Powers of the Beneficiary of a Trust of a Charge

11 Jul 2018

In Skelwith v Armstrong 1 the High Court was required to grapple with the owners’ powers provisions of the Land Registration Act 2002 (LRA 2002) in relation to the difficult question of the ability of a beneficiary of a trust of a charge to sell title to the mortgaged property. The conclusion of the Court—that such a person does have the power to sell the mortgaged property as if they were a registered chargee—was based on the combined effect of ss.106 and 101 Law of Property Act 1925 (LPA 1925) rather than on s.101 alone or on the owners’ powers contained in the Land Registration Act 2002. The conclusion is not without its difficulties even though, it is argued here, the right result was reached. The primary problem with the reasoning is the discussion of the nemo dat principle and the parallel drawn with the equity release scheme litigation. It is argued that the nemo dat principle is irrelevant here, and the Court’s reasoning in place obscures what ought to be a relatively simple question.