Analysis
The parties were children of Concetta Chandler, who had died on 24 January 2019. C was her son and executor. D was her daughter.
On 4 June 2018, Mrs Chandler had transferred her house into the joint names of herself and D as tenants in common in equal shares. C sought a declaration that the transfer was void and rectification of the land register to reflect this.
From 2005 (when it was purchased) until the transfer, the house had been held in Mrs Chandler’s sole name.
On 28 November 2018, D had registered with the Office of the Public Guardian a lasting power of attorney (LPA) for Mrs Chandler in respect of her property and financial affairs.
The transfer was made on 4 June 2018. It was effected by D using the LPA. D’s evidence was that she was unaware of the need to seek permission from the Court of Protection to make the transfer.
The claim was issued on 25 October 2018 (before Mrs Chandler died), with C as Mrs Chandler’s litigation friend seeking a declaration that the transfer was void and for rectification of the land register. Mrs Chandler died on 24 January 2019. C was later substituted as claimant as Mrs Chandler’s executor.
Held:
Given that D had executed the transfer using the LPA, it was unnecessary to determine whether Mrs Chandler had had capacity to execute it. In any case, no date of any transfer by Mrs Chandler herself had been identified which would have been necessary for such a determination.
As a gift falling outside s12(2) Mental Capacity Act 2005, in the absence of authorisation by the Court of Protection the transfer was not authorised by the power of attorney.
The effect of s12 Mental Capacity Act 2005 is to render void transactions executed in breach of s12(1). This was for three reasons. First, the language of s12(1) supported the conclusion since it was concerned with the scope of LPAs and effectively wrote limitations into all LPAs conferring authority in relation to property and affairs. Secondly, the prohibition had as its focus the subject matter of the transaction (the gift itself) rather than seeking to regulate the conduct of or prescribe consequences for the attorney. Thirdly, the approach addressed the mischief at which s12 was directed.
Since the transfer was void rather than merely voidable, its entry on the land register was a mistake which could be rectified under Sch 4 Land Registration Act 2002 (NRAM Ltd v Evans [2017] referred to). Rectification could only be ordered where the registered proprietor (ie D) had by fraud or lack of care caused or substantially contributed to the mistake or it would for any other reason be unjust for the alteration not to be made (para 3(2) Sch 4 Land Registration Act). It was for the party seeking rectification (ie C) to prove that these conditions were satisfied (Sainsbury’s Supermarkets Ltd v Olympia Homes Ltd [2005] referred to).
C, however, had more than made out a case that D’s lack of care caused or substantially contributed to the Land Registry’s mistake in registering the transfer. The duties of an attorney under an LPA for property and affairs are very clear. They were set out in the Mental Capacity Act 2005 and the Mental Capacity Act Code of Practice and included the prohibition on gifts in s12. When D signed the LPA, she had signed an acknowledgment that she understood and confirmed she had a duty to act based on the principles of the Mental Capacity Act 2005 and have regard to the Mental Capacity Act Code of Practice. While D was unaware of the need to seek authorisation from the Court of Protection, this did not mean that she was acting with care. The gift was significantly in excess of that permitted by s12, it was made without consideration, it would have had the effect of substantially affecting the extent of Mrs Chandler’s estate, and she was aware that it was a contentious and controversial step to take. D’s failure to inform herself of the true position, whether by taking specific legal advice on the issue (which on the evidence she did not do) or otherwise, amounted to lack of care and led directly to the mistake which led to registration. Had it been necessary to do so, for the same reason the court would have found that it would be unjust for the alteration not to be made.
Absent any exceptional circumstances, the court was therefore required to make an order for rectification.
JUDGMENT JASON BEER QC: A. Introduction [1] This is a claim for (i) a declaration that the transfer on 4 June 2018 of 34 Mallaby Close, Shirley, Solihull, B90 2PW (the Property) into the joint names of Concetta Chandler and Janet Lombardi, as tenants in common and in equal shares, was void; and (ii) accordingly, …Continue reading "Chandler v Lombardi [2022] WTLR 487"