Neutral Citation Number: [2010] EWHC 2058 (Ch)
Case No: HC 08 C01306
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

Royal Courts of Justice
Strand, London, WC2A 2LL

Date: 3 August 2010

Before :

HHJ DAVID COOKE
Sitting as a judge of the High Court
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Between :

	Jean Sarah English	Claimant	
	- and -		
	Colin English and Yvonne English	First Defendants	
	- and -		
	Hodge Jones and Allen (a firm)	Second Defendant 	
	- and -		
	Swift Advances Plc	Third Defendant 	
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Nigel Clayton (instructed by Armstrong Luty) for the Claimant  
The First Defendants did not appear and were not represented
Graham Chapman (instructed by Mills & Reeve LLP) for the Second Defendant 
Damian Falkowski (instructed by Swift Group Legal Services) for the Third Defendant 

Hearing dates: 21-25 June 2010 
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Judgment

HHJ David Cooke : 

Introduction
1.	The claimant Mrs Jean English is a 75-year-old widow.  After the death of her husband David in 1994 she became the sole owner of her bungalow at 24 Oakfield Drive, Formby, Merseyside.  In 2001 she paid off the mortgage, and thereafter held the property free of charge until the somewhat remarkable events that gave rise to this claim.  
2.	Her case is that in January 2002 one of her sons, Colin English, and/or his wife Yvonne English (the first defendants) forged her signature on a joint application for a loan from the third defendant and also on a form of Legal Charge over the bungalow to secure that loan.  She accepts that at that time she attended the offices of the second defendant solicitors firm and signed a form confirming that she had been advised about the consequences of entering into a loan of £50,000 secured on the bungalow, but says that she did not in fact receive any such advice and thought that what was under consideration was an application for an unsecured loan of £40,000.  All this was arranged by Colin, who subsequently told her that the application had been refused and she thought no more about it.  Unknown to her, the loan transaction was completed and the Legal Charge registered against the property.  Colin pocketed the £50,000.
3.	Two months later in March 2002 the claimant alleges that Colin and/or Yvonne forged her signature on further documentation to increase the amount of the loan to approximately £106,000, again taking the proceeds of the advance made. Repayments were from the beginning not kept up on the loan and in January 2003 possession proceedings were served at the property. The claimant's written evidence was that this was the first she knew of the existence of the loans. In April 2003 the claimant put the bungalow on the market and says that she was told by the solicitors acting on the sale (who were not the second defendant) that there was a charge registered against the property, and that she would have to discharge the amount it secured from the proceeds of sale.  By this stage, she says she realised Colin had committed a fraud against her, but accepted his promise to repay her from the proceeds of a personal injury compensation claim that he was pursuing on behalf of his daughter, who was then a minor.
4.	The sale completed in September 2003 and the balance due to the third defendant (approximately £123,000 including costs and interest) was paid from the proceeds.  The claimant's case is that Colin then fraudulently abstracted the remaining net proceeds from her bank account leaving her with nothing.  Not wishing to get Colin into trouble despite what he had done, the claimant made no complaint to anyone about the fraud or her losses until March 2006 when she was persuaded by other family members to report the matter to the police.  They apparently investigated, obtained the advice of a forensic document examiner that the loan applications and charge did not bear the genuine signatures of the claimant, but nevertheless did not prosecute Colin or Yvonne.  The claimant's case is that this was because the document examiner could not conclude that the forgery had been made by one of them.
5.	The claimant instructed her present solicitors in July 2006 and issued this claim in January 2008.  The first defendants have not responded to the pleadings and the claimant has a default judgment for in excess of £190,000 against them.  It is unsatisfied, they having disappeared. In relation to the other defendants, she now seeks damages for professional negligence from the second defendant solicitors on the basis that they should not have certified to the third defendant that they had advised her in relation to the first loan agreement and the Legal Charge.  As against the third defendant the claimant seeks the return of the monies paid to redeem its charge on the basis of constructive trust or payment by mistake, the relevant mistake being as to the existence of her liability to pay.
6.	The second defendant denies that its advice was negligent, although the solicitor concerned is unable to recall anything about the occasion on which Mrs English attended.  In the alternative, they plead that, contrary to her case, the claimant knew all about the loan transaction and would have proceeded with it whatever advice was given.  In the further alternative they plead that even if it is found that they were negligent and this negligence caused the claimant loss by the securing of the first loan against her property, it was not foreseeable that Colin would commit a further fraud by obtaining the second loan.
7.	The third defendant's case is put in a number of ways. Firstly, in the circumstances the claimant has adopted or ratified the actions of Colin in obtaining the loan and the registration of charge. Alternatively, it was accepted that the effect of registration of the charge, even if forged, was to vest in the third defendant a legal estate in the property.  Had the claimant applied for the register to be rectified whilst it held that estate, it would have been entitled to apply to the Land Registrar for an indemnity.  The claimant having made payment and obtained a release of that estate without making any objection to its validity, represented that the charge and loan agreements were valid and is now estopped from denying that validity.  The third defendant submits that it has been prejudiced because the release of its estate means that it no longer has any entitlement to claim an indemnity from the Registrar. In the further alternative it is said that the payment by the claimant was made not under a mistake of fact but as a volunteer, or has the effect of establishing a settled account between her and the third defendant.
The disputed documents
8.	The first issue of fact to be determined is as to the authenticity of the claimant's signature on six documents that she challenged.  These were:
i)	in relation to the first loan, a credit agreement dated 18 January 2002 providing for a loan of approximately £50,000 to be made to the claimant, Colin and Yvonne jointly, and a letter of the same date requesting that the advance be paid into an account in the name of Ms K English, apparently Colin's daughter Katy English.  In addition an "authorities and declarations" form dated 22 January 2002 and the third defendant's Legal Charge, given the date 25 January 2002 when the loan was completed, but evidently signed some days beforehand.
ii)	In relation to the second loan, a credit agreement and letter requesting that the advance be made urgently, each dated 4 April 2002.
