NRAM Ltd v Evans [2018] 1 WLR 639; [2018] 1 P&CR 32

Key points

  • Whether there is a mistake in register within the meaning of Schedule 4 Land Registration Act 2002 (‘LRA 2002’) is determined at time of registration
  • The registration of a void disposition is a mistake, but the registration of a voidable disposition is not a mistake provided that it was not rescinded at the time of registration

Facts

  • Mr and Mrs Evans (Ds) applied to NRAM (C), for a mortgage to buy a house
  • In 2004, they obtained a second loan to replace the first loan, but the legal charge remained on the register and was intended to secure the second loan
  • In 2014, Ds wrote to C that the mortgage has been redeemed since the first loan was paid off, without mentioning the second loan
  • An employee at C sent an electronic discharge (e-DS1) to the land registry, not knowing of the second loan
  • In the High Court, the judge ordered that rectification be made:
    • There was a mistake in the register within the meaning of Schedule 4 LRA 2002
    • Ds had substantially contributed to the mistake through fraud or lack of proper care thus consent of Ds was not required for the rectification

Held (Court of Appeal)

  • There was no mistake in the register as the e-DS1 was voidable but void when the charge was deleted from the register
  • The order for rectification should substituted for an order for alteration

Kitchin LJ

Meaning of ‘mistake’ in Schedule 4

  • Whether there is a mistake in the register depends on the position at the point in time at which the entry or deletion is made; a change in the register is correct at the time it is not a mistake: [48] – [52]
  • A distinction must be drawn between void and voidable transactions:
    • An entry made in the register of an interest acquired in a void disposition is a mistake
    • In contrast, an entry made to the register to reflect a transaction that is merely voidable is correct at the time it was made, unless it was rescinded: [53]
  • The fact that the disposition was made by mistake but that does not render its entry on the register a mistake: [59]

Present case

  • In the present case the e-DS1 is a voidable disposition not rescinded before the register was updated: [59]
  • The e-DS1 had been rescinded by the judge, alteration can be ordered using the power to bring the register up to date conferred by para 2(1)(b) Schedule 4: [60]
  • The judge had wrongly elided the question of whether the issue of the e-DS1 was a mistake with whether there was a mistake in the register: [62]
  • The alteration of the register after a voidable transaction has been rescinded is not a correction of mistake but bringing it up to date: [63]

Commentary

  • The definition of mistake is not given in the LRA 2002 thus this case provides a helpful clarification
  • The e-DS1 in this case was a voidable disposition due to the equitable jurisdiction to set aside unilateral dispositions laid down in Pitt v Holt