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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Antoine v Barclays Bank UK Plc & Anor [2018] EWCA Civ 2846 (20 December 2018) URL: https://www.bailii.org/ew/cases/EWCA/Civ/2018/2846.html Cite as: [2018] EWCA Civ 2846, [2019] 1 WLR 1958, [2018] WLR(D) 793, [2019] WLR 1958 |
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ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
Miss Joanna Smith QC, Sitting as a Deputy High Court Judge
HC-06C04188
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE PETER JACKSON
and
LADY JUSTICE ASPLIN
____________________
TREVOR ANTHONY ANTOINE (Administrator of the Estate for Joseph Antoine, Deceased) |
Appellant |
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- and - |
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BARCLAYS BANK UK PLC CHIEF LAND REGISTRAR |
1st Respondent 2nd Respondent |
____________________
Mr Guy Fetherstonhaugh QC and Mr Greville Healey (instructed by TLT Solicitors) for the First Respondent
Ms Katrina Yates (instructed by the Government Legal Department) for the Second Respondent
Hearing date: 6th December, 2018
____________________
Crown Copyright ©
Lady Justice Asplin:
Background
Relevant Legislative Framework
"The policy of the Land Registration Act 2002 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 transactions taking effect in the general law, but actually constitutes a registered proprietor's title to a registered estate or charge. In general, therefore, the title conferred by registration should be indefeasible. . ."
The Register is kept by the Registrar pursuant to section 1(1) of the 2002 Act and he is bound by the Land Registration Rules 2003 (the "Rules") in relation to the keeping of the Register.
". . . which is made or executed 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. Section 27(1) of the 2002 Act provides that:
"If a disposition of a registered estate . . . is required to be completed by registration, it does not operate at law until the relevant registration requirements are met."
Section 27(5) provides that, subject to three exceptions which are irrelevant for the purposes of this appeal, the section applies to dispositions by operation of law. It is common ground that the 2007 Order was such a disposition.
"1. In this Schedule, references to rectification, in relation to the alteration of the register, are to alteration which –
(a) involves the correction of a mistake, and
(b) prejudicially affects the title of a registered proprietor.
2. (1) The court may make an order for alteration of the register for the purpose of –
(a) correcting a mistake,
(b) bringing the register up to date, or
(c) giving effect to any estate, right or interest excepted from the effect of registration.
(2) An order under this paragraph has the effect when served on the registrar to impose a duty on him to give effect to it.
3. (1) This paragraph applies to the power under paragraph 2, so far as relating to rectification.
(2) If alteration affects the title of the proprietor of a registered estate in land, no order may be made under paragraph 2 without the proprietor's consent in relation to land in his possession unless -
(a) he has by fraud or lack of proper care caused or substantially contributed to the mistake, or
(b) it would for any other reason be unjust for the alteration not to be made.
(3) 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.
(4) In sub-paragraph (2), the reference to the title of the proprietor of a registered estate in land includes his title to any registered estate which subsists for the benefit of the estate in land."
These are the provisions with which this appeal is concerned. The Registrar's powers of alteration, including rectification, are contained in Schedule 4 paras 5 and 6.
The Judge's reasoning
"116.4 The reasoning of Lord Denning MR in Firman v Ellis was not the reasoning of the majority of the Court of Appeal (albeit that there was no disagreement as to the outcome). Geoffrey Lane LJ agreed with the reasoning and conclusions of Ormrod LJ at page 917, which reasoning was different from that of Lord Denning MR. Importantly, it was not Ormrod LJ's view that the order in that case was a nullity simply because it had subsequently been set aside. Further, albeit that Firman v Ellis was not cited to the Privy Council in Isaacs v Robertson it is plain that their Lordships in the latter case would not have agreed with the approach adopted by Lord Denning MR, which is also not consistent with the statements of principle in the other cases referred to in para 111 above. I reject Mr Umezuruike's submission that the terms "void" and "voidable", when used to describe an order of the court are to be viewed in the context of the facts of the relevant case and that whilst there is no question in this case that the July 2007 Order had to be obeyed, it was nevertheless "a nullity". I do not believe this is a finding that I can properly make in light of the clear statements of principle to contrary effect."
