James Julius Isaaks (by the Bank of Scotland Plc Acting as Attorney) v Charlton Triangle Homes Ltd
| Jurisdiction | England & Wales |
| Judge | Master Matthews |
| Judgment Date | 14 September 2015 |
| Neutral Citation | [2015] EWHC 2611 (Ch) |
| Date | 14 September 2015 |
| Docket Number | Case No: HC-2015-001815 |
| Court | Chancery Division |
[2015] EWHC 2611 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Royal Courts of Justice
Strand, London, WC2A 2LL
Master Matthews
Case No: HC-2015-001815
Nicholas Broomfield (instructed by Shoosmiths LLP) for the Claimant
The Defendant did not appear and was not represented
Hearing dates: 10 August 2015
Introduction
This is a claim made under CPR Part 8, issued on 13 May 2015, seeking (i) rectification of a lease dated 28 January 2002 of the flat known as 7 Games House, Springfield Grove, London SE7 7TN, on the terms of a signed deed of rectification made on 6 November 2014 between the Claimant (acting by his attorney Bank of Scotland plc) and the Defendant, and (ii) a direction to the Chief Land Registrar to amend the land register accordingly.
At the hearing on 10 August 2015, the Claimant was represented by Mr Nicholas Broomfield of counsel. The Defendant did not appear and was not represented. The original lessees were not parties to the proceedings. At the end of the hearing, I indicated that I would make the order sought, but that I wished to record my reasons in writing. These are those reasons.
The Claimant is the immediate assignee of the original lessees Dawn Wright and Gary Wilson, having taken a transfer of the lease on purchase from them (with the aid of a loan secured by mortgage from the Bank of Scotland) on 31 March 2008. The Defendant is the original and continuing lessor. The Defendant by its solicitors filed an acknowledgement of service dated 1 June 2015 indicating no intention to contest the claim.
The mortgage deed entered into by the Claimant with the Bank of Scotland contained a power of attorney in wide form, enabling the bank "to act in [the Claimant's] name and on [his] behalf and [the bank] will have the following rights", including amongst other things "to enforce [the Claimant's] rights, or take over [the Claimant's] right to make any claim or do anything (including bringing or continuing court or arbitration proceedings) to do with the property…" It is by virtue of that power that, in the Claimant's name and on his behalf, the bank (i) entered into the deed of rectification mentioned above and (ii) has taken these proceedings.
Although it was not discussed at the hearing I note in passing that the Court of Appeal held in Gregory v Turner [2003] EWCA Civ 183 that the holder of an enduring power of attorney not being a lawyer was not thereby entitled to conduct litigation ( ie as if he were a solicitor) or to address the court as an advocate. But there is no question of the bank seeking to act as solicitor or advocate in this case. The bank has retained solicitors and counsel. What it has done is to give instruction to those solicitors and counsel on behalf of the Claimant to institute and prosecute these proceedings in relation to the property. That is a question simply of the width of the power of attorney given. In my judgment the power in this case is wide enough to cover the institution and prosecution of this claim.
The Error
The lease and lease plan describe the flat as being on the third floor of Games House. Accordingly, the land register, after stating in paragraph 1 of the property register that the subject of the registration is "The Leasehold land shown edged with red on the plan of the above Title filed at the Land Registry and being 7 Games House, Springfield Grove, London (SE7 7TN)", notes in the usual way that "only the third floor flat is included in the title."
Unfortunately, the flat is in fact on the second floor of the building. The error in the lease was discovered only after the Claimant fell into arrears with his mortgage payments and was the subject of proceedings by Bank of Scotland. On 4 April 2013 he was ordered by Woolwich County Court to give up possession to the bank. When the bailiff and a bank official arrived to take possession on 10 December 2013 it became apparent that the flat was on the second floor, not the third.
Correspondence then ensued between the bank and the owners of the Defendant, culminating in the Defendant signing the deed of rectification of 6 November 2014 already mentioned. By that deed it was agreed between the parties that "All references in the Lease and the Lease Plan to the property known as 7 Games House, Springfield Grove, SE7 7TN as a 'third floor flat' shall be amended to a 'second floor flat'." The Defendant's solicitors confirmed before this claim was issued that the Defendant would not contest the claim when made.
The Land Registry's view
The bank by its solicitors thereupon applied on 21 November 2014 to the Land Registry to amend the entry in the register. The form of the application was not in evidence before me. But the Land Registry responded by a letter dated 26 November 2014 (which was) to the effect that the application was rejected as defective and could not proceed as a rectification of a lease. Instead, said the Land Registry, it would be necessary for the lessee to surrender and the lessor to grant a fresh lease. The bank was unwilling to so this, principally because of the effect on its security. If granted, rectification normally has retrospective effect. A surrender and regrant however would be prospective only. There was apparently a telephone conversation between the Land Registry and the solicitors on 27 November 2014, but evidently nothing came of that.
The bank's solicitors wrote again on 23 March 2015 to inform the Land Registry that the bank intended to issue court proceedings for a declaration as to the error in the lease which required rectification, and to ask whether the Land Registry wished to be a party. The Land Registry replied by letter dated 9 April 2015, saying that the original application had been reviewed, and that its decision to reject the application was considered still to have been correct. I will return to the reasoning later. For present purposes the point is that the Land Registry's position was unchanged.
The letter also said that there was no need for the Registry to be joined, because rule 127 of the Land Registration Rules 2003 made appropriate provision. In fact, as the solicitors pointed out in a letter of 17 April 2015, what rule 127 does not provide for is for the Registrar to be bound by the order of the court. But that is because paragraph 2(2) of Schedule 4 to the Land Registration Act 2002does so provide, as noted in the Registry's letter in reply of 6 May. As already stated, these proceedings were issued on 13 May 2015.
Jurisdiction
Prior to 6 April 2015 it would not have been appropriate for a master to deal with this application. Paragraph 5.1 (g) of CPR Practice Direction 2B provided that a master in the Chancery Division might not without the consent of the Chancellor of the High Court deal with a claim for rectification, except for alteration or rectification of the land register in plain cases. Whether this was a plain case or not, it includes a claim to rectify a lease, which is outside the paragraph. But on 6 April 2015 Practice Direction 2B was amended. Paragraph 5 was completely removed, and (so far as concerns masters) replaced by paragraph 7B.1, which prohibits a master from dealing only with (i) claims to indemnity in derivative actions by minority shareholders, and (ii) certain orders in Patent Court proceedings. So there is now jurisdiction for the master to hear and determine a claim for rectification of a lease, as well as of the land register (and, for the latter, no jurisdictional requirement that it be a plain case).
The Law
There are two matters to consider: (1) the rectification of the lease, and (2) the amendment of the land register. As to the former, and although it was not cited to me, Snell's Equity, 33 rd edition 2015, para 16–001, says that "where the terms of a written instrument do not accord with the true agreement between the parties, equity has the power to reform, or rectify, that instrument so as to make it accord with the true agreement." It is trite law that leases in writing, like other written contracts and multiparty documents, can be rectified. The standard of proof in a claim for rectification is the ordinary civil standard, but the cases speak of the need for...
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Real Estate Update - Case Roundup, Summer 2016
...is planned and where a group company has guaranteed the obligations of another in a lease. Isaaks v Charlton Triangle Homes Ltd [2015] EWHC 2611 (Ch) A tenant sought rectification of its lease and the alteration of the land register where the lease mistakenly stated that the third floor had......