REF/ 2010/0934

 

 

THE ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

LAND REGISTRATION ACT 2002

 

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

 

 

BETWEEN

(1)   FERESHTE BANOU MANOUCHEHRIE-NAINI

(2)   SHIRIN BOROUMAND-NAINI

APPLICANTS

 

and

 

JOHN LEWIS FINANCIAL SERVICES LIMITED

RESPONDENT

 

Property Address: 56 St. Mary’s Crescent, London NW4 4LH

Title Number: AGL81582

 

 

Made by: Mr Michael Michell, sitting as Deputy Adjudicator to HM Land Registry

At: Victory House, Kingsway, London

On: 20^th June 2011

 

Applicants’ Representation: Not appearing and not represented

Respondent’s Representation: Miss Susanna Rickard, counsel, instructed by

Restons Solicitors Ltd.

 

___________________________________________________________________________­

 

ORDER

___________________________________________________________________________

 

UPON the application of the Respondent for summary disposal under Rule 32A of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003 (as amended)

 

The Adjudicator to HM Land Registry orders as follows:

1.                  The application for summary disposal is refused.

2.                  There be no order as to the costs of the application

 

 

REASONS

 

Cases referred to :

Henderson v. Henderson (1843) 3 Hare 100

Barrow v. Bankside Agency Ltd. [1996] 1 WLR 257

Hunter v. Chief Constable of the West Midlands Police [1982] AC 529

Halsbury’s Laws of England Vol. 16(2)

 

1. The Respondent, John Lewis Financial Services Ltd. applied for summary disposal under rule 32A of the Adjudicator to HM Land Registry (Practice and Procedure) Rules 2003. The Respondent made an application dated 24^th June 2010 to HM Land Registry to enter a restriction in Form K on the title to 56 St. Mary’s Crescent, London NW4 4LH registered under title number AGL81582 (“the Property”). The registered proprietors are the Applicants, Fereshte Banou Manoucherie-Naini and Shirin Boroumand-Naini and Dr Mansour Boroumand-Naini (“the Judgment Debtor”). The Respondent had obtained in the Willesden County Court an interim charging order dated 22^nd June 2010 charging the beneficial interest of the judgment debtor, in the Property. The Applicants are the wife or former wife and daughter respectively of the Judgment Debtor. On 12^th July 2011 they objected to the application to enter the restriction on the grounds that the Judgment Debtor did not own any part of the Property. On 9^th September 2010 the matter was referred to the Adjudicator to HM Land Registry for determination. The Respondent applied by letter dated 14^th February 2011 for summary disposal pursuant to Rule 32A of the Adjudicator to Hm Land Registry (Practice and Procedure) Rules 2003.

 

2. In support of their objection to the registration of the restriction, the Applicants produced a document addressed “To Whom It May Concern”, bearing a date 28^th November 2008 and the names and signatures of the Judgment Debtor, the Applicants and three persons described as “witnesses”. The body of this document reads as follows

“I (Dr Mansour Boroumand-Naini) from 13 Brookland Rise, Hampstead Garden Suburb, London NW11 6DN, writing this letter of confirmation that as part of our divorce agreement with my ex-wife (Mrs F.B. Manouchehie-Naini), I have given all my share and interest on the property known as 56 St. Mary’s Crescent, Hendon, London, NW4 4LH, to my daughter (Miss Shirin Boroumand-Naini) and in return she accepts responsibility for the repayment of my mortgages that I have on this property. She also accepts that she will be responsible for the monthly payments of the mortgages until the house has been sold”.

The document appears to have been signed by the Judgment Debtor, the Applicants and by three witnesses. I shall refer to this document as the “November 2008 Agreement”.

 

 

3. The interim charging order directed a further hearing take place on 20^th September 2010. Evidence of what happened on 20^th September 2010 appears from a witness statement of the Respondent’s solicitors’ trainee solicitor, Nazia Yasmin Ali made on 18^th March 2011 and an attendance note of counsel, Sajjad Nabi who appeared for the Respondents at a hearing before District Judge Steel on the 20^th September 2010. The Judgment Debtor appeared at that hearing in person; the Applicants in these proceedings did not appear and were not represented. According to the note, the Judgment Debtor confirmed that he and his wife were not divorced but had separated about 8 years previously, that his daughter had been paying the mortgage for about 5 years and that a legal transfer had not been effected to preserve entitlement to a mortgage rate of 0.5%. The District Judge adjourned the hearing “to allow the [Judgment Debtor] to produce evidence”. Counsel made clear that “a sham argument might be raised in which case the wife and daughter would have to be added as parties and a trial held”.

