Pick v Chief Land Registrar

Under Land Registration Act 2002, section 86(5), the relevant date for determining whether a bankruptcy restriction protects the trustee’s title is the date of the disposition, not the later date of registration. The protection available to a bona fide purchaser for value without notice takes effect only when the purchaser becomes registered, but registration may occur after a bankruptcy restriction has been entered. The restriction can therefore be disapplied to permit registration where the statutory conditions were satisfied when the disposition was made.

The claimant, trustee in bankruptcy, challenged the registration of a purchaser as proprietor and the cancellation of a bankruptcy restriction. The bankrupt had transferred registered land to the purchaser before the restriction was entered, but the purchaser applied for registration after the restriction had been entered. The parties agreed that the purchaser had given valuable consideration, acted in good faith and lacked notice of the bankruptcy, and that the transfer was a registrable disposition.

The preliminary issue was whether the trustee’s title was void against the purchaser under section 86(5) of the Land Registration Act 2002 when registration of the transfer occurred after entry of the restriction.

1. Preliminary issue determined for the Chief Land Registrar. The purchaser’s registration after entry of the bankruptcy restriction did not prevent section 86(5) from applying.
2. Section 86(5) focuses on the date of the disposition. The relevant questions are whether, at that date, no notice or restriction had been entered and the disponee had no notice of the bankruptcy, in addition to the requirements of valuable consideration and good faith. The statutory wording does not require registration to have occurred before a restriction is entered.
3. Section 86(6) requires the relevant registration requirements to be met, but does not prescribe a separate date by which registration must occur. Its function is to ensure that the protection operates only for a person entitled to be registered. Once registration occurs, the protection takes effect from the date of the disposition.
4. This construction is consistent with the former section 61(6) of the Land Registration Act 1925 and with the absence of any evident change of policy in the 2002 legislation. The statutory scheme balances the position of an innocent disponee against that of innocent unsecured creditors.
5. The obligatory form of the bankruptcy restriction did not produce a different result. Section 41(2) of the 2002 Act empowered the registrar to disapply the restriction where circumstances warranted. It was appropriate to do so on the purchaser’s application because section 86(5) applied.