Rectification

Question 1

Fitzwilliam (2 party)

Answer 1

Applying Malory v Cheshire Homes,

(i) S.58 only applies to legal title, and because of the void disposition B merely holds the title on trust for A
(ii) A disposition that would have been void for fraud in unregistered conveyancing is not a “disposition” within the meaning of the Act and thus does not receive protection by S.29

Question 2

2 criticisms of Fitzwilliam; current status?

Answer 2

1. The implication is that B’s title being merely formal, he will never be entitled to indemnity for alteration since his title was from its inception bound by A’s trust interest and he thus loses nothing by rectification – completely undermines the indemnity system of the LRA 2002.
2. The decision was based on Malory, but Malory was decided under the old LRA and thus distinguishable; such an undermining of S.58 was NOT necessary
   Yet Fitzwilliam was applied by the HC in Park.

Question 3

Swift (2 party)

Answer 3

The judge resorted to Sch 8 to interpret Sch 4 (very artificial; logically Sch 4 comes first since indemnity is only awarded if there is rectification) to hold that a party taking an interest under a forged disposition had thereby suffered loss

Question 4

A fraudster forges a disposition of registered land from A to B. In good faith B pays the fraudster and is registered as RP. Who bears the loss? What if the fraudster tricks A into conveying the land to B?

Answer 4

A mistake has been made if B’s title was registered pursuant to a forged, and therefore void disposition. (Lloyd LJ, Guy – “the registration of something that was not properly executed on the part of the RP must be a mistake”)

In the 2nd scenario then the disposition is not void, but voidable - no mistake is made, and no rectification is available (Ruoff and Roper).

Question 5

Baxter v Mannion

Answer 5

It will be unjust under Para 3(2)c not to alter the register whenever there is a mistake, which makes the rest of Para 3(2) redundant/is entirely circular and must surely be wrong

Question 6

Walker v Burton

Answer 6

There has to be a factor making it positively unjust not to rectify – it is not sufficient that rectification is “just” on general principles (though NOTE here those seeking rectification were NOT rightful owners)

Question 7

When may the court refuse rectification if Para 3(2) does not apply?

Answer 7

Only if there are exceptional circumstances; otherwise the court has a DUTY to alter (Para 3(3)).

Question 8

Guy (3 party)

Answer 8

Lloyd LJ thought (obiter) that unless it was shown that C at least had constructive notice of the defect in the title of B (and probably not even then), there was no way of arguing that C’s registration as RP/chargee of the property could be a mistake

Question 9

Stewart

Answer 9

“To allow ex post facto removal of entries which were at the time lawfully made to reflect lawful dispositions” undermines the legislative aim of allowing investigation of title w/ the absolute minimum of additional enquiries; S.58 shows Parliament prefers certainty of title over the property rights of victims of fraud, who are to have their remedy by way of indemnity.

Question 10

a) Ajibade + Gold Harp

Answer 10

Ajibade - “Correcting” a mistake means unravelling all its direct consequences.

Gold Harp - the court implicitly accepted that “correction” required amendment of the Register to reflect “that which ought to be the position had there been no mistake”, observing that this was also the Land Registry’s stance.

Question 11

b) Guy (No.2)

Answer 11

(obiter) A’s removal from the register pursuant to a void disposition might also be construed as a mistake.

Question 12

c) Knights Construction

Answer 12

The history of the LRA 2002 clearly indicates that there was no intention to alter the pre-existing law holding that A’s right to have the register rectified should persist even if C had acquired an interest in it for valuable consideration (e.g. Argyle BS v Hammond). Law Comm intended that S.82(1)g under the old act was to be collapsed into Para 2(1)(a), Sch 4.

Question 13

S.82(1)(g), LRA 1925

Answer 13

“Where a legal estate has been registered in the name of a person who if the land was unregistered would not have been the estate owner”

Question 14

d) Crawley

Answer 14

Since Malory has established that the right to alter the register is in itself a property right, this right can be, if protected by actual occupation, an overriding interest under Sch 3 Para 2, being prior in time to C’s later interest.

Question 15

e) Fitzwilliam

Answer 15

A retains the beneficial interest in the property, w/ B only capable of passing on the legal title; A’s beneficial interest can then be protected by actual occupation under Sch 3 Para 2

Question 16

Ajibade/Gold Harp , justifying rectification in 3-party cases

Answer 16

The mere fact of provision for rectification indicates that the State has never sought to absolutely guarantee registered title, despite the promise of “title by registration”; if Sch 4 is an exception to S.58 then it is S.58 that must be read in light of Sch 4, not the other way round. The special protection under Para 6 helps achieve balance.

Question 17

Knights Construction, justifying rectification in 3-party cases (2 points)

Answer 17

1. There should not be an irrational distinction between the case where the fraudster forges a transfer to a 3rd party (rectification available, Guy/Fitzwilliam) and that where the fraudster forges a transfer to himself, then sells on (according to Stewart, no rectification)
2. The literal effect of Sch 1, Para 1(1)(a) and (b) is that if A obtains no rectification then there can be no indemnity for A (cf if A obtains rectification there can be indemnity for C). If this interpretation is adopted then it may always be unjust under Para 3(2)b, Sch 4 not to alter the register.

Question 18

Lees, criticising Sch 8, Para 1(a) and (b)

Answer 18

Their literal effect is essentially to restrict indemnity to instances where there has been rectification or there is a mistake that remains on the register; thus in cases like Stewart there should technically be no rectification.

Question 19

X’s registered interest over A’s land is protected by a Notice that is mistakenly deleted. A then sells the land to B. Can X alter the register against B?

Answer 19

Yes - Gold Harp provides that Sch 4 Para 8 permits alteration for the purpose of changing the priority of interests affecting the registered estate or charge concerned and thus may allow X’s interest to be reinstated on the register so that it binds B PROSPECTIVELY. However NOTE the judge found that B was not a purchaser for valuable consideration, thus this is technically obiter where S.29 is concerned.