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IN THE HIGH COURT OF JUSTICE
||Royal Courts of Justice
Strand, London, WC2A 2LL
B e f o r e :
MR JUSTICE BRIGGS
|| (1) ALEXANDER RICHARD FRANKS
(2) IRENE KATHLEEN ELIZABETH FRANKS
||- and -
||(1) ROY ANTHONY BEDWARD
(2) ANGELA JUNE BEDWARD
Miss Amanda Tipples (instructed by Treasury Solicitor, One Kemble Street, London WC2B 4TS) as the Advocate to the Court
Mr Timothy Morshead (instructed by Treasury Solicitor, One Kemble Street, London WC2B 4TS) for the Chief Land Registrar
Mr and Mrs Franks appeared in person
Mrs Angela Bedward appeared in person
Hearing date: 28th June 2010
HTML VERSION OF JUDGMENT
Crown Copyright ©
Mr Justice Briggs:
- This is an application by Mr and Mrs Franks for directions sufficient to ensure the effective reinstatement of an application which they made to the Land Registry on 15th April 2005 for registration of title to land which they claim by adverse possession. Their application was ordered to be cancelled by the Adjudicator on the grounds of procedural default on 6th June 2006, but that order was set aside by me on the Franks' appeal, on 20th June 2007. On being belatedly informed of my order allowing the appeal, by letter from the Adjudicator dated 19th December 2008, the Chief Land Registrar ("the Registrar") declined to re-enter the Franks' application in the day list maintained by him under Rule 12 of the Land Registration Rules 2003 ("the LRR"), suggesting that it was impossible for him to do so, and that the Franks should instead make a fresh application to the Land Registry for registration. After further prolonged delay, caused in part by the Franks having no legal representation, they applied by application notice on 4th January 2010 to have their 2005 application reinstated.
- The unusual and protracted procedural history of the Franks' application for registration has thrown up some real difficulties of interpretation of the Land Registration Act 2002 ("the Act") and of the LRR, as well as the Adjudicator to Her Majesty's Land Registry (Practice and Procedure) Rules 2003 ("the AR"), and revealed serious difficulties in the practice and procedure of the Land Registry Adjudicator system, in connection with litigants' rights of appeal from the Adjudicator. In short, where an application for registration is ordered to be cancelled by the Adjudicator (whether, as here, for procedural default or on the merits), and the applicant subsequently succeeds in an appeal, then unless the applicant has in the meantime obtained a stay of the order for cancellation, the full reinstatement of the application risks causing loss to persons obtaining interests in the land the subject matter of the application during the period between cancellation and reinstatement, for which the scheme of the Act and the rules provides no compensation. Conversely if the successful appeal does not lead to full reinstatement of the application, the applicant's apparent success on appeal may prove to be a pyrrhic victory, since the application will lose priority over all other applications for, or registrations of, interests in the subject land made since the application was itself first initiated. Again, the successful appellant would have no remedy for compensation for the loss of priority suffered by him between the date of his application for registration, and the date when his appeal succeeded.
- Furthermore, the present practice and procedure of the Land Registry Adjudicators appears to be such that, for reasons which will appear, it is in practice extremely difficult even for a well represented applicant to obtain a stay of an order for cancellation, before it has been acted upon by the Registrar, with the consequences to which I have just referred. It became apparent to me when giving directions for the hearing of this application that these difficulties were of a sufficient gravity and complexity to require careful submissions both for the Franks (who remain litigants in person) and on behalf of the Registrar, as guardian of the public interest in the simplicity and reliability of the system of registration now enshrined in the 2002 Act and the rules made pursuant thereto. As a result, the court has been greatly assisted by Miss Amanda Tipples appointed by the Attorney General as an Advocate to the Court, to advance arguments in favour of a full restoration of the Franks' registration application, and by Mr Timothy Morshead, who appeared for the Registrar. The Franks appeared in person, as did Mrs Bedward, one of the registered owners of the land subject to the Franks' claim. Entirely understandably, none of them contributed significantly to the argument, since all of them remain, as they have been for some time, litigants in person.
THE PROCEDURAL HISTORY
- Mr and Mrs Franks made their registration application, dated 15th April 2005, on the prescribed form AP1, seeking registration of a strip of land along the boundary between their property known as 50 Norfolk Avenue, Slough, Berkshire SL1 3AD and land registered in favour of a Mr and Mrs Bedward under Title Number BK361792. It was received by the Gloucester District Land Registry on 18th April 2005 and entered in the day list for that day as an application for a transfer of part of the land comprised in that title. The application was objected to by the Bedwards with the result that, on 15th July 2005, it was transferred to the office of the Adjudicator pursuant to section 73(7) of the Act.
