Malory Enterprises Ltd v Cheshire Homes (UK) Ltd and Others
| Jurisdiction | England & Wales |
| Judge | Lady Justice Arden,Lord Justice Clarke,Lord Justice Schiemann |
| Judgment Date | 22 February 2002 |
| Neutral Citation | [2002] EWCA Civ 151 |
| Docket Number | Case No: A3/2001/0568 |
| Court | Court of Appeal (Civil Division) |
| Date | 22 February 2002 |
[2002] EWCA Civ 151
IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM HIGH COURT OF JUSTICE
(CHANCERY DIVISION) MANCHESTER DISTRICT
REGISTRY (HIS HONOUR JUDGE MADDOCKS)
Royal Courts of Justice
Strand,
London, WC2A 2LL
Lord Justice Schiemann
Lord Justice Clarke and
Lady Justice Arden
Case No: A3/2001/0568
Mr J Martin QC and Mr R Oughton instructed by Aziz Saunders for the Appellant
Mr John Dagnall instructed by Pannone & Partners for the Respondent
Mr N Caddick instructed by the Treasury Solicitor for the Chief Land Registrar
This is an appeal, with the limited permission of the judge and this Court, by the first defendant in this action, Cheshire Homes (UK) Ltd, whom I shall call "Cheshire". The action was heard by His Honour Judge Maddocks, sitting as a Deputy Judge of the High Court of Justice in the Chancery Division (Manchester District Registry). On 23 February 2001 he made an order as follows:—
"1. It is declared that:—
(a) at all material times the beneficial interest in the L and presently registered at HM L and Registry under title number GM341218 ("the L and") has been beneficially owned by and (until at least 17 July 1999) in the possession of the Claimant;
(b) following the rectification referred to in paragraph 2 below the L and shall also be in the legal ownership of the Claimant;
(c) at all material times the Claimant was and still is entitled to possession of the L andand on and after 17 July 1999 the First Defendant has trespassed on the L and by entering it and carrying out works upon it.
2. The register be rectified to show the Claimant as registered proprietor of the L and (with address 123 Deansgate, Manchester and showing the Claimant as being incorporated in the British Virgin Isl and s) with such rectification to be (insofar as necessary) retrospective to 12 January 1999.
3. The First Defendant be restrained whether by itself, its directors, officers, servants, agents or otherwise howsoever from entering on or carrying out works upon the L and.
4. There be an assessment of and enquiry into such damages (if any) as should be paid by the First Defendant to the Claimant by reason of matters on and following 17 July 1999 regarding or relating to the L and (being in particular its entries on to and carrying out of works on the L and) …."
Background
The action was for rectification of the l and register under section 82 of the L and Registration Act 1925 as amended by the Administration of Justice Act 1977. I will refer to the Act of 1925, as now in force, as "the LRA". Sections 82 and 83 of the LRA provide the material part as follows:—
"82. (1) The register may be rectified pursuant to an order of the court or by the registrar, subject to an appeal to the court, in any of the following cases, but subject to the provisions of this section:—
(a) Subject to any express provisions of this Act to the contrary, where a court of competent jurisdiction has decided that any person is entitled to any estate right or interest in or to any registered l and or charge, and as a consequence of such decision such court is of opinion that a rectification of the register is required, and makes an order to that effect;
(b) Subject to any express provision of this Act to the contrary, where the court on the application in the prescribed manner of any person who is aggrieved by any entry made in, or by the omission of any entry from, the register, or by any default being made, or unnecessary delay taking place, in the making of any entry in the register, makes an order for the rectification of the register;
(c) In any case and at any time with the consent of all persons interested;
(d) Where the court or the registrar is satisfied that any entry in the register has been obtained by fraud; ….
(e) Where a legal estate has been registered in the name of a person who if the l and had not been registered would not have been the estate owner; and
(f) In any other case where, by reason of any error or omission in the register, or by reason of any entry made under a mistake, it may be deemed just to rectify the register.
(2) The register may be rectified under this section, notwithst and ing that the rectification may affect any estates, rights, charges or interests acquired or protected by registration, or by any entry on the register, or otherwise.
