Tag Archives: Title to Land

Solicitors’ application to Land Registry was negligent misstatement

What follows is a cautionary tale.

In Chief Land Registrar v Caffrey & Co [2016] clients sent their solicitors a Form DS1 Land Registry discharge purportedly signed on behalf of their bank to discharge a mortgage.

It was a forgery.

The clients told the solicitors that the bank was represented by another firm of solicitors, but that was untrue too.

The solicitors did not contact the bank or the so-called bank’s solicitors to verify the DS1 or that the “bank’s solicitors” were actually instructed on it. They submitted the Form DS1 to the Land Registry with a Form AP1 to apply to delete the mortgage.

The Land Registry asked for evidence that the person signing the DS1 had authority to do so on behalf of the bank.

The client supplied the solicitors with a purported power of attorney seemingly appointing four individuals, including the apparent signatory to the Form DS1, as the bank’s attorneys.

The solicitors sent a certified copy of the purported power to the Land Registry. The Land Registry acted on the application, the copy power and the Form DS1, and removed the mortgage from the property’s land register.

Later Santander UK plc lent money on the security of a charge on the property.

When the original Bank discovered that it’s mortgage had been removed, it applied to reinstate it to the register, but Santander objected. A Land Registry adjudicator decided that the original bank’s mortgage should be reinstated, but ranked it after Santander’s mortgage. The original bank then sought and obtained an indemnity for it’s loss from the Land Registry. The Land Registry then sued the solicitors to recoup their outlay under that indemnity.

The first basis of claim was negligence for having assumed a duty of care to the bank and then having breached it. The Land Registry claimed to be subrogated, by Land Registration Act 2002, s 103, Schedule 8, paragraph 10, to that claim of the bank against the solicitors.

But the High Court Master pointed out that the solicitor was acting for the borrowers in the discharge of the bank’s mortgage, and not for the bank, which had conflicting interests. The solicitors had been told that the bank had its own solicitors and so had no reason:
– to think that the bank was relying on it in any way,
– to disclaim any duty towards the bank or,
– to advise it to take its own advice.
Nor was the bank unsophisticated.

The solicitors were never asked to act on behalf of the bank, and never thought they were doing so. They thought that the bank was independently advised. The solicitors were acting for the borrowers, not the bank. The borrowers were not giving instructions to the solicitors on behalf of the bank, but on their own behalf.

The actual act which caused the loss was the act of the Land Registry in removing the charge, not the act of the solicitors in supplying the information to the Land Registry. Facilitating the causing of harm by another person was only grounds for negligence liability in exceptional cases e.g. where someone supplies a dangerous object to, or creates a dangerous situation for, someone else who is known to be irresponsible, or where someone’s job is to take reasonable care to prevent someone else’s actions.

“A solicitor asked to do something for his or her client and against the interests of another person is necessarily doing something capable of harming the other person. If it is done carelessly, it may harm that person even more. But that hardly militates for imposing a duty of care.

The solicitors were responsible for submitting the documents to the Land Registry without making checks. But that is what they were asked to do and their clients could have complained had they not done that. That contractual duty was undertaken to the clients alone.

“The act (of submitting the documents without first making checks) would have been easy to avoid, but at the price of not acting for the clients, or at any rate of greater expense to the clients. Moreover, the bank also has another remedy, i.e. against the [Land Registry].”

Registered land was known to property lawyers and to others, at that time, to be insufficiently secure against that kind of fraud. That was not the solicitors’ fault. The real question was how the law should allocate the risks of such fraudulent activity.

The Land Registry claimed to be subrogated to the rights of the bank. So the issue was to be determined as between the bank and the solicitors. The solicitors had not designed or run the system and it was not fair just or reasonable to make the solicitors responsible to the bank for the risk of fraud within an inherently risky Land Registration system. So the claim failed so far as it was based on negligence.

