[2023] UKUT 284 (LC)

The respondents to this appeal are the victims of a fraud perpetrated on them in 2014 and 2015. They invested money in a property development scheme on the understanding that their investment would be secured by a legal charge but before the charge was registered the owner of the property in question contracted with the appellants for them to purchase parts of it. When they realised that their investment was not protected, the respondents tried to enter a restriction to prevent the disposition of the property. The issue in this appeal is whether they were entitled to such a restriction.

The appeal is against an order of the First-tier Tribunal (Property Chamber) (Principal Judge Michell) (the FTT) dated 17 February 2023. The FTT directed the Chief Land Registrar to give effect to an application made on 23 December 2014 by the respondents, Ms Senada Ziga on behalf of Sensa Ltd and Dr Adil Razoq on behalf of Azdar Ltd, to enter a restriction on the registered titles of two parcels of land at Platt Bridge in Wigan. The application had been the subject of objections by the appellants, Mr Yarnold and Mr Broadbent, Mr and Mrs Owen, and Mr and Mrs Lyon, but these were overruled by the FTT.

The application to enter a restriction was made under section 42(1)(a), Land Registration Act 2002, on the basis that it was necessary or desirable to prevent unlawfulness in relation to the disposition of the registered estates. The FTT was satisfied that so called “joint venture agreements” between the respondents and the registered proprietor of the land, Newbury Venture Capital Ltd, contained an implied term that the land was not to be sold without the respondents’ consent until legal charges had been executed to secure money advanced by them to fund its development. By the time the appellant couples each contracted to purchase one of the newly constructed houses on the land no legal charges had yet been executed. The FTT was satisfied that dispositions of the houses to the appellants would involve unlawfulness because they would breach the implied term it found in the joint venture agreements.

The FTT refused permission to appeal its order, but permission was granted by this Tribunal on 5 May 2023. At the hearing of the appeal the appellants were represented by Mr Booth and the respondents by Dr Razoq, both of whom had appeared before the FTT. I am grateful to them for their submissions.