All these documents were of course sent to the third defendant.  The only other document received by the third defendant and purporting to show the claimant's signature was the form that she accepts she signed at the second defendant's office on 23 January 2002, referred to as a "Solicitors Verification Certificate" or "SVC".
9.	Neither the second nor the third defendant has any direct evidence as to who signed these documents.  A report has been obtained on joint instructions from Dr Audrey Giles the well-known document examiner, who examined the questioned documents and compared the claimant's signatures on them with other acknowledged true signatures.  Although many of the signatures were only available in copy form, she found a number of differences between them and the undisputed signatures, and concluded "that there is very strong support for the view that Mrs [Jean] English signed none of the questioned documents and that the signatures in the name J English on those documents are attempts to simulate her genuine signature." On the basis of that evidence, I find that the claimant did not sign any of the questioned documents.
Events leading to the first loan application 
10.	The claimant's evidence was that the first loan application came about because another of her sons, Mark, had the opportunity to purchase a rented flat in London at a discount under the right to buy scheme.  He had initially thought that he would need to borrow about £40,000 to do this.  Mark also gave evidence in support of the claimant, and said that when he first looked into buying the flat, he thought he would not be able to obtain a mortgage loan himself because of his HIV-positive status.  The claimant had agreed to try and help him by borrowing the £40,000 herself.  They discussed plans to sell her property, repay the £40,000 and buy a property together in Spain, letting out the London flat in the meantime. There was no discussion about this directly between Colin and Mark, as the two of them did not get on.
11.	The claimant did not appear to have taken any steps herself to try and obtain a loan, but said that at some point Colin had become aware of the proposals and told her that he could assist her in obtaining a loan.  She denied that she had seen or signed any loan application or credit agreement.  At some point in January 2002, Colin, who lived at Seaford near Brighton rang her up and said that he had made arrangements for her to see a solicitor in connection with the loan for Mark.  The solicitor was in London and she went down to London for a few days and stayed with Mark.  Mark said that he had nothing to do with these arrangements, had not discussed them with Colin and did not know the solicitors himself.  Those solicitors were the second defendants, and, perhaps remarkably if the events had unfolded in this order, their office was very close to Mark's flat.
The SVC and case against the second defendant 
12.	The claimant went to the second defendant's office with Colin.  Her evidence was that she was introduced to a solicitor she had never met before, and whose name she could not now remember.  The two of them sat down "in front of his desk". Colin gave some paperwork to the solicitor which he said related to the loan, and most of the conversation took place between Colin and the solicitor.  She recalled remarking to the solicitor that the loan was to assist Mark in buying his flat for £40,000 and that it was marvellous that he could buy a flat for that price.  The solicitor had left the room for a short while leaving her and Colin together, she thought to confer with a colleague.  On his return he put a piece of paper in front of her and asked her to sign it.  She recalled that the piece of paper had crossings out on it but could not recall exactly what he said about these.  Colin had said something to the effect that the crossings out had already been dealt with.  Colin had told her that the purpose of the visit was to arrange a loan of £40,000 in her name, but there had not been any mention of security on the property.  In her witness statement she said:
“ the solicitor certainly never mentioned anything to me about it being secured on the property.  I can say without fear of contradiction that had he made a suggestion to me that the loan was to be secured on my home I would not have gone ahead under any circumstances.  I had a mortgage free home and did not wish to get my home involved with any loans. ”
13.	The "piece of paper" was the SVC.  In fact there were two; one in respect of Colin English and the other in respect of the claimant (pages 217 and 218).  They are in a printed standard form produced by the third defendant, requiring the completion of a number of blanks.  In addition, the form as it eventually reached the third defendant had various amendments in manuscript on it.
14.	The solicitor concerned was Mr Nigel Zaoskoufis, who gave evidence.  He had no recollection whatever of the meeting but said that any such meeting would not have been at his desk but around a table in one of the firm's meeting rooms. He confirmed that the SVC had his signature on it and that some but not all of the manuscript amendments were in his writing.  Unfortunately, the original of the SVC is not available, having been sent to the third defendant and, in accordance with its policy, destroyed after microfilming.  The text of the SVC contains nine numbered paragraphs.  Two (paragraphs 2 and 6) are crossed through and another, paragraph 8, partially deleted, in each case with the firm's initials "HJA" appearing next to the deletion.  Mr Zaoskoufis confirmed that this was in his handwriting.  Underneath each of these paragraphs some additional wording in manuscript appears.  Mr Zaoskoufis said that this was not his handwriting and he would not have put the firm's initials next to words that he had not himself added and which he could not verify.  He thought therefore that these must have been added after he had signed the document, and pointed out that the initials are in each case written near to the deletion and not near the extra words.  Unfortunately, it is not possible to check this against a file copy, as although he said it would have been his practice to keep a copy, it would have been placed on a general file and no such copy can now be located at the second defendant's offices.  The text, including the crossings out and manuscript additions (which I have italicised) was as follows:
“1		I am a solicitor of the Supreme Court holding a current Practising certificate
2		I have explained to the Applicant the contents and effect of the Lender's standard form of Legal Charge and Loan Agreement - already signed witnessed and returned
3		I particularly explained that whilst the Loan Agreement secured by the Legal Charge provided for a total loan amount as shown above the Legal Charge was effectively in "all monies" form and secured not only that loan and amount together with interest charges and fees, but was also capable of securing all monies to the Lender under other credit and similar transactions
4		the Applicant agreed that the explanations were understood
5		I saw the Applicant alone.  I asked the Applicant about the circumstances under which the loan was being taken and there was no evidence of any undue influence being applied to the Applicant
6		the Credit Agreement and Legal Charge were then signed by the Applicant in my presence and I witnessed the signature on the Legal Charge - already signed, agreed, witnessed by a solicitor and returned 
7		if there is more than one Applicant to the loan needing advice, I saw them separately 
8		the Applicant produced sufficient identification or is known to me personally Passport + Driving Licence + Bank Card
9		I enclose our specimen letter heading ”
15.	Although Mr Zaoskoufis had no recollection of the meeting, his evidence was that based on these deletions the claimant and Colin must have told him that they did not have the loan agreement and Legal Charge with them.  He would have told them that he could not advise them without these documents and asked them to return with them, but they must have asked him to proceed in any event.  In fact it appears that the originals of these documents had already been sent by the broker Colin was dealing with (the Loan Processing Centre) to the third defendant, as appears from a letter sent by the third defendant to the broker on 17 January 2002 recording their receipt and requiring that the borrowers should receive independent legal advice and a signed SVC be produced.  Mr Zaoskoufis' explanation may therefore be correct, although Colin should have had copies of the loan agreement and Legal Charge which he could have taken to the solicitors office, had he wished to so.
