Doodes v Gotham & Anor

On the 12^th October 1988 a Bankruptcy Order was made against Kevin Leonard Doodes (“the Bankrupt”) in the Chelmsford County Court. On the 12^th May 1989 Peter John Gotham (“the Trustee”) became, as he remains, the trustee in that bankruptcy. On the 18^th December 1990 the Trustee applied to the Chelmsford County Court for possession of 22, Basildon Drive, Laindon, Basildon, Essex (“No. 22”), a residential property registered in the names of and lived in by the Bankrupt and his partner, Cheryl Barbara Perry. There was a substantial gap (the reasons for which have not been explored before me) until the 27^th February 1992 when Mr Recorder P.L. Storr made an order in that Court imposing a charge (then only a charge nisi, it would seem) on No. 22 in favour of the Trustee and removing No. 22 (or perhaps, as it should have been, the Bankrupt’s interest in it) from the Bankrupt’s estate pursuant to section 313 (1) and (3) of the Insolvency Act 1986. On the 29^th May 1992 the Chelmsford County Court made a Charging Order Absolute (“the 1992 Charge”) charging the Bankrupt’s interest in No. 22 in favour of the Trustee. The Bankrupt has been discharged from the 1988 bankruptcy.

After another unexplained gap, on the 16^th June 2004 the Trustee applied to the Chelmsford County Court for an order for, inter alia, the sale of No. 22 with vacant possession and for directions as to the payment of the proceeds of sale. On 7^th December 2004 the matter was transferred to the High Court where, on 3^rd March 2005, the Trustee applied to amend his application of the 16^th June 2004. In opposition to that application, the Bankrupt raised the argument that so long had elapsed – more than 12 years – between the making of the 1992 Charge in May of 1992 and the application for sale and for payment of proceeds in June 2004 that the Trustee, represented by Mr Learmonth, was barred from obtaining any substantive relief by reason of section 20 of the Limitation Act 1980. The Bankrupt’s case was thus that there was no point in amending; no amendment could save the application which was inescapably doomed to fail by reason of limitation. In the High Court the matter came before Mr Registrar Baister who, by his reserved judgment of the 19^th May 2005, ruled that the 1992 Charge was not statute barred. By his Appellant’s Notice of the 22^nd June 2005 the Bankrupt, represented by Mr Stacey, appeals. I have not been concerned with whether the 1992 Charge is or may be wholly or in part unenforceable or ineffective for any reason other than limitation; the only point in the appeal has been whether its enforcement is barred by limitation. I shall therefore assume, notwithstanding some doubts as to other features of the 1992 Charge, that, limitation issues apart, it has been and is a fully enforceable charge.

The Cork Report – “Insolvency Law and Practice”, Cmnd 8558 of 1982 – commented on the fact that eviction from a family home could be a disaster not only for the debtor himself but also to those who were living there as his dependants and who often had no legal or beneficial rights which they could enforce. A trustee-in-bankruptcy’s claim for possession needed to be weighed, it said, against the competing claims of the debtor’s wife and children to a roof over their heads. Considerable personal hardship could be caused to the debtor’s family by a sudden or premature eviction and the writers of the Report believed that it was:-

“… consonant with present social attitudes to alleviate the personal hardships of those who are dependent on the debtor but not responsible for his insolvency, if this can be achieved by delaying for an acceptable time the sale of the family home. We propose therefore to delay but not to cancel, enforcement of the creditors’ rights.”

Much importance, said the Report, had, in reported cases, been attached to the ages, welfare and educational prospects of the children. Relief should not be limited to those who were married; the terms “husband” and “wife” should include persons of the opposite sex who were living as husband and wife – see Cork Report paragraphs 1114-1118, 1123 and 1125. When the Insolvency Act 1986 emerged it was seen that one way in which the legislature had dealt with the problems addressed by the Cork Report was by enacting section 313 as follows:-

“313.

