Registration of fraudulent vesting order not a “mistake”

In a recent landmark case, the High Court had to consider whether it was a “mistake” within paragraph 2(1)(a) of Schedule 4 to the Land Registration Act 2002 (“LRA 2002”) for the registrar to have entered Mr Taylor (T) as proprietor, pursuant to a court vesting order obtained by fraud. If it was deemed a “mistake” the court would have the power to correct the register. A vesting order simply put, is a court order that passes legal title in lieu of a legal conveyance.

T obtained a court vesting order that he be registered as proprietor of a property. The Land Registry gave effect to the order and T was registered as proprietor. T took out a mortgage on the property and a charge was registered against the title in favour of the chargee.

A sought a declaration that the documents used to obtain the vesting order were void and of no legal effect, and an order under Paragraph 2(1)(a) of the LRA 2002, that the register be altered by deletion of the registered charge was required, for the purpose of correcting the “mistake”.

It was accepted that the vesting order had been obtained on the basis of forged documents, but the claim for alteration of the register by removal of the charge on the basis of mistake was disputed.

The court held that the vesting order:

• Effected a valid disposition of the registered title and there was therefore no mistake when T was registered as proprietor.

• Conferred title on T independently of the forged documents on which it was based

• Was akin to a voidable transaction and unless a further order was made setting it aside, the registrar was obliged to comply with it.

It also followed that the registration of B's charge, at a time when the vesting order had been made and given effect, and not yet been set aside, was not a paragraph 2(1)(a) mistake either.

The decision provides clarity on what is deemed a mistake for the purposes of the LRA 2002 and upholds the conclusiveness of the register.

Please contact Lorraine Lancaster at Paul Robinson Solicitors LLP for further information on 01702 338338 or llancaster@paulrobinsonsolicitors.co.uk