The powers of the Land Registration Division of the First-tier Tribunal (Property Chamber) [the ‘Tribunal’] are conferred by statute.
An order for rectification made by the Tribunal has the same effect as an order for rectification made by the High Court, consequently rectification relates back to the time when the instrument was executed.
Practitioners need to distinguish between:
(i) rectification of a document under s.108(2) of the Land Registration Act 2002 [‘LRA]’; and
(ii) alteration of the register under Schedule 4 of the LRA where the word ‘rectification’ has a specific meaning.
In a Schedule 4 case, if the Applicant persuades the Tribunal Judge that it would be ‘unjust for the alteration not to be made’ that will shift the burden of proof onto the Respondent to prove ‘exceptional circumstances’. Then, if the Respondent fails to discharge the burden of proof at the hearing, rectification must be ordered. For the legal test see Dhillon v Barclays Bank Plc & Anor  below.
LRA s.108 states:
‘(1) The adjudicator [i.e. the Tribunal, see: https://www.gov.uk/government/publications/objections-and-disputes-a-guide-to-land-registry-practice-and-procedures/practice-guide-37-objections-and-disputes-a-guide-to-land-registry-practice-and-procedures]
has the following functions—
(a) determining matters referred to him under section 73(7), and
(b) determining appeals under paragraph 4 of Schedule 5.
(2) Also, the adjudicator may, on application, make any order which the High Court could make for the rectification or setting aside of a document which—
(a) effects a qualifying disposition of a registered estate or charge,
(b) is a contract to make such a disposition, or
(c) effects a transfer of an interest which is the subject of a notice in the register.
(3) For the purposes of subsection (2)(a), a qualifying disposition is—
(a) a registrable disposition, or
(b) a disposition which creates an interest which may be the subject of a notice in the register.
(4) The general law about the effect of an order of the High Court for the rectification or setting aside of a document shall apply to an order under this section.’
Under the Land Registration Act 1925, any alteration of the Register to correct a mistake was referred to as ‘rectification’. The LRA has a more limited definition of rectification. It is an alteration which involves the correction of a mistake and prejudicially affects the title of a registered proprietor.
The power of the Registrar and of the court to correct a mistake is tempered by a principle of qualified indefeasibility. Consequently, the circumstances in which the Register can be rectified against certain classes of registered proprietor are limited.
Section 58 of the LRA states:
‘(1) If, on the entry of a person in the register as the proprietor of a legal estate, the legal estate would not otherwise be vested in him, it shall be deemed to be vested in him as a result of the registration.
(2) Subsection (1) does not apply where the entry is made in pursuance of a registrable disposition in relation to which some other registration requirement remains to be met’.
Therefore, a legal estate will be vested in a person upon registration as proprietor of the legal estate, even if it would not otherwise vest.
Schedule 4 to the LRA exists to make provision for alteration of the register and to introduce the concept of ‘rectification’.
Schedule 4 distinguishes between alteration:
(i) pursuant to a court order; and
(ii) otherwise than pursuant to a court order, which in practice means by the Registrar.
‘The registrar has no ability under Schedule 4 to the Land Registration Act 2002 to correct a mistake in a deed. Only the court, or the tribunal under section 108(2) of the Land Registration Act 2002, has such power but you should note that the tribunal’s powers relate to a more limited range of documents than the court.’ See: Practice guide 39: rectification and indemnity – GOV.UK (www.gov.uk)
Paragraph 1 of Schedule 4 states:
‘In this Schedule, references to rectification, in relation to alteration of the register, are to alteration which—
(a) involves the correction of a mistake, and
(b) prejudicially affects the title of a registered proprietor.’
Typically, a reference for rectification made to the Tribunal from the Land Registry will be the result of a contested application to amend the Register. After an objection has been made, the decision about alteration of the Register is effectively made by the Tribunal Judge, who has the power to order the Registrar to allow the application. Under the LRA, Schedule 4, paragraph 1 for an alteration to also be a rectification it must:
(i) involve the correction of a mistake; and
(ii) prejudicially affect the title of the registered proprietor.
Consequently, rectification can only be ordered where:
(a) the registered proprietor consents;
(b) the registered proprietor has by fraud or lack of proper care caused or contributed to the mistake; or
(c) it would for any other reason be unjust for the alteration not to be made.
Schedule 4 of the LRA 2002 provides:
In this Schedule, references to rectification, in relation to alteration of the register, are to alteration which—
involves the correction of a mistake, and
prejudicially affects the title of a registered proprietor.
Alteration pursuant to a court order
The court may make an order for alteration of the register for the purpose of—
correcting a mistake,
bringing the register up to date, or
giving effect to any estate, right or interest excepted from the effect of registration.
An order under this paragraph has effect when served on the registrar to impose a duty on him to give effect to it.
This paragraph applies to the power under paragraph 2, so far as relating to rectification.
If alteration affects the title of the proprietor of a registered estate in land, no order may be made under paragraph 2 without the proprietor’s consent in relation to land in his possessionunless—
he has by fraud or lack of proper care caused or substantially contributed to the mistake, or
it would for any other reason be unjust for the alteration not to be made.
If in any proceedings the court has power to make an order under paragraph 2, it must do so, unless there are exceptional circumstances which justify its not doing so.
In sub-paragraph (2), the reference to the title of the proprietor of a registered estate in land includes his title to any registered estate which subsists for the benefit of the estate in land.
make provision about the circumstances in which there is a duty to exercise the power under paragraph 2, so far as not relating to rectification;
make provision about the form of an order under paragraph 2;
make provision about service of such an order.
Test of ‘exceptional circumstances’
In Dhillon v Barclays Bank Plc & Anor  EWCA Civ 619 (14 May 2020) (bailii.org) Lord Justice Coulson stated:
‘6. PARAGRAPH 3(3) OF SCHEDULE 4: EXCEPTIONAL CIRCUMSTANCES
6.1 The Law
46. The best guide to the test of “exceptional circumstances” remains the decision of Morgan J in Paton and Anor v Todd  EWHC 1248 (Ch);  31 EG 48. The adjudicator had concluded that there were exceptional circumstances which justified the non-rectification of the Register. The appeal against that decision was allowed on the facts and remitted to the adjudicator to consider the practical effect for each party of both altering and not altering the Register. In addressing the relevant test, Morgan J said:
“66. Whilst the statement in the Law Commission report can be taken as accurate for most purposes, it may in some cases be necessary to analyse the position a little more closely. There is no doubt that section 82(1) of the 1925 Act conferred on the court a residual discretion as to rectification. That position is indeed repeated in para. 5 of schedule 4 to the 2002 Act where, in a case of alteration which is not rectification, the registrar has a discretion to alter the register; the statutory wording is: “the registrar may alter the register” (my emphasis). However, in a case of rectification which falls within para. 6(3) of schedule 4 to the 2002 Act, the court must adopt a more structured approach. First of all, the paragraph imposes a duty to rectify the register. Secondly, that duty does not apply in a case where there are exceptional circumstances which justify not rectifying the register. Thus, in a case within para. 6(3), the court must ask itself two questions: (1) are there exceptional circumstances in this case? and (2) do those exceptional circumstances justify not making the alteration? The first of these questions requires one to know what is meant by “exceptional circumstances” and then to establish whether such circumstances exist as a matter of fact. Thus the process involved in the application of para. 6(3) of schedule 4 to the 2002 Act is not identical to the exercise of the discretion involved in section 82(1) of the 1925 Act.
67. “Exceptional” is an ordinary, familiar English adjective. It describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual or special, or uncommon; to be exceptional a circumstance need not be unique or unprecedented, or very rare but it cannot be one that is regularly, or routinely, or normally encountered: see R v Kelly  1 QB 198 at 208 C-D (a decision from a very different context but nonetheless helpful as to the ordinary meaning of “exceptional circumstances”). Further, the search is not for exceptional circumstances in the abstract but those which have a bearing on the ultimate question whether such circumstances justify not rectifying the register.”
47. The result in Paton v Todd reflects that two-stage test. Morgan J agreed with the adjudicator that the fact that the applicants did not own the relevant land was an exceptional circumstance. However, he found that, in the absence of evidence as to the effect of rectification on either party, it could not be concluded in the defendant’s favour that the exceptional circumstance justified the decision not to rectify the Register. Hence the matter was remitted. Unsurprisingly, perhaps, Mr Polli QC relied on the fact that the claimants’ lack of ownership of the relevant land had been regarded in Paton v Todd as an exceptional circumstance, because he said that precisely the same was true of Mrs Dhillon in the present case.’
Tribunal Procedure (First-tier Tribunal)(Property Chamber) Rules 2013, r.40 states:
‘Requirements directed to the registrar
40.—(1) The Tribunal must send written notice to the registrar of any direction which requires the registrar to take action.
(2) Where the Tribunal has made a decision, that decision may include a direction to the registrar to—
(a) give effect to the original application in whole or in part as if the objection to that original application had not been made; or
(b) cancel the original application in whole or in part.
(3) A direction to the registrar under paragraph (2) must be in writing, must be sent or delivered to the registrar and may include—
(a) a condition that a specified entry be made on the register of any title affected; or
(b) a direction to reject any future application of a specified kind by a named party to the proceedings—
(i) unconditionally; or
(ii) unless that party satisfies specified conditions.’
‘Where a disputed application is referred to the [Tribunal] it may, instead of determining the matter, direct a party to the proceedings to commence proceedings for the purpose of obtaining the court’s decision on the matter and will do so where it does not have the jurisdiction to make the relevant decision. If the [Tribunal] does not make such a decision, it must decide the case itself, and if either party wishes to withdraw from the dispute the Tribunal has a discretion whether to terminate the reference or proceed to a determination on the merits. The practice and procedure before the [Tribunal] are prescribed by rules [see below]. An appeal lies from the [Tribunal’s] decision to the Lands Chamber of the Upper Tribunal , on a point of law or fact, but permission to appeal is required.’ Megarry & Wade – The Law Of Real Property, para 6-130.
Tribunal (First-tier Tribunal) (Property Chamber) Rules 2013: The Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 (legislation.gov.uk)
PROPERTY BAR ASSOCATION CONFERENCE 2008 Workshop Session Timothy Harry and David Fox RECTIFICATION AND INDEMNITY: GENERAL PRINCIPLES
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