Nouri v Marvi
| Jurisdiction | England & Wales |
| Judge | MR JUSTICE NORRIS |
| Judgment Date | 07 October 2009 |
| Neutral Citation | [2005] EWHC 2996 (Ch),[2009] EWHC 2725 (Ch) |
| Court | Chancery Division |
| Docket Number | HCO9C02542,Case No: TLC 445/04 |
| Date | 07 October 2009 |
[2005] EWHC 2996 (Ch)
IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
His Honour Judge Rich QC
Sitting as a Deputy Judge of the High Court
Case No: TLC 445/04
MR PHILIP JONES (Instructed by Messrs Mackrell Turner Garrett) appeared on behalf of the Claimant
MR IAN MASON (Instructed by Messrs Knights Solicitors) appeared on behalf of the Second Defendant
MR HUGH JACKSON (Instructed by Messrs Eversheds LLP) appeared on behalf of the Third Defendant
Approved Judgment
Digital Transcript of Smith Bernal Wordwave Limited 183 Clarence Street Kingston-Upon-Thames Surrey KT1 1Q Tel No: 020 8974 7300 Fax No: 020 8974 7301
THE DEPUTY JUDGE:
The first defendant ("Marvi") is the registered proprietor of the leasehold property at 8 Bron Court, Bronsbury Road, NW6 6AU. He was so registered on 4 July 2001 on presentation to the Land Registry of a transfer dated 2 April 2001 from the claimant to Marvi. It is accepted in these proceedings that the claimant's signature on that transfer was forged, and the claimant seeks rectification of the register to restore him as registered proprietor.
Marvi does not appear before the court. It is said that he is untraceable. He has no interest in maintaining the entry of his name on the register because, on 20 December 2002, he contracted to sell the leasehold to the second defendant, Mr Rafaq. That contract was completed by a transfer on 7 January 2003 for a consideration of £223,000 of which the third defendant ("the Bank") provided £189,550 in return for a charge. A mortgage which Marvi had taken from Kensington Mortgage Company in the sum of £152,000 or thereabouts was discharged, but he walked away with £70,000 odd.
At the time of Marvi's purported purchase, it was he instructed the solicitors who purported to act for the claimant. He thus procured that the proceeds of that transaction, which should have been paid to the claimant, were also paid either to himself, some £22,500, or at his nomination to a Dr Khan, £30,731.50. Marvi had also, on 15 August 2000, before the transfer to himself, forged the claimant's signature on a mortgage for £105,000 to iGroup. He used part of the proceeds of that mortgage to redeem the two charges for a total of £60,000 odd which the claimant had himself granted, coincidentally, to the Bank. Marvi, however, diverted the rest of the monies advanced by iGroup into his own account, £42,369 odd. Thus Marvi has obtained some £165,000 out of his dealings with the property and left the claimant without any title to it.
The claimant's claim for rectification is resisted by the two remaining defendants who counterclaim declarations that Mr Rafaq's entitlement by virtue of the statutory magic arising under section 69 of the Land Registration Act 1925 to be registered as proprietor, and that the Bank's registration of its charge should each be given priority in accordance with their application dated 14 February 2003, over the claimant's application for rectification, which is dated 24 April 2003.
The defendants' solicitors do not appear to have made any search of the Register before the contract with Marvi was signed on 20 December 2002. They were therefore unaware of a caution entered by a Mr Jafari who had a claim against Marvi on 16 December 2002. It was only on the day following the transfer that they made such a search and then made their application to register within the priority period. Accordingly, Mr Jafari was able to enter an objection to registration. It appears from a direction of the Land Registry dated 24 May 2005, that the Land Registry had directed Mr Jafari to issue proceedings for the determination of whether his caution should be cancelled on or before 11 December 2003 and that, because he had failed to do so, his caution was cancelled pursuant to rule 299(4) of the Land Registration Rules 1925.
That rule empowers the Registrar, in such circumstances, also to direct that effect should be given to the defendants' application (that is to say to register) as if the objection had not been made. The Registrar did not, however, so direct because on 24 April 2003 the claimant had made the application "under section 82 seeking cancellation of existing owner registration and the restoring of the register of the claimant". That was supported by a statutory declaration by the claimant's attorney, a Mr Razawi, who declared:
"6. Upon a visit to the United Kingdom in December 2002 Mr Amir Nouri informs me that he learnt from Mr Ali Marvi that not only did he sell the property to himself he was also in the process of completing a sale of the property to a third party. The sale price of this is not known to Mr Amir Nouri or myself.
