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Priority, Overreaching and Surprises under the Land Registration Act 2002

Accepted version
Peer-reviewed

Type

Article

Change log

Authors

Dixon, MJ 

Abstract

Before the advent of title registration, if a transaction was tainted by a vitiating factor, one would ask whether the transaction was void or voidable and, if the former, the nemo dat rule would apply and the innocent victim would recover their title unencumbered by any dealings that the wrongdoer had sought to transact. Now, under the Land Registration Act (LRA) 2002 as it has been interpreted in Swift 1st v Chief Land Registrar ([2015] EWCA Civ 330; [2015] Ch. 602), a victim gets no comfort from the nemo dat rule. If they wish to recover their title, they must instead establish either that they have proprietary priority over the current registered proprietor (under ss. 28 or 29 of the Act) or else achieve rectification of the register under Schedule 4 of the Act. Failing these, they are left with the possibility of an indemnity under Schedule 8 of the Act. In Updating the Land Registration Act 2002: A Consultation Paper (Law Com. No. 227 (2016)), the Law Commission indicate that they would not change the disapplication of the nemo dat rule given that this enhances the central aim of title security (para. 5.35 et seq). Unfortunately, of course, wrongdoing does not diminish just because we look at it differently, and in Mortgage Express v Lambert ([2016] EWCA Civ 555) the Court of Appeal had to untangle the claims of a duped former title holder and the innocent lender that now held a registered charge granted by the wrongdoers. In doing so, Lewison L.J. (with which Gloster L.J. and Cobb J. agreed without addition) considered the interplay between the priority rules and owners’ powers provisions of the LRA 2002 and the overreaching provisions of the Law of Property Act (LPA) 1925. His conclusions are surprising, revealing and challenging.

Description

Keywords

Mortgages; Overreaching; Overriding interests; Proprietary rights; Sale and leaseback; Setting aside; Unconscionable bargains

Journal Title

The Law Quarterly Review

Conference Name

Journal ISSN

0023-933X

Volume Title

Publisher

Sweet & Maxwell

Publisher DOI

Publisher URL