The Land Registry’s second basis for claim was negligent misstatement i.e. that by completing and/or submitting the application to the Land Registry and/or certifying a copy of the purported power of attorney and/or supplying it to the Registry, the solicitors “expressly or impliedly represented to the Land Registry that they had taken sufficient steps or measures and/or knew of sufficient facts to satisfy [themselves] that” the discharge form had been properly executed, solicitors had been instructed, the power of attorney was valid, the bank wished to discharge the charge, and that the property was no longer charged in favour of the bank.

The Land Registry said that the relationship between the solicitors and the Land Registry was such that the solicitors “knew or ought to have known that the Land Registry would rely upon” those representations in dealing with the application to discharge the bank’s charge, and so “the [solicitors] owed to the [Land Registry] a duty to take reasonable care to ensure that the [representations] were true.” The Land Registry said the representations were false, that it had relied on them and that it had thereby been caused loss.

Unlike the first negligence ground where the Land Registry claimed to be subrogated to the rights of the bank, and the question therefore arose as between the bank and the solicitors, here the issues arose directly between the Land Registry and the solicitors.

The Land Registry had professional staff who might be expected to have systems for checking matters themselves. They did not just blindly accept whatever the solicitors told them.

However the High Court Master was narrowly persuaded that, on the peculiar facts of this case, the solicitors had assumed a duty to take care in the representations which they had made to the Land Registry.

So the Master gave default judgment to the Land Registry, on the second cause of action, for damages to be assessed.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Dispensation for restrictive covenants futile: the dispenser had no power to dispense

There is no point negotiating a dispensation for restrictive covenants on land if the dispenser has no powers to dispense.

In the Upper Tribunal (Lands Chamber) case of Derreb Ltd v White & Ors Re The Huntsman [2015] the property was subject to the following covenant in a 1956 Conveyance:

“The property … shall not be used for any purpose other than as a Sports Ground or for the erection of detached houses for use as private residen[ces] only such buildings to be erected in such a position and in accordance with such plans and elevations including general layout and development plans as shall first be submitted to and approved …. by the Vendor’s surveyor …”

However Clause 2 of the 1956 Conveyance contained a power of release (“power of release”):

“… it shall be lawful for the Vendor (which expression shall be taken to include the estate owner or owners for the time being of property for the time being remaining subject to the trusts of the present settlement or any future re-settlement of the Cator Estate at Blackheath) … [within the current time period] to release any property which has already been sold from all or any of the stipulations or regulations to which it is now subject.”

Derreb relied on a deed dated 27th September 2013 (“the Deed of Release”) whereby the executors of the Vendor described in the 1956 Conveyance tried to release Derreb from the burden of that restriction. The respondents contended that the restriction had not been validly released.

The Tribunal cited the Supreme Court in Arnold v Britton & Others (2015). When interpreting a written contract the court had to infer “what a reasonable person having all the background knowledge which would have been available to the parties would have understood them … to mean” by using that language in the context. The court could only take into account factual circumstances which existed at the time that the contract was made, and which were known or reasonably available to both the parties. The Court must ascertain what a reasonable person, with all the background knowledge then reasonably available to the parties would have understood the parties to have meant. If there are two possible interpretations, the court was entitled favour the interpretation which was consistent with business commonsense.

The key words were those which defined “the Vendor” in the restriction in the 1956 Conveyance. It was an inclusive definition, and not an exhaustive one. In this case, anything falling within the natural meaning of the term “Vendor” in the relevant context could also fall within that definition.

The words “for the time being” in the power of release pointed to the future. The Tribunal interpreted “for the time being” to mean “from time to time”. However the many plot owners deriving title from the Vendor clearly could not exercise the power of release.

“Vendor” did not include the personal representatives who had tried to give the Deed of Release. The express words of the power of release made it clear that the parties to the 1956 Conveyance only intended the power of release to be exerciseable for as long as the trusts of the then current settlement of the Cator Estate (or any successor re-settlement of them) remained in existence. That purpose had ceased to be effective when the Trust ended.

