Norwich and Peterborough Building Society v Steed

JurisdictionEngland & Wales
CourtCourt of Appeal (Civil Division)
Judgment Date05 March 1992
Neutral Citation[1992] EWCA Civ J0305-4
Judgment citation (vLex)[1991] EWCA Civ J0227-1
Date05 March 1992
Docket Number92/0235,91/0112

[1991] EWCA Civ J0227-1






Royal Courts of Justice


The Master of the Rolls

(Lord Donaldson)

Lord Justice Mccowan

Lord Justice Leggatt


Norwich & Peterborough Building Society
Michael Derek Steed

MR. S. ACTON (instructed by Messrs. Chambers Rutland & Crauford) appeared for the Appellant (Defendant).

MR. R. C. H. JONES (instructed by Messrs. Warren Boyes & Archer, Huntingdon, Cambridgeshire) appeared for the Respondent (Plaintiff).


I will ask Lord Justice McCowan to give the first judgment.


This is an application for an extension of time for appealing against an order of Mr. Justice Knox dated 15th December 1989. The matters which this court takes into account in deciding whether to grant an extension of time are: first, the length of the delay; secondly, the reasons for the delay; thirdly, the chances of the appeal succeeding if the application is granted; and, fourthly, the degree of prejudice to the respondent if the application is granted.


The order of Mr. Justice Knox the subject of the intended appeal was sealed on 18th January 1990. Accordingly, the time for service of a notice of appeal expired four weeks thereafter, that is to say on or about 15th February. The application for an extension of time to appeal was dated 4th September and served soon afterwards. Accordingly, the relevant period of delay is just over six and a half months.


The story behind these proceedings is as follows. The applicant, Mr. Steed, owned a property in Winchmore Hill, London, but lived in America, whilst his mother, Mrs. Steed, and his sister and brother-in-law, Mr. and Mrs. Hammond, lived in the house. Mr. and Mrs. Hammond wanted to raise money on the security of the property and, as the judge found, formed a dishonest scheme to accomplish it. They obtained from Mr. Steed a power of attorney dated 14th April 1979 in favour of his mother. They then tricked Mrs. Steed into executing a transfer of the house dated 4th September 1979 in their favour purportedly under the power of attorney and for a consideration of £24,000. This consideration was fictitious. On the same date the Norwich and Peterborough Building Society lent Mr. and Mrs. Hammond £15,000 on the security of the property which, after payment of expenses and discharge of a small prior mortgage, they retained for their own benefit. The building society to which I have referred was then registered as holder of a charge on the property, as were the Provident Mutual and Lloyd's Bank, who made subsequent secured advances to Mr. and Mrs. Hammond as purported owners of the property.


In the action the building society claimed possession of the property as mortgagee and a declaration that its charge took priority over Mr. Steed's interest in the property; whilst he counterclaimed for rectification of the Proprietorship Register by substituting himself as owner of the property for Mr. and Mrs. Hammond, and of the Charges Register by removing the three charges to which I have referred. The judge by his order preserved the position of the building society and adjourned its possession claim to the Master, while granting Mr. Steed the rectification that he sought of the Proprietorship Register but not of the Charges Register. In other words, Mr. Steed was restored as owner of the property, but subject to the three mortgages.


In the appeal which he wishes to bring Mr. Steed seeks against the building society an order that its claim for possession be dismissed, and the rectification of the Charges Register by deletion of its charge plus the later two to which I have referred.

(1) Was the transfer of 4th September 1979 void by virtue of the doctrine of non est factum?

(2) Was it alternatively executed by Mrs. Steed beyond the authority of the power of attorney and, if so, could the chargees rely on it?

(3) Ought the court nevertheless to exercise its discretion to rectify the Register against the chargees under section 82 of the Land Registration Act 1925 notwithstanding the failure on the first two issues?


The judge decided against Mr. Steed on all three issues. Mr. Acton, who appears for him, says success on any one of them would have been sufficient for him to succeed in the action. Mr. Steed wishes to appeal on all three issues.


Dealing first with the non est factum issue, Mrs. Steed had signed a statement dated 16th December 1985 and this was admitted under the Civil Evidence Act, she having died. Her evidence on the material point was that she signed a document in the presence of her daughter, Mrs. Hammond, and of Mrs. Hammond's solicitor. She said among other things:

"I was asked to sign a document. I do not know what this document was."


Later, she added in the statement:

"I did not know that I had been appointed Michael's attorney. I did not know that the mortgage had been redeemed".


Having quoted extensively from her statement, the judge went on to say:

"Neither Mr. nor Mrs. Hammond gave any reliable evidence about the execution of the Transfer."


He added a little later:

"The solicitor concerned was not called by either side. On Mr. Steed's side because he could not be found, on the Building Society's side because there is no pleaded allegation of fraud against him, which is true but hardly a complete explanation…"


The judge cited the case of Saunders v. Anqlia Building Society [1971] A.C. 1004 extensively, and in particular the well known passage from the speech of Lord Reid where he said:

"…the essence of the plea non est factum is that the person signing believed that the document had one character or one effect whereas in fact its character or effect was quite different. He could not have had such a belief unless he had taken steps or been given information which gave him some grounds for his belief."


