MR JUSTICE MORGAN:
- This is an appeal, with the permission of Birss J granted on 9 May 2017, against one part of the order dated 19 December 2016 of Mrs Recorder McAllister, sitting in the County Court at Central London.
- The Respondent submits that the Recorder's decision was right for the reasons which she gave but, in addition, the Respondent has filed a Respondent's Notice seeking to uphold the decision of the Recorder on different or additional grounds. The Respondent's Notice was late for reasons which were explained to me and at the hearing I gave the Respondent permission to rely on the Respondent's Notice
- Ms Lear appeared on behalf of the Appellant and Mr Hubbard appeared on behalf of the Respondent.
- In the course of the hearing of the appeal, Ms Lear applied for permission to appeal in relation to other parts of the Recorder's order in relation to which Birss J had refused to grant permission to appeal. I will deal with this application also in this judgment.
- The Recorder did not hear evidence and did not make her own findings of fact as to the underlying dispute between the parties. This was because she held that there was an issue estoppel in relation to that underlying dispute, arising from a decision of a deputy adjudicator to the Land Registry (to whom I will refer as "the adjudicator") on 1 June 2011. The Recorder held that the decision of the adjudicator was binding on the parties and that the earlier decision determined the outcome of the proceedings in the county court.
- In this section of the judgment, I will set out those matters of fact which are not in dispute and other facts which relate to the matter being considered by the adjudicator and then becoming the subject of the county court proceedings.
- The parties are sisters. At the hearing, their counsel referred to them by their first names and I will do the same, not intending any disrespect to them. The Appellant is Rita and the Respondent is Rose. Rita is the elder of the two.
- On 24 April 1991, the registered title of 69 Sandringham Gardens, London N12 (title no. MX375417) was transferred to Rita and Rose. The transfer stated that the transfer was in consideration of the payment of a price of £125,000. For some reason, the appeal bundle only has the first page of this transfer. Unfortunately, this is only one of many defects in the appeal bundle which has not been prepared with proper care.
- Rita paid £25,000 of the purchase price for the property in 1991 and the balance of £100,000 was borrowed from Nationwide Anglia and repayment of the advance and interest was secured by a mortgage on the property granted by Rita and Rose.
- Rita has lived at the property ever since it was bought in 1991. Rose lived at the property from 1991 to 1995, when she moved to other accommodation. I understand that Rose lived at the property at some later time or times but I am not clear as to the details in that respect.
- On 31 October 2002, Rita and another sister, Maureen, executed a transfer of the title to Rita alone. Maureen forged Rose's signature on this transfer. The transfer stated that the consideration for the transfer was the redemption of an existing charge and the re-mortgage in one name i.e. that of Rita. Rose was unaware that this document had been purportedly executed until she found out about it in 2008. The official copy entries of this title, dated 4 February 2016, show that Rita became the sole registered proprietor on 24 January 2003. In 2016, the register entries showed that the property was no longer subject to the charge in favour of Nationwide Anglia but was subject to a charge dated 30 June 2004 in favour of Bank of Scotland plc.
- Having found out about the purported transfer of 31 October 2002, Rose applied to the Land Registry, on 3 December 2008, to enter a unilateral notice against the title, using form UN1. The application referred to the purchase of the property in joint names in 1991 which was said to be part of "a family arrangement". She said that she did not sign the transfer of 31 October 2002 as her signature was forged and she wished to take court proceedings if necessary to set aside the transfer, rectify the register and preserve her half share in the property. Rose's application then went on to apply, in the alternative, for the entry of a restriction to prevent the registered proprietor from disposing of the property without a conveyancer's certificate that notice of any such disposal had been given to Rose. On 8 December 2008, pursuant to this application, the Land Registry entered a unilateral notice on the title. The entry stated that the notice was in respect of an interest arising from the transfer of 31 October 2002. Therefore, the notice was not in respect to an interest arising under the 1991 transfer. I expect that the Land Registry expressed the entry in those terms because of section 33(a) of the Land Registration Act 2002 ("the 2002 Act"), to which I will later refer. The Land Registry did not enter a restriction.
- On 23 February 2009, Rita applied in form UN4 for the cancellation of the unilateral notice. On 17 March 2009, Rose objected to this application. The application and the objection were not produced to the court although they were referred to in a case summary prepared by the registrar. There was then a reference of the dispute to the adjudicator. A copy of the reference was not produced to the court. However, I was shown a copy of the case summary which accompanied the reference to the adjudicator. The summary stated that Rose objected to Rita's application to cancel the unilateral notice on the grounds that she was entitled to enter a unilateral notice "to protect her right to seek rectification of the register".
- I was also provided with Rose's statement of case to the adjudicator. This referred to the relationship between Rita and Rose from 1981. It referred to the purchase of the property in 1991 as being pursuant to an express agreement that they would share the beneficial ownership of the property equally. It stated that the 2002 transfer was a nullity as Rose's signature had been forged. It stated that the register should be rectified accordingly. I was not given a copy of Rita's statement of case to the adjudicator.
- On 9 February 2010, the secretariat of the Tribunals Service, Adjudicator to HM Land Registry, wrote to the parties. The letter stated that the adjudicator had reviewed the file and had asked for this letter to be sent. The letter stated that "the essential point" was whether Maureen had signed the 2002 transfer on behalf of Rose. The letter then stated that this question "may involve consideration of whether [Rose] had a beneficial interest in the property". It was explained that the adjudicator would need to hear all relevant evidence in order to determine which party she believed and, having heard such evidence, it was likely that the adjudicator would make findings of fact in relation to it. It was then said that the adjudicator's decision would determine Rose's entitlement to have her name restored to the register as joint proprietor.