So the restriction remained in place and enforceable by the respondents despite the personal representatives entering into the Deed of Release.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Time limits in negligence cases: appellants had insufficient actual or constructive knowledge to trigger limitation period

In a claim for damages for negligence the right to sue accrues at the date that damage occurs, even if no-one knows about the damage at the time.

To stop the limitation period for suing running prematurely section 14A of the Limitation Act 1980 disapplies the more general time limit in section 2 of the Limitation Act 1980 and provides for two alternative periods of limitation – 6 years from the date on which the right to sue accrued or 3 years from “the starting date” which is defined in subsection (5).

Section 14A only applies to claims in negligence and has no application to claims for nuisance, misrepresentation. or breach of statutory duty.

Section 14A (5) of the Limitation Act 1980 requires that the starting date is the earliest date on which the claimant had both:

1. the knowledge required for bringing an action for damages in respect of the relevant damage and

2. the knowledge required of their right to bring such an action.

Section 14A(6)(a) then says that “the knowledge required for bringing an action for damages in respect of the relevant damage” includes knowledge of “the material facts about the damage in respect of which damages are claimed”.

Section 14A(7) says “the material facts about the damage” are such facts about the damage as would lead a reasonable victim of such damage to think it serious enough to justify his starting proceedings for damages against a defendant who did not dispute liability and could satisfy a judgment.

In the Court of Appeal case of Blakemores LDP v Scott & Anor [2015] the trial judge had thought that the relevant “damage” for the purposes of section 14A(5)-(7) was the respondent law firm’s failure, in April 2009, to file an objection to the registration of two Land Registry titles affecting a village before the procedural deadline.

The appellants, Ms Carole Scott (“Ms Scott”), Mr Eric Walker (“Mr Walker”) and Mr Christopher Balchin, were villagers. Ms Scott alone knew that the law firm had been negligent in failing to file the objection, but even Ms Scott did not know the consequences of that failure.

So an issue was whether merely knowing that the firm had been negligent in not advising that the objection should be filed before the deadline was enough to lead a reasonable person to consider it sufficiently serious to justify his instituting proceedings for damages against the law firm, assuming it to be solvent and unwilling to dispute liability.

The court said knowing the firm’s failure to file the objection before the deadline was insufficient knowledge of a “material fact about the damage” to start time running for the purposes of sections 14A(6)(a) and (7).

The appellants needed to know that the effect of the failure to file the objection was to allow the Land Registry Adjudicator to make a discretionary decision against them in relation to a title.

There were two reasons why the material fact about the damage could not just be the negligent advice or the failure to file the objection before the deadline:

1. the appellants were not experts in land registration or manorial law. They could not be taken to have known the arcane consequences of a failure to file an objection in time without being told what they were.

The consequences of the non-filing of the objection by the deadline were “a fact only ascertainable with the help of expert advice” but the last part of section 14A(10) of the Limitation Act 1980 did not mean that they should “be taken … to have [“extended constructive”] knowledge of [that] fact” because Ms Scott and Mr Walker had in April 2009 and before, taken reasonable steps to obtain expert legal advice.

2. The relevant material facts about the damage have to be such as would lead a reasonable person to consider it sufficiently serious to justify his instituting proceedings for damages against a solvent firm, not disputing liability. On the evidence Ms Scott may not have known anything that would have led a reasonable person to sue:

– she had no reason to think she would be worse off. She understood that the costs were to be covered by the law firm and not reclaimed from her

– she had reason to think the case was going to be successful, and

– most crucially she seemed unaware that the firm’s negligence had turned a clear right to have the title closed into a matter for the discretion of the adjudicator.

So the starting date for limitation purposes was not April 2009 when the failure to object occurred. A trial of the facts would be needed before that date could be properly decided.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Banksy was the Landlord’s to pass on

What term is to be implied into a lease as to the ownership of a valuable part of a let property which is justifiably removed from the property by the tenant, in accordance with the tenant’s repairing obligation, and so becomes a chattel?

