Chief Land Registrar – Statutory duty – Cause of action – Bankruptcy petition filed against debtor – Court service failing to notify chief land registrar of petition – Judge holding that action lay for breach of statutory duty but not at common law — Whether judge erring in law – Appellant’s appeal allowed – Respondent’s notice dismissed
The debtor was the subject of a bankruptcy petition. The court failed to send to the Chief Land Registrar notice of the petition and a request that it be registered in the register of pending actions, as required by r 6.13 of the Insolvency Rules 1986. If it had done so, staff at the Land Charges Registry would have entered an entry in the register of pending actions against the debtor’s name and a notice in respect of the petition relating to any affected registered estate of which the debtor was the registered proprietor. The court’s failure meant that those events did not happen.
The debtor was the registered proprietor of certain land which she sold in March 2004 for net proceeds of around £45,000. A bankruptcy order was subsequently filed against the debtor and the respondent trustee in bankruptcy was appointed. The respondent was unable to recover the proceeds of the sale for the benefit of the debtor’s creditors. He therefore brought proceedings against the appellant, as being vicariously responsible for HM Courts Service (HMCS), for damages either for breach of an alleged statutory duty or for breach of a common law duty of care. HH Judge Hazel Marshall QC held that the action lay for breach of statutory duty but not at common law: see [2009] EWHC 2123 (Ch); [2009] BPIR 1512.
The appellant appealed against the first of those conclusions. The respondent appealed against the second by a respondent’s notice. It was accepted for the purposes of the appeal that had the bankruptcy petition been the subject of an entry in the register of pending actions and in the registered title of the particular estate, the sale would not have taken place.
Held: The appellant’s appeal was allowed; the respondent’s notice was dismissed.
The judge had been wrong to hold that an action lay for breach of statutory duty. The question had to be addressed as at 1 January 1926 when a new r 149A was introduced into the Bankruptcy Rules 1915, and understood in the context of the new Land Charges Act 1925 and the Land Registration Act 1925. The new rule, in its proper context of the other bankruptcy rules and the changes made by the two Acts, did not mean that a failure to comply with the duty now in r 6.13 of the 1986 Rules should give rise, if loss resulted, to a private claim for damages.
It was not necessary to impose such a sanction to make the rule more than a “pious aspiration” because the court officers and staff would perform the obligation as a matter of course. It was not as though the duty might otherwise not be performed: Cutler v Wandsworth Stadium Ltd [1949] AC 398 considered.
An occasional oversight was not sufficient to find a private remedy for breach of the obligation created by the rule because the petitioning creditor could make a request to the Chief Land Registrar if it so wanted.
If, as Lord Browne-Wilkinson said in X (Minors) v Bedfordshire County Council [1995] 2 AC 633, the basic proposition was that, in the ordinary case, a breach of statutory duty would not by itself give rise to a private law cause of action, but such a cause of action would arise if it could be shown, as a matter of statutory construction, that the duty was imposed to protect a limited class of the public and that parliament intended to confer on members of that class a private right of action for breach of the duty, the correct view would be that the enactment of the new bankruptcy rule in 1926 had not been intended to confer such a right of action.
With regard to the respondent’s notice, if there were no private claim for failure to comply with the obligation in the rule, it was difficult to see how a common law duty could be said to exist to do that which arose only as a result of the rule, such that a private claim could be made under common law, independently of the statute, by reason of a failure to do what the rule required: Gorringe v Calderdale Metropolitan Borough Council [2004] UKHL 15; [2004] 1 WLR 1057 and Customs & Excise Commissioners v Barclays Bank plc [2006] UKHL 28; [2007] 1 AC 181 applied.
Gabriel Moss QC and Dr Jonathan Lopian (instructed by the Treasury Solicitor) appeared for the appellant; Augustus Ullstein QC and James Dawson (instructed by DWF Solicitors LLP) appeared for the respondent.
Eileen O’Grady, barrister