Grounds of Appeal and Respondent's Notice
Discussion – "mistake" and "void/voidable" distinction
"49. Despite the scope and largely undefined nature of the term "mistake" in this context, the Law Commission noted in its 2016 Consultation Paper No. 227 entitled "Updating the Land Registration Act 2002" at 13.79 to 13.80 that a degree of consensus appeared to be emerging as to its boundaries. In that regard the Law Commission referred to Megarry & Wade, The Law of Real Property 8th ed. whose editors observe at 7-133 that:
"What constitutes a mistake is widely interpreted and is not confined to any particular kind of mistake. It is suggested therefore that there will be a mistake whenever the registrar would have done something different had he known the true facts at the time at which he made or deleted the relevant entry in the register, as by:
(i) making an entry in the register that he would not have made or would not have made in the form in which it was made;
(ii) deleting an entry which he would not have deleted; or
(iii) failing to make an entry in the register which he would otherwise have made." (footnotes omitted)
50. The editors of Megarry & Wade, The Law of Real Property go on to provide various examples of mistakes, the first of which is the case where a person has been registered as proprietor pursuant to a void disposition, such as a forged transfer, or where the transfer was of land which the seller had already sold. Interestingly, the editors note that there is no mistake where the registrar registers a transfer that is voidable but has not been avoided at the date of registration.
51. The Law Commission also referred to Ruoff & Roper, Registered Conveyancing loose leaf ed. The authors of this work adopt, at 46.009, very much the same formulation as that of the editors of Megarry & Wade, The Law of Real Property:
""Mistake" is not itself specifically defined in the 2002 Act, but it is suggested that there 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…. "
"53. . .. a distinction must be drawn between a void and a voidable disposition. On this analysis, an entry made in the register of an interest acquired under a void disposition should not have been made and the registrar would not have made it had the true facts been known at the time. By contrast, a change made to the register to reflect a transaction which is merely voidable is correct at the time it is made. The same distinction is drawn by the authors of Ruoff & Roper, Registered Conveyancing who say, again at 46.009:
"… So the entry of an estate or interest purportedly arising under a void disposition is a mistake. The entry made in the register does not reflect the true effect of the purported disposition when the entry was made. However, the entry of a person as having acquired an estate or interest under what proves to be a voidable disposition is not a mistake. Unless it had been rescinded at the date of registration, the disposition would be valid and it would not be a mistake to enter the disponee as the proprietor of the estate or interest under it…."
Having noted at [54] the different approach of this Court in Baxter v Mannion [2011] 1 WLR 1594 in which at [31] Jacob LJ reserved his position as to whether the authors of Ruoff & Roper were right in the distinction they drew between void and voidable dispositions, Kitchin LJ went on to record the position taken by the authors of Emmett & Farrand on Title loose leaf edition vol. 1 at 9.028 where they point out that the effects of the distinction between void and voidable transactions has been described as "outrageous". He went on as follows:
"56. Nevertheless, the distinction is, in my view, principled and correct and it derives further support from the decision of the Court of Appeal in Norwich and Peterborough Building Society v Steed [1993] Ch 116. In that case, a transfer of a property, induced by the fraud of the transferees, was voidable but not void. An innocent building society advanced a sum of money to the transferees on security of a charge which the transferees executed and which was registered in the charges register. The question to which the case gave rise was whether the court had power under s.82 of the Land Registration Act 1925, the predecessor of the LRA 2002, to order the rectification of the register by deletion of the building society's registered charge. Section 82(1)(h), described by the Law Commission as a "catch-all", provided that the register might be rectified "in any other case where, by reason of any error or omission in the register, or by reason of any entry made under a mistake, it may be deemed just to rectify the register."
