So it is only right that the risk of lack of authority should be borne by the agent by way of an implied warranty. The terms of the loan were set out in the letter. In the common case, where the principal refuses to accept liability, the right of action against the agent for breach of his warranty will be an effective substitute for the loss of any right of action against the principal". While the Lord Ordinary saw that as a separate basis for rejecting the claim, it may be that it is simply another way of expressing the result of the letter being ancillary to a void obligation. The application, which was on a Blemain Finance Application Form, was submitted by Mr Hodges-White, a commercial finance broker then trading as Cestrain Business Finance. Moreover, it was, he argued, clear that the sheriff had placed reliance upon Mr Dougans expert testimony when it came to the proposition that a sum greater than 150,000 ought to have been achievable with the passage of further time. He wrote also to the fraudsters at 34 Danube Street including a copy of Mellicks' letter and requested them to contact him in order that he could take their further instructions. In a subsequent telephone conversation on 23 November 2004 Messrs DM Hall confirmed the value of the subjects, if a sale had to be effected within 90 days, to be 575,000. We confirm that they are in order. The cookies is used to store the user consent for the cookies in the category "Necessary". The stated value is also relevant to the wider issue of proportionality when allocating the claim [16]. Clicking the Accept All button means you are accepting analytics and third-party cookies (check the full list). Your choice regarding cookies on this site, Succession & estate planning for business owners, Partnership agreements & limited liability partnerships, Directive on security & network information systems, Privacy & electronic communications regulations, Claims against HM Courts & Tribunal Services, Care home fees and planning for the future. [24] It should be noted that before this court counsel for the reclaimers and respondents did not seek to attack the Lord Ordinary's findings in fact. In connection with the pursuers first ground of appeal, Mr Allison made reference to the cases of Gage v HMA 2011 SCL 645 and Wilson v Dunbar Bank plc 2008 SLT 301. [35] The terms of the letter of obligation are unusual and the period of time covered extraordinary. In addition to being written in unusual terms, the letter refers to a land certificate in relation to a title which is recorded in the Sasine Register. Moreover, the defenders having explicitly agreed to the shortfall being left out of account (for the reasons specified at paragraph [9] in the sheriffs Note) that agreement precludes the defenders from founding upon the figure of 10,645.31. It was marked for the attention of Akay Ahmet. England and Wales Court of Appeal (Civil Division) 2013. He had the opportunity to consider the evidence in its totality. [8] Mr Allison criticised the sheriffs approach to interest on two levels. On 27 October CMC issued an offer letter addressed to Mr and Mrs Cheetham, referred to as "the Borrowers". If, therefore, he never had authority to act on behalf of the principal or if his authority has terminated or if he exceeds the scope of his authority, he will be in breach of the implied warranty and will be liable in damages to any person to whom the warranty was given. Telefon: + 43 664 4167380 Email: office@herdz.at . As already noted the reclaimers also disclaimed, as they had before the Lord Ordinary, any claim which is to any extent dependent on some failure of duty of care said to be owed to them by the respondents. At the beginning of December Ms Sinclair arranged for the transfer of the net balance to the account of Elmwood Contracts as instructed by Mr and Mrs Morgan. We were advised that commercial lenders, like those involved in the proceedings before us, are not infrequently being made the victims of identity fraud. A guide to voluntary termination: Your rights. It was a term of the mortgage offer that the loan be secured by a first mortgage over the property in the form of the draft standard security accompanying the offer. (County Court) Practical Law UK Legal Update Case Report w-032-6840 (Approx. The fact of entering into the transaction with the professed agent, as such, is good consideration for the promise.". These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. On 11 November Ms Sinclair wrote to Mr and Mrs Morgan asking them to come to her office to sign the standard security and other documents. His dealings were with Mr Cheetham. We will take into account the relevant aspects of the decision specific to this case as we work with all parties to progress this matter.. It appears, however, to highlight the limitations placed on an implied warranty of authority in such a situation as it was understood in at least that case. An official website of the United States government. The judge then went on to refer to the case of Collen v Wright and also the cases of Yonge v Toynbee [1910] 1KB 215 and Firbank's Executors v Humphreys [1886] 18 QBD 54 and Penn cited supra. Christmas party season prompts drink-drive warning following 239% increase in arrests. That Note set out the basis for his decision. Thanks for the referral PT2537. It named the borrowers as Mr and Mrs Cheetham and the address of the property to be mortgaged as 34 Danube Street, Edinburgh. Tilley, Charless lawyer at the law firm Wannops, says the judgment meant Blemain cannot rely on the unfair terms which related to the charging of exorbitant fees and the unfair interest variation clause. It is noteworthy, indeed, that no such claim is made in the Blemain case where a similar letter of obligation was granted. [33] It follows that in relation to the BFL case the reclaiming motion is refused. Complaints