(3) The register shall not be rectified, except for the purpose of giving effect to an overriding interest or an order of the court so as to affect the title of the proprietor who is in possession—
(a) unless the proprietor has caused or substantially contributed to the error or omission by fraud or lack of proper care; or …….
(b) unless for any other reason, in any particular case, it is considered that it would be unjust not to rectify the register against him.
……..
(4) The registrar shall obey the order of any competent court in relation to any registered l and on being served with the order or and official copy thereof.
………
(1) Where the register is rectified under this Act, then, subject to the provisions of this Act—
(a) any person suffering loss by reason of the rectification shall be entitled to be indemnified; and
(b) if, notwithst and ing the rectification, the person in whose favour the register is rectified suffers loss by reason of an error or omission in the register in respect of which it is so rectified, he also shall be entitled to be indemnified.
(2) Where an error or omission has occurred in the register, but the register is not rectified, any person suffering loss by reason of the error or omission shall, subject to the provisions of this Act, be entitled to be indemnified.
(3) …..
(4) Subject to the following provisions of this section, a proprietor of any registered l and or charge claiming in good faith under a forged disposition shall, where the register is rectified, be deemed to have suffered loss by reason of such rectification and shall be entitled to be indemnified under this Act.
(5) No indemnity shall be payable under this Act –
(a) on account of any loss suffered by a claimant wholly or partly as a result of his own fraud or wholly as a result of his own lack of proper care; …….
(6) Where any loss suffered by a claimant is suffered partly as a result of his own lack of proper care, any indemnity payable to him shall be reduced to such extent as is just and equitable having regard to his share in the responsibility for the loss.
(7) For the purposes of subsections (5)(a) and (6) above, any fraud or lack of proper care on the part of a person from whom the claimant derives title (otherwise than under a disposition for valuable consideration which is registered or protected on the register) shall be treated as if it were fraud or lack of proper care on the part of the claimant (and the reference in subsection (6) to the claimant's share in the responsibility for the loss shall be construed accordingly).
(8) Where an indemnity is paid in respect of the loss of an estate or interest in or charge on l and, the amount so paid shall not exceed—
(a) where the register is not rectified, the value of the estate, interest or charge at the time when the error or omission which caused the loss was made;
(b) where the register is rectified, the value (if there had been no rectification) of the estate, interest or charge, immediately before the time of rectification."
The l and in question ("the rear l and") is a development site behind a block of flats numbered 16 to 28 Wilbraham Road, Fallowfield, Manchester ("Hometel flats"). It backs on to Platts Fields, and according to the appellant is close to one of the sites for the XVIIth Commonwealth Games to be held in Manchester in July and August 2002.
At the date of the trial, the rear l and was registered under title GM723895 and the registered proprietor was stated to be Cheshire as from 12 January 1999. The first respondent, Malory Enterprises Ltd, ("Malory BVI") is a company incorporated in the British Virgin Isles in 1993 for the purpose of acquiring the rear l and. It became the registered proprietor of the rear l and on 23 August 1993 under title number GM341218.
The circumstances in which Cheshire became registered proprietor are as follows. In 1996, a company was dishonestly set up in the United Kingdom with the name Malory Enterprises Ltd ("Malory UK"). By deception this company obtained from H.M. L and Registry a new l and certificate in which the name of the proprietor was stated to be "Malory Enterprises Limited" of a new address. It then sold and executed a transfer of the rear l and to Cheshire, which was then registered as proprietor on 12 January 1999.
In the action Malory BVI claimed that at all material times it was in actual occupation of the rear l and so as to have an overriding interest which prevailed against the registered title of Cheshire by virtue of section 70 (1) (g) of the LRA. It claimed that accordingly the register should be rectified. In addition, it claimed that Malory UK had had no power to deal with the title and that the transfer to Cheshire was a nullity, that rectification should follow as a matter of course and that Cheshire could not take advantage of section 82 (3) as it did not have possession of the rear l and. If Cheshire was in possession, Malory BVI contended that Cheshire had caused or contributed to the error by lack of proper care and that it would be unjust not to rectify the register in favour of Malory BVI as an innocent and properly registered proprietor which had not executed any transfer. It...
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