Law Report: 3 June 1998 - Meaning of 'good marketable title' in underta king

Barclays Bank plc v Weeks Legg & Dean (a firm); Barclays Bank plc v Layton Lougher & Co (a firm); Barclays Bank plc v N E Hopkin John & Co (a firm); Court of Appeal (Lord Justice Millett, Lord Justice Pill and Lord Justice May) 21 May 1998

IN A STANDARD form undertaking given to a bank by a purchaser's solicitor to facilitate the completion of a contract for the sale of land, whereby the solicitor undertook to apply any sums received solely for acquiring "good marketable title", the expression "good marketable title" did not mean "a freehold title free from encumbrances".

The Court of Appeal so held on the hearing of three appeals concerning the proper construction of a standard form of undertaking given by solicitors to Barclays Bank plc.

The undertaking was in a form agreed between the Law Society and the banks, and contained the following undertakings:

(a) that any sums received from you or your customer for the purpose of this transaction will be applied solely for acquiring a good marketable title to such property and in paying any necessary deposit legal costs and disbursements in connection with such purpose. The purchase price contemplated is pounds . . . gross and with apportionments and any necessary disbursements is not expected to exceed pounds . . . ;

(b) after the property has been acquired by . . . and all necessary stamping and registration completed to send the title deeds and/or land certificates and documents to you and in the meantime to hold them to your order.

In each of the three cases the bank had brought an action for damages against the solicitor who had given the undertaking, claiming that the solicitor had parted with the money on completion of the purchase of the relevant property but had failed to obtain a title to the property which provided satisfactory security for the bank.

Simon Berry QC, Jonathan Nash, Nigel Jones and Michael Sullivan (Eversheds) for the bank; Mark Hapgood QC and Richard McManus (Blake Lapthorn), Peter Cranfield (Wansbroughs Willey Hargrave) and David Halpern (Morgan Bruce) for the solicitors.

Lord Justice Millett said that the following issues arose on the appeals: the meaning to be attributed to the expression in the undertaking "for acquiring a good marketable title to the property"; and whether the obligation which the solicitors assumed by giving the undertaking was an absolute or a qualified obligation.

The subject-matter of a sale of land and the vendor's duty to prove his title to the subject-matter of the sale were two quite separate questions. The obligation of a vendor was to deduce sufficient title to the property which he had contracted to sell. The expression "good marketable title" described the quality of the evidence which the purchaser was bound to accept as sufficient to discharge that obligation. It said nothing about the nature or extent of the property contracted to be sold to which title had to be deduced.

The expression was a compendious one which described the title and not the property, and where it was contained in a contract for the sale of land, it meant "to the property contracted to be sold". In the present cases it was not contained in a contract for sale or in a communication between vendor and purchaser, but in a separate document provided by the purchaser's solicitor to a third party. The property was described in the undertaking in order to enable the parties to identify the transaction to which the undertaking related, not the property which the purchaser was acquiring. It was not necessary for the full particulars of the property together with the rights with and subject to which it was being sold to be set out in the undertaking, but was sufficient for the property to be described in terms sufficient to enable the relevant transaction to be identified.

The undertaking was, therefore, to be construed as an undertaking not to part with the money except for a good marketable title to the property which was the subject of the transaction briefly described in the document.

Further, the undertaking ought to be construed as subjecting the solicitor to qualified a obligation only, i.e. to obtain in exchange for the money what a reasonably competent solicitor acting with proper skill and care would accept as a good marketable title. That would bring his obligations under the undertaking into conformity with his obligations to his own client as well as with his trust obligations to the bank, and would not involve exposing him to a liability which no solicitor could properly be advised to accept.

