Land registration – Restriction – Claimants applying to register restriction preventing disposal of plots of land without consent – Chief land registrar deciding that objections to registration not groundless and refusing to register restriction – Claimants applying for judicial review – Whether defendant failing to give reason for decision that objections not groundless – Whether defendant failing to give claimants opportunity to respond to further objections – Application granted in part
The claimants claimed rights relating to land at Springbank Garden, Platt Bridge, Wigan. The land has been divided into at least seven plots. The claimants had entered into three joint venture agreements (JVAs) with NVC for the purchase, redevelopment and onward sale of the plots. Related correspondence stated that a legal charge would be registered against the property to protect the claimants’ interests and prevent the property sold without their consent. But those charges were never registered.
A dispute subsequently arose whether each JVA imposed a contractual obligation upon NVC not to dispose of the plot in question without the relevant claimant’s consent. The claimants applied to register a restriction, in respect of the whole of the registered estate, that there should be no disposition by a proprietor was to be registered without a written consent signed by either of the claimants. Subsequent lessees and transferees of the plots made objections to that restriction on grounds, amongst other things, that the claimants had no such contractual right.
The defendant chief land registrar decided that the objections to the claimants’ application for the entry of restrictions into the Land Register were not groundless for the purpose of section 73(6) Land Registration Act 2002. Accordingly, pursuant to section 73(5) the application could not be determined until the objections had been disposed of. As a result, the dispute was referred to the First-tier Tribunal (FTT). The claimants applied for judicial review of that decision.
Held: The application was granted in part.
(1) Where there was no express statutory duty to give reasons for a decision, there was no general obligation to give reasons at common law. However, such a duty might arise in a particular case. Fairness might in some circumstances require it even in a statutory context in which no express duty was imposed. A principal justification for imposing such a duty was to enable a court to intervene and to make effective the right to challenge the decision by way of judicial review. The giving of reasons was essential to allow effective supervision by the courts, and fairness provided the link between the common law duty to give reasons for an administrative decision and the right to the individual affected to bring proceedings to challenge the legality of the decision. The court would exercise caution before accepting reasons for a decision not articulated at the time, particularly where given after the commencement of proceedings: Oakley v South Cambridgeshire District Council [2017] EGLR 22 and Dover District Council v Campaign to Protect England (Kent) [2018] EGLR 1 applied.
In the present case, there was no express statutory duty upon the defendant to give reasons for its decision under section 73(5) or (6) of the 2002 Act. As regards a decision by the defendant that an objection was groundless, there was considerable force in the argument that fairness required the giving of reasons. Such a decision was determinative, and the regime under section 73 might well envisage a challenge by way of judicial review to such a decision.
As regards a decision by the defendant that an objection was not groundless, in general, fairness did not require the defendant to give reasons for such a decision which did not determine the issue; it was a gateway decision and the procedure to challenge that decision, and in fact to resolve the underlying issue, was the statutory mechanism of a reference to the FTT. The parties did not need to know the defendant’s reasons for its gateway conclusion, since they would have no bearing on the outcome of the reference to the FTT; and normally, an application for judicial review of that gateway decision would be unlikely.
In the very particular circumstances of this case, fairness required the defendant to give reasons for, and at the time of, the decision. However, the breach did not provide grounds to quash the decision. The conclusion reached was not unlawful or irrational.
(2) Whether an objection was more than groundless was a low threshold. The issue was whether disposition of the plot in question without the claimants’ consent would be unlawful for the purposes of section 42(1)(a) of the 2002 Act.
The objection was that such disposition would not be unlawful. It was common ground that breach of contract could amount to “unlawfulness” within section 42(1)(a). But, as a matter of construction of the JVA, the argument that a disposition without consent did not constitute a breach of contract was not groundless or hopeless. In any event, even if disposition without consent was a breach of contract, the point was not so clear that no rational decision maker could have concluded otherwise. Those were arguments properly for determination by the FTT which was the proper forum for the resolution of that issue.
Section 73(5)(b) of the 2002 Act referred to the application as a whole. As a matter of law, the defendant was not permitted to determine the application or any part of it until the objections had been disposed of. In any event, even if the defendant had power to enter restrictions, its decision not to do so was not irrational.
(3) In principle, a failure to give the applicant an opportunity, prior to the defendant’s decision on whether an objection was groundless, to make representations on an objection, was a breach of section 73(5). Here, the defendant’s analysis of the stages in the process and section 73(5)(a) and (6) was correct. There was no obligation even to notify the applicant of an objection before the decision under section 73(6) as to whether the objection was groundless. However, on the very particular facts of this case, the defendant’s failure to give the claimants an opportunity to respond or to consider further objections made prior to making the decision, was a breach of the public law duty of procedural fairness.
But the claimants had sustained no substantial prejudice as a result of that failure since their arguments had now been made in the present proceedings. The court was not satisfied that any breach of the duty of procedural fairness rendered the decision unlawful or irrational, and did not provide a ground for quashing the decision.
The claimants appeared in person; Richard Clarke (instructed by Government Legal Department) appeared for the defendant.
Eileen O’Grady, barrister
Click here to read a transcript of R (on the application of Sensar Ltd and another) v Chief Land Registrar
