary West. The title number for the property charged was EGL24820. The registered title bearing that number which existed on the 11^th March 2004 related to all of the property at 31 Billet Lane. The subsequent registered title of EGL470270 and EGL470271 were not removed from EGL24820 until May 2004.

It will be remembered that Mr Howell had the benefit of a transfer dated 4^th December 2002 in relation to the whole of the land in title number EGL24820. However, no application to register Mr Howell as proprietor of that title appears to have been made before he granted the charge to Birmingham Midshires on 11^th March 2004.

Thereafter, steps were taken to register Mr Howell in relation to 31 Billet Lane and to register the charge to Birmingham Midshires/Halifax. For some reason, the application to register Mr Howell was made by another firm of solicitors, Christi & Co. That application was dated 4^th May 2004. Of course, Christi & Co were at the same time handling applications to register Mr Endean and Mr Chan in respect of part of EGL24820 so that the application to register Mr Howell became an application to register him not in respect of all of EGL24820 but only the part remaining after land was transferred to Mr Endean and Mr Chan.

In due course, on 5^th May 2004, Mr Howell became registered in relation to the reduced area in EGL24820.

On the 28^th July 2004, Pulvers applied to register the charge dated 11^th March 2004 in favour of the Halifax/Birmingham Midshires. The charge referred to title number EGL24820 and as at 11^th March 2004 this was all of 31 Billet Lane. However, by the date of application for registration, 28^th July 2004, EGL24820 related to part of 31 Billet Lane only. On the 29^th July 2004, the Halifax became registered as chargee in relation to the reduced area in EGL24820.

Halifax believed that it was to obtain a mortgage over 31 Billet Lane. The valuation on which the Halifax relied related to the whole of 31 Billet Lane and not just the reduced area which in due course remained in EGL24820. In fact, the Halifax obtained a charge over that reduced area only.

The harm done to the Halifax in this case was much less than in relation to the other lenders involved with 31 Billet Lane. However, in so far as it was deceived, Mr Howell and Mary West were a party to the deceit. Mr Howell proceeded on the basis that the land to be valued and the subject of the security was the whole of 31 Billet Lane when he knew that he had transferred away two parts of that land. Mary West also knew this and I have pointed out the things which Mary West knew which she ought to have told the lender but did not raise with the lender. On the basis of Mr Howell’s evidence, which I accept, that he was acting in accordance with the direction of Mr Sinclair, Mr Sinclair caused this deceit to be practised on the Halifax/Birmingham Midshires.

The next property is 10 Beaumont Close, Romford. This was a freehold two storey semi-detached house. The freehold title was registered under title number EGL40021. On 19^th September 2003, Joanne St Leger executed a transfer of title number EGL40021 to Willoughby Management Limited for an express purchase price of £250,000. It may be that this was an executor’s sale as Miss St Leger gave a limited title guarantee and the application to register the transfer was accompanied by a grant of probate.

On the 19^th September 2003, licensed conveyances Reeve, Fisher & Sands applied to register the transfer of EGL40021. At the same time they applied to register two leasehold titles to which I will refer below. There were defects in the applications which meant that the applications were rejected more than once. Eventually the freehold was registered in the name of Willoughby Management Limited with effect from the 18^th November 2003. There is no sign of Pulvers being involved in this transaction concerning the freehold of 10 Beaumont Close.

Pulvers do appear to have been involved in two other transactions concerning 10 Beaumont Close. One transaction involved the grant of a lease of the ground floor of 10 Beaumont Close by Willoughby Management Limited to James Knight. James Knight is the Sixteenth Defendant in these proceedings. He has been served with the proceedings but has taken no part in them. James Knight granted a mortgage over 10 Beaumont Close in favour of the Halifax. James Knight subsequently became registered in relation to the leasehold title to the ground floor of 10 Beaumont Close under title number EGL463186 and a charge in favour of the Halifax has been registered against that leasehold title.

The second transaction involving Pulvers in relation to 10 Beaumont Close was the grant of a lease dated 19^th September 2003 in favour of Mr Endean, the Second Defendant in these proceedings. Mr Endean granted a charge over 10 Beaumont Close in favour of Abbey National. Mr Endean in due course became registered in relation to his leasehold title under title number EGL463187 and the Abbey National’s charge is registered against that leasehold title.

It is now necessary to describe the involvement of Pulvers in these two transactions.

In or before July 2003, Mr Knight applied to Birmingham Midshires for a mortgage advance in relation to 10 Beaumont Close. The application was made on his behalf by Mr Howell of Premium Finance Limited. Mr Knight stated that he was employed by UK Direct but Mr Howell has stated that this was not the case. Mr Knight sought a loan of £210,000. The property to be mortgaged was described as a semi-detached house known as Greenacres, Beaumont Close. The tenure of the property was described as leasehold. The property was said to have three bedrooms. The purchase price/estimated valuation was stated to be £280,000. Mr Knight gave his current address as a property in Harrow and he stated that 10 Beaumont Close was going to be his primary residence and the source of the deposit on 10 Beaumont Close was to be the equity in his present property. Accordingly, Mr Knight was presenting the transaction as a purchase by him of 10 Beaumont Close. The application stated that Mr Knight’s solicitors were Pulvers.

Birmingham Midshires obtained a valuation of Greenacres, 10 Beaumont Close. It is clear that the valuer was valuing the whole of the house at 10 Beaumont Close. The valuer stated that the tenure was freehold although Mr Knight’s application had referred to leasehold tenure. The property was valued at £270,000.

On 5^th August 2003, Birmingham Midshires made an offer to Mr Knight of a loan of some £210,000 against a purchase price of £270,000. The property was described as 10 Beaumont Close and the tenure was stated to be freehold. Pulvers were named as the conveyancers intended to be instructed.

The documents do not include the instructions to Pulvers. However, Pulvers in due course prepared a certificate of title on the Halifax standard form stating that the date of their instructions was the 5^th August 2003. It can be taken that Pulvers were indeed instructed in accordance with the standard form of the lender. The certificate of title dated 13^th August 2003 was signed by Mr Pulver. The conveyancers’ reference was “MW”. One can conclude that the matter was handled by Mary West on behalf of Mr Knight and the Halifax and that she prepared the certificate of title for Mr Pulver to sign, which he duly did. The certificate of title described the property as 10 Beaumont Close. The title number was left blank. The certificate stated that the price stated in the transfer was £270,000 and the mortgage advance was £210,000.

On the 18^th August 2003 Mr Knight executed a charge of 10 Beaumont Close in favour of the Halifax. At that time, the property appears to have been owned by Joanne St Leger. She only transferred it to Willoughby Management Limited on the 19^th September 2003. The charge dated 18^th August 2003 describes the property as 10 Beaumont Close but also refers to title number EGL463186. That title number was not created until November 2003.

On the 19^th September 2003, Willoughby Management Limited granted a lease of Greenacres, 10 Beaumont Close to Mr Knight for a term of 178 years from the 25^th June 2003. The lease was said to be granted in return for a premium of £125,000 and was at a peppercorn rent. A plan attached to the lease shows one floor only of 10 Beaumont Close as the intended demise premises. It later emerged that this floor was the ground floor of the building.

At the same time as Reeve, Fisher & Sands applied for registration of the transfer of the freehold to Willoughby Management Limited they also applied for first registration of the new leasehold title created by the lease of 19^th September 2003 in favour of Mr Knight. Reeve, Fisher & Sands wrote to the Land Registry stating that the matter was urgent but it is not clear why that was so. The Land Registry regarded the applications as substantially defective on a number of grounds and on a number of occasions but, eventually, Mr Knight was registered as the leasee of the ground floor of 10 Beaumont Close known as Greenacres. The registration was with effect from 18^th November 2003 and was under title number EGL463186.

Pulvers had a ledger card in relation to this transaction. It described the transaction as the purchase of 10 Beaumont Close by James Knight. The ledger card shows the mortgage advance of some £210,000 arriving in Pulvers’ client account on the 18^th August 2003. The ledger card is not consistent with a purchase by Mr Knight of a property for £270,000 or £280,000 in that there is no sign of Mr Knight making up the difference between the mortgage advance and such a purchase price. Indeed, the reverse is true because on the 19^th August 2003, part of the monies advanced by the Halifax, approaching £4,000, was paid out to Mr Knight. The bulk of the mortgage advance, some £206,000, was paid to Cavendish Finance as alleged “redemption monies”. On the basis that Mr Knight was purchasing the freehold or a leasehold interest in 10 Beaumont Close, there is no sense in the bulk of the mortgage advance being paid as redemption monies. Further, the ledger is not consistent with Mr Knight acquiring a lease for a premium of £125,000 given that the amount of the mortgage advance was £210,000.

Although Reeve, Fisher & Sands had dealt with the registration of the leasehold title in favour of Mr Knight, Pulvers came back into the matter in February 2004 when Mary West applied to the Land Registry to register the Halifax charge over title number EGL463186, that is, Mr Knight’s leasehold title. The value of the application made by Mary West was stated at £210,000 although the official copy of register entries for title number for EGL463186 stated that the price for the lease granted to Mr Knight was £125,000.

On the 9^th February 2004, the Halifax charge dated 18^th August 2003 was registered against Mr Knight’s leasehold title under title number EGL463186.

The Halifax believed that it was advancing £210,000 towards the purchase of the freehold house at 10 Beaumont Close for £270,000. Instead, the Halifax obtained a charge over a lease of the ground floor only of 10 Beaumont Close, which lease had been granted in return for a premium of £125,000 (or so the lease states).

It is clear that the Halifax was misled. The principal beneficiary of this deceit was Mr Sinclair who (through Cavendish Finance) received a substantial part of the mortgage advance. I find that Mr Sinclair caused this deceit to be practised on the Halifax.

Mary West was instructed by the Halifax. I think it is almost certain that the Halifax’s instructions to her described the transaction as it had been described to the Halifax. Mary West knew that the Pulvers’ ledger was not consistent with the way the transaction had been described to the Halifax. The fact that her certificate of title did not include a title number is suspicious. She must have known that she was assisting Mr Sinclair to deceive the Halifax.

Mr Knight knew that he had applied for a loan of £210,000 from the Halifax to assist him with a purchase of a house at 10 Beaumont Close for £280,000. He must have known that he was only granted a lease of one floor in that property and that he had not paid anything for it but, instead, he received a sum of money out of the transaction. I find that Mr Knight knowingly and dishonestly deceived the Halifax.

