Peter James Horsman & Ors v His Majesty's Attorney General & Anor

This is another puzzle concerning title to an English property held by a foreign company which has ceased to exist, at least in its original guise; in this case, as a result of the company’s merger with other corporate entities under the law of the British Virgin Islands. The property itself is a residential dwelling known as Crowsmarsh in the hamlet of Fawley Bottom, in the lower slopes of the Chiltern Hills north of Henley-on-Thames.

Since 2008 Crowsmarsh has been registered at HM Land Registry in the name of ZRH Nominees (0048) Ltd (“0048”), a BVI company. In November 2017, 0048 and seventy-nine associated BVI companies merged, leaving a single surviving company, ZRH Nominees Limited, the third-named claimant. No further steps were taken at the time in respect of title to Crowsmarsh which remained registered in the name of 0048, despite that company having ceased to retain any separate corporate identity and its name having been struck off the register of BVI companies in consequence of the merger.

On 17 May 2023, the third claimant, believing itself to hold the registered estate in Crowsmarsh in consequence of the merger, executed a transfer in form TR1 purporting to transfer title to the first and second claimants. When they applied to complete the transfer by their registration as new proprietors, HMLR took issue with the third claimant’s title to the property, and thus its power to transfer title to them. As the point was succinctly put by HMLR in its letter to the court in response to this claim dated 11 September 2025:

The claimants seek declaratory relief that English law does so recognise the merger as having that effect, on the basis that:-

If they are wrong on this principal head of relief, the claimants contend that the defect in title to Crowsmarsh can and should be remedied by one or other of two well-trodden alternative routes:-

In grappling with these matters, I have been ably assisted by Alice Hawker of counsel, who appeared before me for the claimants. HMLR was not formally joined as a defendant to the claim, but I have also found very helpful the detailed analysis of the issues set out by Dorothea Schriever, Assistant Land Registrar, in HMLR’s letter to the court of 11 September 2025 to which I have referred above. This written judgment has been prepared in deference to the questions and uncertainties highlighted by that letter, which I have endeavoured to address.

For completeness, I should add that the first and second defendants, as representatives of the Crown in its separate emanations, have been joined as parties to the proceedings for the purposes of these two alternative heads of relief. They do not oppose the grant of such relief as may be justified, and have played no part in these proceedings.

I shall first fill in a little more of the factual background.

0048 was originally incorporated in the BVI on 10 September 1998 under the International Business Companies Act 1984. The third claimant was incorporated under the same Act on 30 June 2005. Both companies were subsequently re-registered under the BVI Business Companies Act 2004 from 1 January 2007. They were part of a group of BVI companies (“the ZRH Group”), all of the shares in which companies were held by Master Nominees Inc.

Crowsmarsh has been registered at HMLR under title number BM277474 since 31 December 2002. Rothschild Trust Guernsey Ltd and Rothschild Trust Canada Inc were registered proprietors before 7 July 2008; they held Crowsmarsh on the trusts declared by a deed of settlement dated 28 November 2002 known as the Crowsmarsh Trust.

On 1 July 2008 the two Rothschild trust companies transferred Crowsmarsh to 0048, and on 7 July 2008 that company was registered as proprietor.

By a declaration of trust dated 22 July 2008 made between 0048 and two other Rothschild trust companies, Rothschild Trust (Schweiz) AG and RTB Trustees Ltd, 0048 declared that it held Crowsmarsh on trust for those companies in their capacity as trustees of the Crowsmarsh Trust.

By a deed of retirement and appointment dated 20 January 2011, the first and second claimants were appointed as trustees of the Crowsmarsh Trust in place of those two companies.

Thus it is clear that 0048 from this date held Crowsmarsh on trust for the first and second claimants in their capacity as trustees of the Crowsmarsh Trust.

On 9 November 2017, a Plan of Merger was entered into under Part IX of the BVI Business Companies Act 2004 providing for the merger of eighty constituent companies, all part of ZRH Group, including 0048 and the third claimant. Under the merger, the third claimant was to be the surviving company with which the other companies (whom I shall refer to as “the merging companies”) were to merge; the shares in each of the merging companies were to be cancelled, leaving only the shares in third claimant as surviving company, and the assets and liabilities of all of the merging companies were to be automatically vested in the third claimant as surviving company. On the following day, Articles of Merger were executed by each of the constituent companies approving the Plan of Merger and providing it to take effect on 22 November 2017.

On 22 November 2017, the merger took effect, and a Certificate of Merger issued by the BVI Registrar of Corporate Affairs certifying that the third claimant was the surviving company of the merger. Each of the merging companies, including 0048, were thereupon struck off the BVI register.

As I have already noted, following the merger no further steps were taken in England in relation to Crowsmarsh which remained registered in the name of 0048.

On 17 May 2023, the third claimant executed a transfer in form TR1 purporting to transfer Crowsmarsh to the first and second claimants as trustees of the Crowsmarsh Trust.

On 24 May 2023 Brecher LLP, on behalf of the first and second claimants, applied to HMLR to alter the register by naming them as new proprietors. HMLR raised a requisition, noting that the transferor under the TR1 was not the registered proprietor, in response to which Brecher supplied a copy of the Certificate of Merger. HMLR then raised the question which lies at the heart of this case, asserting that rights over immovable property were governed by English law as the lex situs, rather than BVI law as the law of the place of incorporation, with the result that Crowsmarsh had not automatically vested in third claimant in consequence of the merger, as provided for under BVI law; instead, any vesting would have necessitated execution by 0048 of a formal transfer to the third claimant.

On 20 February 2024, Brechers supplied HMLR with a legal opinion from a firm of BVI lawyers, ATU Legal Services (BVI) Limited (“ATU”) explaining the effect of a merger under Part IX of the BVI Business Companies Act 2004 as vesting automatically in the surviving company all of the assets and liabilities of the merged companies. This was insufficient to satisfy HMLR that the position was not governed by English law as the lex situs, and so Brecher then obtained counsel’s advice which it forwarded to HMLR; in his written opinion dated 17 June 2024, Jonathan Chew advised, amongst other matters, that under the relevant conflict of laws rules, English law did recognise the universal succession of one foreign company to another, whether by merger or otherwise, as governed by the law of the place of incorporation of the companies, a proposition established by the House of Lords in First National Bank of Greece vMetliss [1958] AC 509.

On 28 June 2024, HMLR noted that there was no precedent for the application of such rule in relation to immovable property in England, and set out its position as follows:

In the light of this, HMLR cancelled the first and claimant’s application, leaving it for them to seek declaratory or other relief from the court, as I have set out above.

The starting point is to consider the effect of the merger at a corporate level under BVI law. Section 173 of the BVI Business Companies Act 2004 provides as follows:

I have evidence of the effect of these provisions in the form of the legal opinion from ATU, which, unsurprisingly, reflects the plain meaning of the language which is used. The process which is described is one under which, by virtue of the merger, the surviving company of the merger succeeds to all of the rights, privileges, powers and purposes of the constituent companies, and their assets of any description, but is subject to the whole of the debts, liabilities and obligations of the constituent companies. In my judgment, it may be confusing to talk of assets or liabilities being “transferred” from the merging companies to the surviving company under such a merger; it is rather that the merging companies are absorbed into the surviving company, and with it all their rights and obligations, casting off the skin of their previous corporate identity.

The question then is whether as a matter of conflict of laws English law recognises not merely the merger as it was effected under BVI law, but also the effect of the merger as it concerns the assets and liabilities of the merging companies, including title to English immovable property held by 0048 as one of the merging companies.

The editors of Dicey, Morris and Collins on the Conflict of Laws 16th ed. (2022) say this at paragraph 30-013:

The leading authority on recognition in cases of universal succession is First National Bank of Greece v Metliss [1958] AC 509. In that case, a Greek statute had effected the amalgamation of two original banks into a new banking company and enacted that the new company was the “universal successor” to the rights and obligations of the amalgamated banks. The Greek government had previously purported to impose a moratorium on the payment of certain bonds governed by English law which had been guaranteed by one of the original banks. The question for the English courts was (i) whether the moratorium was effective, and, if it was not, (ii) whether the new bank was liable to honour the bonds as successor to the guarantor bank. On the first question, it was held that the moratorium was ineffective because any change in Greek law could not affect liability to pay, which was governed by English law, the law of the contract. On the second question, the English courts recognised the new bank as the universal successor to the amalgamated banks under the Greek statute, and thus its liability under the bonds.