Charge on bankrupt’s home

(1)

Where any property consisting of an interest in a dwellinghouse which is occupied by the bankrupt or by his spouse or former spouse is comprised in the bankrupt’s estate and the trustee is, for any reason, unable for the time being to realise that property, the trustee may apply to the Court for an order imposing a charge on the property for the benefit of the bankrupt’s estate.

(2)

If on an application under this section the court imposes a charge on any property, the benefit of that charge shall be comprised in the bankrupt’s estate and is enforceable, up to the value from time to time of the property secured, for the payment of any amount which is payable otherwise than to the bankrupt out of the estate and of interest on that amount at the prescribed rate.

(3)

An order under this section made in respect of property vested in the trustee shall provide, in accordance with the rules, for the property to cease to be comprised in the bankrupt’s estate and, subject to the charge (and any prior charge), to vest in the bankrupt.

(4)

Subsections (1) and (2) and (4) to (6) of section 3 of the Charging Orders Act 1979 (supplemental provisions with respect to Charging Orders) have effect in relation to Orders under this section as in relation to Charging Orders under that Act.”

Section 313 has been amended with effect from the 1^st April 2004 but I have not understood the parties before me to argue that the amendments are relevant to the only question before me although the changes have had the effect that the question I am dealing with will in future arise in the different context provided for in sections 283A (2) and (3) and 313 of the Insolvency Act as amended by the Enterprise Act 2002.

The Insolvency Rules 1986, rule 6.237, make provision as to how applications to Court should be made under section 313 but there has been no inquiry before me as to how far, if at all, those rules were complied with or even whether Cheryl Perry was a “spouse” at all relevant times for the purposes of section 313. As I have said, the only question before me has been one of limitation.

The provisions of section 3 (1), (2), (4)-(6) of the Charging Orders Act 1979 as referred to in section 313 (4) supra provide as follows:-

3 - (1) A Charging Order may be made either absolutely or subject to conditions as to notifying the debtor or as to the time when the charge is to become enforceable, or as to other matters.

(2)

The Land Charges Act 1972 and the Land Registration Act 2002 shall apply in relation to Charging Orders as they apply in relation to other orders or writs issued or made for the purpose of enforcing judgments.

(4)

Subject to the provisions of this Act, a charge imposed by a Charging Order shall have the like effect and shall be enforceable in the same courts and in the same manner as an equitable charge created by the debtor by writing under his hand.

(5)

The court by which a Charging Order was made may at any time, on the application of the debtor or of any person interested in any property to which the order relates, make an order discharging or varying the Charging Order.

(6)

Where a Charging Order has been protected by an entry registered under the Land Charges Act 1972 or the Land Registration Act 2002, an order under subsection (5) above discharging the Charging Order may direct that the entry be cancelled.

The word “debtor” found in subsections (3) and (5) is defined in the 1979 Act section 6 (1) by reference to section 1 (1) of that Act. Section 1 (1) of the 1979 Act contemplates a debtor being a person required to pay a sum of money to another person by a judgment or order of the High Court or a County Court.

Section 20 of the Limitation Act 1980, on which the Bankrupt relies, provides, so far as material for immediate purposes, as follows:-

“20 (1) No action shall be brought to recover –

(a)

any principal sum of money secured by a mortgage or other charge on property (whether real or personal); or

(b)

proceeds of the sale of land;

after the expiration of 12 years from the date on which the right to receive the money accrued.”

Subsection (2) of section 20 makes special provision in relation to foreclosure and subsection (3) to cases where the property charged comprises any future interests or a life insurance policy that has not matured or been determined. Subsection (5), which relates to recovery of arrears of interest, speaks of “the expiration of 6 years from the date on which the interest becamedue”. Similarly subsection (6), speaking of arrears, speaks of arrears “which felldue”. Again, subsection (7) speaks of interest not being treated “as becomingdue” as is there more specifically provided. There is thus ample material for a linguistic argument that “the date on which the right to receive the money accrued” in section 20 (1) is not necessarily the same as the date on which the money in question “fell” or “became” due; the argument would be that when the legislature wanted to refer to money becoming due it can be seen that it knew how to do so and that when, therefore, instead it used a quite different expression – “the date on which the right to receive the money accrued” – it must have meant something other than the date of the money becoming due.

