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England and Wales High Court (Chancery Division) Decisions
You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> National Westminster Bank Plc v Malhan & Ors  EWHC 847 (Ch) (22 April 2004)
Cite as:  EWHC 847 (Ch)
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Strand, London, WC2A 2LL
B e f o r e :
| NATIONAL WESTMINSTER BANK PLC
||Claimant/ 1st Part 20 Defendant
|- and -
|NAVJET BAHADUR MALHAN
ANIL KUMAR MALHAN
|(3) PUNEETA MALHAN
Part 20 Claimant
|THE SECRETARY OF STATE FOR CONSITUTIONAL AFFAIRS & LORD CHANCELLOR
||2nd Part 20 Defendant
Mr. Mark Herbert QC and Mr. Duncan Macpherson (instructed by Messrs Johnson Sillett Bloom) for the 3rd Defendant/Part 20 Claimant
Mr. Tim Mould (instructed by the Treasury Solicitor) for the 2nd Part 20 Defendant
Hearing dates : 16th/17th/18th March 2004
Crown Copyright ©
The Vice-Chancellor :
a) she paid £31,000 in respect of the original purchase price,
b) she paid instalments due on the First Charge,
c) Navtej and Anil held the property in trust for Puneeta and Anil under a resulting or constructive trust in the proportions 55.4%/44.6%,
d) she was, at all material times, in occupation of the Property so that her interest therein was an overriding interest for the purposes of s.70(1)(g) Land Registration Act 1925 and took priority over that of the Bank under the Second Charge,
e) anticipating the reliance of the Bank on the overreaching provisions of s.2(1) Law of Property Act 1925, those provisions are contrary to Articles 8 and 14 of the European Convention on Human Rights and Article 1 of Protocol 1 thereto.
In her witness statement dated 8th May 2002, but not her defence, she alleged that she had not been consulted by Navtej or Anil about the Second Charge and would not have consented to it if she had been.
a) whether, on 7th September 1994, Puneeta was and now is entitled to the equitable interest in the Property she claims, and if so
b) whether Puneeta consented to the Second Charge, and if not
c) whether Puneeta's equitable interest in the Property was overreached by the Second Charge pursuant to the provisions of s.2(1) Law of Property Act 1925, and if so
d) whether those provisions are incompatible with all or any of Articles 8 and 14 of ECHR or Article 1 of Protocol 1 thereto.
I will deal with those issues in that order.
"we chose to run the home in line with Indian tradition. We spoke Punjabi at home and my wife worked partly in the business but mainly in the home."
"When she married my son she brought a dowry with her. As is usual in Punjabi families all of Sunita's money was given to me as head of the family. This included all cash gifts given to Sunita at her wedding."
As Mr Satya Malhan did not maintain any bank account separate from that of the business all such money went into the business of SND.
(1) Savings 1975-1981 4,000
(2) Wedding Presents 4,000
(3) Personal Injury damages 3,500
(4) Presents on birth of sons 2,000
(5) Savings 1981-1986 17,500
Total contribution 31,000
"(i) the wife of ANIL KUMAR MALHAN being one of the registered proprietors and a person occupying the property comprised in the registered title and enjoys rights of occupation therein.
(ii) a person enjoying an equitable interest in the property and in the net proceeds of sale arising therefrom."
"(1) A conveyance to a purchaser of a legal estate in land shall overreach any equitable interest or power affecting that estate, whether or not he has notice thereof, if –....
(ii) the conveyance is made by trustees for sale and the equitable interest or power is at the date of the conveyance capable of being overreached by such trustees under the provisions of sub-section (2) of this section or independently of that sub-section, and the statutory requirements respecting the payment of capital money arising under a disposition upon trust for sale are complied with;"
Subsection (2) provided (before such amendment) that
"Where the legal estate affected is subject to a trust for sale, then if at the date of a conveyance made after the commencement of this Act under the trust for sale or the powers conferred on the trustees for sale, the trustees (whether original or substituted) are either –two or more individuals approved or appointed by the court or the successors in office of the individuals so approved or appointed; or
a trust corporation
any equitable interest or power having priority to the trust for sale shall, notwithstanding any stipulation to the contrary, be overreached by the conveyance, and shall, according to its priority, take effect as if created or arising by means of a primary trust affecting the proceeds of sale and the income of the land until sale."
"The powers conferred by this subsection shall be exercised with such consents (if any) as would have been required on a sale under the trust for sale, and when exercised shall operate to overreach any equitable interests or powers which are by virtue of this Act or otherwise made to attach to the proceeds of sale as if created by a trust affecting those proceeds."
The only available power of charging is that contained in s.71 Settled Land Act 1925, which, as is conceded, could not have authorised the Second Charge.
Article 8 Right to respect for Private and Family Life(1) Everyone has the right to respect for his private and family life, his home and his correspondence.
(2) There shall be no interference by a public authority with the exercise of this right except such as is in accordance with the law and is necessary in a democratic society in the interests of national security, public safety or the economic well-being of the country, for the prevention of disorder or crime, for the protection of health or morals, or for the protection of the rights and freedoms of others.
Article 14 Prohibition of DiscriminationThe enjoyment of rights and freedoms set forth in this Convention shall be secured without discrimination on any ground such as sex, race, colour, language, religion, political or other opinion, national or social origin, association with a national minority, property, birth or other status. The First Protocol Article 1 Protection of PropertyEvery natural and legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by the general principles of international law.
The preceding provisions shall not, however, in any way impair the right of a state to enforce such laws as it deems necessary to control the use of property in accordance with the general interest or to secure the payment of taxes or other contributions or penalties.
"If a court follows this model it should ask itself the four questions I set out below. If the answer to any of the four questions is "no", then the claim is likely to fail, and it is in general unnecessary to proceed to the next question. These questions are:(i) Do the facts fall within the ambit of one or more of the substantive Convention provisions (for the relevant Convention rights see Human Rights Act 1998, section 1(1))?
(ii) If so, was there different treatment as respects that right between the complainant on the one hand and other persons put forward for comparison ("the chosen comparators") on the other?
(iii) Were the chosen comparators in an analogous situation to the complainant's situation?
(iv) If so, did the difference in treatment have an objective and reasonable justification: in other words, did it pursue a legitimate aim and did the differential treatment bear a reasonable relationship of proportionality to the aim sought to be achieved?
The third test addresses the question whether the chosen comparators were in a sufficiently analogous situation to the complainant's situation for the different treatment to be relevant to the question whether the complainant's enjoyment of his Convention right has been free from Article 14 discrimination."