Nouri v Marvi

JurisdictionEngland & Wales
JudgeLord Justice Patten,Sir Mark Waller,Lord Justice Rix
Judgment Date14 October 2010
Neutral Citation[2010] EWCA Civ 1107
Date14 October 2010
CourtCourt of Appeal (Civil Division)
Docket NumberCase No: A3/2009/2362

[2010] EWCA Civ 1107




Norris J

Before: Lord Justice Rix

Lord Justice Patten


Sir Mark Waller

Case No: A3/2009/2362


Amir Nouri
Ali Marvi & Ors

Philip Jones (instructed by Mackrell Turner Garrett) for the Appellant

Ben Lynch (instructed by Davies Arnold Cooper LLP) for the Respondent

Hearing date: 26 th July 2010

Lord Justice Patten

Lord Justice Patten:



This appeal raises the familiar question of when a cause of action in tort has accrued so as to start time running for the purposes of the Limitation Act 1980. Section 2 of that Act provides that:—

“An action founded on tort shall not be brought after the expiration of six years from the date on which the cause of action accrued.”


A cause of action in tort (unlike one in contract) only accrues when the claimant suffers actual damage in the sense of measurable loss which can be quantified in money terms and made the subject of an award of damages at the relevant date. In Forster v Outred [1982] 1 WLR 86 in the court of Appeal Stephenson LJ (at page 94) accepted the definition of actual damage put forward by Mr Stuart-Smith (as he then was) in these terms:—

“What is meant by actual damage? Mr. Stuart-Smith says that it is any detriment, liability or loss capable of assessment in money terms and it includes liabilities which may arise on a contingency, particularly a contingency over which the plaintiff has no control; things like loss of earning capacity, loss of a chance or bargain, loss of profit, losses incurred from onerous provisions or covenants in leases. They are all illustrations of a kind of loss which is meant by “actual” damage. It was also suggested in argument, and I would accept it, that “actual” is really used in contrast to “presumed” or “assumed.” Whereas damage is presumed in trespass and libel, it is not presumed in negligence and has to be proved. There has to be some actual damage.”


The claimant, Mr Nouri, was from 1996 the registered proprietor of a leasehold flat at 8 Bron Court, Bronsbury Road, London, NW6 (“the Flat”). He bought the Flat when he came to England to study English and to enrol on a business studies course at Westminster University. It was purchased for £69,000 with the benefit of a mortgage from Barclays Bank for £39,000 and with £30,000 provided by his father.


In 1998 the first defendant, Mr Marvi, came to London and moved into the Flat. He was a family friend. In July 1999 Mr Nouri left the UK but Mr Marvi remained living in the Flat. By then a further loan of £30,000 had been obtained from Barclays Bank on the security of the property. The arrangements with Mr Marvi were that he would pay sufficient monies into the claimant's Barclays Bank account to meet the mortgage payments and the other outgoings on the flat. Mr Nouri also executed a power of attorney in favour of a Mr Musawi, a friend of his father's.


After Mr Nouri left, the mortgage payments fell into arrears and in October 1999 a notice of default was issued by the bank. These and other arrears were cleared in August 2000 when the Barclays Bank mortgage was redeemed and replaced by a new mortgage in favour of iGroup Mortgages. In earlier High Court proceedings before HHJ Rich QC (which I will come to shortly) evidence was given that Mr Marvi had agreed to clear the indebtedness to Barclays using money provided by his family. But the re-mortgage to iGroup was obtained by Mr Marvi in Mr Nouri's name whose signature on the mortgage deed was forged.


In about December 2000 Mr Nouri and his father instructed Mr Musawi to obtain confirmation from Barclays Bank that its charge had been redeemed and he instructed a firm of solicitors (Nattu & Co) to do this. They also asked the bank for the return of Mr Nouri's life policy which had been charged to the bank as part of the security. By March 2001 the bank had told the solicitors that the charge had been redeemed but that the land certificate had been sent to another firm of solicitors. Mr Musavi then instructed Nattu & Co to obtain office copy entries of the registered title, which they did by 3 rd May 2001. These, of course, revealed that the Flat was now charged to iGroup under a mortgage which Mr Nouri had not authorised.


The mortgage to iGroup secured a loan from them in the sum of £105,000. After payment of the sums due to Barclays Bank about £40,000 remained which Mr Marvi misappropriated. Not, however, content with this he then embarked on the steps which have led to this claim in negligence by Mr Nouri against the first defendants, Athi Kulisra Smith (“AKS”), a firm of solicitors.