- The reference to the adjudicator was heard on 5 and 6 May 2011 and the adjudicator (Ms Sara Hargreaves) gave her decision on 1 June 2011. The adjudicator made an order that the Chief Land Registrar do cancel Rita's application to cancel the unilateral notice. The adjudicator's written decision can be summarised as follows (numbers in square brackets are the numbers of the relevant paragraphs in the decision):
(1) She referred to the notice being registered to protect Rose's right to seek rectification of the register to restore her name as a joint proprietor; she stated that it was unusual that Rose had entered a unilateral notice rather than making an application for rectification of the register; she said that an application for rectification would have stood "a good chance of success": ;
(2) She set out the background to the application and a chronology:  – ; she referred to the rival cases about the 1991 transaction at ; she referred to the rival cases about the 2002 transfer at ;
(3) Between  and , under the heading "The Applicant's evidence", she set out the evidence given by Rose, both in answer to questions put by the adjudicator and in answer to cross-examination; Rose's evidence included an account of the arrangement made in 1991;
(4) At , she said in relation to Rose's evidence:
"I have also concluded that the account of the offer made by [Rita] in 1991 is accurate, though as will be seen below, whether [Rita] made a genuine offer or not is another question altogether. But I find that [Rita] told [Rose] she would have a half share in the property even if she did so just to get her signature on various documents which she needed to."
(5) At , she accepted Rose's evidence that she had no knowledge of the 2002 transfer until 2008;
(6) Between  and , under the heading "The Respondent's evidence", she set out the evidence given by Rita;
(7) At , she referred to Rita's evidence in relation to the transfer in 1991; Rita had said that the solicitor then acting had told Rose that she could go "on the mortgage" even though she had no income and that her name could be removed later; the adjudicator noted that this allegation had not been put to Rose in cross-examination;
(8) At  to , the adjudicator set out a number of findings under the heading "Findings of fact";
(9) She held that Rita needed Rose's signature on the documents because Rita's husband was away and Rose was available "to do what she was told", which was to provide another signature at the request of the mortgage broker; Rita told Rose that she would have an interest in the property as a reward; she did not make a finding as to whether Rita meant what she said; Rose signed the documents without being fully informed as to the prospective liabilities which she was undertaking which she had no means of satisfying; "[s]he was told she would have an interest in order to get her signature on the documents"; Rita used Rose to acquire the property as advised by the mortgage broker: ;
(10) Maureen impersonated Rose in 2002, the transfer was forged and was a nullity; Rose did not know about these events until later: ;
(11) Rose expected "some reward or payback from the property" and she thought she had "an interest" in it; Rita's case that Rose had approved the transfer of 2002 was not supported by any credible oral or written evidence: ;
(12) The adjudicator had the impression that Rita organised both transfers for her own benefit on her own terms and cared nothing for perpetrating a straightforward fraud: ;
(13) She found against Rita's case on the facts and did not need to consider other arguments about the 2002 transfer: ;
(14) She then held: "[Rita's] defence to [Rose's] claim to have the right to rectify the register is without merit or foundation and it follows that [Rita's] application to cancel [Rose's] notice, must itself be cancelled": .
The county court proceedings
- On 4 March 2015, Rose commenced proceedings in the county court against Rita. Rose claimed a declaration that the property was held on trust for Rita and Rose in equal shares and for an order for sale under section 14 of the Trusts of Land and Appointment of Trustees Act 1996 ("the 1996 Act"). Rose filed details of her claim and contended that the decision of the adjudicator had given rise to an issue estoppel in relation to the forgery of the 2002 transfer and also to the effect that Rose was beneficially entitled to a half share of the property. She also pleaded that the position in equity should follow the position at law. She pleaded an alleged agreement in 2002 which does not seem to fit with the rest of her case; the reference to 2002 might have been a mistake for 1991. In the details of her claim, she sought rectification of the register, a declaration as to the beneficial interests in the property and an order for sale.
- On 24 June 2016, Rita served a Defence and Counterclaim. In her Defence, Rita contended that the decision of the adjudicator did not give rise to an issue estoppel in relation to the dispute as to the beneficial interests in the property. Rita pleaded facts in relation to the 1991 transfer which were very similar to the findings of fact made by the adjudicator in that respect, save that Rita pleaded that Rose knew in 1991 that she would not have any interest in the property. Rita pleaded that Rose never had any beneficial interest in the property. Rita admitted that Rose was entitled to have rectification of the register so as to become a joint registered proprietor but that position would not affect the beneficial interests in the property. In her Counterclaim, Rita repeated her Defence. She then claimed a declaration that she was the sole beneficial owner and an order vesting the legal title in her sole name. The Counterclaim then pleaded a further case in the alternative if it should be found that Rose had had a beneficial interest in the property; this alternative case was that there should be an equitable account to reflect the mortgage payments made by Rita alone to Nationwide Anglia or to a replacement mortgagee.
- On 11 July 2016, Rose served a Reply and Defence to Counterclaim. Rose set out again her case as to the arrangement made in 1991 and denied that Rita was entitled to an equitable account.
- There have been various directions given in the county court as to disclosure and other matters. The appeal bundle contained witness statements from Rose and Rita and Rita's husband.
