BAILII [Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]

England and Wales High Court (Chancery Division) Decisions


You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Pulvers (a firm) v Chan & Ors [2007] EWHC 2406 (Ch) (29 October 2007)
URL: http://www.bailii.org/ew/cases/EWHC/Ch/2007/2406.html
Cite as: [2007] EWHC 2406 (Ch)

[New search] [Printable RTF version] [Help]


Neutral Citation Number: [2007] EWHC 2406 (Ch)
Case No: HC05C01355

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL
29/10/2007

B e f o r e :

MR JUSTICE MORGAN
____________________

Between:
PULVERS (A Firm)

Claimant
- and -

1) NEVIL CHAN
2) DAVID ENDEAN
3) JOHN FARMER
4) SUSAN HOOKER
5) PAUL HOWELL
6) JOHN ROSE
7) JOHN SINCLAIR a.k.a JOHN WHALE
8) RONALD ST LEGER
9) MARY WEST a.k.a MARY FRANCIS a.k.a MARY LAUX a.k.a MARY LANGTON
10) CAVENDISH FINANCE LIMITED
11) COSEC FACILITIES LIMITED
12) PREMIUM FINANCE LIMITED
13) UK DIRECT LIMITED
14) JACK THOMAS DOUGHTY
15) JAMES DOUGHTY
16) JAMES KNIGHT
17) DEBORAH ANN PEARMAN

Defendants

____________________

Mr Charles Douthwaite & Mr Stephen Innes (instructed by Mills & Reeve) for the Claimant
The 2nd Defendant appeared in person on behalf of himself and the 4th Defendant
The 5th Defendant appeared in person
The 9th Defendant appeared in person
The other Defendants did not appear and were not represented
Hearing dates: 11th, 12th, 13th, 16th, 17th, 18th, 19th, 20th, 23rd &24th July 2007

____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Mr Justice Morgan :

    The Claimant

  1. 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.
  2. The Defendants

  3. 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 18th 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.
  4. The Second Defendant is Mr David Endean. Mr Endean served a defence and appeared in person at the trial.
  5. 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.
  6. 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.
  7. 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.
  8. The Sixth Defendant is Mr John Rose. The Claimant could not locate Mr Rose and he has not been served.
  9. 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 18th 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.
  10. The Eighth Defendant is a Mr Ronald St Leger. The Claimant could not locate Mr St Leger and he has not been served.
  11. 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.
  12. 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 18th January 2006. Cavendish Finance Limited was incorporated on the 15th July 2002 and dissolved on the 5th 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.
  13. 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 18th January 2006. This company was incorporated on 12th January 2001 and dissolved on 11th 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.
  14. 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 18th January 2006. This company was incorporated on 20th April 1999 and dissolved on 24th 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.
  15. 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 23rd February 2000 and dissolved on 22nd November 2005. Cosec Facilities Limited owned all of the shares in this company. Mr Whale was a director of this company.
  16. 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 13th 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.
  17. 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 13th July 2007.
  18. The Sixteenth Defendant is James Knight. He has been served with the proceedings but not has taken any active part in them.
  19. The Seventeenth Defendant is Deborah Pearman. She has not been served with the proceedings.
  20. Mary West

  21. 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.
  22. 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.
  23. 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.
  24. 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 24th May 2004, he wrote in one memorandum:
  25. "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.

  26. 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 18th 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 18th April 2005 and in fact she left her employment with Pulvers on 1st April 2005.
  27. 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.
  28. The Claims

  29. 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.
  30. 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.
  31. 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.
  32. 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.
  33. 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.
  34. 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.
  35. Background matters

  36. 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.
  37. 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.
  38. 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.
  39. 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.
  40. 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.
  41. 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.
  42. 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.
  43. The standard of proof

