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Case and Comment
FITZWILLIAM v Richall Holdings Services Ltd. [2013] EWHC 86 (Ch) is the latest English case to address the consequences of a void transaction that was plausible enough to persuade Land Registry to register it. Under section 58 of the Land Registration Act 2002 ('LRA 2002'), registration vests the registered estate in the new registered proprietor even where the underlying transaction is void. However, this does not mean a fraudster can permanently deprive a landowner of his title to land merely because he succeeds in deceiving Land Registry as well as others. Registration under a void transaction is a 'mistake' under schedule 4 of the statute, which gives the court (sch. 4, para. 2) and the registrar (sch. 4, para. 5) the discretion to alter the register and so "break the statutory spell" of registration, as H.H.J. Robert Reid Q.C. described it in Commercial Acceptances Ltd. v Shaikh (Ch., 22 June 2001).
In Malory Enterprises Ltd. v Cheshire Homes (UK) Ltd. [2002] EWCA Civ 616, the Court of Appeal decided that, under the Land Registration Act 1925, the statutory spell did not have to be broken for the original proprietor to get his legal title back. Arden L.J. held that section 69 of the 1925 Act, the equivalent to section 58 of the LRA 2002, vested the legal estate in the new registered proprietor only as trustee for the former registered proprietor. This statutory vesting was not a "disposition" for the purposes of section 20 of the 1925 Act, so the equitable interest of the original proprietor bound the new proprietor whether or not he had given valuable consideration. If the same is true of the equivalent provisions of the LRA 2002 (s. 58 and s. 29), the original proprietor can ask for an alteration of the register as of right under Saunders v Vautier (1841) Cr. & Ph. 240, without recourse to schedule 4. Fitzwilliam v Richall Holdings Services Ltd. is the first case to apply this analysis to the interpretation of the LRA 2002.
The case concerned title to 100 Richmond Avenue in Islington. The claimant registered proprietor had been arrested in Dubai and remained in prison from June 2008 to April 2011. During...