England and Wales Court of Appeal (Civil Division) Decisions

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
(MR JUSTICE NEWEY)

		Royal Courts of Justice Strand, London, WC2A 2LL
		30th July 2013

Lord Justice Rimer:

1. This is an adjourned application for permission to appeal against an order of Newey J, made in the Chancery Division on 5 June 2013, on a summary judgment application. The applicant for such judgment was Barton Bridging Capital Limited ("Barton"), which is the claimant. It named five defendants to its claim: Timothy Obadare, Paul Obadare, Elizabeth Afilaka, Comfort Adewumi, and the Chief Land Registrar to Her Majesty's Land Registry ("the Registrar").
2. The material parts of the judge's order were in paragraphs 2 and 3, by which he ordered the register of title in respect of Title No. 168867, being land and property known as the Mission Hall, 64 Gifford Street, London, N1 ("the property"), to be rectified by the removal from its Charges Register of the unilateral notice in favour of the first four named defendants, and directed the Registrar to remove the notice. The judge refused those four defendants permission to appeal, but on 10 June 2013 the latter three of them filed an Appellant's Notice. All four are in fact described as "appellants" in the notice, but as Timothy Obadare was also described as, and was, deceased, the applicant's solicitors should have known better than to name him as a proposing appellant. Dead people cannot appeal to the Court of Appeal. References hereafter to "the applicants" are to the other three proposing appellants.
3. Because of the proposed appeal, which challenges the order for removal of the notice, the Registrar has not yet removed the notice and, pending the disposal of the applicant's permission application, its removal has been stayed, first by an order of Kitchin LJ and then by an order of 4 July by me when I considered the permission application on the papers. The applicants seek to maintain the registration in place pending the disposal of their proposed appeal, but its presence on the Charges Register has had, and will if it remains in place continue to have, the effect of preventing the completion of a contract for the sale of a property for the sum of £1.2 million that Barton has entered into and which it is anxious to complete.
4. When considering the permission application on the papers, I took the view that the fairest course to both sides, and the most expeditious one, was to adjourn the application to an oral hearing on notice to Barton to be heard before the end of this term. That is what happened, and on 25 July I heard argument from Mr Mason in support of the giving of permission and from Mr Hanham, for Barton, opposing it.
5. The judge's succinct judgment summarised the story as follows, although I shall in certain respects supplement it by reference to the documents. Barton is the mortgagee of the property, its charge dated 21 June 2010 having been registered in the Charges Register on 2 July 2010. Also on 2 July 2010, Timothy Obadare, Paul Obadare, and Elizabeth Afilaka were registered as the proprietors of the property. They held it as trustees for a charity, the Christ Apostolic Church. The three proprietors had, together with Ms Adewumi, formerly also been the registered proprietors of the property, but by a transfer (or, as the applicants would say, a purported transfer) of which a copy is in the papers before me, the four of them transferred, or purported to transfer, the property to three of them.
6. In 2011, Barton brought possession proceedings against the registered proprietors in the Clerkenwell and Shoreditch County Court. An order for possession was made on 14 April 2011. The order recites that a representative of Ms Afilaka, one of the registered proprietors, was present. The applicants say, however, that they were never involved in the 2011 proceedings, that they knew nothing of them at the time and that, to the extent that anyone named as a defendant pretended to be such a defendant, he or she was an impostor. By an application notice of 3 January 2012, Timothy Obadare and the three applicants applied to the county court for a declaration that Barton's charge was ineffective or a nullity, a declaration that Ms Adewumi's rights in respect of the property were in the nature of an overriding interest and a re-opening of the proceedings earlier brought by Barton on the footing, inter alia, that none of the applicants had been present or represented at the earlier hearings.
7. District Judge Manners dismissed that application on 18 January 2012 as an abuse of process on the basis that it was an attempt to re-litigate issues already decided. It appears that he made the order on his own initiative. No application was made to set his decision aside or to appeal against it.
8. Undaunted, a year later the same four applicants brought new proceedings in the same court in February 2013. This time, the proceedings were by way of a claim form, which purported also to include Particulars of Claim, in which the claimants were Timothy Obadare and the applicants, and Barton was the defendant. The claimants' case was that the transfer inducing the change to the proprietorship register in June 2010 was a forgery, that Barton's charge was another forgery and that the claimants had known nothing of Barton's possession proceedings.
9. On 4 March 2013, District Judge Manners struck the claim out as totally without merit. His order recites that he had read a letter of 1 March 2013 from Barton. The order entitled the claimants to apply within 14 days of service to have it set aside, as they did. On 20 March 2013, however, District Judge Manners, after reciting that he had considered the court file and the application, directed that the claim should remain struck out. His order was perfected on 26 March 2013. The order was, I understand, served on the claimants, including therefore the applicants, on 5 April 2013. My understanding is also that, before it was so served, the applicants had no knowledge of the making by District Judge Manners of his order of 20 March.
10. In the meantime, on 22 March, and in what I understand to be their claimed ignorance of the order of 20 March, the applicants applied to HM Land Registry for the unilateral notice to be entered in relation to the title of the property. Their application annexed a copy of their Particulars of Claim in the February 2013 proceedings. The notice was entered on 27 March 2013, the day after the perfection of the court order. The Land Registry entry in the Charges Register states that the notice was in respect of "a pending land action regarding a claim for rectification of the register in the Clerkenwell and Shoreditch County Court (Court Reference Number 3EC00746)." The reference number is that of the applicants' 2013 claim.
11. The applicants filed an Appellant's Notice in the county court against District Judge Manners' order of 20 March. The notice bears a court file date of 4 June 2013, but the applicants assert that they had in fact sent it to the court on 9 April. The judge said, in paragraph 7 of his judgment, that it did not matter precisely when notice was sent to the court. The relevant facts were, in his view, that no Appellant's Notice had been filed as at either the date the unilateral notice was applied for or the date when it was entered on the Register. It is, however, relevant to note a post-judgment fact, namely that on 11 July HHJ Mitchell in the county court made an order treating the Appellant's Notice filed on 4 June 2013 as an application for, as I interpret it (although something has plainly gone wrong with the drafting), the setting aside of District Judge Manners' orders of 4 and 20 March 2013. There is also a reference to his order of 18 March, but I do not know to what that is a reference.
12. Barton's claim before Newey J in the High Court was for an order under Schedule 4 to the Land Registration Act 2002 for an alteration of the register of the property's title by the removal of the unilateral notice on the basis that such removal was needed in order to correct a mistake. Paragraph 2 of Schedule 4 provides that the court may make an order for the alteration of the Register for, inter alia, "correcting a mistake". Paragraph 3(2) of Schedule 4 provides, however, that an alteration affecting the title of the proprietor of a registered estate in land is not to be made 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."