- There then ensued an unsatisfactory procedural history which included an unless order by the Adjudicator made on 28th November 2005 for service by the Franks of their Statement of Case, and a further unless order on 11th May 2006 to the effect that unless the Franks served a full copy of their Statement of Case on the Adjudicator and the Bedwards by 5 p.m. on 18th May 2006, the Adjudicator would require the Registrar to cancel their registration application.
- On 6th June 2006 the Adjudicator made an order requiring the Registrar to cancel the registration application. It was posted both to the Registrar and to the parties and, on 14th June it was acted upon by the Registrar, by deleting the record of the registration application in the day list. From that date, no-one searching the Bedwards' title (including for that purpose the day list) would know that the Franks' registration application had ever been made.
- At that time the Franks were still legally represented but, by 7th September 2006, they had become litigants in person. On 13th October 2006 the three year time limit for applying for adverse possession registration as a transitional overriding interest under section 97 of and Schedule 12 to the Act expired. It is probable (although I make no finding one way or the other) that the Franks were not then in occupation of the disputed land, because in proceedings in the Slough County Court between the same parties they had been restrained from entering on the disputed land by a Consent Order pursuant to which the Bedwards had also undertaken not to enter upon it, in each case pending the outcome of the dispute as to ownership.
- Coincidentally, the Franks began to take steps on their own to challenge the cancellation of the registration application, initially by correspondence with the Adjudicator by emails sent on 19th and 24th October 2006, which the Adjudicator decided to treat as an application for permission to appeal, which he purported to grant, albeit without a stay of his cancellation order, on 27th October 2006. He did so without obtaining representations from the Bedwards, contrary to AR45(4) which required him to do so and, although the time for appealing had expired before the arrival of the Franks' emails, he did not purport to extend time.
- Permission to appeal out of time was in due course given by Henderson J on the Franks' paper application, with detailed reasons, on 26th March 2007, and the appeal came on for hearing before me on 20th June 2007, at which the Bedwards were represented by counsel and the Franks appeared in person.
- I allowed the appeal, taking the view that the cancellation of the Franks' registration application was not a proportionate response to the procedural muddle which had preceded the Adjudicator's order, and I substituted for the Adjudicator's order a further unless order in the following terms:
"Unless the Applicants/Appellants do attend the offices of the Respondents' solicitors Irwin Mitchell, at Riverside West, 1 Millsands, Sheffield S3 8NH on a date to be agreed during the month of August 2007 to identify the document or documents said to constitute their statement of case, for which purpose the Respondents' solicitors shall provide to the Applicants/Appellants a list of available dates, the Adjudicator will require the Chief Land Registrar to cancel the original application dated 18th April 2005 to register title based on adverse possession."
- It is now apparent that, as at 20th June 2007, no-one had acquired or sought to apply to register an interest in the disputed land, either during the period following the cancellation of the Franks' registration application on 14th June 2006, or indeed, at any time since the entry of that application on the day list on 18th April 2005. The Franks' registration application could therefore have been re-entered on the day list, with priority from April 2005, without causing any risk of harm to anyone relying upon the Register (or day list) in the meantime.
- No transcript has been obtained of the hearing on 20th June 2007, or of my extempore judgment given at its conclusion, and I cannot now recall whether I inquired (in particular of Mr Michael Bowmer, counsel for the Bedwards), whether a reinstatement of the Franks' application would prejudice any third party rights. It is common ground that both I and the parties in court on 20th June 2007 assumed that the effect of my allowing the appeal, and making the order which I have recited, was that the Franks' application would be reinstated, for all purposes as if it had never been ordered to be cancelled.
- It took until 31st July 2008 before a minute of the order which I had made on 20th June was sealed, after preparation by Mr Bowmer (to whom I had given that task, the Franks being in person). In the meantime, due to a (possibly well intentioned) failure by the Bedwards' solicitors to provide dates for the Franks pursuant to the June 2007 order, it had become necessary for me to vary that order by substituting November for August as the period for compliance. Compliance was in fact achieved by the Franks, with the result that the specified sanction for non-compliance never came into effect.
- For reasons which I have been unable to ascertain, it took a further year before the Registrar was notified of the setting aside of the Adjudicator's order for cancellation. Paragraph 23.8B(4) of CPR52PD provides that an appellant must serve a copy of the appeal court's decision on the Registrar as soon as reasonably practicable, and in any event within 14 days. In fact notification occurred, as I have already described, during correspondence between the Adjudicator and the Registrar in December 2008. Nothing had therefore been done to record the reinstatement of the Franks' registration application in the day list and, in the meantime, two adverse interests were registered against Title Number BK361792 (including the disputed land). The first was a legal charge dated 29th October 2007 in favour of Southern Pacific Mortgage Limited. The second was a general equitable charge dated 6th June 2008 in favour of Welcome Financial Services Limited. It is not known whether either of the chargees made a priority search before entering into the transactions giving rise to those charges or, therefore, whether the chargees relied (potentially to their detriment) on the absence of any reference to the Franks' registration application in the day list.