 

4. The adjourned hearing came before Deputy District Judge Parker on 29^th November 2010. The Respondent was represented at that hearing by counsel, Ms Susanna Rickard, who also appeared before me. As evidence of what happened at that hearing, a copy of the e-mail sent by Ms. Rickard to her instructing solicitor was exhibited to Nazia Yasmin Ali’s witness statement. The Judgment Debtor appeared in person at the hearing. The Applicants did not appear and were not represented. It appears from the note of the submissions that Ms. Rickard referred the Deputy District Judge to the provisions of CPR 73.8 which she submitted required that “any person who objects must file and serve on the applicant written evidence 7 days before”. Ms Rickard submitted that the November 2008 Agreement in so far as it did amount to a valid transfer of the Judgment Debtor’s interest, would fall foul of section 423 of the Insolvency Act 1986. She also submitted “should at some point in the future this court, some other court, or a tribunal determine that in fact [the Judgment Debtor] did not have any interest in his property then the charging order could of course be lifted, a charging order in an interest which did not exist would be pointless”. After the Judgment Debtor had addressed the court, Ms Rickard made further submissions, which, according to her e-mail, included the following

“I said that as the Defendant had referred to the November 2008 document as a deed I would briefly address her on that in addition to my earlier submission that if it was a deed it was bound to fail under the Insolvency Act. I said that in order to validly dispose of his beneficial interest he would need to make a disposition in writing by deed. I referred to the requirements of the Law of Property Act 1925 and the Law of Property (Miscellanous Provisions) Act 1989. I said that it was not a valid deed, it did not even purport to be a deed and in fact all that it did say was “I have given all my share and interest on the property … to my daughter”. I said that the court should go ahead and make a charging order final and if the defendant or someone else wished to challenge it thereafter then they could do”.

 

5. The Deputy District Judge took time to consider and gave a judgment which was summarised by Ms Rickard in her e-mail as follows “

·         Counsel points out that under s. 52 of the LPA 1925 … to dispose of an interest in property it needs to be validly executed as a deed

·         I am asked to determine the matter today on the basis that he does have an interest and the creditor will be prejudiced by any delay because of the possibility of bankruptcy proceedings

·         I agree that [the Judgement Debtor] has not disposed of his interest

·         This document was not a deed

·         It was signed 2 years ago and nothing has been done to give effect to it

·         The property remains in his name

·         His daughter has not provided a witness statement

·         The burden remains on the debtor

·         He has not satisfied me that the final order should not be made”.

 

6. It is a point of some concern that the District Judge referred only to s. 52 of the Law of Property Act 1925 and not to s. 53. S. 52(1) provides as follows

“All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed”.

This section would not appear to be of any relevance. The Property is registered land. The Land Registration Act 2002 s. 23 specifies the powers the owner of a registered estate has to dispose of registered land. The mode of exercise of those powers is set out in s. 25 and Rule 58 of the Land Registration Rules. These require the transfer of a registered estate to be in a specified form. There is no reference anywhere in Ms. Rickard’s note to s.53. Ms. Rickard told me in the course of her submissions that she had referred to s. 53 but there is no mention in her e-mail of an argument based on s. 53 or of the District Judge having made any reference to s. 53. S. 53(1) includes the following

“(1) Subject to the provisions hereinafter contained with respect to the creation of interests in land by parol

(b) a declaration of trust respecting any land or any interest therein must be manifested and proved by some writing signed by some person who is able to declare such trust or by his will;

( c ) a disposition of an equitable interest or trust subsisting at the time of the disposition, must be in writing signed by the person disposing of the same, or by his agent thereunto lawfully authorised in writing or by will”.

7. The issue before the Deputy District Judge on 29^th November 2010 ought to have been whether the November 2008 Agreement was effective to dispose of the Judgment Debtor’s equitable interest in the Property. That issue would have required a consideration of s.53(1) of the Law of Property Act 1925.

 

8. Ms Rickard submitted that it was not open to the Applicants to contend that the Judgment Debtor had no beneficial interest in the Property. She submitted that the District Judge had decided that the Judgment Debtor did have a beneficial interest in the Property. She submitted that the issue whether the Judgment Debtor had a beneficial interest in the Property was res judicata. Ms Rickard further submitted that in continuing with the proceedings before the Adjudicator, the Applicants were making a collateral attack on the decision of the Judgment Debtor and that such attack was an abuse of process. Further Ms Rickard sought to rely on the rule in Henderson v. Henderson (1843) 3 Hare 100.

 

9. Ms Rickard did not refer me to any authority in which the doctrine of res judicata is expounded or explained. However, she submitted that the question whether the Judgment Debtor has an interest in the Property had been determined in the county court proceedings and so was res judicata. There is a helpful exposition of estoppel per rem judicatam in Halsbury’s Laws of England Vol. 16(2) para. 953. The relevant passage is as follows

“Estoppel by record, also known as estoppel per rem judicatam, arises:

….

(3) where an issue has been judicially determined as a necessary step in reaching a judgment and the issue arises in subsequent proceedings between the same parties (this is usually known as issue estoppel”.

The key point in the present case is that the Applicants were not parties to the proceedings in which the charging order was made. The issue as to whether the Judgment Debtor had a beneficial interest in the Property at the date the charging order was made final was not judicially determined in proceedings in which the Applicants were parties.

 

10. In support of the submission that it was an abuse of process for the Applicants to continue with their application, Ms Rickard referred me to Hunter v. Chief Constable of the West Midlands Police [1982] AC 529 and the following passage in the speech of Lord Diplock

“The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made”.