16.	At the top of the form, there are three boxes to be filled in.  These have been completed in manuscript with the name of the applicant given as "Mr C English and Mrs J English", the address of the bungalow, and the loan amount of £50,000.  The handwriting for all these entries is not Mr Zaoskoufis', nor is it the same as the manuscript additions noted above.  The names have been crossed out in further handwriting, apparently by Mr Zaoskoufis because the firm's initials again appear next to the deletion, and he has inserted in his own writing on one form "Jean Sarah English" and on the other "Colin James English". It would appear therefore that the boxes had been completed by someone before the meeting, and Mr Zaoskoufis amended the names at the meeting.
17.	At the foot of the form appears the following text:
“ Acknowledgement of Applicant 
I confirm that the above Solicitor advised me as set out in paragraph 2 and 3 and that I have not been influenced by anyone to sign the Legal Charge ”
The deletion has again been initialled by Mr Zaoskoufis.  The claimant's signature appears underneath, with her name in capitals and the date inserted in Mr Zaoskoufis' writing.  The claimant accepted that this is her genuine signature.
18.	If the claimant's account of this meeting is correct, what actually transpired must have been markedly different from what is recorded on the SVC as having happened.  Firstly, although she claims to have discussed a figure of £40,000 with Mr Zaoskoufis, he cannot have noticed or remarked on the fact that the form referred to £50,000.  He could not in fact have provided any advice about the "all monies" form of the Legal Charge. He must not even have mentioned anything about a Legal Charge, since Mrs English, on her account, would have immediately said she wanted nothing to do with charging her property. He could not in fact have seen Mrs English alone, separately from Colin or made any enquiries about undue influence.  As Mr Chapman submitted, although the case as pleaded in negligence and the claimant has not put forward any case based on intentional wrongdoing or recklessness, it is difficult to see how, if the claimant's account is correct, that can be so unless Mr Zaoskoufis was aware that he was giving a certificate in false terms at the time.
19.	It is not impossible that all the above is the case.  But the claimant bears the burden of showing by evidence that on the balance of probabilities the contemporary document is not a true reflection of events, and her evidence must be all the more convincing given that she accepts that she signed the document herself at the time confirming its accuracy.  Her case against the second defendant therefore depends entirely upon the credibility of her own evidence as to what transpired at that meeting and whether it is sufficient to outweigh the signed acknowledgement she gave at the time.
20.	Mr Zaoskoufis gave evidence that at the time of the meeting he was familiar with conveyancing practice and the requirements for giving independent advice to parties entering into such transactions.  He had spent the whole of his post-qualification career, and a substantial part of his training, working in conveyancing departments.  He was, he said, careful about what he signed and what he would put the firm's name to.  It was his practice if asked to explain the effect of a document such as a charge both to give a simple explanation and to go through all its provisions, although "the clients get very bored". This of course is unlikely to be determinative in itself, given the lack of specific recollection and the obvious temptation for a professional to assume that he would on every occasion have followed his best practice.  
21.	But there are a number of indications within the document that it was completed with some care, and not amended in advance by Colin or some other unqualified person and handed over in its amended form as the claimant suggested.  Firstly, Mr Zaoskoufis amended the names of the applicants so that there was a separate form for each of Colin and the claimant.  It suggests that he was paying more than lip service to the certificate he was being asked to give that he had seen the applicants separately.  Secondly, if he was being careless as to the content of the certificate and not actually giving the advice recorded, why would he have deleted paragraph 2?  The lender on receiving the certificate would never have known that the loan and charge documents had not been produced to him, at least in copy form.  It might be said that it would have been obvious to him that he could not leave paragraph 6 in place because the lender would be aware that he had not in fact witnessed the signatures, but the same would not apply to paragraph 2. For the same reasons it seems less likely (though clearly possible) that an unqualified person amending the form in advance would have troubled to delete paragraph 2. Thirdly, he need not have amended paragraph 8, since as drafted he could have certified it if one of the two alternatives was true without specifying which it was.  The fact that he did so suggests that he was reading it carefully and making it accord with what had happened.  Finally, the amendment in the acknowledgement, to make it correspond with the fact that paragraph 2 had been deleted, suggests a lawyer of some precision.  It is an amendment less likely to have been made in advance by an unqualified party.  It does not seem likely that a solicitor who approached the document with sufficient care to make that amendment would nevertheless have disregarded in a wholesale fashion the substantive provisions of that document as to the task he was required to perform. All these matters go to support the likelihood that the SVC is an accurate record.
