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Mortgages.

The editor of this section of the site is Nigel Clayton of Kings Chambers, Leeds and Manchester. Nigel also maintains the specialist website dealing with mortgages at www.legalmortgage.co.uk

Forged charge

Entitlement to indemnity

Swift 1st Limited v The Chief Land Registrar
[2015] EWCA Civ 330

Summary

A residential mortgage lender was entitled to an indemnity from the Land Registry where its registered charge had been removed from the charges register as a consequence of forgery.

Facts

R was the registered proprietor of a residential property. A fraudster (F) fraudulently executed a legal charge in R’s name to secure a loan from a lender (GE). The charge was registered. A month later F fraudulently executed a legal charge in R’s name to secure a replacement loan from another lender (S), some of which was used to redeem GE’s charge. S’s charge was registered.

Following default in payment, S commenced possession proceedings which R defended on the ground of forgery. S accepted that it had no enforceable security either under its own charge or by way of subrogation and entered into a consent order which required the Land Registry to delete S’s charge. S subsequently commenced proceedings against the Land Registrar seeking an indemnity under Schedule 8 of the Land Registration Act 2002 on the basis that the register had been rectified by the correction of a mistake which prejudicially affected S’s title to the registered charge.

The registrar contended that the alteration did not prejudicially affect S’s title because the registration of its charge was always subject to R’s overriding interest to have the forged disposition set aside. S, however, relied on para 1(2)(b) of Sch 8 which provided that the proprietor of a registered estate or charge claiming in good faith under a forged disposition is, where the register is rectified, to be regarded as having suffered loss by reason of such rectification as if the disposition had not been forged.

At first instance the Court allowed S’s claim and ordered the Registrar to indemnify it for the lo ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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