- The Registrar was notified of my June 2007 Order in a letter from the Adjudicator dated 19th December 2008 which concluded by inviting his view as to whether:
the cancelled application can be in any way revived and re-entered on the Day List with the same original priority date (assumed to be 18th April 2005) so that the Adjudicator could make a further substantive order on it or whether you consider Mr and Mrs Franks will need to make a fresh application."
The response, by letter from the Gloucester office of the Land Registry dated 9th January 2009, was that:
"It is not possible to revive an old application once it has been cancelled. It appears that the applicant should make another application to Land Registry if the matter is to be revived."
- The Franks were, understandably, reluctant to have to start all over again, having won their appeal in June 2007. They sought my assistance, initially by telephone to my clerk and then by letter dated 17th February 2009. Recognising that a potentially important and wide-ranging point of principle might be at stake, I directed on 19th February 2009 that the Franks should elect between seeking an order that the Registrar reinstate their registration application, or making a fresh application. They chose the first of those two options on 17th April 2009 and, after further delays, caused largely by their lack of legal qualifications or experience, I was able to give directions for this hearing on 30th March 2010, enabling the Registrar to be represented, and having received confirmation that an Advocate to the Court would be appointed. The Registrar had in the meantime set out in substantial detail his reasons for objecting to the reinstatement of the registration application with priority from April 2005. The essence of his detailed and carefully reasoned objection was that since the day list is a 'real time' record, based precisely upon the actual time and date at which entries are made in it or cancelled from it, it would be destructive of the integrity of the day list to include any entry capable of having retrospective effect, having regard to the important function which the day list performs in the context of registered conveyancing. I shall have more to say about the Registrar's grounds of objection in due course.
THE STATUTORY SCHEME
- The essential purpose of the scheme re-created by the Act in 2002 was to provide a system of state-guaranteed registered title. Subject to limited exceptions, the Register is intended to provide a comprehensive and accurate reflection of the state of title to registered land at any given time and, in the exceptional circumstances where it does not, for example where rectification is required, then persons adversely affected are entitled to compensation: see for example Megarry and Wade's Law of Real Property (7th edition) at pages 130 132, and paragraph 1.5 of the Law Commission's report 'Land Registration for the Twenty-First Century, a Conveyancing Revolution' (2001) Law Com No 271.
- The Registrar is required to maintain a Register of Title which, as is apparent from LRR 2(2) includes an individual register for each registered estate vested in a proprietor. By section 68(1)(d) of the Act and Part 2 of the LRR (Rules 10 to 12), the Registrar must also keep an index or indices. They include an index map, an index of proprietors' names and the day list. His duties in relation to the day list are set out in LRR 12, of which the following part is material:
"(1) The registrar must keep a record (known as the day list) showing the date and time at which every pending application under the Act or these rules was made and of every application for an official search with priority under rule 147"
The Franks' registration application is a type of pending application which the Registrar is therefore required to record in the day list.
- By LRR 15, detailed provision is made as to the time at which an application for registration is to be taken as having been made. Sub-rule (1) provides as follows:
"(1) An application received on a business day is to be taken as made at the earlier of-
(a) the time of the day that notice of it is entered in the day list; or
(b) (i) midnight marking the end of the day it was received if the application was received before 12 noon, or
(ii) midnight marking the end of the next business day after the day it was received if the application was received at or after 12 noon."
Similar provision is made in relation to applications received otherwise than on a business day and, under sub-rule (3), an application is received when it is delivered to the designated proper office of the Land Registry, subject to irrelevant exceptions.
- LRR 20 provides that, subject to an irrelevant exception:
"(1) Any entry in, removal of an entry from or alteration of the register pursuant to an application under the Act or these rules has effect from the time of the making of the application."
- Pausing there, if the Franks' registration application, recorded in the day list as having been made on 18th April 2005 had simply proceeded to Adjudication and been successful, registration of the Franks as owners of the disputed land would have taken effect, pursuant to LRR 20, from that date, with priority over every subsequent registered entry or application for registration made thereafter. Furthermore, any person considering acquiring an interest in the disputed land after that date would, on a priority search, have been notified of the Franks' pending application, and could not have complained of the postponement of any interest thereafter acquired.
