Edinburgh woman whose ex-partner forged signature on standard security succeeds in action for reduction

Gillian Pearce stated she was not aware of the security granted in favour of David Myers until two years after its creation. She sought reduction of the security as well as suspension of a Calling-up Notice and interdict against the defender preventing him from taking steps to enforce repossession of the property.

The case was heard by Sheriff John Mundy. The pursuer was represented by McShane, advocate, and the defender by Murdoch, solicitor.

Cheque returned unpaid

The pursuer, a 58-year-old property manager, was the heritable proprietor of a property on Essendean Place in Edinburgh. From 2007 until about 2017 she was in a relationship with a man, Mark Easton, who lived with her at the property. There was a break in the relationship for around 6 to 12 months in 2012.

In September 2011, a standard security over the property was purportedly granted by the pursuer in favour of the defender, described as a “commercial lender”, in consideration for a loan in the sum of £32,000. Later that month, a cheque was written on the pursuer’s building society account in that amount, payable to “M. Easton”, which was returned unpaid.

In August 2016, a letter was sent to the pursuer’s address by solicitors acting for the defender indicating that a Calling-up Notice was to be issued in respect of the security, with a total sum of £146,326, including arrears and charges, owed to the defender. Following the final separation of the pursuer and Mr Easton, a Calling-up Notice was sent in September 2017. At this time, she reported the matter to the police and sought legal advice.

It was averred by the pursuer that the signatures and handwriting on the security agreement and the cheque were not her own, and that she received no funds from the defender. Her position was that she first became aware of the security during a meeting with an independent financial advisor in 2012 or 2013. When she became aware of it, Mr Easton indicated that the matter would be resolved, and she was not to worry about it.

The pursuer led evidence from herself and from a handwriting expert, Dr Gillies. She stated that she was herself in financial difficulty at the time, that she was sequestrated between 2016 and 2019, and that Mr Easton had been “very manipulating”. It was submitted that the evidence of the pursuer was sufficient to permit the court to grant decree of reduction on the basis of the forged signature.

It was submitted for the defender that the pursuer’s position regarding her knowledge of the security was not plausible, and that the signature on the cheque had been made by the pursuer with a view to deny. The pursuer had failed to discharge the onus upon her to prove the forgery on a balance of probabilities.

Credible and reliable

In his opinion, Sheriff Mundy outlined the key issue of the case as follows: “There was no issue between the parties that, if it were established that the signature on the Standard Security was forged, then the result would be that the deed was null and void and of no effect and not simply voidable.”

Assessing the evidence of the pursuer, he said: “I have found the pursuer to be a credible and reliable witness. While it was legitimate to question her knowledge of the transactions and why she did not take any steps in relation to the security before she did, this did not, in my assessment, undermine her credibility and in particular the essentials of her evidence that she did not sign the Standard Security.”

He continued: “Her evidence that she did not sign the security or the cheque is supported by Dr Gillies, the handwriting expert, who gave her evidence in a fair, measured and balanced manner. She was not moved from the conclusions in her report that the signature on those documents was unlikely to be that of the pursuer.”

Turning to the question of who had signed the document, Sheriff Mundy said: “There was evidence from the pursuer that, at the meeting with the financial adviser in 2012, Mr Easton admitted as much. I accept that he gave such an indication. An inference may also be drawn from the fact that ‘M.EASTON’ appears as payee on the said cheque for £32,000 being the sum referred to in the Standard Security.”

He continued: “Whether he personally perpetrated the forgery is a distinct issue. However, it is unnecessary for me to find that he did. The material averments to the effect that the pursuer did not sign the Standard Security and that her signature has been forged are proved and are sufficient to warrant the remedy sought.”

For these reasons, the decree of reduction sought by the pursuer was granted.