Strand, London, WC2A 2LL
B e f o r e :
| PRESTIGE PROPERTIES LIMITED||Claimant|
|- and -|
|(1) SCOTTISH PROVIDENT INSTITUTION |
(2) THE CHIEF LAND REGISTRAR
Mr Mark Cunningham QC (instructed by The Treasury Solicitor, Queen Anne’s Chambers, 28 Broadway, London SW1H 9JS) for the Second Defendant
The First Defendant did not attend and was not represented
Hearing dates : 30th January - 8th February & 28th February 2002
Crown Copyright ©
Mr Justice Lightman:
“The boundaries of the two plans were not completely flush with each other but I was aware that the plans had been prepared at different times and that HM Land Registry plans are not to be relied on entirely to show the actual extent of the land.”
“All these filed plans are stated to be of scale 1:1250. However there are slight differences in the dates of the plans (some pre-dating the erection of the present buildings on the Property) and in so comparing them I was not alerted to any discrepancy between the filed plans of the title to the reversion and the filed plan of the TSB Lease”
He did not compare the filed plans with the Index Plan. He did not make any check in respect of the application for first registration. The proposed sale did not go ahead and he did not investigate the extent of the freehold and leasehold titles further.
a) Does the error in the filed plan relating to the Green Land give rise to a prima facie claim by Prestige to an indemnity in respect of its loss under section 83(1)(b) or (2) of the LRA 1925?
b) Do the errors in the 1997 Search Certificate relating to the Blue and Orange Land give rise to a prima facie claim by Prestige to an indemnity in respect of its loss under section 83(3) of the LRA 1925?
c) Is the prima facie entitlement of Prestige under either or both of the above defeated in whole or in part by reason of the responsibility for its loss being its own lack of proper care under section 83(5)(a) or (6) of the LRA 1925?
“83.- (1) Where the register is rectified under this Act, then, subject to the provisions of this Act-
(a) any person suffering loss by reason of the rectification shall be entitled to be indemnified; and
(b) if, notwithstanding the rectification, the person in whose favour the register is rectified suffers loss by reason of an error or omission in the register in respect of which it is so rectified, he also shall be entitled to be indemnified.
(2) Where an error or omission has occurred in the register, but the register is not rectified, any person suffering loss by reason of the error or omission shall, subject to the provisions of this Act, be entitled to be indemnified.
(3) Where any person suffers loss ... by reason of an error in any official search, he shall be entitled to be indemnified under this Act.
(5) No indemnity shall be payable under this Act-
(a) on account of any loss suffered by a claimant ... wholly as a result of his own lack of proper care;
(6) Where any loss suffered by a claimant is suffered partly as a result of his own lack of proper care, any indemnity payable to him shall be reduced to such extent as is just and equitable having regard to his share in the responsibility for the loss.
(8) Where an indemnity is paid in respect of the loss of an estate or interest in or charge on land, the amount so paid shall not exceed-
(a) where the register is not rectified, the value of the estate, interest or charge at the time when the error or omission which caused the loss was made;
(b) where the register is rectified, the value (if there had been no rectification) of the estate, interest or charge, immediately before the time of rectification.
(10) Where indemnity is paid to a claimant in respect of any loss, the registrar on behalf of the Crown shall be entitled-
(a) to recover the amount paid from any person who caused or substantially contributed to the loss by his fraud; or
(b) for the purpose of recovering the amount paid, to enforce-
(i) any right of action (of whatever nature and howsoever arising) which the claimant would have been entitled to enforce had the indemnity not been paid...”
“13. Where any clerical error or error of a like nature is discovered in the register or in any plan or document referred to therein which can be corrected without detriment to any registered interest, the Registrar may (if he thinks fit and after giving any notices and calling for any evidence or obtaining any assent he may deem proper) cause the necessary correction to be made.”
“9.—(1) Any person may apply for an official search of the Index Map or General Map and the Parcel Index....
(2) An application under paragraph (1) shall be made:
(a) by delivering in documentary form an application in Form 96;
(4) If the application is in order an official certificate of search shall be issued.
(5) An official certificate of search shall be issued in the form set out under the heading ‘Certificate of result of Official Search of the Index Map” in Form 96 or to like effect.
10.—(1) Any person may apply for a copy of an Index Map section.
(2) An application under paragraph (1) shall be made by delivering in documentary form an application in Form 96B.
(3) A copy of an Index Map section provided by the registrar under this rule shall not constitute ... an official search for the purpose of section 83(3) of the Act ....”
“(1) When a solicitor or other person obtains an official certificate of the result of a search he shall not be answerable in respect of loss that may arise from any error therein.”