- Section 72 of the Act and LRR 147 to 149 make similar provision in relation to priority protection. In summary, an application for an entry in the Register is protected if it is one to which a priority period relates, and is made before the end of that period. By section 72(2), where an application for an entry in the Register is protected, any entry made in the Register during the priority period relating to that application is postponed to any entry made in pursuance of it. In order to protect persons dealing with the registered land from inadvertent loss of priority to those with priority protection, LRR 12(2) provides that:
"The entry of notice of an application for an official search with priority must remain on the day list until the priority period conferred by the entry has ceased to have effect."
Part 3G of Schedule 6 to the LRR provides that an applicant for an official search is to be given notice of the entry of any relevant pending applications affecting the registered title entered on the day list.
- Mr Morshead submitted, and I accept, that the day list therefore plays an essential part in registered conveyancing by protecting persons contemplating acquiring interests in the registered land from doing so in ignorance of applications for registration which, under the provisions which I have summarised, would take effect in priority to that person's contemplated interest.
- I must briefly mention Mr Morshead's submission, which I also accept, that it is by no means clear that the provisions for indemnity in Schedule 8 of the 2002 Act would assist a person who had, during the period between the cancellation of an application and its restoration on appeal, searched the Register (and day list) and then acquired an interest in the relevant registered land in ignorance of the temporarily cancelled application. Generally speaking, compensation is available where there has been either rectification (which itself usually depends upon some mistake) or some other relevant mistake. The removal from the day list of a cancelled application is not a mistake, merely because it might be restored on appeal. Furthermore, although the re-entry of an application restored on appeal might have something of the quality of rectification, (loosely speaking), it would be rectification of an index rather than rectification of the Register. For reasons to which I shall come, I do not consider that the day list is, within the meaning of the Act and the LRR, either a Register or part of a Register.
- I turn to the provisions conferring powers on the Adjudicator. For present purposes, I am concerned with the AR which were made in 2003, prior to their amendment in 2008, although the amendments are not in any respect material. Section 73(7) of the Act requires any objection to an application for registration which cannot be disposed of by agreement to be referred to the Adjudicator. His power to determine matters referred under section 73(7) is conferred by section 108(1)(a). Section 109(2) provides for rules to be made to regulate the practice and procedure to be followed with respect to proceedings before the Adjudicator. Section 111 provides for an appeal to the High Court by a person aggrieved by a decision of the Adjudicator. That engages CPR 52.10(1) and (2)(a) by which the appeal court has all the powers of the lower court, including a power to affirm, set aside or vary any order or judgment made or given by the lower court. By section 112 an order of the Adjudicator is to be enforceable as an order of the court.
- AR 39 provides that:
"(1) Where there is a hearing, the substantive decision of the adjudicator may be given orally at the end of the hearing or reserved.
(2) A substantive decision of the adjudicator, whether made at a hearing or without a hearing, must be recorded in a substantive order.
(3) The adjudicator may not vary or set aside a substantive decision."
By AR 40:
"(1) A substantive order must-
(e) state any steps that must be taken to give effect to that substantive decision."
By AR 40(2) the substantive order must be served by the Adjudicator on every party to the proceedings and, where it requires the Registrar to take action, the Registrar.
- AR 55 confers a power on the Adjudicator to impose sanctions for failure to comply with a direction given by him either on the application of any other party or of his own motion. By sub-rule (2) a sanction may include requiring the Registrar to cancel the original application, in whole or in part. By sub-rule (4) a sanction of that kind is to be treated as a substantive decision on that matter. The surprising result is that where the Adjudicator orders the Registrar to cancel an application as a sanction for procedural default, AR 39(3) then prevents him thereafter from varying or setting aside that decision.
- AR 45 gives the Adjudicator a very limited power to stay the implementation of a decision of his, pending the outcome of any appeal. AR 45(1) provides that:
"Where a party is granted permission to appeal, the adjudicator may, of his own motion or on the application of a party, stay the implementation of the whole or part of his decision pending the outcome of the appeal."
By sub-rule (2) a party wishing to apply for a stay is required to make his application to the Adjudicator at the same time that he applies to the Adjudicator for permission to appeal. By sub-rule (4) the Adjudicator must, before reaching a decision whether to grant permission to appeal a decision, or to stay implementation of a decision, allow the parties the opportunity to make representations or objections.
