Rectification of Title Register: mistake and rectification

An entry on a registered title cannot retroactively become a mistake, the High Court has confirmed. In this complex case[1], the Court considered the issue of mistake, rectification, and entries on the register following a court order. The Court heard two actions relating to the same property together.

What led to the claim?
The facts and chronology of the case are detailed, but in summary - the registered owner (JA) of a London property died in 1996. The claimant (TA) was JA’s son, and was granted Letters of Administration in respect of the estate. However, he did not register himself as the registered proprietor of the property. The property remained vacant for some years and was in need of major building works.

A third party (T) brought proceedings based on two purported loan agreements in respect of the property which he claimed was security for a £11,000 loan to the late JA which was unpaid. T asked the court to make a vesting order, or alternatively payment of the sum of £11,000. In the event, the court made a vesting order in July 2007 in TA’s absence (TA had gone to live in New Zealand at the time and failed to leave a forwarding address for mail sent to the property).

T was then registered as the registered proprietor, and soon afterwards he mortgaged the property to Barclays Bank. Later that year, TA discovered T was carrying out renovations at the property; found out about the proceedings; and asked the court to set aside the vesting order on the basis that the loan agreements were forgeries.

He was successful, and the July 2007 Vesting Order was set aside, but without prejudice to the rights of Barclays and its registered Legal Charge. HMLR then reinstated TA (as administrator of JA’s estate) as the registered proprietor. T died in mid-2013.

In 2016, TA started a new claim against Barclays and the Chief Land Registrar, arguing that the registration of both the vesting order and the Bank’s legal charge were mistakes on the Registered Title that should be corrected by rectification.

Both the claims were heard together. For a full account of the registration and conveyancing history of the property, it’s worth reading the judgment in full.

What did the High Court decide?
It was not disputed that the loan documents were forgeries. However, Barclays and the Chief Land Registrar took the view that the registration of the vesting order was not a mistake as a matter of law, so there was no proper basis for rectifying the Register by cancelling the Bank’s charge either.

In the words of the judge, at the heart of the case “is an important point of principle: whether a court order said to have been obtained by reference to forged documents and given effect to by an entry on the register at HMLR results in a ‘mistake’ for the purposes of the Land Registration Act 2002 … such that the Court has power to alter the register for the purpose of correcting that mistake”.

The Court considered various lines of authority, and ruled that only the vesting order of the Court took effect as a registrable disposition. And as a Court order, this was valid and effective unless or until it had been set aside - and the Registrar was bound to give effect under the 2002 Act. This meant that the vesting order entitled T to be registered as proprietor as per the court order; and while he was the registered proprietor, he was entitled to exercise ‘owner’s powers’ under s24 of the 2002 Act - including charging the Property to the Bank.

By the same reasoning (ie. T’s registration as the proprietor of the Property was not a mistake), then the registration of the Bank’s charge could not be a mistake either. The July 2007 Order was good on its face, and the registration of T as proprietor on the basis of that Order was not a mistake at the time, or at all.

[1] Antoine (Administrator of the estate of Joseph Antoine deceased) v Barclays Bank plc and others [2018] EWHC 395 (Ch)

 

 

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