57. Scott LJ (as he then was), with whom Butler-Sloss and Purchas LJJ agreed, concluded it could not. He said this at page 135:
"Paragraph (h) is relied on by Mr Lloyd. But in order for the paragraph to be applicable some "error or omission in the register" or some "entry made under a mistake" must be shown. The entry in the charges register of the building society's legal charge was not an error and was not made under a mistake. The legal charge was executed by the Hammonds, who were at the time transferees under a transfer executed by Mrs Steed as attorney for the registered proprietor. The voidable transfer had not been set aside. The registration of the Hammonds as proprietors took place at the same time as the registration of the legal charge. Neither registration was an error. Neither entry was made under a mistake. So the case for rectification cannot be brought under paragraph (h)."
58. It is to be emphasised that this was the position in relation to a voidable transfer. The decision would have been different had the transfer been void: see, for example, Argyle Building Society v Hammond (1985) 49 P&CR 148 (CA).
59. In my judgment, the registration of a voidable disposition such as that with which we are concerned before it is rescinded is not a mistake for the purposes of Schedule 4 to the LRA 2002. Such a voidable disposition is valid until it is rescinded and the entry in the register of such a disposition before it is rescinded cannot properly be characterised as a mistake. It may be the case that the disposition was made by mistake but that does not render its entry on the register a mistake, and it is entries on the register with which Schedule 4 is concerned. Nor, so it seems to me, can such an entry become a mistake if the disposition is at some later date avoided. Were it otherwise, the policy of the LRA 2002 that the register should be a complete and accurate statement of the position at any given time would be undermined. In this connection, I believe the authors of Ruoff & Roper Registered Conveyancing put it very well at 46.009 in saying:
"An entry cannot retroactively become a mistake. It cannot be argued therefore that the rescission of a voidable transaction retroactively makes the entry which recorded the disposition - being an entry made at a time while the disposition was still effective - a mistake. That would undermine the policy of the 2002 Act that the register should be a complete statement of title at any given time. Consequent upon such rescission, application may be made for an order for alteration of the register to reflect the rescission. This would, however, be an alteration for the purposes of bringing the register up to date … rather than for the purposes of correcting a mistake. . ."
"Void or voidable.
This raises a nice question as to the status of the order of Mr. Registrar Morris Jones on July 11, 1973, when he gave leave to amend and join the Smiths as defendants. Was it a nullity and void ab initio? For in that case everything that followed from it was also a nullity and void: and no action had been "commenced" against the Smiths. Or was it good when it was made and only voidable? For in that case everything that followed was good until it was set aside: and an action would have been "commenced" against the Smiths and then dismissed by Rees J. in a "final" order. I think that the order of July 11, 1973 was a nullity and void ab initio for two reasons: (i) it was made under a fundamental mistake in that the registrar was told and believed that the Smiths had agreed to it, when they had not: and (ii) it was made contrary to the rules of natural justice, because no notice of appointment had been given to the Smiths' solicitor. Such failures make the order a nullity and void ab initio: see Anisminic Ltd. v. Foreign Compensation [1969] 2 AC 147, 171 by Lord Reid and at p. 195 by Lord Pearce. It is true, of course, that the Smiths might have waived their right to complain of it. They might have entered an unconditional appearance. But they did not waive it. They entered a conditional appearance and got it set aside. On being set aside, it is thereupon shown to have been a nullity from the beginning and void. So after some vacillation, I would adopt the meaning of "void" and "voidable" given by Professor Wade in his Administrative Law, 4th ed. (1977), pp. 300, 450. Seeing that it was a nullity, it follows that in point of law, no action had been "commenced" against the Smiths. So section 3 applies. The Act of 1975 operates retrospectively so as to enable Mr. Pheasant to bring an action against the Smiths-provided always that he can persuade the court to exercise its discretion so as to override the time limit".