- Mr Morshead submitted that the requirement in AR3(3)(b) to interpret the Adjudicator's Rules in accordance with the overriding objective justified interpreting AR 45 as permitting the Adjudicator both to grant a stay pending the hearing of an application to him (or to the High Court) for permission to appeal, and to grant a stay where, after refusing permission to appeal himself, the unsuccessful party sought permission to appeal to the High Court. While I agree that a wider power to grant a stay of the type to which Mr Morshead referred would probably serve the overriding objective more usefully than the power to stay conferred by AR 45, I do not consider that the clear limitations in that rule can be ignored by a process of interpretation. Read as a whole, the rule unmistakably limits the Adjudicator's power to grant a stay to the occasion where he decides to grant permission to appeal. He can neither do so in advance of that decision, or, a fortiori, if he decides not to give permission to appeal. Furthermore, he cannot grant a stay, even of his own motion, unless he has first allowed the parties an opportunity to make representations or objections. AR 45 is in those respects in sharp contrast with the generality of the court's power to grant a stay in CPR3.1(2)(f). In my view the contrast must have been deliberate.
- It appears that the present practice of the Adjudicator when making a decision which includes a direction to the Registrar to cancel an application is to communicate his decision more or less simultaneously to the Registrar and to the parties, and not to set a deferred date upon which the Registrar is to cancel the application, designed to give the unsuccessful applicant time both to seek permission to appeal and a stay. I say that this appears to be the present practice of the Adjudicator both because of the facts of the present case, which I have described, and because counsel before me did not suggest that this case revealed anything atypical. It is fair comment that the Adjudicator has not been invited to appear on this application (although he is aware of it), and that it may be that there is no such uniform practice. I shall nonetheless proceed on the assumption, but without a finding, that the practice is as it appears to be.
- The result of such a practice is that the unsuccessful applicant for registration, even if competently represented, may in practice find it impossible to take effective steps for the obtaining of a stay, before the Registrar has cancelled his application. If he applies to the Adjudicator he cannot expect a decision until time has been given to his opponent to object, and he will obtain no stay if the Adjudicator refuses permission to appeal, even though the applicant may subsequently obtain permission to appeal from the High Court, and in due course succeed on his appeal.
- If he applies to the High Court for a stay, I consider that the High Court judge's powers under the CPR are sufficient to enable him to grant a stay pending the hearing of an application (to the Adjudicator or to the High Court), for permission to appeal. I was reminded by Mr Morshead that in this regard the High Court is exercising statutory appellate powers rather than any inherent jurisdiction and that, pursuant to CPR 52.10, those powers may in certain respects be limited to the powers available to the Adjudicator. Nonetheless CPR 52.7 plainly assumes that the appeal court has power to stay the order appealed against, (as does 52PD paragraph 23.8B), and the general power to stay in CPR 3 is expressed to be (like all other powers in rule 3) in addition to any power conferred by any enactment. It is however hardly satisfactory that the aggrieved recipient of a cancellation order can only obtain a stay in time by an emergency application to the High Court.
- I turn to the question whether the High Court can, or should, restore an application for registration on the hearing of an appeal from an order by the Adjudicator that it be cancelled, in circumstances where the order for cancellation has not been stayed, and has been complied with by the Registrar before the hearing of the appeal. The Registrar's written case in response to the Franks' present application is that the cancellation of the registration application is "an irreversible historical fact which cannot now be altered it has taken place, with the application being removed from the Daylist on 14th June 2006 at 14.29.08". Anticipating a response from the Franks (which duly appeared in Miss Tipples' skeleton argument) that his power to alter the Register under paragraphs 2 and 5 of Schedule 4 to the Act might be sufficient, the Registrar submitted that those powers related only to the Register and, deliberately, not to the day list, because of its vital status as a real time record. Paragraph 2 of Schedule 4 empowers the court to direct an alteration of the Register, either to correct a mistake or to bring it up to date. Paragraph 5 empowers the Registrar to do the same, of his own motion, for the same purposes.
- The difficulty with Miss Tipples' otherwise attractive submission is, (as she eventually acknowledged) the difficulty of treating the day list as, or as part of, the Register. In my judgment the day list is not the Register or part of the Register. It is clearly and distinctly identified in the LRR as an index, in a section separate from those dealing with the Register itself. Furthermore, and conclusively in my judgment, LRR 12(3) shows that the distinction between the day list and the Register was deliberate. It provides that:
"Where the Registrar proposes to alter the register without having received an application he must enter his proposal on the day list and, when so entered, the proposal will have the same effect for the purposes of Rules 15 and 20 as if it were an application to the registrar made at the date and time of its entry."
I consider that this sub-rule clearly shows that the day list is an index which contains information about alterations which may be made to the Register, so as to give appropriate warning to interested parties. This is not the Register itself, nor part of it.