22.	Regrettably, I have come to the conclusion that the claimant's evidence and recollection is not sufficiently reliable to overcome the evidential hurdle she faces.  There were a number of instances in which, to put it no higher, her recollection and her evidence in chief were shown to be inaccurate or were difficult to believe.
23.	It was plain that the claimant knew the difference between a secured loan and an unsecured one.  She accepted that she had taken out a number of unsecured loans to assist Colin, although she had only mentioned one in her witness statement.  She accepted that she knew that in general unsecured loans were only available for relatively small amounts, likely to be less than £40,000.  She maintained however that she thought "you could just get a loan" and assumed that the £40,000 would be available without security.  She did not appear to have thought about how it could be repaid from her pension income of about £13,000 per annum.  Asked how she was going to make the repayments she could only say "I just was.  I had two pensions".
24.	She had referred in one of the witness statements to a loan of £8000 from Bank of Scotland which had been arranged over the telephone.  After the telephone call, she said, a cheque had been brought down by motorbike courier.  She denied repeatedly that she had been required to sign any documentation at all.  I do not accept that.  However willing banks were to lend at that time, and even if they were prepared to arrange loans over the telephone, it is simply not credible that an advance of £8000 would be made under what would have been a regulated loan agreement without any documentation at all.  It may be that the claimant has focused only on the end result, that money was advanced to her, and forgotten about the formalities that were required.  If so, her recollection as to the formalities in the present case may be equally suspect.
25.	In her witness statement, the claimant stressed that she had not become aware of either loan until January 2003, when the possession proceedings were served.  She said that it was her practice to send any mail addressed to Colin to him at fortnightly intervals, in an envelope with a copy of the local paper containing reports on Everton football matches.  She said this (page 138):
“28	I was not aware of either the first or second loan and I did not receive any communication about this until sometime in January 2003.  
29		I am aware that on occasions during 2002 letters did arrive for Colin, which I simply put in the envelope that I sent him fortnightly and sent down to his house.  I had no idea what these letters were, I never opened the envelopes.  I was not suspicious about the letters at that time. ”
26.	I am satisfied that this is not an accurate picture.  The third defendant keeps a log of activity on its loan files in a very summarised form.  This records all communications, and all actions taken.  The log in relation to the first loan is at page 174, and that in relation to the second loan starts at page 412.  A great number of telephone calls are recorded chasing arrears particularly in relation to the second loan.  Many of the entries are ambiguous about exactly who was spoken to.  Where telephone calls were made, it is for the most part not made clear which number was called (although the evidence of Mr White was that unless specified otherwise it would be likely that the number called would be that of the security address since that was what was displayed on the operator's screen and if so, as many of the entries show that answer phone messages were left, these would have been likely to come to the claimant's attention).  The individuals spoken to are generally identified as "Mr" or "Mrs".  Given that there were three parties to the loan as far as the third defendant's records were concerned, it is not clear without more whether "Mrs" refers to the claimant or to Yvonne English.  For instance the entry for 27 March 2002 (page 175) which reads "Borrower telephoned regarding their account.  Mrs said she will send a cheque" does not necessarily record a conversation with the claimant.
27.	However this is clearly not the case in relation to the entry on 20 June 2002 (page 413) which reads "Telephoned Borrower to discuss arrears following arrears letter being sent.  Mrs (Jean) advised a cheque for £874.76 will be sent 27/06/02 together with a letter to amend the payment date."  This was plainly a conversation with the claimant and not Yvonne.  It does not record any surprise on the claimant's part that a loan was being referred to or that there were arrears, or any objection that the arrears letter referred to had not been received. Other entries made in this file record the reaction, response and explanations of the borrowers to various queries and matters raised. If any such surprise or objection had been expressed I would expect it to have been recorded, particularly as it would be likely to have rung alarm bells with the third defendant's employee.  Further, the fact that the claimant not only promised a cheque but discussed amending the payment date shows her to be actively involved in the arrangements for repayment and not, for instance, referring everything to Colin.
28.	Similarly the entry on 29 October 2002 (page 414) which reads "Telephoned Borrower and left message for them to call us back as they were not in. Spoke with mother" strongly suggests that it was the claimant, ie Colin's mother, who returned the call.  In her oral evidence, the claimant was vague about when she first spoke to the third defendant on the telephone, but eventually accepted that there probably had been a telephone call in 2002, although she could not now recall it.  It was pointed out to her that in her reply (page 50) it had been pleaded "the claimant's only recollection of a discussion with the third defendant or their solicitors was in 2002 when she received a letter.  This was the first she was aware of a loan from the third defendant."  That of course was inconsistent with her own witness statement made a few days later which said that she was not aware of the loan until January 2003.  It is also not consistent with the fact that she clearly had a considerable number of telephone conversations with the third defendant's employees after January 2003.  In cross-examination she accepted that a conversation on 11 February 2003 noted as with "Mrs English" was with her.  That conversation was a detailed discussion of arrears and payment arrangements, after which she paid £900, being the amount of arrears she was told existed.  She was also clearly party to at least two other conversations, one in April (the date is not clear) and one on 9 May 2003, in which she said that repayments would be made by her son, presumably Colin.  Asked about the records of these conversations, she said she accepted the conversations must have taken place but she could not recall any of them, which I find unlikely.
29.	Asked about whether she had seen any of the numerous letters sent by the third defendant in relation to the arrears were building up, the claimant said that any letters that had arrived that included Colin's name in the address she had sent on to him without opening.  Since it appeared that all the letters sent prior to the service of the possession proceedings were addressed to all three of the named borrowers, this she said meant that she had not been aware of any of the contents of them, not having opened them or discussed them with Colin.  
