Forged signature had to make disposition void, Inner House rules

A disposition of property to which a husband had taken title in his wife's name without her knowledge, on which he forged her signature when transferring it to their son, was a nullity and there was no basis for the court exercising its discretion to refuse decree of reduction at the instance of the wife, the Inner House has ruled.

Lady Paton, Lady Smith and Lord Drummond Young gave their decision in allowing an appeal by Therese Chalmers, who sought reduction of the disposition by which her husband Paul transferred title to a flat in Glasgow to their son Chris, the defender in the action. It had come to light in 2012 during divorce proceedings that the husband had bought the flat in 1998, taken title in the wife's name without her knowledge or consent, and then caused it to be disponed without consideration to Chris in 2006, forging her signature on a deed witnessed by Chris. 

The Lord Ordinary, Lord Boyd of Duncansby, dismissed the action on the basis that Mrs Chalmers had no interest in the property before her signature was forged; reduction would not restore her to the position she was in before the forgery, because of the subsequent divorce in which the flat would have formed part of the matrimonial property; and she had delayed raisng her action until after the divorce was finalised, in order to gain an advantage.

Delivering the opinion of the court, Lady Paton said the forged deed was wholly void, and the only circumstances in which it might have any effect were where the person whose signature had been forged expressly or impliedly authorised or adopted the forged signature as his or her own. There was no evidence to that effect in this case. The Scottish land registration system "could be subverted if it were possible to forge a signature on a disposition which was duly registered, and then put forward equitable circumstances supporting a contention that the forged disposition should not be reduced".

She added that the Lord Ordinary had in any event exercised his discretion wrongly. It was wrong to say that Mrs Chalmers had no interest in the property prior to the forgery, as she had a real right even if she did not know of it; the action had been raised while the divorce was still proceeding; and she appeared to be taking such steps as she could to raise the question of the flat, rather than keeping quiet about it. It was he husband who was being unforthcoming.

The Lord Ordinary having concluded that the husband was engaged in tax avoidance, as well as non-disclosure of income in the divorce proceedings, and the son not being a third party acting in good faith and for full consideration, but rather having received as much of a windfall as any his mother might be perceived to have, the proper exercise of the court’s discretion would result in the granting of decree of reduction.

Click here to view the opinion.