"In my judgment, the order and the amended writ were void in the sense that the appellants were entitled ex debito justitiae to have both of them set aside. Essentially this was a case of non-service: see Craig v. Kanssen [1943] K.B. 256. Alternatively, there was a fundamental mistake on the part of the court making the order. R.S.C, Ord. 2, r. 1 does not apply. That is not, however, to say that the order or the amended writ was a nullity. Each was a document emanating from the court and good on its face. Such orders or documents must be acted upon until declared void by the court; see per Diplock J. in O'Connor v. Isaacs [1956] 2 Q.B. 288, 303. Consequently, if the appellants had not challenged the order or the amended writ, the subsequent proceedings would have been validly constituted: but as they did challenge them, the court had no option but to declare them void as Rees J. in effect, did in holding that the registrar had no power to give leave to amend. Neither was voidable in the sense that the court had a discretion to allow them to stand. (See the judgment of Sir George Baker P. in Dryden v. Dryden [1973] Fam. 217 and also the judgment of this court In re F. (Infants) [1977] Fam. 165, where the point was fully considered).
In these circumstances the plaintiffs cannot be said to have "commenced an action" because the whole proceedings were void ab initio and there is no res which could found an estoppel."
At 917B, Geoffrey Lane LJ stated that he agreed with Ormrod LJ's "reasoning and conclusions" in relation to the questions arising on the Pheasant v Smith appeal.
"…Dicta that refer to the possibility of there being such a distinction between orders to which the descriptions "void" and "voidable" respectively have been applied can be found in the opinions given by the Judicial Committee of the Privy Council in the appeals Marsh v. Marsh [1945] AC 271, 284 and MacFoy v. United Africa Co. Ltd. [1962] A.C.152, 160; but in neither of those appeals nor in any other case to which counsel has been able to refer their Lordships has any order of a court of unlimited jurisdiction been held to fall into a category of court orders that can simply be ignored because they are void ipso facto without there being any need for proceedings to have them set aside. The cases that are referred to in these dicta do not support the proposition that there is any category of orders of a court of unlimited jurisdiction of this kind; what they do support is the quite different proposition that there is a category of orders of such a court which a person affected by the order is entitled to apply to have set aside ex debito justitiae in the exercise of the inherent jurisdiction of the court without his needing to have recourse to the rules that deal expressly with proceedings to set aside orders for irregularity and give to the judge a discretion as to the order he will make. The judges in the cases that have drawn the distinction between the two types of orders have cautiously refrained from seeking to lay down a comprehensive definition of defects that bring an order into the category that attracts ex debito justitiae the right to have it set aside, save that specifically it includes orders that have been obtained in breach of rules of natural justice.
The contrasting legal concepts of voidness and voidability form part of the English law of contract. They are inapplicable to orders made by a court of unlimited jurisdiction in the course of contentious litigation. Such an order is either irregular or regular. If it is irregular it can be set aside by the court that made it upon application to that court; if it is regular it can only be set aside by an appellate court upon appeal if there is one to which an appeal lies."
"…When the word "void" is used in relation to orders which are good on their face it must, therefore, have a more restricted meaning than it has in relation to marriages, contracts, and other transactions inter partes. It can only mean that when an application is made to a court to set it aside the court has no option or discretion in the matter and must do so. The most obvious examples are provided by cases where, in Sir George Baker P.'s phrase in Dryden v. Dryden [1973] Fam. 217, 237: "…the irregularity is such that it undermines the adversary procedure for the entire proceedings," e.g., where there has been a total failure to comply with the rules relating to service: see also Craig v. Kanssen [1943] K.B. 256 and Woolfenden v. Woolfenden [1948] P. 27. In such cases, the applicant is entitled ex debito justitae to have the order set aside, but it is not accurate to say that the order is a nullity, because it is good on its face and valid until set aside. There are other classes of case in which the court is bound to set aside the order in question, i.e., the relevant provision is "imperative," either because Parliament has expressly so provided as in section 41 (3) of the Act of 1973 or because, as a matter of construction, the court so holds."
Conclusions:
Lord Justice Peter Jackson:
Lord Justice Longmore: