The land registration system in
Unfortunately, however, Ijacic v Game Developments Ltd [2010] PLSCS 15 indicates that the protection conferred by the legislation is not absolute. The case concerned land that vested in a personal representative following the death of the registered proprietor. A fraudster, posing as the proprietor, borrowed against the security of the property. The lender registered its charge at the Land Registry and exercised its power of sale when the borrower defaulted on the loan. The buyer made an official search of whole and applied for registration within the relevant priority period.
In the meantime, the personal representative had been alerted to the fraud. He contacted the Land Registry and asked for the charge to be removed just before the buyer submitted its application to be registered as the new proprietor. The Land Registry asked the adjudicator to decide which application to allow.
The adjudicator ruled that an official search does not afford priority over an application to correct a mistake. Registration of a void disposition is a mistake. The charge was void because it was a forgery and the Land Registry was entitled to rectify the mistake by removing the charge from the register, even though the buyer was in possession of a clear search.
The 2002 Act prohibits the Land Registry from altering the register in a manner that affects the title of a proprietor of a registered estate in land without the consent of the proprietor in possession (unless the proprietor has, by fraud or lack of proper care, caused or substantially contributed to the mistake or it would be unjust not to make the alteration). Unfortunately, however, the legislation defines a “registered estate in land” in such a way as to exclude a registered charge. Consequently, the adjudicator decided that the Land Registry must delete the charge from the register because no exceptional circumstances justified an order to the contrary: para 3(3) of Schedule 4 to the 2002 Act.
The adjudicator acknowledged that a lively debate might have taken place concerning the ability to rectify the register as against the buyer, if the buyer had been registered before the application for rectification was received: see here.
Unfortunately, however, the buyer’s application for registration post-dated the application for rectification. As a result, the application for rectification took priority. This resulted in the removal of the charge from the register. Consequently, the application to register the transfer by the mortgagee had to be refused and the buyer was left to claim against the Land Registry for any loss suffered.
Allyson Colby is a property law consultant