The judge then went on to find on this issue as follows:

"In my judgment the heavy onus of proving non est factum in relation to a person who was neither senile nor illiterate is not discharged. I find that Mrs. Steed was tricked but it is at least as likely that she was willing to sign whatever Mrs. Hammond put before her as that she was tricked by some much more specific misrepresentation as to the substance of the transaction."


Against that finding Mr. Acton submitted in his skeleton argument:

"It follows that the judge ought to have found that Mrs. Steed did not know that she had been appointed Mr. Steed's attorney at all, and so could not have known that she had any power to deal with, or was dealing with, his property.…the distinction [referred to by Lord Reid] should not apply where the signer does not even know that he is dealing with his property. In such a case in principle the plea of non est factum should be available even where there has not been any specific misrepresentation as to the nature of the document…

In this case if Mrs. Steed did not even know that she had the power of attorney she could not have known that she had power to deal with, or was dealing with, her son's property at all. That ought to have been sufficient to enable the plea to succeed on the judge's finding that Mrs. Steed was tricked into signing the Transfer because she was willing to sign whatever Mrs. Hammond put before her."


Turning to the second issue, that is the question of exceeding authority of power of attorney, the learned judge dealt with that issue in these words:

"If the plea of non est factum fails as I hold that it does there cannot in my judgment be a successful reliance on the substance of the transaction being outside the scope of the Power of Attorney. It is conceded that a power of attorney which authorises a sale does not authorise a gift. Equally it is plain that the transaction as effected of only £1,801 being applied for Mrs. Steed's benefit and the rest of the £15,000 loan being applied to the benefit of Mr. and Mrs. Hammond, was not in any sense a sale save possibly at such a gross undervalue as to vitiate it as a sale. But the Transfer on its face was a perfectly regular sale and as against third parties taking a legal estate for value and in good faith it was within the ostensible authority of Mrs. Steed and cannot now be repudiated against such third parties. Nothing short of non est factum rendering the Transfer void or forgery which has the same legal effect but is not now alleged, will suffice to defeat the Building Society's innocent reliance upon the Transfer."


Against that finding, Mr. Acton wants to argue as follows. He says that the judge rightly held that Mrs. Steed did exceed her authority under the power because the power only authorised a sale and, in essence, this transfer was a gift. But, he says, the judge's finding that Mrs. Steed exceeded her authority must have meant that the transfer was void as between Mrs. Steed and Mr. and Mrs. Hammond, who knew of and indeed engineered the excess of authority. Prima facie, he argued, they could not therefore give the chargees any title to what they had not got. The doctrine of ostensible authority is not applicable to such a case and cannot assist the chargees. It applies as between an agent and a third party with whom that agent deals and not as between the agent and any more remote third party.


Of the third issue, the discretion to rectify, suffice it to say that the judge weighed up the arguments on each side and came down in favour of the building society. Mr. Acton says, in effect, that the judge was plainly wrong in that exercise of discretion.



To continue reading

Request your trial
189 cases
  • Imbangan Utama Sdn Bhd v Lotan Engineering Sdn Bhd
    • Malaysia
    • High Court (Malaysia)
    • 1 January 2002
  • Mallory v Butler and Another
    • United Kingdom
    • Court of Appeal (Civil Division)
    • 14 March 1991
  • Strachan v The Gleaner Company Ltd et Al
    • Jamaica
    • Court of Appeal
    • 6 April 2001
    ...Printery v. Gleaner Co. (1968) 13 W.I.R. 127 Ratnam v. Cumarasamy [1964] 3 All E.R. 933 Norwich & Peterborough Building Society [1991] 2 All E.R. 880 Finnegan v. Parkside Health Authority [1998] 1 All E.R. 595 Mason v. Desnoes & Geddes (1990) 38 W.I.R. 214 Mills v. Lawson et al ......
  • American Jewellry Company Ltd v Khemlani and Others
    • Jamaica
    • Court of Appeal
    • 2 December 2004
    ...A recent instance of rectification of the Register is Racoon Ltd. v Turnbull [1996] 3 W.L.R. 353. This is in contrast to Norwich Building Section v. Steed [1992] 3 W.L.R. 669. 90 Turning to Thomas and Another v Johnson and Another (1997) 52 W.I.R. 410, 420 Gault J. delivering the opinion......
  • Request a trial to view additional results
1 books & journal articles
  • Title by Registration: Rectification, Indemnity and Mistake and the Land Registration Act 2002
    • United Kingdom
    • The Modern Law Review Nbr. 76-1, January 2013
    • 1 January 2013 thatthis fundamentally undermines the guarantee of title in section 58. As ProudmanJ highlights in Pick vChief Land Registrar:4844 [1993] Ch 116.45 ibid 133.46 n 40 above at [25].47 n 20 above at [40].48 [2011] EWHC 206 (Ch).Emma Lees© 2013 TheAuthor.The Moder n Law Review© 2013 The Mode......

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT