Jayasinghe v Liyanage

An adjudicator determining an objection to an application for a restriction may decide substantive questions concerning the asserted right or claim. The function is not necessarily limited to deciding whether the applicant has an arguable case. The appropriate course depends on the restriction sought, the right or claim said to require protection, and the objection. The statutory scheme permits the adjudicator either to determine the matter or to direct proceedings in court. A mortgage discharged with the applicant’s money, followed by reimbursement from the respondent, did not establish a beneficial interest in the property.

The appellant appealed against the cancellation of her application for a restriction on the registered title to a property. She claimed to be the sole beneficiary under a resulting trust because she had allegedly funded its purchase, mortgage payments and outgoings. The respondent denied that she had made any financial contribution and said that he owned the investment.

After a two-day trial, the Land Registry Adjudicator rejected the appellant’s evidence and concluded that she had no beneficial interest. The appeal concerned whether the adjudicator had jurisdiction, or had improperly exercised his discretion, by conducting a trial rather than preserving the restriction pending determination by a court. It also concerned the significance of the mortgage repayment.

1. The appeal was dismissed. The adjudicator’s jurisdiction under the Land Registration Act 2002 was not confined to determining whether an applicant had an arguable claim. The reference under section 73(7) included both the existence of the relevant right or claim and whether a restriction was necessary or desirable to protect it.

2. The Practice and Procedure Rules created a procedural code capable of supporting a determination of substantive rights, including disclosure, witness evidence, cross-examination and a trial. Section 110(1) gave the adjudicator a broad discretion either to decide the matter or to direct proceedings in a competent court.

3. The earlier decision in Croatia v Serbia [2009] EWHC 1559 (Ch) did not establish that every restriction application required only a summary assessment of arguability. That case concerned a different preliminary issue: whether a non-justiciable treaty claim constituted a sufficient interest for the purposes of section 43(1)(c). The present application asserted an existing beneficial interest and raised the additional question whether protection by restriction was necessary or desirable.

4. On the facts, the parties had prepared for and conducted a full trial without objection. The central issue was whether the appellant had any beneficial interest at all. In those circumstances the adjudicator’s decision to determine the matter himself was plainly correct and could not be challenged as an inappropriate exercise of discretion.

5. The adjudicator’s description of the mortgage as having been indirectly funded by the respondent was read in context as referring to reimbursement after the appellant had discharged it from her own funds. That infelicity did not undermine the credibility findings or the rejection of the appellant’s case. Repayment from her own funds followed by reimbursement could not give rise to a beneficial interest in her favour.

• High Court (Chancery Division) — Appeal from the decision of the Land Registry Adjudicator dated 12 May 2008. The appeal was dismissed.