Hunt & Anor v Conwy County Borough Council

Under section 283A of the Insolvency Act 1986, an application is made when it is filed with or received by the court. A later dismissal following a valid disclaimer does not cause property already removed from the bankruptcy estate to revest under section 283A(4).

A failure to send a disclaimer to the Chief Land Registrar may displace the presumption of validity under Rule 6.185, but does not itself invalidate the disclaimer. A vesting order under section 320 may relate to part only of disclaimed property. The court has a broad discretion and will ordinarily favour a qualifying applicant absent a competing applicant or good reason to refuse relief.

These were appeals from orders of Judge Jarman QC in the Caernarfon County Court concerning applications for vesting orders under section 320 of the Insolvency Act 1986.

The trustee in Mr Hunt’s bankruptcy had disclaimed the Victoria Pier and Foreshore after applying for possession and sale. Mr Hunt relied on his occupation of part of the Pier as a dwelling-house. Mrs Hunt claimed a beneficial interest arising from financial contributions towards its acquisition.

The appeals concerned the timing and effect of the trustee’s applications, the validity of the disclaimer, the scope of the dwelling-house provisions, the court’s discretion to make a vesting order, and whether Mrs Hunt had established a beneficial interest.

1. Mr Hunt’s appeal was allowed in part. The trustee’s application under section 283A was received by the court within the three-year period. The relevant date was receipt or filing by the court, not the date on the hearing notice. When the application was dismissed after the trustee had validly disclaimed the Pier, section 283A(4) did not cause the property to revest because the disclaimer had already removed it from the bankruptcy estate.
2. The disclaimer was effective. The requirement to send a copy to the Chief Land Registrar served the purpose of enabling an appropriate entry to be made on the register. It was consequential rather than a prerequisite to validity. Rule 6.185 displaced only the presumption of validity; it did not provide that a breach automatically invalidated the disclaimer.
3. The definition of dwelling-house in section 385(1) confined the dwelling-house to the part of the pavilion adapted for use and occupation as a dwelling. It did not extend to the whole Pier, its decking, struts or the foreshore. Nevertheless, section 320(3), read with its power to impose such terms as the court thinks fit, permits a vesting order for part only of disclaimed property. An applicant under section 320(2)(c) need occupy only part of the disclaimed property as a dwelling-house.
4. The discretion under section 320(3) is broad. In the absence of a competing applicant or good reason to the contrary, it should ordinarily be exercised in favour of a qualifying applicant, particularly where the property is freehold land. The Pier’s disrepair, the Council’s legitimate acquisition of title, and the Council’s non-existent plans did not justify refusal. The judge below had therefore exercised the discretion on an erroneous basis.
5. Mr Hunt’s application was remitted for reconsideration of whether a vesting order should be made and, if so, whether it should cover all or part of the Pier and foreshore.
6. Mrs Hunt’s appeal was dismissed. Applying the general approach in Stack v Dowden [2007] UKHL 17, she bore the burden of showing that the beneficial interest did not follow the sole legal title. The judge was entitled to find that she had not discharged that burden, particularly in the absence of cross-examination. It was therefore unnecessary to determine the discretionary issue on her application.

• High Court (Chancery Division): Appeals from orders of Judge Jarman QC in the Caernarfon County Court. Mr Hunt’s appeal was allowed in part and remitted for reconsideration of the vesting-order discretion. Mrs Hunt’s appeal was dismissed.