Capital Home Loans is suing former solicitors firm JST Mackintosh over a series of property transactions in Manchester that turned out to be hidden sub-sales.
CHL is claiming more than £300,000 in damages from the partners in the firm, of Colonial Chambers, Temple Street, Liverpool, after it advanced sums that it claims were higher than the purchase price for several properties.
According to a high court claim recently made available, the mortgage lender is suing partners in the firm, including John Shield and Heather Summers, who are now partners in JST Lawyers, at the same address.
CHL says it loaned a total of £442,031 in a series of mortgage advances to Rosarie O’Leary for six buy-to-let properties: apartments 17 and 23, Ainsworth Court, Stanley Road; apartments 8 and 13 Cecil Court, Cecil Road; and apartments 6 and 9 Canalside, Liverpool Road.
However, it claims that the solicitors firm, through its employee Claire Britton, knew or ought to have known that four of the transactions – excluding the Cecil Court apartments – proceeded by way of a sub-sale, involving O’Leary’s husband, James Mary Nicholson, or a company named Silverlance Ltd.
CHL says that it does not know the prices at which Nicholson or Silverlance contracted to buy each property, but that it is likely that they were profiting from these transactions by selling them on to O’Leary.
As a result, CHL claims it lent in excess of 100% of the genuine purchase price of the properties.
It alleges that this was a mechanism that allowed the borrowers to complete the purchases without contributing anything from their own resources.
Folowing the loans, the borrowers failed to make adequate payments, and receivers have been appointed in respect of the properties.
CHL alleges that the firm acted in breach of its express and implied contractual duties, its fiduciary duty and its duty of care, and should compensate it for its loss.
The partners in JST Mackintosh are defending the claim.
Capital Home Loans Ltd v Shield and others
HC12C01406
Claim issued by Philip Tebbatt of Slater Rhodes Solicitors
