Ministry of Housing and Local Government v Sharp

Ministry of Housing and Local Government v Sharp [1970] 2 QB 223, is an English tort law case concerning assumption of responsibility.

Facts
An employee of the authority failed to exercise reasonable skill and care in searching for entries in the local land charges register. The search certificate prepared by the clerk negligently failed to record a charge of £1,828 11s. 5d. in favour of the Ministry.

Judgment
Lord Denning MR held the local authority was liable to the Ministry for the employee's incompetence. At 268 he rejected that a duty of care only arose when there was a voluntary assumption of responsibility, rather "from the fact that the person making it knows, or ought to know, that others, being his neighbours in this regard, would act on the faith of the statement being accurate." Lord Denning MR's judgment ran on the law as follows.

The validity of the rules

The judge made much research into parallel Acts of Parliament. He analysed the sections which gave power to make rules as to the registration of charges as local land charges. He divided them into three classes: and decided that the present section 28 (5) gave the lowest power of all, viz., power only to regulate the manner of registration, and not the effect of it.

I find no help from this analysis of other Acts of Parliament. I go simply by this Act of 1954. If section 28 (5) is construed literally, it would justify the judge's view. But we do not now in this court stick to the letter of a statute. We go by its true intent. We fill in the gaps. We follow what I said in Seaford Court Estates Ltd v Asher [1949] 2 KB 481, 498-499. Looking at section 28 (5) quite broadly, I am of opinion that the words "in such manner" should be read as including "to such effect." They are only shorthand to bring in the entire rule-making power contained in section 15 (6) of the Land Charges Act 1925. If Parliament had intended it to be limited to particular subsections, such as section 15 (6) (a) or (c), it would have singled them out for special mention; whereas, instead, it left it quite general.

In my opinion, therefore, section 28 (5) on its true construction brings in the entire rule-making power contained in section 15 (6) of the Land Charges Act, 1925. It entitled the Lord Chancellor to incorporate section 17 (1) (2) and (3) of the Land Charges Act, 1925, and apply them to local land charges. I hold, therefore, that those sections are applicable in this case. In particular, section 17 (3) makes the certificate conclusive in favour of the purchasers. They are entitled to assume conclusively that the land was clear of any charge. They were not, and are not, liable to pay the Ministry's charge for £1,828 11s. 5d. The Ministry have, therefore, suffered damage. They will lose that sum unless they can recover it from the party who made the mistake.

The Liability of the Registrar

According to the rules, the "proper officer" to act as registrar, for the purpose of registering local land charges, is the clerk to the local council. But in this respect he does not act as a servant of the council. He acts as a public officer in his own right. His duties are prescribed by statute. It is he who is responsible for their due performance, not the council: see Stanbury v Exeter Corporation [1905] 2 KB 838. As local land registrar, he is in the self-same position as the Chief Land Registrar. Each is responsible for keeping a register of land charges. The one in the local registry. The other in the central registry. But each is governed by the same statutory provisions. Each has the same powers and is subject to the same obligations: see section 15 (3) of the Land Charges Act 1925. The only difference is that the local land registrar deals with local land charges: and the Chief Land Registrar deals with land charges generally. (Some difference was suggested because originally the local land registrar was only concerned with charges in favour of his own council. But that is quite insufficient to warrant any distinction between them.) They are both in the same position. I will, therefore, speak of the registrar, as meaning either of them.

The fundamental obligation of the registrar is to keep the register, and in return he receives the prescribed fees. He must enter in the register every charge which is duly submitted to him. He must allow any person to search the register: and, if asked, he must make an official search and issue an official certificate setting forth the result: see section 17 (1) and (2) of the Land Charges Act 1925.

The object of the register is to provide security for two classes of people, incumbrancers and purchasers.

(1) Incumbrancers. By requiring his charge to be entered on the register, an incumbrancer is entitled to regard it as safe, not only against the owner of the land, but also against any purchaser from him. If it is not entered on the register, he loses his charge: for it is then of no effect against a purchaser, even though the purchaser had full knowledge of it: see section 13 of the Land Charges Act 1925, and section 199 of the Law of Property Act 1925.

(2) Purchasers. By requiring a search, a purchaser is entitled to know exactly what charges incumber the land, and to adjust his price accordingly. If the registrar issues an official certificate, showing the land to be clear of any charge, that is conclusive in favour of the purchaser: see section 17 (3) of the Land Charges Act 1925.

