Rita Brenda Knight v Michael Fernley
| Jurisdiction | England & Wales |
| Judge | Mr Justice Marcus Smith |
| Judgment Date | 21 May 2021 |
| Neutral Citation | [2021] EWHC 1343 (Ch) |
| Court | Chancery Division |
| Docket Number | Claim No: F30BS790 |
| Date | 21 May 2021 |
[2021] EWHC 1343 (Ch)
IN THE HIGH COURT OF JUSTICE
BUSINESS AND PROPERTY COURTS IN BRISTOL
Appeals (ChD)
On appeal from the County Court at Bristol
Order of Mr Recorder Hyam, QC dated 19 March 2020
Sitting remotely at: Bristol Civil Justice Centre
2 Redcliff Street
Bristol BS1 6GR
THE HONOURABLE Mr Justice Marcus Smith
Claim No: F30BS790
Appeal No: None allocated
Mr James Howlett (instructed by DGR Law) appeared for the Appellant
Mr Simon Williams (instructed by Humphries Kirk Solicitors) appeared for Respondents
Hearing date: 4 May 2021
Approved Judgment
I direct that no official shorthand note shall be taken of this Judgment and that copies of this version as handed down may be treated as authentic.
A. INTRODUCTION
. This is an appeal from the order of Mr Recorder Hyam, QC (the “Judge”) dated 20 March 2020 (the “Order”). By his Order, and for the reasons given in his judgment (the “Judgment”), the Judge refused the Appellant's application for an order altering the proprietorship register of a plot of land registered at Her Majesty's Land Registry under Title Number WT157289 so as to substitute the Appellant's name for that of the Respondents. The Appellant sought a declaration as to ownership of this property to similar effect, which was also refused by the Judge.
. The Judge refused permission to appeal. Permission was given by order of Murray J dated 15 May 2000, and the appeal was heard by me on 4 May 2021. I reserved my judgment, and this is that judgment. 1
B. THE FACTS
. The facts of this case are largely uncontroversial and are adopted by me (with gratitude) from the careful Judgment of the Judge and from the documents in the trial bundles that were before the Judge.
. This appeal concerns the development and sale of a plot of land registered at Her Majesty's Land Registry under Title Number WT157289. The land is situate in Marlborough, and is more precisely described below.
. The developers of the land were Morteza Pourzadeh and Sepehr Izadpanah trading as “Pars Developments” (which is how I shall refer to Messrs Pourzadeh and Izadpanah). The land being developed comprised in substance three dwelling houses, built by Pars Developments, and described in the contracts for their sale as “Plot 1”, “Plot 2” and “Plot 3”.
. The Appellant, Mrs Knight, was the purchaser of Plot 1. The contract of sale (dated 20 August 2015) describes the property as “Plot Number 1, 1A London Road, Marlborough SN8 1PH to be known as 3 Wye Lane, Marlborough SN8 1PH and shown edged red on plan 1”. The land being developed by Pars Development was in the shape of a capital “T”. The T's cross-bar comprised Plot 2 (to the left) and Plot 1 (to the right) abutting Wye Lane and becoming, respectively, 2 and 3 Wye Lane. Plot 3 formed the T's downstroke.
. As with many developments, not all of the land was used for Plots 1, 2 and 3. There were various what I shall term “off-cuts” – effectively useless pieces of land, of no development potential. One of these off-cuts is of central importance to this appeal, and it is referred to as “Plot A”. Plot A is a small, parallelogram or perhaps rectangular shaped piece of land, about 2 metres by 1 metre in size. Plot A does not, in any way, abut Plot 1,
but sits next to, and to the left of, Plot 3. Plot 3 lies between and separates Plot 1 from Plot A. The land to the left of the T is not open space. There are six properties comprising the land to the left of the T, and these properties are known as numbers 1 to 6 London Road. Numbers 1 to 6 London Road abut the development and (on their other side) abut London Road. Plot A sits between 6 London Road and Plot 3.
. Pars Development succeeded in selling all three of Plots 1, 2 and 3. All three plots were part of the same parcel of registered land, registered (as I have said) under Title Number WT157289. In order to convey the relevant part of this registered title, Pars Development (as transferor) executed in favour of the purchasers of each of Plots 1, 2 and 3 (as transferees) a form “TP1”, which is the form used to transfer part of a registered title. It is the practice of Her Majesty's Land Registry, when registering transfers such as this, to allocate a new title number to the part of the land being transferred. The territorial extent of the old registered title is diminished to that extent, although the title number of that remaining portion remains the same.
. Of course, if the TP1 is not registered, no new registered title is created, although the transferee holds that part beneficially, with the transferor as trustee of that beneficial interest. In this case, on the sale of Plots 2 and 3, TP1s were duly executed and registered, and (on registration) new registered titles of the legal estate were carved out of the old registered title. That left Plot 1 and Plot A:
(1) The Appellant completed the purchase of Plot 1 on 21 August 2015 when a form TP1 was executed in her favour by Pars Developments. The form identifies the title number out of which the property was transferred (i.e., Title Number WT157289) and identified Plot 1 by reference to an attached plan. The consideration paid by the Appellant for Plot 1 was £309,000.
