Jayasinghe v Liyanage
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE BRIGGS,Mr Justice Briggs |
| Judgment Date | 18 February 2010 |
| Neutral Citation | [2010] EWHC 265 (Ch) |
| Docket Number | Case No: CH/2009/APP/0392 |
| Court | Chancery Division |
| Date | 18 February 2010 |
[2010] EWHC 265 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Before: Mr Justice Briggs
Case No: CH/2009/APP/0392
Mr Christopher Maynard (instructed by Lakhani & Co, 521 Kingsbury Road, London NW9 9EG) for the Appellant
Ms Nicola Muir (instructed by Seth Lovis & Co, 33 Henrietta Street, Covent Garden, London WC28NH for the Respondent
Hearing date: 11 th February 2010
Approved Judgment
I direct that pursuant to CPR PD 39A para 6.1 no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
This is an appeal, with permission of Proudman J, from the decision of Mr Owen Rhys sitting as Deputy Adjudicator to HM Land Registry dated 12 th May 2008, whereby he directed the cancellation of the application made by the Appellant Kusum Jayasinghe and dated 25 th October 2007 for the registration of a restriction against the registered title to the property known as 37 Reading Road, Hallfield Estate, London W2 6HD (“the Property”).
The Appellant applied for a restriction on the ground that she was the sole beneficiary under a resulting trust of the Property in her favour, having provided the original funds for its purchase, paid the instalments under a charge of the Property in favour of Halifax Building Society, redeemed that charge out of her own money, and borne all outgoings of the Property, as well as having received all income accruing from its letting.
Her application was opposed by the Respondent, one Don Liyanage, on the grounds that the Appellant had no interest whatsoever in the Property and that (to quote from paragraph 60 of the Respondent's Statement of Case before the Adjudicator),:
“The Applicant's version of the history of matters is complete fiction unsupported by evidence.”
After a two day trial, which included cross-examination of the Appellant, the Respondent and another witness called by the Appellant, in which the opposing parties presented utterly different accounts of the relevant history, the Adjudicator concluded, broadly in accordance with the Respondent's case, that the Applicant's case was indeed a fiction, that her evidence was, save where corroborated, wholly unreliable and implausible, and that the Property had, from first to last, been an investment made by the Respondent, in relation to which, although she had from time to time played a role in its management, and received certain benefits in connection with it, she had made no financial contribution of any kind from her own resources.
Two main points are taken on the appeal, by Mr Maynard on the Appellant's behalf. First, he submitted that the Adjudicator should not have embarked upon a trial of the issue whether the Appellant had any beneficial interest in the Property. He should have ascertained merely whether she had an arguable claim to that effect and directed that her claim should be tested by a competent court, with the restriction for which she had applied remaining in place in the meantime. On that basis, he submitted that she plainly had an arguable case sufficient to withstand any summary determination to the contrary. Secondly, he submitted that in any event the Adjudicator's judgment was vitiated by a conclusion that the Respondent had funded the repayment of the mortgage which was irreconcilable with the documents before the court, thereby undermining both the Respondent's credibility and the soundness of the Adjudicator's general conclusion that the Respondent's evidence was, wherever it differed from the Appellant's, to be preferred. Furthermore, he submitted that even if the correct conclusion was only that the Appellant had paid for the discharge of the mortgage, this would of itself have given her a sufficient beneficial interest in the Property (or claim to that effect) to justify the registration of the restriction.
The first ground of appeal found no place in the Grounds of Appeal appended to the Appellant's Notice. Nonetheless it was the basis upon which Proudman J considered that permission to appeal ought to be granted. If correct, it would be a matter of major significance to the way in which the Land Registry Adjudicators currently perceive that they should carry out their statutory functions.
Mr Maynard's argument may be summarised as follows:
i) The Chief Land Registrar may enter a restriction in the register for the purpose of protecting a right or claim in relation to a registered estate or charge: section 42(1)(c) of the Land registration Act 2002 (“the Act”).
ii) An objection which, in substance, denies the existence of a right in relation to a registered estate or charge does not thereby impugn the existence of a claim in relation thereto, unless it demonstrates that the claim is wholly without foundation. Otherwise, all it does is to show that the claim is disputed.
iii) The Adjudicator's function in relation to an objection to an entry of a restriction is simply to ascertain whether the applicant for the restriction has demonstrated an arguable claim within the meaning of section 42(1)(c). If that is demonstrated, then the Adjudicator has no business to embark upon the trial of that claim, a process which should be left to be carried out by a competent court in the usual way, while the restriction remains in place.