30.	But it emerged that she must have received at least one such letter.  She gave some rather confused evidence about the fact that she had made two payments totalling £900 after the conversation in February 2003 recorded with "Mrs English".  Having said that she accepted that that conversation must have been with her she later said that she did not think it had been (although in her witness statement at paragraph 33 she clearly accepted that there had been such a conversation).  Asked how she could have known how much to pay if not through that conversation she said "from the letter, probably this one" referring to a letter sent in April 2002 (page 290) addressed to all three borrowers.  On looking at it, she corrected herself and said that it had been a letter laid out like that one but written just to her and that that was why she had opened it.  No such letter could be identified, so it is most likely that she was referring to one of letters addressed to all three of them.  At all events, she was clearly acknowledging that, contrary to her earlier evidence, she had opened and read at least one of the letters referring to arrears.  
31.	Later in her evidence, pressed about the fact that she had apparently given her solicitors an account reference which it appeared she could only have obtained from one of the letters addressed to all three she said she "might have read one of them", and asked what had happened to the letters she said "I got rid of them when the house was sold" and then, perhaps recalling that she had earlier said that they had all been sent to Colin, she added "if there were any there".
32.	Further, the claimant was obliged to accept that she had received and read default notices sent to her dated 9 April 2002 (page 268) and 5 August 2002 (page 294A).  Separate notices were sent individually addressed to each borrower so the explanation about sending documents on to Colin if they had his name on would not apply.  In the claimant's favour, it must be said that although these documents say "if you fail to take the action required… we will recover possession of the land and enforce the security" this wording is not very specific about the security held.  But even the most superficial reading of the rest of the document would show that it is alleged that the claimant was in breach of a loan agreement and required to make payment of the arrears, so she must have been aware that there was a loan agreement, that she was a named party to it, and that arrears had risen by no later than April 2002 which were being demanded from her. 
33.	It was the claimant's evidence that when she came to sell the property, she was told by the solicitor acting in the sale that she had no alternative but to discharge the liability in favour of the third defendant to remove its charge.  The solicitor's file is in evidence, and it shows no reference to any such advice being given.  Nor is there any reference to any queries having been raised by the claimant over the fact that a charge existed, or that she was required to pay it off.  The claimant accepted that she had not raised any such queries, or asked for any advice about these matters, which would be very surprising if she considered herself to have been defrauded by Colin and to have had a charge put on the property which she had not signed and knew nothing about until the possession proceedings began.
34.	In fact it appears from the documents disclosed by the solicitor that, contrary to her account, it had been the claimant who informed the solicitor of the existence of the loan from the third defendant, at the outset of her instructions to them.  It appears that when the claimant came to sell the property she must have first instructed the estate agent, who was called Collette Gunter.  Miss Gunter produced a set of particulars, dated 28 April 2003 (page 334). It appears that the solicitors were instructed on or about that date, because on 28 April 2003 they sent a request for office copy entries to the Birkenhead District Land Registry (page 335).  Immediately after that on the file appears a note (undated), which the claimant accepted was in her handwriting, marked for the attention of the solicitor dealing with the file, and giving a correspondence address for Swift Advances PLC, the third defendant.  Behind that is another manuscript note (again undated), this time not in the claimant's writing, which reads as follows:
“ Jean English 
24 Oakfield Drive Formby L37 1NR
831386 [the claimant's telephone number]
£[illegible, presumably the asking price of £219,950] Collette Gunter 
£96k loan Swift Advances 
EN67/19258/M2
Sale only ”
35.	This note, it seems to me, is most likely explained as the solicitor's note made on receiving initial instructions by telephone.  The claimant denied that she had given this information and said that it may have come from Collette Gunter, given that her name was mentioned. If the call had come from Collette Gunter, and it was she who told the solicitors of the '£96k loan', that information must have been given to her by the Claimant.  This is possible, although it seems to me more likely that it was the claimant who had telephoned and told the solicitor that the property was up for sale with Collette Gunter at that price, and gave the information about the loan and the account reference number.  Whoever telephoned, it is clear that the solicitor was being told that there was a secured loan outstanding to the third defendant, which would have to be redeemed on the sale, because the solicitors wrote on 30 April 2003 to the third defendant , quoting the reference given and saying:
“ we are instructed by the Borrower Mrs J S English in connection with her sale.  We understand that the title deeds are in your possession.  … kindly supply a redemption figure up to 31 May 2003 … we will proceed on the basis that we are your duly authorised agent to receive that part of the money paid to us which is needed to discharge the charge or charges in your favour unless we hear from you to the contrary ”
36.	The claimant denied that she had put forward this information to the solicitor, and said that it had been the solicitor who had told her about the charge and asked her about it, to which she had responded with the information and been told she would have to pay it off.  This did not fit well with her witness statement in which she had said that she had no idea where the figure of £96,000 came from.  It would be unlikely that a solicitor would have given such advice, if told that the claimant had not signed or authorised any loan or charge documents.
37.	Furthermore, it does not appear that the solicitor had any other source of information about the existence of a charge at the time he wrote to Swift, because the office copy entries that had been requested two days beforehand were themselves sent by letter dated 30 April 2003 (page 339) which presumably would have arrived at least one day later.
38.	It had been the claimant's evidence that although she had lent various sums to Colin in the past he had never paid a penny of what he owed her.  However it emerged from her bank statements that substantial credits have been made to her account immediately after each of the two loans had been advanced. The first loan completed on 25 January 2002, and on 28 January 2002 an amount of £3200 was credited to her account, by way of a deposit made at Seaford, where Colin lived.  On 19 April 2002, shortly after the second loan was advanced, there was a deposit at Seaford of £2500.  Asked about these, the claimant said, in my view unconvincingly, that she did not know about them.  She accepted that Colin and Yvonne were the only people she knew in Seaford.  It is overwhelmingly likely that they made these payments, and I do not find it conceivable that they did not tell the claimant about them.  It does not of course follow that they must necessarily have also told her that these were the proceeds of an advance by the third defendant, but these payments do show that the claimant was not telling the whole story when she said that Colin had never paid her anything.