Procedure | Although the implied warranty of authority in agency, as enunciated in the case of Collen was of English origin it was adopted into the law of Scotland like many of the other instances of judicial legislation in commercial matters just referred to. Please note we wish to take a 1st charge over the property. However, the terms of that judgment are recorded in his Note dated 1 July 2014. These instructions were set out more fully in two letters of 30 November which Mr Cheetham left with Mr Longmuir's secretary in an envelope for passing to Mr Longmuir. The clause relating to the recovery of costs, charges and expenses was also judged to be unfair as it was too heavily weighted against the consumer and could mean a borrower having to pay a disproportionate amount in charges. All times are GMT. In the Cheshire Mortgage Corporation Limited ("CMC") case a separate point also arises as to the meaning and effect of a letter of obligation. We will also require a property enquiry certificate, a Form 12 and details of the buildings insurance cover for the property. Court Procedure. They were sent an instruction letter on 8 November 2004 from CMC which identified the borrowers as Christopher Paul Cheetham and Julie Cheetham with a correspondence address at 34 Danube Street, Edinburgh, which was also given as their security address. . Registration is recorded at: https://register.fca.org.uk. The purpose of the loan was said "to assist the purchase of overseas property". Mrs Thomas quickly fell into arrears with the loan agreements. There is no detail as to the date upon which interest had been frozen or as to the rate of interest involved. In addition, two of the agreements contained Payment Protection Insurance, known as PPI, costing between 800 and 1,500. The payment protection she had taken on two of the agreements only covered her for the first 12 months she was out of work and in total she received only 2,311.32 in repayments from the payment protection insurer, despite paying much more in premiums and interest. [20] In any event, esto the sheriff was entitled to have regard to the shortfall amount, to eliminate what would otherwise have been an appropriate award of interest particularly where the defenders pleadings were silent on that very issue, was, to my mind, of doubtful legitimacy. A .gov website belongs to an official government organization in the United States. The extent and effect of that warranty was, in the absence of something specifically addressed to the question of the fraudsters' attributes in particular as to their ownership of the subjects in question, as we have just defined it. One of the leading and authoritative English textbooks on the topic of agency, namely Bowstead and Reynolds on Agency (19th Edition) at page 581 sets out the following points: (1) Where a person, by words or conduct, represents that he has actual authority to act on behalf of another, and a third party is induced by such representation to act in a manner in which he would not have acted if that representation had not been made, the first-mentioned person is deemed to warrant that the representation is true, and is liable for any loss caused to such third party by a breach of that implied warranty, even if he has acted in good faith, under a mistaken belief that he had such authority. As can be seen below, in the context of litigation, the warranty is similarly limited in that the agent (normally a solicitor) does not promise that a claim is valid". It added that Charles, who now lives in Worthing, was an intelligent borrower who went into the agreement open-eyed and, based on the figures she provided, the monthly payments were affordable. We have had sight of the necessary Searches in respect of the properties. [20] On 2 November Ms Sinclair responded to Messrs Mellicks letter of 29 September by sending the extract title deeds to them to enable them to prepare the draft standard security. My costs. The interest rate will now be fixed at 11.45%, and Blemain must pay 75% of the legal costs that Charles incurred. Together Personal Finance Limited is a member of the FLA. In other words, the defenders, through MsHamilton, maintained that when the shortfall amount was taken into account there was, in any event, no loss and that the sheriff had, once again, erred in that regard. They would, of course, have warranted that they had authority to act on behalf of their client. Google Analytics cookies help us to understand your experience of the website and do not store any personal data. Firstly, under reference to paragraph [9] in the sheriffs Note, having explicitly precluded consideration of the shortfall for the purposes of determining the principal sum due to the pursuer, the sheriff then decided that the existence of the shortfall, [9] Secondly, Mr Allison stressed that the defenders pleadings were silent both as to, [10] Ground of appeal 3 was a development of the main theme inherent in ground of appeal 2, viz. The defenders pleas in law exclusively concerned the merits of the action and the relevancy etc of the pursuers averments. The court heard she had written to complain about the high level of interest, and that she said whatever she did, [Blemain] kept adding to her account. In para 97 of his judgment Judge Hegarty said: "Excel carries on business in the financial sector, specialising in making short-term commercial loans. Enter your email address to subscribe to this blog and receive notifications of new posts by email. The claimants brought an action allowing there had been unfair conduct by the defendant when a loan was arranged. They made an application for a loan on or about 20 October 2004, initially through a broker. BFL issued an offer letter to the borrowers the same day i.e. It would be quite unreasonable and inappropriate to extend this to an implied warranty that his client has a certain attribute or