Iain Clifford Stamp & Ors v Capital Home Loans Limited T/A CHL Mortgages & Ors

A transfer of a mortgage lender’s beneficial or equitable interest does not, without registration of the legal title, alter the registered proprietor’s legal ownership or the contractual relationship between lender and borrower. Failure to notify a borrower of securitisation may have procedural consequences, but does not extinguish the lender’s rights or create a damages claim equivalent to mortgage payments or property value.

Claims founded on incoherent assertions, irrelevant historical statutes, speculative allegations or purchased templates may be struck out under the Civil Procedure Rules 1998. The court may also act under its inherent jurisdiction where proceedings abuse the court’s process or obstruct the just disposal of litigation.

Three representative mortgage claims were considered together against CHL Mortgages, Lloyds Bank and Bank of Scotland. The claims alleged that mortgage debts had been assigned or securitised without proper disclosure or registration, causing the borrowers to lose their contractual relationships with the original lenders and entitling them to substantial compensation.

The claims relied on similar templates, extensive historical legislation and broad allegations of constitutional wrongdoing. One claim had previously been struck out, another was subject to an application for strike-out or summary judgment, and the third was stayed pending further information. The applications before the court concerned whether the claims should be restored, allowed to continue or struck out.

1. All three claims struck out. The court ordered strike-out of the claims, dismissed the application to set aside the earlier strike-out order, refused to lift the stay in the third claim and awarded the defendants their costs.
2. A registered proprietor retains legal ownership of a registered mortgage for so long as it remains registered. Under section 27 of the Land Registration Act 2002, an unregistered disposition required to be registered does not operate at law. An agreement or transfer of a beneficial interest may nevertheless operate in equity and is not itself a registrable disposition. Section 58 makes the register conclusive as to the proprietor of the registered legal estate.
3. The consequence is that a beneficial assignment does not end the borrower’s contract with the registered lender. The lender remains entitled to receive contractual payments and exercise rights arising from its legal title. The court relied on Paragon Finance PLC v Pender [2005] 1 WLR 3412 in confirming this analysis.
4. Where securitisation occurs without notice, the consequence is an equitable assignment with procedural consequences only. It does not extinguish the transferor’s legal ownership or provide a damages claim based on the value of the mortgage or secured property. The court applied Promontoria (Oak) Ltd v Emanuel [2022] 1 WLR 2004, at [116]-[118].
5. Mr Stamp’s claim disclosed no reasonable ground and was incoherent. It also amounted to an abuse of process because the pleadings were vague, irrelevant and so poorly drafted that the defendants could not know the case they had to meet. These were grounds for strike-out under CPR 3.4(2)(a) and (b), with the pleading requirements in CPR 16.2(1)(a) and 16.4(1)(a) also not met.
6. Mr Whitworth’s application could not succeed because he could not explain the claim, had failed to comply with the court’s direction for information and had relied substantially on material prepared by others. Mr Le Clere’s claim was speculative, unsupported by evidence that his mortgage had been assigned and disclosed no reasonable grounds. The court also emphasised its inherent jurisdiction to prevent abuse and the parties’ duty under CPR 1.3 to assist the court in furthering the overriding objective.

This was a first-instance decision. The judgment records that Mr Whitworth’s claim had previously been struck out by order of Master Thornett dated 23 October 2023, while Mr Le Clere’s claim had been stayed by order dated 19 December 2023. The present court dismissed the application to set aside the earlier strike-out order and struck out all three claims.