Registered land – Fraud – Rectification – Adverse possession – Respondent being deprived of title to property by fraud – Respondent applying to alter register of title to restore his name as registered proprietor – First-tier Tribunal directing Chief Land Registrar to respond to application – Whether appellant acquiring title to property by adverse possession giving rise to exceptional circumstances justifying not altering register – Appeal dismissed
The respondent applied to alter the register of title to 40 Henley Street, Birmingham so as to restore his name as registered proprietor. He was the registered proprietor until May 1989 when he went abroad. While he was away, the appellant’s father forged the respondent’s signature on a transfer of the property and was registered as proprietor. In 1990, the appellant’s father executed a transfer of the property by way of gift to the appellant who had been the registered proprietor of the property ever since.
The First-tier Tribunal directed the Chief Land Registrar to respond to the application and restore to the respondent land of which he had been deprived by fraud. The judge found that the appellant was the registered proprietor in possession of the property. The Land Registration Act 2002 gave special protection to such a proprietor; the register could not normally be rectified so as to prejudicially affect his title. However, a registered proprietor who had caused or substantially contributed to the mistake by fraud or lack of proper care (as the judge found the appellant had done) did not have that protection and the register would be rectified unless there were exceptional circumstances that would justify not altering it. The judge rejected the appellant’s argument that he was in adverse possession of the property and that that amounted to exceptional circumstances. He followed the Court of Appeal’s decision in Parshall v Hackney [2013] EWCA Civ 240; [2013] 2 EGLR 37; [2013] EGILR 6 as authority for the proposition that a registered proprietor of land could not be in adverse possession of it.
The appellant appealed contending that the FTT was wrong in law because there were exceptional circumstances that would justify not altering the register, namely that he was in adverse possession and that the respondent’s title had been barred.
Held: The appeal was dismissed.
(1) It was clear from the decision in Best v Chief Land Registrar [2014] EWHC 1370; [2014] 2 EGLR 133; [2014] EGILR 6 that adverse possession was not ruled out by a squatter’s wrongful or even criminal behaviour. However, from a practical and common sense point of view, it was unrealistic to argue that the appellant had been in adverse possession in this case. Both the appellant’s possession of the property and the respondent’s current predicament arose because the appellant was the registered proprietor. As a matter of fact, the appellant was in possession because his father transferred the land to him; to say that he was a trespasser who happened to be registered in much the same way as another trespasser might change the locks was to mischaracterise the situation. The respondent had failed to recover the land because the appellant was the registered proprietor. He went to see a solicitor in 1989 but was unable to get any help because, in the absence of documentary title or any paperwork, he had no evidence of his entitlement to the land and nothing to show that he might be able to seek rectification of the register. To describe that as a situation primarily of trespass, in which the registration of the appellant as proprietor was just the “icing on the cake”, did not accurately describe what had happened.
(2) The registered proprietor had a title conferred by section 58 of the 2002 Act. There could be more than one fee simple in land, even in registered land, but registration conferred a title that was indefeasible save as provided for by Schedule 4 to the 2002 Act. Schedule 4 was self-sufficient and enabled persons in the respondent’s position, who had lost their title as a result of fraud or any other mistake on the register, to have the register put right, and there was no time limit on their doing so. But, subject to that right, the title conferred by the statute put the registered proprietor in an unassailable position. Accordingly, the respondent could not take possession of the property until the register was rectified in his favour. To say that meanwhile the registered proprietor was in the position of a squatter, holding a precarious estate derived from his possession pursuant to Asher v Whitlock (1865) 1 QB 1, was inconsistent with the provisions of the statute.
(3) It was nonsense to suppose that the appellant now held both his title conferred by the land registration legislation and, alongside that estate, a fee simple derived from his possession. He was the registered proprietor with the statutory title and could not be regarded as having an additional title by possession. Nor could the appellant take up the position of a successful squatter who had barred the title of the dispossessed proprietor after the register was rectified. Once rectification took place he became a trespasser, starting afresh as a person in adverse possession of the land until the respondent took possession proceedings. The title conferred by statute upon the registered proprietor put him in a unique position whose weakness was defined, wholly, by the statutory provisions relating to alteration and rectification. That did not limit the courts’ powers to put right what had gone wrong, because the statute provided that the register could be rectified to correct a mistake or to bring the register up to date But until the register was altered, the registered proprietor was not a squatter, who just happened to be registered, with a squatter’s vulnerability to possession proceedings and a squatter’s power (until the LRA 2002 changed the law) to bar the title of someone with a cause of action against him or her.
(4) The ratio of the decision in Parshall v Hackney was that a registered proprietor could not be in adverse possession of land. The decision reflected the provisions of the legislation and the unique position of the registered proprietor, rather than being confined to its facts. Even if that was wrong and the decision in Parshall v Hackney did depend upon lawful possession, the appellant could not be allowed to plead his own fraud so as to escape from the principle in that case. To allow the appellant to retain the land would be to reward him for fraud and to give the message that fraud could be condoned after some years. To deny the appellant’s claim in adverse possession was a wholly proportionate response to his conduct and his father’s. The appellant had not acquired title to the property by adverse possession and there were no exceptional circumstances that justified not altering the register in the respondent’s favour.
Michael Paget (instructed by Direct Access) appeared for the appellant; Stephanie Tozer (instructed by Green & Olive Solicitors, of Hinckley) appeared for the respondent.
Eileen O’Grady, barrister
