Urban Manor Ltd v Sadiq

Under s.110(5) of the Land Registration Act 1925, a purchaser may require a non-registered vendor to procure registration or a disposition from the registered proprietor. A contractual time limit for making that request is valid if it gives the purchaser a real opportunity to decide after receiving the relevant title information and replies to requisitions.

Until the request is made, the contingent statutory obligation is not an outstanding obligation for the purposes of a notice to complete. A vendor may therefore serve such a notice when ready to complete under s.37(2), and may rescind and forfeit the deposit if the purchaser fails to complete within the notice period.

The purchaser agreed to buy registered land from a vendor which had contracted to acquire it but was not yet the registered proprietor. The vendor supplied register entries and an agreed transfer, and the purchaser delivered requisitions without requesting completion under s.110(5) of the Land Registration Act 1925. The vendor later completed its own purchase, served a notice to complete, and agreed an extension of the completion period.

After the contractual period for title observations had expired, the purchaser sought to require completion under s.110(5) and failed to complete within the extended notice period. The deputy judge declared the contract rescinded, ordered forfeiture of the deposit and directed that the caution be vacated. The central issues were whether the contractual conditions could limit the time for a s.110(5) request and whether the vendor was ready and willing to complete when the notice was served.

The appeal was dismissed unanimously with costs. Morritt LJ gave the leading judgment. Roch LJ agreed, and Staughton LJ agreed with Morritt LJ’s reasons, specifically rejecting the contrary approach in Lee v Olancastle.

1. Construction of section 110(5). The section regulates the position between vendor and purchaser on a sale of registered land. Subsections (1) to (4) concern the initial production of title documents. Subsection (5) applies where those documents do not show the vendor as registered proprietor. The relevant obligation is to make title in one of the prescribed ways when the purchaser has requested it.
2. Contractual time limit. The words “stipulation to the contrary” do not invalidate a provision limiting the time for the request. National Condition 9 allowed the request during the period for requisitions and observations, after the purchaser had received the relevant information. That gave a real opportunity to make an informed decision and did not negate the statutory right.
3. Notice to complete. For the purposes of National Condition 22, the vendor’s outstanding obligations did not include the contingent obligation to comply with s.110(5) when no request had been made. The court distinguished Lee v Olancastle in part because title had not been accepted there and the time-limit issue had not been decided. It did not follow the wider proposition that a vendor must always be ready to complete under s.110(5) before serving a notice.
4. Application. When the notice was served on 10 January 1995, no s.110(5) request had been made and the vendor was ready to complete under s.37(2) by the agreed transfer. By the original expiry date, the purchaser was deemed to have accepted title. The request made on 1 February was out of time and ineffective. When the extended notice expired, the vendor was ready and willing to perform its outstanding obligations and was entitled to rescind and forfeit the deposit. The alternative issues of waiver and estoppel therefore did not arise.

• Court of Appeal (Civil Division): Appeal dismissed with costs.
• Chancery Division: Mr Martin QC, sitting as a deputy judge, declared the contract rescinded, ordered forfeiture of the deposit and directed that the caution be vacated.