Suppose, now, that a clerk in the registry makes a mistake. He omits to enter a charge: or wrongly gives a clear certificate: with the result that the incumbrancer loses the benefit of it. Who is to suffer for the mistake? Is the incumbrancer to bear the loss without any recourse against anyone? Surely not. The very object of the registration system is to secure him against loss. The system breaks down utterly if he is left to bear the loss himself.

Who, then, is to bear the loss? The negligent clerk can, of course, be made to bear it, if he can be found and is worth the money - which is unlikely. Apart from the clerk himself, there is only one person in law who can be made responsible. It is the registrar. He must answer for the mistakes of the clerk and make compensation for the loss. He is a public officer and comes within the settled principle of English law that, when an official duty is laid on a public officer, by statute or by common law, then he is personally responsible for seeing that the duty is carried out. He may, and often does, get a clerk or minor official, to do the duty for him, but, if so, he is answerable for the transgression of the subordinate: see Sanderson v Baker (1772) 3 Wils. 309, 317, where Blackstone J states the position of the sheriff. Sometimes it is an absolute duty, in which case he must see that it is performed absolutely: see the instances given by Holt CJ in Lane v Cotton (1701) 1 Ld.Raym. 646, 651. At other times it is only a duty to use due diligence, in which case he must see that due diligence is used: see the celebrated judgment of Best C.J. in Henly v Lyme Corpn (1828) 5 Bing 91, 107-109. But, in any event, if the duty is broken, and injury done thereby to one of the public, then the public officer is answerable. The injured person can sue him in the civil courts for compensation. It is not open to the public officer to say: "I get low fees and small pay. It is very hard to make me personally responsible." By law he is responsible. He will, of course, if he is wise, insure himself against his liability: or get the Government to stand behind him. But liable he is - to the person injured. Our English law does not allow a public officer to shelter behind a droit administratif.

It is, of course, open to Parliament to exempt a public officer from personal liability, as indeed it did exempt the registrar by section 131 of the Land Registration Act 1925, but in that case Parliament itself set up an insurance fund. It did not leave the injured person to suffer. In our present case, under the Land Charges Act 1925, Parliament has not exempted the registrar from liability. It has provided no insurance fund. So he is personally liable. Otherwise the injured person would be left without a remedy - which is unthinkable.

In support of this principle, I would cite two cases which actually dealt with the keepers of registers. In the old days it was the clerks of the courts who kept the registers. They were held liable for any mistakes made in the keeping of them. In Herbert v Pagett (1663) 1 Lev 64 the defendant was the keeper of the writs and records of the court. Someone tampered with one of the judgments in his custody - to the prejudice of the plaintiff. The keeper was not himself negligent but the court by a majority held him liable.

"By Mallett and Wyndham it was held that though here appeared no neglect or want of care in the defendant, yet he having taken upon him to keep the records, he is at his peril to answer for all the misusage that is in the records, and so is chargeable in the action. Twysden held the contrary, that he ought not to be chargeable, for that by no industry he could prevent it."

Even Twysden would have held him liable, if he had been negligent. In Douglass v Yallop (1759) 2 Burr. 722, the chief clerk of the court kept the roll on which judgments were entered up. Lord Mansfield held that it was his duty to see that the judgments were duly entered and he could not excuse himself by delegating it to others.

"Lord Mansfield intimated, that it very much concerned the chief clerk, to take care that judgment be actually entered up upon the roll in due time, and docketed: for that after he has received his fees for making such entry, he would be liable to an action upon the case, to be brought by the purchaser who should have become liable to it, and had searched the roll without finding it entered up."

After those cases there were several statutes which put upon the chief clerks of the courts the duty of keeping registers of judgments, is pendens, and so forth; but did not provide for mistakes. I have no doubt that, in case an entry was omitted, the chief clerk would be liable to compensate anyone who suffered by the mistake.

Official Searches

In those days, anyone (who might be affected by an entry in a register) had to make his own search, by himself or by his attorney. If he overlooked an entry, it was his own lookout. In 1882 Parliament made provision for official searches. These were to be made by the proper officer who kept the register. Section 2 (2) of the Conveyancing Act, 1882, said that, on requisition being made, "the proper officer shall diligently make the search required, and shall make and file in the office a certificate setting forth the result thereof" and it provided (3) that the certificate was conclusive in favour of a purchaser.