The case concerned a claim by Mr Hunter against the police for damages for assaults causing him physical injuries which he alleged were inflicted on him by police officers while he was in their custody. Mr Hunter had been convicted of causing explosions in two public houses in Birmingham. He had made an oral confession while in police custody. At his trial for murder, Mr Hunter argued that his confession was not voluntary and so not admissible in evidence. A trial within a trial was held to determine whether the confessions were voluntary. Mr Hunter argued that he had been assaulted by the police in order to make him confess; the physical injuries in respect of which he claimed damages in the civil action were identical with those of which he gave evidence at the trial within a trial as having been inflicted upon him by the police in order to extract the confession. The judge found it established beyond reasonable doubt that there had been no physical violence or threats by the police to Mr Hunter, that the confession was voluntary and therefore admissible. In the civil action, the House of Lords dismissed an appeal from the order of the Court of Appeal that Mr Hunter’s statement of case be struck out because it made a collateral attack on the decision of the criminal court and accordingly was an abuse of process.

 

11. The important point in this decision was that it was Mr Hunter who had sought to establish in the criminal proceedings that he had been subjected to physical violence on the part of the police and who also sought to argue in civil proceedings that he had been subjected to physical violence by the police. Lord Diplock in the passage quoted above emphasised that the intending plaintiff was intending to mount an attack on a decision made by another court against him and after he had had a full opportunity to contest the decision. In the present case, the Applicants were not parties to the proceedings before the District judge; the decision was not a decision made against them; and because they were not parties, were not represented and did not appear, they did not have a full opportunity to contest the decision.

 

12. Miss Rickard relied on the formulation of the rule in Henderson v. Henderson (1843) 3 Hare 100 to be found in the following passage in Barrow v. Bankside Agency Ltd. [1996] 1 WLR 257

“… in the absence of special circumstances, the parties cannot return to the court to advance arguments, claims or defences which they could have put forward for decision on the first occasion but failed to raise … it is a rule of public policy based on the desirability, in the general interest as well as that of the parties themselves, that litigation should not drag on forever and that defendants should not be oppressed by successive suits when one would do. That is the abuse at which the rule is directed”.

 

13. I do not consider that the rule in Henderson v. Henderson has any application to the present case. The Respondents were not parties to the litigation before the District Judge.

 

14. Miss Rickard placed particular emphasis in her submissions on the provisions of Partt 73 of the Civil Procedure Rules and in particular, 73.8 which provides as follows

“(1) If any person objects to the court making a final charging order, he must –

(a)    file; and

(b)   serve on the applicant;

written evidence stating the grounds of his objection, not less than 7 days before the hearing.

(2) At the hearing the court may-

(a) make a final charging order confirming that the charge imposed by the interim charging order shall continue with or without modification;

(b) discharge the interim charging order and dismiss the application;

( c) decide any issues in dispute between the parties, or between any of the parties and any other person who objects to the court making a final charging order; or

(d) direct a trial of any such issues, and if necessary give directions.”

Miss Rickard also referred to the power of the court to discharge a charging order under CPR 73.9. The Applicants did not file and serve evidence stating the grounds of their objection.

 

15. The Civil Procedure Rules are silent as to the consequences of a person served with notice of an interim charging order failing to serve written evidence setting out the grounds of his objection. The consequence of serving such evidence appears from 73.8(2); the court can decide any issues in dispute between any of the parties and the person who objects. The rules do not say that if a party who objects does not serve written evidence, the court may, by making a charging order final, determine issues between the party seeking the charging order and a person who is not a party. This may be why Miss Rickard submitted to the District Judge that if the charging order was made final, it would remain open for any other person to challenge it. That submission was correct, in my view.

 

16. I consider that the Applicants are entitled in these proceedings to raise the question of whether the Judgment Debtor had a beneficial interest in the Property to which the charging order could attach. That issue had not been judicially determined in proceedings to which the Applicants were parties. For the Respondent to succeed in its application to enter a restriction, it must show that it has a sufficient interest in the making of the entry, within the meaning of section 43(1)( c) of the Land Registration Act 2003. The Respondent claims to be entitled to register a restriction as being within Rule 93(k) of the Land Registration Rules 2003, namely as a person

“with the benefit of a charging order over a beneficial interest in registered land held under a trust of land who is applying for a restriction in Form K to be entered in the register of the land”.

If the Respondent does not have a charging order over a beneficial interest in the Property because the Judgement Debtor had disposed of his beneficial interest by the time the charging order was made, the Respondent is not entitled to enter a restriction. The issue of whether the Judgment Debtor had such a beneficial interest is one that has to be determined in these proceedings as between the Applicants and the Respondent. Accordingly, I refuse the application for summary judgment.

 

17. As the Applicants did not appear at the hearing of the application, I consider it just to make no order as to the costs of the application for summary disposal. The Respondents have lost this application. They should not recover the costs of this application in any event. The Applicants have not incurred costs in respect of this application and so it is not appropriate to make any order as to the Applicants’ costs.

 

Dated this 22nd day of July 2011

 

 

 

 

 

 

BY ORDER OF THE ADJUDICATOR TO HM LAND REGISTRY