When attempting to trace and recover assets, a claimant has a number of tools in its legal arsenal ranging from an order that a debtor attend for questioning as to its assets, to freezing injunctions, search orders, pre action disclosure, Norwich Pharmacal orders and Bankers Trust orders.
The recent case of Barfoot Farms Limited v Mr Romanas Revuckas and others [2021] EWHC 2423 (QB), 2021 WL 03549328 is a welcome reminder of another tool; the ability to ask the courts for a pre-judgment order that the Land Registry carry out a search of the index of proprietors’ names against the name of the defendant.
This article explores the case, the legal test applied, and the practical relevance of the decision.
Background
Mr Revuckas, the first defendant/respondent, was employed by Barfoot Farms, the claimant/applicant, as a labour and harvester manager. Barfoot Farms alleged that, over the course of 2013 to 2021, Mr Revuckas falsified employment records for seasonal workers who were said to be employed by Barfoot Farms (but were actually not) in order to secure payments into his account and the account of the second defendant.
The claims brought total £719,091.04 and included inter alia a claim against Mr Revuckas for monies wrongly paid as a result of his deceit and dishonesty and claims against the second, third and fourth defendants as constructive trustees of the sums each is alleged to have received.
Barfoot Farms’ request for an order permitting the registrar of the Land Registry to search the index of proprietors’ names against the names of Mr Revuckas and the second defendant was made along with requests for two other orders designed to assist with asset tracing and recovery: (1) a continuation of a freezing order already in place; and (2) an order for disclosure of relevant bank statements.
The index of proprietors' names
A search of the index of proprietors’ names will reveal the details of all titles in the index that are owned by or mortgaged to the name searched against.
In some countries, such as Ireland and France, anyone can search their Land Registry equivalent by proprietor’s name. In England, a person can apply for a search of the index only in respect of:
- His own name; and
- The name of some other person in whose property he can satisfy the registrar that he is interested generally (i.e. as a trustee in bankruptcy or personal representative).
(Rule 11 of the Land Registration Rules 2003)
However, as Barfoot Farms reminds us, in the right circumstances, a way around these limitations may be to secure a court order for a search at the Land Registry against the name of the defendant.
The legal test
The test applied in Barfoot Farms by Ellenbogen J when deciding whether to make the search order was threefold:
- Does the applicant have a claim with reasonable prospect of success?
- Is the respondent unlikely to be able to satisfy a judgment from the disclosed or known assets?
- Is there any competing reason not to allow access to the index of proprietors’ names?
As to whether the order could be made pre-judgment, Ellenbogen J’s considerations were as follows:
- Is there a significant likelihood that deferring the order sought would frustrate its legitimate purpose?
- Is it in the interests of justice to make the order at this stage of proceedings?
Points to note
A search at the Land Registry is likely to be particularly useful in circumstances where the defendant is suspected of hiding assets or where it is necessary to build up a full picture of the defendant’s assets for enforcement purposes.
The fact that such an order can be obtained pre-judgment will be helpful where there is a risk of dissipation and/or where it is necessary to establish whether the defendant retains any assets of value prior to pursuing a claim.
The courts may limit what the information obtained through the search can be used for. In Barfoot Farms, the information obtained was to be used for the sole purpose of assisting in the recovery of monies claimed in the proceedings.
A search at the Land Registry is not infallible. It will not, for example, reveal any land held by a defendant that is unregistered.
Teja Pisk