Sale of property — Completion date passing — Owner contracting to sell to another — Defendant applying to register restriction or unilateral notice — Whether application having no reasonable basis — Whether permissible for owner to seek order for withdrawal of application — Section 77 of Land Registration Act 2002 — Claim allowed
The claimants were the registered freeholders of a property, which they contracted to sell to the defendants. The agreed completion date was intended to give the defendants time to apply for planning permission. No permission was forthcoming by that date, or by a later completion date subsequently agreed by the parties, who then entered into negotiations for a further extension. Although an agreement was reached, no contract was ever signed or exchanged for the new time extension. The claimants found a new purchaser and served notice to complete on the defendants.
The defendants applied to the Land Registry for a restriction or unilateral notice on the registered title to the property, on the basis that the negotiations had resulted in a binding contract that extended the completion date. Section 77 of the Land Registration Act 2002 provided that one must not apply for such a notice without reasonable cause.
The new purchaser refused to proceed with the purchase while the defendants’ applications were pending. Furthermore, its finance was only available up to a certain date, and this did not leave sufficient time for the adjudication procedure under the 2002 Act to be completed and the applications determined.
The claimants applied to the court for, inter alia, an order for the withdrawal of the defendants’ applications to the Land Registry, on the ground that there was clearly no contract for an extension of the completion date, and, therefore, no reasonable basis for the defendants’ applications. The defendants argued that the machinery provided by the 2002 Act, and the ancillary rules for the determination of applications and objections, was adequate and should be followed.
Held: The claim was allowed.
In appropriate circumstances, the court would order the withdrawal of applications to the Land Registry made in breach of section 77. On the evidence, there was no binding contract for the sale of the property to the defendants, and, therefore no sustainable basis for their applications to register a restriction and unilateral notice against the property. Consequently, there was no reason why the court should not entertain a claim for breach of section 77 and make an order requiring the defendants to withdraw their applications and restraining-like applications.
Paul Letman (instructed by Colman Coyle) appeared for the claimants; Amjad Sheikh (instructed by Dhillon & Co, of Southend) appeared for the defendants.
Sally Dobson, barrister
