COMPENSATION FOR NON-REGISTRATION OR DEFECTIVE OFFICIAL SEARCH CERTIFICATE (Hansard, 30 October 1975)

§ Mr. Graham Page
I beg to move Amendment No. 15, in page 7, line 10, leave out 'as registered in it'.

Mr. Deputy Speaker
With this we may consider also Amendment No. 17, in page 7, line 11, at end insert 'as registered in that register'.

§ Mr. Graham Page
This is a drafting amendment. It deals with compensation for non-registration of a defective official 1927 register certificate. If an official certificate of search fails to show a local land charge which is in existence and is not registered, or even if it is in existence and is registered and the official certificate of search fails to show that there is such a charge, the purchaser is entitled to compensation if he has made losses through that very certificate.
The wording here speaks of a charge that was not shown by the official search certificate as registered in that register", in lines 5 and 6, and that seems to me grammatically absolutely right: but when one comes to lines 10 and 11, the words are turned round to read: was not shown as registered in it by the official search certificate", which reads as if the charge would be registered by the official search certificate, whereas, if one keeps to the words of the previous paragraph, allowing it to read: was not shown by the official search certificate as registered in that register", it complies with the previous paragraph and makes grammatical sense.

§ Mr. Arthur Davidson
I have news for the right hon. Gentleman. I need not speak at length, because I intend to accept both amendments.

§ Mr. Graham Page
I beg to move Amendment No. 18, in page 8, line 37, at end insert or by separate proceedings based upon fraud'.

Mr. Deputy Speaker
With this we may discuss Government Amendment No. 19, in page 8, line 37, at end add 'or on grounds of fraud'.

§ Mr. Page
This amendment arises because there is for a purchaser who has made a loss as a result of a charge not being registered which should be, or an official search certificate erroneously showing that there is no charge, an absolute right to compensation. The registering authority cannot, for example, say: "It was not entirely our fault, and we charge a joint tort feasor in the vendor, because he should have disclosed 1928 and was negligent in not disclosing this, and therefore we ask for a contribution from him".
The Bill is clear about it. It says in subsection (6): Where any compensation for loss under this section is paid by a registering authority, no part of the amount paid, or of any corresponding amount paid to that authority by the above, shall be recoverable by the registering authority or the originating authority from any other person except as provided by subsection (5) above or under a policy of insurance. So the registering authority, faced with a claim for compensation, would have no right to bring a third party into the proceedings and thereby clutter up the proceedings against the authority by the person entitled to compensation.
In Committee, we asked what would happen if there were fraud and not just mere negligence in disclosing. Was the local authority to be prevented from taking its proper right of action against those who had been fraudulent? For example, suppose that Mr. X is selling property to Mr. Y which is subject to an improvement line which should be registered as a charge and which makes the property much less valuable for development purposes. Let us further suppose that the lady clerk employed by the registrar of local land charges is Mr. X's girl friend, and, in collusion, they plot to have any mention of the improvement line removed from the official certificate of search.
Surely, in those circumstances of a fraud between the vendor and someone employed by the registering authority, although the purchaser is protected and the clause to that extent is beneficial to a purchaser or, as the case may be, a mortgagee, the provision goes too far in penalising the registering authority by preventing it from taking action where fraud arises.
I am delighted to see that our arguments in Committee prevailed on the Government and that Amendment No. 19 recognises the principle that I have been arguing. Of course, I prefer my own amendment, because No. 19 excludes the bringing in of the fraudulent person as a third party in the action; it would make it necessary for the registering authority to take separate action. But I shall not carp about that. The principle has been accepted. If the Minister can satisfy me that there is no real difference between 1929 the wording of the two amendments, I shall readily accept No. 19.

§ Mr. Arthur Davidson
I assure the right hon. Gentleman that there is no real difficulty. The wording is slightly different, but the purpose is the same. Although the right hon. Gentleman no doubt prefers his amendment, I am instructed that mine is better. In those circumstances, perhaps he will ask leave to withdraw the amendment.

§ Mr. Graham Page
I beg to ask leave to withdraw the amendment.