REF/2013/0964

PROPERTY CHAMBER, LAND REGISTRATION
FIRST-TIER TRIBUNAL

LAND Registration act 2002

IN the matter of a reference from hm land registry

BETWEEN

Michael Frank Dodd & Olive Dodd

APPLICANT(S)

and

Judith Anne Walker

RESPONDENT(S)

Property Address: Pools Cottage Five Ways Road Hatton Warwick CV35 7HZ
Title Number: WK284022

Sitting at: Property Chamber
On: Tuesday 28 July 2015
Before: Principal Judge Elizabeth Cooke 

Applicant Representation:	Messrs William Graham Law Ltd Solicitors
Respondent Representation:	Messrs O'Gorman & Co Solicitors

DECISION

Introduction
1.	The applicants in this case are Mr and Mrs Dodd; the Respondent, Judith Walker, is their daughter. The case arises because some years ago Mr and Mrs Dodd registered a caution against dealings against Mrs Walker’s property, Pools Cottage in Hatton, Warwick. In 2013 Mrs Walker applied to HM Land Registry to remove it that caution. Mr and Mrs Dodd objected to her application, and the matter was referred to this Tribunal. Mr and Mrs Dodd were designated the Applicants because they have the burden of proving that they are entitled to have a caution against dealings.

2.	Today’s hearing was listed as a case management conference and possible disposal. It was attended by Mr McDaide for the Applicants. Walker Graham, the solicitors for the Respondent, wrote to the Tribunal on 8 June 2015 to say that they were without instructions. They were informed of the hearing date by letter from the Tribunal on 24 June 2015. They faxed a letter to the Tribunal on 27 July 2015, the day before the hearing, to confirm that they remained without instructions.

A hearing in the absence of the Respondent
3.	Rule 34 of the Tribunal Procedure (First-tier Tribunal) (Property Chamber) Rules 2013 says that if a party fails to attend a hearing the Tribunal may proceed with the hearing if it is satisfied that the party has been notified of the hearing or that reasonable steps have been taken to notify the party of the hearing, and if the Tribunal considers that it is in the interests of justice to proceed with the hearing.

4.	I am satisfied that reasonable steps have been taken to notify the Respondent of the date of the hearing, by informing Walker Graham who are on record as her solicitors, albeit that they have not been instructed to attend. I took the view at the hearing that it was in the interests of justice to proceed, particularly because the Applicants are elderly and infirm and are frightened of losing their home, and because the facts of the case as I am about to set them out – and as disclosed by of the Respondent’s own statement of case – mean that there can be no doubt about the Applicants’ entitlement to keep the caution against dealings on the title to Pool Cottage. 

5.	Accordingly today’s hearing proceeded in the Respondent’s absence. I heard Mr McDaide for the Respondents, and I gave my decision at the hearing. These are my written reasons.

The facts
6.	Pool Cottage is the Applicants’ home. They sold it to the Respondent in 1996. They say that they sold it an undervalue and that accordingly they have a beneficial interest in the property. 

7.	In 1998 the Respondent granted to the Applicants a tenancy of the property. It is a periodic tenancy expressed to continue, subject to the performance of the Landlord’s covenant for quiet enjoyment, “until the death of the survivor of those persons comprising the Tenant set out at the head of this Agreement or until the expiry of one month’s written notice by the Tenant to the Landlord to determine the same during the lifetime of them or either of them.”

8.	That tenancy agreement has been the subject of litigation between the parties. The Respondent has sued the Applicants for payment of insurance premiums, pursuant to the tenancy. On 21 January 2013 HHJ David Cooke in the Birmingham County Court gave judgment against Mr and Mrs Dodd. I have read the transcript of his judgment. For the purposes of the matter before this Tribunal the relevant points made in that judgment are:
a.	that the property was transferred to Mr and Mrs Dodd for less than its market value and that therefore they had an equitable interest in the property following the transfer (paragraph 18);
b.	that the 1998 tenancy was valid (paragraph23 – 25); and
c.	that it is possible that Mr and Mrs Dodd continue to hold both the equitable right and the rights under the tenancy agreement.

9.	That judgment was not appealed. Points 1 and 3 were not essential to the matter that the judge had decide (that is, in lawyers’ language, they were obiter), but point 2 was central to his decision and neither party can now seek to go behind that. 

The law: caution against dealings
10.	I turn now to section 54 of the Land Registration Act 1925, which sets out who may lodge a caution against dealings as follows:

Any person interested under any unregistered instrument, or interested as a judgment creditor, or otherwise howsoever, in any land or charge registered in the name of any other person, may lodge a caution with the registrar to the effect that no dealing with such land or charge on the part of the proprietor is to be registered until notice has been served upon the cautioner

Provided that a person whose estate, right, interest, or claim has been registered or protected by a notice or restriction shall not be entitled (except with the consent of the registrar) to lodge a caution in respect of such estate, right, interest, or claim…

11.	The Land registration Act 1925 has now been repealed, but paragraph 3 of Schedule 12 to the Land registration Act 2002 provides that a caution against dealings lodged under the 1925 Act continues to have effect.

12.	A caution against dealings is an administrative matter. It takes the form of a note on the register of title, and it prevents the registration of any dealing with the land until the cautioner has been notified of it (section 55 of the Land registration Act 1925). It does not protect the priority of an interest, nor does it guarantee the validity of an interest. But it gives the cautioner the protection of a warning that a dealing is about to happen. More importantly it warns a prospective purchaser that there is a matter to be cleared up, and a purchaser will require it to be cleared up before buying the property or taking a charge of it.

Decision
13.	It will be seen that the requirements of section 54 are minimal. All that Mr and Mrs Dodd need to show is that they are “interested” in the land, whether under an unregistered instrument (such as the tenancy agreement) or “otherwise howsoever”, for example as beneficial owners. 

14.	The Respondent’s own case is that the Applicants are her tenants. Accordingly they are interested in the property and they are entitled to the benefit, such as it is, of a caution against dealings. Accordingly I find that the Applicants have made out their case. I do not need to decide anything about the Applicants’ claim to an equitable interest, but I take the view that the findings of HHJ Cooke in the Birmingham County Court about an equitable interest are sufficient to give the Applicants an entitlement to a caution against dealings on that basis too.

15.	In her statement of case the Respondent says that on 22 January 2014 this Tribunal disposed of the Applicants’ objection to the removal of the caution without a hearing. That is not correct. The order made by this Tribunal on 22 January 2014 was gave the parties notice that the Tribunal proposed to deal with the matter without a hearing, subject to any representations that might be made by the parties by 5 February 2014. Representations were made by that date, and accordingly the matter continued until today’s hearing. Importantly, the order dated 22 January 2014 was made without sight of the transcript of the judgment of HHJ David Cooke and without much of the information that has since been given to the Tribunal.

16.	I direct the Registrar to reject the Respondent’s application to remove the caution against dealings currently noted on Pools Cottage, Five Ways Road, Hatton, Warwick,  title number WK284022.

17.	At the hearing Mr McDaide made an application for costs. In this Tribunal costs normally follow the event and I see no reason as things stand not to make an order that the Respondent pay the Applicants’ costs. However, I have not heard from the Respondent on this point and accordingly I order that unless within 28 days of the date of this order the Respondent files with the Tribunal, and sends to the Applicants’ solicitor, reasons why she should not pay the Applicants’ costs, she is to pay their costs. Those costs are to be summarily assessed on the Applicants’ solicitor sending to the Tribunal and to the Respondent a schedule of his costs within 56 days of the date of this order.

18.	If the Respondent does provide reasons why she should not be ordered to pay the Applicants’ costs, the Applicants have a further 14 days from the date of receipt of those representations to reply, and then the application for costs is to be determined by a judge on the papers.

Dated this Tuesday 28 July 2015

By Order of the Tribunal