McPherson v Legal Services Commission

JurisdictionEngland & Wales
JudgeMR JUSTICE MORGAN,Mr Justice Morgan
Judgment Date24 November 2008
Neutral Citation[2008] EWHC 2865 (Ch)
Date24 November 2008
Docket NumberCase No: CH/2008/PTA/0086
CourtChancery Division

[2008] EWHC 2865 (Ch)

IN THE HIGH COURT OF JUSTICE

CHANCERY DIVISION

ON APPEAL FROM

THE ADJUDICATOR TO HER MAJESTY'S LAND REGISTRY

IN THE MATTER OF THE LAND REGISTRATION ACT 2002

AND IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

Royal Courts of Justice

Strand, London, WC2A 2LL

Before:

MR JUSTICE MORGAN

Case No: CH/2008/PTA/0086

Between
Maureen Linda Mcpherson
Appellant/
Respondent
and
Legal Services Commission
Respondent/
Applicant

Mr Mc Pherson appeared for the Appellant

Michelle Stevens-Hoare (instructed by Legal Services Commission) for the Respondent

Hearing date: 29 th October 2008

Approved Judgment

I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.

MR JUSTICE MORGAN

Heading

Paragraph

Introduction

1

The case in summary

4

The facts

5

The decision of the Deputy Adjudicator

31

The relevant legislation

34

Mrs Mc Pherson's submissions

44

The LSC's submissions

45

A possible further analysis

50

The authorities

54

Discussion

72

Conclusion on the main point

94

Registration in relation to the statutory charge

97

Estoppel

106

The overall result

111

Mr Justice Morgan

Introduction

1

This is an appeal by Mrs McPherson from an order made by a Deputy Adjudicator to HM Land Registry (Mr Rhys) on 12 th November 2007. The Deputy Adjudicator refused permission to appeal and, having considered the matter on the papers, I granted permission to appeal on 8 th May 2008. The issues of law and of fact raised by this appeal are far from straightforward and the issues of law may be of some general importance.

2

Mrs McPherson did not herself appear at the hearing of this appeal. She had served various documents setting out written submissions prepared for her by others and, pursuant to section 27(2)(c) of the Courts and Legal Services Act 1990, I permitted her husband to address me on her behalf.

3

Miss Stevens-Hoare appeared for the Legal Services Commission (“the LSC”), the Respondent to the appeal. Her submissions were of considerable assistance to the Court on the various matters arising. Miss Stevens-Hoare sought to draw my attention to all of the relevant authorities under the legal aid legislation. Following the hearing, she made written submissions on points that emerged for the first time at the hearing and in relation to two further authorities.

The case in summary

4

The LSC claims to be entitled under Section 16(6) and (7) of the Legal Aid Act 1988 (“the 1988 Act”) to a charge, conventionally called the statutory charge, in relation to a residential property known as Woodland Cottage, Vine Grove, Hillingdon, Middlesex, UB10 9LW. Section 16(6) of the 1988 Act refers to “any property which is recovered or preserved for him in the proceedings”. The reference to “the proceedings” is a reference to proceedings in which a person is a legally assisted person. Mrs McPherson was a legally assisted person in relation to proceedings which concerned Woodland Cottage which, the LSC says, was preserved for her in those proceedings. The amount of the costs which are claimed to be the subject of the statutory charge are £16,762.30. Mrs McPherson contends that no property was preserved for her in the proceedings and Woodland Cottage is not therefore subject to a statutory charge. Further, Mrs McPherson relies on Regulation 99(6) of the Civil Legal Aid (General) Regulations 1989 (“the 1989 Regulations”) which, for certain purposes, states that references to the amount of any charge created by Section 16(6) of the 1988 Act are references to the amount of the costs in question or to “the value of the property to which it applied at the time when it was recovered or preserved”, whichever is the less. Mrs McPherson submits that if any property were preserved in this case, at the time of such preservation, that property had a nil or negative value, if one took into account the amount of a mortgage over the property securing a substantial debt owed to a lender.

The facts

5

Mr and Mrs McPherson appear to have acquired the freehold of Woodland Cottage in 1986, with the assistance of a mortgage. The legal title to the property was, at that time, vested in them jointly. There is no direct evidence as to the extent of their beneficial interests in the property although there is a reference in a later document which indicates that Mr and Mrs McPherson were beneficially entitled in equal shares.