Usually the term, which is to be implied, is that the chattel becomes the property of the landlord. For:

1. the default position is that every part of the property belongs to the landlord. The tenant only has a tenancy for a period of time. If the tenant thinks differently it is for the tenant to show that it is right to imply into the lease a term which leads to a contrary conclusion;

2. the mere fact that the tenant is carrying out its repairing obligation does not imply that it acquires ownership of the chattel which results from part of the property being removed;

3. even if a term could be implied that (1) waste or (2) chattels with just scrap or salvage value belong to the tenant, it did not mean that it should be implied with respect to the ownership of a chattel with a substantial value. Such a term would not be necessary, would not go without saying and would not be one that would be implied as something that might have been raised by an “officious bystander” when the terms of the lease were originally hammered out;

4. it makes no difference that the value is attributable to the spontaneous actions of a third party. Whatever solution is adopted, one party gets a windfall. Who has the better right to the windfall? Usually it will be the landlord.

In The Creative Foundation v Dreamland Leisure Ltd & Others [2015] a Mural attributed to Banksy was removed by the First Defendant (“Dreamland”) from a building at Folkestone (“the Building”). Then the wall was made good. Dreamland was the tenant of the Building.

This was done without the knowledge or permission of Stonefield Estates Ltd (“the Landlord”). The Landlord had assigned to the Claimant (“the Foundation”) its ownership of the Mural and its rights to sue Dreamland. The claim was for the return of that section of wall.

The High Court said the problem arose from the public knowledge that a Banksy had been on the site and would remain the same whether the Banksy was removed by overpainting, cleaning or removal and reinstatement of the wall. The shrine would remain a shrine, whichever method was used. So the removal of the wall was not in any event justified.

Even if it had been justified the wall would still belong to the Foundation as assignee of the Landlord’s ownership of it – under points 1-4 listed above.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Third party’s use of land for unrelated purpose did not support squatter claim

The grant of a licence to make a particular use of land is an indication that the licensor regards himself as in control of the land, and therefore indicates that he has an intention to possess it.

The parking of a vehicle in a restricted space can amount to an act of possession if
it demonstates an intention to control the space.

Acts of possession done on parts of the land to which a squatter’s title is claimed may be evidence of possession of the whole. The issue is whether there is such a ‘common character of locality’ between the different parts as to raise a reasonable inference that the disputed land belonged to the person who has possessed it in the same way as the other parts did.

In the Upper Tribunal (Tax and Chancery Chamber) case of Re Land adjoining 19 Bridge End, Billington, Clitheroe [2015] the claimant had licensed a third party to park a vehicle on hardstanding outside a garage and to the west of it (“the Western Land”) -though insufficiency of space meant any vehicle also having to encroach onto land to the front of that hard standing.

The tribunal said:

– the garage was enclosed whereas the Western Land was open land; and,

– the boundaries of the garage (its walls) were clear, whereas the boundaries of the Western Land were not obviously delineated.

The claimant’s possession of the garage for storage purposes raised no reasonable inference that the claimant was also in possession of the hard standing, still less of the whole of the Western Land. That inference was ruled out because the boundaries of the Western Land were not “obviously defined”.

Was the hard standing to the west of the garage so inherently linked to the garage itself as to raise the reasonable inference that the claimant was also in possession of that hard standing?

No, because:

(a) The claimant did not use the Western Land for storage. Instead it was used by a third party licensee for the purpose of parking a motor vehicle in connection with that licensee’s occupation of his own neighbouring house;

(b) That use for parking was not in any way related to the use of the garage, but rather to the use of that licensee’s own house, some distance from the garage; and

(c) the claimant’s possession of the garage for the purposes of storage alone could not give rise to any reasonable inference that the claimant was also in possession of the Western Land, which was used for an entirely different purpose.

This blog has been posted out of general interest. It does not replace the need to get bespoke legal advice in individual cases.

Land Registry Compensation applied despite rightful owner’s occupation

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 [2015] .

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.