13. Paragraph 3(3) shows that, where 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. Barton's case was that, at the time of the application for the unilateral notice, there was no "pending land action" since the applicants' 2013 proceedings had been struck out on 20 March. The notice was, therefore, registered as a result of a mistake to which the applicants had, by fraud or lack of proper care, contributed by their false declaration as to the existence of a pending land action. The judge said that, even though the applicants' proceedings had been struck out on 20 March, he could see how on 22 March, when they made the application in respect of the unilateral notice, they could have believed that there was an extant application for the reopening of the county court proceedings. He said that it followed that the applicants could not be said to have fallen within the grasp of paragraph 3(2)(a) quoted above. He did, however, nonetheless say that he was satisfied in the terms of paragraph 3(2)(b). He said that, following the unchallenged order of District Judge Manners of 18 January 2012, the 2013 proceedings must have been hopeless. He concluded:

"16. ...The points raised in those proceedings were rightly, as it seems to me, regarded as having already been determined by the court. As I have mentioned, there has been no appeal from the 18^th January 2012 order.

17. It follows, as it seems to me, that it must have been inevitable that the 2013 proceedings would be struck out, and correspondingly, the attempts to obtain permission to appeal the 20 March order must be doomed to fail. The fact that that is so appears to me to point strongly in favour of making an order for rectification. Since the pending land action which the unilateral notice was supposed to protect not only did not exist at the date the unilateral notice was entered, but was, in any event, hopeless, it seems to me that it would be unjust for the proposed alteration not to be made."

