Saunders (Executrix of the Will of Rose Maud Gallie, Decd.) v Anglia Building Society [1971] A.C. 1039

Contract - Term of Contract - Costs - Legal Aid - Entitlement to payment

Facts:

A widow was induced by a fraudster to sign her leasehold interest in her house over to him. He then mortgaged her property to the Anglia Building Society (ABS). The mortgage deed stipulated that any costs incurred by ABS under the mortgage were to be paid by the mortgagee. The widow brought action claiming the contract for a mortgage over her property with ABS was void and that the title should return to being in her name. She succeeded in her claim. Proceedings were funded by legal aid. The court held that even though the mortgage deed was void, the assignment of the title was not and that costs had been incurred by ABS so they were at liberty to recover their costs. The widow appealed.

Issues:

Whether the legal aid funding of the case affected whether the building society could recover their incurred costs on the assignment.

Held:

The claim for costs were found not conflict the provisions of s 2(2)(e) of the Legal Aid Act 1964. The order for costs was not against the widow and had no bearing on her to make payment out of the estate. The costs were found to be properly incurred, incurred without any relevance to the actual fraud and were reasonable. On the court’s decision, it was also found that even though ABS were an unassisted party in the proceedings, as the appeal costs had been incurred getting the case to its final decision, those costs were also considered reasonable. ABS were entitled to have them paid.