Land registration – Sale of land – Fraudulent transfer -Claimant’s property sold by another party using forged power of attorney – Defendant purchaser registered as proprietor – Whether claimant retaining beneficial interest – Whether claimant entitled to alteration of register to reinstate him as registered proprietor pursuant to Schedule 4 of Land Registration Act 2002 – Claim allowed The claimant was for many years the registered proprietor of a house in London N1. While he was overseas, another party sold the property to the defendant company using a forged power of attorney purportedly granted to him by the claimant. Part of the money from the defendant’s purchase was used to redeem an existing charge over the property. The defendant was registered as proprietor in the claimantÕs place. The claimant later became aware of the transaction and claimed that he had never authorised the sale. He applied to the court for an order that the register be altered in his favour for the purpose of correcting a mistake, pursuant to para 2(1)(a) of Schedule 4 of the Land Registration Act 2002, so as to reinstate him as the registered proprietor. The claimant contended that, notwithstanding the vesting of the legal title in the defendant by virtue of section 58 of the 2002 Act, the claimant remained the beneficial owner in circumstances where he had been deprived of his legal ownership by fraud. As authority for that proposition, he relied on Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151; [2002] Ch 216; [2001] 10 EG 155 (CS), a case that pre-dated the 2002 Act and concerned the equivalent provisions of section 69 of the Land Registration Act 1925. In that case, it was held that section 69 of the 1925 Act only vested the bare legal estate in the new registered proprietor and that, where the transfer was fraudulent, it would not amount to a “disposition” within section 20 so as also to transfer all transfer all “rights, privileges, and appurtenances belonging or appurtenant thereto”. Held: The claim was allowed. The court was bound by authority to construe section 69 of the 1925 Act as dealing only with the legal estate in the relevant land, not its beneficial ownership, and to hold that a fraudulent transfer that would be of no effect in the absence of the 1925 Act could not constitute a “disposition” within the meaning of section 20 of the Act. The court was also bound to construe the equivalent provisions in the Land Registration Act 2002 similarly, unless there were relevant distinctions between those provisions and their predecessors in the 1925 Act: Malory applied. Sections 58 and 29 of the 2002 Act respectively corresponded to sections 69 and 20 of the 1925 Act. Those sections did not differ in any important respects from their predecessors under the 1925 Act. Sections 27(1) and 58(2) of the 2002 Act were concerned with when a disposition was to take effect at law. Neither provision made any reference to the position in equity and neither assumed that a disposition would have effect in equity in advance of registration. They simply did not touch on the equitable implications of a disposition. In the context of section 29 of the 2002 Act, the word “disposition” could not be read as extending to a void transfer. Accordingly, the relevant provisions of the 2002 Act were similar in effect to those under the 1925 Act; consequently, the claimant remained the beneficial owner of the property notwithstanding the defendant’s registration as the property’s proprietor. It was therefore appropriate to order alteration of the register to show the claimant as the proprietor. The claimant was to reimburse the defendant in respect of that part of its money that had been used to redeem the charge over the property. Richard Clegg (instructed by Colman Coyle) appeared for the claimant; Greville Healey (instructed by Underwood Solicitors LLP) appeared for the defendant. Sally Dobson, barrister
Land registration – Sale of land – Fraudulent transfer -Claimant’s property sold by another party using forged power of attorney – Defendant purchaser registered as proprietor – Whether claimant retaining beneficial interest – Whether claimant entitled to alteration of register to reinstate him as registered proprietor pursuant to Schedule 4 of Land Registration Act 2002 – Claim allowed The claimant was for many years the registered proprietor of a house in London N1. While he was overseas, another party sold the property to the defendant company using a forged power of attorney purportedly granted to him by the claimant. Part of the money from the defendant’s purchase was used to redeem an existing charge over the property. The defendant was registered as proprietor in the claimantÕs place. The claimant later became aware of the transaction and claimed that he had never authorised the sale. He applied to the court for an order that the register be altered in his favour for the purpose of correcting a mistake, pursuant to para 2(1)(a) of Schedule 4 of the Land Registration Act 2002, so as to reinstate him as the registered proprietor. The claimant contended that, notwithstanding the vesting of the legal title in the defendant by virtue of section 58 of the 2002 Act, the claimant remained the beneficial owner in circumstances where he had been deprived of his legal ownership by fraud. As authority for that proposition, he relied on Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] EWCA Civ 151; [2002] Ch 216; [2001] 10 EG 155 (CS), a case that pre-dated the 2002 Act and concerned the equivalent provisions of section 69 of the Land Registration Act 1925. In that case, it was held that section 69 of the 1925 Act only vested the bare legal estate in the new registered proprietor and that, where the transfer was fraudulent, it would not amount to a “disposition” within section 20 so as also to transfer all transfer all “rights, privileges, and appurtenances belonging or appurtenant thereto”. Held: The claim was allowed. The court was bound by authority to construe section 69 of the 1925 Act as dealing only with the legal estate in the relevant land, not its beneficial ownership, and to hold that a fraudulent transfer that would be of no effect in the absence of the 1925 Act could not constitute a “disposition” within the meaning of section 20 of the Act. The court was also bound to construe the equivalent provisions in the Land Registration Act 2002 similarly, unless there were relevant distinctions between those provisions and their predecessors in the 1925 Act: Malory applied. Sections 58 and 29 of the 2002 Act respectively corresponded to sections 69 and 20 of the 1925 Act. Those sections did not differ in any important respects from their predecessors under the 1925 Act. Sections 27(1) and 58(2) of the 2002 Act were concerned with when a disposition was to take effect at law. Neither provision made any reference to the position in equity and neither assumed that a disposition would have effect in equity in advance of registration. They simply did not touch on the equitable implications of a disposition. In the context of section 29 of the 2002 Act, the word “disposition” could not be read as extending to a void transfer. Accordingly, the relevant provisions of the 2002 Act were similar in effect to those under the 1925 Act; consequently, the claimant remained the beneficial owner of the property notwithstanding the defendant’s registration as the property’s proprietor. It was therefore appropriate to order alteration of the register to show the claimant as the proprietor. The claimant was to reimburse the defendant in respect of that part of its money that had been used to redeem the charge over the property. Richard Clegg (instructed by Colman Coyle) appeared for the claimant; Greville Healey (instructed by Underwood Solicitors LLP) appeared for the defendant. Sally Dobson, barrister
