Barclays Bank Plc v Guy
| Jurisdiction | England & Wales |
| Judgment Date | 16 January 2008 |
| Neutral Citation | [2008] EWHC 893 (Ch) |
| Docket Number | Claim No: HC07C02121 |
| Court | Chancery Division |
| Date | 16 January 2008 |
[2008] EWHC 893 (Ch)
IN THE HIGH COURT OF JUSTICE (Chancery Division)
Royal Courts of Justice
Strand
London WC2a 2LL
Mr TERENCE MOWSCHENSON QC sitting as a deputy High Court Judge
Claim No: HC07C02121
Mr McGhee appeared on behalf of the Claimant
The Defendant appeared in person
( As Approved)
Wednesday, 16th January 2008
The deputy Judge: This is an application by Barclays Bank Plc, who I shall refer to as “the claimant”, against Mr Trevor Guy, who I shall refer to as “the defendant”, for summary judgment. Mr Guy represented himself but was very ably assisted by Miss Victoria Gregory, who I allowed to address me with the consent of Mr McGhee, counsel for the claimant.
The claimant's claim is for declaration that it is entitled to sell registered freehold land at Ten Acres Lane, Manchester, which I shall refer to as the property, pursuant to its registered first legal charge dated 8 th March 2005, granted by the registered proprietors of Ten Acres Limited, who I shall refer to as Ten Acre, and that any purchaser of the property of the property from the claimant selling as chargee would take the property free of any interest, right or claim the defendant may have in, over or in relation to the property.
The total sum due to the claimant and secured by the charge is in excess of £110m. The value of the property is estimated to be around £35m and is likely to represent the single largest recovery for the claimant in part payment of the sum secured by the charge. I refer to the second witness statement of Miss Bradford at paragraph 3witness statement, of Miss Bradford at paragraph 33.
The defendant has served a defence, which remains in draft. No formal defence has been served following an application by the defendant to join Ten Acres, a part 20 defendant, to these proceedings; that application has been adjourned until after the determination of the claimant's summary judgment application, which is before me today.
The defendant's draft defence and counterclaim seeks to defend the claimant's claim on two bases. First, it asserts that the charge is not a genuine legal document. I refer to paragraphs 1 and 2 of the draft defence, although no reasons are given for the assertion in the draft defence. Secondly it asserts that the transfer of the property by the defendant to Ten Acre on 22 nd June 2004 by a document, which I shall refer to as the transfer, was fraudulently procured by Ten Acre. As a result the Defendant contends that the transfer is void, at paragraphs 3 and 4 of the draft defence, and that the charge is invalid or ineffective, and that he is entitled to rectification of the register as against the claimant.
The defendant's contention that the transfer was fraudulently procured by Ten Acre is the subject of separate proceedings issued on 2 nd March 2006, to which the claimant is not a party. Those proceedings were stayed pursuant to paragraph 43 of schedule B1 of the Insolvency Act 1986 upon Ten Acre entering into administration on 18 th October 2006, and a further application by the defendant to lift the stay and to join the claimant and his former solicitors to those proceedings has also been adjourned pending determination of this application.
I shall summarise the chronology of events briefly. On 22 nd June 2004 the property was transferred by the defendant to Ten Acre. A copy of the form TR1, signed by the defendant and witnessed by his solicitors, is in the bundle, and I have seen that document. It was apparently completed subsequently by the Defendant's solicitor who wrote in the amount of the consideration.
On 30 th July 2004 the transfer was registered against each of the registered titles to the property, the price being recorded as £15m.
On 8 th March 2005 Ten Acre, Lexi Holdings Plc, which I will refer to as Lexi, a related company, and the claimant entered into the charge. By clause 2, Ten Acre charged the property as security for the payment or discharge of all monies and liabilities for the time being due, owing or incurred to the claimant, whether by Ten Acre or Lexi. By clause 5 of the charge the statutory power of sale was exercisable at any time after demand. Accordingly, the charge was an all monies charged, which explains why such a large amount of money, well in excess of the value of the property, is apparently secured by the charge.
