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Proprietor’s index search: Effective tactic for discovering defendants’ assets

Print publication

27/09/2021

Why is Barfoot v Revuckas of interest?

The recent High Court case of Barfoot v Revuckas [1] will be of interest to any party concerned to take action to trace and recover assets, particularly in cases where losses have been sustained as a result of suspected dishonesty or fraud.

The case confirms the courts’ power to order a search of HM Land Registry’s proprietor’s index which, along with related orders, can be an effective tactic for discovering defendants’ assets and then protecting against the risk of dissipation.

What are the key takeaways?

The Land Registry maintains an index of title ownership that can be searched by individuals’ or businesses’ names.

Ordinarily searches of the register are permitted against an applicant’s own name, the name of a corporate body or, in limited circumstances, the name of a person in whose property the registrar is satisfied the applicant has a proper interest (for example, where the applicant is a personal representative and wishes to establish the deceased’s estate).

A search of the index can be of significant assistance, however, to a claimant who wishes to trace and/or protect against the dissipation of assets held in the name of a defendant.  A court order will be required in those circumstances.

This case confirms:

  • Before ordering a proprietor’s index search, the court would need to be satisfied that access to the index is required to assist with enforcing the claimant’s legal rights in court proceedings.
  • The court would then apply a three-step test, asking:
  1. whether the claimant/applicant has a reasonable prospect of success;
  2. whether the defendant/respondent was unlikely to be able to satisfy a judgment from disclosed/known assets; and
  3. whether there were any competing reasons to refuse access to the index?
  • It is not a pre-requisite of the granting of an order to search the proprietor’s index that any judgment has already been obtained.

In our experience, a court is more likely to order a proprietor’s index search in a case where fraud/dishonesty and concealment of assets is alleged.

In this case, other specific factors in favour of granting the order included the absence of any identified defence, the defendants’/respondents’ non-compliance with earlier asset disclosure orders, and the absence of any explanation from the defendants/respondents as to where the money alleged to have been wrongfully paid had gone.

What happened in the particular case?

The first defendant/respondent worked for the claimant/applicant as a labour manager.  The claimant/applicant alleged that the first defendant/respondent falsified records of fictitious seasonal workers who did not, in fact, work for the claimant/applicant in order to obtain payments into his own and his mother-in-law’s (the second defendant/respondent) bank accounts, to the tune of some £719,000.

The claimant applied for, and was granted, a freezing order against the assets of both defendants/respondents; orders for disclosure of their bank statements which might assist in identifying receipts of monies dishonestly acquired and tracing those monies; and a proprietor’s index search.

How we can help

Fraud, whether it be mortgage fraud, push payment fraud, cyber fraud, or commercial fraud of any kind [2] is, unfortunately, on the rise.  However, so too are the legal and technical expertise, and the powers of the UK courts, required to effectively respond to and combat it.

Walker Morris’ Banking Litigation team has significant experience in successfully resolving fraud claims, as well as tracing and recovering assets.  The team is also experienced in providing training and strategic risk management advice to help clients to spot indicators of fraud and to implement practical solutions and effective security practices.  The most effective approach to the fight against fraud is to be both proactive in your prevention strategies and to have expert legal assistance in your corner just in case anything does go wrong.  Please do not hesitate to get in touch.

 

[1] [2021] EWHC 2423 (QB)

[2] For further information and advice, please see our earlier briefings on mortgage fraud in 2021, push payment fraud and cyber fraud

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