Ainscough v Ainscough & Anor

A decision of the Land Registry may be protected from collateral attack in later proceedings where allowing the claim would be manifestly unfair or would bring the administration of justice into disrepute. The principle applies to administrative decisions as well as court decisions.

Under Schedule 4 to the Land Registration Act 2002, rectification following a mistake is required unless exceptional circumstances justify refusal. Exceptional circumstances are assessed case by case and must bear on whether rectification should be ordered. The receipt and retention of mortgage proceeds, acquiescence in the mortgage, delay, and the claimant’s prior acceptance of partial rectification may justify leaving a charge on the register.

The claimant sought removal of his brother’s name and a mortgage charge from the registered title to residential property. The Land Registry had previously rectified the proprietorship register after determining that a transfer to the claimant’s son was forged, but had refused to remove the mortgage charge because exceptional circumstances existed, including the claimant’s receipt of mortgage proceeds and apparent adoption of the mortgage.

The claimant then brought proceedings against his brother and the mortgagee. The mortgagee argued that the claim to remove the charge was an abuse of process because it was a collateral attack on the Land Registry’s decision. The central issues were whether the claim was abusive and, alternatively, whether the statutory conditions for rectification under Schedule 4 to the Land Registration Act 2002 were satisfied.

1. Abuse of process. The claim against the mortgagee was dismissed as an abuse of process. The collateral attack principle applies to decisions of administrative bodies, including the Land Registry, as well as decisions of courts. The relevant question is whether, in all the circumstances, allowing the claim would be manifestly unfair or would bring the administration of justice into disrepute among right-thinking people.
2. The claimant had not challenged the Land Registry’s decision by judicial review within the applicable time. Instead, he sought years later to relitigate the same issue in civil proceedings. He had also accepted the benefit of rectification of the proprietorship register while seeking to reject the Land Registry’s decision to retain the charge. That combination made the claim procedurally unfair and abusive. It was also procedurally unfair to determine the charge issue without the claimant’s son, who was not a party.
3. Alternative statutory analysis. Under Schedule 4 to the Land Registration Act 2002, a forged transfer could constitute a mistake and could initially justify rectification of a consequential charge. However, after the Land Registrar had consciously exercised the power under paragraph 6(3) not to remove the charge, its continued registration could no longer properly be characterised as a mistake.
4. Alternatively, the court would have refused rectification under paragraph 3(3). The circumstances were exceptional because the claimant and his brother had received most of the mortgage advance, the claimant had made mortgage payments and delayed challenging the mortgage, the mortgage had been contemplated in correspondence, and the claimant had already obtained rectification of the proprietorship register while accepting that the charge remained.
5. Removing the charge would confer an unjust windfall on the claimant and his brother, who would retain mortgage proceeds while holding the property free of encumbrance. The charge therefore remained on the register. The claimant also had no basis for removing his brother’s name: the June 2006 transfer made them beneficial tenants in common in equal shares, and the brother retained a beneficial interest despite receiving £30,000.
6. The claimant’s claim against both defendants was dismissed. The first defendant’s counterclaim was also dismissed.