Property Litigation Column: When Is A Sham Not A Sham?

Brie Stevens-Hoare QC and Amanda Eilledge consider the impact of co-owner forgery following the decision in Victus Estates and others v Munroe and others [2021] EWHC 2411 (Ch).

Introduction

In Victus Estates and others v Munroe and others  [2021] EWHC 2411 (Ch) the Court considered the position where one joint owner (S1) forges the signature of the other (S2) on the transfer of their property to B1, where B1 is aware of the forgery. The Court concluded that such a transfer is not a sham and is still effective to transfer S1's equitable interest in the property to B1, under section 63 of the Law of Property Act 1925 (LPA 1925). In this case B1 (one of the fraudsters), purported to charge the property to a mortgage lender. The Court concluded this was effective to charge the interest to which B1 was entitled, namely its half share in the property.