39.	I conclude then that the claimant's own testimony is not a reliable basis on which I could ignore the written record of the advice given that the meeting signed by the solicitor and by the claimant herself, and that on the balance of probabilities the SVC accurately records what happened at the meeting and the advice given.  The most likely explanation for the deletions made is, as Mr Zaoskoufis said, that he was told (presumably by Colin) that he and the claimant had not brought these documents with them (no doubt because they had already been returned to the third defendant) and asked him to proceed as best he could.  He did so, adapting the SVC accordingly.  The claimant must, as I find, have at least concurred with this request, and known and accepted that he was making the amendments he did.
40.	Mr Clayton submitted that it was nevertheless negligent of Mr Zaoskoufis to proceed on this basis and that what he ought to have done was to refuse to sign the SVC at all if he was not in a position to provide all the advice that it anticipated.  He argued that Mr Zaoskoufis had two clients, the claimant and the third defendant, but that the scope of his duties to the claimant was defined by his instructions on behalf of the third defendant, i.e. to give the advice set out in the SVC, and it was in breach of those duties to do anything less.
41.	I do not accept that submission.  Mr Zaoskoufis had no prior contract of retainer with the third defendant and was thus not obliged in advance to provide all, or indeed any, of the advice contemplated by the SVC.  When the SVC was presented to him it no doubt constituted a request to give the relevant advice to the borrower and provide a certificate to the third defendant, with a corresponding assumption of responsibility to the third defendant.  Mr Zaoskoufis was free to accept or decline that request, and could be under no obligation to the third defendant if he declined.  Equally, so far as the third defendant was concerned, if Mr Zaoskoufis returned the certificate with deletions of those matters he was not prepared to certify he was not in breach of any obligation to the third defendant in making the deletions and nor would he incur any liability to the third defendant in respect of the subject matter of the deleted clauses.  No doubt it would be a matter for the third defendant whether it was prepared to proceed with the transaction notwithstanding the deletions, but it could have no complaint or recourse against Mr Zaoskoufis arising from the fact that they had been made.
42.	The form of the SVC itself did not therefore define the scope of Mr Zaoskoufis' duties to the third defendant and it cannot therefore be said that it established duties that were necessarily also owed to the claimant.  The question for the court is whether, given that I have found that the claimant either requested or concurred in a request for Mr Zaoskoufis to do exactly as he did, i.e. to amend the SVC and proceed without having advised (other than in the general terms set out in paragraph 3 of the SVC) on the obligations created by the loan agreement and the Legal Charge, Mr Zaoskoufis nevertheless owed the claimant a duty to refuse to do so.  It is clearly not the case that there can be no circumstances in which a solicitor owes a duty to the client to refuse to accept the client's express instructions; he might do so if for instance the circumstances were such that he was unable to give the client sufficient advice for the client to understand the nature of the risks inherent in proceeding with the transaction.
43.	That however is not in my judgment the position here.  Mr Zaoskoufis, as I have found, saw the claimant alone and was satisfied that she was not being put under any undue influence to proceed with the transaction.  This was not a surprising conclusion; the claimant was named as one of the borrowers and had given him a credible explanation of her reason for wanting the funds, namely to assist Mark in buying his flat. That explanation was not such that it should have aroused any suspicion of undue influence by anyone. The claimant may have told him (as she accepted was the case) that it was her intention to sell the bungalow and pay off the loan from the proceeds, in which case there would be nothing surprising in her also agreeing that the loan should be secured on the property in the meantime. Mr Zaoskoufis was able to give the general advice about the effect of the Legal Charge, and particularly its "all monies" nature, recorded in paragraph 3 of the SVC.  He did not need to see the Legal Charge or the loan agreement to give that advice, which is of a generic character and an appropriately simple explanation for a lay client of the overall effect of those documents.  It has not been submitted that there were any unusual factors known to him about the transaction which would have suggested that he could not properly have advised without seeing the detailed terms of the documents, or indeed that if he had seen them he would not have been able to give the advice and explanation that he did.
44.	I find therefore that Mr Zaoskoufis was not in breach of duty to the claimant, and the case against the second defendant must be dismissed.
The case against the third defendant 
45.	So far as the case against the third defendant is concerned, I have found that the claimant did not sign the loan agreements or Legal Charge, and no case has been made that whoever did sign those documents was authorised by the claimant to do so on her behalf.  It follows that those documents did not, initially at least, themselves create any obligations on the claimant's part.  
46.	The third defendant does however put its primary case on the basis that the claimant is estopped from denying that she is bound by those documents because her conduct amounts to an adoption or ratification of Colin's acts or a representation that the documents were authentic.  The conduct relied on is in failing to notify the third defendant of the fact of the forgery when she became aware of it, in having the discussions that she did about the loans, and making payment of certain instalments, in failing to raise any objection to the validity of the charge when her conveyancing solicitors made arrangements for redemption, and in paying the balance apparently secured by the charge on the sale of the property and obtaining a release of the third defendant's registered interest.
47.	In support of his case as to adoption, or ratification or representation founding an estoppel, Mr Falkowski relied on Greenwood v Martins Bank Ltd [1933] AC 51.  In that case the plaintiff sued for repayment of monies paid out of his account by the defendant bank on cheques forged by his wife.  He had known of the forgeries for several months but not told the bank in order that the bank should not pursue his wife.  When he eventually did inform the bank, his wife committed suicide.
