REF/2005/0797

REF/2005/1232

REF/2005/1551

 

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

LAND REGISTRATION ACT 2002

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

 

BETWEEN

LAVAINE  MARGARET  ARCHER

 

APPLICANT

 

and

 

(1)    MICHAEL  EDEN

(2)    HALIFAX  PLC

 

RESPONDENTS

 

 

 

Property Address:  9 Meadow Lane, Northallerton, DL6 1RE

Title Number: NYK84850

 

 

Before: Mr Timothy Cowen sitting as Deputy Adjudicator to HM Land Registry

 

 

Sitting at: Darlington County Court

On: 15 January 2007

 

 

Applicant Representation:                  Tamsin Cox, counsel

First Respondent Representation:       none

Second Respondent Representation:  Matthew West, counsel

 

 

___________________________________________________________________________­

 

SUBSTANTIVE  DECISION

___________________________________________________________________________

 

 

 

ALTERATION OF THE REGISTER - FORGERY - validity of TR1 transfer deed challenged on 3 grounds  –firstly, because deed not properly attested - secondly, because Applicant’s signature allegedly forged on TR1 - thirdly, on basis of misrepresentation making transaction voidable  – held that TR1 void because Applicant’s signature had been forged and deed would have been invalidated in any event by absence of proper attestation, but that improper attestation not necessarily enough to defeat transaction - Chief Land Registrar ordered to give effect to the application - mortgagee’s application for recital relating to alleged subrogation refused.

 

Cases referred to:-

Shah v Shah [2002] QB 35

Biggar v London Borough of Havering [2001] EWCA Civ 411

 

Introduction

1.                  The Applicant, Lavaine Archer, contends that a TR1 transfer deed, by which she appeared to transfer the Property from her name jointly with Michael Eden into his sole name for no consideration, is void and the register ought to be altered to restore her name as joint proprietor.  She offers 3 grounds for her contention that the TR1 is void for the purposes of conveying the legal estate:

(a)    Because the signatures on it (particularly the one purporting to be hers) were not validly attested;

(b)   Because she did not sign it and the signature on it which purports to be hers is a forgery.

(c)    Because her signature (if she did sign it) was induced by a negligent misrepresentation and she elects to rescind the transaction.

2.                  Lavaine Archer and Michael Eden purchased the Property in joint names in 1994.  They obtained a mortgage loan from Lloyds TSB for that purpose. They moved into the Property and lived together there.  In August 2001, they split up and Mrs Archer moved out.  Mr Eden carried on living at the Property and paying mortgage instalments.

3.                  In September 2002, Mr Eden and Mrs Archer met at the Property at Mr Eden’s invitation.  Mrs Archer’s daughter, Terri, accompanied her.  Mr Eden had explained to Mrs Archer in advance of the meeting that he wanted to transfer the mortgage from Lloyds TSB to Halifax to get a better deal and he wanted Mrs Archer to sign the necessary paperwork.

4.                  At the meeting, Mr Eden handed her a document to sign and repeated his explanation.  Mrs Archer says that the document consisted of one side of A4 paper headed with the words “Halifax Mortgage Transfer” and with room for signatures at the bottom, but not for witnesses.  Halifax say that they do not issue any documents with that or any similar heading.  Mrs Archer signed it.  No sign of this document has ever emerged.  No inference can be drawn from its disappearance.  Mrs Archer would not have it because she says she left it with Mr Eden.  Mr Eden would not produce it because it is not his case that she ever signed such a document.

5.                  On 5 November 2002, Mr Eden was registered as the sole proprietor of the Property at Her Majesty’s Land Registry (“HMLR”).  This was the result of Hammonds Direct (Halifax’s solicitors) submitting a Transfer Deed in form TR1 to HMLR.  The TR1 is dated 30 September 2002 and purports to transfer the Property to Mr Eden for no monetary consideration.  It appears to be signed by Mr Eden and Mrs Archer.  Those signatures appear to be witnessed by M Harper.

6.                  Upon becoming the sole registered proprietor, Mr Eden executed a mortgage in favour of Halifax Plc, the Second Respondent.  Halifax advanced him money which he applied partly to redeem the Lloyds TSB mortgage.  On 5 November 2002, Halifax’s legal charge was registered and the Lloyds TSB charge was removed from the register.

7.                  In March 2003, Mrs Archer discovered what had happened.  A criminal prosecution was brought against Mr Eden on an allegation that he had forged her signature on the transfer.  A handwriting expert, Mr Baxendale, gave evidence for the prosecution that there was strong evidence that the signature on the TR1 was not Mrs Archer’s.  On 11 June 2004, Recorder Bayliss sitting in the Teesside Crown Court directed the jury to acquit Mr Eden.  I have seen a transcript of his direction.  It seems to have been on the grounds that Mrs Archer had admitted to signing a document (the “Halifax Mortgage Transfer”), but that document had never come to light, so the jury could not be sure to the criminal standard of proof that she had not signed the TR1.  I am not bound by the outcome of the criminal proceedings or anything said in them.

8.                  In February 2005, Mrs Archer applied to HMLR for a restriction and for the register to be altered under Schedule 4 to the Land Registration Act 2002 so as to restore her name as joint proprietor.  Mr Eden objected to both applications – this led to 2 of the references before me.  Halifax Plc objected to the application to alter the register – this was the third matter referred to the Adjudicator.  All 3 have been consolidated.  Miss Cox, for Mrs Archer, conceded at the hearing that the application for a restriction is superseded by the application to alter the register.

9.                  Mr Eden filed an undated Respondent’s Statement of Case in March 2006.  He said there that he had paid £3,000 to Mrs Archer when she moved out of the Property and that in 2002 he had asked her to come round to sign a document to transfer the Property into his sole name.  He said that she did come round with her daughter, Terri, and signed the document.  He then took the document to Marian Harper, who worked in a local café, and she witnessed his signature.

10.              Mr Eden then wrote a letter to the Adjudicator, received on 19 June 2006, in which Mr Eden said that he did not want Mr Baxendale, the expert, at the hearing before the Adjudicator because Mr Baxendale’s evidence was proved to be flawed.

11.              An unless order was made by the Adjudicator on 28 July 2006 requiring Mr Eden to serve a witness statement in accordance with directions, failing which he would be debarred from calling oral evidence.  Mr Eden did not comply with that order.  In fact the letter of June 2006 was the last contact from Mr Eden.  He did not attend the substantive hearing before me.

12.              Halifax, the Second Respondent, did attend the hearing through its Counsel, but called no evidence.  On the substantive questions of fact, Halifax said only that it puts the Applicant to proof; on the points of law, Halifax made no substantive submissions.  Halifax only made submissions on the form of the order, which I shall deal with below.

13.              Mrs Archer and her daughter gave evidence in accordance with their statements (the relevant substance of which I have summarised above) and they were not challenged.  I accept the evidence of Mrs Archer and her daughter.  I attach no weight to the evidence offered by Mr Eden in his statement of case, where it conflicts with the evidence of Mrs Archer and her daughter, because he has not attended to be cross examined.

14.              As I indicated above, Miss Cox for the Applicant puts her case in 3 ways.  I shall deal with each as follows.

Attestation

15.              The Applicant submits that the purported transfer deed is not valid to effect a transfer of the legal estate because it is not properly attested.  Miss Cox put this as her primary point and invited me to deal with it as such.

16.              The legal basis for this submission is as follows:

16.1.             By section 52(1) Law of Property Act 1925, all conveyances of land are void for the purpose of conveying a legal estate unless made by deed;

16.2.             Section 1 of the Law of Property (Miscellaneous Provisions) Act 1989 sets out the requirements for execution of a deed by an individual, the relevant parts of which are:

“(2) An instrument shall not be a deed unless - . . .

(b) it is validly executed as a deed by that person or, as the case may be, one or more of those parties.

(3) An instrument is validly executed as a deed by an individual if, and only if -

(a) it is signed -

(i) by him in the presence of a witness who attests the signature; . . .”

17.              The purported transfer deed in this case appears on its face to be properly executed.  Marion Harper has signed as witness to each of the 2 signatures of the apparent parties to the deed; but the evidence is this case is pretty clear that Mrs Archer did not sign in the presence of Marion Harper.  Mrs Archer’s evidence is, of course, that she did not sign this document at all, but that there was no provisions for witnesses in the document she did sign and that she has never met Ms Harper.  Ms Harper told the police in the criminal investigations that she did not witness Mrs Archer sign the document.  Mr Eden’s own evidence, in his statement of case before the Adjudicator, was that after Mrs Archer had signed he alone took the TR1 to a café where Ms Harper signed as witness.

18.              It seems to follow from this evidence and the law which I have cited that the TR1 is not a valid deed for the purposes of effecting a transfer of the land.  Miss Cox submits that I do not need to go further because if a transfer of the land was not effected, then the register ought to be altered in accordance with her application.  The ground for alteration would be that it was correcting a mistake.

19.              This submission troubles me because without determining the allegation of forgery, I am left with the possibility that Mrs Archer may have signed the TR1 voluntarily, but that she now seeks to renege on that action by relying on a technical breach of the requirements for executing deeds.

20.              This may open the door to further litigation.  I do not know why Mr Eden did not attend and I do not know what he will do upon his return.  Miss Cox suggested that a mere defect in attestation could be defeated by estoppel only in a case where there was consideration for the transfer (which would act as the detriment).  I am not sure that estoppel would be necessarily so restricted.

21.              A very similar case, on this point, came before the Court of Appeal in 2001.  In Shah v Shah [2002] QB 35, (which was not cited to me) the transaction was required to be effected by deed.  The transaction was for no consideration.  The document was signed by the parties, but the witness attestation was added later by someone who has not been present when the parties signed.  By section 1 of the 1989 Act, the deed was not validly executed.  The judge had held that the Appellants were estopped from denying the validity of the deed.  The Appellants argued on appeal that as a matter of law estoppel could not be used to validate a transaction which statute has rendered invalid.

22.              Pill LJ rejected that argument on the basis that the application of that principle depends on the policy of the statute in question and he concluded as follows:

“[30] I have, however, come to the conclusion that there was no statutory intention to exclude the operation of an estoppel in all circumstances or in circumstances such as the present.  The perceived need for formality in the case of a deed requires a signature and a document cannot be a deed in the absence of a signature.  I can detect no social policy which requires the person attesting the signature to be present when the document is signed.  The attestation is at one stage removed from the imperative out of which the need for formality arises.  It is not fundamental to the public interest, which is in the requirement for a signature.  Failure to comply with the additional formality of attestation should not in itself prevent a party into whose possession an apparently valid deed has come from alleging that the signatory should not be permitted to rely on the absence of attestation in his presence.  It should not permit a person to escape the consequences of an apparently valid deed he has signed, representing that he has done so in the presence of an attesting witness, merely by claiming that in fact the attesting witness was not present at the time of signature. The fact that the requirements are partly for the protection of the signatory makes it less likely that Parliament intended that the need for them could in all circumstances be used to defeat the claim of another party.

[31] Having regard to the purposes for which deeds are used and indeed in some cases required, and the long term obligations which deeds will often create, there are policy reasons for not permitting a party to escape his obligations under the deed by reason of a defect, however minor, in the way his signature was attested. The possible adverse consequences if a signatory could, months or years later, disclaim liability upon a purported deed, which he had signed and delivered, on the mere ground that his signature had not been attested in his presence, are obvious. The lack of proper attestation will be peculiarly within the knowledge of the signatory and, as Sir Christopher Slade observed in the course of argument, will often not be within the knowledge of the other parties.

[32] In this case the document was described as a deed and was signed. A witness, to whom the third and fourth defendants were well known, provided a form of attestation shortly afterwards and the only failure was that he did so without being in the presence of the third and fourth defendants when they signed.

[33] Having considered the wording of s 1 in the context of its purpose and the policy consideration which apply to deeds, I am unable to detect a statutory intention totally to exclude the operation of an estoppel in relation to the application of the section or to exclude it in present circumstances. The section does not exclude an approach such as that followed by Sir Nicholas Browne-Wilkinson in TSB. For the reasons I have given, the delivery of the document in my judgment involved a clear representation that it had been signed by the third and fourth defendants in the presence of the witness and had accordingly been validly executed by them as a deed. The defendant signatories well knew that it had not been signed by them in the presence of the witness, but they must be taken also to have known that the claimant would assume that it had been so signed and that the statutory requirements had accordingly been complied with so as to render it a valid deed. They intended it to be relied on as such and it was relied on. In laying down a requirement by way of attestation in s 1 of the 1989 Act, Parliament was not in my judgment excluding the possibility that an estoppel could be raised to prevent the signatory relying upon the need for the formalities required by the section. In my judgment, the judge was correct in permitting the estoppel to be raised in this case and in his conclusion that the claimant could bring an action upon the document as a deed.”

23.              I have included a lengthy quote from this judgment because its reasoning seems to me to be particularly relevant to the present case.  The most important distinction between that case and this one is that Mr Eden is not here to claim estoppel and he has not done so in writing.  I can of course make no finding as to whether such a claim is likely to succeed, but I think it is undesirable for me to decide the case on a point which is so narrow and (on its own) unattractive.  If Mr Eden does seek to overturn the effects of this decision on the grounds of estoppel, the result may be a reversion of registered title back into his sole name.  The estoppel would not necessarily relate only to the beneficial interest in the Property; it would prevent Mrs Archer from asserting any legal title.

24.              I therefore find in favour of the Applicant on the attestation point, but I go on to consider the forgery point.

Forgery

25.              This is a matter of evidence rather than law.  The standard of proof in these circumstances is as set out in paragraph 19 of the judgment of Simon Brown LJ (as he was) in Biggar v London Borough of Havering [2001] EWCA Civ 411:

“The proper approach, of course, as now enshrined in In re H ([1996] AC 563, HL) is essentially this.  The graver the conduct alleged, the more intrinsically improbable that it happened; and the more improbable the event, the stronger must be the evidence that it did happen.  Yet in a real sense the need to produce more cogent evidence than is ordinarily required (that is, required for a less serious allegation) is closely akin to the notion of proving the case to a higher than usual standard.”

            The learned Lord Justice went on to describe an application of the criminal standard of proof in such a case as an “egregious error”.  I intend to approach the evidence in the way described in the paragraph quoted above.

26.              I have already said that I prefer the evidence of the Applicant where it conflicts with the statement of case of the Respondent.  She says that she did not sign a transfer deed in favour of the Respondent.  I have seen the report of the handwriting expert, Mr Baxendale.  He did not appear before me.  Had he done so, however, he could not have been cross examined by Mr Eden and counsel for Halifax indicated that he would have had no questions for Mr Baxendale.  The report does not seem to contain any obvious flaws.  It reaches the conclusion that there is “strong evidence” that the signature on the TR1 was not made by Mrs Archer because there are significant differences from her usual signature and because there are signs of hesitation consistent with someone forging the signature.  Mr Baxendale’s report was effectively unchallenged before me.  I take all of this evidence together with the clear evidence of Mrs Archer and her daughter that the document which Mrs Archer did sign was significantly different from the TR1.

27.              Unlike the court in the criminal prosecution, I do not need to be satisfied beyond a reasonable doubt and I do not need to make any finding as to the identify of the person(s) who made the forgery.  In my judgment, it is more likely than not that the signature on the TR1 was not made by Mrs Archer.  It therefore follows that the TR1 is not a valid transfer deed for any purposes.

Misrepresentation

28.              As a result of my decisions above, it is not necessary for me to consider the question of misrepresentation, which would be predicated only upon a finding that Mrs Archer did sign the TR1.  She did not.

Direction to the Chief Land Registrar

29.              It follows from my findings that I will direct the Chief Land Registrar to give effect to Mrs Archer’s application to alter the register and to cancel her application for a restriction.  There is, however, one more matter to resolve.  Halifax invited me to make my order subject to a recital in the following terms:

“And upon it appearing that the Second Respondent having redeemed the liability of the Applicant and First Respondent to Lloyds TSB Bank Plc under a mortgage dated 05.09.94, save for £24.38 paid by the First Respondent, is subrogated to the rights and registered charge dated 05.09.94 in favour of Lloyds TSB Bank Plc which charge was registered at HMLR on 04.10.94 in respect of all sums secured by that charge and on the terms contained therein.”

30.              Miss Cox, for the Applicant, did not consent to any such recital.  It seems to me that in the absence of such consent, I do not have jurisdiction to make what is effectively a declaratory judgment.  Even if I did have such jurisdiction, I could not exercise it fairly here because I have heard no evidence or argument on the subrogation issue and Miss Cox did not come prepared to argue it.  Halifax would not be prejudiced by the absence of any such recital in my order, because there is nothing to prevent it from seeking that remedy at another time or elsewhere.  I therefore refuse to make the recital sought by Halifax.

Costs

31.              I indicated at the hearing that costs would be likely to follow the event.  This would mean here that the First Respondent, at least, should pay the costs of the Applicant.  Miss Cox also indicated that the Applicant would seek her costs against the Second Respondent.  That is a more complex issue.  It was not possible fully to hear argument on it before I had delivered my substantive decision.  I therefore now order all parties to prepare written submissions on the question of costs of the proceedings to include (in the case of a party seeking a costs order) a schedule of the amount of those costs.  Those submissions should be filed at the Office of the Adjudicator by 5 pm on Friday 15^th February 2007 after which date I shall make an order relating to costs.

Dated this 24^th January 2007

 

 

 

By Order of The Adjudicator to HM Land Registry