In support of that submission Mr Maynard relied primarily upon observations of mine in another appeal from the Land Registry Adjudicator, namely Croatia v. Serbia [2009] EWHC 1559 (Ch), to the effect that a person may have a sufficient interest in the making of an entry to enable him (or it) to apply for the entry of a restriction within the meaning of section 43(1)(c) of the Act, on the basis of a claim to an interest in the registered estate, even if that claim is not justiciable in the English courts, and is disputed by the registered proprietor. Mr Maynard bolstered his submissions by reference to paragraph 16.1 of the Law Commission Report (Law Comm No 271) entitled Land Registration for the 21 st Century – a Conveyancing Revolution, which led to the passing of the Act, in which it is stated that the newly created office of the Adjudicator was designed to offer, for the first time on a wholly independent basis, substantially the same service of dispute resolution formally provided by Solicitor to HM Land Registry under the previous statutory regime.
Attractively though those submissions were presented by Mr Maynard, I have been wholly unpersuaded by them. In order to understand my reasons, it is necessary to describe the structure created by the Act in relation both to restrictions and to the resolution by the Adjudicator of disputes occasioned by objections to them.
Section 42 of the Act provides that:
“(1) The registrar may enter a restriction in the register if it appears to him that it is necessary or desirable to do so for the purpose of 3/4
(a) …
(b) …
(c) protecting a right orclaim in relation to a registered estate or charge.”
Section 43 provides that:
“(1) A person may apply to the registrar for the entry of a restriction under section 42(1) if 3/4
(a) …
(b) …
(c) he otherwise has a sufficient interest in the making of the entry.”
Section 43(2)(c) states that Rules may provide for classes of person to be regarded as included in subsection (1)(c).
Rule 93 of the Land Registration Rules 2003 (SI 2003 No 1417) identifies over twenty classes of person to be regarded as having a sufficient interest in the making of the entry. For present purposes the relevant class is identified in sub-rule (b) as follows:
“any person who has a sufficient interest in preventing a contravention of section 6(6) or section 6(8) of the Trusts of Land and Appointment of Trustees Act 1996 and who is applying for a restriction in order to prevent such a contravention.”
For a general review of Rule 93, see paragraphs 47 to 53 of my judgment in Croatia v. Serbia (supra).
Section 73(1) of the Act provides that, subject to exceptions which are irrelevant for present purposes, anyone may object to an application to the registrar. By sub-section (5):
“Where an objection is made under this section, the registrar 3/4
(a) must give notice of the objection to the applicant, and
(b) may not determine the application until the objection has been disposed of.”
By sub-section (6), sub-section (5) is disapplied if the objection is one which the registrar is satisfied is groundless. Sub-section (7) then provides that:
“If it is not possible to dispose by agreement of an objection to which sub-section (5) applies, the registrar must refer the matter to the adjudicator.”
Adjudication is dealt with in Part 11 of the Act. Under section 108:
“(1) The adjudicator has the following functions 3/4
(a) determining matters referred to him under section 73(7), and
(b) …”
By sub-sections (2) and (4) the Adjudicator is given the same powers as the High Court to make orders for rectification or setting aside of certain classes of documents. Section 109 contains certain general procedural provisions, and makes provision for the establishment of a detailed procedural regime by rules. Under section 110, headed Functions in Relation to Disputes:
“(1) In proceedings on a reference under section 73(7), the adjudicator may, instead of deciding a matter himself, direct a party to the proceedings to commence proceedings within a specified time in the court for the purpose of obtaining the court's decision on the matter.”
By section 111(1) a person aggrieved by a decision of the Adjudicator may appeal to the High Court.
The procedural code regulating the discharge by the Adjudicator of functions conferred by the Act is set out in The Adjudicator to Her...
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