On 21 st December 2000, holding himself out as Mr Nouri, Mr Marvi instructed AKS to act for him on a sale of the Flat to Mr Marvi. Mr Marvi also instructed another firm of solicitors to act for him as the purchaser. On 2 nd April 2001 there was a simultaneous exchange of contracts and completion which resulted in AKS releasing to Mr Marvi's solicitors a transfer again containing Mr Nouri's forged signature. On 4 th July 2001 Mr Marvi, using the transfer, obtained registration of the Flat in his own name. The purchase price of the Flat was stated to be £179,000. As part of the fraudulent transaction Mr Marvi was able to redeem the iGroup mortgage with a new loan from the Kensington Mortgage Company of £152,090. The balance necessary to complete the purchase was some £29,731.50 which was provided by a Dr Khan. On completion a balance of £55,518.47 was due to Mr Nouri as vendor after the payment of expenses. Mr Marvi forged further letters of instruction which resulted in £30,731.50 of this sum being repaid to Dr Khan and the balance of £24,786.97 being returned to Mr Marvi. Subsequently on 7 th January 2003 the Flat was sold on to an unconnected third party, a Mr Razaq, for the sum of £223,000. Mr Razaq was then registered as the proprietor.


Despite becoming aware of the unauthorised mortgage to iGroup, Mr Nouri took no steps against Mr Marvi. This enabled the fictitious sale of the Flat to him to be completed and his title registered and also allowed Mr Marvi to go on to sell the Flat to Mr Razaq. It was not until April 2003 that Mr Nouri applied belatedly to the Land Registry for rectification of the register. They directed him to take proceedings against Mr Marvi, Mr Razaq and the Kensington Mortgage Company for rectification. These proceedings were concluded on 18 th October 2005 when HHJ Rich QC refused to order rectification largely on the basis that the registration of title in favour of Mr Marvi and subsequently Mr Razaq had occurred due to Mr Nouri's failure to take proper care of his own interests.


There has been no appeal against that judgment. Instead, on 2 nd July 2007 Mr Nouri commenced these proceedings against Mr Marvi, the Land Registry and AKS. The claim against AKS is for negligence. The claim cannot be based in contract on the retainer because there was none. Instead it is alleged that, on receipt of the instructions from Mr Marvi in Mr Nouri's name, AKS assumed a responsibility to the real Mr Nouri to handle the sale in a competent manner and knew that if it failed to do so Mr Nouri might suffer loss and damage. Its duty of care to him encompassed not only the conveyancing transaction itself but also an obligation to confirm their instructions directly with the client and to satisfy themselves of his identity. This would include having a face-to-face meeting with him and verifying his identity from his passport. The case against AKS is that none of these steps was taken and that sight of the client's passport was not requested until 15 th May 2001. When it was requested and produced, AKS failed to ensure that the passport was that of Mr Nouri.


It is also alleged that the firm failed to take note of the advice contained in the Law Society's Green Card warning on property fraud. The warning signs generated by many of the unusual features of the transaction were simply ignored. As a result, AKS failed to warn Mr Nouri or the Land Registry, either before or after the sale, that this was or might be a fraudulent transaction and consequently allowed Mr Nouri to be removed as the registered proprietor and Mr Marvi to be registered in his place.


It is common ground that the registration of Mr Marvi as the proprietor of the Flat did cause actual damage to Mr Nouri. As a result of the provisions of s.69 of the Land Registration Act 1925, title was transferred to Mr Marvi by the act of registration. Mr Nouri therefore lost his title and would have had, at the very least, to commence rectification proceedings against Mr Marvi and his mortgagees in order to restore himself to the register. The six year limitation period for the claim in negligence against AKS must therefore have begun to run by 4 th July 2001 at the latest. It does not depend on the subsequent sale of the Flat to Mr Razaq. But AKS in their defence have taken a limitation point that time began to run earlier when the fictitious sale to Mr Marvi was completed on 2 nd April 2001. If this is correct then the limitation period expired on 2 nd April 2007 prior to the issue of the claim form in these proceedings on 2 nd July 2007.


On 3 rd June 2009 Master Eyre ordered the trial of a preliminary issue on this limitation point. It was tried by Norris J on 7 th October 2009 ( [2009] EWHC 2725 (Ch)). He found that the claim in negligence was statute barred because Mr Nouri did suffer actual damage on completion of the sale and was not simply...

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