Land registration – Practice and procedure – Restrictions – Section 73(7) of Land Registration Act 2002 – Appellant appealing against decision of First-tier Tribunal directing Land Registrar to enter restriction against former family home – Whether FTT having jurisdiction to quantify beneficial interests of unmarried couple in former home registered in sole name of one party – Appeal dismissed
The respondent applied to the Land Registry for the entry of a restriction against the registered title to a house at 19 Durham Avenue, Bootle to protect a beneficial interest which she claimed to have in the property. Her former partner, the appellant, from whom she had separated in 2016 after 13 years together, was the sole registered proprietor of the house. He objected to the application.
The dispute was referred to the First-tier Tribunal (FTT) under section 73(7) of the Land Registration Act 2002 which concluded, as a matter of inference from the facts, that the parties had had a common intention from January 2013 that the respondent should have a beneficial interest in the house. It directed the Chief Land Registrar to give effect to her application for a restriction to be entered on the register.
The FTT also quantified the respondent’s share, having been invited to do so by the parties. By an arithmetical calculation based on the duration of the couple’s engagement relative to the total length of their relationship, it concluded that her beneficial interest in the property was 35%.
The appellant appealed challenging the FTT’s conclusion that the couple had pooled their resources without regard to relevant parts of the evidence; and the FTT’s approach to the quantification of the respondent’s beneficial interest.
Held: The appeal was dismissed.
(1) The FTT had not overlooked or misunderstood any relevant evidence in concluding the respondent had a beneficial interest. It had considered whether the respondent’s contribution was to the improvement of the property, a contribution of a substantial nature and whether there was any contrary agreement which would prevent it from giving rise to a beneficial interest. The FTT’s direction was entirely orthodox and could not be faulted: Dibble v Pfluger [2010] EWCA Civ 1005; [2010] PLSCS 241 followed.
(2) In deciding whether the FTT’s approach to the quantification of the respondent’s beneficial interest was correct, an inclusive assessment of the parties’ true financial arrangements was necessary. Where there was no evidence of any discussion of the share which each was to have, each was entitled to that share which the court considered fair having regard to the whole course of dealing between them in relation to the property. In any event, errors made by the FTT in computing the length of the parties’ relationship, which the respondent did not dispute, required the court to set aside its determination of the extent of her interest: Stack v Dowden [2007] UKHL 17; [2007] 2 AC 432, Jones v Kernott [2011] UKSC 53; [2011] PLSCS 264 and Oxley v Hiscock [2004] EWCA Civ 546; [2004] PLSCS 112 applied.
(3) The important question which the FTT did not address, was whether the FTT had any jurisdiction to determine the extent of a beneficial interest at all. The respondent’s application to the registrar was for the entry of a restriction in the register of title for the property under section 42(1) of the 2002 Act. On receipt of the respondent’s application, the question for the registrar was whether it was necessary or desirable to do so for any of the identified purposes, including securing that an interest capable of being overreached was overreached on a disposition, or protecting a right or claim in relation to the registered estate. That required consideration of whether any such interest existed, but the registrar had no jurisdiction to consider the extent of the parties’ interests to reach a view on that question. The function of the registrar was to deal with “the business of registration” under the 2002 Act, but no part of that business was concerned with the quantification of beneficial interests. No consent could confer on a court or tribunal with limited statutory jurisdiction any power to act beyond that jurisdiction or estop the consenting party from subsequently maintaining that such court or tribunal had acted without jurisdiction: Essex County Council v Essex Incorporated Congregational Church Union [1963] AC 808 applied.
Where an objection to a restriction could not be disposed of by agreement, section 73(7) required the registrar to refer the matter to the FTT. The issue for the FTT was the same as for the registrar, namely whether in light of the objection it was necessary or desirable to enter the restriction for any of the purposes mentioned in section 42(1). No question of quantification arose in the determination of that question. The narrowness of the FTT’s jurisdiction was confirmed by the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013. The outcome of a reference under section 73(7) provided for by the 2002 Act, and the Rules made under it, was a direction to the registrar to take action either to give effect to the application for a restriction or to cancel it. The FTT could not arrogate any wider jurisdiction to itself and had no power to make declarations concerning the beneficial interests under a trust of land. The rules made no provision for effect to be given to such a determination by the registrar. The resolution of issues which were not necessary to the performance by the FTT of its function of determining the specific matter referred to it by the registrar would not bind the parties before it: Jayasinghe v Liyanage [2010] 1 EGLR 61, Silkstone v Tatnall [2011] 3 EGLR 47, Whitehouse v Jervis [2017] UKFTT 805 (PC) and Inhenagwa v Onyeneho [2018] 1 P&CR 10 followed.
(4) In the present case, the FTT was entitled to find that the respondent had a beneficial interest which should be protected by a restriction. However, it had no jurisdiction to determine the extent of that beneficial interest and its conclusion was not binding on the parties. In any event, the FTT’s view was based on an incomplete assessment of the evidence and was wrong in principle. The better course would be for the FTT to make a direction under section 110(1) of the 2002 Act that one party commence proceedings in court. A binding decision by a judge with all the necessary powers and experience might then be obtained in a single forum not only on the matter referred by the registrar but on all connected questions.
The parties appeared in person.
Eileen O’Grady, barrister