6

On the 17 th April 1989, Mr and Mrs McPherson re-mortgaged Woodland Cottage to Royal Trust Bank (Jersey) Limited. The amount of the advance was 478,040 Swiss francs. In 1989, that sum in Swiss francs was equivalent to approximately £170,000.

7

At some unspecified time after 1989, but before 1997, the benefit of the mortgage of 17 th April 1989 became vested in Birmingham Midshires Mortgage Asset Number One Limited (“BM”). BM became registered as chargee or mortgagee at the Land Registry. I will refer to this charge or mortgage as a “mortgage” to help distinguish it from the statutory charge claimed by the LSC.

8

It appears that from time to time, Mr and Mrs McPherson lived at Woodland Cottage and at other times they let it in order to gain a rental income.

9

On 9 th December 1997, BM brought mortgage possession proceedings against Mr and Mrs McPherson. These are the relevant proceedings for present purposes. Initially, Mr McPherson obtained legal aid for the purpose of defending those proceedings and, later, Mrs McPherson separately obtained legal aid to assist her in defending the proceedings.

10

The Particulars of Claim filed in the above proceedings claimed possession of Woodland Cottage and an order that Mr and Mrs McPherson pay the outstanding arrears on their mortgage. The sum said to be outstanding as at 11 th December 1997 was £267,864.35. The Particulars of Claim also refer to further sums by way of costs and charges. These further sums together came to approximately £1,000. The Particulars of Claim also referred to an early redemption penalty in excess of £11,000, but that penalty only applied in the case of a redemption before 1 st January 2000. No such redemption took place and that penalty can be disregarded for present purposes. The Particulars of Claim itemise receipts from Mr and Mrs McPherson in 1995, 1996 and 1997 and stated that Mr and Mrs McPherson had fallen into arrears to the tune of some £42,000. The Particulars of Claim stated that the monthly sum due was £1,362.21 and interest was payable at the rate of 7.10%. It is not immediately clear how these last figures are to be reconciled.

11

On 12 th May 1998, Mrs McPherson applied for emergency legal aid under the 1988 Act. The purpose of the application for legal aid was stated to be “to defend possession proceedings”. In her application, Mrs McPherson stated that she had been given a copy of the Legal Aid Board's leaflet about the statutory charge and that this had been explained to her by her solicitor. Her application was countersigned by her nominated solicitor who certified that the statutory charge had been explained to her and that she had seen the relevant leaflet.

12

On 19 th June 1998, Mr McPherson obtained a legal aid certificate. The scope of the certificate referred to Mrs McPherson being represented “in an action for possession of property under a legal charge and/or other remedies in the same action against the opponent”.

13

The proceedings brought by BM continued for some years and were eventually settled on 30 th January 2002. The issues in those proceedings are referred to in two places in the documents before the Court. The first is an affidavit sworn by Mrs McPherson in those proceedings on the 9 th November 1998 and the second is the bill of costs prepared by her solicitor for the purposes of detailed assessment. In brief summary, Mrs McPherson raised a number of issues by way of Defence and Counterclaim. She put BM to proof that it was the proprietor of the mortgage of 17 th April 1989; she did not deny that there was a mortgage but she raised an issue as to whether the benefit of the mortgage was vested in BM. She denied that she was liable to BM under a facility letter which she said she had not signed. She said that her liability was that of a surety for her husband's liabilities in respect of the facility and that she had been discharged as a surety. In relation to the possession claim, she relied on Section 36 of the Administration of Justice Act 1970 and Section 8 of the Administration of Justice Act 1973. For the purpose of that jurisdiction, she sought, by way of Counterclaim, an account of the monies due and she referred to alleged errors in the computation relied on by BM.

14

Mrs McPherson's affidavit referred to the fact that she and her husband were receiving rental income from Woodland Cottage and were living in rented accommodation, but paying rent at a lower rate. She also stated that the court in those proceedings had ordered payment to BM of a little over £1,000 per month. In relation to the claim for possession, she stated that her husband had received a mortgage offer which would enable payment of what was said to be the initial advance of £170,000, subject to assistance from family members.

15

On 13 th March 2001, Mrs McPherson wrote to the LSC dealing with certain queries that had been raised. In the course of her letter she referred to an enquiry made by her husband for clarification concerning the statutory charge. It was explained that clarification as to the circumstances in which a statutory charge would be imposed on the property was urgently needed in order for Mr and Mrs McPherson to consider the possibility of settling the claim brought against them. There is no indication in the documents before the...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT