A property investor who lost a house in Islington as a result of a forged power of attorney has won a high court fight to recover the title.
Newey J ordered that the register be altered to restore Arthur Fitzwilliam as owner of 100 Richmond Avenue, London N1, which was sold without his permission to Richall Holdings Services Ltd for a gross purchase price of £680,000 in December 2009.
The judge found that Fitzwilliam, who bought the property in 1972, remained the beneficial owner throughout, notwithstanding Richall’s registration as proprietor.
In doing so, he ruled that the oft-criticised Court of Appeal decision in Malory Enterprises v Cheshire Homes (UK) Ltd, decided in the context of the Land Registration Act 1925, still applied following the enactment of the Land Registration Act 2002.
He ordered Fitzwilliam to reimburse Richall for the £274,370 paid from the purchase price to redeem a building society charge of the property. However, he ordered Richall to account to Fitzwilliam for the rent it received from the property, which has been let to a group of young professionals since November 2001, less £20,000 for improvement works it carried out there.
The judge found that the property was sold by Sameer George using a power of attorney supposedly granted to him by Fitzwilliam whilst Fitzwilliam was held in prison in Dubai facing charges of aiding and abetting a bank fraud from June 2008 until his acquittal in April 2011.
The judge said that George had offered to assist Fitzwilliam in borrowing money on the security of properties including 100 Richmond Avenue, but was never authorised to sell it.
He said that the “overwhelming evidence” was that the power of attorney was forged, and that George admitted he had attempted to replicate Fitzwilliam’s signature on it.
Whilst acknowledging that he could see the force in some of the arguments advanced by critics of the decision in Malory to the effect that a void transfer of land could not constitute a “disposition” under the Land Registration Act, he found that he was bound by the decision in the context of the 2002 Act.
He said: “I do not think it is open to me to give a wider interpretation to ‘disposition’ as regards the 2002 Act. The case for taking ‘disposition’ to include a void transfer was at least as strong in relation to the 1925 Act.
“In the circumstances, it seems to me that, just as the Court of Appeal concluded in Malory that Cheshire’s status as registered proprietor is subject to the rights of Malory BVI as beneficial owner, I must hold that Mr Fitzwilliam remained the beneficial owner of 100 Richmond Avenue, notwithstanding Richall’s registration as the property’s proprietor.
Fitzwilliam v Richall Holdings Services Ltd Chancery (Newey J) 28 January 2013
Richard Clegg (instructed by Colman Coyle) for the claimant
Greville Healey (instructed by Underwood & Co) for the defendant