Kate O'Hanlon, Barrister

Life and Style
Small winemakers say the restriction makes it hard to sell overseas
food + drink
Arts and Entertainment
A comedy show alumni who has gone on to be a big star, Jon Stewart
tvRival television sketch shows vie for influential alumni
Arts and Entertainment
Carrie Hope Fletcher
booksFirst video bloggers conquered YouTube. Now they want us to buy their books
News
Clare Balding
peopleClare Balding on how women's football is shaking up sport
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksNow available in paperback
Arts and Entertainment
Damien Hirst
artCoalition's anti-culture policy and cuts in local authority spending to blame, says academic
Sport
premier leagueMatch report: Arsenal 1 Man United 2
Arts and Entertainment
Kirk Cameron is begging his Facebook fans to give him positive reviews
film
News
i100
Sport
Jonny May scores for England
rugby unionEngland 28 Samoa 9: Wing scores twice to help England record their first win in six
Life and Style
fashionThe Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Arts and Entertainment
Jason goes on a special mission for the queen
tvReview: Everyone loves a CGI Cyclops and the BBC's Saturday night charmer is getting epic
Arts and Entertainment
Jerry Hall (Hand out press photograph provided by jackstanley@theambassadors.com)
theatre
Sport
Tony Bellew (left) and Nathan Cleverly clash at the Echo Arena in Liverpool
boxingLate surge sees Liverpudlian move into world title contention
Voices
Neil Findlay
voicesThe vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Life and Style
food + drinkMeat-free recipes and food scandals help one growing sector
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Reach Volunteering: Financial Trustee and Company Secretary

Voluntary Only - Expenses Reimbursed: Reach Volunteering: A trustee (company d...

Recruitment Genius: Senior Project Manager

£45000 - £65000 per annum: Recruitment Genius: This is a fantastic opportunity...

Recruitment Genius: Shopfitter

Negotiable: Recruitment Genius: This is an opportunity to join a successful an...

Recruitment Genius: Digital Sales Account Manager

£25000 - £30000 per annum: Recruitment Genius: A Digital Sales Account Manager...

Day In a Page

Mau Mau uprising: Kenyans still waiting for justice join class action over Britain's role in the emergency

Kenyans still waiting for justice over Mau Mau uprising

Thousands join class action over Britain's role in the emergency
Isis in Iraq: The trauma of the last six months has overwhelmed the remaining Christians in the country

The last Christians in Iraq

After 2,000 years, a community will try anything – including pretending to convert to Islam – to avoid losing everything, says Patrick Cockburn
Black Friday: Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Helpful discounts for Christmas shoppers, or cynical marketing by desperate retailers?

Britain braced for Black Friday
Bill Cosby's persona goes from America's dad to date-rape drugs

From America's dad to date-rape drugs

Stories of Bill Cosby's alleged sexual assaults may have circulated widely in Hollywood, but they came as a shock to fans, says Rupert Cornwell
Clare Balding: 'Women's sport is kicking off at last'

Clare Balding: 'Women's sport is kicking off at last'

As fans flock to see England women's Wembley debut against Germany, the TV presenter on an exciting 'sea change'
Oh come, all ye multi-faithful: The Christmas jumper is in fashion, but should you wear your religion on your sleeve?

Oh come, all ye multi-faithful

The Christmas jumper is in fashion, but should you wear your religion on your sleeve?
Dr Charles Heatley: The GP off to do battle in the war against Ebola

The GP off to do battle in the war against Ebola

Dr Charles Heatley on joining the NHS volunteers' team bound for Sierra Leone
Flogging vlogging: First video bloggers conquered YouTube. Now they want us to buy their books

Flogging vlogging

First video bloggers conquered YouTube. Now they want us to buy their books
Saturday Night Live vs The Daily Show: US channels wage comedy star wars

Saturday Night Live vs The Daily Show

US channels wage comedy star wars
When is a wine made in Piedmont not a Piemonte wine? When EU rules make Italian vineyards invisible

When is a wine made in Piedmont not a Piemonte wine?

When EU rules make Italian vineyards invisible
Look what's mushrooming now! Meat-free recipes and food scandals help one growing sector

Look what's mushrooming now!

Meat-free recipes and food scandals help one growing sector
Neil Findlay is more a pink shrimp than a red firebrand

More a pink shrimp than a red firebrand

The vilification of the potential Scottish Labour leader Neil Findlay shows how one-note politics is today, says DJ Taylor
Bill Granger recipes: Tenderstem broccoli omelette; Fried eggs with Mexican-style tomato and chilli sauce; Pan-fried cavolo nero with soft-boiled egg

Oeuf quake

Bill Granger's cracking egg recipes
Terry Venables: Wayne Rooney is roaring again and the world knows that England are back

Terry Venables column

Wayne Rooney is roaring again and the world knows that England are back
Michael Calvin: Abject leadership is allowing football’s age-old sores to fester

Abject leadership is allowing football’s age-old sores to fester

Those at the top are allowing the same issues to go unchallenged, says Michael Calvin