- For his part, Mr Morshead adopted a rather more pragmatic, less doctrinaire, approach than the Registrar had done in his written case. He began by pointing out, correctly, that in the real world it is frequently the case that the appeal court cannot restore the status quo ante when allowing an appeal from an order of the court or tribunal below which has not been the subject of a stay. He gave the obvious example of a judgment for the payment of a debt or damages, where the judgment creditor is paid before appeal and is unable to repay when the appeal is allowed. He submitted that the Registrar has no alternative but to cancel the entry of an application for registration if ordered to do so by the Adjudicator. He acknowledged that, if the application for registration was restored by the court, then its restoration ought to be recorded in some way in the day list. In my judgment that concession is correct, if for no other reason than because LRR 12(1) requires the Registrar to record in the day list every pending application for registration, and the effect of the setting aside of an order for the cancellation of a pending application is that, at least, it becomes a pending application again. His sticking point was that the new entry in the day list should not appear to suggest, contrary to the truth, that the application had been pending during the period between its cancellation and the order made for its reinstatement on appeal. Both he and Miss Tipples appeared for a time to be in agreement that the court could, at least, require the application for registration to be re-entered in the day list as an application made at the moment of its re-entry.
- In his helpful oral submissions, Mr Morshead eventually submitted that, at least in theory, the appeal court might make any one of the following orders, by analogy with the Adjudicator's power under AR 40(1)(e):
(a) An order that the Registrar re-enter the registration application on the day list, with its original date of entry, but with liberty to any aggrieved third party with an interest in the relevant land to apply to have the order varied or set aside.
(b) Allow the appeal, but treat the steps made in the cancelled application as steps in a new application for registration to be made by the appellant, and waive any duplicative fees.
(c) Adjourn the appeal for inquiries as to the state of the Register and of the day list, so as, if possible, to avoid the need for liberty to apply under (a).
(d) Direct the re-entry of the registration application, but with a postponed date of entry.
- As a matter of discretion, Mr Morshead submitted that save in the most exceptional case, the court should ordinarily choose between (b) and (d), because the applicant for registration had sufficient alternative avenues for the protection of his priority not to need the assistance of the appeal court by directing a re-entry of his application with retrospective effect.
- An order in the form of Mr Morshead's alternative (b) or (d) would, of course, cause the applicant for registration to lose priority for the whole of the period between the date of his original application and the date of the entry (or re-entry) in the day list following the order made on appeal. He would be vulnerable not merely to applications for and entries on the Register made during the period following the cancellation of his registration application, but applications already made before cancellation. Mr Morshead submitted that it would be unlikely that any adverse interest would be made the subject of registration or an application for registration for as long as the day list showed the appellant's own application (before cancellation), but with respect I disagree. There would, for example, be nothing surprising in a mortgage of a large registered title notwithstanding a pending application for a transfer of a very small part of it on the basis for a claim for adverse possession. The mortgagee would probably be unconcerned by a minor loss of subject matter. Similarly, a purchaser from the registered owner might be prepared (for an appropriate discount) to take the risk of the adverse possession application succeeding.
- The alternative remedies which Mr Morshead submitted were available to an applicant for registration were as follows. First, he suggested that an applicant claiming adverse possession could apply for a unilateral notice to protect his interest. Miss Tipples did not suggest otherwise, but it seems to me bizarre to think that the statutory scheme required an applicant for registration not merely to lodge an application in the appropriate form but also to lodge a belt and braces unilateral notice in case that application was cancelled, and then restored on appeal. By contrast, a unilateral notice entered only at the time of the hearing before the Adjudicator, while it might provide protection during the period of temporary cancellation, would not provide any protection for interests registered or applied for during the period from the original application for registration and the (ex hypothesi) much later date of the unilateral notice. Accordingly, while an ingenious suggestion, it seems to me to have been neither intended by the legislation, nor to be practicable in the real world as a complete form of protection. It would plainly be inappropriate in the case of a cancellation order made on the merits.
- Mr Morshead's second alternative was that the claimant for adverse possession should protect his right by continued occupation of the land in question, so as to confer upon his rights the status of an overriding interest. Again, that might often be so, but it is not every case in which an applicant is able to insist on remaining in occupation. In the present case both the Franks and the Bedwards agreed, pursuant to a consent order, that neither should occupy the land in dispute, sensibly turning it into a sort of demilitarised zone. In any event, the problem thrown up by the present case is by no means limited to applications for registration based on adverse possession.
- The third suggested solution is, of course, an application made in good time for a stay of the cancellation order. This would, if obtained in time, be a complete solution, but for the reasons which I have given, the present powers of the Adjudicator to grant a stay, and the practice apparently adopted of the simultaneous communication of decisions requiring cancellation to the Registrar and to the parties does not lend itself to the obtaining of a stay in time.