Court ordered removal of Land Registry Caution in advance of full hearing

The effect of registering a caution against the first registration of unregistered property has tended, in practice, to be that it cannot be sold.

Furthermore the process to challenge the registration of the caution takes a considerable length of time.

If an application is made to remove the caution, the court must consider whether the respondents have a seriously arguable case for obtaining ownership of, or a proprietary interest in, that property, when the case comes to trial.

The court must also consider whether either or both parties would be adequately compensated by an award of damages for:

– the loss of the property or that proprietary interest if the caution is wrongly ordered to be removed; or

– the loss of a selling opportunity, perhaps in a falling market, if the caution is wrongly ordered to remain

in advance of a full trial of the issues.

If neither can be adequately compensated in that way, the court must decide “where the balance of convenience lies”.

In the High Court case of Williams v Seals & Ors [2014] the respondents claimed an interest in some Derbyshire farm property under the Inheritance (Provision for Family and Dependents) Act 1975 and by proprietary estoppel. They lodged a caution against first registration to prevent the property from being sold free of their claims.

The claimant was the sole executrix and beneficiary under a Will bequeathing the property and now applied to get the caution removed.

The respondents’ statement of means in support of their claim under the 1975 Act showed that they had very limited means. Mr Seals stated in his witness statement that he had no assets of any real value.

The claimant had not put any evidence before the court of her financial resources, but the respondents’ evidence indicated their belief that she was independently wealthy and the sole freehold owner of two properties in Ashbourne which were free of mortgage.

The fact that respondents were asking that the claimant’s property remain subject to the caution pending the full court hearing of these issues created an obvious difficulty where (as here) the owner was proposing an imminent sale of the property. Since in the meantime the respondents had not given the claimant any undertaking to pay damages or afford other protection in the event that the caution was ordered to be cancelled at the full hearing but had frustrated a sale in the meantime.

If the caution were not cancelled and the farm and other land could not be sold, then pending a full trial of the action the risks to the estate were threefold:

1. loss of interest on the sale price in the meantime;

2. expenditure to maintain the property and

3. the possibility of a decline in market value.

Were the respondents to fail in their claims, there was no evidence to suggest that the respondents would be in a position to meet a claim to compensate the claimant estate for any of those losses which it might suffer as a result of the caution remaining in place. On the other hand, it appeared likely that the claimant would be able to compensate the respondents for any loss resulting from the cancellation of the caution.

This conclusion was a major factor in leading the court to order the caution to be cancelled and so permit the sale of the farm to proceed.

This blog as been posted out of general interest. It does not replace the need to get bespoke legal advice in indvidual cases.

Estoppel based on promise of permanent home

In the Court of Appeal case of Southwell v Blackburn [2014] the Appellant and the Respondent had set up home together in Droitwich, in 2002. The Respondent, a divorcee with 2 daughters, had given up a secure tenancy of a property in Manchester, which she had spent roughly £15,000 on, based on his representations that she would have a long term home and the same security as a wife. The Appellant funded the purchase of the house with the equity from his old house and a repayment mortgage in his sole name which he alone repaid.

When the relationship broke down 10 years later the Respondent unsuccessfully claimed that the Appellant held the Droitwich house under a constructive trust for the benefit of both of them in equal shares. But the judge at first instance found she had an enforceable equity, in the Droitwich house, by operation of proprietary estoppel to the tune of £28,500.

It’s notable that the representations he made to her were specific as to the nature and extent of the “long term commitment” he gave her “to provide her with a secure home” but were not specific as to ownership of their new home.

The judge at first instance found that he had led the Respondent to believe she would have an entitlement which would, on any breakdown of the relationship, be recognised in the same way as the contribution of a wife to the assets of a marriage would be recogised on a marital breakdown. Without that she would not have given up her secure tenancy in Manchester.

His promise had not been of a half share in the house, but he had given her a promise of security, which he had failed to fulfil, and it would be unconscionable for the Appellant not to try to put her back in much the same position as she was before she gave up her own house.

