Inhenagwa v Onyeneho

An adjudicator determining an objection to cancellation of a Land Registry notice may decide the underlying merits of the dispute referred to the adjudicator. That decision can, in principle, give rise to an issue estoppel.

Issue estoppel is confined to an identical issue decided by a competent tribunal where the decision was necessary to the earlier result. Evidentiary findings made merely to illuminate the issue referred do not create an estoppel in later litigation. An unless order must state clearly and precisely the consequences of non-compliance; a direction debarring a party from defending a claim does not, without clear words, strike out that party’s counterclaim.

Rose Onyeneho and Rita Inhenagwa jointly acquired a property in 1991. In 2002, a transfer purporting to remove Rose from the title was executed using a forged signature. Rose obtained a unilateral notice and objected to its cancellation.

A Land Registry adjudicator found that the 2002 transfer was a nullity and that Rose could seek rectification. Rose later commenced county court proceedings for declarations concerning beneficial ownership and an order for sale. The Recorder treated the adjudicator’s decision as establishing equal beneficial ownership, ordered sale, and directed an equal division of the net proceeds.

Rita appealed against the division of proceeds. The central issues were what the adjudicator had decided, which findings were necessary to that decision, and whether the unless order also prevented Rita from pursuing her counterclaim.

1. Appeal allowed and Respondent’s Notice dismissed. The order directing an equal division of the net sale proceeds was set aside. Permission was granted to appeal the remaining relevant parts of the Recorder’s order, and that appeal was also allowed. The form of the consequential order was reserved.
2. An adjudicator is a judicial tribunal. A decision made within the adjudicator’s jurisdiction can give rise to an issue estoppel. The jurisdiction under the Land Registration Act 2002 extends to determining the underlying merits of the claim giving rise to the relevant Land Registry application, rather than merely whether the claimant has an arguable case.
3. The adjudicator decided that the 2002 transfer was a nullity and that Rose had a right to seek rectification protected by the unilateral notice. The adjudicator did not decide that Rose owned a half share, or that she had an unquantified beneficial interest.
4. Issue estoppel requires an identical issue to have been decided and the decision on that issue to have been necessary to the earlier result. The adjudicator’s findings about the 1991 arrangement were evidentiary findings used to assess the 2002 transfer. They were not ultimate findings necessary to determine the application and therefore did not bind the parties in the county court proceedings.
5. The adjudicator was within jurisdiction in making findings about the 1991 arrangement because they assisted in determining the dispute referred. That did not convert those findings into an estoppel. The question of beneficial ownership therefore required determination in the county court, including any relevant equitable accounting and the effect of later events.
6. The unless order debarred Rita from defending Rose’s claim but did not expressly strike out Rita’s counterclaim. It was insufficiently clear to imply that consequence. Unless orders should state precisely the consequences of non-compliance. The Recorder should also have considered whether relief from sanctions was appropriate, particularly given Rita’s status as a litigant in person.

• High Court (Chancery Division): Appeal from the County Court at Central London order dated 19 December 2016. The appeal was allowed and permission was granted for further grounds.
• County Court at Central London: The Recorder treated the adjudicator’s decision as establishing equal beneficial ownership, ordered sale, and directed an equal division of the net proceeds.