Appeal court rules on status of signatures on mortgage documents

The Court of Appeal has clarified the consequences for solicitors of witnessing the signature of a party involved in a mortgage transaction. In a case involving a woman who signed a letter agreeing to postpone her beneficial interest in her matrimonial home, the court has ruled that Scottish Equitable Life Assurance Society was entitled to assume she had received legal advice because her signature had been witnessed by a solicitor. The Appeal Court dismissed an appeal by Mrs Trishna Virdee against a Brentford County Court ruling in November 1997 that she had no defence to a claim by Scottish Equitable for possession of her home in Twickenham. David Schmitz, counsel for Mrs Virdee, argued that Judge Marcus Edwards had been wrong to rule that because Mrs Virdees signature had been witnessed by a solicitor, Scottish Equitable was entitled to assume that she had received legal advice. He said that the letter of consent, signed by Mrs Virdee and witnessed by a solicitor, had been sent to Scottish Equitable by her husbands solicitor. It was accompanied by a covering letter stating that the writer understood from the witnessing solicitor that the wife had been advised as to the legal nature and implications of the consent form. But he argued that this did not absolve Scottish Equitable from the consequences of the House of Lords ruling in Barclays Bank plc v OBrien [3] EGCS 169, namely that consent letters should come from a solicitor acting for the wife. For Scottish Equitable, counsel Jonathan Marks argued that the judge had been correct in ruling that taking the signature of the solicitor witnessing the disclaimer and the covering letter from the husbands solicitors together, Scottish Equitable was entitled to assume that the wife had been properly advised. Dismissing Mrs Virdees appeal, Mummery LJ said that Scottish Equitable had acted reasonably in accepting a statement by Mr Virdee’s solicitors, who had passed on a document from Mrs Virdees solicitors, which appeared to satisfy its requirements. Scottish Equitable Life Assurance Society v Virdee (Court of Appeal) Stuart-Smith and Mummery LJJ, 23/11/98 David Schmitz (instructed by Singh Karran & Co) appeared for the appellant; Jonathan Marks (instructed by Addleshaw Booth & Co, of Leeds) appeared for the respondent.