Blemain Finance Ltd v Goulding

Permission to appeal should be refused where the proposed grounds have no real prospect of success. In registered land, the vesting of property in a trustee in bankruptcy does not, on the argument advanced, displace the statutory scheme of the Land Registration Act 2002. A registered proprietor may make a registrable disposition, and the trustee’s failure to register vested property does not invalidate it. Under section 86(5), a disposition for valuable consideration made in good faith, without the specified notices or restriction, can confer good title against the trustee. A claim under section 283A of the Insolvency Act 1986 depends on occupation as a sole or principal residence at the relevant bankruptcy date.

Blemain Finance Ltd v Goulding concerned a renewed application for permission to appeal from an order of Mr Recorder Stead in the Bristol County Court. Blemain had obtained a possession order concerning property registered in the name of Mr Cugley. Goulding, the former registered proprietor and an occupier, sought to be added to the proceedings and to challenge Blemain’s registered charge.

He argued that his transfer of the property to Mr Cugley was avoided by the Insolvency Act 1986, that the property vested in his trustee in bankruptcy, and that it would revest in him under section 283A. The Recorder dismissed the application on 3 June 2013. Sir Stanley Burnton refused permission on the papers. The central issue on renewal was whether any proposed ground had a real prospect of success, particularly the alleged conflict between bankruptcy vesting and registered land legislation.

Disposition. This was a renewed application for permission to appeal. Lord Justice Rimer agreed with Sir Stanley Burnton’s refusal of permission and refused the application.

1. Section 283A. The Recorder found that Goulding was not occupying the property as his sole or principal residence in February 2003 and began such occupation only in 2005. There was no real prospect of the Court of Appeal taking a different view of that factual finding. The case based on section 283A therefore had no better prospect of success. The alternative argument based on the trustee’s later knowledge could not assist.
2. Alleged forgery. Rimer was disposed to agree that, where Goulding alleged that his signature to the consent postponing his interest to Blemain’s charge was forged, the burden lay on Goulding to prove the forgery. The issue did not justify permission because Goulding had no interest in the property as against Blemain.
3. Interaction between bankruptcy and registration. Goulding argued that sections 283 and 306 of the Insolvency Act 1986 vested title in the trustee and made Blemain’s charge void. Rimer held that it was not seriously arguable that those provisions could undo the effect of sections 23 and 58 of the Land Registration Act 2002. The registration scheme contemplated that a trustee would apply to be registered under rule 168 of the Land Registration Rules 2003. The trustee’s omission to do so did not prevent the registered proprietor from making a registrable disposition under section 29.
4. Section 86(5). Blemain had given valuable consideration. The Recorder found that it had no notice of the bankruptcy and recorded that no suggestion had been made that it acted other than in good faith. Applying section 86(5) of the Land Registration Act 2002, Blemain acquired good title as against the trustee. Goulding consequently had no title to occupy the property, and the suggestion that he occupied it on the trustee’s behalf was groundless.

• Court of Appeal (Civil Division): Sir Stanley Burnton refused permission on the papers on 25 July 2013. On renewal, Lord Justice Rimer refused permission.
• Bristol County Court: Mr Recorder Stead dismissed Goulding’s application by order dated 3 June 2013.
• Bristol County Court: Deputy District Judge Cronin had ordered possession of the property on 20 January 2009.