“8(1) Index Maps shall be kept in the Registry which shall show the position and extent of every registered estate ....
(3) Where there is a registered Index Map, the number under which each estate was first registered shall be shown thereon or, where practicable the current title number.
274(1) A Parcels Index shall be kept in the Registry containing any reference numbers on the parcels of registered land shown on the General Map and showing, with regard to each of such parcels, the numbers of the titles....”
a) to establish a prima facie claim to an indemnity the claimant must establish that an error of the Land Registry was an effective cause of his loss: this is necessary to bring into play section 83(3). For the Registrar to invoke the complete defence afforded by section 83(5) he must establish that, notwithstanding that the error of the Land Registry was an effective cause of the loss, yet that loss should be regarded as wholly attributable to the claimant’s lack of proper care. This he may seek to do in an appropriate case by establishing that proper care on the part of the claimant could and should have prevented that error from having any such effect. For the Registrar to invoke the defence afforded by section 83(6), it is sufficient only that he establishes the shared responsibility of the claimant’s lack of care for the loss;
b) the shared responsibility may take the form of contributory negligence or a failure to mitigate damage, and in either case the reduction of the claimant’s entitlement (depending on what is just and equitable) may be anything from nil to total: consider Jayes v. IMI (Kynock) Ltd  ICR 155;
c) in the case of the defence of contributory negligence the focus goes beyond causation and extends to the respective blameworthiness of the claimant and the Land Registry.
a) there is no need to look beyond the language of section 83 in deciding questions of entitlement and disentitlement to an indemnity and section 83(5) must be read in conjunction with section 83(6): see Dean v. Dean (2000) 80 P&CR 457 at 462 per Gibson LJ and 464 per May LJ;
b) in order to qualify to make a claim to an indemnity, it is necessary for the claimant to establish that he has suffered a loss “by reason of” an error in an official search: see section 83(3). For this purpose the claimant must establish that (beyond the existence of the error) the error was “an” (but not “the” or “the sole”) effective cause of the loss claimed both in respect of its occurrence of the loss and its quantum;
c) if the claimant establishes the error and causation of the loss, in the absence of circumstances bringing into play section 83(5) or (6), he is entitled to an indemnity in respect of his full loss: see section 83(3). In cases where the loss is not of an estate or charge, there is no statutory limit of the amount payable under the indemnity (compare section 83(8));
d) notwithstanding the fact that the Land Registry’s error was an effective cause of the loss, it is however open to the Registrar by way of defence to establish that the claimant’s own lack of proper care was also an effective cause of his loss. There are two distinct defences. The first is that the significance and causative effect of the claimant’s lack of proper care was such that the loss should be regarded as wholly the result of that lack of care (section 83(5)). For this purpose it will only rarely be sufficient to establish that the Land Registry error would not have caused the loss “but for” the claimant’s lack of care: see Dean v. Dean above. The second is that the loss resulted both from the Land Registry’s error and the claimant’s own lack of care (section 83(5) and (6));
e) the claimant’s “own” lack of care includes lack of care both by the claimant and by his servants and agents. The word “own” distinguishes lack of care by the claimant, his servants and agents from lack of care by an independent third party;
f) the lack of care by an independent third party does not operate to reduce the entitlement of the claimant, but may operate under section 83(10)(b)(i) to vest in the Registrar by way of subrogation any right on the part of the claimant against that third party;
g) the language of section 83(5) and 83(6) are apt to embrace consideration of the claimant’s lack of proper care in respect both of the occurrence and quantum of loss. Accordingly it is open to the Registrar to maintain a challenge to the claimant’s entitlement to an indemnity on grounds both that the claimant was negligent in failing to exercise proper care in preventing the occurrence of the loss and that the claimant failed to exercise proper care to mitigate and limit the loss;
h) if the Registrar is to take either or both of these defences, he must clearly and distinctly raise them at an early stage in any proceedings and (in particular if the proceedings are to be tried on pleadings) in his Defence;
i) the claimant’s lack of care under consideration refers to lack of care to prevent the loss or occasion for the loss arising or the loss being greater than it need be. In respect of the occurrence of the loss the investigation may require consideration of the extent to which the claimant may have taken steps which would have revealed the existence of the error or prevented the error having the impact which it did;
j) the extent of the ordinary duty of care owed by a solicitor to his client on the conveyancing transaction in question (as opposed to the duty provided for in a particular retainer which may extend or restrict that duty) may provide a yardstick as to the care to be expected of the claimant. For this purpose it is important to bear in mind, when considering the nature and extent of the care to be expected of the claimant, the reliance which the statutory scheme (and most particularly section 83 of the LRA 1925 and Rule 295 of the 1925 Rules) entitles the claimant and his solicitor to place on what a Search Certificate tells them.