Before I look further at the expression “the date on which the right to receive the money accrued” it would be as well to look first at the 1992 Charge. A charge imposed under section 313 of the 1986 Act is, by subsection (4) of that section, to have effect as a charging order under the 1979 Act and is therefore, by section 3 (4) of the 1979 Act, to have the like effect and to be enforceable in the same manner as a written equitable charge under the debtor’s hand. What, then, are the rights which such an equitable chargee acquires? He cannot foreclose nor take possession “since he has neither a legal estate nor the benefit of a contract to create one” – Megarry & Wade, The Law of Real Property, 6^th Edition paragraph 19-091. He has no autonomous power of sale or to appoint a receiver; his primary remedies are to apply to the court for an order for sale or for the appointment of a receiver – paragraph 19-091 supra. Mr Stacey argues that in the absence (as here) of contrary express provision in the equitable charge, the chargor of an equitable charge under hand is able, even against the wish of the chargee, to decrease the amount charged as he chooses, bit by bit or all at once, but he gives no authority for that conclusion and I would expect that, by analogy with a mortgagee’s position, the equitable chargee, should he choose to do so, would be able to refuse all but a full tender of the whole principal and interest due at the time – see, as to a mortgagee’s position, Megarry & Wade supra at paragraphs 19-134 and 19-147 and Snell’s Equity 31^st Edition paragraphs 37-17 and 37-18.

An unusual (but not unique) feature of a charge created under section 313 is that immediately before it is imposed by the court there will generally (indeed, perhaps always) have been no enforceable debt whatsoever from the prospective chargor – the bankrupt – to the person who will then become the chargee, the trustee. Such a position is not peculiar to charges under section 313; it is similar to that in which A, without making any promise himself to pay anything to C, charges or mortgages his own property in support of a debt from B to C. It could be argued that as there is, at the moment the charge is created, no antecedent debt from bankrupt to trustee and no judgment or order for payment from the one to the other that there is thus, strictly, no “debtor” for the purposes of section 3 (4) of the 1979 Act. However, so to hold would so emasculate section 313 that I cannot think that the legislature can have required so strict a view to be taken of the word.

As for its amount, the charge under section 313 (so far as concerns principal and subject to the limit in section 313 (2)) is “for the payment of any amount which is payable otherwise than to the bankrupt out of the estate”. The charge will therefore be for an amount which reflects, for example, sums owing to creditors in the bankruptcy but the creditors in the bankruptcy can, of course, no longer themselves sue the bankrupt as the whole point of the bankruptcy is that their rights against the bankrupt are replaced by rights against the estate. Moreover, if, for example, by reference to his fees, charges and disbursements for his rôle as trustee, the trustee is unable to provide for the same out of the estate, he has no right to sue the bankrupt for the unpaid balance. The outcome is that the chargee-trustee has no means of recovery from the chargor-bankrupt in the guise of a creditor to whom a sum is presently due but his only his rights as an equitable chargee under hand. If he demands payment from a chargor who is minded to sit tight in the property, he can thus be met with the conclusive answer that there is no present obligation upon the chargor to pay anything and that none will arise unless and until the charge is enforced by the court by way of an order for sale and for an appropriate distribution of the proceeds of sale or for the appointment of a receiver. Quite unlike the positions likely to arise under commercial mortgages or charges, in which express provision is likely to be made for sums becoming due at specified times and on certain events or defaults, here the chargee-trustee, short of his going to court, has no right to require immediate payment of any sum from the chargor-bankrupt and hence, short of his going to court, the trustee’s rôle is wholly passive, awaiting the day when the chargor is minded to sell or to transfer the charged property.

In the light of that being the position of the Trustee, when can it be said that a “right to receive the money accrued” to the Trustee for the purposes of section 20 of the 1980 Act?

