Penn v Bristol & West Building Society
| Jurisdiction | England & Wales |
| Judgment Date | 22 May 1995 |
| Date | 22 May 1995 |
| Court | Chancery Division |
Chancery Division
Before Judge Kolbert
Solicitors - negligence - sham transaction in house sale
The sale of a house owned jointly by a husband and wife, by a conveyance which was forged by the husband in collusion with the buyer, was a sham transaction which did not sever the husband and wife's beneficial joint tenancy.
Solicitors who were instructed by the husband to act in the sale of the house and who failed to ascertain that they had the wife's authority to act were liable in negligence to the wife.
The solicitors were also liable to the building society which provided the mortgage to the buyer for breach of warranty of authority because they had represented that they had the authority to act for both vendors in the transaction.
Judge Kolbert, sitting as a Chancery Division judge in Leeds, so held in a reserved judgment following applications by the plaintiff, Deborah Penn, the first defendants, Bristol and West Building Society, and the third defendant, Peter Penn, the plaintiff's former husband, for declarations relating to the purported contract of sale of a house owned jointly by the husband and wife.
The husband had instructed the fourth defendants, Ian Brill & Co, solicitors, Leeds, to act in the proposed sale of the house which was subject to a mortgage. The proposed purchaser was the second defendant, Patrick Wilson, the husband's accomplice in an intended mortgage fraud. Wilson obtained a mortgage offer from the Bristol and West Building Society. Both Wilson and the building society instructed the same firm of solicitors, Gartons, Wakefield.
The title deeds of the house showed that the wife was a legal and beneficial co-owner but the husband's solicitors did not contact the wife to ascertain her instructions. The husband forged the wife's signature on a purported contract of sale and transfer of the house and the building society advanced the purchase price to Wilson.
Miss Josephine Hayes for the wife; Mr Daniel Worsley for the building society; Mr Patrick Lawrence for Ian Brill & Co; the husband and Wilson did not appear and were not represented.
JUDGE KOLBERT said that a deed which was forged was a nullity. Accordingly, Wilson's claim to be registered as proprietor of the house had to fail under section 52(1) of the Law of Property Act 1925 as he had no conveyance in his favour by deed.
A void deed executed by one of two trustees for sale...
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