The case is also significant in that much the larger part of her award was quantified not on what she spent on the Droitwich house but on what she had spent on the Manchester house, they not cohabited in, and that she had given up.

On top of her spending on her old home that she had given up, she had spent £4,000 – £5,000 as her contribution to setting up the new house with the Appellant. The Respondent had been relieved of her liability to pay rent in Manchester and had lived rent-free in Droitwich but her practical support had assisted him to increase his earnings by at least one major career promotion. The value of the new house had increased from £240,000 to £320,000. Allowing for inflation £20,000 was adjusted to the £28,500 she was awarded. That figure reflected the prejudice she had been subjected to by the Appellant not fulfilling his promise and should allow her to get back to her 2002 position.

The detriment to the Respondent had not been that she embarked upon a relationship with the Appellant but that she had abandoned her secure home in which she had invested, and she had then invested what little else she had in the Droitwich home even though she had no legal title to it.

It was that detrimental reliance which made the Appellant’s promise irrevocable and led to the conclusion that he could not conscionably go back on the assurance about her having a long term secure home.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Rectification of Land Register cost priority of derivative lease

The principle of the indefeasibility of the Land Register may be more qualified than had been thought as a result of the following Court of Appeal decision.

In Gold Harp Properties Ltd v Macleod & Others [2014] a freeholder wanted to see their property’s roof space developed so tried to forfeit the two existing leases of that undeveloped roof space by peaceable re-entry. The freeholder succeeded in getting the leases removed from the register and the roof space was relet. The new lease went through several assignments. From the available evidence, the new lease was neither granted or changed hands for valuable consideration appearing to move between the parties who were companies owned and controlled by the same family whose son owned the freehold.

The two tenants of the “forfeited” leases (the respondents) were later found, by a court, to have tendered the rent arrears in time and it was ruled that peaceable re entry had not occurred so the court ordered their leases to be restored to the Land Register as though they had never been forfeited.

The effect of the court’s order was that:

– The new lease remained in place and registered on the title but as a lease reversionary to the restored leases with those leases noted against its title.

– So, the ultimate tenant by assignment of the new lease (Gold Harp) became the new immediate landlord of the restored leases.

– The respondents, and their successors in title, would enjoy the right to occupy the roof space under their respective restored leases in priority to Gold Harp. It’s interest being reversionary only was now practically valueless save in the unlikely event of a future termination of the respondents’ leases before their terms expired.

The appeal here was against that part of the order.

As the new leasehold had neither been granted nor changed hands for valuable consideration passing between any parties the basic rule of Section 28 Land Registration Act 2002 (“2002 Act”) applied and the priority of the respondents’ interests derived out of the freehold was not affected by any of those dispositions.

At first sight the omens for the Gold Harp were good because Paragraph 8 of Schedule 4 of the 2002 Act headed “Rectification and derivative interests” says:

“The powers under this Schedule to alter the register, so far as relating to rectification, extend to changing for the future the priority of any interest affecting the registered estate or charge concerned.”

Gold Harp said the words “for the future” made it clear that, rectification of the Register cannot operate retrospectively to remove the priority that the new lease had acquired over the restored leases due to their absence from the register at the time the new lease was registered.

To give rectification retrospective effect was to undermine the basic rule that the state of the Land Register, at any given time, was conclusive and could be relied on and was indefeasible.

Consistently with this most of the texts took the view that rectification only operated in respect of future dealings and left any derivative interests created in the meantime alone.

The Court of Appeal said that the principle of the indefeasibility of the register had always had its qualifications.

Schedule 4 was concerned with “correcting” mistakes in the Register, and the power to do so extended to correcting the consequences of such mistakes.

That power was in some circumstances a duty.

Gold Harp’s interpretation would have meant that, wherever derivative interests have been created during the period of mistaken de-registration, that correction would be incomplete, and, in certain cases, such as this one, worthless.

