REF/2014/0645

 

PROPERTY CHAMBER, LAND REGISTRATION DIVISION

FIRST-TIER TRIBUNAL

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

 

BETWEEN

CYRIL BAKER PROPERTIES LIMITED

 

APPLICANT

 

and

 

TYLER PROPERTIES LIMITED

 

RESPONDENT

 

 

Property Address: Land on the west side of Tattershall Road, Boston

Title Number: LL160410

 

Before: Judge Michell

 

Sitting at: Peterborough Magistrates Court

On: 8 ^th December 2016

Followed by written submissions received on 10 ^th February 2016

 

 

Applicant Representation: Mr Jonathan Hardy, director

Respondent Representation: Ms Zoe Gibbon, counsel, instructed by Bridge McFarland

 

___________________________________________________________________________­

 

DECISION

___________________________________________________________________________

 

Alteration of the register - Land Registration Act 2002 Schedule 4 paragraph 5 - Sale pursuant to an order for sale obtained following default judgment - default judgment set aside but order for sale not set aside or appealed

 

 

1. Cyril Baker Properties Ltd ("CBP")has made an application to HM Land Registry to alter the register of title number LL160410, being the title of land on the west side of Tattershall Road, Boston in Lincolnshire. The alteration sought is the removal of Tyler Properties Ltd ("TPL") as registered proprietor and the reinstatement of CBP. as registered proprietor. The alteration would prejudicially affect the title of the registered proprietor and so is that type of alteration referred to as "rectification" within Schedule 4 to the Land Registration Act 2002.

 

2. On September 2011 Rushworth and Partners Ltd. ("RPL") issued proceedings in the County Court against CBP claiming judgment for an amount of unpaid accountancy fees for which it had issued an invoice. The proceedings were served on the same address as that of RPL, that address having been the registered office of CBP. A different address had been registered at Companies House in June 2010 but there is a dispute between the parties as to whether or not the registration had been valid and effective to change the address of the registered office. On 23 ^rd September 2011 RPL entered a default judgment against CBP. On 2 ^nd February 2012 RPL obtained a charging order on CBP's interest in land registered under title number LL160410 and being land on the west side of Tattershall Road, Boston. The address given for CBP in the charging order proceedings was what was said to be its registered office, namely the office of RPL. On 29 ^th July 2013 District Judge Cooper sitting in the Boston County Court made an order that the property be sold without further reference to the court at a price not less than £4,000 and that RPL have conduct of the sale. RPL say that it produced valuation evidence to the learned District Judge valuing the land at between £4,000 and £7,000. The order contained a term made pursuant to section 90 of the Law of Property Act 1925 vesting in RPL to enable it to carry out the sale, a term in the property of the 3000 years.

 

3. On 21 ^st November 2013 CBP made an application to set aside the default judgment. It disputed that the claimed fees were due and asserted that it had not been properly served with the proceedings. The judgment was set aside by an order of District Judge Hudson made on 20 ^th December 2013 at a hearing at which RPL did not appear and was not represented. The order also set aside the interim charging order dated 13 ^th October 2013 but made no reference to any charging order dated 2 ^nd February 2012 or to the order for sale

 

4. On 31 ^st January 2014 RPL executed a transfer in form TR2, transferring the property to TPL. The application to register the transfer was made by AP1 dated 3 ^rd March 2014 and the transfer was registered on 5 ^th March 2014.

 

5. The director of TPL, Mr Tyler gave evidence about his purchase of the property. It was the first piece of land he had ever bought. He was working at the time for RPL. He purchased the property he said with £2,000 in cash and £2,000 as a loan from RPL. Mr Tyler said that he did not learn about the land being for sale from Mr Rushworth but happened to see it advertised. Although it was advertised for sale for £5,000, he said that he decided to try an offer of £4,000. He said that he did not know who the vendor of the property was until some time after the estate agents, Poyntons, told him that his offer had been accepted. He said that he did not have £4,000 when he made the offer but intended to obtain a bank loan. He said he was refused a loan by Barclays Bank and HSBC and that he then asked Mr Rushworth if he would lend him £2,000 towards the purchase of a piece of land. He said that he did not tell Mr Rushworth the address of the piece of land and that he did not know at this time that RPL or Mr Rushworth was the vendor. He said that it was only after Mr Rushworth had agreed to loan him the money and the terms of the loan had been agreed, namely that it was to be repaid by 31 ^st January 2015 with interest of 5 per cent, that he told Mr Rushworth where the land was and Mr Rushworth told him RPL was the vendor. Mr Tyler said that he did the conveyancing himself, after Mr Rushworth told him he could and that it was Mr Rushworth who printed out and completed the transfer form.