- I was told that an unless order was made in the county court on 30 November 2016. The appeal bundle contained the first page of an order of 30 November 2016 but that first page did not contain an unless order. Mr Hubbard provided me with what he said was a draft of the order which the county court had been asked to make and which, he said, the court did make on 30 November 2016. Ms Lear did not dispute this account of what had happened. The order, which had been drafted by the lawyers advising Rose, provided for Rita to give disclosure of various classes of documents. Paragraph 1 of the order provided that Rita was to carry out a search for certain documents by 1 December 2016. Rita was then required to serve a list of documents, although there was no date stated for such service. Under paragraph 3 of the order, Rita was to provide Rose with copies of the documents disclosed, by 4 pm on 7 December 2016. Paragraph 4 of the order then provided that if Rita should fail to comply with all of paragraphs 1, 2 and 3, then Rita would be "debarred from defending the claim" and Rita should pay to Rose, Rose's costs of the proceedings on the standard basis.
- The case came on for hearing before the Recorder on 19 December 2016, with a time estimate of 2 days. Rose was represented by counsel (not Mr Hubbard) and Rita appeared in person. I was shown the skeleton argument which had been prepared by counsel for Rose. It was submitted that Rita had failed to comply with the order of 30 November 2016 so that she was debarred from defending the claim. Counsel noted that the order did not refer to the counterclaim but it was submitted that the counterclaim was struck out by the order. It was said that the counterclaim simply repeated the Defence. Alternatively, it was submitted that the counterclaim should be summarily dismissed. Counsel's skeleton argument then developed the case for there being an issue estoppel in relation to the question as to the beneficial interests in the property. The skeleton argument then addressed matters arising in the alternative if there were no issue estoppel as to the beneficial interests.
- I have a transcript of the hearing before the Recorder. The first part of the hearing addressed the question of whether Rita had complied with the unless order for disclosure. At page 8 of the transcript, the Recorder said that she was putting that question to one side for the moment and would move on to consider the case that there was an issue estoppel as to the beneficial interests. Having considered the adjudicator's decision, the Recorder said to Rita that "this matter" had already been determined by the Adjudicator. The Recorder then moved on to consider the consequences of that position. There was considerable discussion about the amount of the mortgage debt at the date of the hearing and what the monies raised on mortgage after 2002 had been used for. At one point, the Recorder indicated that there would have to be a further hearing to take an equitable account as between the two beneficial owners. Later, counsel for Rose indicated that she was prepared to accept a division of the proceeds of sale of the property which assumed that all of the monies borrowed and charged on the property after 2002 had been spent on the property and had increased its value. Counsel said that the result of that acceptance would be that the mortgage debt at the date of the hearing should be paid out of the proceeds of sale before the net proceeds were divided equally between Rita and Rose. The Recorder then indicated that she would give judgment. Up to that point, the Recorder had not considered any alternative to making an order for sale of the property. The Recorder did not hear any evidence at any point during the hearing.
The judgment of the Recorder
- The Recorder gave a short judgment. She recited some of the history of the matter and referred to the decision of the adjudicator. She noted that Rose submitted that there was an issue estoppel as to the beneficial interests in the property. She said: "That must be right. The matter has already been determined." She noted that the adjudicator had jurisdiction to determine the underlying merits of the substantive dispute. In those circumstances, she said that it was not necessary for her to hear any evidence as that would be covering the same ground as the evidence before the adjudicator.
- The Recorder then referred to the debarring order. She appears to have held that Rita had failed to give disclosure in accordance with the order of 30 November 2016 and the debarring order had taken effect. She did not mention that Rita had a counterclaim and she did not consider the effect of the debarring order on the counterclaim. However, having decided the case on the basis of an issue estoppel, she stated that the effect of the debarring order might not have been sufficient to enable her to reach the conclusion that Rose was entitled to the relief which she sought. She did not give any further explanation as to that.
- The Recorder then considered the relief to be granted. She held that the register should be rectified. As to the application for an order for sale, she said: "I cannot see any reason why Rose should not be entitled to an order for sale." As to the proceeds of sale, she stated that the mortgage debt should be paid out of the proceeds of sale and the net proceeds split equally between Rita and Rose. She then dealt with the mechanics of the sale and asked counsel for Rose to draw up an order.
- The order made by the Recorder provided for:
(1) A declaration that it had been found as a fact by the adjudicator that Rita and Rose were tenants in common in equal shares and that the 2002 transfer was a forgery and a fraud on Rose;
(2) A direction to the registrar to register Rose as a joint proprietor;
(3) An order for sale of the property with directions as to the sale;
(4) An order that the net proceeds of sale, after payment of the mortgage and the costs of the sale, should be divided equally between the parties, save that any costs caused by any default of Rita in making mortgage payments should be deducted from Rita's half share;
(5) An order that Rita should pay Rose's costs on the standard basis.
- Rita served an Appellant's Notice seeking to challenge the Recorder's order. Rita put forward eight grounds of appeal. The grounds of appeal challenged:
(1) The decision as to the beneficial interests in the property;
(2) The failure of the Recorder to undertake equitable accounting, taking into account matters such as the mortgage payments made by Rita over the years;
(3) The fact that the Recorder did not have regard to statements made by Rose to the effect that she did not have an interest in the property;
(4) The order for sale;
(5) The provision in the order about certain costs coming out of Rita's half share only.
- On 9 May 2017, Birss J granted Rita permission to appeal in relation to one part only of the order. The relevant part was the order that the net proceeds of sale, after payment of the mortgage and the costs of the sale, should be divided equally between the parties, save that any costs caused by any default of Rita in making mortgage payments should be deducted from Rita's half share. Birss J refused permission to appeal on all other matters.
