Alteration, Rectification & Indemnity Flashcards
What is the effect of s58 Land Registration Act 2002?
- If the legal estate would not otherwise be vested in him, it shall be demmed to be vested in him as a result of the registration
- This means that if B forges a document of A to make himself the registered proprietor and sell to C, this section will make them registered
How is a mistake defined?
NRAM Ltd v Evans
Would the registar have done something different had he known the true facts at the time he made the entry? If so, it is a mistake
What is the difference between a void and voidable transaction?
NRAM Ltd v Evans
* An entry made due to a void disposition is a mistake, it cannot legally exist
* An entry made by transaction that is voidable is correct at the time it was made unless rescinded (inducing the person to give you the thing, valid contract until other party exercises the right to go against it, e.g. duress or misrepresentation)
How might a party to forgery correct the mistake under a trust analysis?
- Rashid v Nasrullah: the fraudster has a constructive trust imposed on them for the benefit of the person they have done wrong against
- Use the process of S28, beneficial interest came first
- Under s29 C will take priority if they have registered disposition for value consideration unless A has overriding interest via s29(2) and Sch3
- Actual occupation paired with equitable interest is sufficient to override (Boland)
- If A has overriding interest, they can then compel B to Saunders v Vautier property
- No indemnity for C as rectification has not taken place
What is a rectification of the register?
Schedule 4 Para 1
An alteration which involves the correction of a mistake and prejudicially affects the title of a registered proprietor
Schedule 4 Para 2
Court can make an order for alteration of the register for the purpose of correcting a mistake
NOTE: In a PQ unlikely that you will be able to simply just alter, will have to use rectification because C’s title will be affected
How does the case law discuss whether the registration of C is a mistake?
- NRAM v Evans: All subsequent transfers after the original one are a mistake
- Barclays Bank v Guy (No1): Rectification should not be possible unless A can show that A hd some actual notice or was turning a blind eye to facts
- Barclays Bank v Guy (No2): We can either see registration of C as part and parcel of the mistake involving B and, even if not, correcting the mistake of B may involve removing C
NOTE: Can likely say in a PQ that C’s registration is a mistake
How would C provide a defence to rectification
Sch 4 Para 3
If the title of the proprietor will be affected, no order can be made without their consent in relation to land in his possession
C can either be in possession themselves, or under S131 may be his tenant etc.
HOWEVER, if C has by fraud or lack of proper care substantially contributed to the mistake OR it would be for any other reason unjust for alteration not to be made, there will be alteration regardless of consent
What is an indemnity and who would get this under the common law rectification approach?
Sch 8 Para 1
A person is entitled to an indemnity (monetary compensation) if he suffers loss by rectification, a mistake that would require rectification
* If rectification does take place, C gets indemnity under para 1(a), measured immediately before the indemnity under para 6(a)
* If rectification doesn’t take place, A gets an indemnity under para 1(b), value is measured at the time of the mistake under para 6(b)
Sch 8 Para 5
No indemnity payable if they suffer loss wholly or partly as a result of their own fraud or lack of proper care
How has the right to rectify been described as an overriding interest?
Swift 1st Ltd v Chief Land Registrar
* Confirmed the Malory 2 argument from Malory v Cheshire Homes
* The right to rectification paired with actual occupation is capable of subsisting as an overriding interest
To show this would have to go through s28, s29 and sch 3. C would be bound by this right to recitfy if made out
What does the case law say about an indemnity where the register is changed to give effect to an overriding interest?
- Re Chowood: C is in no worse a position than they were in before because the OI was binding in the first place, C cannot be indemnified
- Swift 1st: Exception where C is claiming in good faith and are the victim of forgery, Sch 8 Para 1(2)(b) applies. Indemnity made under 1(1)(a) meaning it is assessed at the value immediately before rectification under 6(a)
How is the case different where the disposition is only a voidable one?
- If duress / undue influence, there is no mistake (NRAM v Evans: only void disposition are mistakes)
- No trust analysis or overriding right as these are limited to cases of forgery
Could rely on s116 under (b) has a mere equity that binds successors in title, BUT this is subject to priority so A would have to show actual occupation. These combined would be overriding interest
This would be alteration and not rectification, C cannot get the defence under Sch 4 Para 3 or an indemnity
