If a court order has been obtained on the strength of forged documents and leads to a change of proprietor at the Land Registry, is the registration of the new proprietor a “mistake”? And, if the court order is subsequently set aside, what effect does that have on changes to the register made in the intervening period?
Antoine v Barclays Bank plc; Taylor v Antoine [2018] EWHC 395 (Ch); [2018] PLSCS 49 answers both these questions for us. The litigation concerned a property in London that became vacant when the landowner died. The deceased’s son was granted letters of administration, but did not update the proprietorship register or provide the Land Registry with a new address for service, which facilitated the events that followed.
A third party issued proceedings against the deceased claiming that the property had been charged to him as security for a loan. He persuaded the court to make a vesting order in his favour and, once he was registered as the proprietor of the property, charged the property to a bank and used the mortgage advance to renovate it.
When he discovered what had happened, the deceased’s son applied to have the vesting order set aside on the ground that there had been a mistake because the documents supplied to the court were forgeries. He claimed that the charge in favour of the bank had been registered by mistake as well, and sought its removal from the register too.
The Land Registry and the bank accepted that the documents supplied to the court to obtain the vesting order were forgeries, but drew the court’s attention to the fact that they did not have any dispositive effect themselves. So the Land Registry would not have been able to change the register without the court order, which – they argued – was valid until it was set aside. Therefore, the changes to the register had been correct when they were made, and could not be turned into mistakes retrospectively: NRAM plc v Evans [2017] EWCA Civ 1013; [2017] PLSCS 154.
The court agreed. The judge accepted that the court order had been obtained by fraud and that it might appear anomalous to differentiate between a fraudster who provides forged documents directly to the Land Registry and a fraudster who uses those same documents to obtain a court order that enables him to be registered with title to a property. However, a court order is effective when it is made, even if it is obtained by fraud, and must be complied with unless and until it is set aside.
The judge likened the court order to a transaction that is voidable, as opposed to one that is void. And, because the order was valid, the registration of the new proprietor was not a mistake. It followed that the registration of the charge in favour of the bank was not a mistake either. The register is conclusive and section 24 of the Land Registration Act 2002 confers owner’s powers on registered proprietors. Consequently, the new proprietor had been entitled to create a charge over the property.
The judge sympathised with the plight in which the deceased’s son found himself as a result. It would cost him nearly £150,000 to discharge the charge (failing which the bank would be entitled to exercise its power of sale to recover the amount due).
Allyson Colby, property law consultant