Property in dispute - August 2011

I have started so I will finish

Can you withdrawn from Land Registration adjudication proceedings once they have started?

The Court of Appeal has upheld the decision of the High Court in Silkstone v Tatnall [2010].  Once a matter has been referred to the Adjudicator to the Land Registry, the Adjudicator may continue with those proceedings and determine the underlying issue, regardless of any purported withdrawal by one of the parties.  This case concerned an objection to an application to cancel a unilateral notice but this decision could apply to any references to Land Registry adjudication on other matters. 

In this particular case one of the parties to the Land Registry adjudication proceedings was actually the Chief Land Registrar at the Land Registry itself.  It was the Chief Land Registrar that wished to withdraw from the adjudication proceedings but the Court of Appeal decided that once a matter has been referred to the Adjudicator, the Adjudicator’s discretion includes the determination of the underlying merits of the claim.  The Adjudicator is required to deal with the matter justly and this could mean that in the earlier stages of an adjudication it may be just for the Adjudicator to permit the withdrawal and make an order as to the costs of the application.  If however the purported withdrawal is made later in the adjudication process, it may be just for the Adjudicator to proceed to the substantive hearing, rule upon the merits and make an appropriate order.

This is of interest to all property professionals.  Land Registry adjudication is a much used procedure.  During a Land Registry adjudication procedure it is not uncommon for new information to be found or the relative strengths of a party’s strength change due to new developments.  Historically parties have simply been able to withdrawn an application for adjudication and avoid an unfavourable decision.  This decision now withdraws that ability and enables the Adjudicator to proceed to a determination in respect of a purported withdrawal of the application.  The moral is to be sure of your case before proceeding to Land Registry adjudication.

Buyer could withdraw from a contract where seller had made innocent misrepresentation

The Court held that in the case of Cleaver v SCHYDE Investments [2001] the buyer was entitled to rescind a contract for purchase development land for an innocent misrepresentation is made by the seller

The buyer had contracted to purchase a site that had potential for the development as a block of flats.  The seller had provided replies to enquiries to the buyer.  However, he failed to update his replies when he became aware of a third party’s planning application, despite knowing that this would be a material consideration for the buyer and would go to the merits of the buyer’s development proposals.  The buyer only became aware of the planning application following exchange of contracts and subsequently refused to complete the contracts.

The buyer saw the return of its deposit.  The seller argued that the buyer was not able to rescind the contract as the buyer was only entitled to rescind where the error or omission resulted from fraud or recklessness or where the buyer would be obliged to accept property differing substantially from what the error or omission had led the buyer to expect.

A County Court Judge had concluded that the buyer was entitled to the deposit as the conditions of the contract limiting the return of the deposit were not fair and reasonable in the circumstances of the case.  Accordingly, the court found the purchase contract fell foul of Section 3 of the Misrepresentation Act 1967 and the Unfair Contract Terms Act 1977.  The decision was appealed to the Court of Appeal but the Court of Appeal dismissed the appeal and held that the buyer was entitled to rescind the contract.

Again this is a relevant decision for all property professionals.  Property professionals need to be aware that at all times all material facts are conveyed to the relevant parties of a property transaction.  Failure to inform another party of new relevant information could enable the other party to withdrawn from a contract.