 

6. Mr Rushworth in his evidence said that he knew it was Mr Tyler or his company that had made the offer for the land before Mr Tyler asked him for a loan and that when he agreed the loan he knew it was for the property. Mrs Rushworth said she did not have any dealings directly with Mr Tyler about the purchase of the land, notwithstanding that he was working for her at the time. She said it was her husband who told her Mr Tyler had made an offer of £4,000 to buy the land and that Mr Tyler would pay £2,000 and that the remaining £2,000 would be left outstanding as a loan, with £1,000 to be paid after one year and the final £1,000 at the end of the following year.

 

7. Against that background it is not surprising that CBP has expressed concerns that it has lost land as a result of proceedings which did not come to its attention until after the land was sold; that it has been acquired by an associate of RPL and that the associate may be in substance a nominee for RPL. CBP states that the land was sold at a significant undervalue. CBP paid £25,000 for the land Mr Rushworth's evidence was that the price paid BY CBP reflected the value of the hope of getting planning permission to develop the land and that by the time of the sale to TPL it was clear that planning permission would not be granted because of the provisions of a 10 year flood prevention plan for the town of Boston. CBP has produced no evidence as to the value of the land at the date of sale.

 

8. RPL's case is that it was not aware of the application to set aside the default judgment until 15 ^th May 2014 because it had changed its address from the address given at the time of issue of the proceedings claiming payment of the accountancy fees. On 19 ^th May 2014 RPL made an application to set aside the order of 20 ^th December 2013. District Judge Toombs then on 29 ^th May 2014 made an order that CBP file and serve a Defence to RPL's claim. CBP did not file a Defence but Mr Jonathan Hardy, a director of CBP made a witness statement dated 10 ^th June 2014 stating that CBP's registered office was changed on 17 ^th November 2010 and that CBP had not received any of the case papers.

 

9. The case came before District Judge Hudson on 29 ^th August 2014. The District Judge made an order that there be no order on the basis that the invoice the subject of the dispute had been discharged out of the proceeds of sale. Though it was asserted on behalf of TPL before me that District Judge Hudson found that the debt in respect of the accountancy fees was proved, on my reading of the transcript of the proceedings before him, the learned District Judge appears to have made no such finding. It is also true to say that the learned District Judge did not make a finding that the accountancy fees were not properly due and recoverable at the date of issue of the proceedings. What the learned District Judge said (as appearing at pages 48 and 49 of the transcript) was that he did not have enough evidence to make a declaration as to whether or not the debt had been due and that as the debt had been paid out of the proceeds of sale, he had nothing to decide. No application to set aside the order for sale was before District Judge Hudson on this occasion. This appears from page 47 of the transcript where the learned District Judge said this

"Well at the moment I have set that judgment aside"(i.e the default judgment of 23 ^rd September 2011) "No one has gone behind that and no-one has appealed that order, so there is no judgment. What has happened is that the order for sale of the Boston land has been utilised, that judgment has been utilised to perfect the order that sale and the only argument is in December 2013, when I set the judgment aside, did Mr Rushworth know about that? Because if he did his purported sale, well I do not mean Mr Rushworth did but Miss Pinner," (i.e. Mrs Rushworth) "did either of them effectively know about that because if they did then that transaction is going to be set aside. But that is not to do with me".

 

10. Mr Jonathan Hardy, who gave evidence on behalf of CBP, said that CBP did not appeal or seek to set aside the order for sale made on 29 ^th August 2013 or bring it to the attention of District Judge Hudson on 20 ^th December 2013. He said this was because he was not aware of the order for sale at the time and had only seen it in the course of these proceedings before the Tribunal. That is a surprising statement given that Mr Hardy was present at the hearing before District Judge Hudson on 29 ^th August 2014 and was then represented by a solicitor, Mr Quinn.

 

Conclusions

11. Whatever the justification for CBP's concerns about the sale, it has not in my judgment shown grounds to rectify the register. The land was sold to TPL under a power of sale given by an order of the court. That order had not been set aside at the time of the sale and has not yet been set aside. If there were good grounds to set aside the order for sale (a matter on which I make no finding) that would not enable this Tribunal to ignore the order of the court and make an order to alter the register as if the order of the court had not been made or had been set aside. The Tribunal has no power to set aside an order of the court. While the order under which the sale was made to TPL stands, there are no good grounds to alter the register. The application of CBP to alter the register is premature and cannot succeed while the order for sale stands.

 

Costs

12. My preliminary view is that Cyril Baker Properties Ltd should pay the cost of the proceedings before the Tribunal. Its application has failed. It should not have made or continued its application before the Tribunal before applying to set aside or appealing the order for sale made by the county court. Any party who wishes to submit that some different

 

 

 

 

order should be made as to costs must apply to the Tribunal in writing with reasons by 15 ^th

April 2016 .

 

 

 

 

DATED THIS 31 ^ST MARCH 2016

 

 

 

 

BY ORDER OF THE TRIBUNAL