In this case, the High Court examined the issue of whether, following the Land Registration Act 2002, the Court maintained its inherent power to determine an application for cancellation of a unilateral notice registered against a title and provided clarification as to how this power should be exercised.
The Defendant jointly owned a 74 acre piece of land known as Court Farm with her husband until his death in or around 1986, after which date the Defendant was the sole owner. The Claimant in the proceedings was the Defendant’s grandson. The Claimant claimed that the Defendant’s husband had promised Court Farm to him and that he had acted to his detriment in reliance of this promise and therefore he held an equitable interest in Court Farm and so was entitled to Court Farm, or would be upon the death of the Defendant.
The Defendant denied that any such promises were made and indicated that she did not intend to leave Court Farm to the Claimant. The Claimant requested, inter alia, a declaration from the Court that the Defendant was not free to dispose of more of Court Farm than was reasonably necessary. In order to protect the interest being claimed, the Claimant registered a unilateral notice against Court Farm, which prevented the Defendant from selling or charging any part of Court Farm.
This decision follows from the hearing of an Application by the Defendant, requesting an order that the Chief Registrar to the Land Registry cancel the unilateral notice registered by the Claimant in order to enable the Defendant to sell or charge part of Court Farm in order to fund her legal costs.
Existence of Jurisdiction
The key question which the Court was required to address was whether or not it had jurisdiction to decide upon the issue of the unilateral notice.
Unilateral notices were introduced by the Land Registration Act 2002, which specifies the process for removal and provides two situations in which the Court can intervene.
The first is where a unilateral notice is applied for without reasonable cause. In this scenario, a statutory tort is committed under section 77 of the 2002 Act and the Court can intervene and order the applicant to apply for the removal of a notice. However, this power is only exercisable where the applicant has acted without reasonable cause. The Court considered that the Claimant in these proceedings had acted in good faith in relation to a claim which was reasonably arguable.
In relation to the second scenario, the removal of the unilateral notice constituted an alteration under Schedule 4 of the 2002 Act and so the Court could possibly make an order under the Schedule for an alteration to correct a mistake in the register or to bring the register up to date. This power allows the Court to order removal of a unilateral notice where the proprietor of the burdened land seeks a declaration that the beneficiary of the notice did not, in fact, have the interest which they sought to protect. However, this power cannot be exercised where issues such as whether or not the interest exists cannot be determined until trial. As no arguments had been submitted in relation to the Claimant’s prospects of successfully demonstrating that he had the interest claimed, the Court could not therefore determine the issue.
Prior to the 2002 Act, it was well established that the Court had inherent power to vacate cautions registered under the Land Registration Act 1925; however, it was not clear as to how the 2002 Act impacted upon this inherent jurisdiction.
The 2002 Act does not expressly provide for the removal of this inherent jurisdiction, therefore the Court questioned whether it had impliedly restricted the Court’s jurisdiction. On the basis that the inherent jurisdiction of the Court was compatible with the 1925 Act, the Court held that in order to imply that the jurisdiction had been restricted, there would need to be a substantial difference between the 1925 Act and the 2002 Act which made inherent jurisdiction incompatible with the new system.
The Court concluded that there are no changes between the 2002 Act and the 1925 Act substantial enough to support the conclusion that inherent jurisdiction of the Court was compatible with the 1925 Act but incompatible with the 2002 Act. Therefore the inherent jurisdiction of the Court which developed in relation to cautions registered under the 1925 Act also applies to unilateral notices registered under the 2002 Act.
Exercise of Power
The Court was unable to order cancellation of the notice on the grounds that the Claimant’s claim was without substance as there was a good and arguable case. The Court proceeded to explain that where there is a good arguable case, the situation is to be treated as though the beneficiary of the notice had, rather than registering a unilateral notice, instead applied for a proprietary freezing injunction and the normal principles are to be applied.
This decision confirms that the inherent jurisdiction of the Court has not been altered by the Land Registration Act 2002 and that the Court is entitled to intervene in relation to unilateral notices. This decision also provides an alternative method of objecting to the registration of a unilateral notice to the procedure detailed on section 73 of the Land Registration Act 2002.
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