- Rose has served a Respondent's Notice which, in the alternative to upholding the order of the Recorder for the reasons which she gave, seeks to uphold that order on different or additional grounds. It was said in the Respondent's Notice that the findings of fact in the decision of the adjudicator were binding on the parties and those findings supported a finding that in 1991 the position in equity followed the position at law and, accordingly, Rita and Rose were beneficial joint owners of the property. It was also submitted that there was no evidence before the Recorder which was different from the evidence which had been before the adjudicator and, on that evidence, the correct conclusion was that the property was owned equally by Rita and Rose.
- Although Birss J had refused permission to appeal, save in relation to one part of the order, Rita did not apply pursuant to CPR rule 52.4(2) and (6), within 7 days of his order, for a renewal of her application for permission to appeal at an oral hearing. If she had made such an application, then I expect that the court would have directed that the renewed application for permission to appeal in relation to the other grounds would have been listed to be heard together with the substantive appeal pursuant to the permission which had been given.
- At the hearing of the appeal, in the light of some of the submissions made by Ms Lear, it soon became clear that, if those submissions succeeded, the scope of the appeal was restricted more than it should have been by the refusal of permission to appeal in some respects and that Ms Lear ought to be renewing the application for permission to appeal. In the end, Ms Lear did submit that I should give permission to appeal in relation to other parts of the Recorder's order so that, if Ms Lear's submissions found favour with the court, the court could then give effect to its view of the case in relation to all parts of the Recorder's order which were affected by them. Mr Hubbard submitted that it would be unduly prejudicial to Rose if I were to grant permission to appeal in that way. He told me on instructions that the value of the property had fallen although I doubt if the period involved in the alleged fall in value was the same as the short period of time between the order of Birss J and the hearing of this appeal.
- Before considering any further what course I should take, I will set out some legal matters which I need to reflect in my analysis of the arguments raised on this appeal.
- Part 4 of the 2002 Act provides for the registration of notices and restrictions. Section 32(1) provides that a notice is an entry in the register in respect of the burden of an interest affecting a registered estate or charge. Section 32(3) provides that the fact that a registered estate or charge is the subject of a notice does not necessarily mean that the interest is valid. Section 33 provides that a notice may not be entered in the register in respect of certain specified interests. One of the specified excluded interests is an interest under a trust of land: section 33(a). A person claiming the benefit of an interest which can be protected by the entry of a notice may apply to enter a unilateral notice without the consent of the registered proprietor: section 34. The registered proprietor is then given notice (pursuant to section 35) of the register entry and may apply for its cancellation: section 36(1). In such a case, the beneficiary of the unilateral notice is given notice of the application for cancellation and of his right to object to the cancellation: section 36(2). Sections 40 to 47 deal with the registration of restrictions. A person claiming an interest under a trust of land can apply for a suitable restriction to protect that claim but, as I have indicated, no restriction was entered in the present case.
- Where the registered proprietor applies for the cancellation of a unilateral notice and the beneficiary of the notice objects to that application, the registrar must give notice of the objection to the registered proprietor and may not determine the application until the objection has been disposed of, unless the objection is groundless: section 73(5) and 73(6). Section 73(7), in its form at the time of the relevant events in this case, provided that if it was not possible to dispose of the objection by agreement the registrar must refer "the matter" to the adjudicator.
- Part 11 of the 2002 Act deals with various functions in relation to adjudication. At the time of the relevant events in this case, these functions were performed by the adjudicator. Under section 108(1)(a), one of the functions of the adjudicator was to determine "matters" referred to him under section 73(7). The jurisdiction formerly exercised by the adjudicator has now been transferred to the First-tier Tribunal, with effect from the 1 October 2013, so that section 73(7) and section 108 now refer to that tribunal instead of the adjudicator.
- The Recorder held that the decision of the adjudicator in this case gave rise to an issue estoppel. On this appeal, the appellant challenges that decision and the respondent seeks to uphold it.
- There was no real dispute as to the principles as to issue estoppel. Mr Hubbard cited the following summary of the principles in Price v Nunn  EWCA Civ 1002 at  as a recent statement of the law:
"68 Issue estoppel is a form of estoppel precluding a party from disputing the decision on an issue reached in earlier proceedings even though the cause of action in the subsequent proceedings is different. It may arise where a particular issue forming a necessary ingredient in a cause of action has been litigated and decided and in subsequent proceedings between the same parties or their privies to which the same issue is relevant one of the parties seeks to re-open that issue. In such a situation, and except in special circumstances where this would cause injustice, issue estoppel bars the re-opening of the same issue in the subsequent proceedings. The estoppel also applies to points which were not raised if they could with reasonable diligence and should in all the circumstances have been raised, but again subject to special circumstances where injustice would otherwise be caused."
This summary of what is involved in issue estoppel is not, however, a comprehensive statement of all of the requirements of issue estoppel.
- It is not in dispute that in order for there to be an issue estoppel, there must be a decision of a judicial tribunal acting within its jurisdiction. I will also later deal with a requirement that the relevant finding was necessary to the relevant decision. In the present case, the questions which need to be addressed are:
(1) Can a decision of the adjudicator give rise to an issue estoppel?
(2) What was the jurisdiction of the adjudicator in the present case?
(3) What did the adjudicator decide?
(4) How much of the decision of the adjudicator was necessary for the purposes of the decision?