On 11 th March 2005 the same parties entered into a deed of priorities by which the charge was granted priority over an earlier charge in favour of Lexi. On 23 rd March 2005 the charge was duly registered at the Land Registry with priority.
On 5 th October 2006 the claimant demanded repayment by Lexi of the sum of £102m odd due under a credit facility. Lexi failed to satisfy that demand. On 5 th October 2006 the claimant appointed insolvency practitioners from KPMG as joint administrators of Lexi. By an administration order made on 18 th October 2006 the same insolvency practitioners were also appointed joint administrators of Ten Acre.
By letter dated 9 th August 2007 the joint administrators of Ten Acre consented to these proceedings and to the sale of the property by the claimant. The joint administrators of Ten Acre have been in negotiations for the possible sale of the property to Countryside Properties UK Limited. A conditional offer has been made which both the joint administrators and the claimant considered to be fair, although this offer is subject to the satisfactory resolution of the various claims asserted by the defendant by declarations in the form sought by the application. In the light of what I have said before it is obvious that neither Lexi nor Ten Acre through their administrators have sought to or are seeking to challenge the charge.
The grounds for the defendant's assertion that the charge is not a genuine legal document are that there are unspecified inconsistencies in the last three pages of the charge. Those inconsistencies seem to me to flow more from photocopying than anything else. The defendant asserted that the charge does not state how much is secured under it. It does. It is an all monies charge; furthermore, he said the charge did not bear the same references at the foot of each page right through the document. In my opinion none of these matters suggest that the charge is not a genuine document, and I was afforded the facility of inspecting the original, and nothing on that suggests that there was anything untoward about it. It was, as I have said, registered on the date I have referred to above.
As I have indicated, the defendant contends that the transfer of the property by the defendant to Ten Acre was fraudulently procured. He goes to some length to set out the facts of the alleged fraud in his draft defence and witness statement. In summary he contends that he was in negotiations with a Mr Luqman to sell the property to a special purchase vehicle (controlled by Mr Luqman), which is Ten Acre. The defendant signed the transfer form, which is said to have no date and purchase price on it at the time, and I refer to the narrative and description of what occurred, which is set out at paragraphs 3.4 to 3.8 of the draft defence, and also to paragraph 4 of the draft defence. The issue is whether those assertions give rise to any real prospect of defending the claim, which is a claim for declaration that the claimant may sell the property free of any interest of the defendant.
The claimant contends that assuming in the defendant's favour that the transfer was fraudulently procured by Ten Acre, which is not a matter I can determine, which is a matter to be determined in Ten Acre proceedings, that cannot affect the claimant's right as registered chargee. It does not provide the defendant with any basis for rectification of the register as against the claimant.
The grounds for rectification of the register pursuant to 65 of the Land Registration Act 2002, which I shall refer to as the 2002 Act, are set out in section 65 and paragraph 2 of schedule 4 and include the alteration of the register for the purposes of correcting a mistake. By paragraph 1 of schedule 4, references to rectification of the register, in relation to alteration of the register are to alterations which involve the correction of a mistake and which prejudicially affects the title of a registered proprietor.
The starting point is that at the date of the charge and its registration against the property Ten Acre was the registered proprietor of the property. It was entitled to exercise its power to charge the property. By sections 23 sub-section 1 and section 24 of the 2002 Act the registered proprietor of a registered estate is entitled to make a disposition of any kind permitted by the general law, subject to various exceptions. This includes under section 23 (1) (b) a power to charge the estate at law with the payment of money, Section 58 sub-section 1 of the 2002 provides under the heading “Conclusiveness”: “If on the entry of a person on the register as the proprietor of a legal estate the legal estate would not otherwise be vested in him, it shall be deemed to have been vested in him as a result of the registration.”
It follows that at the time the property was charged to the claimant Ten Acre was the registered proprietor. The legal estate was deemed to be vested in it, and it was entitled to exercise its owner's powers to charge the property. It follows that there can be no mistake in the claimant's registration as chargee. I refer to the decision of Scott LJ in Norwich Building Society v Steed [1993] Ch 116 at page 135 between letters A to H.
Paragraph (h) is relied on by Mr. Lloyd. But in...
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