In fact Paragraph 8 was entirely consistent with the opposing interpretation made by the court. Paragraph 8 permits (for the future) the “changing the priority” of an interest. The lead Appeal Judge said

“What an interest having priority means is that the owner can exercise the rights which he enjoys by virtue of that interest to the exclusion of any inconsistent rights of the owner of the competing interest. The concept of priority thus bites at the moment that those rights are sought to be enjoyed. Once that is appreciated the effect of the words “for the future” seems to me straightforward. They mean that the beneficiary of the change in priority – that is, the person whose interest has been restored to the Register – can exercise his rights as owner of that interest, to the exclusion of the rights of the owner of the competing interest, as from the moment that the order is made, but that he cannot be treated as having been entitled to do so up to that point.”

The order of the County Court Judge, restoring the respondents’ two leases in priority to Gold Harp’s new lease, meant that from then on the respondents were entitled to exercise their rights as leaseholders – mainly, to occupy the roof space – to the exclusion of Gold Harp. But until then they had no such right. For example, even if there had been any occupation by Gold Harp or its predecessors up to that point in time, the respondents could not have claimed “mesne profits” (compensation equivalent to rent) from them in respect of that occupation up to that date.

Schedule 4 openly appreciated that the rectification could prejudice the interests of third parties who had in good faith relied on the Land Register as not disclosing any previous land interests. However Paragraphs 2 and 3 of Schedule 4 (and their equivalents in the case of rectification by the Registrar), gave a special protection to a proprietor in possession, and allowed a fair balance to be struck between the competing interests in any particular case. Furthermore, Schedule 8 of the 2002 Act gave the loser the right to seek an indemnity from the public purse.

Nor were there any exceptional circumstances which would justify the court departing from the presumption in favour of rectification that would otherwise apply under paragraph 3 (3) of Schedule 4 of the 2002 Act. Not least with it being the case that Gold Harp was neither independent of the relevant family member who had devised the corporate arrangements for the freehold, and for taking over the roof space, nor had given any value for it’s interest in the new lease.

The decision construes the statute in an expansive and common sense way to bring about a just solution, safe in the knowledge that a disappointed party can, in an appropriate case, get compensation under the Land Registration indemnity provisions just mentioned.

This blog has been posted out of general interest. It does not remove the need to get bespoke legal advice in individual cases.

Residential squatting being a crime did not prevent title by adverse possession

Section 144(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012, (“LASPOA”) criminalises trespass by “living in” a residential building. Did this prevent time running for applications for registration of title by adverse possession? That’s to say the registration of so-called squatter’s title, to registered land? The Chief Land Registrar decided that it did.

In the High Court Judicial Review case of Best v The Chief Land Registrar & Anor [2014] Mr Best had taken occupation of the then empty and vandalised property at 35 Church Road, Newbury Park in 1997.

The High Court ruled that Parliament could only have enacted s144 as it did on the assumption that adverse possession was not affected by whether the trespassory acts of possession was criminal or merely a trespass solely actionable in the civil courts.

So Parliament must have thought that criminalising trespass would have no effect on the operation of adverse possession for registered, and indeed unregistered land.

Had Parliament thought otherwise, it would surely have given some thought to the consequences and made some specific provision for them.

Parliament should be taken to have thought that the mere fact that the adverse possession was based on criminal trespass did not and should not preclude a successful claim to adverse possession especially in view of the public policy advantages of adverse possession at common law in terms of ensuring that land remained in economic use.

The fact that the trespass was a crime was not of itself a sufficient circumstance to prevent adverse possession from being an adequate basis for extinguishing or transferring the former owner’s title to the squatter.

Accordingly, the Chief Land Registrar’s decision was founded on an error of law as to the effect of Section 144 of LASPOA on adverse possession.

The decision in this case seems to conflict in principle with the rule against getting a prescriptive vehicular rights of way across common land in circumstances where driving across common land is illegal.

This blog has been posted as a matter of general interest. It does not remove the need to get bespoke legal advice in individual cases.