It is relatively unusual to speak of a right to receive money; far more common is consideration of an obligation to pay on the one hand or a right to demand or require payment of money on the other. Nor is there any issue as between chargor and chargee as to the latter’s ability to give a good receipt. If I am right in my view that the chargor cannot oblige the chargee to accept anything short of a full tender, there is no duty on the chargee to receive anything less than that full tender but the absence of a duty to receive does not, as it seems to me, of itself connote the absence of a right to receive. It might also be that a right to receive is not coincident with an ability to receive. The “right to receive the money” is an expression that can be traced back through similar forebears to the legislation on the subject of limitation in the reign of William IV but I need struggle no further with what, untutored, I would have found a puzzling formula as the phrase has been dealt with in Hornsey Local Board –v- Monarch Investment Building Society (1889) 24 QBD 1 C.A., a case to which I need to turn in some detail as, unless it can be distinguished, it plainly binds me.

By section 69 of the Public Health Act 1848 the Hornsey Local Board of Health had the right to require frontagers to level their street and put in sewers and a further right, if that work was not done after due notice, itself to do the same “and the expenses incurred” by the Board “in so doing shall be paid by the owners in default according to the frontage of their respective premises, and in such proportion as shall be settled by the Surveyor or in case of dispute as shall be settled by arbitration …..”. The section continued that such expenses could be recovered from those owners “in a summary manner”. The Local Government Act 1858 section 62 amplified methods of recovery; “the same may be recovered from the person who is the owner of such premises when the works are completed ….”. The 1858 Act continued “and such expenses shall be a charge on the premises in respect of which they were incurred”.

The Hornsey Local Board, after due notice to frontagers and after the frontagers defaulted, completed paving work in 1875. The apportionment, however, was not made until 1885 and notice of the apportionment was not served on the defendants until 1886. The consequential demand was not made of the defendants until 1887. It is to be noted that the defendant, a Building Society, had not been the owner of the premises at the completion of the works and hence, although the defendants’ premises were prima facie charged on what had become the Board’s land, the charge was for another’s debt. There was no debt due directly as such from the defendants to the Local Board. When, in 1888, the Local Board sought a declaration in the County Court that the premises were charged and for their sale, the Building Society pleaded limitation – the Real Property Limitation Act 1874 section 8. That provided, inter alia, that recovery by a chargee of money charged on land had to be claimed not later than 12 years “next after a present right to receive the same shall have accrued ….”. There were added provisions but (save in two respects that I will deal with below) the formula then enacted is for immediate purposes indistinguishable from that in section 20 of the 1980 Act. The County Court found in favour of the Local Board. A complication, one I do not have in the case at hand, was the need in Hornsey for apportionment and demand, but, on appeal to the Queen’s Bench Divisional Court – (1889) 23 QBD 149 – Mathew J. held that the right to recover the amount had become vested in the Local Board “who could at once have given a discharge for or release of the same in 1875, when the expenses were incurred” – p. 152. Grantham J. was of the same view. The Local Board was thus barred by limitation.

In the Court of Appeal the Local Board raised the question as to when a “present right to receive” the money had accrued. At page 5 Lord Esher M.R. said:-

“It was strongly argued that the words “present right to receive the same” in this section are equivalent to “present right to enforce payment of the same”. If there were some overwhelming reason why that construction should be given to the words; if that were the only construction that would render the procedure sensible, I think possibly the words might receive that construction, but I do not think it would be their ordinary meaning in the English language. A present right to receive is not in ordinary English the same as a present right to enforce payment. Then is there any overwhelming reason why we should read the words otherwise than in their natural sense? So far from that, I think that in the present case to read the words in the way suggested for the plaintiffs would raise insuperable difficulties, whereas to read them in their natural sense makes the whole legislation sensible and easier application. The difficulty that arises on the plaintiffs’ construction has been pointed out, viz., that the Board, who have to receive the money, and also to apportion the amount, would have the power to delay the application of the Statute of Limitation for any time they please. When that difficulty was presented, the plaintiffs’ Counsel endeavoured to meet it by the ingenious suggestion that, if the apportionment were not made within a reasonable time, the making of it might be enforced by mandamus; and other modes were suggested of meeting the difficulty. But why should we embark on such questions and invent means of overcoming this difficulty, when by reading the words in their ordinary sense no such difficulty arises?”

