Nugent v Nugent

The High Court has an inherent jurisdiction to regulate or cancel a unilateral notice registered under the Land Registration Act 2002, including where the protected claim is arguable. The jurisdiction survived the statutory scheme because its continued exercise is not incompatible with that scheme.

Where the claim is arguable, the court should consider the position as it would on an application for an interim injunction. It should balance the injustice to the claimant if the land is dealt with against the injustice to the registered proprietor if access to the land is denied. A proprietor seeking access to protected or frozen property to fund a defence must show that no other available assets, including effective family or friends’ support, can meet the legal expenses.

David Nugent claimed a proprietary estoppel equity in Court Farm against his grandmother, Sarah Jane Nugent. He registered a unilateral notice against her registered title under the Land Registration Act 2002. She applied for cancellation, or alternatively for arrangements allowing her to sell or charge part of the land to fund her defence.

The parties disputed whether the court retained the inherent jurisdiction formerly used to vacate cautions under the Land Registration Act 1925. They also disputed the circumstances in which a defendant claiming ownership of an asset could use it to fund litigation defending a proprietary claim. The court determined the jurisdictional and governing-principle issues, leaving detailed implementation to the parties.

1. Jurisdiction. The court retained the jurisdiction, recognised under the former land-registration legislation, to order the vacation or regulation of a register entry. Nothing in the Land Registration Act 2002 expressly abrogated that jurisdiction, and its continued existence was not incompatible with the Act’s scheme.
2. The jurisdiction operates both where the protected claim is unsustainable and where it is well arguable. An unsustainable claim may justify cancellation. Where the claim is arguable, the court should not allow the beneficiary to obtain all the practical protection of an interim injunction without considering protection for the registered proprietor.
3. The appropriate analogy is an application for an interim injunction. The court should assess the competing potential injustices, including the possibility that the claimant will establish a present or future proprietary right and the possibility that the registered proprietor will defeat the claim and remain entitled to deal with the land.
4. In deciding whether to permit a defendant to sell or charge property to fund the defence of a proprietary claim, the court should make a careful and anxious assessment. The burden lies on the defendant to show that no other available assets can meet the legal expenses. The court may consider whether family or friends could effectively provide support.
5. On the evidence, Mrs Nugent had no substantial alternative funds, and her son had no resources available for the defence. Given her age, the significance of the claim and the fact that the proposed expenditure would leave the greater part of the farm available if David Nugent succeeded, justice required permission for an appropriately limited sale or charge.
6. The court could not grant cancellation under section 77 or Schedule 4 paragraph 2 on the material before it. David Nugent’s claim was reasonably arguable, and there was no serious issue that registration of the notice had been without reasonable cause. Consequential details were adjourned for agreement or further determination.

First-instance decision of the High Court (Chancery Division). The judgment determined the jurisdictional and governing-principle issues and left consequential matters for further hearing if required.