Dwelling-house — Plaintiff owning house jointly with wife — Wife executing transfer of property through power of attorney by forging husband’s signature — Property sold and new owners borrowing money on property — Failure to keep up mortgage payments — Mortgagees selling property and plaintiff claiming half-share of proceeds — Whether plaintiff “proprietor in possession” — Whether entitled to half-share — Judgment for plaintiff
The plaintiff married the third defendant and they purchased 44 Sidmouth Road, Willesden, London NW2, which was registered in their joint names. The property was unencumbered. The marriage broke down in 1984 and the plaintiff, who was an airline pilot, visited this country only rarely. His wife then forged the signature of her husband and then through an attorney under a power of attorney purported to exchange contracts for the sale of property to the first and second defendants for £255,000. On the same day she then proceeded to a purported transfer of the property to the first and second defendants, as though executed by the first plaintiff and herself. They then created a first charge in favour of the fourth and fifth defendants who were both banks. It was accepted by the court that the plaintiff’s signatures on the power of attorney and the transfer were forgeries and that he did not consent to either the sale of the house or the mortgages created by the first and second defendants.
In 1987, the fourth defendant obtained a possession order against the first and second defendants due to mortgage arrears. The first second and third defendants took no part in the action. The fourth defendant executed the possession order and then took active steps to sell the property as mortgagee in possession, but the plaintiff registered a caution against it. He only allowed the sale to proceed on the basis that half the net proceeds of sale were to be put on deposit pending the result of the present action. The sum was £111,712.79. The issue was whether but for the recent sale, the title could have been rectified in the plaintiff’s favour so as to show him as still remaining the registered proprietor together with the third defendant or whether the fourth and fifth defendants, as proprietors of a registered charge in possession, were the “proprietors in possession”, under the Land Registration Act 1925. Under section 82(3) of that Act, “the register shall not be rectified … so as to affect the title of the proprietor who is in possession …”. Counsel for the fourth and fifth defendants submitted that section 82(3) in the words “the proprietor who is in possession” described not only the proprietor of the land who was in possession, but also the proprietor of a registered charge in possession.
Held Judgment for the plaintiff.
1. The presence of the definite article before the word “proprietor” made it clear that the proprietor was the proprietor of the registered land of which he was in possession.
2. If the recent sale by the fourth defendant had not taken place, the court would have rectified the register in the plaintiff’s favour so as to delete the charges of which the fourth and fifth defendants were proprietors.
3. The court would also delete the first and second defendants as registered proprietors and reinstate the plaintiff and the third defendants as registered proprietors.
Philip Hoser (instructed by Tringhams) appeared for the plaintiff; Hugh Jackson (instructed by Glenisters, of Ruislip) appeared for the fourth defendant and (instructed by Speechley Bircham) for the fifth defendants; the first, second and third defendants did not appear and were not represented.