A little later Lord Esher equated a present right to receive with entitlement to receive. At page 7 he continued:-

“So, reading the words of the section in their ordinary sense, it seems to me that in the present case the Local Board were a body of persons in whose favour a charge existed for a sum of money, who were entitled to receive it, and who were capable of giving a receipt or discharge for it….. It seems to me therefore that the case comes within the words of the section read in their ordinary sense and that there is no reason for giving them any other construction. Consequently the claim of the plaintiffs is barred by the Statute of Limitations.”

The sense of his judgment was thus that the existence of a present right to receive did not wait upon the Board’s 1885 apportionment (or the required lapse of 3 months after the apportionment during which it could be disputed) or the later demand in 1887 but was coincident with the charge which, following yet earlier authority, was taken to have been imposed when the works were completed, namely in 1875.

Lindley LJ, giving the second judgment, accepted that the expression, a “present right to receive” was “a little ambiguous” – p. 9 – but that if it was construed as Lord Esher had construed it:-

“…. and as distinguishable, as apparently it is meant to be, from “present right to sue”, everything works out harmoniously; the moment the time of the coming into existence of the charge is ascertained, the period of limitation will begin to run: whereas, if the opposite construction is adopted, we are at once landed in the curious anomaly that the creditor, that is to say, the person who is entitled to the charge, can by his own act postpone his right to sue indefinitely …..”

– p. 9. Lindley LJ regarded that possibility as “extremely anomalous”. The moment referred to, he said, was “the moment when the charge came into present operation …..” – p. 10. The charge was a present existing charge as from the completion of the works and there then arose a present right to receive the sum charged even if its amount was unascertained – pp. 10 and 11.

Lopes LJ agreed; the right to receive what was secured by the charge arose concurrently with the charge. He continued – p. 11-12:-

“The words are “present right to receive” not “present right to recover”.

He, too, was affected by the argument that, were that not so, the chargee could delay the start of limitation for any length it thought fit by delaying apportionment.

The decision seems to have running through it a distaste on the merits for the Local Board’s position, based on its failure to put an apportionment in train for the ten years from 1875 to 1885 and its then sitting on its thumbs for a further 2 years until the Building Society was served with demands in 1887 – see in particular Lindley LJ’s comment that if the Board’s argument were right “a creditor could enlarge the time for suing indefinitely by omitting to do that which it is his duty by statute or common law to do”. But I do not see that notion of fault on the chargee’s part as crucial to the applicability of the decision to a case, such as the one before me, in which there has been no omission by the chargee-trustee “to do that which it is his duty by statute or common law to do”. Rather the decision seems more to rest on what was taken to be the ordinary and natural meaning of a “present right to receive”, coupled, if those words were not in contra-distinction to “a present right to enforce”, with the difficulty that, where the chargor was minded to sit tight, the chargee could postpone limitation even beginning. Nor, whilst I can see that the added word “present” when added to the current phrase “right to receive”, may lead to a different conclusion in some cases – e.g. the case of the reversionary charge referred to by Lord Esher on p. 6 and Lindley LJ on p. 10 – I do not see it as adding anything where, as here, whatever are the Trustee-chargee’s rights, they were from the start vested in his possession and were in relation to property vested in the Bankrupt’s possession.

Hornsey was cited without disapproval both in the Court of Appeal and the House of Lords in West Bromwich Building Society –v- Wilkinson [2004] EWCA Civ 1063 and [2005] 1 WLR 2303 respectively although, in neither case was the Court grappling with the meaning of “a right to receive” in the context of there being no debt and no covenant to pay as between chargor and chargee and no default on the chargor’s part in the sense of his not here having failed to do anything which he had promised to do. In the House of Lords, in particular, it proved unnecessary to deal with argument on the meaning of “a right to receive” – see per Lord Hoffmann at p.2309h.