The documents do not include the form of lease which was granted by Willoughby Management Limited to Mr Endean in relation to the first floor of 10 Beaumont Close. However, Mr Endean became registered under title number EGL463187 and that registered title refers to a lease dated 19^th September 2003 granted to Mr Endean for a term of 168 years from 25^th June 2003 in return for a premium of £125,000.

The documents do not include Mr Endean’s application to the Abbey National for a mortgage advance. Nor do they include a valuation report nor any instructions to Pulvers nor a certificate of title from Pulvers.

It seems highly improbable that Mr Endean was in a position to pay £125,000 for a lease of the first floor of 10 Beaumont Close on the date which the lease apparently bears, namely, 19^th September 2003. Although Mr Endean did obtain an advance from the Abbey National, the mortgage advance was only received on the 3^rd December 2003.

In any event, on the 3^rd December 2003, Mr Endean executed a mortgage of a property described as Brickdale, 10 Beaumont Close. That property was said to have title number EGL463187. That was the title which had been opened by the Land Registry in November 2003 pursuant to the earlier application made by Reeve, Fisher & Sands.

Although Reeve Fisher & Sands dealt with the registration of the lease in favour of Mr Endean, Pulvers came back into the matter in February 2004 when Mary West applied to register the Abbey National charge against title number EGL463187. Her application stated that the value of the application was £209,175. This was the precise amount of the mortgage advance by Abbey National although registered title EGL463187 was a leasehold interest where the registry entry stated that the premium paid for the lease was £125,000.

Pulvers maintained a ledger card for this transaction. It described the transaction as the re-mortgage by Mr Endean of San Remo. It will be remembered that Mr Endean had borrowed money from the Halifax in relation to Flat B San Remo Parade at a time when he did not have any title to that flat. The mortgage advance made by Abbey National apparently on the strength of the charge dated the 3^rd December 2003 of Brickdale, 10 Beaumont Close was apparently used to repay the Halifax charge which related to Flat B San Remo Parade. The Pulvers ledger shows a sum of some £115,000 being paid to the Halifax as a mortgage redemption and that would have been the right sort of figure needed to redeem the charge on Flat B San Remo Parade. Further, the Pulvers description of the transaction as a re-mortgage of San Remo and the description of the payment to the Halifax as “mortgage redemption” is consistent with that conclusion. Having redeemed the Halifax charge on Flat B San Remo Parade, the Pulvers ledger shows that the greater part of the remaining monies from the Abbey National advance were paid out to Cavendish Finance as “mortgage redemption” and some £2,000 was paid to Mr Endean. The ledger is inconsistent with Mr Endean buying an interest in 10 Beaumont Close and certainly inconsistent with him acquiring a lease for a premium of £125,000.

Because the documents in relation to the Abbey National are incomplete, one cannot be certain as to what the Abbey National thought it was buying. However, having regard to the nature of the transaction that Mr Knight entered into with the Halifax at 10 Beaumont Close and the fact that the Abbey National advanced £210,000, it seems much more likely than not that the Abbey National believed that it was advancing £210,000 to enable Mr Endean to buy the freehold property at 10 Beaumont Close for a figure substantially above £210,000 and that it would take a charge over the freehold of 10 Beaumont Close. In fact what the Abbey National obtained was a charge over Mr Endean’s leasehold interest in the first floor only of 10 Beaumont Close.

In connection with the mortgage advanced by Abbey National in relation to 10 Beaumont Close, I also note the hearsay statement made in the letter dated 29^th March 2006 from Eversheds (acting for Abbey National) to the solicitors for Pulvers that Abbey National “lent on the belief that it would secure a charge over the entirety of the house”.

It is clear that the Abbey National was deceived. The principal beneficiary was Mr Sinclair in that he (acting through Cavendish Finance) received part of the mortgage advance. Further, part of the mortgage advance was used to pay off the loan ostensibly taken out in relation to Flat B, 11 San Remo Parade. Mr Endean told me, and I accept, that he had acted in relation to Flat B on behalf of and for the benefit of Mr Sinclair. I find that Mr Sinclair caused Abbey National to be deceived in relation to this transaction.

As to Mary West, she was acting for Abbey National in relation to this transaction. It is almost certain that its instructions to her described the transaction as understood by Abbey National. She knew from the Pulvers’ ledger that the transaction was not in accordance with such instructions. She must have certified title to Abbey National to obtain the mortgage advance. She must have known that she was assisting Mr Sinclair to deceive Abbey National.

The position in relation to Mr Endean in relation to this transaction is less clear because there are gaps in the documents. He must have applied to the Abbey National for a loan. He explained in his evidence how he was prepared to make applications in his own name, or to allow others to use his name for the purposes of applications, to obtain loans from a bank or building society. It seems much more likely than not that he did participate in this transaction. There would have had to be a lease granted to him and he would in turn have had to execute a charge in favour of the Abbey National. Further, he received some £2,000 as a result of this transaction. On the balance of probabilities, I find that he knew that his name was being used to deceive Abbey National for the principal benefit of Mr Sinclair.

113 Grifon Road was a three bedroomed detached house. Title to the property was registered in the name of Hannah Kelleher under title number EX597144.

In around September 2003, Mr Howell applied to the Halifax for a mortgage advance. He appears to have applied online and subsequently made a written application. In the online application, Mr Howell stated that his basic annual income before tax was £72,000. In fact, Mr Howell’s income was £20,000 per annum. He knew that his statement was untrue. The application sought mortgage finance to be secured on 113 Grifon Road. The application referred to a purchase price of £250,000 and a requested loan of £187,500. The application stated that only Mr Howell’s family would occupy 113 Grifon Road. Mr Howell knew that that statement was untrue also.

On 23^rd September 2003, Mr Howell countersigned a client care memorandum from Pulvers which stated that Mary West would carry out most of the work in the transaction. On the same day, Mr Howell completed a mortgage questionnaire prepared by Pulvers. He was asked to provide details of any existing mortgages or any property owned by him. In answer to this question he referred to Cosec Facilities. In fact, there is no indication that Cosec Facilities had any mortgage on any property owned by Mr Howell. Instead, Mr Howell had granted a mortgage to Bank of Scotland on the property he lived in at 182 Suttons Lane. Mr Howell had also granted a mortgage to Verso in relation to 31 Billet Lane. In response to a question as to Mr Howell’s use of 113 Grifon Road, Mr Howell stated that he intended to use the property for his own use and occupation.

Mr Howell made a revised mortgage application to the Halifax on the 24^th October 2003. The property at 113 Grifon Road was described as being a detached house and the type of purchase was described as “normal”. The application stated that Mr Howell personally would use the property for residential purposes after he entered into the mortgage. Mr Howell knew that that statement was untrue. The application stated that the purchase price was £260,000 and he wished to borrow £195,000. The application stated that Mr Howell was using the mortgage agent, Premium Finance Limited, where the person acting was Mr J Sinclair and Mr Sinclair signed the application form as agent.

On the 4^th November 2003, Premium Finance Limited wrote to the Halifax stating that the purchase price for 113 Grifon Road had been reduced to £250,000 so that the advance required had been reduced to £187,500. The previous lender to Mr Howell (presumably on the property he was selling to enable him to buy 113 Grifon Road) was stated to be Cosec Mortgage Services.

On the 27^th October 2003, Mary West wrote to Mr Howell stating Pulvers’ fees for acting for Mr Howell. The letter was headed “your re-mortgage” and the transaction was described as a proposed re-mortgage in the body of the letter.

On the 31^st October 2003, the Halifax obtained a valuation of 113 Grifon Road. The property was valued at £250,000. It is apparent from the valuer’s report that the property being valued was the whole of the detached house and not just one half of it. A copy of the valuation report was sent to Mr Howell.

In date order, the next document which appears in the documents appears to be official copies of a register entry for title number EX597144. The copies state that they show the information current on 3^rd November 2003. This was the title number for the whole of 113 Grifon Road. The address of the property in the copy is Westleigh, Grifon Road. The name “Westleigh” does not appear to have been previously used to describe the property. The registered owner of title EX597144 is stated to be Paul Howell of 113 Grifon Road and the lender in relation to the property is stated to be Cosec Facilities Limited. The second page of the copy entries state that they show the entries in the register on the 3^rd February 2004. Again, the property is described as Westleigh, Grifon Road. The proprietor is shown as Paul Howell and the effective date of Mr Howell being registered as proprietor is given as 7^th December 2001. In fact, Hannah Kelleher was registered in relation to title number EX597144 on 7^th December 2000 and it appears that the date has been moved by one year to give the impression that Mr Howell owned the property since 7^th December 2001. The charges register shows a registered charge allegedly dated 1^st November 2001 in favour of Cosec Facilities Limited. The company registration number for Cosec Facilities Limited is left blank and their address is stated to be an address in Gloucester. The date when the charge in favour of Cosec Facilities Limited was supposed to have been registered was 7^th December 2001. There is no indication that Cosec Facilities Limited ever had an address in Gloucester and it is entirely possible that the form of the entry in these copy entries was arrived at by amending the name of some other chargee who had an address in Gloucester to the name Cosec Facilities Limited. These copy entries must be a forgery. Mr Howell had no connection with Grifon Road in 2001. Mr Howell was not genuinely registered as proprietor of a house in Grifon Road until much later (as described below).

The existence of this forged document raises difficult questions. In particular, who was meant to be deceived by this forgery? One answer to that question might be: the Halifax whom Mr Howell was approaching for the purpose of borrowing on the security of 113 Grifon Road. However, the transaction as described to the Halifax by Mr Howell was a purchase by Mr Howell not a re-mortgage of a property Mr Howell had owned for some years and which was the subject to an existing charge in favour of Cosec Facilities. When Mary West gave evidence she stated, speaking generally and not in relation to this transaction, that forged documents were produced to her by or on behalf of Mr Sinclair to persuade her that a particular client was re-mortgaging a property which that client already owned and she acted on that basis in various transactions. If that evidence were true, it would have an important bearing on Miss West’s state of mind and honesty in relation to this and possibly other transactions. The forged office copy entries are indeed consistent with Mr Howell’s transaction being a re-mortgage in relation to Westleigh, Grifon Road pursuant to which he would borrow from the Halifax to pay off the earlier chargee, Cosec Facilities.

On the 10^th November 2003, the Halifax made a mortgage offer to Mr Howell of £187,500 to be secured against 113 Grifon Road.