Can a decision of an adjudicator give rise to an issue estoppel?
- An adjudicator is a judicial tribunal and an issue estoppel can, in principle, arise from a decision within his jurisdiction. In this context, it is relevant to refer to Crown Estate Commissioners v Dorset County Council  Ch 297 which concerned another system of registration in relation to land, but did not concern registration under the Land Registration Act 1925 or the 2002 Act. In that case, the court considered the position of a commons commissioner who had to decide whether to register the verges of a highway as common land. The relevant statute provided that land which formed part of a highway could not be so registered. The highway authority objected to a proposed registration on the ground that the land in question was part of a highway. That objection was upheld by the commissioner, following a hearing. Subsequently, the Crown Estate claimed to be the owner of the verges in question and brought High Court proceedings in which it contended that the verges were not part of a highway. It was held that the earlier decision of the commissioner was a final decision on the merits, within his jurisdiction, and gave rise to an issue estoppel. The argument of the Crown Estate had been that the commissioner had a limited function only, namely to inquire into the validity of a registration so that he had no jurisdiction to adjudicate on the status of the land for other purposes. That argument was rejected.
The jurisdiction of the adjudicator
- The jurisdiction formerly exercised by the adjudicator was the subject of Part 11 of the 2002 Act. These provisions have now been amended to refer to the First-tier Tribunal in place of the adjudicator but are not otherwise changed.
- References to the adjudicator were the subject of the Land Registration (Referral to the Adjudicator to HM Land Registry) Rules 2003 and the Adjudicator to her Majesty's Land Registry (Practice and Procedure) Rules 2003. Under the Rules dealing with the referral, the registrar was required to prepare a case summary which contained the information specified in Rule 3. "The matter" referred to the adjudicator is defined in the notice of referral given under Rule 5 of these Rules. The Practice and Procedure Rules have now been replaced by the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 but the provisions of the former Rules are usefully summarised in Silkstone v Tatnall  1 WLR 400 at -.
- The jurisdiction of the adjudicator in relation to the determination of objections to applications to the registrar was considered in detail in Jayasinghe v Liyanage  1 WLR 2106 and Silkstone v Tatnall  1 WLR 400. The first of these cases concerned an objection to an application to cancel a restriction which had been registered to protect a claim to an interest under a trust of land. The second of these cases concerned an objection to an application to cancel a unilateral notice which had been registered to protect a claimed easement. In both cases, the court held that the adjudicator had jurisdiction to determine the merits of the dispute in relation to "the matter" which had been referred to the adjudicator. The court held that the Adjudicator was not restricted to determining whether the beneficiary of the restriction or the notice had an arguable claim to the interest in question.
- In Silkstone v Tatnall, it was said at :
"A reference to an adjudicator of a "matter" under section 73(7) confers jurisdiction upon the adjudicator to decide whether or not the application should succeed, a jurisdiction that includes the determination of the underlying merits of the claim that have provoked the making of the application. If the adjudicator does not choose to require the issue to be referred to the court for decision, he must determine it himself. In the case of an application under section 36 to which an objection has been raised, the relevant issue will be the underlying merits of the claim to register the unilateral notice."
- In the earlier case of Jayasinghe v Liyanage, having decided that the adjudicator had jurisdiction to determine the merits of the dispute in relation to "the matter" which had been referred, the judge (Briggs J) held that the precise nature of the adjudicator's function on any particular reference under section 73(7) will be significantly affected by an examination of the precise restriction (or notice) sought, the nature of the claim or right thereby sought to be protected, and the basis of the objection which has led to the reference: see at . This is an important point.
- It is implicit in both of these decisions that the decision of the adjudicator on "the matter" referred to him is binding on the parties, not only in relation to the state of the register under the 2002 Act, but also more generally as to the outcome of the underlying dispute which is the subject of the reference to the adjudicator: see, in particular, Silkstone v Tatnall at .
The requirements as to the earlier decision
- Before the result of earlier proceedings before a judicial tribunal can give rise to an issue estoppel, there obviously must be "a decision" on the point that is later in issue. Further, the matter which was decided on the earlier occasion must be the identical issue to that which is involved in the subsequent litigation. Yet further, the decision on a point in the earlier proceedings must have been necessary to the result of the first proceedings before it will give rise to an issue estoppel. Not every finding made in the earlier proceedings will create such an estoppel. The position was explained by Diplock LJ in Thoday v Thoday  P 181 at 198 in this way:
"The second species, which I will call "issue estoppel," is an extension of the same rule of public policy. There are many causes of action which can only be established by proving that two or more different conditions are fulfilled. Such causes of action involve as many separate issues between the parties as there are conditions to be fulfilled by the plaintiff in order to establish his cause of action; and there may be cases where the fulfilment of an identical condition is a requirement common to two or more different causes of action. If in litigation upon one such cause of action any of such separate issues as to whether a particular condition has been fulfilled is determined by a court of competent jurisdiction, either upon evidence or upon admission by a party to the litigation, neither party can, in subsequent litigation between one another upon any cause of action which depends upon the fulfilment of the identical condition, assert that the condition was fulfilled if the court has in the first litigation determined that it was not, or deny that it was fulfilled if the court in the first litigation determined that it was.
