In the case of Bhatia v Purkiss & Anor [2025] EWHC 359 (Ch) Deputy Master Scher refused a claim to rectify a declaration of trust contained in a standard TR1 Land Registry form on the basis it was allegedly ticked to say the owners held the property on trust for themselves as beneficial joint tenants by mistake.
The claim was brought by Mrs Suman Bhatia, one of the co-owners of the property against the liquidator of a company that was owed £3.4 million by the other co-owner, her son, Deepak Bhatia. The liquidator had obtained a charging order over Deepak’s interest and was seeking to sell the house.
It was said by the Claimant, not uncommonly, that Deepak was only on the register to assist with Suman obtaining a mortgage, but that it was actually agreed between them that Suman would own 100% of the beneficial interest in the property, so there should be nothing for the liquidator. The existence of a signed TR1 saying otherwise was explained as being a mistake, and that the TR1 was completed by the solicitor acting in the transfer, without instructions.
Deputy Master Scher set out the test for a claim to rectify a document based on a common mistake, and specifically addressed the extent to which the leading authority of FSHC v GLAS Trust Corp Ltd[2020] Ch 365 applies in a family context such as this.
the mere fact that the mistake was allegedly made in a family context does not affect the substance of the legal test which I must apply. In assessing whether Suman has provided sufficiently convincing proof of the alleged outward expression of accord, I will take into account all the relevant circumstances, including various aspects of this particular family's arrangements and relationships. However, I am bound by authority to hold that rectification, even in the family context, requires "convincing proof to displace the natural presumption that the written contract is an accurate record of what the parties agreed".
The court however was far convinced by the witnesses put forward by the Claimant and found that there had not been any such agreement or mistake and refused the application to rectify.
Interestingly nothing was made of the fact it was held that the declaration of trust on the TR1 was completed, by the solicitor on the instruction of the co-owners but only after it had been signed and so a potential breach of s53(b) of the Law of Property Act 1925. The Deputy Master did however refer to the presumption that would apply in the absence of an express agreement in that the beneficial interests would be the same as the legal ownership (and so as joint tenants) as explained in Jones v Kernott and Stack v Dowden, and that the ticked box on the TR1 matched this, so there would be little in that.
In conclusion, this case stands as a good example of how hard it will be to get around a written declaration of trust contained within a TR1 signed at the time of purchase as to how property is held by co-owners, and that obtaining strong advice at the outset of pursuing such an argument is essential.
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