48.	The lead opinion was given by Lord Tomlin, all the other Law Lords agreeing with him.  He dismissed the case on ratification and adoption, and addressed  the question whether silence could amount to a representation, in the following passage:
“Now it may be said at once that there can be no question of ratification or of adoption in this case. The necessary elements for ratification were not present, and adoption as understood in English law requires valuable consideration, which is not even suggested here.
The sole question is whether in the circumstances of this case the respondents are entitled to set up an estoppel.
The essential factors giving rise to an estoppel are I think:-  
(1.)     A representation or conduct amounting to a representation intended to induce a course of conduct on the part of the person to whom the representation is made.  
(2.)     An act or omission resulting from the representation, whether actual or by conduct, by the person to whom the representation is made.  
(3.)     Detriment to such person as a consequence of the act or omission.
Mere silence cannot amount to a representation, but when there is a duty to disclose deliberate silence may become significant and amount to a representation.
The existence of a duty on the part of the customer of a bank to disclose to the bank his knowledge of such a forgery as the one in question in this case was rightly admitted.”
49.	He went on to hold that the plaintiff's silence in the face of the admitted duty to disclose the forgery was deliberate and intended to cause the bank not to take action against his wife, that in those circumstances it amounted to a representation. Further, in the circumstances of the case the necessary elements of reliance and detriment were shown.
50.	I was not addressed in detail as to the requirements for ratification to which Lord Tomlin referred, but in the context of the law of agency a transaction capable of ratification is entered into when one person enters into a transaction purporting to act on behalf of another (the principal) rather than on his own behalf, although the purported agent in fact has no authority to do so. It must be a transaction the principal could have made at the time on his own behalf. The principal ratifies the transaction if at a later stage, with full knowledge of the relevant facts, by clear voluntary conduct (or in certain cases by acquiescence) he accepts the transaction as binding on him; see for instance the relevant section in Halsbury's Laws of England, volume 1 (fifth edition 2008) beginning at paragraph 57 and including the following:
“66. Essentials of ratification.
Ratification must be evidenced either by clear adoptive acts, or by acquiescence equivalent thereto. The act or acts of adoption or acquiescence must be accompanied by full knowledge of all the essential facts, and must relate to a transaction to which effect can be given, unless the principal shows an intention to take all risks, but it is not necessary that he should know the legal effect of the act ratified…”
[I omit the footnotes, save the following in relation to the necessary character of the adoptive acts: "A principal cannot be said to adopt an act when he cannot help himself"]
“68. Ratification by acquiescence.
Although a ratification must be clear and must bear distinct reference to the facts of the particular case, it need not necessarily be proved by positive acts of adoption. In certain cases it is sufficient evidence of ratification that the intended principal, having all material facts brought to his knowledge and knowing that he is being regarded as having accepted the position of principal, takes no steps to disown that character within a reasonable time, or adopts no means of asserting his rights at the earliest time possible...
The acquiescence must be acquiescence in the particular facts and be incapable of referring to another set of facts. Acts which the principal has no choice but to perform will not of themselves amount to ratification.”
51.	In Greenwood's case there were certainly no positive acts by the husband adopting the cheques as binding on him, and although Lord Tomlin did not go into detail about the elements of ratification that he regarded as not made out, he clearly did not regard the husband's mere silence as amounting to ratification by acquiescence in the circumstances of the case.  Is the position the same here?
52.	First, the loan agreements and charge were clearly transactions entered into by Colin in which he purported to act on behalf of the claimant.  Whether or not Colin personally forged the claimant's signature, he was responsible for putting those documents forward to the third defendant on the footing that they had been executed by the named parties with a view to procuring the loan.  Although he was also named as a borrower, he was not purporting to act solely on his own behalf since he also purported to engage the liability of the claimant as a party to the loans and as the chargor of the property. For the purposes of establishing whether in principle the purported transaction was one that was capable of ratification I do not think it makes any difference that he submitted documents with a forged signature on behalf of the claimant, rather than, say, a 'pp' signature which he in fact had no authority to make. The transactions he purported to enter into on her behalf were clearly ones which she could have entered into herself. In my judgment the transactions were therefore in principle capable of ratification by the claimant.
53.	In my judgment, the conduct of the claimant that the third defendant relies upon does amount to an acceptance that the loans and charge constituted transactions binding upon her.  The facts that in the conversation in June 2002 she promised a payment and asked to amend the payment date, and later in February 2003 she made arrangements to make payment of £900 towards the arrears and discussed the application of the proceeds of a claim which Colin had made under a PPI policy, all in the context of avoiding an order for possession, are some indication that she regarded the loans as binding on her. I would not have held this conduct by itself to be sufficiently clear evidence of ratification however, as it clearly could have been explained as assisting Colin in relatively small ways with his own liability rather than recognising a liability of her own, (although that is not an explanation the claimant has in fact given).
54.	Much stronger however is the fact that, as I have found, the claimant instructed her conveyancing solicitors about the existence of the loans made by the third defendant (although she underestimated the liability) and the fact that they were secured on the property, and caused the same solicitors to pay the amount necessary to redeem the charge on sale, without any protest, or even asking them for any advice, as to whether she was liable to pay.  This in my view goes beyond acquiescence and amounts to a positive acceptance of the binding effect of the charge and loan agreements on the claimant.
55.	These acts were undertaken at a time when, I am satisfied, the claimant had knowledge of all the material facts.  I think it likely, for the reasons that I have given, that the claimant was in fact aware of the making of the loans at or very shortly after the time they were advanced.  At all events, she was clearly aware of the existence of both loans, and that she was regarded as liable for them, by the time she received and read the default notice in August 2002, and she was aware of the existence of a charge on the property to secure those loans either at that date or when the possession proceedings were served in January 2003.