But "issue estoppel" must not be confused with "fact estoppel," which, although a species of "estoppel in pais," is not a species of estoppel per rem judicatam. The determination by a court of competent jurisdiction of the existence or nonexistence of a fact, the existence of which is not of itself a condition the fulfilment of which is necessary to the cause of action which is being litigated before that court, but which is only relevant to proving the fulfilment of such a condition, does not estop at any rate per rem judicatam either party in subsequent litigation from asserting the existence or non-existence of the same fact contrary to the determination of the first court. It may not always be easy to draw the line between facts which give rise to "issue estoppel" and those which do not, but the distinction is important and must be borne in mind. Fortunately, it does not arise in the present case."
- As to the requirement that the finding which is relied upon to found an estoppel be necessary to the relevant decision, Spencer Bower and Handley, Res Judicata, 4th ed., at para. 8-02 contains an extensive quotation from the judgment of Dixon J in Blair v Curran (1939) 62 CLR 464 at 531-533 and the following part of that judgment (at page 532) was approved by the Court of Appeal in Kirin-Amgen v Boehringer Mannheim GmbH  FSR 289 at 300:
"In matters of fact the issue estoppel is confined to those ultimate facts which form the ingredients in the cause of action, that is, the title to the right established. Where the conclusion is against the existence of a right or claim which in point of law depends upon a number of ingredients or ultimate facts the absence of any one of which would be enough to defeat the claim, the estoppel covers only the actual ground upon which the existence of the right was negatived. But in neither case is the estoppel confined to the final legal conclusion expressed in the judgment, decree or order. In the phraseology of Coleridge J. in R. v. Inhabitants of the Township of Hartington Middle Quarter (1855) 4 E & B 780 at 794, the judicial determination concludes, not merely as to the point actually decided, but as to a matter which it was necessary to decide and which was actually decided as the groundwork of the decision itself, though not then directly the point at issue. Matters cardinal to the latter claim or contention cannot be raised if to raise them is necessarily to assert that the former decision was erroneous. In the phraseology of Lord Shaw, "a fact fundamental to the decision arrived at in the former proceedings and "the legal quality of the fact" must be taken as finally and conclusively established (Hoystead v. Commissioner of Taxation  AC155,165). But matters of law or fact which are subsidiary or collateral are not covered by the estoppel. Findings, however deliberate and formal, which concern only evidentiary facts and not ultimate facts forming the very titled rights give rise to no preclusion."
- Kirin-Amgen also approved the following passage from the 2nd edition of Spencer Bower and Turner at page 179:
"Even when in one way or another it can be demonstrated that the court has expressly determined, in the earlier proceeding, the same issue as is now in dispute, an issue estoppel will not by any means always be the result. Only determinations which are necessary to the decision—which are fundamental to it and without which it cannot stand—will found an issue estoppel. Other determinations, without which it would still be possible for the decision to stand, however definite be the language in which they are expressed, cannot support an issue estoppel between the parties between whom they were pronounced. The authority for the rule as above set out is ancient, and it may be traced back as far as a dictum of Lord Holt in Blackham 's case."
The 4th edition of Spencer Bower and Handley contains a similar passage at para. 8.23.
Discussion and conclusions
- It is helpful to begin this discussion by considering what it was that the adjudicator decided. For this purpose, I will not distinguish between the issues that are raised by the appeal or by the Respondent's Notice or potentially raised as a result of the application for permission to appeal.
- It is clear that the adjudicator decided that the 2002 transfer was a nullity. She also decided that Rose had a right to seek rectification of the register and that such a right could be protected by the entry of a unilateral notice. (She proceeded on the basis that the right to seek rectification was an interest affecting a registered estate within section 32.) In view of her findings at the end of her decision, it is not clear why she said in  that an application to rectify the register "stood a good chance of success" as it is not clear what arguments she thought might be raised to defeat such an application. In the light of the adjudicator's decision, Rita does not now contend that the 2002 transfer was valid and binding on Rose.
- The Recorder held that the adjudicator had decided that Rita and Rose held the property beneficially as tenants in common in equal shares: see the Recorder's judgment at . I do not consider that the adjudicator did decide that. The adjudicator made a number of findings of fact which are relevant to Rose's argument that she had a half share in the property. The adjudicator made a finding of fact that there was an arrangement between Rita and Rose in 1991 when the property was acquired: see . The adjudicator had earlier accepted Rose's evidence that Rita had said to her that Rose would have a half share in the property: see . The adjudicator then made a finding of fact that Rita had said to Rose in 1991 that Rose would have an interest in the property: see . The adjudicator made further findings of fact about this arrangement. She held that the reason that Rita said what she did was to get Rose's signature on the documents: see . The adjudicator also doubted whether Rita meant what she said: see . She also held that Rose thought she had "an interest" in the property and that she expected "some reward or payback": see . Having reviewed the adjudicator's findings, I do not consider that she went beyond those findings of fact and actually decided that Rose had a half share in the property.
- Mr Hubbard submits that if Rita said to Rose in 1991 that she would have a half share in the property and if the property is then put in joint names and Rose executes the mortgage, then Rita will be unable to rebut the presumption that the parties intended that they would be jointly entitled in equity or be tenants in common in equity: see Stack v Dowden  2 AC 432 at  and . Mr Hubbard may or may not be right about that. However, his ability to make that submission does not mean that the adjudicator actually made the finding which he says would have been appropriate.
- In so far as one can tell why the adjudicator expressed herself in the way she did, it seems to me that the adjudicator deliberately did not make a finding that the property was owned in equal shares. It looks like she recognised that such a finding was not necessary for her decision as to whether the 2002 transfer was a nullity and whether Rose was entitled to apply to rectify the register. She went into the history of the matter and made her findings as to the 1991 arrangement in order to consider the later evidence as to the 2002 transfer and to consider the inherent improbability of Rose agreeing to transfer the property to Rita alone in view of what had been said in 1991 and in view of the fact that Rose believed that she had "an interest" in the property.