The principle of universal succession was explained by Parker LJ in the Court of Appeal [1957] 2 QB 33 (at 53) as follows:

Returning to the extract from Dicey cited above, the editors state that there may be no true universal succession which will be recognised under English law where the successor corporation is “so radically different from its predecessor that it cannot be properly described as the same legal entity”, citing the decision of Colman J in Centro Latino Americano de Commercio Exterior SA v Owners of the Ship “Kommunar” (The Kommunar) (No 2) [1997] 1 Lloyds Rep 8. In its letter of 11 September 2025, HMLR sets out its understanding of this qualification as follows:

This therefore gives rise to two issues:-

The Kommunar concerned the question whether POL, a former Russian state enterprise which had managed a fleet of fishing vessels based at Leningrad was the same legal entity as AOL, the limited company which succeeded to certain of its assets and liabilities following its privatisation under Russian legislation. It was crucial to establish that it was, under section 21(4) of the Senior Courts Act 1981, in order to maintain the arrest of a vessel now owned by AOL in relation to relevant liabilities which had been incurred in connection to the vessel by POL pre-privatisation. Colman J held that AOL could not be regarded as the same legal person as POL; whilst there was no doubt that AOL had succeeded to such of POL’s assets and liabilities as had not been stripped out in the privatisation, it was fundamentally different as a legal entity from the state enterprise which had preceded it, and there was nothing inconsistent between such succession and there being a discontinuity of legal personality. In discussing the question as to continuity of legal personality, Colman J said this at p. 16:

As already noted, The Kommunar was not a case about universal succession, but rather simply whether AOL was the same legal entity as POL so that SCA 1981 s. 21 (4) was engaged. There are however a number of first instance decisions following Metliss to which I have been referred in which the doctrine has been further considered in the context of mergers of foreign corporations. They do not all speak with one voice, but none appear to treat continuity of legal personality as essential to the conception of universal succession, rather than it simply being an actual or deemed incidence of such succession.

Toprak Enerji Sanayi v Sale Tilney Technology plc [1994] 1 WLR 840 was a case concerning the effect of the merger of Turkish companies, governed by Article 151 of the Turkish Commercial Code which provided that upon the merger “the subsisting or newly created company takes the place of the disappearing companies whose rights and obligations are transferred to the remaining or newly founded company”. The original company, E, had brought a claim in this country before it merged with and was absorbed by another company in the Toprak group, S, with E thereupon ceasing to exist as a separate entity. The question arose whether following E’s cessation, the claim became a nullity and should be struck out, or whether it thereafter continued as S’s claim, albeit in suspended form until S was formally substituted as claimant. In holding that the latter was the correct analysis, HHJ Diamond found that the relevant merger provisions of Turkish law applied the doctrine of universal succession, as to which he stated (at p. 845) (my emphasis):

Eurosteel Limited v Stinnes AG [2000] CLC 470 concerned the merger of two German corporations which had the effect, under the relevant German legislation, that upon entry of the merger into the register “the assets of the transferor association, including the liabilities of this association, pass over to the transferee association” and “the transferor association expires” without the need for any further act of cancellation. The question for the court in that case was whether an arbitration to which the transferor was a party lapsed as a result of the transferor corporation ceasing to exist upon merging with the transferee without having first given notice of assignment of its rights to the transferee. In rejecting this, Longmore J accepted that under German law the transferee corporation was the universal successor of the transferor. He said this (at p.474) (my emphasis):

In A v B [2016] EWHC 3003 (Comm), the court was also concerned with the effect on arbitration proceedings of the merger of an Indian company, P, the original claimant to the proceedings, with another Indian company, F, in consequence of which P had ceased to exist as a separate entity and all of its assets including the right to continue litigation or arbitral proceedings had vested in F. The defendant maintained that the arbitration had lapsed in the absence of any notice of assignment given by P before the merger took effect; unlike the position in Eurosteel, there was no doctrine of universal succession under Indian law which English law should recognise. In rejecting this, Sir Jeremy Cooke held (at [36]) that what mattered was the substance not the form of what takes place under the foreign law. He continued (at [43] – [44]) (my emphasis):-

I have also found of assistance a review of the English and Commonwealth authorities (including The Kommunar) undertaken by Edmund Leow JC sitting in the High Court of Singapore in JX Holdings Inc v Singapore Airlines Ltd [2016] SGHC 212. Whilst they are not binding on me, he sets out various conclusions from such review in his summary at [43], which include the following:

In the light of the English authorities to which I have been referred, I am satisfied that it is not a pre-requisite of universal succession to establish continuity of legal personality between the old and new entities. In cases of amalgamation or merger of corporate entities, under the law of the place of incorporation it may generally be the case that there is continuity of legal personality between the merging companies and the surviving company, but this is not essential.

In this case, I do not have any evidence whether under BVI law there was continuity of legal personality between 0048 as one of the merging companies, and the third claimant as the surviving company; it is not a point specifically addressed in the ATU legal opinion to which I have referred above. It is tempting to assume that there was, since that appears on the face of it to be the natural consequence of the provisions of section 173 of the BVI Business Companies Act 2004 to which I have referred, as it is with similarly worded provisions of other jurisdictions. However, I consider that it would be wrong to make such assumption in the absence of specific evidence of BVI law on the point; if it were necessary to do so, I would adjourn the hearing to enable such further evidence to be adduced, but in the light of my conclusion above I consider that I can proceed to determine the case without having to decide the point.

This leaves outstanding the question whether it was necessary under English law as the lex situs for the third claimant to have been formally registered as proprietor in place of 0048 in order for the third claimant to have acquired the owner’s powers under section 23 LRA 2002 to transfer Crowsmarsh to the first and second claimants.

The Claimants say not, because the transmission of title from 0048 to the third claimant was a disposition falling within LRA 2002 s. 27(5)(b). HMLR disputes that s. 27(5) is of any application; in its letter of 11 September 2025 it contends that:-

HMLR further contends by the letter that s. 27 would not be engaged at all in a true case of universal succession. It says this:-

LRA 2002 s. 27 provides so far as material as follows:

In my judgment, HMLR is correct in stating that s. 27 is of no application in this case, although my reasons for so concluding are slightly broader. As I construe the section, the transmission of title by universal succession is not “a transfer” under ss. (2)(a), nor does it otherwise fall within the list of “dispositions” set out in ss. (2) which are required to be completed by registration. As for ss. (5), this does not expand the list of applicable dispositions beyond those set out in ss. (2), but simply clarifies that it applies to the types of disposition set out in ss. (2) even though they come about by operation of law.

If I am wrong on this, I am doubtful whether the transmission of title effected on the merger of 0048 with the third claimant was excepted from the requirement for registration by reason of ss. (5)(b). I agree with HMLR that this provision applies to the vesting of property under English law in the Crown as bona vacantia consequential upon the dissolution of a company, whether by operation of what is now section 1012 of the Companies Act 2006 in cases of UK companies, or by operation of common law in the case of foreign companies which hold the property on trust (as was the case in Hamilton v Attorney-General). However it does not naturally extend to cases where title is vested in a surviving company as a result of the amalgamation or merger of two or more companies. Whilst it is no doubt the case that in consequence of a merger the constituent companies other than the surviving company will cease to exist as separate entities, that is an incidental by-product or consequence of the merger, and not in itself the reason why the property is transmitted to the surviving company. Moreover, it is not entirely clear, under BVI law, whether it is correct to talk of the merging companies being “dissolved” in consequence of the merger: section 173 (4) of the BVI Business Companies Act simply states that the constituent companies other than the surviving company are to be “struck off” the register, which may be a different thing from dissolution, although I have not had the benefit of evidence on this point.

In conclusion, therefore, I am satisfied that the third claimant succeeded to title to Crowsmarsh in consequence of its merger with 0048; that was the effect of the BVI statute, which operated in substance as a universal succession recognised in English law. I am also satisfied that third claimant acquired owner’s powers to transfer Crowsmarsh to the first and second claimants under LRA 2002 s.23 and it was unnecessary for these purposes for it first to have been formally registered as proprietor in place of 0048.

I will accordingly make a declaration to that effect.

In the light of my conclusions on the principal ground of relief, it is unnecessary to deal with the two alternative routes proposed by the claimants in order to remedy the defect in title. I should record however that I am satisfied that it would have been appropriate in this case otherwise to make a vesting order in favour of the first and second claimants under section 44 of the Trustee Act on the basis that 0048 held Crowsmarsh on trust for them.