- Whose fraud is it anyway? The effect of forgery and the defence of illegality on equitable property interests (Victus (2) v Munroe; Benjamin v Victus (1))
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Case details
Property Disputes analysis: The court held that where A and B jointly own a property and B forges A’s signature on the transfer to C who is aware of the forgery; the transfer is not a sham and is still effective to transfer B’s equitable interest in the property under section 63 of the Law of Property Act 1925 (LPA 1925). The judge also considered whether applying the principles in Patel v Mirza should lead to B’s equitable interest remaining with B, but concluded that as a matter of public policy and applying the law as to illegality in relation to transactions, the result should be the same. It follows that if C then purports to charge the property to a mortgage lender, this has the effect of charging the interest to which C was entitled, namely its half share in the property. This judgment analyses the passing of beneficial interests in the context of fraudulent transactions. Written by Amanda Eilledge, barrister at Gatehouse Chambers.
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