Landlord and tenant – Mistake – Rectification of lease – Claimant lessee applying to rectify lease on terms of signed deed of rectification between claimant and defendant lessor and for direction to amend the land register – Application granted
The claimant was the immediate assignee of the original lessees of a flat at 7 Games House, Springfield Grove, London, having taken a transfer of the lease with the aid of a loan secured by mortgage from the bank. The defendant was the original and continuing lessor. The lease and lease plan described the flat as on the third floor. Accordingly, the land register noted that only the third floor flat was included in the title. Unfortunately, the flat was in fact on the second floor of the building. The error in the lease was discovered only after the claimant fell into arrears with his mortgage payments and was the subject of proceedings by the bank. He was ordered by county court to give up possession to the bank. When the bailiff arrived to take possession, it became apparent that the flat was on the second floor, not the third.
Correspondence ensued between the bank and the defendant, culminating in the defendant signing a deed of rectification, under which it was agreed between the parties that all references in the lease and the lease plan to the property as a “third floor flat” should be amended to a “second floor flat”. The mortgage deed entered into by the claimant with the bank contained a power of attorney, enabling the bank to act in the claimant’s name and on his behalf with the right, among other things, to enforce the claimant’s rights, or take over his right to make any claim or do anything to do with the property. By virtue of that power, in the claimant’s name, the bank entered into the deed of rectification and brought a claim under CPR Part 8 seeking rectification of the lease on the terms of the signed deed of rectification; and a direction to the Chief Land Registrar to amend the land register accordingly.
Held: The application was granted.
(1) Paragraph 1 of Schedule 4 to the Land Registration Act 2002 defined rectification of the register as an alteration which involved the correction of a mistake which prejudicially affected the title of a registered proprietor. That definition fed into paragraph 3, which limited the court’s power to order rectification in cases where the registered proprietor in possession did not consent. What was sought here was an alteration of the property register of Flat 7 (changing “third” to “second”) which did not prejudicially affect the title of the registered proprietor of the lease of that flat. That title was to the property known as Flat 7, wherever it was. The register provided incorrect information as to where the flat was located. It did not give title to a different flat because that would be a property known as a flat with a different number.
Even if that was wrong, and the alteration prejudicially affected the title of the registered proprietor of the flat, the limitation on rectification of the register in paragraph 3 would not apply, either because the registered proprietor was no longer in possession, or because he had given his consent. In addition, rule 126 and 127 of the Land Registration Rules 2003 provided that alteration under a court order was not rectification. Unlike paragraph 2(1)(a) of Schedule 4 to the Act, rule 126(1)(a) of the Rules expressly referred to mistake “in the register”. But it was hard to see what the mistake in paragraph 2(1)(a) could be, if it was not a mistake in the register. There was nothing wrong in the registration process, and there was nothing on the face of the register to show that there was a mistake. But in law there was nothing to register in the first place. Yet even that still resulted in a mistake in the register, because the very entry itself was only there by mistake. In the former case, the court might make an order for the alteration of the register, whereas in the latter case, if the court was satisfied that there was a mistake in the register, the court had to make an order for alteration of the register, subject only to the provisions of paragraph (2) (exceptional circumstances) and (3) (cases of rectification). There were no exceptional circumstances here, and this was not a case of rectification of the register.
(2) As regards alteration of the land register, the lease was in error in describing the flat as situated on the third floor, and the register was equally mistaken in referring (in both the leasehold and the freehold titles) to the third floor only as being included in the title. Those were mistakes contained in the register. The fact that the error was not the Registry’s fault, because it copied over what the parties had wrongly stated in the lease, and it made no mistake in any of the registration procedures, did not make what was stated in the Register to be any the less a mistake. “Mistake” for that purpose was not limited to official mistakes in the course of dealing with an application: Lannion v Baxter [2011] EWCA Civ 120 applied.
By virtue of rule 126(1), being a “mistake in the register”, it required the court to make such an order, subject to the exceptional cases mentioned in rule 126(2), (3) (which did not apply in the present case). Even if it were not a mistake in the register within rule 126(1), it was still a mistake within paragraph 2(1)(a) of Schedule 4, for the purpose of correcting that which the court had power (though no obligation) to order alteration of the register. The exercise of that power was a matter of judicial discretion, but having ordered rectification of the lease it made no sense not to order alteration of the register to conform with the lease, and the court would have done so had it been necessary. It would also have been compulsory under rule 126(1)(b) to alter the register to bring it up to date after the rectification of the lease. It was proper to order that the Land Register be altered to reflect the correct position.
Nicholas Broomfield (instructed by Shoosmiths LLP) appeared for the claimant; The defendant did not appear and was not represented.
Eileen O’Grady, barrister
Click here to read a transcript of Isaaks v Charlton Triangle Homes Ltd