- Accordingly, I hold that because the adjudicator did not decide that Rose had a half share in the property, there was no issue estoppel to that effect. For that reason, Rita has established her ground of appeal against the part of the Recorder's order which directed that the net proceeds of sale should be split 50/50 between Rita and Rose.
- Rita had further arguments in support of her appeal against that part of the order. She submitted that even if the property was agreed to be held in equal shares in 1991, it was still necessary to determine the position at the date of the trial and that would involve considering events which happened after 1991. Further, it was said that even if the parties had agreed equal shares in 1991, Rita was entitled to an equitable account and Rita wished to contend that a 50/50 split of the net proceeds of sale was too generous to Rose. The Recorder had not heard the evidence which was available in relation to an equitable account but instead just discussed the matter with counsel for Rose and with Rita in person, but without Rita giving any evidence. In view of my finding that there was no issue estoppel which bound the Recorder to hold that the property was held in equal shares, it is not necessary to discuss these further matters. There was a further point in relation to the part of the order which referred to the costs caused by any default in making mortgage payments. As the order as to the division of the proceeds of sale will have to be set aside, it is not necessary to consider that point.
- The next question is whether the adjudicator made a finding that Rose had "an interest" in the property with the extent of that interest remaining to be quantified. Again, on examining the detailed findings of the adjudicator, I do not consider that she did make such a finding, as distinct from making findings of fact in the way I have described earlier.
- At this point, I need to consider the points made in the Respondent's Notice as developed by Mr Hubbard at the hearing of the appeal. He submitted that the parties were bound by the adjudicator's findings of fact and the legal consequence of those findings of fact was that the property was held jointly or in equal shares. However, I consider that the parties are not bound by the adjudicator's findings of fact in these respects. Although a finding in relation to an issue of fact can give rise to an issue estoppel, just as a finding in relation to an issue of law or a mixed issue of law and fact can do so, the authorities referred to above make it clear that not all findings of fact in a judgment or decision create an issue estoppel. Applying those authorities to this case, the relevant findings of fact were not necessary to the decision as to whether the 2002 transfer was a nullity and whether Rose was entitled to rectification of the register. Instead, the adjudicator made these findings as part of the background to the 2002 transfer in order to make her findings as to that transfer. Using the language of Dixon J in Blair v Curran, the findings of fact related to "evidentiary facts" and not to "ultimate facts". Therefore, the findings of fact as to the 1991 arrangement did not give rise to an issue estoppel in this case.
- I could see some circumstances in which it might have been necessary for the adjudicator to decide whether Rose had an interest in the property, without necessarily having to quantify that interest. Such a case might have arisen if Rita had argued that, although the 2002 transfer was a nullity, Rose should not be entitled to rectification of the register because Rita was the sole owner in equity and could therefore direct that the legal title should be vested in her alone without Rose being a joint trustee. If that argument had been put forward it might have been necessary for the adjudicator to address the question whether Rose had an interest in the property. So far as I can tell, no such argument was put forward. There is no sign of the argument in the adjudicator's decision and I was not shown Rita's statement of case to the adjudicator.
- This conclusion as to the status of the findings of fact in relation to the 1991 arrangement means that I do not need to consider the further arguments put forward by Ms Lear, to which I have already referred, namely, the need to quantify the extent of the beneficial interests at the date of the court hearing and/or Rita's right to have an equitable account.
- My conclusions as to the extent of any issue estoppel mean that it is not strictly necessary to address separately the arguments as to the jurisdiction of the adjudicator. However, the arguments as to which findings were necessary for the adjudicator's decision overlap with the arguments as to which issues went to the merits underlying the dispute in relation to "the matter" referred to the adjudicator, as explained in the authorities referred to earlier, and it may be helpful to make the following comments.
- The jurisdiction of the adjudicator (and now the First-tier Tribunal) is to determine the issues which go to the merits of the dispute in relation to the matter referred for determination. Prima facie, therefore, the adjudicator or the tribunal should not determine the merits of other disputes between the same parties, even disputes relating to the same registered title, if those disputes are different from the dispute in relation to the matter referred for determination. However, I would qualify that statement as follows. The adjudicator or tribunal may consider that it would be helpful to make findings on certain points where such findings would throw light on the findings which are necessary to determine the dispute in relation to the matter referred for determination. The present case is a good example of that. The adjudicator found it helpful to make findings about the arrangement in 1991 to assist with her findings as to the 2002 transfer. I consider that the adjudicator was acting within her jurisdiction when making those findings as to the 1991 arrangement. However, because her findings as to the 1991 arrangement were evidentiary findings and not ultimate findings, they do not give rise to an issue estoppel and the parties are not bound by them in any subsequent litigation.
- Mr Hubbard had a further argument based on the Respondent's Notice. He said that Rita had been debarred from defending so that, in relation to Rose's claim, Rita was not entitled to resist that claim. Mr Hubbard accepted that Rose would have to persuade the court to make the declaration as to the beneficial interests and the order for sale which she sought but, as regards the evidence, the only evidence would come from Rose and, as regards submissions, Rita was not entitled to make submissions. Although the Recorder did not adopt this route to her decision, Mr Hubbard submitted that I should uphold the Recorder on this alternative ground.
