Summary

Where the adjudicator's cancellation of an application to the Land Registry for registration of title to certain land claimed by adverse possession had been set aside by a judge on appeal, it was not appropriate to require the applicants to make a fresh registration application as that would deprive them of a benefit of a transitional overriding interest through no fault of their own and provide a windfall benefit to the registered owners. Instead, the court ordered the re-entry of their registration application with its original entry date in the day list maintained under the Land Registration Rules 2003 r.12, with liberty to any chargees over the registered property to apply to vary or set it aside.

Facts

The applicants (F) applied to the court for directions to ensure the reinstatement of an application made to the Land Registry for registration of title to certain land which they claimed by adverse possession. In April 2005, F had sought registration of a strip of land along the boundary between their property and land registered in favour of the respondents (B). F's application was ordered to be cancelled by the adjudicator on grounds of procedural default in June 2006. F's appeal against that decision was successful and that order was set aside by the judge in June 2007. On being belatedly informed of the order allowing the appeal, by letter from the adjudicator some 18 months later, the Chief Land Registrar declined to re-enter F's application in the day list maintained by him under the Land Registration Rules 2003 r.12 on the basis that it was impossible for him to do so, and he suggested that F should instead make a fresh application to the Land Registry for registration. By that time, two adverse interests had been registered against B's property, which included the disputed land, by two financial institutions. F's application for reinstatement of their registration application threw up real difficulties because, where an application for registration was ordered to be cancelled by the adjudicator and an applicant subsequently succeeded in an appeal, then unless the applicant had in the meantime obtained a stay of the order for cancellation, the full reinstatement of the application risked causing loss to persons obtaining interests in the subject land during the period between cancellation and reinstatement, for which the scheme of the Land Registration Act 2002 and the Rules provided no compensation. Conversely, if the successful appeal did not lead to full reinstatement of the application, the applicant's apparent success on appeal would be without effect, since the application would lose priority over any other applications for, or registrations of, interests in the subject land made since the application was itself first initiated. Again, the successful appellant would have no remedy for compensation for the loss of priority suffered by him between the date of his application for registration and the date when his appeal succeeded. Given the gravity and complexity of the issues, and because F and B were litigants in person, an advocate to the court was appointed to advance arguments in favour of a full restoration of F's registration application, and the registrar was also represented. The registrar contended that an application once cancelled was inherently incapable of being restored, or re-entered on the day list, on appeal because the integrity of the day list as a real time record not admitting any retrospectivity had to be preserved.

Held

(1) A conclusion that the court could never restore a cancelled application, so as to require it to be re-entered on the day list with its original priority, was capable of causing injustice to successful appellants without any corresponding benefit to anyone else and ran counter to the general ability of an appeal court to restore a struck-out claim with retrospective effect. However, the prejudice caused to an intermediate chargee by the restoration of a cancelled application was a powerful reason why, as a matter of discretion, the court would not direct its restoration by way of appeal, all the more so where compensation was not available to the intermediate chargee under any statutory scheme. In all the circumstances of F's case, it was appropriate to make an order for the re-entry in the day list of their registration application with its original entry date, with liberty to the two chargees to apply to vary or set it aside. It might be that, on inquiry, the chargees would have no objection at all, but if they did, F might be able to provide satisfactory undertakings to preserve their rights. It would be wrong to require F to make a fresh application as that would deprive them of a benefit of a transitional overriding interest through no fault of their own and provide a windfall benefit to B, as the consequence of the adjudicator's order which, as had been found on appeal, should not have been made. (2) (Per curiam) The obvious solution to the difficulties revealed in the instant application was for the rules and practice relating to stay pending appeal to be reviewed, so as to make a stay more readily available as the sensible precaution. That could occur if and when the adjudicator's jurisdiction was replaced by that of the First Tier Tribunal. Even in advance of that process, there was no reason why steps could not be taken by the adjudicator, by way of a change to the present apparent practice, to ensure that an order for cancellation of an application was not acted upon by the registrar within a certain period, nothing less than two months, during which the applicant might obtain both permission to appeal and a stay. Specifying such a period in the order for cancellation would make a successful appeal, unprotected by a stay, wholly exceptional.

Directions given