Also on 10^th November 2003, the Halifax sent mortgage instructions to Pulvers for the attention of Mary West instructing her to act for the Halifax in connection with the mortgage to be granted by Mr Howell of 113 Grifon Road. The mortgage instructions were in the Halifax standard form. They stated that Mr Howell’s address was 182 Suttons Lane and the property to be mortgaged was 113 Grifon Road which was a freehold house. The purchase price was stated to be £250,000. These instructions are of great importance to the question asked earlier as to who was intended to be tricked by the forged office copy entries showing Mr Howell as the owner of 113 Grifon Road. It did not make sense for, say, Mr Sinclair to trick Mary West into believing that Mr Howell was the owner of 113 Grifon Road when she was acting for the Halifax who thought that the transaction it was facilitating with its loan was a purchase of 113 Grifon Road by Mr Howell from a third party vendor. Therefore, this consideration tends to defeat the suggestion that Mary West dealt with the matter on the basis that Mr Howell was remortgaging a property he already owned. If Mary West had thought that, it is baffling why she did not tell the Halifax that or ask for clarification from either the Halifax or Mr Howell. Mary West did not suggest that she ever sought such clarification.

Reverting to the mortgage instructions from the Halifax to Mary West, one of the conditions in the mortgage instructions referred to the conveyancer becoming aware that the borrower owned property in the United Kingdom either alone or with some one else which was not the subject of an associated sale and on which there were mortgages. Miss West knew that Mr Howell had a mortgage on 182 Suttons Lane and a mortgage on 31 Billet Lane. She did not take any action in relation to informing the Halifax about these mortgages.

On the 10^th November 2003, Mary West wrote to Cosec Facilities stating that she was acting for Mr Howell in connection with a re-mortgage of Westleigh, Grifon Road. She asked for a redemption figure from Cosec Facilities.

On the 12^th November 2003, Miss West wrote to Mr Howell in connection with his “re-mortgage”. She stated that Pulvers had been instructed to act for the Halifax and she sent Mr Howell a mortgage deed and asked him to sign it and return it in advance of 19^th November 2003, the target date for completion. In her letter, she stated that the mortgage was being granted to Mr Howell on the basis that he would not be party to any other mortgage or secured loan at the date of completion and that he would be the only adult occupier of the property. She said that if this was not the case, Mr Howell should let her know.

On or about the 17^th November 2003, Mary West carried out a search of the Land Registry in relation to title number EX597144. The result of the search stated that no adverse entries had been made since 3^rd November 2003. The significance of this date may be that it was the date on the first page of the forged copy entries for title EX597144.

On the 18^th November 2003, Mary West signed a certificate of title addressed to the Halifax. The property was described as 113 Grifon Road and the title number was given as EX597144, that is, the whole of the detached house.

Pulvers maintained a ledger card in relation to this transaction. The transaction was described as a re-mortgage of 113 Grifon Road. The mortgage advance from the Halifax arrived in Pulvers’ client account on the 19^th November 2003 and some £173,000 was on the same day sent to Cosec Facilities as a “mortgage redemption”. After fees to a mortgage agent, the sum of approximately £10,000 was remitted to Mr Howell.

The documents do not include a transfer by Hannah Kelleher prior to the 19^th November 2003 nor do they include a mortgage by Mr Howell in favour of the Halifax prior to November 2003.

Nothing seems to have happened for a considerable time after 19^th November 2003. On the 8^th October 2004, Hannah Kelleher executed a transfer of part of the title EX597144 relating to Westleigh, 113 Grifon Road. There is no plan attached to the copy transfer although from other documents it would seem almost certain that the plan referred to in the transfer showed the right hand half only of 113 Grifon Road. The transfer was said to be for a price of £132,000. There is no positive evidence to connect Mary West with the execution of this transfer. On the 13^th October 2004, UK Direct applied to the Land Registry to register the transfer to Mr Howell. There is no positive evidence that Mary West was involved with this application. The application appears to have been received by the Land Registry on the 27^th October 2004.

By an application dated 12^th October 2004, UK Direct applied to register a legal charge in respect of Westleigh, 113 Grifon Road. The title number in the application is EX736595. This appears to be the first time that this title number appears in the documents. There must have been a communication with the Land Registry in around October 2004 when the Land Registry identified that title number as appropriate for the right hand half of 113 Grifon Road. The application which is dated 12^th October 2004 appears to have been received by the Land Registry on 22^nd October 2004 and the necessary fee was treated as paid on the 1^st November 2004.

The documents include a form of mortgage deed signed by Mr Howell in favour of the Halifax relating to Westleigh, 113 Grifon Road. Mr Howell’s signature has been witnessed by Mr Chan, the First Defendant in these proceedings. The title number for the property charged is given as EX736595, that is, the proposed title number which related only to the right hand half of 113 Grifon Road.

In due course, the Land Registry registered Mr Howell as the proprietor of the right hand half of 113 Grifon Road, known as Westleigh, under title number EX736595. The Halifax was registered as chargee in respect of that title pursuant to the charge dated 26^th October 2004. Copy register entries were printed on the 22^nd November 2004. On the 3^rd December 2004, Mary West sent to the Halifax copy entries which are likely to have been the copy entry printed on the 22^nd November 2004. The copy entries in the file do not include a plan.

The Halifax thought that it was lending £187,500 to Mr Howell to enable him to purchase the whole of the house at 113 Grifon Road for a price of £250,000. What seems to have happened is that Hannah Kelleher transferred one half of a house to Mr Howell for a stated price of £132,000 and the Halifax became registered chargee over that one half of the property.

It is clear that the Halifax was deceived. The principal beneficiary of the deceit was Mr Sinclair in that his company Cosec Facilities received a substantial part of the mortgage advance. I find that Mr Sinclair caused the Halifax to be deceived in this way.

As to Mary West, she knew what the Halifax thought was the nature of the transaction and she knew from the Pulvers’ ledger that the real transaction was not in accordance with the Halifax’s belief. It seems much more likely than not that she knew that she was assisting Mr Sinclair to deceive the Halifax.

Mr Howell also knew that the transaction he was involved with was different from described to the Halifax and that the Halifax was being deceived. He received some £10,000 for his involvement. I find that he knew that the Halifax was being deceived.

After the Halifax mortgage monies relating to 113 Grifon Road were released to Cosec Facilities on the 19^th November 2003, but some time before the applications to the Land Registry to register a transfer to Mr Howell and a mortgage to the Halifax, there began a second transaction in respect of 113 Grifon Road. In April 2004, Mr Rose applied to the Bank of Scotland for a mortgage advance. Mr Rose is named as the Sixth Defendant in these proceedings but has not been served with them.

Mr Howell appears to have been acting for Mr Rose in connection with Mr Rose’s application to the Bank of Scotland. On the 11^th May 2004, Mr Howell sent to the Bank of Scotland various documents which purported to identify Mr Rose. He sent further documents to the Bank of Scotland on the 18^th May 2004.

The documents do not include a valuation report in relation to Mr Rose’s transaction although Mr Howell’s fax to the Bank of Scotland on the 11^th May 2004 referred to the valuation being on “a re type basis” which suggests that an earlier valuation report was being reissued, addressed to the Bank of Scotland.

On the 20^th May 2004, the Bank of Scotland made a mortgage offer to Mr Rose of an advance of £215,000 to be secured on a house known as Gorge House, 113 Grifon Road. The name “Gorge House” had not apparently been used in relation to 113 Grifon Road before this time.

Also on the 20^th May 2004, the Bank of Scotland sent mortgage instructions to Pulvers for the attention of Mary West. The mortgage instructions were in the standard form of the Bank of Scotland. The property was described as Gorge House, 113 Grifon Road which was said to be a freehold house. The Bank of Scotland stated that they would lend £215,000 against a purchase price of £255,000.

On the 25^th May 2004, Mary West signed a certificate of title addressed to the Bank of Scotland in relation to Gorge House, 113 Grifon Road. The title number for the property was left blank.

Pulvers maintained a ledger card for this transaction. John Rose’s address was given as Gorge House, Grifon Road. The transaction was described as a re-mortgage of Gorge House, Grifon Road. The ledger shows a mortgage advance of some £215,000 arriving in the Pulvers’ client account from the Halifax on the 26^th May 2004. On the next day, some £212,000 was paid out to Cavendish Finance as “redemption monies”. There was a small sum paid to Mr Rose as “balance to client”.

The documents do not show any transfer by Hannah Kelleher to Mr Rose prior to 26^th May 2004. Nor do they show any charge by Mr Rose in favour of the Halifax prior to the 26^th May 2004.

On the 15^th August 2004, Hannah Kelleher executed a transfer of part of 113 Grifon Road to Mr Rose for a stated purchase price of £128,000. The part in question was described as Gorge House and was the left hand side of the property.

On the 2^nd September 2004, Mr Rose executed a mortgage of Gorge House, 113 Grifon Road in favour of the Bank of Scotland. The title number was stated to be EX735935. This appears to be the first time this title number was used for a part of 113 Grifon Road. It may be that this title number was only identified by the Land Registry later around the same time as an application was made in October or November 2004 to register the transfer and the charge in relation to the right hand side of 113 Grifon Road.

On the 13^th October 2004, an application was made to the Land Registry to register the transfer of the left hand side of 113 Grifon Road to Mr Rose. This application was made by UK Direct and was made at the same time as UK Direct were applying to register Mr Howell in relation to the right hand side of 113 Grifon Road. The fact that the applications were being made by UK Direct at the same time is further shown by the fact that the application in relation to Gorge House shows some confusion and in one place uses the address Westleigh, 113 Grifon Road.

Around the same time, UK Direct also applied to register the charge by Mr Rose in favour of the Bank of Scotland. For this purpose, they used title number EX735935 which was the left hand side of the property. On the 22^nd October 2004, Mr Howell said to be of UK Direct wrote to the Land Registry pointing out that an incorrect house name had been used.

In due course, the Land Registry registered Mr Rose as proprietor of EX735935 and the Bank of Scotland as chargee in relation to that title.

The Bank of Scotland thought that it was lending £215,000 to Mr Rose to enable him to buy the whole of 113 Grifon Road for a purchase price of £255,000. In the end, a transfer of one half of 113 Grifon Road was executed in favour of Mr Rose for a stated purchase price of £128,000 and the Bank of Scotland’s charge was registered in relation to that one half of the property.

It is clear that the Bank of Scotland was deceived. The principal beneficiary of the deceit was Mr Sinclair who, acting through Cavendish Finance, received the greater part of the mortgage advance. I find that Mr Sinclair knowingly deceived the Bank of Scotland.

