Breach of trust

Lloyds TSB Bank Plc v Markandan & Uddin (a firm) [2010] EWHC 2517 (Ch) 14 October; LSG 4 November, p19

A cautionary tale. The bank offered a mortgage to the buyer of a residential property and the solicitors were instructed to act on behalf of the buyer and the bank. The bank transferred the mortgage advance to the solicitors who proceeded to transfer it to solicitors holding themselves out to be acting for the vendors. The solicitors sent out the monies before they had received any documentation that would enable them to register title. In the event, the transaction was a fraud; the vendors were unaware of the whole transaction and the vendors supposed solicitors did not even exist. The monies vanished.