Conveyancers cleared of negligence over Declaration of Trust

A conveyancing firm have been cleared of negligence over allegations they failed to explain a Declaration of Trust covering a home to a woman who subsequently divorced her husband, as well as having a conflict of interest.

Bromets (which subsequently merged to become Bromets Jackson Heath LLP) were instructed to deal with the Declaration of Trust, executed on 9th December 2005 for Ms Turner and Mr Millington.

At that time Mr Millington and Ms Turner had been cohabiting at 23 Burns Way, Clifford, Wetherby LS23 6TA (“23 Burns Way”) since about 2002. 23 Burns Way had been purchased in Mr Millington’s sole name in late 2001. Ms Turner was proposing to invest £20,000 in 23 Burns Way. As a result the ownership of 23 Burns Way was to be transferred into joint names, it was to be re-mortgaged and the Declaration of Trust was to be executed to reflect the beneficial interests.

The Declaration of Trust calculates the value of Mr Millington’s equity at £160,486.58 and the value of Ms Turner’s equity at £20,000. It contains a declaration that on the sale of 23 Burns Way the net proceeds will be divided as to £160,486.58 for Mr Millington, £20,000 for Ms Turner with any further sums being shared equally between them. Thus Ms Turner would receive half of any increase in value after the date of the transaction.

Ms Turner alleged that there was no explanation of the Declaration of Trust before she signed it, and that she wouldn’t have signed it if she had understood its terms.

Ms Turner also contended that Bromets should have appreciated that there was a significant risk of a conflict of interest between herself and Mr Millington and should have advised her to seek separate advice. If that had happened Ms Turner stated she would have sought such advice and not have signed the Declaration of Trust.

The relationship between Ms Turner and Mr Millington broke down in 2012. Following the breakdown she negotiated a settlement with Mr Millington involving the return of the £20,000 and some other sums reflecting moneys that had been spent by her. Ms Turner claims that she would have achieved a better settlement if she had not executed the Declaration of Trust.

The firm contended that the terms of the declaration of trust was fully explained to both parties on 6th December, and two members of staff at the firm had “formed the view that there was no significant risk of a conflict of interest.”

That view, according to His Honour Judge Behrens at Leeds County Court, was “an opinion they were entitled to hold.”

“To put the matter another way Ms Turner has failed to establish that in forming that opinion either Miss Alden or Mrs Natkus was negligent or fell below the standards of a reasonably competent solicitor.

“In my view therefore the claim based on conflict of interest also fails. There was no duty on Bromets to advise Ms Turner to seek separate advice or to advise her not to enter the agreement.”

Judge Behrens continued: “In my view there is no substantial chance that if Ms Turner had been advised to take separate legal advice that she would not have signed the Declaration of Trust and other documents necessary for the transaction to proceed.

“It follows that even if (contrary to my view) Bromets was under a duty to advise Ms Turner to take independent advice Ms Turner suffered no loss.
“For all these reasons Ms Turner’s action against Bromets fails.”

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