Antoine v Barclays Bank Plc & Ors

This case involves the trial of two separate actions which have been directed to be heard on the same occasion by Order of the Court.

The first action in time (HC-06C04188) (“the 2006 Claim”) dates back to 2006 and concerns a dispute between Mrs Athena Taylor (“Mrs Taylor”) as Personal Representative of her deceased husband, Mr George Taylor (“Mr Taylor”) and Mr

The 2006 Claim involved a claim for relief by Mr Taylor in respect of a property at 14

On 12 July 2007, Mr Taylor obtained an order from Master Moncaster in Mr Antoine’s absence (“the July 2007 Order”) to the effect that in default of payment of what was referred to as “the Mortgage Debt” and absent notice of intention to redeem the mortgage, Mr Taylor would be absolutely entitled to all the estate and the interest of Mr Joseph in the freehold of the Property and to have transfer thereof. In the event of default by an identified date, it was ordered that Mr Taylor be registered as the proprietor of the freehold in the Property and that the leasehold would vest in Mr Taylor.

Mr Taylor received no payment and no notice of intention to redeem the mortgage by the default date and title to the Property vested in him pursuant to the July 2007

In early 2008, Mr Taylor obtained a loan by way of legal mortgage from Woolwich Mortgages (by then a part or a subsidiary of Barclays Bank) (“Barclays”) in the sum of £80,000 which was secured on the Property by way of a legal charge dated 26 February 2008 (“the Legal Charge”). The Legal Charge was registered at HMLR.

In 2008, Mr Antoine discovered that Mr Taylor was carrying out renovations at the Property and applied to set aside the July 2007 Order on the grounds that it was obtained by fraud. In particular, Mr Antoine asserted that the Contested Documents were all forgeries and that his father’s signature on two of the three Contested Documents was not genuine.

By an Order dated 10 July 2008 (“the July 2008 Order”), Master Moncaster ordered that the 2006 Claim should continue against Mr Antoine as personal representative of Mr Joseph. He set aside the July 2007 Order albeit without prejudice to the rights of

Some further steps were taken in the 2006 Claim, as more particularly set out below, but it was ultimately not pursued beyond the receipt of a report on the signatures on the Contested Documents from a jointly instructed handwriting expert (Dr Audrey Giles) dated 26 March 2009.

In the second action in time (HC-0002311) (“the 2016 Claim”), originally commenced only against Barclays and the Chief Land Registrar (“the Registrar”) as Defendants, Mr Antoine seeks a declaration that the two Contested Documents which purport to have been signed by Mr Joseph are null and void and of no legal effect. Further, he seeks an order pursuant to paragraph 2(1)(a) of Schedule 4 of the Land

Barclays and the Registrar do not dispute that the Contested Documents are forgeries but dispute the claim for an order altering the register on grounds of mistake. They both maintain, for reasons I shall return to later, that there is no proper basis for the register to be altered so as to delete the Legal Charge. Mrs Taylor, later joined as

On the first morning of the trial, Mr Antoine made an application to amend his Reply to Barclays’ Amended Defence in the 2016 Claim which I permitted in part and shall return to in due course. He also made an application to extend time for service of a

Ms Yates, acting on behalf of the Registrar, invited me to take a pragmatic approach to this application. Although she maintains that the new case has no prospect of success, she was not prejudiced in dealing with it and proposed that I deal with it de bene esse, which I agreed to do. I return to it later in this Judgment.

At the heart of this case lies an important point of principle as to whether a court order said to have been obtained by reference to forged documents and given effect to by an entry on the register at HMLR results in a “mistake” for the purposes of the Land Registration Act 2002 (“the LRA”) such that the Court has power to alter the register for the purpose of correcting that mistake.

The parties are agreed that the following issues fall to be determined at trial:

Issues Common to both the 2006 and 2016 Claims:

Issues particular to the 2006 Claim (all of which, apart from the Issue at 17.3, assume that the Contested Documents were forgeries):

Issues particular to the 2016 Claim (all of, which apart from the issue at 18.5, assume that the Contested Documents were forgeries)

In his skeleton argument for trial and during the course of his closing submissions, Mr Serugo-Lugo, appearing on behalf of Mrs Taylor, raised some additional points which he invited me to consider. I shall pick these up during the course of my judgment.

The parties each called witnesses in support of their cases:

In addition to the report of Dr Giles obtained in the context of the 2006 Claim, a further report dated 22 August 2017 was obtained in the 2016 Proceedings by Mrs Taylor from Mr Stephen Cosslett. Dr Giles and Mr Cosslett signed a Joint Statement in September 2017. In light of their agreement that the disputed signatures of Mr Joseph in the Contested Documents “demonstrate significant and consistent differences” when compared with undisputed examples of his signature and their respective views that:

Before I address the issues in this matter, I need to set out in some detail the registration and conveyancing history of the Property.

On 22 November 1963 Hearts of Oak Benefit Society, as owner of the unregistered freehold, granted a lease of the Property to Mr Bernard Benjamin (“Mr Benjamin”)

First registration of the leasehold title occurred on 31 January 1964 (under title number LN237624) and the 1963 Charge was entered in the charges register on the same date.

On 5 August 1964 Mr Benjamin and Mr Joseph signed a memorandum of agreement for the sale of the leasehold interest in the Property for £4,700. On 7 September 1964 Mr Benjamin duly conveyed the leasehold interest to Mr Joseph for that sum. On the same date Mr Joseph executed a legal charge over the leasehold title in favour of the Metropolitan Borough of Fulham (“the 1964 Charge”). It would appear that the 1963 Charge was discharged at the same time.

Mr Joseph was registered as proprietor of the leasehold title on 14 October 1964 and the 1964 Charge was entered in the charges register on the same date.

On 26 March 1971 Mr Joseph purchased the freehold reversion to the Property from Hearts of Oak Benefit Society for £2,100. On the same date Mr Joseph executed a legal charge over the Freehold in favour of the London Borough of Hammersmith (“the 1971 Charge”). The conveyance as originally drafted contained a provision (at clause 2) for the leasehold title to merge and be extinguished in the freehold title, but the provision was struck through prior to execution, thus ensuring that both titles remained extant.

On 31 March 1971, Mr Joseph applied for first registration of the freehold title. He was registered as proprietor on 19 April 1971 (under title number NGL162212) and the 1971 Charge was entered in the charges register on the same date.

According to Mrs Taylor’s case in the 2006 Claim, the 1987 Transaction took place as evidenced by the Contested Documents:

It would appear that Mr Taylor knew nothing about the Contested Documents at the time when they were executed. His case in the 2006 Claim was that he first learned of their existence in May 2005, when they were provided to him by Mr Borland, who had been a witness to the execution of each of them. Mr Borland’s evidence is that he was not only present at the time of the signing of the Contested Documents but that he also prepared them on behalf of Ms Pisani.

As referred to above, Mr Joseph died on 21 February 1996 and administration of his estate was granted to Mr Antoine on 14 August 1996. Mr Antoine confirmed in his oral evidence that he did not take any legal advice as to his duties as administrator and did not register himself as proprietor of the Property.

Mr Antoine decided to retain the Property but did not live in it (his own residence being 66 Saltoun Road SW2 (“Saltoun Road”)) and it was left unoccupied for many years. Mr Antoine’s oral evidence was that he visited the Property to collect mail every month or so, but that he did not arrange for mail addressed to the Property to be forwarded to him.

In 2005, squatters broke into the Property. Mr Antoine persuaded them to leave voluntarily, without the need to take legal proceedings, and he then boarded up the Property in an attempt to make it more secure. By this time, Mr Antoine accepted in cross-examination that he was visiting the Property less frequently owing to medical problems and from about March 2006, Mr Antoine did not visit the Property at all.

In about October 2007, Mr Antoine and his family left Saltoun Road to move to New Zealand. Although Mr Antoine arranged for mail addressed to Saltoun Road to be forwarded to his sister’s address, he still made no arrangement for mail addressed to the Property to be forwarded to an alternative address.

On 25 November 2005, Mr Taylor applied to HMLR by UN1 to enter a unilateral notice against the freehold and leasehold titles in reliance on the Contested Documents. HMLR rejected the application on 29 November 2005 and invited him to resubmit the application in a different format. On 13 December 2005, Mr Taylor made a fresh application by two RX1s for restrictions in Form N, one in respect of each title.

On 19 December 2005, HMLR sent a notice of the applications to Mr Joseph at the Property, asking for any objection thereto to be made by 12 January 2006. In the absence of receipt of any objection, HMLR completed the freehold application with deemed effect from 13 December 2005, and completed the leasehold application with deemed effect from 19 December 2005.

On 4 August 2006 Mr Taylor issued the 2006 Claim claiming against Mr Joseph an order for the transfer of both titles in the Property in reliance on the Contested

On 11 January 2007 and 15 January 2007 respectively, Mr Taylor applied to HMLR by form AP1 to discharge the 1971 Charge and the 1964 Charge from the freehold and leasehold title, enclosing DS1s from the London Borough of Hammersmith and Fulham. The application was completed in respect of both titles with deemed effect from 15 January 2007.

In circumstances where Mr Taylor asserted that he had been unable to effect service at the Property of the 2006 Claim on Mr Joseph and had been unable to trace Mr Joseph despite the involvement of a private investigator, Master Moncaster made an order dated 9 March 2007 for substituted service of the 2006 Claim, which required the claim to be advertised in local newspapers in Fulham, Grenada and St Lucia.

On 12 July 2007, in the absence of Mr Joseph, Master Moncaster made the July 2007 Order referred to above and on 11 September 2007, having received no payment and no notice to redeem, Mr Taylor applied to HMLR by form AP1 for a transfer of both the freehold and leasehold interest pursuant to the July 2007 Order.

On 14 September 2007 HMLR received an application on behalf of Mr Taylor to be registered as the proprietor of the freehold and leasehold titles to the Property. This application was made on form AP1, Panel 6 of which specified that a single document was lodged with the application: “a sealed court order dated the 12^th July 2007”; that is, the July 2007 Order.

Also on 14 September 2007, HMLR raised a requisition that requested a postal address for Mr Taylor and sent a notice of the application addressed to Mr Joseph at the Property, inviting an objection to the application by 12pm on 5 October 2007.

On 19 September 2007, HMLR received an application on behalf of Mr Taylor on form RX4 (dated 17 September 2007) to remove the restrictions that had been entered onto the freehold and leasehold titles in December 2005, and the application was completed.

By a letter dated 14 November 2007, Mr Taylor personally made an application to HMLR to change his postal address to the Property, stating that he had “now been able to move to the above address”. The application was completed with deemed effect on 16 November 2007. Letters were sent by HMLR to Mr Taylor at the Property on 16 November 2007 in respect of the freehold and leasehold titles. These letters did not come to Mr Antoine’s attention at the time, although he fairly accepted in cross-examination that if he had made arrangements for mail addressed to the Property to be forwarded to an alternative address, they would have come to his attention.

On 12 December 2007 Mr Taylor made a mortgage application to Barclays, seeking a loan of £70,000 in order to renovate the Property.

On 2 January 2008 a mortgage valuation report was prepared for Barclays, valuing the Property at £650,000 and noting that it was vacant and in need of major refurbishment.

On 3 January 2008 Mr Taylor wrote to HMLR asking for the leasehold title to be closed in readiness for registering a charge against the freehold title in favour of Barclays.

On 10 January 2008 HMLR effected a merger of the two titles, thereby bringing the leasehold title to an end. The deemed date of determination of the title, and of closure of the register, was 4 January 2008.

On or about 4 February 2008 Mr Taylor asked to increase the amount of the loan to £80,000, which Barclays approved by way of a formal mortgage offer on 6 February 2008 for £80,000 together with an application fee.

On 26 February 2008 Mr Taylor executed the Legal Charge in favour of the Bank charging the freehold title to the Property as security for repayment of the loan.

On 29 February 2008, Mr Taylor’s solicitors applied to HMLR to register the Legal Charge against the title to the Property, which was deemed completed on the same date.

Mr Antoine’s case in the 2016 Claim (which I accept) is that he first discovered that the freehold title to the Property had been transferred into Mr Taylor’s name in about April 2008, and first became aware of the existence of the July 2007 Order when it was sent to his solicitors by HMLR on 23 April 2008 following a request by them for documents to show how Mr Taylor had become registered as the owner of the Property.

On 8 May 2008 Mr Antoine applied to be joined to the 2006 Claim and to set aside the July 2007 Order, on the basis that he had not been served with the proceedings and that the July 2007 Order had been obtained by defrauding the Court. On 9 May 2008, Mr Antoine also applied for an injunction to restrain Mr Taylor from dealing with the Property.

On 13 May 2008 Mr Antoine applied to HMLR by UN1 to enter a unilateral notice against the freehold title to the Property (“the Unilateral Notice”) on the basis of the pending 2006 Claim. The notice was entered in the charges register on 14 May 2008.

Master Moncaster made the July 2008 Order setting aside the July 2007 Order without prejudice to Barclay’s rights pursuant to the Legal Charge and gave directions for the parties to file and serve statements of case. Between 22 August and 27 October 2008, the parties to the 2006 Claim filed and served their respective statements of case.

On 26 March 2009, Dr Giles acting as joint expert provided her report on the authenticity of the signatures in the Contested Documents. On or about 24 April 2009, Mr Taylor filed his allocation questionnaire in the 2006 Claim. No further progress was made in those proceedings at that time.

On 9 February 2009 Mr Antoine applied to HMLR by AP1 for the register to be altered so as to show him as the registered proprietor of the freehold title, but without prejudice to the rights of Barclays (pursuant to the July 2008 Order). The application was entered onto the Day List on 11 February 2009.

HMLR gave notice of the application to Mr Taylor via his solicitors on 18 February

Mr Taylor died intestate on 13 June 2013 and payments of the mortgage to Barclays ceased in July 2013. It was Mrs Taylor’s oral evidence that her husband’s estate had nil value other than the Property, or the claim to the Property. In September 2013,

On 20 February 2015 Barclays appointed Touchstone CPS Ltd as LPA receiver. It is

The 2016 Claim which is the lead claim in these joined proceedings, was issued against Barclays and the Registrar on 4 August 2016. At a CMC on 17 October 2016,

A PTR was held on 30 January 2018 at which the court directed that the experts’ respective reports would stand as their evidence and that they would not be crossexamined at trial. It seems that Mrs Taylor made an application for disclosure of original documents at the PTR which she wanted to provide to Mr Cosslett who, unlike Dr Giles, had seen only copies. However this application was dismissed.

Before I turn to address the live issues in the order they have been identified earlier in this Judgment, I should deal with a submission from Mr Serugo-Lugo on the part of Mrs Taylor to the effect that Master Moncaster should not have heard the application to set aside the July 2007 Order which it is argued was in effect an appeal from his

I reject these submissions. Mr Serugo-Lugo was unable to show me any authority supporting the proposition that Master Moncaster should have refused to hear the application to set aside the July 2007 Order and he was unable to explain the grounds on which he said Master Moncaster was biased. The July 2007 Order was made in the absence of Mr Joseph (the original Defendant) and Mr Antoine’s evidence, which I accept, is that he had been unaware of the 2006 Claim at that stage. The July 2007 Order gave liberty to the parties to apply. When Mr Antoine discovered the existence of the July 2007 Order, he made an application to set it aside. He did so (as Ms Yates submitted) not by way of an appeal from a regular order, but pursuant to the inherent jurisdiction of the court that entitles it to set aside irregular orders (Isaacs v Robertson [1985] 1 AC 99 (PC) per Lord Diplock at p. 103). I can see no proper basis on which I could find that the July 2008 Order took no effect.

An allegation of forgery is an allegation of fraud. Mr Serugo-Lugo directed my attention to the decision of Mr John Martin QC, sitting as a Deputy High Court Judge in Tony Pittas v Katerina Christou [2014] EWHC 79 (Ch), a case involving an allegation of forgery in relation to a will, on the approach to be adopted to such an allegation.

At paragraph 13 of his judgment, Mr Martin QC said this:

“…there is no dispute that the approach I should adopt…is first to assess the lay evidence and then see whether or not the handwriting evidence supports the view I have formed of the lay evidence: Supple v Pender [2007] WTLR 1461. As to the standard of proof, there was agreement between the parties that the relevant approach was that set out in Re H [1996] AC 536, where Lord Nicholls said this (at pp 586-7):

‘the balance of probability standard means that a court is satisfied an event occurred if the court considers that, on the evidence, the occurrence of the event was more likely than not. When assessing the probabilities the court will have in mind as a factor, to whatever extent is appropriate in the particular case, that the more serious the allegation the less likely it is that the event occurred and, hence, the stronger should be the evidence before the court concludes that the allegation is established on the balance of probability. Fraud is usually less likely than negligence…Built into the preponderance of probability standard is a generous degree of flexibility in respect of the seriousness of the allegation.

Although the result is much the same, this does not mean that where a serious allegation is in issue the standard of proof required is higher. It means only that the inherent probability or improbability of an event in itself is a matter to be taken into account when weighing the probabilities and deciding whether, on balance, the event occurred. The more improbable the event, the stronger must be the evidence that it did occur before, on the balance of probability, its occurrence will be established…This approach also provides a means by which the balance of probability standard can accommodate one’s instinctive feeling that even in civil proceedings a court should be more sure before finding serious allegations proved

than when deciding less serious or trivial matters’.”

I did not understand any of the other parties to disagree with the guidance and approach articulated in Re H, and I have approached my analysis accordingly. As to the order in which I should assess the evidence, Ms Yates submitted that as a matter of discretion the court is entitled to decide upon the order in which it deals with the evidence of fact and the expert evidence and she said that whilst the approach taken in

Mrs Taylor’s case is that the Contested Documents are genuine. She says that she is the victim of a carefully planned scheme by Mr Antoine to dispossess her late husband of the Property by reliance on false allegations of fraud, albeit that this case was not in fact put to Mr Antoine in cross-examination. In passing, I note that Mr Serugo-Lugo sought in his skeleton argument and in his oral closing to question Mr

Mrs Taylor relies on Mr Borland’s evidence to support her case that the Contested Documents are genuine.

According to Mr Borland’s witness statements, the Contested Documents came to be prepared in the following circumstances.

In my judgment there are a number of significant difficulties with Mr Borland’s evidence. However, before I address these difficulties, I need to summarise Mr

I have already said that I accept Mr Antoine’s evidence, and in a number of important respects it is obviously inconsistent with Mr Borland’s evidence, which I consider to be unreliable. I do not accept from Mr Borland that he had any form of social relationship with Mr Joseph – he was certainly unable to give any description of Mr Joseph when asked to do so in cross-examination and I believe that if he had enjoyed the social interaction with Mr Joseph that he says he had, this would inevitably have come to the attention of Mr Antoine. In light of Mr Antoine’s evidence as to the state of his father’s finances, I find it very difficult to believe that Mr Joseph would have needed to borrow £11,000 in 1987, or indeed that he would have sought out an arrangement of the type alleged (as opposed to seeking a loan through more conventional channels). Furthermore, I find it incredible that he would have confirmed to Mr Borland that Mr Benjamin was the leasehold owner of the Property when he, Mr Joseph, had become the leasehold owner many years before. I also find it incredible that Mr Joseph would have jeopardised his home for a loan of £11,000 (at a rate of 6% interest per annum), that he would not have kept any record for himself of such a loan and that he would have said nothing about it to Mr Antoine. In short, I am unable to accept Mr Borland’s evidence as to the 1987 Transaction, and in particular, his evidence that Mr Joseph signed the Contested Notice Document and the Contested Freehold Document.

Mr Umezuruike points out that Mr Borland has criminal convictions for dishonesty and he relies in particular upon convictions which are recorded in what appears to be an unreported judgment of the Court of Appeal dated 20 May 1969; R v Ernest Courtney Borland. Mr Borland confirmed in cross-examination that this case had indeed involved him. Mr Umezuruike says I must have regard to what he referred to as “a conviction” in this case as similar fact evidence.

It is clear from the judgment that Mr Borland had been appealing against two convictions of obtaining money by false pretences and one count of larceny. The former convictions appear from the report to have arisen in circumstances where Mr Borland was purporting to act as an estate agent and (i) took £125 from a prospective purchaser, a Mr May, provided him with a receipt indicating that the money was part payment of the purchase price of a property, but then used the majority of the money to pay off a debt owed by one Mr Gooding to Ilford Borough Council in respect of a mortgage on that same property (count 1), and (ii) took £13 from Mr May which he said was a survey fee having asked him to sign a document which he said was an application form for a mortgage (count 3).

In the judgment, Edmund Davies LJ records at page 2D-F the background facts to the

I am bound to say that I have some difficulty with this submission. There appears to have been no conviction based on these background facts and certainly I can find no indication in the judgment of the Court of Appeal that any finding was made in respect of these facts. The matters in respect of which Mr Borland was in fact convicted (which convictions were all upheld by the Court of Appeal) do not, in my judgment, amount to similar fact evidence. Further and in any event, I was not shown any authority as to the approach to be taken by a civil court to similar fact evidence, or indeed as to what might properly be said to amount to similar fact evidence.

In the circumstances, I reject the suggestion that I must have regard to similar fact evidence in this case, although it seems to me (as was accepted by Mr Serugo-Lugo) that I can and should have regard to the fact that Mr Borland has convictions for dishonesty in the context of my assessment of his general credibility. To this extent

Aside from the evidence of Mr Borland, the Contested Documents themselves appear to me to contain a number of oddities:

I turn shortly, then, to the expert evidence, which I have already summarised. As I understood his submissions, Mr Serugo-Lugo sought to challenge that evidence

In my judgment, there is strong evidence that the Contested Documents are forgeries and I accept that the burden of establishing that has been satisfied. I shall now turn to deal with the remaining issues on the basis that the Contested Documents were forged; I shall not address those issues which are premised upon the assumption that the Contested Documents are genuine.

Mr Umezuruike submits that Mrs Taylor’s claim should be dismissed in its entirety for the following reasons:

I was not shown any authorities as to unjust enrichment and I was not addressed as to the appropriate legal test. Mr Serugo-Lugo made no submissions on this issue.

Doing the best I can, in the circumstances, I take the view that Mrs Taylor’s claim should be dismissed in its entirety and that she is not entitled to the relief claimed.

Whilst I accept that extensive renovations were carried out to the Property by Mr Taylor, there is no evidence on which I can determine whether, and if so to what extent, such renovations have in fact increased the value of the Property. Furthermore, in light of findings I make later in this judgment, Mr Antoine will now be left in the unenviable position of either having to sell the Property to repay the monies due under the loan obtained by Mr Taylor from Barclays or of being subject to the exercise of Barclay’s power to sell the Property to recover the outstanding sum due under that loan, which I understand from Mr Althaus to be £149,973.97 as at 19 February 2018, of which some £69,378.97 is overdue arrears. It is very difficult to see how Mr Antoine could possibly have been unjustly enriched in such circumstances.

As to the claim for compensation in relation to the cost of renovation of the Property

In any event, I fail to see why Mrs Taylor should be entitled to compensation in circumstances where her husband (whether he realised it or not) had not obtained title to the Property by lawful means at the time and took out the loan from Barclays at his own risk without the knowledge of Mr Antoine. It would appear from a tenancy agreement dated 28 June 2010 that even after the July 2008 Order, Mr Taylor rented out the Property to tenants as “the Landlord”, thereby making a profit from the Property to which he was plainly not entitled. Although Mr Antoine has a claim to recover damages in the 2006 Claim for use and occupation of the Property, that claim was not pursued before me (as I have indicated already) in circumstances where he accepts that Mr Taylor’s estate is worth nothing. As a matter of justice, I find it very difficult to see why Mrs Taylor should be entitled to recover for the costs of renovation (including interest on the Barclays loan) in all of these circumstances.

Accordingly, I dismiss the 2006 Claim and I accept the submissions made on behalf of the Registrar and Mr Antoine that as a consequence of my decision I should direct the deletion by HMLR of the Unilateral Notice registered against title number NGL 162212 in favour of Mr Taylor, dated 19 March 2009.

The LRA is not merely a scheme for registering title: it is a scheme of title by registration. Accordingly, by s. 27(2)(a), “If a disposition of a registered estate... is required to be registered, it does not operate at law until the relevant registration requirements are met” (s. 27(1)). As the authors of Ruoff & Roper, Registered Conveyancing point out at para 46.001 “the policy of the LRA is that the Register should be a complete and accurate reflection of the state of the title to the registered estate at any given time. Registration not only records the effect of the transaction taking effect in the general law, but actually constitutes a registered proprietor’s title to a registered estate or charge”.

The register of title is kept by the registrar pursuant to section 1(1) of the LRA. He is bound by the Land Registration Rules 2003 (“the Rules”) as to the keeping of the register and his duties are circumscribed by the LRA and by the Rules.

Section 27(5) LRA provides that subject to three exceptions which are irrelevant for the purposes of this case, dispositions by operation of law are treated as registrable dispositions that must be completed by registration to take effect.

Pursuant to section 9 of the Law of Property Act 1925 (“the LPA”), a vesting order made by any court of competent authority for the purpose of vesting, conveying or creating a legal estate “shall operate to convey or create the legal estate disposed of in like manner as if the same had been a conveyance executed by the estate owner of the legal estate to which the order…relates”. A vesting order is thus a disposition by operation of law and is treated as a registrable disposition.

An application to register a disposition by operation of law must be accompanied by sufficient evidence of the disposition (the Rules at 161(1)). Where a vesting order has

Once the registration requirements have been satisfied, the entry of a person in the register as the proprietor of a registered estate is conclusive as to title (s. 58(1) LRA): “If, on the entry of a person in the register as the proprietor of a legal estate, the legal estate would not otherwise be vested in him, it shall be deemed to be vested in him as a result of the registration”.

A person who is the registered proprietor of an estate has the right to exercise

“owner’s powers” (LRA s. 24), which consist of the power to make a disposition of any kind permitted by the general law, including to charge the estate at law with the payment of money (LRA s. 23(1)(b)). The right to exercise owner’s powers in relation to a registered estate or charge is taken to be free from any limitation affecting the validity of a disposition, so as to prevent the disponee’s title being questioned (LRA s. 26).

The conclusiveness of the register is subject to the powers of alteration conferred on the Registrar and the Court by LRA s. 65 and Schedule 4.

By Schedule 4 para. 2, the Court,

Schedule 4 para. 2(2), provides that “An order under this paragraph has effect when served on the registrar to impose a duty on him to give effect to it”.

By reason of Schedule 4 para. 1, “rectification” is a specific type of alteration of the register, “which-

It follows that an alteration of the register only constitutes “rectification” where there is a “mistake” on the register that is being corrected, which “prejudicially affects” the title of a registered proprietor. In this case, the Bank’s title as registered proprietor of the Legal Charge would be prejudicially affected if the register were to be corrected so as to remove the Legal Charge. Accordingly, this is a case in which I am concerned with the exercise of the power to rectify the register, under Schedule 4 para 3. Different rules apply to updating the register, where the alteration does not amount to rectification.

Schedule 4, para 3 provides as follows:

I note in passing that some arguments were addressed to me during the hearing by Mr Umezuruike by reference to Schedule 4, para 3(2), but it was ultimately accepted that those arguments were not relevant to the issues that I have to decide and they were not pursued.

The Registrar enjoys similar powers of alteration, including rectification, as the Court (Schedule 4, paras 5 and 6).

The indemnity provisions of LRA s. 103 and Sch. 8 are the corollary of the powers to rectify the register. Indemnity is therefore an important part of the statutory context for rectification, and a potential consequence of such an order being made. However, I am not invited to make any order pursuant to the indemnity provisions in this case.

It is common ground that “mistake” is not defined in the LRA itself. However, the question of the circumstances in which a mistake may arise has recently been considered by the Court of Appeal in NRAM Ltd v Evans [2018] 1 WLR 639. In that case, the Bank had made an administrative error by mistakenly lodging an e-DS1 discharge with HMLR. A key issue on the appeal was whether the subsequent reregistration of the charge constituted the rectification of a mistake or simply an update to the register.

In his judgment (with which Richards LJ and Henderson LJ agreed) at paragraphs 4859, Kitchin LJ examines this question is some detail. At paragraph 51, he sets out an extract from Ruoff & Roper, Registered Conveyancing at para 46.009 in which the authors adopt a very similar formulation to that of the editors of Megarry & Wade: The Law of Real Property 8^th Ed (2012), to this effect:

“[T]here will be a mistake whenever the registrar (i) makes an entry in the register that he would not have made; (ii) makes an entry in the register that he would not have made in the form in which it was made; (iii) fails to make an entry in the register which he would otherwise have made; or (iv) deletes an entry which he would not have deleted; had he known the true state of affairs at the time of the entry or deletion. The mistake may consist of a mistaken entry in the register or the mistaken omission of an entry which should have been made. Whether an entry in the register is mistaken depends upon its effect at the time of registration …”

Kitchin LJ goes on to say at paragraph 52: “It will be noted that both these formulations focus on the position at the point in time that the entry or deletion is

Kitchin LJ rejected the argument that the re-registration of the charge constituted the rectification of a mistake making, amongst others, the following points relevant to the issue in this case:

On 15 February 2018, the Supreme Court refused permission to appeal the decision in NRAM Ltd v Evans [2018] 1 WLR 639.

Various authorities were cited to me in argument as examples of cases involving, on the one hand, voidable transactions which did not give rise to a “mistake” for the purposes of LRA (for example NRAM Ltd v Evans itself), and, on the other hand, void transactions at the time of registration which would give rise to a mistake (for example a forged transfer - Argyle Building Society v Hammond (1985) 49 P&CR 148 (CA) - and the closure of a leasehold title on the basis of a void forfeiture - MacLeod v Gold Harp Properties Ltd [2015] 1 WLR 1249 (CA)). I was also referred to the very useful commentary in Ruoff & Roper: Registered Conveyancing at 46.024-

However, none of these materials deals specifically with what I understand to be the novel issue that arises in this case, namely whether the registration of a vesting order made by the court in circumstances where that order has been induced by fraud (here by reason of the reliance upon forged documents) is capable of amounting to a

“mistake” such that the Court has power under LRA Schedule 4 para 2(1)(a) to correct the register.

The Effect of Court Orders

Ms Yates and Mr Althaus both made submissions as to the general law on the effect of Court Orders, which they prayed in aid in addressing the issue identified above. They argued that the authorities are united in treating a Court Order as valid and binding until it is set aside (notwithstanding that it might be irregular in varying respects). Between them, they relied upon the following propositions:

Mr Umezuruike, on behalf of Mr Antoine, submits as his primary case that a registration of title pursuant to a Court Order obtained by fraud is a mistake. Alternatively, he submits that the registration of Mr Taylor as the proprietor of the Property in 2007 without an observation in the register that Mr Taylor was registered pursuant to an Order which had been made in default of the attendance at the hearing of the defendant, was a mistake. This latter argument is the argument that I have agreed to address de bene esse.

In support of his primary case, Mr Umezuruike argues persuasively that the 2007 July Order was made by mistake because if the court had known that the Contested Documents were forged it would not have made the order. Accordingly, he says, the order is null and void because it was induced by fraud and the registration of Mr Taylor as proprietor of the Property in compliance with the July 2007 Order was a mistake.

He drew my attention to the judgment of Lord Denning MR in Firman v Ellis [1978] 1 QB 886at p. 908C-G where Lord Denning deals with the void or voidable issue in the context of a court order in Pheasant v Smith, one of four cases joined together for the purposes of this appeal, finding that an order in that case was “a nullity and void ab initio” such that the claimant was not precluded by the provisions of the Limitation

Mr Umezuruike goes on to say that his submissions are reinforced by the provisions of section 9 LPA (which I have set out above) because section 9 makes it clear that an order of the court is to be treated in like manner to a disposition by the owner of the legal estate; if a disposition is void when induced by fraud, it follows that a court order induced by fraud is also void. Mr Umezuruike points to the inherent irrationality in treating differently the situation of a fraudster providing HMLR with forged documents so as to procure registration and the situation of a fraudster who presents those documents to the court first so as to obtain an order which entitles him to registration.

Although I see the logic in Mr Umezuruike’s position and recognise the apparent injustice that Mr Antoine will suffer if I arrive at a different conclusion, after careful consideration I have decided that I cannot accept his arguments. I say that for the following reasons (which in large part adopt the arguments advanced by Ms Yates and Mr Althaus, for the Registrar and Barclays respectively):

Mr Umezuruike’s alternative argument, that it was a mistake on the part of the Registrar for the purposes of LRA Schedule 4, paragraph 2(1)(a) not to include an observation in the register at the time of registering Mr Taylor’s interest that Mr Taylor was registered pursuant to an order which had been made in default of the attendance at the hearing of the defendant, has no merit in my judgment.

Mr Umezuruike accepts that there is no express rule or provision that requires the Registrar to register an interest so as to record the existence of an order of this type, but he says that registration should be consistent with the policy of the LRA and that

In my judgment this alternative argument amounts to a contention that the Registrar has made an entry in the wrong form, alternatively has omitted an entry he should have made. Of course these are paradigm situations in which a “mistake” may be made, but in circumstances where there is no duty on the part of the Registrar (under the LRA, the Rules or otherwise) to record the existence of such an Order, I cannot see that his failure to do so can possibly amount to a mistake. As Ms Yates submitted, it is hardly surprising that there is no duty on the Registrar to record the fact that there may be reason to think an order is precarious (whether because it was made in the absence of the defendant or whether because it gives liberty to apply – which is in any event implied in all court orders). Any such duty would be tantamount to requiring the Registrar to go behind the terms of the order, the very thing that it is accepted by everyone that the Registrar may not do. Furthermore, it would undermine the purpose of the legislation, in particular the conclusive nature of registration.

In all the circumstances I refuse Mr Antoine’s application for an extension of time to serve his Reply (in which he pleads this argument for the first time), on the grounds it has no merit. Even if I am wrong to refuse that application, I reject the argument for all of the reasons set out above.

In light of my decision on the preceding issue, it is my judgment that the registration of the Legal Charge at a time when the July 2007 Order had not yet been set aside and Mr Taylor was registered as the proprietor of the Property could not possibly have been a mistake. I agree with Mr Althaus’ submissions to the effect that:

Mr Umezuruike relied upon Ajibade v Bank of Scotland Plc and Endeavour Personal Finance Limited (REF/2006/0163/0174) (which I believe to be unreported), a decision of a deputy adjudicator to HMLR, in support of his case that it was a mistake on the part of the Registrar to have registered the Legal Charge. However, in my opinion, this reliance was misplaced.

In summary, Ajibade concerned an application to rectify the register for mistake in circumstances where there had been a forged transfer of property to Mr Abiola (which transfer had been duly registered) and a subsequent loan made by Endeavour to Mr Abiola secured on the property by way of legal charge. It was common ground that the forged transfer of the property rendered the registration of Mr Abiola “an operative mistake” (para 12 of the Decision), but Endeavour argued that the registration of the subsequent legal charge was not a mistake given that Mr Abiola was the registered proprietor of the property (with all that entails) at the time of the registration of the legal charge. The Deputy Adjudicator rejected that submission.

However, in this case I am not concerned with whether I should correct the consequences of an existing mistake. Here I have found that the original registration of Mr Taylor as proprietor was not a mistake; accordingly I cannot see how the decision in Ajibade assists me. The same may be said of MacLeod v Gold Harp Properties Ltd [2014] EWCA Civ 1084, a case in respect of which I also heard argument. MacLeod v Gold Harp Properties Ltd is also authority for the proposition that the register may be corrected so as to correct the consequences of an acknowledged mistake (see in particular, paragraph 95 of the judgment of Underhill LJ), but it is not in my judgment authority for the proposition that a legal charge registered in circumstances where there is no mistake as to the title of the proprietor of the freehold may be set aside as a mistake.

During his closing submissions, Mr Umezuruike sought to resurrect an argument which he had pleaded in his proposed amended Reply to Barclays’ Amended Defence in the 2016 Claim in respect of which he had sought permission on the first day of trial. This argument was to the effect that the registration of Barclays’ Legal Charge was a mistake because before Barclays registered the charge it knew or ought to have known of the existence and nature of the July 2007 Order that conferred title on Mr

I rejected the application to amend to pursue this argument (applying the principles inherent in the Overriding Objective) in circumstances where it seemed to me to have no real prospect of success, it was raised extremely late and, if permitted at this trial, it would have caused real prejudice to Barclays. Mr Althaus told me that Barclays would wish to investigate the possibility of calling internal evidence as to the state of its knowledge at the relevant time together with evidence from its solicitor, through whom it was alleged knowledge should be imputed to it. Had I permitted the amendment, it seemed to me that the trial would have had to be adjourned.

