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Insolvency Law

Expert guidance on all aspects of corporate and personal insolvency

21 MAY 2013

Hughmans Solicitors v Central Stream Services Ltd and Hunt [2012] EWCA Civ 1720; [2013] BPIR 322

(Court of Appeal, Ward and Hughes LJJ and David Richards J, 20 December 2012)

The appellants appealed against a ruling of Briggs J ([2012] EWHC 1222 (Ch); [2012] BPIR 1013) that a Tomlin order had created an interest in property in favour of the respondents which was sufficient to take priority over a later charging order created in favour of the appellants. There was no appeal against the ruling that the charging order had not been created for valuable consideration within the meaning of s 29 of the Land Registration Act 2002. The Court of Appeal dismissed the appeal. The judge had been correct in his analysis of the construction and effect of the compromise agreement. Although it could not be construed as creating an equitable charge, it had created an equitable interest in the property in favour of the respondent company. This interest was capable of being enforced by specific performance. Priority between competing equitable interests was by virtue of s 28 of the Land Registration Act 2002 to be determined by order of creation unless there is something to displace that prioritisation. Here the prior equitable interest of the respondents meant that the property could be sold with the unilateral notice of the charging order having been first removed at their direction. 

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