I should add that the 1874 Act section 8, after referring to the time when “a present right to receive the sum shall have accrued …”, continued “… to some person capable of giving a discharge for or release of the same”. As no one would doubt that the Trustee could at any point after the creation of the 1992 Charge have given a receipt to the Bankrupt had the latter sought to make a payment to discharge or reduce it, it could be argued that those added words, coupled with the right having to be a “present” right, makes it easier under the 1874 Act to argue than does the current formula of section 20 (1) (which does not refer to a discharge or release) that the right to receive accrued upon the very creation of the charge. There is, perhaps, a little force in that but every member of the Court in Hornsey in the Court of Appeal pointed to the function of those added words as being to deal with the case of persons “legally incapacitated, such as infants or lunatics” – Lopes LJ at p. 12 and see per Lord Esher at p. 7 and per Lindley LJ at p. 10. Lord Esher made the point that if money is paid and a receipt is given then where there is no legal incapacity there is a discharge and the added words are then made good. The added words give an emphasis to an equation of the arising of the ability to give a receipt with the time at which the present right to receive the money accrues but, given the rest of the conclusions of the members of the Court in Hornsey, that, as it seems to me, was no more than a wayside emphasis on the road towards a conclusion at which the Court would have arrived even without it. I do not, in other words, see the added words as a ground for distinguishing Hornsey.

It has proved possible to distinguish Hornsey in some very particular instances – see Re Loftus deceased [2005] 2 All ER 700 at 728-9 -but I feel unable to do so here. In consequence I am obliged to see a “right to receive” as having arisen upon the very entry into the 1992 Charge, despite, as in Hornsey, the chargor, immediately before the charge, having owed no debt to the chargee.

As I have assumed that, limitation apart, the 1992 Charge has been and is fully enforceable, I have not dealt, nor shall I now deal, with any questions as to the quantification of the sum which it charged on No. 22 but I note in passing that Hornsey suggests that so long as the sum is ascertainable that will suffice to avoid unenforceability on the ground of uncertainty.

If I am right in my interpretation of Hornsey and as to its indistinguishability, then there is only one other argument available to the Trustee. It is this. Mr Learmonth argues that the Trustee-chargee’s claim is a claim that falls into what both Counsel have called “the bankruptcy exception” to the ordinary application of limitation. But Counsel differ as to the nature of the exception and as to its applicability to the case at hand.

There are plainly many claims in bankruptcy cases that fall outside the bar of limitation. Thus a claim in a simple contract case raised for the first time more than 6 years after the cause of action arose or a claim under a deed so raised more than 12 years after the cause of action came into being will escape the bar which they would otherwise have encountered if it transpires that before the expiry of the 6th or, in the latter case, the 12th,year the debtor was made bankrupt – see, by analogy, a winding up case – In re General Rolling Stock Co (1872) LR 7 Ch App 646. As James LJ put it, upon the winding up:-

“A duty and a trust are thus imposed upon the Court, to take care that the assets of the company shall be applied in discharge of its liabilities. What liabilities? All the liabilities of the company existing at the time when the winding up order was made ……”

Mellish LJ agreed, expressly referring to bankruptcy as being a corresponding case. That, then, is the rule where the delayed claim existed at the date of the bankruptcy and where it is a claim against the estate upon which there is a duty and a trust imposed by the Court, namely, in an individual’s case, where it is a claim against the bankrupt’s estate. But that reasoning does not deny limitation its familiar consequences where the delayed claim is not against the bankrupt’s estate or, to put it another way, is not a claim “in the bankruptcy” – In re Benzon [1914] 2 Ch 68 CA at p. 75.