The argument did not improve when it was raised a second time in closing and I told Mr Umezuruike that I was not going to permit him to rely upon it. No authorities were cited to me by the parties on late amendments but I am aware of the relevant principles as set out in Quah Su-Ling v Goldman Sachs International [2015] EWHC 759 (Comm) by Carr J at paragraphs 36-39 and Vilca v Xstrata Ltd [2017] EWHC 2096 by Stuart-Smith J at paragraphs 22-30. In particular for these purposes, I note from paragraph 38(b) of Carr J’s judgment in that case that a heavy burden lies on a party seeking a very late amendment to show the strength of the new case and why justice requires him to be able to pursue it. In my judgment, this was not a burden that Mr Antoine could begin to satisfy. In short, even if Barclays knew about the July

This issue does not arise in light of the findings set out earlier in this Judgment. Should it be relevant, if I had found that the original registration of Mr Taylor as proprietor was a mistake, I would have gone on to hold (following the decision in MacLeod v Gold Harp Properties Ltd) that the registration of the Legal Charge was a consequence of that mistake and that I had power to order its removal from the register, a point which was conceded by Mr Althaus on behalf of Barclays strictly for the purposes of this case only.

Again, this issue no longer arises. However, I should record briefly what my decision would have been had this issue remained live.

Paragraph 3(3) of LRA Schedule 4 provides that if in any proceedings the court has power to make an order under paragraph 2, it must do so, unless there are exceptional circumstances which justify its not doing so.

Although various grounds were pleaded as amounting to “exceptional circumstances” in Barclays’ Amended Defence, Mr Althaus indicated that he relied on only two of those grounds for the purposes of this argument at trial (and further that he did not pursue the pleaded case on the exercise of the court’s equitable jurisdiction or estoppel). First, Barclays relied on the failure on the part of Mr Antoine to register his interest in the Property in or after 21 February 1996 as the administrator of the estate of Mr Joseph; and second it relied on the fact that its loan had been used to renovate the Property, which had thereby enriched Mr Antoine.

“Exceptional circumstances” are not defined in LRA, but guidance as to how to interpret the requirement for exceptional circumstances in the context of paragraph 6(3) of Schedule 4 LRA (a parallel provision) was given by Morgan J in Paton v Todd [2012] EWHC 1248 (Ch) at paragraphs 63-67. In particular:

In my judgment, the two particular circumstances relied upon by Barclays do not amount to “exceptional circumstances” which would justify not making the rectification order under paragraph 2 of Schedule 4 LRA (assuming I had found that such an Order should be made).

It is common ground that Mr Antoine did not register his interest in the Property as Administrator on or after 21 February 1996 when his father died and Mr Althaus argues that there was in fact a protracted lack of care in respect of the Property for over 10 years; it was allowed to sit empty, attracting squatters; mail was not redirected and Mr Antoine did not think to appoint anyone else as Administrator when he went to live in New Zealand (all of which was accepted by Mr Antoine in crossexamination). Whilst Mr Althaus accepts that a Personal Representative is not obliged to place himself on the register, he says that Mr Antoine’s failure to do so “caused” the fraudulent transfer of the Property. In particular, Mr Althaus draws my attention to various documents which were delivered to the Property which, had Mr Antoine seen them, would have alerted him to Mr Taylor’s claims. Mr Althaus contends that a PR is obliged to administer the estate and if he is not going to do so properly, he must at the very least ensure that his interest is recorded on the register so that any nefarious activity will come to his attention.

I accept from Mr Umezuruike that the facts as to lack of care relied upon by Mr

As to the second ground relied upon by Barclays, I find it difficult to see why the fact that the loan provided by Barclays was used to renovate the Property (as I accept on balance it was, to the tune of something in the region of £87,600) can be an exceptional circumstance. It may be unusual, as Mr Althaus suggests (although I have no evidence to this effect), for a fraudster to plough the proceeds of a loan secured on a Property, title to which he has obtained unlawfully, back into the Property itself but here, there is no basis on which I can find that Mr Taylor knew that the Contested Documents were forged. His case in the 2006 Claim was that the Contested Documents had been given to him by Mr Borland in 2005 and that he (Mr Taylor) had never seen them before. The use of the proceeds of a loan for renovations is neither unusual nor uncommon and given that I cannot say whether Mr Taylor was in on the fraud, I cannot see why the fact of the renovations amounts to an exceptional circumstance. I accept that if the Legal Charge is removed Mr Antoine will be left with the benefit of the renovations, but there is no evidence on which I could conclude that the value of the Property was enhanced by those renovations and if it was, to what extent. Furthermore, I am inclined to accept Mr Umezuruike’s submissions that any likely monetary advantage gained by Mr Antoine by reason of the renovations has been extinguished by the expenses he has incurred in seeking to address the situation in which he finds himself.

I will hear the parties as to the form of Order required to reflect the decisions I have made on the various issues. Issues of costs and any other consequential matters will be dealt with on the formal handing down of this judgment to the parties, if they cannot be agreed.