In the case of Ikbal v Sterling Law, the court was asked to decide whether a firm of solicitors acting for the purchaser of a property was liable to its client for a breach of trust and/or breaches of duty of care after it failed to recognise that a property purchase was a fraudulent transaction, the result of which being that its client did not obtain legal title.
Mr Ikbal instructed Sterling Law to act for him on his purchase of a property in London. Although at one stage he intended on purchasing the property with a mortgage, Mr Ikbal eventually purchased the property free of a mortgage with the assistance of funds from family sources. This was not a case of mortgage fraud.
Completion was believed to have occurred on 26 July 2010, when Sterling transferred the full purchase price of £350,000 to the seller’s solicitors, Fernando & Co. Sterling believed that completion had occurred pursuant to the Law Society Code for Completion by Post, which contains various undertakings that are impliedly accepted by solicitors using the code relating to completion. These include an undertaking that a seller’s solicitor will forward to a purchaser’s solicitor an executed transfer form following receipt of sale funds and completion…
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