Land registration – Mistake – Rectification – Court making vesting order in respect of property and legal charge registered in favour of bank – Court setting aside vesting order as obtained by reference to forged documents without prejudice to rights of bank – Claimant seeking rectification of register – Whether court order obtained by reference to forged documents and entered on Land Register resulting in “mistake” under Land Registration Act 2002 – Whether court having power to alter register to correct mistake – Appeal dismissed
The deceased (J) owned a property at 14 Mirabel Road, London, SW6. When he died in February 1996, the appellant was granted letters of administration but did not register himself as proprietor of the property at the Land Registry and it was vacant for several years. In 2006, T brought a claim against J seeking relief in respect of the property which he said had been used as security for a loan provided by him to J. He sought the transfer to him of the leasehold and freehold interests in the property. On 12 July 2007, the court made a vesting order that entitled T to be entered as the registered proprietor of the property. T charged the property to the first respondent bank and the charge was registered with deemed effect from 29 February 2008.
The appellant applied to set aside the vesting order on the ground that it had been obtained in reliance on forged documents. By an order dated 10 July 2008, the court ordered that the 2006 claim should continue against the appellant as personal representative of J. The judge set aside the July 2007 order albeit without prejudice to the rights of the first respondent and its registered legal charge over the property. The Land Registrar, acting on the July 2008 order, reinstated the appellant as proprietor of the property.
The 2006 claim had not been determined when T died in 2016. The appellant commenced a fresh claim contending that the first respondent’s charge was a mistake on the register that ought to be corrected, pursuant to para 2(1)(a) of Schedule 4 to the Land Registration Act 2002, by the deletion of the legal charge. The High Court dismissed the claim: [2018] EWHC 395 (Ch); [2018] PLSCS 49.
The appellant appealed, contending that the judge was wrong to hold that the 2007 order was not void for the purposes of the 2002 Act.
Held: The appeal was dismissed.
(1) There was no mistake for the purposes of Schedule 4 to the 2002 Act. The policy of the 2002 Act was that the register should be a complete and accurate statement of the position in relation to title at any given time and, subject to the powers of alteration in Schedule 4, the register was conclusive as to legal title. Whether an entry in the register was a mistake had to be judged at the time that the entry was made. If a change in the register was correct at the time it was made, it could not be called a mistake. Paragraphs 1 and 2(1) of Schedule 4 were concerned with the alteration of the register involving the correction of a mistake as to the state of the register. Therefore, the focus was upon the register and not the underlying disposition in relation to the property. Furthermore, there was a mistake when a disposition was registered or deleted from the register when it ought not to have been or it was recorded in a way which was inaccurate. The Registrar did not have a duty to investigate and the state of his knowledge about an underlying disposition was irrelevant. As a result of the provisions and structure of the 2002 Act and the Land Registration Rules, if the relevant requirements were met (subject to limited powers to raise requisitions) the Registrar was required to register a disposition (in this case, by operation of law) and did so as an administrative act: Isaacs v Robertson [1985] 1 AC 97 and NRAM Ltd v Evans [2018] 1 WLR 639; [2017] PLSCS 154 applied.
(2) In the present case, the judge was dealing with a novel situation. As a result of section 9 of the 1925 Act and section 27(5) of the 2002 Act, the registration of T as registered proprietor of the property was based upon the 2007 order alone, and the 2007 order effected the disposition and conferred title upon T independently of the underlying documents. The Registrar was under a duty to register the disposition by operation of law. The 2007 order was valid and effective even if irregular and susceptible to being set aside. In such circumstances, the judge was right to conclude that registration on the basis of a valid court order was akin to the position in relation to a voidable transaction. The fact that a voidable transaction was subsequently rescinded did not make the entry on the register made before the rescission a mistake.
(3) That should not be taken to equate the position in relation to a court order, which was valid on its face and was a vesting order, too closely with that of a voidable transaction. The concepts of “void” and “voidable” belonged to the realm of contract law and, in the context of land registration, were applicable when a registration was based on the transaction itself. They were not apposite in relation to court orders which were either “regular” and could only be overturned on appeal or “irregular” and might be set aside by the court that made them upon application to that court. There was no mistake at the time of registration. The vesting order was valid. It was good on its face until declared void by the court. The fact that the court order was later set aside as of right and was declared at that stage to be void did not render the Registrar’s administrative act at the time he completed it a mistake.
(4) As the registration of the 2007 order was not a mistake, neither was the registration of the legal charge, and the question whether the legal charge was properly registered even if T’s registration as proprietor was a mistake did not arise.
Chima Umezuruike (instructed by Riverbrooke Solicitors) appeared for the appellant; Guy Fetherstonhaugh QC and Greville Healey (instructed by TLT LLP) appeared for the first respondent; Katrina Yates (instructed by the Government Legal Department) appeared for the second respondent.
Eileen O’Grady, barrister
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