The Court of Appeal held that the registration of a voidable disposition was not a mistake within the meaning of schedule 4 of the Land Registration Act 2002. There is a distinction between the consequences of the recording of void and merely voidable transactions in the register.
The Court concluded that the question of whether the entry was a mistake should be determined according to the position at the point in time where the entry or deletion was made. Where a disposition was not void, but merely voidable and until such a disposition was rescinded, the register would remain accurate. This was contrasted with a void disposition, where the registration would never have been made had the registrar been aware of the full facts.
After a voidable disposition had been rescinded, the registrar could amend the register in order to bring it up to date. No compensation would be payable as ‘rectification’ was not necessary or applicable.
The Judge at first instance had erred in confusing an error by the mortgagee - who had mistakenly requested that their change be removed from the register and later, having realised its mistake sought to rectify the register – with a ‘mistake’ within the meaning of schedule 4, which is where the register does not reflect the true position. The ‘disposition’ made by the bank error was merely voidable as it was made due to a mistaken belief on their part, rather than being void ab-initio. The consequence for the mortgagee was that the register could not be reset to the position before their mistake, so the charge, when re-registered had lost its priority.