In two recently concluded cases, Trinity Business and Property barrister, Graham Bartlett succeeded in recovering property that had reverted to the Crown and restoring it to the Claimants.
In the first case, where Graham represented the Claimant against the Crown Commissioners, a trustee in bankruptcy claimed business premises belonging to a bankrupt as part of the bankruptcy estate and registered himself as the legal owner. The trustee subsequently disclaimed the property and the registered estate in the title was determined and became subject to escheat to the Crown. In effect this meant that the freehold estate was dissolved, and ownership of the property reverted to the Crown.
The Claimant was unaware that this had happened and continued to run his business from the property. He only realised that he was not the legal owner when he went on to sell the property, some 14 years after he had been discharged from his bankruptcy.
Graham established that the Claimant ran the business from the property in partnership with his wife, and the property was therefore partnership property. Partnership property does not become part of a bankruptcy estate and did not vest in the trustee in bankruptcy, following Brake v Swift [2020] EWHC 1810 (Ch).
Graham persuaded the Court that registration of the trustee as legal owner was a mistake and the subsequent disclaimer was therefore void and of no effect. The Court made an order under schedule 4 of the Land Registration Act 2002 requiring the register to be corrected to show the Claimant as the legal owner, holding the property on trust for the benefit of the partnership.
In the second case, Graham acted on behalf of the Claimants in proceedings against HM Attorney General. A company had prepared a deed of gift of a property to one of its directors. The deed was not, however, executed and the transfer of the property was not completed. The company was subsequently dissolved and under section 1012 of the Companies Act 2015 the assets of the company were deemed bona vacantia and belonged to the Crown.
The director was unaware that the property he and his wife lived in was not his, to the extent that he later completed the necessary documentation to transfer the property into the joint names of him and his wife. It was only when the couple came to sell the property that they discovered that the property that they had lived in for many years did not belong to them and was not for them to sell.
One of the exceptions to the rule that assets of a company become bona vacantia on its dissolution is where the company holds the property on trust. Graham persuaded the Court that the incomplete gift of the property took effect as an immediate equitable assignment, meaning that the company held the property on trust for the director, and alternatively that the preparation of the deed of gift amounted to a representation upon which the director had relied to his detriment, giving him a claim to the property in proprietary estoppel.
The Court made an order under section 44 of the Trustee Act 1925 vesting the property in the director and his wife.