  44. 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.
  45. 23 Nelmes Road

  46. 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 25th 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.
  47. On the 12th 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.
  48. The Halifax obtained a valuer's report and valuation for mortgage purposes. The report is dated 26th 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 28th 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.
  49. On the 29th June 2000, the Halifax sent to Curry Popeck (for the attention of Mary Langton/Mary West) the valuation report of 26th June 2000. Curry Popeck were asked to check that the valuer's assumptions were correct.
  50. On the 30th 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.
  51. 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 5th 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 6th 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 5th 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 5th 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 5th July 2000 when the Halifax made its advance of £280,000.
  52. On 24th 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 24th 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 25th August 2000 although that, in the normal way, was retrospective to the date of application for registration. It is clear from correspondence on 1st 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 1st September 2000.
  53. On the 25th 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 27th September 2000 and in due course the Halifax charge was registered with effect from that date.
  54. 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.
  55. 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.
  56. 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.
  57. 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.
  58. On the 20th 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 9th 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.
  59. Mr Sinclair approached Verso (the trading name of Mortgage Agency Services Number Two Limited) for a mortgage advance. Verso obtained a valuation dated 20th 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.
  60. On the 23rd 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.
  61. Also on 23rd 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.
  62. On the 29th 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.
  63. On 30th 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 2nd 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.
  64. 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.
  65. 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 3rd September 2002. Verso wrote on many occasions from 2nd 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 12th August 2003, stating that the charge certificate would be provided within 7 days. Verso wrote again in September 2003 and on the 18th 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.
  66. In the end, Mr Sinclair became registered in relation to title number NGL113835 on the 2nd 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 18th 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 18th December 2002 even though the mortgage monies had been released by Pulvers to Cosec Facilities on 3rd September 2002.
  67. Mr Sinclair deceived Verso as to the nature of the transaction. The transaction was not a purchase by him for £500,000.
  68. 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 18th December 2002 stated the price at £200,000.
  69. Before the transfer of title number NGL113835 to Mr Sinclair on 18th December 2002 and before the charge to Verso of the same date, there was a third transaction in relation to 23 Nelmes Road.
  70. On 28th 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.
  71. On 27th November 2002, the Bank of Scotland made an offer of a mortgage advance of £377,000 approximately to Mr Sinclair.
  72. 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.
  73. The certificate of title which was supplied to the Bank of Scotland is dated 18th 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.
  74. On the 18th 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, 18th 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.
  75. The Bank of Scotland advanced approximately £377,000 to Pulvers' client account on 20th 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.
  76. It follows from the above that the two charges were executed by Mr Sinclair on the same day, namely, 18th 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.
  77. 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.
  78. Mr Sinclair deceived the Bank of Scotland as to the nature of the transaction and as to the charge which was being granted.
  79. 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.
  80. The documents include a TR1 dated 24th 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 18th December 2002 when he executed a charge of that property to the bank of Scotland nor on the 16th 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 18th December 2003 to register the transfer to Mr Sinclair of EGL411645 and this application was received by the Land Registry on the 26th January 2004. The official copy of registered entries for this title shows Mr Sinclair as the registered proprietor with an entry date of 26th January 2004. On 14th 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 15th March 2005.
  81. 58 Herbert Road

  82. 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 27th February 1996 in favour of the Halifax.
  83. 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 10th February 1999 in favour of Bank of Scotland.
  84. 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 25th 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.
  85. 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.
  86. On 27th 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.
  87. 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.
  88. On the 19th 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.
  89. 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 19th April 2003.
  90. On the 2nd 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.
  91. On the 7th 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.
  92. 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.
  93. 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 6th 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.
  94. On the 7th 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 21st 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.
  95. Eventually on the 22nd 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 7th May 2003 was £195,000.
  96. 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.
  97. Miss Hooker deceived the Bank of Scotland as to the nature of the transaction and as to the security being granted to the Bank.
  98. 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.
  99. 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.
  100. 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?
  101. 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.
  102. 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.
  103. On the 8th September 2004, the Halifax made a mortgage offer to Mr St Leger of £350,000. Also on the 8th 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.
  104. On the 14th 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.
  105. 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.
  106. 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 20th 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".
  107. 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.
  108. 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.
  109. 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.
  110. 51 Medlar Drive

  111. 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.
  112. On 30th 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.
  113. On 23rd October 2002, the bank obtained a valuation of the property in the sum of £250,000.
  114. On 4th November 2002, the Bank of Scotland made a mortgage offer to Mr Rosier of £120,000 towards a purchase price of £190,000.
  115. Also on 4th 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.
  116. On the 5th 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.
  117. On 25th 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.
  118. On the 28th 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 28th November 2002, Mary West wrote to the Bank of Scotland stating that contracts had been exchanged with completion on 2nd December. It is not clear whether contracts were indeed exchanged on the 28th November 2002 after the letter to Cosec Facilities but before the letter to the Bank of Scotland.
  119. Mary West's letter of 28th November 2002 enclosed the certificate for title also dated 28th 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.
  120. Pulvers' ledger in relation to this transaction describes the transaction as a purchase of 51 Medlar Drive. On 29th November 2002, the mortgage advance of some £120,000 arrived from Bank of Scotland in Pulvers' client account. On the 3rd 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.
  121. On the 3rd 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.
  122. 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 29th October 2004 when it was discharged electronically.
  123. 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 9th December 2003 had been completed. This document is puzzling. Miss Severn remained the registered proprietor in the edition of the register dated 18th October 2004 as shown by an official copy of register entry dated 17th May 2005.
  124. 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.
  125. On 4th 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.
  126. 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.
  127. On 15th October 2003, a Mr Farmer applied to the Halifax for a mortgage advance. Mr Farmer is named as the 3rd Defendant in these proceedings but the proceedings have not been served upon him.
  128. 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.
  129. On 19th November 2003, the Halifax made a mortgage offer to Mr Farmer of £210,000, to be secured on Heatherwood, 51 Medlar Drive.
  130. Also on 19th 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.
  131. 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 12th 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 12th December 2003, Mr Rosier was paid a sum in excess of £5,000.
  132. 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 12th 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.
  133. Nothing seems to have happened for some time after 12th December 2003. On the 6th 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 6th 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 6th August 2004 in relation to Heatherwood, 51 Medlar Drive.
  134. On the 8th September 2004, the Inland Revenue wrote to UK Direct in relation to this transfer and UK Direct applied on 14th 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.
  135. On the 18th October 2004, the Land Registry wrote to UK Direct referring to the fact that the charge dated 26th 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.
  136. On 18th 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.
  137. On 29th 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 29th October 2004, Mary West appears to have come back into the transaction on 28th 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 2nd November 2004 about a mix up in the use of the name Bank of Scotland for Halifax.
  138. 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.
  139. 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.
  140. 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.
  141. On 12th 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 6th Defendant in these proceedings but the proceedings have not been served upon him.
  142. On the 16th 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.
  143. The documents do not include the instructions from UCB Home Loans to Pulvers. However, on 23rd 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.
  144. 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 27th August 2004. On the 30th 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.
  145. Although Mary West called for the mortgage monies to be paid out on the 30th 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.
  146. On 10th 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.
  147. On the 27th 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.
  148. 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 10th 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 25th October 2004. Also in October 2004, the Inland Revenue wrote to UK Direct about the transfer of The Elms. On the 2nd 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 3rd 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.
  149. The only involvement of Mary West in relation to this transaction after the release of the mortgage monies on the 30th August 2004 appears from Pulvers' ledger. This shows that fees were paid to the Land Registry on the 27th 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.
  150. 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.
  151. 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.
  152. 11 San Remo Parade