7. I was instructed by Mr Amir Nouri to investigate the matter and have accordingly instructed the firm of Mackrell Turner Garrett … to apply for a rectification of the register under s.82(3) of Land Registration Act 1925."
This was treated, as has been agreed at the Bar was right, as an application to rectify the Register. Accordingly the Registrar directed on 14 October 2003 as follows:
"WHEREAS:
(1) The registered proprietor of the property is Ali Marvi, registered on 4 July 2001.
(2) On 14 February 2003, the Applicant applied to register a transfer dated 7 January 2003 made between (1) the said Ali Marvi and (2) the Applicant ("the 2003 transfer").
(3) The Respondent was previously registered as proprietor of the Property on 8 August 1996.
(4) The Respondent has objected to the registration of the 2003 transfer on the grounds that an earlier transfer of the Property dated 2 April 2001 made between (1) the Respondent and (2) the said Ali Marvi was not executed by or with the authority of the Respondent.
The Solicitor to HM Land Registry directs the Respondent to issue proceedings in the Chancery Division of the High Court of Justice on or before 11 December 2003 for the purpose of determining whether the register should be rectified to show the Respondent as registered proprietor."
It is in compliance with that direction that these proceedings have been issued. In their course, the Bank, by a letter dated 26 August 2005, formally admitted:
"1. The Third Defendant accepts that the signatures on the Legal Charge to the iGroup and upon the Transfer from the Claimant to the First Defendant are not in the hand of the Claimant.
2. The Third Defendant accepts that the Claimant did not intentionally permit the First Defendant to sign documents in the Claimant's name for the purpose of entering into the Legal Charge to the iGroup or the Transfer from the Claimant to the First Defendant."
Likewise on 27 September 2005, Mr Rafaq made the following admissions (I read only those which are material):
"1. The following admissions are made on behalf of the second defendant and Part 20 claimant:
(a) The 2001 transfer was not signed by the claimant;
(b) The signature on the 2001 transfer purporting to be that of the claimant is not in the hand of the claimant;
(c) On a balance of probabilities the 2001 transfer was a fraudulent transaction carried out by the first defendant.
…
3. It is further admitted that the signatures on the legal charge to the iGroup are not in the hand of the claimant."
Section 82 of the Land Registration Act 1925 provides:
"(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…"
I will read only cases (d) and (g) for reasons which will appear:
"(d) Where the court or the registrar is satisfied that any entry in the register has been obtained by fraud …
(g) Where a legal estate has been registered in the name of a person who if the land had not been registered would not have been the estate owner…"
One of the provisions to which this power to rectify is subject is found in subsection (3) which (as amended) reads:
"The register shall not be rectified, except for the purpose of giving effect to an overriding interest [or an order of the court]…"
(Those last words having been inserted by the Administration of Justice Act 1977):
"… 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
…
(c) unless for any other reason, in any particular case, it is considered that it would be unjust not to rectify the register against him."
The claimant had pleaded that cases (a), (b) and (h) (which I have not read) applied as well as (d) and added case (g) only by way of amendment permitted by consent in the course of the hearing on the Bank's contention that only (g) applied. Mr Jackson for the Bank had maintained this point, because he submitted that, if the jurisdiction to rectify arose only under case (g), the discretion to rectify as against Mr Rafaq would be fettered by subsection (3), whereas under the case as pleaded, it would be unfettered, as he accepted it would be in any case under any of the cases, against the Bank.
I think this distinction is mistaken, because my understanding of Peter Gibson LJ's judgment in Kingsalton Limited v Thames Water Developments Limited [2002] 1 P&CR 184, is that the court's discretion is unfettered by subsection (3) in any case. It is only the discretion of the registrar that may be fettered when the circumstances of subsection (3) are satisfied. I read from his judgments at paragraphs 17 and 18:
"17. The first issue which arises is a point taken by Mr Elvin QC for Kingsalton for the first time in this Court. By its respondent's notice, Kingsalton says that the Deputy Judge need not have considered section 82(3) because the questions raised by the subsection...
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Nouri v Marvi
...2009 Master Eyre ordered the trial of a preliminary issue on this limitation point. It was tried by Norris J on 7 th October 2009 ( [2009] EWHC 2725 (Ch)). He found that the claim in negligence was statute barred because Mr Nouri did suffer actual damage on completion of the sale and was no......