A full report of this Court of Appeal case is not yet available, but it appears to uphold the first instance decision ([2008] EWHC 893 (Ch)) which is, itself, slightly alarming. To put it briefly, Mr Guy was seeking to rectify the register so that an allegedly fraudulently procured transfer of his property could be set aside, and his title could be restored to him. The trouble for Mr Guy was that the transferee had created a charge over the land in favour of Barclays Bank. No modest legal charge, but a charge to the tune of about £110m (albeit the property itself was only worth £35m, and had been charged along with other property). The court declared that Barclays enjoyed a valid power to sell the land. It was permissible to rectify the register so as to restore the title to Mr Guy, but the mortgage to Barclays would be left untouched. Barclays were able to rely upon section 58 LRA 2002 and the conclusiveness of the register. As far as they were concerned, the chargor had sufficient owners’ powers under the LRA 2002 to create an effective legal charge. More analysis of this case will be provided in the June edition of the CPI UPdate. However, for the time being, it is worth considering once again whether there is any reason NOT to use a form LL standard form restriction when acquiring property. If the Land Registry is not going to provide us with a simple antidote to opportunistic fraud (which goes by the name of a “land certificate”), one should consider using the form LL restriction to provide greater security against fraudulent dispositions.
Property PSL