  153. 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.
  154. 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.
  155. On 7th 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.
  156. About two weeks later, on the 22nd 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 22nd April 2003 onward in connection with his sale.
  157. On the 29th 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.
  158. On the 29th 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.
  159. On the 14th 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.
  160. 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 15th May 2003 and on the 16th May 2003, some £110,000 was paid to Cosec Facilities Limited and described as a "mortgage redemption".
  161. 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 14th 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 14th August 2003 and the bulk of the purchase monies being paid out on the 15th 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.
  162. 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.
  163. 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 14th May 2003 was accurate. Mr Endean was not purchasing the flat and Mr Endean had no title right or interest in the flat.
  164. 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.
  165. 31 Billet Lane

  166. 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.
  167. 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.
  168. On 18th 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.
  169. Also on 18th 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.
  170. On 19th 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.
  171. On 19th 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.
  172. 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.
  173. The documents include part of a certificate of title addressed to Verso and dated 28th November 2002. The certificate bears the name of Mr Pulver but Mary West accepted that she had signed the certificate in his name.
  174. 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.
  175. On 4th December 2002, Mr and Mrs Cary transferred 31 Billet Lane, having title number EGL24820, to Mr Howell for £250,000.
  176. 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 3rd December 2002. The balance needed to complete the purchase came from Cosec Facilities on 4th 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.
  177. The documents do not include any charge granted by Mr Howell in favour of Verso.
  178. 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 5th 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 4th 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.
  179. The second transaction in relation to 31 Billet Lane began in around July 2003. On 11th 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.
  180. On 19th 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.
  181. Also on 19th 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.
  182. 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.
  183. On 29th 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.
  184. The documents do not show what draft documents were in existence as at the date of the certificate of title, 30th 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 27th April 2004. One cannot tell whether the transfer of part was prepared by Mary West or someone else.
  185. On 30th 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 30th September 2003 but it also bears the title number EGL470271 which does not appear to have come into existence until May 2004.
  186. For some reason, another firm of solicitors, Christi & Co applied to the Land Registry on the 4th May 2004 to register the transfer which had been entered into apparently on the 27th April 2004. That transfer showed a purchase price of £115,000.
  187. 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 12th 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 30th September 2003.
  188. 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 30th September 2003 and on the 1st October 2003 some £170,000 of these monies was paid out to Cavendish Finance. On the 2nd 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.
  189. In due course, on about the 5th 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.
  190. 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.
  191. 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.
  192. Mr Endean accepted that his involvement in this transaction was dishonest.
  193. 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.
  194. 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 30th September 2003 in favour of the Bank of Scotland and her application dated 12th 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.
  195. On 15th 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.
  196. On 31st 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.
  197. On 12th November 2003, the Halifax made an offer to Mr Chan of a loan of £225,000 in relation to Firndale, 31 Billet Lane.
  198. Also on the 12th 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.
  199. On the 14th 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 18th 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.
  200. 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.
  201. On the 17th 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.
  202. 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.
  203. Although Christi & Co had applied to register the transfer to Mr Chan, Pulvers applied, on the 30th 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.
  204. In due course, on or about the 5th May 2004, Mr Chan became registered under title number EGL470270 in relation to Firndale, 31 Billet Lane and on 4th August 2004, the charge in favour of the Halifax was registered against this title.
  205. 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.
  206. 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.
  207. 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 30th 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.
  208. 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.
  209. 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.
  210. 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 31st 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.
  211. 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.
  212. On 2nd March 2004, Birmingham Midshires made an offer to Mr Howell of a mortgage advance of some £250,000.
  213. Also on the 2nd 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 2nd 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.
  214. 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.
  215. On 9th 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.
  216. Pulvers had a ledger card in relation to this transaction. The ledger described the transaction as a re-mortgage of Billet Lane. On the 11th 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.
  217. On the 11th 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 11th 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.
  218. It will be remembered that Mr Howell had the benefit of a transfer dated 4th 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 11th March 2004.
  219. 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 4th 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