- Finally, Mr Morshead suggested that the applicant for registration could always protect himself from a continuing loss of priority by the making of a fresh application, for example upon learning of his failure before the Adjudicator, and pending an appeal. Again, this solution would give the applicant protection against loss of priority during the cancellation period, but no protection against loss of priority between the date of his original application and the date of the belt and braces new application. Furthermore, it would on the face of it, render any appeal almost nugatory, save in the limited sense that he might, if otherwise successful, obtain an order that steps taken in the first application be treated as steps in the second, and the setting aside of any adverse order for costs. Finally, in the case of a cancellation order made on the merits, it would be tantamount to an abuse of process.
- In my judgment the alternatives available to the court as a matter of jurisdiction when disposed to allow an appeal against an order for the cancellation of an application for registration are, broadly, those proposed by Mr Morshead, with the exception that I doubt whether his alternative (d) works, notwithstanding Miss Tipples' support for it. The difficulty with an order that an application for registration be restored with a postponed entry date is that it appears to run counter to the provisions of LRR 15 and 20. LRR 20 provides that an application for registration, if it succeeds, is to take effect from the time when it was made, and LRR 15 provides that an application is to be taken as made on the earlier of the day (or the day after the day) when it was actually received, and the date of its entry in the day list. A restored application would in my judgment still have been made when it was originally made even if re-entered in the day list at a much later date (namely after a successful appeal). Accordingly, Mr Morshead's alternative (d) would not protect bona fide intermediate incumbrancers who searched the Register and the day list during the period of temporary cancellation and found nothing.
- Before looking at the remaining alternatives, I record that I have not been persuaded that I should adopt the doctrinaire approach favoured by the Registrar himself, namely that an application once cancelled is inherently incapable of being restored, or re-entered on the day list, on appeal. While I appreciate the force of his objection, based upon the preservation of the integrity of the day list as a real time record not admitting any retrospectivity, a conclusion that the court could never restore a cancelled application, so as to require it to be re-entered in the day list with its original priority, would seem to me to be capable of causing injustice to successful appellants without any corresponding benefit to anyone else. For example, in the present case, no third party would have been prejudiced by a re-entry in the day list of the Franks' application, with its original priority, after their successful appeal in June 2007, and before the registration of the first adverse incumbrance some four months later. An order in the form of Mr Morshead's type (a) would simply not have led to any application to set aside by any interested party. But it would have preserved for the Franks their ability to treat their rights as a transitional overriding interest. Those rights would be irretrievably lost by the time of their successful appeal if their application could not be restored with effect from a date prior to October 2006, when the three year period for applications of that type expired.
- The view that an application for registration once cancelled pursuant to an order of the Adjudicator cannot be restored on appeal runs counter to the general ability of an appeal court to restore a struck-out claim with retrospective effect, so as for example to save it from having become statute barred in the meantime, and I am not persuaded that the understandable desire of the Registrar to preserve the integrity of the day list as a real time record is sufficient to require the court to adopt a fundamentally different approach in relation to appeals from the Adjudicator.
- Nonetheless I readily accept that, where an intermediate incumbrancer would be prejudiced by the restoration of a cancelled application, then this would be the most powerful reason why, as a matter of discretion, the court would not direct its restoration by way of appeal, all the more so if compensation to the intermediate incumbrancer under the statutory scheme was, as it appears to be, unavailable. It follows that if, on appeal, the court is aware that there exists such an intermediate incumbrancer, then it would not ordinarily direct the restoration of the application and its re-entry in the day list with its original priority, otherwise than on terms which required the successful appellant fully to respect the intermediate incumbrancer's rights. If, on the hearing of an appeal, the court did not have the requisite information available, then there is no reason why the appeal could not be adjourned (Mr Morshead's alternative (c)) or alternatively why the court could not make an order for re-entry on the day list, giving liberty to any aggrieved third party to apply to have it varied or set aside (Mr Morshead's alternative (a)). In that regard I do not consider that the High Court would be incapacitated by AR39(3): see CPR3.1(7). Any such order would need to include a direction to the Registrar to notify any third party appearing to him (from the Register and the day list) to be capable of being adversely affected.
- In a case in which there were intermediate incumbrancers who would be unfairly prejudiced by the making of an order for restoration of the application with its original priority, the court may have no alternative than to require the applicant to make a fresh application, and to direct that steps taken in the cancelled application be treated as steps in the new application, so as to save the incurring of unnecessary work and cost. Such a case would arise if, for example, the prejudice which would otherwise be caused to an intermediate incumbrancer could not be remedied by any form of conditional order, or where the appellant was unwilling to comply with the terms of any proposed conditions.
