Gold Harp Properties Ltd v MacLeod [2015] 1 WLR 124

Facts

• Gold Harp Properties Ltd acquired a property, but the registered title contained an incorrect description of the extent of the land.
• The error in the register was not apparent upon acquisition and was only discovered when Gold Harp attempted to sell the property.
• Gold Harp sought rectification of the register to correct the land description.
• Between Gold Harp’s acquisition and the discovery of the error, MacLeod had acquired an interest in the property, acting in good faith and relying on the accuracy of the register.
• Rectification would directly impact MacLeod’s rights, as it would alter the scope of his interest in the property.

Issues

1. Whether rectification of the land register could be granted to correct the error when doing so would affect the rights of a third party who had acquired an interest in good faith.
2. What protections should be afforded to third parties under the Land Registration Act 2002 in such rectification proceedings.
3. How to balance the need to correct registration errors with safeguarding the certainty and reliability of registered titles for third parties.

Decision

• The Court of Appeal held that rectification could be granted to correct the register where a clear mistake had been made and the parties' true intentions were evident.
• The court recognized the importance of protecting third-party rights under the Land Registration Act 2002, especially for those acting in good faith.
• Rectification was ordered, but with appropriate safeguards to ensure that MacLeod’s interests as a third party were not unfairly prejudiced.

Legal Principles

• Rectification under the Land Registration Act 2002 aims to correct errors in the register so it reflects the true state of title.
• The "mirror principle" underpins the registration system, but exceptions exist where errors arise.
• Section 65 of the Land Registration Act 2002 provides the statutory basis for rectification, subject to protections for third parties who acquire their interests in good faith.
• Equitable principles require that the remedy of rectification be exercised judiciously, balancing the need to correct mistakes with the fairness owed to third parties.

Conclusion

The Court of Appeal confirmed that rectification of the land register is available to correct clear mistakes, even when it affects third-party interests acquired in good faith, provided statutory and equitable safeguards are respected to protect those parties under the Land Registration Act 2002.