(1)A recovery order is to have effect in relation to any property despite any provision (of whatever nature) which would otherwise prevent, penalise or restrict the vesting of the property.
(2)A right of pre-emption, right of irritancy, right of return or other similar right does not operate or become exercisable as a result of the vesting of any property under a recovery order.
A right of return means any right under a provision for the return or reversion of property in specified circumstances.
(3)Where property is vested under a recovery order, any such right is to have effect as if the person in whom the property is vested were the same person in law as the person who held the property and as if no transfer of the property had taken place.
(4)References to rights in subsections (2) and (3) do not include any rights in respect of which the recovery order was made.
(5)This section applies in relation to the creation of interests, or the doing of anything else, by a recovery order as it applies in relation to the vesting of property.
Cases considering section 269 3
[2012] UKSC 35 · 25 July 2012Interprets
Section 269 governs rights overridden or protected when property vests under a recovery order. Its operation made practical sense on the construction that Part 5 recovery orders concern property within the United Kingdom, and supported that construction (see paras [46]-[50]).
[2011] EWCA Civ 578 · 18 May 2011Limits
Section 269(1) was limited to provisions of English law which would otherwise prevent, penalise or restrict vesting. It was not construed as disapplying foreign law governing property abroad (see paras [154]-[156]).
Section 269(2) and (3) protect the trustee from rights of pre-emption, irritancy, return or similar rights arising from vesting, by treating the trustee as the same person in law as the former holder (see para [58]).
[2010] EWHC 1711 (Admin) · 28 June 2010Limits
The statutory priority given to vesting under a recovery order was treated as incapable of automatically overriding foreign rights affecting foreign real property. (see paras [9]; [13])
The provisions concerning pre-emption, irritancy, return and similar rights were treated as territorially limited where those rights arose under foreign law. (see paras [9]; [13])
What each judgment says about section 269 is in the case-law panel in the full Act.
355.Subsection (1) establishes that a recovery order will override any provisions that would otherwise prevent, penalise or restrict the vesting of the property in the trustee for civil recovery. Under subsection (2), rights relating to the property such as those specified here do not automatically come into effect or become exercisable as a result of the vesting of the property. However, under subsection (3), following a recovery order, any such rights will continue to have effect when the property is vested as if no transfer of property has taken place. This applies to any interests created by the recovery order (see section 272(3)(b)), as well as any interests transferred by the order. So a person who has the first right to buy property when it changes hands will not be able to exercise his right to prevent the vesting of recoverable property in the trustee by the recovery order. But he will have first right to buy the property when the trustee, or other person in whom the recovery order vests it, comes to sell it on (paragraph 1ofSchedule 7 gives the trustee the power of sale). Under subsection (4), the protections provided for any of the rights referred to in subsections (2) and (3) do not apply if the right itself is the subject of a recovery order.
356.If a person holding such rights suffers loss as a result of property vesting in the trustee, he may apply to the court for compensation under section 283(6) and the court may require compensation to be paid under section 283(8).