56.	Furthermore, these were not acts which the claimant had no choice but to perform.  She could at any time have objected that she had not signed any of the relevant documents and they were nothing to do with her.  I have rejected her evidence that the conveyancing solicitor advised her that she had no option but to pay the amount claimed to secure the release of the mortgage and found that the facts were the other way around. 
57.	In my judgment, therefore, the defence based on ratification is made out.  Although pleaded in terms of estoppel, the effect of the ratification is to constitute Colin retrospectively as the claimant's agent to enter into the transactions on her behalf and to put forward the documents that he did as being authorised by her.  In those circumstances, it does not matter that the signatures on the documents were not hers.  The resulting position goes beyond an estoppel and the transactions are actually binding upon her.
58.	This makes it strictly unnecessary to consider the further grounds relied on by the third defendant, but I do so in case I am wrong on the issue of ratification.  Adoption is a separate process by which a person who was not originally bound by a contract may become so.  He may not have been originally named as a party to it, but may become liable either as an additional party, or in place of one of the previous parties (in which case the process is referred to as novation).  A further instance would be a contract purportedly made in the name of a company which has not yet been incorporated- ratification is not available in the circumstances because the contract is not one to which the principal could have been a party at the time it was made, since the principal did not then exist.  Once the company is incorporated however it may adopt the contract.  In all these cases, the incoming party is regarded as entering into a new contract to which all the normal rules for the formation of a contract apply, including the requirement for consideration.  It was not suggested in this case that the third defendant had provided any additional consideration to the claimant for her to become a party to the contract, and so in my judgment adoption is not in issue here.
59.	So far as the case based on estoppel by representation is concerned, in my judgment the same matters that I have found amounted to acts of ratification could equally be treated as representations that the loan and charge documents were in order.  The facts of this case in my view go beyond those in Greenwood, where the plaintiff had simply kept silent about his knowledge of the forgery (but it was nevertheless held that because of his duty as a customer to disclose the forgeries the deliberate silence amounted to a representation).  On her own case, the claimant did as she did in order that the existence of the forgeries should not become apparent, and that the third defendant should not take the action it might have done if it had become aware of them.  What she had in mind, she said, was that this might get Colin into trouble with the police.  Her actions did produce the intended effect, in that the third defendant continued to treat the loans and that charge as valid and accepted the payment she made to redeem the charge.
60.	Mr Falkowski submitted that had the third defendant known of the forgery and the fact that the claimant denied liability before it released its charge, it could have sought an indemnity from the Land Registrar.  Having released the charge, it is no longer eligible to do so.  In my judgment, releasing the charge amounts to an act taken in reliance on the claimant's representations, and not seeking the indemnity from the Land Registrar to which it may have been entitled amounts to an omission in similar reliance.  Mr Clayton submitted that  although in principle a claim for an indemnity could be made, there was no element of detriment because I should find that the lending policies of the third defendant were so reckless that it would have been refused indemnity in any event.  In my judgment however the evidence goes nowhere near establishing the proposition that indemnity would inevitably have been refused, and the right to claim an indemnity is a right of value, the loss of which is a detriment, even if there is some possibility (short of a certainty) that the claim may not in the event have been successful.  I should therefore have held that the elements necessary to establish an estoppel based on representation by the claimant were made out.
61.	Had it been necessary to do so, I should have accepted the submission that the claimant made her payment to discharge the loans not by virtue of any mistake of fact but as a volunteer.  On her own case, the claimant thought she was paying Colin's liabilities.  She was aware of the existence of the loans and the charge, and must have been aware that Colin had obtained the loans by fraudulently putting forward documents in her name which she had not signed.  She said in her oral evidence that although she became aware of the loans and knew that they existed, she was not concerned by that knowledge because she knew that she had not had any loans herself.  She therefore did not regard herself as personally liable for those loans.  I have rejected her evidence that she was advised by the conveyancing solicitor that she nevertheless had to discharge them.  She was not therefore acting under any mistake as to the existence of a legal liability on her part. The conclusion must be that she did so voluntarily and in order to fulfil her objective of keeping Colin out of trouble.  She was successful in that objective.  Even if the third defendant had not been able to enforce the charge or loan agreements to recover the money from her, it could not be said that there was anything unjust or inequitable about it receiving the money she voluntarily paid for her own purpose.  Accordingly, there would be no grounds for any remedial constructive trust to be imposed, or for any restitutionary remedy.
62.	Finally and for completeness I should say that I would not have accepted the submission that the payment resulted in a settled account. If the claimant had no contractual liability on creation of the forged documents, and had not become contractually liable by either of the processes of ratification or adoption, no account existed between the claimant and the third defendant which could have been regarded as settled by the payment made.
63.	For these reasons, in my judgment the claim against the third defendant also fails.
64.	I should say that I have come to these conclusions despite my sympathy for the claimant, who in my view was motivated primarily by the desire, as she freely said, to help Colin as she helped other members of her family. It would seem that the trust and belief she placed in him was not shared by her other children, and this may have led her to conceal from them the extent of the assistance she was providing to Colin, as they would not have approved of it. She may have been misguided in taking on the liability Colin had incurred in her name, and I am sure she now agrees with her other children that she was. But it is too late now to undo the fact that she did take on that liability, and discharged it.
65.	I will list a short hearing in Birmingham at which this judgment will be formally handed down.  In the hope of avoiding the costs of attendance, I invite the parties to agree a form of order to reflect this judgment.  If there is to be any request for permission to appeal, I would be content to receive it in writing.  However if there are any matters requiring representations to be made, on that or any other issue arising, I will list a hearing at a later date in order that representatives may attend, but I draw attention to the fact that time for requesting permission to appeal from me will run from the date of handing down, unless a request is made in advance for the hearing to be adjourned specifically for the purpose of making such an application pursuant to PD 52 paragraph 4.3B.