Borrowers granted the lender a mortgage over their property in respect of a loan given in 2004. In 2005, the lender agreed to consolidate various loans under one loan agreement and the 2004 loan was redeemed. However, the mortgage continued as it secured ‘all monies’ due and remained registered at the Land Registry.
In 2014, the borrowers’ solicitors wrote to the lender asking for the mortgage to be discharged as the 2004 loan had been redeemed. No mention was made of the 2005 loan and the lender’s employee did not pick it up from the lender’s system and filed a form at the Land Registry discharging the mortgage.
The lender subsequently discovered the mistake and registered a unilateral notice against the property’s title. The borrowers issued proceedings asking for the notice to be removed to enable a sale. The lender issued its own proceedings for rescission of the discharge form and rectification of the register.
High Court decision
The Judge at first instance found that the 2004 mortgage clearly secured the 2005 loan and granted an order to rectify the register, as the discharge form had been mistakenly actioned. The borrowers were granted leave to appeal the finding of mistake and contended that the mistake was the lender’s and it should be bound by it.
Court of Appeal decision
The Court of Appeal agreed that the mistake was not the Land Registry’s; it had correctly actioned the request to remove the charge from the register.
The Court found that NRAM was entitled to be re-registered as the proprietor of the 2004 charge and that the Land Registry records could properly be updated to reflect this.