Walker Morris

Court of Appeal considers the detail required for unilateral notices

On 23 January 2014, the Court of Appeal accepted the arguments of Walker Morris’s client, Bank of Scotland, in the first reported case to analyse the proper content of and protection provided by a unilateral notice registered in the charges register to a property.

On 10 March 2005, Mr S bought a flat on a long lease from a development company. On the same day, Mr S assigned the lease to Ms J, but her title was not registered until much later. She purchased the property with the benefit of a mortgage provided by the bank, which took a charge over the property, also dated 10 March. Mr S used the mortgage monies to pay for his purchase of the property from the development company. The bank was, therefore, subrogated to the developer’s unpaid vendor’s lien. On the same day, Mr S purportedly granted a company, Wingfield Financial Heritage, another charge over the property intended to secure a personal guarantee for another individual.

The completion solicitors failed to register Ms J as proprietor or the bank’s mortgage at the Land Registry. Accordingly, on 4 July 2006, the bank registered a unilateral notice against the charges register to the property. It read: ‘in respect of a mortgage dated 10 March 2005 in favour of Bank of Scotland’. The bank was, however, able to register its charge in February 2011 when Ms J was registered as proprietor of the property. Prior to that, however, in April 2010, Wingfield registered its charge against the property…

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