In re Benzon supra was followed by Buckley J in Cottrell –v- Price [1960] 1 WLR 1097. He said of it, at p. 1105:-

“The importance of that case and of the way in which the doctrine is stated in the judgment of the Court is that it makes it clear that it is only “in the bankruptcy” that the statute ceases to operate. It does not have any effect on the operation of the statute on any rights or remedies which are unaffected by the bankruptcy.”

The rights of a secured creditor against his security were, he held, rights “outside the bankruptcy”. Cottrell –v- Price was the subject of detailed argument in Anglo-Manx Group Ltd –v- Aitken [2002] BPIR 215 where, after reference to the case, Mr John Jarvis Q.C., sitting as a Deputy Judge of the High Court said, at p.227:-

“There was considerable argument before me as to what is meant by the words “in the bankruptcy” as distinct from the words “outside the bankruptcy”. Mr Adair submitted that the question can be formulated in this way. Is the claim being directed at property within the statutory trust, or does it relate to property outside of the trust: for example, after-acquired property, or property which cannot form part of the estate. It seems to me that this is the correct formulation and is consistent with the analysis of Buckley J in Cottrell –v- Price.”

The Trustee’s rights against No. 22 under the 1992 Charge were, of course, created in consequence of the bankruptcy but I see them as being rights “unaffected” by the bankruptcy just as are other rights of secured creditors. The rights under the charge subsist even after the bankruptcy has ended and could subsist even after the Trustee had ceased to be the chargee or the Bankrupt the chargor. Moreover, the rights are directed against the Bankrupt’s interest in No. 22, which is property taken out of the estate and vested not in the Trustee but in the Bankrupt himself. The rights are “outside the bankruptcy” or “outside the statutory trust” in the sense that it is not the statutory trust that the Trustee invokes against No. 22 but his rights as chargee. These considerations suggest to me that the Trustee’s rights as chargee should be vulnerable to limitation but so also those rights ought to be vulnerable if one considers them from a different angle. A familiar ground for limitation not barring a claim is that for some reason or other the claim has been incapable of having been mounted earlier. Thus a claim by an infant will generally have to wait upon his majority. The converse is that, where a claim could have been brought but was not, then that militates in favour of limitation being able to bar the claim. Looking at the 1992 Charge from that angle, one sees that at any time after 1992 the Trustee could have moved the Court asking for possession, sale or a receiver. If there was a good case for such relief not being granted the application could have been adjourned generally or on terms. Nothing here seems to have precluded the Trustee having made some such application before he did so, late, in 2004. Despite Mr Learmonth’s attractive argument I cannot find that the Trustee’s position falls within any “bankruptcy exception”, whatever the true boundaries of that exception are.

I have now dealt with the two principal arguments with which I have needed to deal. It is unfortunate that Mr Registrar Baister did not have Hornsey cited to him. I have seen no way round Hornsey and I must therefore allow the appeal. I do so with some reluctance and no enthusiasm. I have real doubts about whether the result is just. Mr Doodes over many years, consistently with the broad social policy to which the Cork Report referred, has not only had the benefit of a roof over his head at No. 22 but, in all probability, has seen its value greatly increase as residential properties have generally greatly increased in value over the years with which this case is concerned. Interest would no doubt have had to be paid by the Bankrupt had he chosen to sell his interest in No. 22 or had the Trustee successfully applied for a sale but the interest would be likely to have been well outweighed by the increase in the value of No. 22. Whilst the Bankrupt has enjoyed No. 22 and any increase in its value the creditors in the bankruptcy have remained with their debts not paid in full. It could be, as the long lapse of time between the creation of the 1992 Charge in that year and the application for sale in June 2004 has been attributed, albeit loosely, to forgetfulness on the Trustee’s part, that the creditors might have some remedy against the Trustee but one can well imagine a lack of appetite on their part for litigation so long after the debts to them were incurred. In all the circumstances the justice of the Bankrupt’s escape from liability under the Charge is far from manifest although, for the reasons I have given, I find myself obliged so to conclude. I do not permit the suggested amendment which the Trustee has sought to his application of the 16^th June 2004 and, in consequence of my allowing the appeal, that application is dismissed.