Mary West knew how the transaction had been described to the Bank of Scotland and she knew that the real transaction was different. Her certificate of title is suspicious because it did not contain a title number. She must have known that she was assisting Mr Sinclair to deceive the Bank of Scotland.

17 Cornwall Close Hornchurch was a four bedroomed semi-detached house. There was side access to a garage at the rear and there was a separate garage registered under a separate title. The property was owned by Deborah Anne Pearman. She is the Seventh Defendant in these proceedings but has not been served with them.

Miss Pearman was registered in relation to the house and the garage served by the side access under title number NGL123293. That title appears to have been the subject of a charge in favour of the Alliance and Leicester dated 6^th July 1999 and a second charge in favour of First National Bank dated 28^th February 2001. The documents include what appeared to be copies of the register entry for title NGL123293 showing that the charges in favour of the Alliance and Leicester and First National Bank had been discharged and in their place was a charge dated 6^th July 2003 in favour of Cavendish Finance Limited. I am suspicious of these register entries because of the form of the typescript and also because the documents included other register entries on other property, where the entries are plainly forged. However, taking this document at face value it would suggest that Cavendish Finance Limited was in the practice of providing secured finance to borrowers. The separate garage was registered under title number EGL44338 and was subject to the charge in favour of the Alliance and Leicester. In the event, nothing appears to have changed in relation to EGL44338 and Miss Pearman and the Alliance and Leicester remained registered in relation to it at all times. However, this title number does appear in some of the subsequent documents to which I will refer.

The first transaction concerning 17 Cornwall Close began in around February 2004. Mr Chan, the First Defendant in these proceedings, applied to the Bank of Scotland for a mortgage advance in relation to 17 Cornwall Close.

On 20^th February 2004, Mr Chan countersigned a client care letter for Pulvers stating that Mary West would carry out most of the work in the transaction. On the same day, he completed a mortgage questionnaire prepared by Pulvers. This stated that Cavendish Finance had an existing mortgage on a property owned by Mr Chan. Mr Chan stated that he intended to use 17 Cornwall Close for his own use and occupation. Mr Chan knew that statement to be untrue.

The Bank of Scotland obtained a valuation of 17 Cornwall Close. The property was valued at £250,000. It is clear from the valuer’s report that the property being valued was the whole of the property including the two garages. The position in relation to the two garages was described in a little detail in the report.

On the 11^th March 2004, Mary West wrote to Cavendish Finance referring to Mr Chan’s “proposed re-mortgage”. She asked for a redemption figure from Cavendish Finance.

On the 17^th March 2004, the Bank of Scotland wrote to Pulvers for the attention of Mary West and stated that a mortgage offer had been made to Mr Chan in connection with his purchase of 17 Cornwall Close. This letter makes it clear that the transaction was not a re-mortgage by Mr Chan of a property he owned but was a purchase of a property in reliance on a mortgage advance.

On the 17^th March 2004, the Bank of Scotland wrote to Pulvers for the attention of Mary West instructing Pulvers to act for it in connection with the mortgage to be granted by Mr Chan. Mr Chan’s address was given as Firndale, 31 Billet Lane and the address of the property to be mortgaged was 17 Cornwall Close. The property was described as a freehold house. The amount of the loan was stated to be £200,000. The instructions were in accordance with the Bank of Scotland’s standard form. The purchase price of the property was stated to be £250,000. On the 17^th March 2004, Bank of Scotland sent to Pulvers for the attention of Mary West amended mortgage instructions but the essential matters were described as before.

On the 23^rd March 2004, Mary West signed a certificate of title addressed to the Bank of Scotland. The property was described as 17 Cornwall Close. The title number was given as EGL44338 but this was the separate garage and not the house. The certificate referred to the price stated in the transfer as £250,000.

Cavendish Finance sent to Pulvers a redemption statement for approximately a £199,000. Pulvers maintained a ledger in relation to this transaction. Mr Chan’s address was given as 784A Harrow Road Sudbury and not 31 Billet Lane or 17 Cornwall Close. The transaction was described as a re-mortgage of 17 Cornwall Close. The ledger shows that the mortgage advance of some £200,000 was received in Pulvers’ client account on the 24^th March 2004. On the next day, some £199,000 was paid out to Cavendish Finance as a “mortgage redemption”. A small sum was paid to an account in the name of Mr Chan.

The documents do not show any transfer by Miss Pearman to Mr Chan prior to 25^th March 2004. Nor do they show any charge by Mr Chan in favour of the Bank of Scotland prior to that date.

Nothing seems to have happened for a few months. The documents include a dated but unsigned application to the Land Registry to register the discharge of a charge and the grant of a charge. The title number is given as EGL44338 which is the separate garage and not the house. There is no sign that this document was proceeded with as title number EGL44338 was not altered at any time.

On the 11^th August 2004, Miss Pearman executed a transfer of part of the land in title NGL123293 in favour of Mr Chan. The land in question was described as The Ridings, 17 Cornwall Close. The name “The Ridings” does not appear to have been previously used in connection with this property. The transfer referred to a plan which showed the land transferred as being the side access way leading to the garage to the rear of the house and a part of the garden to the rear of the house; this is not the separate garage under title EGL44338. The transfer was expressed to be for a purchase price of £139,500. There is no positive evidence that Miss West was involved with this transfer. The matter appears to have been handled by UK Direct at this stage.

In around October 2004, UK Direct applied to the Land Registry to register the transfer of The Ridings, 17 Cornwall Close in favour of Mr Chan. Mr Howell appears to have been involved with the Land Registry at this stage. The Land Registry have a note of a conversation with Mr Howell described as being of UK Direct. On the 3^rd November 2004 Mr Howell rang the Land Registry enquiring as to progress with the registration. The Land Registry note uses title number EGL478308. This appears to be the first time that the documents show the use of this title number. This is the title number which is used for the registration of the land transferred to Mr Chan by the transfer of 11^th August 2004. When Mr Farrow of the Land Registry telephoned Mr Howell, he asked Mr Howell if there was any particular urgency and Mr Howell is recorded as saying that the property formed part of a portfolio for a corporate client and there was pressure to complete.

On the 19^th November 2004, Mr Chan executed a charge of The Ridings, 17 Cornwall Close in favour of the Bank of Scotland. Mr Chan’s signature is witnessed by Mr Howell. The land being charged is given the title number EGL478308.

On the 19^th November 2004, UK Direct applied to the Land Registry to register the charge dated 19^th November 2004 in relation to title number EGL478308.

In due course, Mr Chan was registered as the proprietor of The Ridings, 17 Cornwall Close having title number EGL478308. This land was the access way at the side of 17 Cornwall Close and the garage to the rear and a part of the garden to the rear. The charge in favour of the Bank of Scotland was registered against this title.

The Bank of Scotland thought that it was advancing £200,000 to Mr Chan to enable him to buy the semidetached house at 17 Cornwall Close together with two garages for a price of £250,000. What happened was that Deborah Pearman transferred to Mr Chan an access way and a garage and a part of the garden for a stated price of £139,500 and Mr Chan became the registered proprietor of that land and the Bank’s charge was registered against that title.

It is clear that the Bank of Scotland was deceived. The principal beneficiary of the deceit was Mr Sinclair who (through Cavendish Finance) obtained the principal part of the mortgage advance. It might be said that if there was a genuine loan from Cavendish Finance to Miss Pearman and the amount paid to Cavendish Finance was no more than the sum due to it, then the transaction from its point of view should be viewed as a genuine commercial transaction. There is no evidence one way or the other as to the amount of any genuine loan from Cavendish Finance to Miss Pearman. In any event, Mr Sinclair (through Cavendish Finance) obtained the benefit of having the loan, if there was one, being paid off with the monies from the Bank of Scotland. Further, in relation to the second transaction involving 17 Cornwall Close which is referred to below, Cavendish Finance put forward a similar redemption figure on two occasions and was paid twice. Having regard to the very clear pattern which has emerged from all the other cases considered up to this point, I find on the balance of probability that Mr Sinclair was behind this transaction and caused the Bank of Scotland to be deceived.

Mary West knew how the transaction was described to the Bank of Scotland and she knew from the Pulvers’ ledger that the real transaction was very different. She must have known that the purpose of the transaction was to deceive the Bank of Scotland.

Mr Chan made an untrue statement in the mortgage application to the Bank of Scotland. He participated in the transaction by taking a transfer of part of the property and executing a charge of that part in favour of the Bank of Scotland. The transaction he participated in was not a sensible transaction and it must have been for the purpose of deceiving the Bank of Scotland. I find that Mr Chan knew of the deceit.

In around March 2004, Miss Pearman applied to Preferred Mortgages for a mortgage advance. At that time, the copies of the register entries for title number NGL123293 stated that 17 Cornwall Close was charged to Cavendish Finance although, as I have stated, I am suspicious as to the genuineness of these register entries. On 2^nd March 2004, Miss Pearman countersigned a client care memorandum from Pulvers stating that Mary West would carry out most of the work in the matter. On the same day, Miss Pearman completed a mortgage questionnaire prepared by Pulvers she stated that she had an existing mortgage in favour of Cavendish Finance and that she intended to use the property for her own use and occupation.

Preferred mortgages obtained a valuation of 17 Cornwall Close. It is clear that the valuer was valuing the whole of the house together with the garage at the rear. The valuation was valued for either £240,000 or £260,000.

On the 8^th June 2004, Preferred Mortgages made a mortgage offer to Miss Pearman of a loan of some £195,000.

Also on the 8^th June 2004, Preferred Mortgages instructed Pulvers to act for it in connection with the mortgage to be granted by Miss Pearman. The instructions referred to the CML Lenders’ Handbook and to the specific part II instructions for Preferred Mortgages.

On 21^st June 2004, Mr Pulver signed a certificate of title in favour of Preferred Mortgages. In accordance with the usual practice, the certificate would have been prepared by Miss West. The property was described as 17 Cornwall Close but no title number was given. The standard form of certificate for title had an entry headed “price stated in transfer”. As the transaction was a re-mortgage and not a purchase, this part of the form had been correctly filled in by stating “re-mortgage”. That may be relevant when one considers how other certificates of title were filled in where, in many cases, a specific figure was stated as the “price stated in transfer”.

Mary West sent the certificate of title to Preferred Mortgages on the 21^st June 2004. Preferred Mortgages obviously raised a query about the title number to the property because Mary West wrote to Preferred Mortgages on 23^rd June 2004 giving the title number as NGL123293. At that time, the property in title number NGL123293 included not only the house but also the side access way and the garage and garden to the rear.

