What exactly are the limits of the jurisdiction of the First-tier Tribunal (FTT)? Can it decide whether one of the parties to a relationship, who has been declared bankrupt, has a beneficial interest in a property registered in joint names?
Or is such jurisdiction reserved exclusively to the court because bankruptcy is controlled and administered by the court and section 363(1) of the Insolvency Act 1986 (the 1986 Act) provides that “every bankruptcy is under the general control of the court and… the court has full power to decide all questions of priorities and all other questions, whether of law or fact, arising in any bankruptcy”.
The point arose in Wolloff v Patel [2019] UKUT 333 (LC). The property in question was registered in the joint names of the bankrupt and his partner and his trustees in bankruptcy had applied to register a restriction against the title to protect the proceeds of any disposal against overreaching. However, the joint proprietor explained that she and the bankrupt lived apart, that he had done nothing more than help her to obtain a mortgage by lending his name to the purchase, and that it had been agreed or understood that he would have no interest in the property, which was her home.
The FTT decided that it did have jurisdiction to decide the question of beneficial ownership, upheld the joint proprietor’s objection to the registration of a restriction, and directed the Land Registry to cancel the trustees’ application.
The Upper Tribunal (UT) began its consideration of the law that applied in this case by observing that the general provisions in the 1986 Act could not be used to override specific statutory provisions in land registration legislation enacted more recently.
In particular, rule 93 of the Land Registration Rules 2003 enables a trustee in bankruptcy, in whom a beneficial interest in registered land held under a trust of land has vested, to apply for a restriction in Form J to be entered in the register under section 43(1)(c) of the Land Registration Act 2002. Had there been a conflict, or a potential conflict between these provisions and the insolvency legislation, parliament would not have overlooked it.
The FTT had needed to decide whether the bankrupt had a beneficial interest in the property in order to decide whether to uphold the objection to the registration of a restriction. Furthermore, the question raised was whether the bankrupt owned any beneficial interest immediately before the bankruptcy order; it was not a question arising in the bankruptcy itself.
The UT rejected the notion that its decision – that the FTT did have jurisdiction to decide whether the bankrupt was interested in the property – threatened the court’s supervisory role in bankruptcy cases. It reminded the parties that the FTT has discretion to direct that “the matter” be decided by a court, where that would be more appropriate, and suggested that this was likely to be the case in the event of a live dispute about quantum, citing Hallman v Harkins [2019] UKUT 245 (LC) (a recent decision on a similar point, albeit in a case without any bankruptcy complications).
Allyson Colby, property law consultant