- There are a number of problems with this further argument from Mr Hubbard. Even assuming in Rose's favour that the Recorder made a finding that Rita had failed to comply with the unless order of 30 November 2016, this may have been a case where the Recorder ought to have considered whether the case was one where Rita should be given relief from sanctions. Where a party is subject to a sanction and does not make an express application for relief from sanctions, the court is not obliged to raise the issue as to whether there should be such relief. However, in the present case, Rita was in person and had begun to explain why she was late in providing disclosure and, as I understand it, she produced certain documents at court and the Recorder gave Rose and her advisers time to consider those documents. This might therefore have been a case where the Recorder might have wished to have considered granting relief from sanctions. The Recorder did say in her judgment that the argument based on the debarring order might not have justified her in finding against Rita, although she did not elaborate what she meant by that remark.
- However, there is another difficulty about Mr Hubbard's submission based on the debarring order. That order debarred Rita from defending Rose's claim. But Rita had a counterclaim. The order did not in express terms strike out the counterclaim. Prima facie, the result was that Rita was debarred from defending the claim but was not prevented from presenting her counterclaim. The counterclaim was in large part the mirror image of the claim but it also claimed other heads of relief including a claim to an equitable account. Of course, if the claim were determined first, there would be fewer live issues in relation to the counterclaim but I am not convinced that even then the counterclaim would be effectively at an end. If the counterclaim were tried first, then that would have an impact on the relief to be granted pursuant to Rose's claim.
- Counsel who appeared for Rose in the county court submitted that the unless order had resulted in the counterclaim being struck out. The recorder did not mention that submission and certainly did not give her reasons for accepting it but she appears to have proceeded on that basis. I am not persuaded that that submission was correct. I agree that the order of 30 November 2016 was not well thought out. The order should have dealt with the counterclaim as well as with the claim. The order was curious in another respect. It did not provide that judgment should be entered for Rose on the claim (possibly because the claim included a claim to a declaration) but yet the order provided for Rose to be awarded the costs of the claim.
- It has been held that unless orders should be expressed clearly and precisely: see Morgans v Needham, The Times, November 5, 1999, CA, referred to in the White Book at 3.1.4. That case concerned the expression of the conditions which were to be complied with but I consider that I should adopt a similar approach to the way in which the order should express the consequences of non-compliance. It is a strong thing to hold that an order which does not mention the counterclaim contained a direction by implication that the counterclaim would be struck out if the conditions were not complied with. I am not prepared to hold that the counterclaim had been struck out when the order did not so provide. It does not help Rose's argument in this case that the order which was made was drafted by her legal advisers and it was the order which they invited the court to make.
- It follows from the above, that I will allow the appeal against the part of the order dealing with the division of the proceeds of sale and I will dismiss the Respondent's Notice. There remains the application for permission to appeal against other parts of the Recorder's order.
- The first objection to the application for permission to appeal is that it is late. When Birss J refused permission to appeal against other parts of the order, Rita had a right within 7 days of that refusal to renew her application for permission to appeal to an oral hearing: see CPR rule 52.4(2) and (6). She did not do so within that time. The order refusing permission to appeal did not tell Rita that she had a right to renew her application for permission to appeal. The current Practice Direction dealing with appeals to the High Court, PD52B, does not expressly require an order refusing permission to appeal to inform the appellant of the right to request an oral hearing to renew the application for permission to appeal. A former Practice Direction did so: see the White Book at 52.4.2. I know from my own experience that it is still the standard practice for such an order to do so.
- I can only speculate whether Rita would have renewed her application within 7 days of the refusal if she had been informed in the order of her right to do so but she might have done so. If she had done so, as I indicated earlier, I doubt if the court would have given her a separate oral hearing of that application. It is very likely that the court would have directed that her renewed application for permission to appeal would be heard together with her substantive appeal. In this way, I doubt if Rose is any worse off because Rita only renewed her application for permission to appeal at the hearing of the appeal. In this case, but not in all cases, the time between Birss J's order and the hearing of the appeal was comparatively short. There is a further point which was very fairly made by Mr Hubbard himself. He pointed out that the logic of Birss J's decision to grant permission to appeal should have persuaded him to grant permission to appeal against the part of the order which granted a declaration that there was an issue estoppel to the effect that the property was held in equal shares but the order granting permission to appeal did not in fact do so.
- The other parts of the order which Rita now wishes to appeal include the declaration that there was an issue estoppel to the effect that the property was held by Rita and Rose in equal shares, the order for sale of the property and the order for costs against Rita. As Mr Hubbard accepted, the permission to appeal granted by Birss J should, logically, have permitted Rita to appeal that declaration. I have now held that that declaration should not have been made. The order for sale is likely to have a significant effect on Rita and her family who live in the property. If it were to be held that Rose did not have an interest in the property then the order for sale should not have been made. If it were to be held that Rose had only a modest interest in the property as "the reward" which she said she expected, then the extent of that interest and the possibility of Rita buying out that interest would be relevant factors when the court came to consider whether to make an order for sale. As to the order for costs, in view of my rejection of Rose's case based on issue estoppel and my dismissal of the Respondent's Notice, that order for costs needs to be reconsidered.
- Having considered the arguments in relation to the further parts of the order for which permission to appeal was originally refused, I hold that if permission to appeal those parts of the order were to be given, the appeal would succeed. I therefore give the permission to appeal which is sought and I will allow the appeal.
- I will hear counsel on the form of the order to give effect to this judgment.