Miss West obtained a mortgage redemption figure from Cavendish Finance prior to 25^th June 2004. What is remarkable is that Miss West had earlier asked for a redemption figure in relation to this self-same mortgage in connection with the transaction involving Mr Chan and she had been given a redemption figure and that sum was paid to Cavendish Finance on 25^th March 2004. It should have struck Miss West as very odd that a similar sum of money was again being put forward by Cavendish Finance as due on the self-same mortgage and that the purpose of Miss Pearman’s transaction was ostensibly to pay off that self-same debt to Cavendish Finance.

Pulvers maintained a ledger card in relation to this transaction. The transaction was correctly described as a re-mortgage of Cornwall Close Hornchurch. The ledger shows that the mortgage monies of some £195,000 arrived in Pulvers’ client account on 25^th June 2004 and on the same day, a sum of approximately £193,000 was paid out to Cavendish Finance Limited as “mortgage redemption”. A sum of approaching £2,000 was paid to Miss Pearman on the 29^th June 2004.

The documents include an executed mortgage by Miss Pearman in favour of Preferred Mortgages. The mortgage is dated 29^th June 2004 and there may have been a short delay in completion in this case. The property which was subject to the mortgage was described as 17 Cornwall Close having title number NGL123293. That title number at that time included the side access way and the garage and garden to the rear. Miss Pearman’s signature was witnessed by Mr Howell.

Although Pulvers had been instructed by Preferred Mortgages to act for it in connection with the grant of this mortgage, the application to the Land Registry to register the mortgage was made by UK Direct. That application was made on the 17^th November 2004 the application was made in relation to title number NGL123293. This application was made following the earlier application made by UK Direct on behalf of Mr Chan to register a transfer by Miss Pearman in favour of Mr Chan of part of the land in title NGL123293. Accordingly, when UK Direct applied to register the charge in favour of Preferred Mortgages, they were applying to register it over the part of the land which remained in title NGL123293 and not the entirety of 17 Cornwall Close. In due course, the mortgage in favour of Preferred Mortgages was registered against the balance of the land remaining in NGL123293 and not the whole of 17 Cornwall Close.

Preferred Mortgages believed that it would obtain a charge over the land in title number NGL123293 and as described in the valuation report. Instead, they obtained a charge over the land remaining in that title after the access way and the garage and part of the garden to the rear had been removed from the registered title.

It is clear that Preferred Mortgages was deceived. The principal beneficiary of the deceit was Mr Sinclair who received (through Cavendish Finance) the greater part of the mortgage advance. I find that Mr Sinclair knew of this deceit.

As to Mary West, she had been engaged in relation to two transactions involving 17 Cornwall Close within a short space of time. She knew that the lender in relation to the first transaction was lending money to Mr Chan to enable him to buy the property and she signed a certificate of title in relation to that transaction. Not long afterwards she was acting for Miss Pearman who, so far as the second lender was concerned, still owned the property and wished to re-mortgage it. Further, Miss West caused Cavendish Finance to be paid twice, apparently for the same debt, within a short period of time. Miss West must have realised that the lenders were being deceived.

Matthews Farm, Panfield Lane, Braintree comprised a four bedroomed detached farmhouse with stables, outbuildings and seven acres of land. This property was registered under title number EX598265. The registered proprietor was Michael O’Neill. The documents do not include official copies of the register entries for title EX598265 before the transactions involving Jack Doughty and James Doughty. There do exist what appear to be official copies of register entries for title EX598265 which show the edition date of 7^th January 2004 and purport to show the entries subsisting on the register on 12^th August 2004. This shows James Doughty as the proprietor of the registered land. His address is given as The Farmhouse, Matthews Farm. The date on which, apparently, Mr James Doughty became registered proprietor is 6^th December 2002. These official copies of register entries show a charge dated 18^th September 2002 in respect of the Halifax. These register entries cannot be accurate. The registration of James Doughty in respect of title number EX598265 as at 6^th December 2002 is inconsistent with the other register entries which show Michael O’Neill as registered proprietor from 6^th December 1999 to 17^th May 2005. It seems very likely that the register entries showing James Doughty as registered proprietor from 6^th December 2002 are a forgery. Nonetheless, those register entries may well be accurate insofar as they show the existence of a charge in favour of the Halifax dating from 18th September 2002 and may refer to a charge binding Mr O’Neill as owner of Matthews Farm, which charge came to be redeemed in the course of the transactions referred to below.

If the register entries showing James Doughty as registered proprietor of EX598265 from 6^th December 2002 are forgeries, this raises the question as to who was intended to be deceived by these forgeries. I will refer to the transactions involving James Doughty in detail hereafter. It does not seem that the forgery was directed at Birmingham Midshires from whom James Doughty obtained a mortgage advance. James Doughty did not represent to Birmingham Midshires that he was re-mortgaging a property he already owned but rather represented to Birmingham Midshires that he was seeking to purchase a property with the benefit of a loan from Birmingham Midshires. Mary West gave evidence generally, and not specifically in relation to this transaction, that documents were provided to her by Mr Sinclair and his associates and these documents included forgeries on which Mary West relied. Could it have been the case that the document showing James Doughty as registered proprietor of some part of Matthews Farm subject to a charge in favour of the Halifax was provided to Mary West to persuade her that James Doughty had title to re-mortgage this land in favour of Birmingham Midshires? What is significant here is that when Mary West signed a certificate of title in relation to James Doughty’s loan from Birmingham Midshires, she referred to the price “in the transfer”. Although Mary West gave evidence generally and not in relation to this specific transaction that language such as this could be understood as the price stated in the valuation where the transaction involved a remortgage, I find that explanation less than likely. If one does take her statement in the certificate of title at face value, then the transaction being described to the lender was a purchase by James Doughty and not a re-mortgage of a property he already owned and charged to the Halifax.

Having identified the possibility of a forgery in relation to one set of register entries for title number EX598265, it is right to refer to another pair of documents in relation to the transactions involving Jack Doughty and James Doughty which documents are obvious forgeries. The documents contain two accounts from Anglian Water. In both cases the customer’s name is given as Mr J Doughty. In one case, the premises said to be supplied are the Coach House and in the other case the premises said to be supplied are the Farmhouse. In all other respects the documents are the same. The documents appear to relate to a period before Jack Doughty could claim to have acquired the Coach House and James Doughty could claim to have acquired the Farmhouse. These documents therefore relate to some third property and the property said to have been supplied must have been forged on the parent document. These documents appear to have been brought into existence to assist with the identity of Mr Jack Doughty and Mr James Doughty. Again, the documents could not really have been intended to deceive lenders from whom Jack Doughty and James Doughty were intended to borrow because, in the case of Mr Jack Doughty, he represented to his lender that he was purchasing the Coach House in mid 2004 and, in the case of James Doughty, he represented to his lender that he was purchasing the Farmhouse in mid 2004. Mary West does not appear to have believed that Jack Doughty or James Doughty already lived at the addresses shown on the water bill. For example, when Mary West wanted to send a large cheque to Mr Jack Doughty, she sent it to what seems to have been his true address in Upminster.

The first transaction concerning a part of Matthews Farm began in around June 2004 and involved Jack Doughty. On or about 30^th June 2004, Jack Doughty applied to the Halifax for a mortgage advance. On 30^th June 2004, Jack Doughty countersigned a client care memorandum from Pulvers stating that Mary West would carry out most of the work in his transaction. On the same day, Jack Doughty completed a mortgage questionnaire from Pulvers. He stated that he had an existing mortgage with Cavendish with an account number “to be advised”. He stated that he intended to use the property (the subject of the transaction) for his own use and occupation. There is a further version of this completed questionnaire again apparently completed by Jack Doughty where he gives his full name as Jack Thomas Doughty and he gives the account number of a mortgage with Cavendish Finance.

The Halifax obtained a valuation of the property to be mortgaged. The property was described as the Coach House, Matthews Farm, Panfield Lane. The valuation report makes it clear that the valuer was valuing a four bedroomed detached farm house with a range of outbuildings and stables set in approximately seven acres of land. This property appears to equate to the full extent of the land originally in title number EX598265 and it does not appear that any part of that property had earlier been called the Coach House. The valuation report states that Jack Doughty’s address is at a property in Upminster. The property to be mortgaged was valued at £680,000.

On the 21^st July 2004, the Halifax made an offer to Jack Doughty of a mortgage advance of £400,000 to be secured on the Coach House, Matthews Farm. Also on the 21^st July 2004, the Halifax sent a copy of this mortgage offer to Mr Howell of Premium Finance who was apparently acting as a mortgage agent for Jack Doughty.

Also on the 21^st July 2004, the Halifax sent mortgage instructions to Pulvers for the attention of Mary West. The mortgage instructions were in the Halifax standard form. The mortgage instructions gave Mr Jack Doughty’s residential address as a property in Upminster. The Halifax stated they would lend £400,000 against a purchase price of £680,000.

On the 22^nd July 2004, Mary West wrote to Cavendish Finance referring to “a proposed re-mortgage” of the Coach House and asking Cavendish Finance for a redemption figure. On 26^th July 2004, Cavendish Finance gave a redemption figure of just under £200,000.

Pulvers maintained a ledger card in relation to this transaction. The transaction was described as the re-mortgage of the Coach House. On the 27^th July 2004, there arrived in Pulvers’ client account, the mortgage advance of some £400,000 from the Halifax. Approximately £200,000 of that went out the same day to Cavendish Finance. Also on the 27^th July 2004, Pulvers drew a cheque in favour of J Doughty for some £200,000 and this went to Mr Jack Doughty at his address in Upminster under cover of a letter of 28^th July 2004. In the letter, Mary West said that the re-mortgage of the Coach House had been completed and the sum of £200,000 was the sum due to Mr Jack Doughty.

On the 28^th July 2004, Mary West wrote to the Halifax stating that completion of its mortgage took place the previous day. On the 2^nd August 2004, the Halifax stated that the matter was completed on the 27^th July 2004 upon verbal confirmation that a clear and unqualified certificate of title was being submitted but the Halifax had not yet received it. They enclosed a duplicate certificate of title.

On the 9^th August 2004, Mary West signed a certificate of title. The borrower was said to be Jack Thomas Doughty and the property was the Coach House, Matthews Farm. The price stated in the transfer was given as £680,000 and the completion date was 27^th July 2004. The title number for the Coach House was given as EX598265. That was the original title to the farmhouse and outbuildings and seven acres of land vested, at that time, in Mr O’Neill. Although the documents also contain what I have described as the forged register entries for title number EX598265, these showed the registered proprietor as James Doughty and not Jack Thomas Doughty in relation to whom the certificate of title of 9^th August 2004 was being given. On the face of it, the certificate of title related to the entirety of the property namely the farmhouse, the outbuildings and seven acres of land which were the subject of the valuation report addressed to the Halifax.

