Exceptional Circumstances Defeat Claim for Rectification: Dhillon v Barclays Bank Plc [2019] EWHC 475 (Ch)


HHJ Pellling Q.C. has handed down his judgment in Dhillon v Barclays Bank Plc [2019] EWHC 475 (Ch).

The Claimant, Mrs Dhillon, had lived with her family in a house in East London (‘the Property’) since about 1993. She was originally a secure tenant of the local authority and, in time she acquired the Right to Buy the Property. She commenced the process of exercising that right in about 1999 but, as far as she was concerned, she did not hear further from the Council. In fact, without her knowledge, Mrs Dhillon’s then husband fraudulently “hijacked” her application to exercise the Right to Buy. He fraudulently induced the local authority to proceed with the sale, apparently to Mrs Dhillon, in the process forging Mrs Dhillon’s signature on the Deed by which she purported to receive the transfer. Simultaneously, and again fraudulently, he forged Mrs Dhillon’s signature on a transfer selling the Property to a company, CEL, which was acquiring it as a BTL investment. Completion of those transactions took place in September 2002. A month later, CEL mortgaged the Property to the Bank.

Mrs Dhillon subsequent brought a claim under Schedule 4 to the Land Registration Act 2002 to rectify the register in respect of the Property. However, the Court dismissed her claim on the grounds that there were exceptional circumstances which justified not making the order for rectification. Mrs Dhillon had never owned the Property: prior to her husband’s fraud, she was only ever the secure tenant and, although she had acquired the Right to Buy she was unable to exercise it without funding her acquisition by a simultaneous sale of the Property. She was only able to suggest that she was entitled to the unencumbered Property by relying on the acquisition from the local authority, that she maintained was fraudulent and void. Refusing the alteration properly reflected the fact that she would never have been able to exercise the Right to Buy without funding the purchase with an immediate sale.

Nicholas Trompeter acted on behalf of the Chief Land Registrar, who was the second defendant to the claim.