Is the proprietor of a forged registered mortgage entitled to an indemnity payment under Schedule 8 to the Land Registration Act 2002 (“LRA 2002”) where the registered proprietor of the property was in actual occupation of it at the date of the mortgage?
That was the issue in the Court of Appeal case of Swift 1st Ltd v The Chief Land Registrar  .
The registered proprietor of the property had the right to seek rectification (now alteration) of the register on the ground that the mortgage was forged.
This was an “overriding interest” by virtue of their occupation and therefore took precedence over the registration of the forged mortgage at the Land Registry.
Paragraph 1(2)(b) of Schedule 8 of LRA 2002 applied where the overriding interest enforced against the registered title consists of a right to seek alteration of the Land Register.
However the fact remained that the registered proprietor of the mortgage would have suffered loss because the Land Register would have been altered to remove the mortgage as an incumbrance against the property.
The court said the fact the mortgage had been registered in the first place had conferred substantive rights on the proprietor of the mortgage although it had been forged.
So it’s loss was to be considered prejudicial despite the fact that the mortgage had of itself been void for forgery.
The court therefore supported the lender’s claim for compensation against the Land Registry.
This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.