There does not appear to have been a transfer of any part of Matthews Farm in favour of Jack Thomas Doughty nor a charge by Jack Thomas Doughty in favour of the Halifax before the 27^th July 2004 when the monies were released nor indeed before the 9^th August 2004 when the certificate was signed by Mary West.

Some two months later, on 8^th October 2004, Mr O’Neill transferred a part of title EX598265 to Jack Thomas Doughty. The part was described as the Coach House edged in blue on an attached plan. The plan is not attached to the transfer in the documents before the court but it appears from the later registration that the land transferred, given the name the Coach House, was one of the outbuildings at the farm and some adjoining land but not anything like the seven acres in title EX598265. The purchase price for the transfer to Jack Thomas Doughty was stated as £248,000.

On the 8^th October 2004, Jack Thomas Doughty charged the Coach House to the Halifax. The property known as the Coach House is said to be described in more detail in the document transferring it to Jack Thomas Doughty. The title number for this property is left blank in the charge. There is no positive evidence that Mary West was involved with the transfer of 8^th October 2004 nor the charge of 8^th October 2004.

The registration of the transfer of 8^th October 2004 and the charge of October 2004 was dealt with by UK Direct rather than by Mary West and Pulvers. On 15^th October 2004, UK Direct applied to the Land Registry to register the transfer to Jack Thomas Doughty. They did not at that stage apply to register the charge in favour of the Halifax. The application to register the transfer resulted in a requisition from the Land Registry. This requisition gave a title number EX736476 to the property known as the Coach House. The requisition related to the fact that the parent title out of which this new title was being created showed a charge in favour of Halifax Plc registered on 7^th January 2003. This could well be the charge in favour of the Halifax registered on that date shown on what are otherwise forged copy entries for title EX598265.

UK Direct did not immediately reply to the requisition of 25^th October 2004. There was a warning of cancellation letter sent on 12^th November 2004. In due course, Jack Thomas Doughty did become registered in relation to the Coach House under title number EX736476. That was because the charge in favour of the Halifax, securing a loan of some £400,000 was in due course paid off by the money borrowed by James Doughty in the transaction referred to below.

Having applied to register the transfer of the Coach House to Jack Thomas Doughty, UK Direct then applied to register the charge in favour of the Halifax. Their application was made on the 16^th November 2004 and referred to the new title number EX736476. In due course the charge in favour of the Halifax was registered against title EX736476.

The Halifax thought it was lending £400,000 to enable Jack Thomas Doughty to buy the farmhouse and outbuildings and seven acres of land for £680,000. In fact, there was transferred to Jack Thomas Doughty one of the outbuildings and some adjoining land for a stated price of £248,000 and the Halifax charge was registered in relation to that land.

It is clear that the Halifax was deceived. The principal beneficiary of the deceit was Mr Sinclair who (through Cavendish Finance) received a substantial part of the mortgage advance. I also accept Jack Doughty’s evidence (to which I refer below) on the point that the transaction was set up by Mr Sinclair. I find that Mr Sinclair caused the deceit to be committed.

As to Mary West, she knew how the matter had been described to the Halifax and that the real transaction was different. She must have known that she was assisting Mr Sinclair to deceive the Halifax.

Jack Doughty was served with these proceedings but the only part he has played in them is to file an affidavit shortly after the beginning of the trial. In that affidavit he stated that he had never been to the Coach House and had never seen the Coach House. He states that John Sinclair asked him for a favour in that John Sinclair needed a name with a good track record to obtain a mortgage on a property. Jack Doughty agreed to assist John Sinclair with his plan. He was provided with documents and papers which he signed. He was aware that the papers related to a mortgage. He says he had no interest in the matter, financial or otherwise. He assumed that John Sinclair just needed use of Jack Doughty’s name. He now regrets what he has done and realises that he should not have signed the forms.

What is significant from Jack Doughty’s evidence is that he accepts that he did sign the various documents and papers involved in the transaction. He may or may not have read them but if he did not read them then he deliberately turned a blind eye to what they said and what statements were being made by him on which others would be expected to rely. His application to the Halifax stated that he had a mortgage account with Cavendish Finance; on the basis of his affidavit, that statement was untrue. His application also stated that he intended to occupy the property; that statement was untrue. Jack Doughty also received documents from Pulvers sent to his home address which he could not have failed to understand were referring to him mortgaging the Coach House. Jack Doughty also executed a charge in favour of the Halifax. Jack Doughty also received a cheque for approximately £200,000 and his affidavit is silent as to what happened that cheque. In an affidavit sworn by his brother, James Doughty, it is stated that money in relation to the Coach House appeared in James Doughty’s bank account. The cheque had been made payable to “J. Doughty” without specifying the first name. James Doughty stated that the money in his account was transferred out on the instructions of Mr Sinclair.

On the basis of the above evidence, I find that Jack Doughty dishonestly assisted Mr Sinclair to deceive the Halifax.

The second transaction relating to Matthews Farm concerned James Doughty and began in around June 2004. It should be noted that the transaction involving Jack Doughty and the transaction involving James Doughty were being handled by Mary West over the same period of time.

On the 24^th or 26^th June 2004, James Doughty countersigned a client care memorandum from Pulvers stating that Mary West would carry out most of the work in the transaction. On the 24^th June 2004, James Doughty answered a mortgage questionnaire from Pulvers stating that he had an existing mortgage in favour of the Halifax. He stated that he intended to use the property the subject of the transaction for his own use and occupation. James Doughty applied to Birmingham Midshires for a loan in relation to a property called the Farmhouse, Matthews Farm. Birmingham Midshires obtained a valuation of the Farmhouse, Matthews Farm. The property was valued at £650,000. It is clear from the valuer’s report that the valuer was valuing a four bedroomed detached house with stables, outbuildings and seven acres, that is, the entirety of the land originally in the title EX598265 owned by Mr O’Neill.

On the 29^th July 2004, Birmingham Midshires made an offer to James Doughty of a loan of £464,600 which, after fees, became approximately £460,000. A copy of this offer was sent to Pulvers. Condition 37 of the offer required the conveyancer to complete confirmation of identification for James Doughty.

Also on 29^th July 2004, Birmingham Midshires instructed Pulvers to act for it in connection with the proposed mortgage from James Doughty. Birmingham Midshires referred to the CML Lenders’ Handbook and sent a copy of the mortgage offer letter.

On 3^rd August 2004, Birmingham Midshires wrote to Pulvers stating that condition 37 of the mortgage offer as to identification of James Doughty had now been satisfied.

On the 10^th August 2004, Mary West signed a certificate of title addressed to the Halifax (effectively trading as Birmingham Midshires). The property was described as the Farmhouse, Matthews Farm. The title number was left blank. The price stated in the transfer was stated to be £650,000. I have already referred to the fact that the certificate of title referred to the transaction as involving a transfer. That is what the Halifax/Birmingham Midshires believed.

The transfer executed by Mr O’Neill in favour of James Doughty is dated 4^th August 2004. The transfer relates to part of the land in title EX598265, namely, the Farmhouse, Matthews Farm the part in question is said to be edged in blue on an attached plan. There is no plan attached to the transfer in the documents but the later registrations show that the transfer related to the main farmhouse in Matthews Farm and some adjoining land but not the outbuildings and not the greater part of the seven acres of land. The price stated in the transfer was £228,000.

Pulvers maintained a ledger card in relation to this transaction. Mr James Doughty’s address was given as the Farmhouse, Matthews Farm. The transaction was described as the re-mortgage of the farmhouse. On the 11^th August 2004, the mortgage advance from Birmingham Midshires of some £460,000 arrived in Pulvers’ client account. On the same day, Pulvers paid out some £402,000 to the Halifax. It appears that this payment to the Halifax was by way of the redemption of a charge Mr O’Neill had granted to the Halifax in September 2002 which was registered against title number EX598265 and which was probably the subject of the Land Registry requisition of 25^th October 2004 in relation to the transaction involving Jack Doughty. Having paid this sum to the Halifax, there remained some £57,500 from the Birmingham Midshires mortgage advance and this was paid to James Doughty.

The documents do not include a charge granted by James Doughty to Birmingham Midshires before the monies were released on the 11^th August 2004.

Mary West and Pulvers did not handle the subsequent registration of this transaction. On 15^th October 2004, UK Direct applied to the Land Registry to register the transfer of the Farmhouse to James Doughty. On or about the 24^th October 2004, James Doughty charged the Farmhouse to the Halifax trading as Birmingham Midshires. This charge referred to the Farmhouse as having title number EX736074. This was the first time this title number is used in the documents. James Doughty’s signature was witnessed by Paul Howell. In late October 2004 or early November 2004, UK Direct applied to register the charge in favour of the Halifax. The application referred to title number EX736074.

On 9^th November 2004, the Land Registry raised a requisition in relation to the application to register the charge over title EX736074. Amongst other things it was pointed out that the charge submitted was undated. It seems therefore that the date 24^th October 2004 written on the charge granted by James Doughty was written there after 9^th November 2004.

In due course, James Doughty became registered under title number EX736074 in relation to the property known as the Farmhouse. This property was the principal farmhouse and some adjoining land but not the outbuildings and not the greater part of the seven acres of land. The charge in favour of the Halifax which bore the date 24^th October 2004 was registered against this title.

The Halifax, trading as Birmingham Midshires, advanced £400,000 to James Doughty to enable him to purchase the farmhouse and outbuildings and seven acres of land for £650,000. Instead, there was transferred to James Doughty the farmhouse but not the outbuildings and not most of the land for a stated purchase price of £228,000 and the relevant charge was registered against this area of land only.

It is clear that the lender was deceived. Mr James Doughty’s evidence to which I refer below and which I accept on this point stated that Mr Sinclair set up the transaction and caused the lender to be deceived.

As to Mary West, she knew that the lender thought that it was lending on a purchase whereas the Pulvers’ ledger showed that the real transaction was different. The omission of a title number from her certificate of title is suspicious. She must have known that she was assisting with a deceit practised on the lender.

James Doughty was served with these proceedings but the only part he has played in them is to file an affidavit shortly after the beginning of the trial. In that affidavit he stated that he had never been to the Farm House and had never seen the Farm House. He states that John Sinclair asked him for a favour in that John Sinclair needed a name with a good track record to obtain a mortgage on a property. James Doughty agreed to assist John Sinclair with his plan. He was provided with documents and papers which he signed. He was aware that the papers related to a mortgage. He says he had no financial interest in the matter. He assumed that John Sinclair just needed use of James Doughty’s name. He now regrets what he has done and realises that he should not have signed the forms.

What is significant from James Doughty’s evidence is that he accepts that he did sign the various documents and papers involved in the transaction. He may or may not have read them but if he did not read them then he deliberately turned a blind eye to what they said and what statements were being made by him on which others would be expected to rely. His application to Birmingham Midshires stated that he had a mortgage account with the Halifax; on the basis of his affidavit, that statement was untrue. His application also stated that he intended to occupy the property; that statement was untrue. James Doughty also executed a charge in favour of the Halifax. James Doughty also received a payment of some £57,500. In his affidavit, he states that this sum was transferred to his bank account but he then transferred it on the instructions of Mr Sinclair. He also says that a similar thing happened in relation to a sum of money which had earlier gone into his account in relation to the Coach House.

On the basis of the above evidence, I find that James Doughty dishonestly assisted Mr Sinclair to deceive the Halifax/Birmingham Midshires.

I have examined in detail the many transactions in which Mary West was involved. On the basis of that examination, it appears in every case that she must have known that she was assisting Mr Sinclair (and others) to deceive a lender. When one considers not just an individual case, but all the cases together, a clear consistent pattern emerges. That body of evidence to the effect that she knew of the deception appears overwhelming.

Mary West denies that she knew of any deception or dishonesty. She says that she was not a wrongdoer but a victim. She says that Mr Sinclair first of all tricked her for the purpose of tricking the lender. She did not know that anything she ever did for a lender or certified to a lender was wrong in fact and for the purposes of deception. She says that Mr Sinclair gave her forged documents on the basis of which she certified title in the borrower and that led to the lender advancing the mortgage monies. She freely accepts that she should have spotted what was going on if she had been more diligent or more competent. She positively asserts that she was very incompetent. But she says she was not dishonest.

I have considered very carefully whether Mary West might be right in the evidence she gave. There are a number of points which are possibly in Mary West’s favour that need to be addressed.

The first point is that, unlike the other participants in the deceptions, there is no independent evidence either way as to whether Mary West did, or did not, profit from her involvement. She says she got nothing out of it. Pulvers have not asked to see her bank accounts and have not set out to prove a positive case that she was benefiting financially from her involvement. Of course, the work she did brought in fees for Pulvers but that did not affect her remuneration. Her evidence was that she was over worked anyway so that if she had not done these transactions for Mr Sinclair, it would have helped her with her work load and Mr Pulver could not have complained about the work load she was managing to bear. A possible answer may be that the court simply does not know what the arrangements were between Mr Sinclair and Mary West. It is right to say that the evidence given by Mary West revealed very little of herself and in some respects e.g her use of different names and her use of her mother’s address as her home address, she was secretive about herself and her affairs.

A second consideration arises from the visit from the Law Society in February 2004. Would Mary West really have continued after February 2004 to assist in deception and fraud in those circumstances? A possible answer is that the principal subject matter of the investigation by the Law Society was client care and communicating with clients. It may be that Mary West did not feel that the investigation had touched on the substance of her activities.

Another consideration arises from the fact that Mr Sinclair did not use Mary West alone for his activities. He used Reeve, Fisher & Sands and Christi & Co. In the later period, he used UK Direct, which appears to have been controlled by him, to handle registrations at the Land Registry. Could this have been because he was deceiving Mary West as to his activities and it was important not to reveal to her too much of what was going on? The difficulty with that suggestion is that in the detail of the transactions I have examined, which detail was generally known to Mary West, it was really obvious what Mr Sinclair was up to.

Another point arises out of the fact that there do appear to be forged documents in the material before the court. Could these be examples of forged documents used to trick Mary West as she describes? I have examined the various cases of forgery or possible forgery. It does not appear to be the case that Mary West relied upon the forged documents and she had other material which showed that the position was not in accordance with the forgeries. Thus, whoever was intended to be tricked by these forgeries, it does not appear to have been Mary West.

Another question that might be asked is: if Mary West had been knowingly dishonest, would she not have dealt with matters more competently and covered her tracks better? I think that the answer to that is that so far as she was concerned the work which she was doing produced the desired result. All she had to do was to sign a certificate of title (or get Mr Pulver to sign one) and the money was advanced to the lender and could be paid out to Mr Sinclair and others. In some cases, it was necessary to wait to register the transactions because of the splits in the original title that needed to be carried out. It seems to me that Mary West did not feel that she had to be especially diligent in covering her tracks but she dealt with matters in her normal way which was slow and not thorough.

Having considered these various matters which might be argued to be in favour of Mary West, my overall conclusion is that the evidence that Mary West knew she was assisting Mr Sinclair to deceive the lenders is too strongly against her such that it cannot be overborne by the possibilities and questions which I have just identified.

The persons who suffered the principal loss as a result of the various Defendants’ activities were the various lenders. However, these proceedings have not been brought by the lenders, or any of them, against the Defendants. Instead, these proceedings are brought by Pulvers. In these circumstances, it is appropriate to consider what liability Pulvers might have to the various lenders by reason of the events described in this judgment and then, separately, to consider the claims which Pulvers might be able make against the various Defendants as a result. At this stage, I will deal with the claims that might be made against Pulvers and when I come to deal with the claims that might be made against the various Defendants I will consider both claims which lenders might bring against the various Defendants (which are relevant for the purposes of the Civil Liability (Contribution) Act 1978) and also the claims which Pulvers might make direct against the various Defendants.

In each of the cases described above, where the lenders paid money into the Pulvers’ client account, those monies were held by Pulvers on trust for the relevant lender. This is the general position in a case where a mortgagee pays money to the mortgagee’s solicitor on terms that the solicitor is to use the money for the purpose of assisting the mortgagor to purchase a property or to discharge an earlier mortgage and where the money is only to be paid out of the solicitors’ client account upon the execution of a valid charge by the mortgagor in favour of the lender. This position was also expressly spelt out in the various mortgage instructions given by the lenders to Pulvers to which I have referred. The nature of such a trust is discussed in Twinsectra Limited v Yardley [2002] 2 AC 164 at[99] per Lord Millett.

When the monies were paid out of the Pulvers’ client account to the various recipients described above this was a breach of trust by Pulvers. In this respect, Pulvers, the firm, is responsible for the dishonest behaviour of Mary West. The present is not simply a case where a solicitor negligently believes that the pre conditions to transferring the trusts money are satisfied and does so in that belief: contrast Bristol and West Building Society v Mothew [1998] Ch1. Accordingly, Pulvers are liable to the lenders for breach of trust in parting with the trust monies in the various transactions described above.

In addition to Pulvers’ breach of trust, Pulvers owed a duty of care to the various lenders and were in breach of that duty of care. Pulvers are vicariously liable for the actions of Mary West even though she was dishonest: see Lloyd v Grace-Smith & Co [1912] AC 716.

I was not addressed on the proper approach to the assessment of the damages for which Pulvers will be liable to the various lenders. I therefore proceed on the basis that Pulvers’ liability for breach of trust will oblige it to pay equitable compensation to the lenders and such compensation will be assessed in accordance with the decision in Target Holdings Limited v Redferns [1996] AC 421. In relation to damages for negligence, the general principles relating to the assessment of such damages will apply. Both equitable compensation and common law damages will potentially involve the court in assessing the deterioration in the position of the individual lender by reason of the matters complained of and the deterioration in question will be the net deterioration after taking account of any benefits (such as the grant of a valid charge) which the lender obtained as a result of the transaction.

I have found that Mr Sinclair was behind the various acts of deception involved in the transactions I have described. Mr Sinclair’s liability can be founded on various different grounds.

First, I find that Mr Sinclair conspired with the person whose name was used in the various transactions to deceive the lender in question. I also find that Mr Sinclair and the person or persons involved with him in the conspiracy intended to injure the relevant lender.

I have more difficulty with the question whether Mr Sinclair and his fellow conspirator or conspirators intended to injure Pulvers. The question of the intention which must be shown to exist in relation to the tort of conspiracy to injure by unlawful means involves a consideration of the principles which were discussed in detail by the Court of Appeal in Douglas v Hello! Limited(No. 3) [2006] QB125 and by the House of Lords when considering the three conjoined appeals reported under the name OBG Limited v Allan [2007] 2 WLR 920. In the Court of Appeal, the intention needed for the tort of conspiracy was considered together with the intention needed for other economic torts: see at [159] – [162], [174] – [212] and the conclusions at [213] – [225]. The conclusion was that the unlawful act must be aimed or targeted or directed at the claimant. The House of Lords considered the question of intention to injure in relation to the tort of causing loss by unlawful means. It seems likely that the same intention is needed for the tort of conspiracy to injure by unlawful means. The question of intention was considered in detail by Lord Hoffmann at [62] – [64] and [130] (where he disagreed with the approach of the Court of Appeal) and by Lord Nicholls at [164] – [167]. In these passages distinctions are drawn between the ends and the means and the consequences of the unlawful acts. In the present case, it seems to me that there is considerable scope for debate whether the injury to Pulvers was simply a consequence of the intention to injure the lenders (and therefore not actionable by Pulvers in the tort of conspiracy) or whether the injury to Pulvers was part of the means by which the intended injury to the lenders came about. As this point was not explored in argument at the trial and as it does not affect the overall outcome, I would prefer not to decide it in this judgment. If Pulvers wish to have a decision on the point, then I would be prepared to hear further submissions from them as to whether this point does need to be decided and, if so, how it should be decided.

I have also considered whether Mr Sinclair is liable for knowing receipt of monies paid in breach of trust. The general requirements of liability for knowing receipt of trust money are summarised in Lewin on Trusts 17^th Edition at para 42-18A. The requirements are:

In the present case, the same conclusions apply to each of the transactions referred to above. There was property subject to a trust, namely, the lenders’ money in the Pulvers’ client account. That property was transferred and the transfer was in breach of trust. Mr Sinclair, insofar as he personally received the money (see below), received it with knowledge that the property was trust property and had been transferred in breach of trust and it is unconscionable for him to retain the benefit of the receipt.