14. In interpreting those passages, it is important to note that the only basis of the application before the judge was that this was a case in which the entry of the notice had been a "mistake" and the court therefore had jurisdiction to order its removal. The judge had, therefore, to be satisfied that there was a mistake, as he held that he was; and, having held that it could not be said that the present applicants had contributed to such a mistake, that it would anyway be unjust not to make the requested alteration. I understood Mr Hanham to accept that the finding of a "mistake" in the entry of the notice was crucial, and having regard to the terms of paragraph 2 of Schedule 4, that would seem to me to be probably right. The only "mistake" asserted was the registration by HM Land Registry of a unilateral notice to protect a "pending land action" when at the time of its entry the land action relied on was no longer pending, such action having been struck out on 4 March, its strike out having been affirmed on 20 March.
15. I therefore interpret the judge as saying, in the passages I have quoted, that he was satisfied that the making of the entry was a mistake, because at the time it was made the alleged land action was no longer pending; and the total lack of merit in such action, and therefore in the proposed appeal against its strike out, meant that it would be unjust not to order the removal of the entry. If the judge was right that the land action was no longer pending when the unilateral notice was applied for and entered, I did not understand Mr Mason to argue that there was any sound basis for challenging the judge's order. I record that of the seven somewhat ill-drawn grounds of appeal Mr Mason did not advance any arguments to me in support of the proposition that grounds 2 to 7 merited the giving of permission to appeal.
16. In the course of argument, it became apparent that there is only one issue that might perhaps be regarded as raising an arguable ground of appeal, namely whether the judge was correct to hold that as at the date of the application for, and the making of, the registration of the unilateral notice, the applicant's land action was in fact no longer "pending". If he was wrong, then there would have been no "mistake" in the making of the registration, and he would have had no jurisdiction to order its removal. Ground 1 of the Grounds of Appeal comes close to making this point without quite doing so. The question, therefore, is whether the judge was right that by the time of the application for, and the making of, the registration of the unilateral notice, the 2013 action was no longer pending. Mr Hanham pointed out that District Judge Manners' order of 20 March, being made on his own initiative and without hearing the parties or giving them an opportunity to make representations, was made under CPR Part 3.3(4). I consider that he is probably correct. If so, the order ought, but did not, to have included a notice to the applicants informing them of their right to apply to have it set aside. Although it did not do so, I nevertheless consider that the applicants had, by CPR Part 3.4(6), seven days after the service of them upon of the order to make such an application. In this case, the order was served on 5 April.
17. The question, therefore, is whether the fact that the applicant still had a right following the order of 20 March to apply to reinstate their action means that their action was during that time still "pending". In my judgment, it was not still pending, nor do I regard it as seriously arguable that it was. The effect of District Judge Manners' order of 4 March was to strike out the whole claim, and he affirmed that order on 20 March. The consequence of that was that the action was at an end as from 4 March. It was, therefore, no longer pending. It makes no difference to that conclusion that it was open to the applicants to apply to reinstate it. If they did so, and did so successfully, the effect of the order acceding to their application would no doubt be that the action would be treated as having never been struck out in the first place. But until such an order was made, the fact remains that the action was struck out and so was at an end. The position is analogous to a case in which a claim is dismissed or struck out for want of compliance with an "unless" order. There is no doubt that such a claim is at end, and it does not cease to be at an end merely because there is a right to apply for relief against the sanction imposed by the non-compliance with the "unless" order.
18. In my view, therefore, the correct position is that at the time the unilateral notice was registered, it was purporting to protect an action that was no longer pending. It follows, therefore, that the Registrar was mistaken in entering it. If the Registrar had had notice of District Judge Manners' two orders of 4 and 20 March at the time of the application to register the notice, I regard it as inconceivable that he would have registered it. I consider, therefore, that the judge was correct to find that the registration was made as a result of a mistake, and Mr Mason advanced no submissions that the judge's assessment of the merits of the applicant's 2013 claim was other than fully justified or, therefore, that this was a case in which the judge could be other than satisfied that, in the terms of paragraph 3(2)(b) of Schedule 4, it would be unjust not to order the removal of the notice.
19. In these circumstances, I consider that an appeal against Newey J's order would have no real prospect of success. I therefore refuse permission to the applicants to appeal.

Order: Application refused