Suppose now that the proper officer delegated this duty to a clerk, as he usually would: and the clerk was careless and overlooked an entry; and gave a clear certificate wrongly. The purchaser would take clear of the charge: and the incumbrancer would have lost his charge. Would he have a remedy? Surely he would. The "proper officer" was under a statutory duty. He was under a duty to search diligently. That duty was broken: and he was answerable. The statute itself provided no remedy for the want of diligence. But a civil action was clearly imported on the well-known principles set out in Comyns' Digest (Com. Dig., 5th ed. (1822), Vol. 1, p. 442), exemplified in Dawson & Co v Bingley Urban District Council [1911] 2 KB 149 and restated in Cutler v Wandsworth Stadium Ltd [1949] AC 399, especially as, at that time in 1882, there was no remedy at common law for negligence in giving a certificate: see Le Lievre v Gould [1893] 1 QB 491, per Bowen LJ at p. 502. Unless there was an action for breach of statutory duty, the incumbrancer would be left without a remedy - which is unthinkable.

In 1925 when Parliament set up the land charges register, it repeated in substance section 2 of the Act of 1882, but, significantly enough, dropped the word "diligently." It said in section 17(2): "The registrar shall, thereupon, make the search required and shall issue a certificate setting forth the result thereof."

I should myself read that section, as the judge did, as imposing an absolute duty. The registrar is under a duty to make an effective search, i.e., a search which will discover any relevant entry in the register; and he is to issue a complete certificate, i.e., a certificate which sets forth every relevant entry. Nothing less will adequately protect the incumbrancer. If a mistake is made whereby the incumbrancer loses his charge, it is small comfort for the registrar to tell him: "None of our clerks was negligent - it was the computer which made the mistake"; or "Some stranger came in and sponged out the entry." If a mistake is made, whether by negligence or not, the loss should fall on the officer responsible: and not on the innocent incumbrancer.

Even if I am wrong, however, in thinking that section 17 (2) of the Act of 1925 imposes an absolute duty, still it must at least impose a duty to use due diligence, just as did section 2 of the Act of 1882. and that is enough for this case, and for most cases. The registrar is personally responsible for seeing that due diligence is used by all his subordinates in making the search. If there is any failure, whereby injury is done, he is liable to compensate the injured person.

Unless this remedy lies against the registrar, I do not think it lies against anyone else, save only against the clerk who made the mistake. The Crown cannot be sued for the mistakes in the Land Registry. The Crown Proceedings Act 1947, does not apply to "proceedings by or against the registrar of the Land Registry, or any officers of that registry": see section 23 (3) (f). Nor can the local council be sued for the mistakes in the local land registry. The local land registrar is their clerk, but he is not, in this respect, under their control. In keeping the register and issuing the certificates, he is not acting for the council. He is not carrying out their duties on their behalf. He is carrying out his own statutory duties on his own behalf. So he himself is responsible for breach of those duties and not the council: see Stanbury v Exeter Corporation [1905] 2 KB 838.

The Liability of the Clerk who made the Mistake

I have no doubt that the clerk is liable. He was under a duty at common law to use due care. That was a duty which he owed to any person - incumbrancer or purchaser - whom he knew, or ought to have known, might be injured if he made a mistake. The case comes four square within the principles which are stated in Candler v Crane, Christmas & Co [1951] 2 KB 164, 179-185, and which were approved by the House of Lords in Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

Mr. Hunter submitted to us, however, that the correct principle did not go to that length. He said that a duty to use due care (where there was no contract) only arose when there was a voluntary assumption of responsibility. I do not agree. He relied particularly on the words of Lord Reid in Hedley Byrne's case [1964] AC 465, 487, and of Lord Devlin at p. 529. I think they used those words because of the special circumstances of that case (where the bank disclaimed responsibility). But they did not in any way mean to limit the general principle.

In my opinion the duty to use due care in a statement arises, not from any voluntary assumption of responsibility, but from the fact that the person making it knows, or ought to know, that others, being his neighbours in this regard, would act on the faith of the statement being accurate. That is enough to bring the duty into being. It is owed, of course, to the person to whom the certificate is issued and whom he knows is going to act on it, see the judgment of Cardozo J. in Glanzer v. Shepard (1922) 233 N.Y. 236. But it also is owed to any person whom he knows, or ought to know, will be injuriously affected by a mistake, such as the incumbrancer here.