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England and Wales High Court (Chancery Division) Decisions |
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You are here: BAILII >> Databases >> England and Wales High Court (Chancery Division) Decisions >> Barclays Bank Plc v Guy [2008] EWHC 893 (Ch) (16 January 2008) URL: http://www.bailii.org/ew/cases/EWHC/Ch/2008/893.html Cite as: [2008] EWHC 893 (Ch) |
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(Chancery Division)
Strand London WC2a 2LL |
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B e f o r e :
____________________
BARCLAYS BANK PLC |
CLAIMANT |
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-v- |
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MR TREVOR GUY |
DEFENDANT |
____________________
1st Floor, Paddington House
New Road, Kidderminster DY10 1AL
(Official Court Reporters to the Court)
The Defendant appeared in person
____________________
Crown Copyright ©
Paragraph (h ) is relied on by Mr. Lloyd. But in order for the paragraph to be applicable some "error or omission in the register" or some "entry made under a mistake" must be shown. The entry in the charges register of the building society's legal charge was not an error and was not made under a mistake. The legal charge was executed by the Hammonds, who were at the time transferees under a transfer executed by Mrs. Steed as attorney for the registered proprietor. The voidable transfer had not been set aside. The registration of the Hammonds as proprietors took place at the same time as the registration of the legal charge. Neither registration was an error. Neither entry was made under a mistake. So the case for rectification cannot be brought under paragraph (h ).
"Example 1.2. R1 is the proprietor of a registered freehold estate in land. R2 forges R1's signature on a form of transfer and is registered as the new proprietor of the estate. R2 then grants a legal mortgage charge over the land to M1, which is duly registered. R1 applies for rectification so that R2's may be removed from the proprietorship register and his own name replaced, and the charge to M1 deleted from the charges register.
The registrar will rectify the proprietorship register against R2, as in Example 1.1 above. He will not rectify the charges register against M1. R1 will hold the freehold estate subject to M1's charge.
The legal estate is "deemed to be vested" in R2 when he was registered as its proprietor, even though it would not otherwise have vested in him owing to invalidity of the purported disposition from R1 to R2. No special significance attaches to the use of the expression "deemed to be vested", which in this context simply means that the estate is actually vested in R2. The consequence is that R2 had full owner's powers of disposition over the estate, including the power to grant the mortgage charge to M1, since he was the registered proprietor. His powers of disposition remained unqualified so long as his registration as proprietor remained effective. It cannot be said therefore that the disposition by way of legal mortgage to M1 was in any way invalid, nor that the registration of that mortgage was a mistake. Accordingly, R1 has no right to have the register rectified as against M1. R1 could have prevented this result by applying to the registrar to enter a restriction on R2's powers of disposition as soon as he discovered that a forgery had taken place. R2 could be restricted from making a registered disposition of the estate without the consent of the court or registrar.
This result is different from what would have been happened with unregistered conveyances, where the title of R2 and M1 would have depended on the rule nemo dat quod non habet. It also differs from what might have been the result under the rectification provisions of the former Land Registration Act 1925. Under that Act, there was equivocal authority that rectification would have been ordered against a third party transferee or chargee of an registered estate, where the original disposition which transferred the estate was void. The power to rectify would exist, though the court, in its discretion, might refuse to exercise it. One of the reasons for this result was the courts' wish to achieve by rectification the same result as would have followed according to the principles of unregistered conveyancing.
It is submitted, however, that this approach is not justifiable under the 2002 Act. First, it was the explicit policy of HM Land Registry and the Law Commission in the consultation paper that preceded 2002 Act that, in the absence of some error on the register, the principles of unregistered land should not determine whether the register should be rectified. Any other result would undermine the general aim of the Act that the register should indicate accurately and comprehensively the state of the registered proprietor's title. A registered proprietor cannot be deemed to lack powers of disposition which the fact of registration indicates that he actually has. Secondly, the 2002 Act has narrowed the grounds of rectification provided in the 1925 Act so that it no longer allows rectification where the proprietor of a legal estate would not have been the estate owner if the land had been unregistered. The applicant for rectification must prove some error in registration."
"It is a fundamental principle of registered conveyancing that it is registration that vests the legal estate in the registered proprietor (cf. LRA 1925, s 69(1)). In accordance with this principle, the LRA 2002 provides that if on the entry of a person in the register as the proprietor of the legal estate, the legal estate would not otherwise be vested in that person, the legal estate will be deemed to be vested in him as a result of the registration (LRA 2002, s 58(1)). What this means is that the legal estate will vest in a person even if he is registered as proprietor on the basis of a forged transfer – which is itself a nullity (See (2001) Law Com No 271, para 9.4)."
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"The judge dealt very shortly with the ultra vires point. He said:
"the transfer on its face was a perfectly regular sale and as against third parties taking a legal estate for value and in good faith it was within the ostensible authority of Mrs. Steed and cannot now be repudiated against such third parties. Nothing short of non est factum rendering the transfer void, or forgery which has the same legal effect but is not now alleged, will suffice to defeat the building society's innocent reliance upon the transfer."
Save that I would not describe Mrs. Steed's authority to execute the transfer as "ostensible" authority, I am in complete and respectful agreement with the judge."
"...the interest holder must still be in actual occupation of the land within the normal of that term before the disponee's actual knowledge becomes an issue. This is not the doctrine of notice and the right binds, if at all, as an overriding interest and for no other reason. So, if the interest holder is not in actual occupation, then the fact that the disponee knows of the right is irrelevant. It is crucial to grasp this if the law of registered conveyancing is not to be undone by a secret re-introduction of the law of notice." (emphasis in the original)
"As a general principle, the doctrine of notice, which still has a residual role in relation to the priority of certain interests in registered land, has no application whatever in determining the priority of interests in registered land. Whether or not a disponee of an interest in registered land is bound by a prior interest is determined by the principles set out above. Under those rules, subject to what is said below, issues as to whether that disponee had knowledge or notice of a prior interest, or whether he or she acted in good faith, are irrelevant