ERROR IN FILED PLAN
ERRORS IN OFFICIAL SEARCH CERTIFICATE
LACK OF PROPER CARE
LACK OF PROPER CARE AND RELIANCE ON AN OFFICIAL SEARCH
“Land Registry index map
The Chief Land Registrar keeps an index map from which it is possible, in relation to any parcel of land, to ascertain whether that land is registered or affected by a caution against first registration and, if so, the title number or numbers under which the land is registered or the distinguishing number of every caution against first registration that affects it.
Anyone who wishes to ascertain whether the title to a particular parcel of land is registered or to discover the extent of a registered title may apply for an official search of the Land Registry index map” [citing Rule 9 of the LRR 1991].
“Agency is the fiduciary relationship which exists between two persons, one of whom expressly or impliedly consents that the other should act on his behalf so as to affect his relations with third parties and the other of whom similarly so consents to act and so acts”
FAILURE TO MITIGATE
a) the failure to negotiate any reduction in the retention figure of £450,000;
b) agreeing to a retention figure of £450,000 which (as Prestige knew) was far in excess of the true value of Parcel 116 at the time (i.e. in 1997) when the errors made by the Registrar were made;
c) the failure to apportion the retention between the land within and without the reversion to the Lease; and
d) the failure to ensure that there would be a pro-rated release of the retention in the event of some of Parcel 116 being registered with absolute freehold title in the name of SPI within the registration period.
“The overriding objective (of the CPR) is that the Court shall deal with cases justly. That includes, so far as practicable, ensuring that each case is dealt with expeditiously but also fairly. Amendments in general ought to be allowed so that the real dispute between the parties can be adjudicated upon provided that any prejudice to the other party or parties caused by the amendment can be compensated for in costs and the public interest in the efficient administration of justice is not significantly harmed.”
a) the Registrar has proffered no reason for his failure to raise this new defence earlier save a failure to recognise its availability. If this is a good defence, the Registrar (and his legal advisers) should surely have appreciated its availability long ago;
b) even after appreciating its availability not later than the 24th January 2002 the Registrar proceeded thereafter lackadaisically not even preparing a draft amended pleading until some way into the trial:
c) the delay in raising this new defence has seriously prejudiced the ability of Prestige to meet it, for an explanation of the commercial and other reasons for agreeing to the terms of the Agreement relating to the Retention (and in particular the importance to Prestige of the proposed sale) were matters to be addressed in the evidence of Mr Aviv, the alter ego of Prestige, who died without any occasion to prepare a witness statement addressing this issue in October 2001. This prejudice plainly cannot be compensated for by any order for costs;
d) the raising of this new issue would necessitate the trial being adjourned to enable the parties to adduce relevant evidence on this issue and in particular: (i) to admit expert evidence on the value of Parcel 116 at the relevant date in 1999. The Registrar has never even applied for an order for such evidence. Indeed he remained inactive in this regard even after Prestige’s letter of the 24th January 2002; and (ii) to allow an Israeli Mr Herbert Kaufman (the father of Mr Kaufman and a consultant with FF living in Israel) who discussed the provisions of the retention clause with Mr Aviv, to come to give evidence here; and (iii) to investigate whether evidence was available from SPI as to its likely response in 1999 to overtures from Prestige along the lines which the Registrar suggests should have been advanced;
e) it is also likely that Mr Cohen, who came over to this country to give evidence at this trial, would be needed to come again to give evidence on the new issue in the light of the new pleading and other new evidence;
f) the raising of the new issue would occasion material delay to Prestige in obtaining finality in this case and any sum to which it is entitled from the Registrar; and
g) the raising of the new issue would also mean that beyond the 5-7 days set aside by the Court for the trial of this action, there would have to have been made available a further trial period for conclusion of this new issue at the expense of other litigants awaiting trials of their cases.
INDEMNITY AS TO COSTS
“(2) Section 83(5)(c) of the [LRA 1925] (by virtue of which no indemnity is payable under that Act on account of costs incurred in taking or defending any legal proceedings without the consent of the Registrar) shall not apply to proceedings [for an indemnity under the provisions of the LRA 1925].”
“(9) Subject to subsection (5)(c) above, as restricted by section 2(2) of the Land Registration and Land Charges Act 1971-
(a) an indemnity under any provision of this Act shall include such amount, if any, as may be reasonable in respect of any costs or expenses properly incurred by the claimant in relation to the matter; and
(b) a claimant for an indemnity under any such provision shall be entitled to an indemnity thereunder of such amount, if any, as may be reasonable in respect of any such costs or expenses, notwithstanding that no other indemnity money is payable thereunder.”