Banking & Mortgages

03 Jul 2015

In the case of NRAM plc v Evans and another (2015), the High Court was asked to consider whether an electronic discharge of a legal charge should be set aside and for the register to be rectified to reinstate the legal charge.

An e-DS1 is form of discharge electronically submitted to the Land Registry by lenders.   In this case, the borrowers had taken out a loan from a lender in 2004 which was secured by way of a legal charge.  In 2005, the borrowers moved their borrowings into one mortgage product so the 2004 loan was redeemed.  The lender did not discharge the 2004 legal charge as it was an all monies charge and so secured the 2005 borrowings.  In 2014, the borrower's solicitor wrote to the lender referring to the 2004 loan and requested that it was removed from the property register as it had been redeemed in 2005.  The lender duly submitted an e-DS1 as it's computer system did not reveal the 2005 loan.  After it discovered its mistake, the lender wrote to the borrower's solicitor confirming that the e-DS1 should not have been issued.

The High Court held that it would be unconscionable not to correct the mistake in the circumstances and the register should be rectified to reinstate the lender as proprietor of the 2004 charge.