(2) Unfortunately, the form TP1 was never registered by the Appellant's solicitors. This was clearly a mistake and (for the purposes of this judgment) I proceed on the basis that it was a negligent mistake, in breach of the Appellant's solicitors' duty of care owed to the Appellant, such that the Appellant has a good cause of action against those solicitors so as to hold her harmless against any losses that the solicitors' negligence might occasion.
(3) It was common ground between the Appellant and the Respondents that this failure to register meant that the Appellant only ever had an equitable interest in Plot 1. Thus, section 27 of the Land Registration Act 2002 provides:
“(1) If a disposition of a registered estate or registered charge is required to be completed by registration, it does not operate at law until the relevant registration requirements are met.
(2) In the case of a registered estate, the following are the dispositions which are required to be completed by registration –
(a) a transfer…”
This transaction was a disposition falling within section 27(2)(a) and so it could not operate at law until the relevant registration requirements were met, and they were not. 2 However, pending registration, the Appellant held an equitable interest in Plot 1 – but, to be clear, that interest will have extended only to Plot 1 as defined, and not to any other part of the land registered under Title Number WT157289. 3
(4) The Respondents, Mr and Mrs Fernley, were – at this time – the owners of 6 London Road. Unsurprisingly, they were interested in purchasing the (otherwise useless) Plot A in order to extend the rear of their property. They agreed with Pars Developments to purchase Plot A for £2,500 and this sale was effected by a transfer under form TR1 dated 7 December 2015. It is important to be very clear about the findings that the Judge made in relation to this transaction:
(a) There was no intention – on the part of either the Respondents or Pars Developments – to transfer more than Plot A.
(b) The reason form TR1 was used – which, unlike form TP1, concerns the transfer of the whole of a registered title – is because the parties proceeded on the basis that Plot A and the land registered under Title Number WT157289 were co-extensive.
(c) That was an entirely reasonable assumption, and one that would have been correct, had the Appellant's solicitors registered the transfer of Plot 1 as they should have done.
(5) The effect of this combination of events was that the Respondents became registered proprietors of all of the land registered under Title Number WT157289, which comprised (at that time) Plot A and Plot 1.
(6) The Appellant has, since discovering this state of affairs, sought to correct it. But Her Majesty's Land Registry have declined to do so unilaterally; and the Respondents have declined to consent to any change in the proprietorship register to reflect the Appellant's interest (such as it may be) in relation to Plot 1. The details of the Appellant's dealings with Her Majesty's Land Registry and those of her dealings with the Respondents, to the extent they are known, 4 are matters that it is unnecessary to explore. It is sufficient to note that the Respondents became the proprietors of the land registered under Title Number WT157289 on registration of the form TR1 dated 7 December 2015 that I have described above.
(7) In the Judgment, the Judge noted that 6 London Road “has now been sold”. 5 The circumstances are of relevance, as they affect the extent of the land now registered under Title Number WT157289. Under a form TR5 – which concerns the transfer
of a portfolio of titles (whether in whole or in part) – dated 28 January 2019, the Respondents transferred to a transferee (whose identity is immaterial):(a) The property under Title Number WT227692, this being 6 London Road.
(b) Part of the property under Title Number WT157289. The form describes the part so transferred in the following terms:
“Part of the land known as 1A London Road, Marlborough, Wiltshire, which comprises the landlocked courtyard area to the rear of 6 London Road, Marlborough, shown shaded pink on the attached plan.”
Thus, 6 London Road plus what I am referring to as Plot A have been transferred by the Respondents to the new proprietor. Plot A, being a part of a larger title, Title Number WT157289, will of course receive a fresh title number. The result is that Title Number WT157289 now only describes what I...
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Knight v Fernley: Motivation For Registration
...Court has recently handed down their judgment in Knight v Fernley and another [2021] EWHC 1343 (Ch) which concerns the consequences of a purchaser failing to register their interest with the Land The judgment applies the well-established principle that following the sale of registered freeh......
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Knight v Fernley: Motivation For Registration
...Court has recently handed down their judgment in Knight v Fernley and another [2021] EWHC 1343 (Ch) which concerns the consequences of a purchaser failing to register their interest with the Land The judgment applies the well-established principle that following the sale of registered freeh......
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Mistakes, mispleading and overreaching: understanding title registration and correcting the register
...but importantly, you had never been the owner of the legal title, so it was not a“return”you want, but a transfer for the first time.3. [2021] EWHC 1343 (Ch)4. The developed land was held originally under one title number, and this was the transfer of Plot1, carved out of the larger plot. ......
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Mistakes, mispleading and overreaching: understanding title registration and correcting the register
...but importantly, you had never been the owner of the legal title, so it was not a“return”you want, but a transfer for the first time.3. [2021] EWHC 1343 (Ch)4. The developed land was held originally under one title number, and this was the transfer of Plot1, carved out of the larger plot. ......