In general, the monies which Mr Sinclair caused to be paid over in breach of trust were not received by him into his own bank account but were, it seems, received by companies controlled by him. In my judgment, the receipt by the company should properly in this case be regarded as receipt by a nominee for Mr Sinclair and therefore sufficiently a receipt by Mr Sinclair personally for the purposes of the personal liability which attaches to a knowing recipient of trust monies paid in breach of trust.

A claim against the Defendant for knowing receipt of trust monies paid in breach of trust is often brought by the beneficiary of the trust rather than by the trustee. In the present case, the lenders are the beneficiaries under the various trusts but they are not a party to these proceedings. The question as to the ability of the trustee to claim equitable compensation against a third party for knowing receipt of trust monies and breach of trust is referred to in Lewin on Trusts 17^th Edition at para 42.01 where the editors contemplate that such a claim may be brought by the beneficiaries or by the trustee on their behalf. A similar point is made in relation to a claim to a propriety remedy arising out of breach of trust; see para 41.01. Accordingly, I conclude that Pulvers as trustees of the relevant trusts can claim equitable compensation from knowing recipients of trusts monies paid in breach of trusts.

In addition to Mr Sinclair’s liability as a recipient (through nominee companies) of trust monies, I have also considered whether Mr Sinclair is liable for dishonestly assisting a breach of trust. The general requirements of liability for dishonest assistance are summarised in Lewin on Trusts 17^th Edition at para 40.09. These are:

If Mr Sinclair had been sued by the lenders for conspiracy or for equitable compensation for knowing receipt of trusts monies or for equitable compensation for dishonestly assisting a breach of trust, Mr Sinclair would have been liable to the lenders as beneficiaries under the trust.

I also hold that Mr Sinclair is liable to repay to Pulvers the monies which were paid to Mr Sinclair’s nominee companies as these were monies had and received by Mr Sinclair and which were paid to his nominee companies by reason of Pulvers’ mistake. Pulvers mistakenly believed that the transactions in question were genuine honest transactions involving a purchase or a re-mortgage in circumstances where a substantial part of the mortgage advance made by the relevant lender was due to Mr Sinclair’s nominee company.

Later in this judgment I will consider the rights of Pulvers against Mr Sinclair pursuant to the Civil Liability (Contribution) Act 1978.

In considering the detail of the various transactions, I have considered the involvement of Mary West in each transaction. I have found that she knew that she was assisting Mr Sinclair to deceive the various lenders. I find that she conspired with Mr Sinclair with an intent to injure the lenders. As to the possibility of a claim for the tort of conspiracy brought by Pulvers against Mary West, I have already explained in relation to Mr Sinclair that in this judgment I do not determine whether Pulvers have shown the necessary intention to injure Pulvers (as distinct from an intention to injure the lenders). For the same reason I do not determine whether Pulvers have a claim in conspiracy against Mary West. Indeed, I adopt the same approach in so far as Pulvers make a direct claim in conspiracy against all the Defendants. Mary West is not liable as a recipient of trust monies as she did not, so far as the evidence in this case goes, receive any such monies. She is however liable for dishonestly assisting a breach of trust and in that respect she is liable whether the claim is brought by Pulvers as trustee or by the relevant lender as beneficiary.

I have described the position of the various Defendants when considering the detail of the various transactions. I am able to express some general conclusions in relation to each of the Defendants (apart from Mr Sinclair and Mary West with whom I have already dealt). I will later make additional specific findings in relation to the Defendants (apart from Mr Sinclair and Mary West).

Insofar as a Defendant received monies, as shown in the Pulvers’ client account for each transaction I find that those monies were received in circumstances where the recipient knowingly received them in breach of trust. I also find that those monies were paid to that recipient by Pulvers under a mistake so that the monies are now repayable to Pulvers. In the case of Mr Sinclair’s companies, I find that Mr Sinclair is the recipient through his nominee company but if that is wrong then the right recipient would be the company itself. This finding would apply both for the purpose of equitable compensation for knowing receipt of trust monies and for the cause of action for money had and received.

I have not drawn up a schedule of all the recipients and all of the sums involved. It would be helpful if the Claimant could draw up such a schedule indicating the relief being sought against each Defendant as a result so that the schedule is ready for the date when this judgment is handed down.

Apart from the claim for knowing receipt of trust monies paid in breach of trust and for money had and received, I also find that the various Defendants are liable in conspiracy to the lenders and for dishonestly assisting a breach of trust in the case of properties identified below. I make no determination of any direct claim in conspiracy brought by Pulvers against these Defendants.

Mr Chan is liable (to the relevant lenders) for conspiracy and (to the relevant lenders and to Pulvers) for dishonestly assisting a breach of trust in relation to the transactions involving 31 Billet Lane and 17 Cornwall Close where he was named as the borrower.

Mr Endean is liable (to the relevant lenders) for conspiracy and (to the relevant lenders and to Pulvers) for dishonestly assisting a breach of trust in relation to the transactions at 31 Billet Lane and 10 Beaumont Close where he was named as the borrower.

I find that Ms Hooker is liable (to the relevant lender) for conspiracy and (to the relevant lender and to Pulvers) for dishonestly assisting a breach of trust in relation to the transaction at 58 Herbert Road where she was named as the borrower.

I find that Mr Howell is liable (to the relevant lenders) for conspiracy and (to the relevant lenders and to Pulvers) for dishonestly assisting a breach of trust in relation to the transactions at 31 Billet Lane and 113 Grifon Lane where he was named as the borrower.

I find that Jack Doughty is liable (to the relevant lender) for conspiracy and (to the relevant lender and to Pulvers) for dishonestly assisting a breach of trust in relation to the transaction involving a part of Matthews Farm where he was named as the borrower.

I find that James Doughty is liable (to the relevant lender) for conspiracy and (to the relevant lender and to Pulvers) for dishonestly assisting a breach of trust in relation to the transaction involving a part of Matthews Farm where he was named as the borrower.

I find that Mr Knight is liable (to the relevant lender) for conspiracy and (to the relevant lender and to Pulvers) for dishonestly assisting a breach of trust in relation to the transaction in relation to 10 Beaumont Close where he was named as the borrower.

I grant permission to re-amend the schedule referred to in the Particulars of Claim. The significant amendment relates to Mr Rosier’s involvement with 51 Medlar Drive. Mr Rosier has not been served with these proceedings so that the amendment does not directly impact upon him. The purpose of the amendment is to enable Pulvers to claim against Mr Sinclair and/or his nominee companies and Mary West in relation to the transaction involving Gary Rosier. In my judgment, it is appropriate to grant the permission sought. The facts of that transaction involving Mr Rosier are very closely bound up with the facts of the many other transactions which I have had to review and it is appropriate to include in these proceedings claims in relation to that transaction also.

Section 1(1) of the 1978 Act provides:

“Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect to the same damage (whether jointly with him or otherwise).”

Section 1 (6) of the 1978 Act provides:

“References in this section to a person’s liability in respect of any damage are references to any such liability which has been or could be established in an action brought against him in England and Wales by or on behalf of the person who suffered the damage;…. ”

Section 2 of the 1978 Act provides:

1)

“Subject to subsection (3) below, in any proceedings for contribution under Section 1 above the amount of the contribution recoverable from any person shall be such as may be found by the Court to be just and equitable having regard to the extent of that person’s responsibility for the damage in question.

2)

Subject to subsection (3) below, the Court shall have power in any such proceedings to exempt any person from liability to make contribution, or to direct that the contribution to be recovered from any person shall amount to a complete indemnity.”

3)

………”

The decision of the House of Lords in Dubai Aluminium Co Limited v Salaam [2003] 2 AC 366 is of great assistance in applying the provisions of the 1978 Act to the facts of this case. That decision established two propositions relevant to the present case. The first related to the case where there was dishonesty which involved a partner in a firm of solicitors and third parties. In circumstances where the firm and the third parties were all liable to compensate the victim of the dishonest scheme, it was held, that, subject to a point about the fruits of the wrongdoing, the firm and the third party should (on the facts of that particular case) all be held to be equally at fault for the purpose of assessing their respective contributions. In particular, the firm could not say that it was innocent and that the wrong was done by a partner in the firm because the firm was vicariously liable for the partner’s wrongdoing. The personal innocence of the co partners was not a relevant matter to be taken into account in this context. The second point established by the decision was that the Court was entitled to have regard to the extent to which some parties to the fraud but not others remained in possession of considerable sums of misappropriated monies which were proceeds of the fraud even after the Claimant’s claims against them had been met and it was just and equitable that the third parties should bring into assessment the sums they had retained from the fraud in circumstances where the partner in the solicitors firm had not retained any proceeds of the fraud.

I intend to apply the principles laid down by that decision to the facts of this case. Before considering the issue of the proceeds of the fraud, I will determine the prima facie contributions to the lenders’ losses to be made by the various Defendants.

In a case where the persons who are liable to a lender for the lender’s losses are Pulvers and Mr Sinclair alone (with Mary West being equated with Pulvers for this purpose), I direct that the lender’s losses are to be borne equally by Pulvers and Mr Sinclair.

In a case where the persons liable for a lender’s losses are Pulvers and Mr Sinclair and one or more other persons (with Mary West being equated with Pulvers for this purpose) then I direct that the lender’s losses are to be borne equally by Pulvers and Mr Sinclair and the person or persons referred to.

As between Pulvers and Mary West, I direct that Mary West is responsible for all of the losses and Pulvers is not obliged to contribute as between itself and Mary West.

The above directions as to the responsibility to contribute to an individual lender’s losses are subject to the overriding point that, if this approach produces a greater liability on the part of a person other than Pulvers, then any person other than Pulvers liable to contribute to a lender’s losses shall contribute the amount of his or its receipts from the transaction in question.

I invite the Claimant to prepare a draft order to be considered when judgment is handed down. The draft order should reflect the liability of the various Defendants in relation to the separate transactions and the principles as to contribution which I have attempted to describe. Insofar as the Claimant has already obtained summary judgment against a Defendant, the draft order to be made following judgment should not duplicate judgment for that liability but should be in addition to any earlier relevant judgment. I will award interest on all sums awarded by the judgment. There was discussion at the hearing as to whether interest should be simple interest or compound interest. Since the hearing, the decision of the House of Lords in Sempra Metals Limited v Inland Revenue Commissioners [2007] 3 WLR 354 has been reported. If the Claimant wishes to seek compound interest in some or all of these cases, then I will hear submissions to that effect following judgment.

The claim form claims relief in relation to documents said to have been taken from Pulvers. If the Claimant wishes to obtain an order in relation to that head of claim, then the matter should be mentioned following judgment.