Conjoined Appeal in Court of Appeal on Fraudulent Sale of Properties:
P&P Property Ltd v Owen White & Catlin LLP ;
Dreamvar (UK) Limited v Mishcon de Reya;
An Important ruling by the Court of Appeal regarding the question of responsibility for Estate Agents and Solicitors / Conveyancers for both vendors and purchasers and following fraudulent sales of property. Both rulings were overturned, thus setting a new precedent.
Following the sale of 2 different million pound plus properties where the vendors did not possess the ownership rights, an important principle has been established by the Court of Appeal regarding responsibility for insufficient due diligence.
In Dreamvar V Mishcon de Reya, de Reya acting as purchaser’s solicitors was held liable for a loss of over £1.1 million suffered by Dreamvar even though the fraudulent vendor’s solicitor who was also also sued was not deemed to be at fault.
By contrast, in P & P Property Ltd v Owen White & Catlin LLP, the seller’s solicitor was was held liable for not applying the appropriate level of due diligence and therefore negligently enabling the fraud to proceed.
As a result of these rulings, the position appears to be that the vendor’s and purchaser’s conveyancors / solicitors have partial responsibility for not passing the money for the purchase of the property over to a fraudulent vendor. Both the parties previously found solely reliable are no doubt relieved. The indemnity insurance bill for the parties and no doubt the legal bill for the claims themselves with all the vested parties involved have meant a lot of legal input.
This is one case where it could be argued: the lawyers both win and lose!
To read the full case transcript from the British and Irish Legal Information Institute, click here: http://www.bailii.org/ew/cases/EWCA/Civ/2018/1082.html