- I do not pretend that any of the alternatives which I have outlined above represent a simple, easy, neat or necessarily cost-effective solution to the problems thrown up by a successful appeal against a cancellation order, not protected by a stay. The obvious solution to these difficulties is for the rules and practice relating to stay pending appeal to be reviewed, so as to make a stay more readily available as the sensible precaution against the difficulties revealed by these proceedings. In that context I bear in mind that the present jurisdiction of the Adjudicators may be about to be replaced by that of the First Tier Tribunal, with an appeal to the Upper Tribunal rather than to the High Court. In that context it seems to me to be likely that a replacement of the AR and the relevant provisions of the Act will have to be undertaken in any event, and that the difficulties thrown up by the present case could be addressed as part of that process.
- Even in advance of that process, I can see no reason why steps cannot be taken by the Adjudicator, by way of a change to the present apparent practice, which ensures as far as possible that an order for cancellation of an application does not have to be acted upon by the Registrar before the expiry of an appropriate time during which the applicant may obtain both permission to appeal and a stay. That period would need to be specified in the order for cancellation, and to be sufficiently long to enable the prospective appellant to apply for permission and a stay from the Adjudicator (with time built in to permit representations or objections from other parties) and, if unsuccessful, to obtain permission and a stay from the High Court. I bear in mind in that context that AR 39(3) does not permit the Adjudicator to vary his cancellation order by extending the time before which it is to take effect if he refuses permission to appeal, so as to enable the prospective appellant to try again in the High Court. Doing the best I can, it seems to me that nothing less than a two month period before implementation of a cancellation order (built into the order itself when first made) would be sufficient to enable the processes to be undertaken in a way that made a successful appeal, unprotected by a stay, wholly exceptional.
- Difficulties of this kind are rare in ordinary court proceedings, because orders are generally made in court at a time when (often having received a draft judgment) the aggrieved party can immediately seek a stay, in the presence of his opponent. They are much more likely to arise where a decision is published by letter, accompanied by an order which gives it immediate practical effect.
THE PRESENT CASE
- My order in June 2007 allowing the Franks' appeal did not expressly spell out any steps which the Registrar was required to take in consequence. In that respect it probably ran contrary to AR 40(1)(e) (to which my attention was not drawn at the time) as applied to the High Court by CPR 52.10(1). Nonetheless it provided by necessary implication for the restoration of the Franks' registration application, and was meaningless on any other basis. In my judgment the Registrar would, once belatedly appraised of it in December 2008, have been better advised to seek directions as to its implementation, bearing in mind his obligation to record pending applications for registration in the day list. Nonetheless the present hearing is in substance, even if not in form, capable of being dealt with as if he had.
- This is a case in which it would neither be just to the Franks to require them to make a new application (even with a provision that steps taken in the original application stand as steps in the new application) nor, necessarily, just to the two intermediate incumbrancers simply to make an order for the re-entry of the registration application in the day list with priority from its original entry date of 18th April 2005. The first alternative would forever deprive the Franks of the availability of the right to treat their adverse possession as a transitional overriding interest. The second alternative may unfairly prejudice the two chargees.
- The court knows nothing about the precise nature of the rights of the two chargees, still less whether restoration of the Franks' application would cause real rather than merely theoretical prejudice. The adverse possession claim is for a modest part of the Bedwards' property, and it may well be that the value of the chargees' security rights may be more likely to be increased by a final determination of this long-running boundary dispute, than decreased by the abstraction of some small part of the property from the land comprised within their security.
- In those circumstances the choice lies between making an order for the re-entry in the day list of the Franks' registration application with its original entry date, with liberty to the two chargees to apply to vary or set it aside, and a yet further adjournment of this long-running appeal to ascertain, if possible, the chargees' views.
- I prefer the first of those alternatives. It may well be that the chargees will, on inquiry, have no objection at all. Alternatively, if they do, the Franks may be able to provide satisfactory undertakings which preserve the chargees' rights. Either of those outcomes would save the costs and delay of a further hearing.
- I am satisfied that it would be wrong to require the Franks to make a fresh application now, unless compelled to that conclusion as the only way of avoiding irreparable prejudice to the chargees. That would deprive the Franks of the benefit of a transitional overriding interest, through no fault of their own. That would merely provide a windfall benefit to the Bedwards, as the consequence of the Adjudicator's order which, as I concluded on appeal, should not have been made.
- I will hear submissions on an appropriate form of order. It will need to include liberty to apply, not only to the two chargees, but also to any third party aggrieved by the order, and for the Registrar to be directed to notify any person appearing to be potentially prejudiced, as appears from the state of the Register and the day list on the day when he makes the re-entry.
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