attributes. On the same day Mellicks wrote to Longmuir & Co enclosing the standard security document together with a standing order mandate. Blemain has had to reconstruct the account as a result, and the judgment has reduced the sum Charles is said to owe by about 25,000. The borrowers' solicitors were identified in this document as Longmuir & Co. It also oversees the operation of several specialized courts known as problem solving courts. If so, Consumer Reclaim could get you many thousands of pounds back. These cookies ensure basic functionalities and security features of the website, anonymously. In successfully defending the possession proceedings, the legal charges relating to the unenforceable agreements were ordered to be removed from Mrs Thomas property. He had held that any entitlement to interest flowing from the wrongful withholding of 10,000 as from the date of sale, viz. In a case where the parties themselves had agreed to dispense with shorthand notes (and, consequently, no transcript of the evidence was available for the purposes of the appeal) I would be slow to interfere with the decision of the sheriff at first instance unless it could be demonstrated, clearly, that he had misunderstood the facts, applied the wrong principles or arrived at a conclusion which was manifestly unjust (see, generally, Macphail, 3rd Edition at paragraph 18.116). [25] The cross-appeal has failed in its entirety. The documents were then sent on by Longmuir & Co to the borrowers under cover of a letter addressed to them as Mr and Mrs C Cheetham at 34 Danube Street, Edinburgh. Borrowing from the Willes J's formulation of the warranty in Collen v Wright, the solicitors here in each case did not more than warrant "that the authority which (they professed) to have, did in point of fact exist". In Elias & anor v Blemain Finance HHJ Keyser QC gave helpful guidance on the application of the allocation guidelines for the county court at CPR 26.7 & 26.8. Call on 0161 348 7670 or freephone 0800 988 822 for advice. Firstly, under reference to paragraph [9] in the sheriffs Note, having explicitly precluded consideration of the shortfall for the purposes of determining the principal sum due to the pursuer, the sheriff then decided that the existence of the shortfall should be taken into account when consideration was being given to what, if any, award of interest should be made. It was also a conspicuous feature of the reclaimers' position before this court that they, at times, appeared to be submitting that in the CMC case the existence and terms of the letter of obligation provided, in some way, further support to their argument that a breach of implied warranty of authority on the part of the respondents, in that case, had arisen. The cookie is set by the GDPR Cookie Consent plugin and is used to store whether or not user has consented to the use of cookies. The fourth ground of appeal for the pursuer was not insisted upon. This cookie is set by GDPR Cookie Consent plugin. She stressed the absence of evidence from a marketing expert as to which other steps the defenders might reasonably have taken. That is correct insofar as it goes. He never in fact met Mrs Cheetham. The frauds perpetrated upon them as a result of fraudsters, each of the reclaimers involved two different pairs of individuals applying for a loan, pretending to be husband and wife who were owners of heritable property which was to institute the security for the loans. There had been evidence to the effect that interest on the outstanding balance due to the defenders had been frozen by them as at the date of the sale of the subjects. In that letter the following appeared: "Once the loan monies are received these are to be paid over to complete our purchase of property in Spain. Jane Charles is hoping her 15-year nightmare involving a costly interest-only loan may soon be over after a court ruled that some of the lenders terms and conditions were unfair. There was no attempt on record to challenge the pursuers averments thereanent. The agency also defends suits contesting its dismissals of administrative complaints, petitions for review of Commission decisions regarding the presidential public funding program and civil suits challenging the constitutionality of provisions of the Federal Election Campaign Act (FECA) and the validity of the Commission's regulations. [17] In due course, some time in late September 2004, Balfour and Manson solicitors obtained instructions to act on behalf of Mr and Mrs Morgan. [13] On 26 November Messrs Mellicks wrote to Longmuir & Co enclosing the formal offer of loan together with the acceptance form which required to be signed and returned to them along with the standard security document and the standing order mandate. Other uncategorized cookies are those that are being analyzed and have not been classified into a category as yet. Ms Hamilton, for the defenders, argued that the absence of evidence regarding what particular steps ought reasonably to have been taken by the defenders meant that there had been insufficient evidence before the sheriff to enable him to conclude that the defenders were in breach of the statutory provision in section 25 supra. Please check and confirm when the customers purchased the property and for how much. As previously noted Mr Cheetham came into the offices of Longmuir & Co on 30 November. That risk normally manifests itself in the fact that, if the agent does not, in truth, have the authority which he claims, the other party will be deprived of any effective redress against the assumed principal. But the risks against which Excel is seeking to be protected in these proceedings are the commercial risks involved in lending to a person who may not be all that he claims to be. The letter of obligation are unusual and the address of the loan agreements CMC an. 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