Land Registration: Alteration/Rectification and indemnity (outline)

Alteration of the register is governed by Section 4 of the Land Registration Act 2002 and deals with when things go wrong.There are two forms of alteration:

• 'Simple alteration', when the register fails to reflect legal rights.
• Alteration that changes current rights. The 2002 Act provides a test of 'mistake'. Examples of second type given by Law Commission: Where the wrong person is registered as proprietor on first registration. There may then be rectification to restore the rightful owner as proprietor. Where an adverse possessor has been registered as proprietor. If there was in fact no adverse possession for the required period, then the title can be rectified in favour of the original proprietor even though the registry has complied with the procedure laid down in the legislation regarding adverse possession.

Doubt has begu to creep in with regard to the proposition that mistake does not apply when there's forgery (Barclay's Bank Plc v Guy).

If proprietor is in possession, there is a presumption against rectification which is rebutted if:

• He has by fraud or lack of proper care caused or substantially contributed to the mistake, or
• It would be unjust for any other reason for the alteration not to be made.

• Meaning of 'possession' is extended by LRA Section 131 so that, for example, a landlord is treated as being in possession if a tenant is there and a trustee is treated as being in possession if a beneficiary is there.

A proprietor who loses because of rectification may receive an indemnity (paid under LRA Scheduule 8). Compensation is payable for expenses incurred in sorting it out, as well as losses caused by mistakes. Note that only applies to rectification, not alteration.

Baxter v Mannion (2011) CA - Registered proprietor failed to hand in form declaring objection in time (he planned to but being referred to a different solicitor and family misfortunes distracted him) and adverse possessor became owner. Court rejected argument that this did not fall within 'correcting a mistake': Parliament can't have intended someone to be able to lose out on property for want of a form. Note: If have time, look into this and see whether it's expressly distinguished from a case where he had no intention ever to hand it in and then went back on the intention (probably is...)

Swift 1st Ltd v Chief Land Registrar (2015) CA  - The 'deeming provision' in Paragraph 1(2)(b) of Schedule 8 'trumps' the proprietor's overriding interest, meaning that they can claim indemnity (rejects the argument that overriding interest means that the alteration would not be prejudicial and hence not 'rectification'). Lord Patten noted that this is problematic and ought to be reviewed.

Gold Harp Properties v MacLeod (2015) CA - Clarifies reference in legislation for changing the priority of an interest 'for the future'. The effect of the legislation is that the power of the  court of Registrar is not limited to restoring an interest to the register, but 'extends' to changing what would otherwise be the priority between it and another interest - in other words, to giving it the priority which it should have had but for the mistake. Also, 'exceptional circumstances' was argued and rejected: delayed claim for rectification will only be 'exceptional circumstance' if it gives rise to substantial identifiable prejudice; the fact that Gold Harp's loss if rectification ordered would clearly have been greater for the claimaints if not was not a sufficient reason. Was not established that planning permission was not available, and could have come to a deal. Judgements of this kind were matters for the trial judge. Far from the sort of case which can be said on appeal to be wrong.