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Stuff to Remember
1. LRA 2002
Section 58: Conclusiveness of register Schedule 4: Provisions on the alteration of the register Schedule 4, Para 1: Rectification: 1) Mistake; 2) Prejudicially affecting the title of the RP Schedule 4, Para 2: Grounds for altering the register:
- Correcting a mistake;
- Bringing register up to date;
- Giving effect to estate/right/interest that was excepted from effect of registration *
- Removing superfluous entry
A's right to alter register against B's right might override disposition to C: Malory Enterprises v Cheshire Homes - after forgery, original RP retains beneficial interest, had rights to receive rents + future sale proceeds; new RP only has legal title
Schedule 8, Para 1: Indemnity only granted if there was:
- Rectification
- Rectification prejudicially affected title of RP
The principle of the conclusiveness of the register has been confirmed by the Court of Appeal in Swift 1st v Chief Land Registrar (2015), overruling the earlier difficult decisions in Malory Enterprises Ltd v. Cheshire Homes and Chief Land Registrar (2002) and Fitzwilliam v Richall Holdings (2012). In Swift 1st , the lender (Swift) had properly registered a mortgage (a registered charge) but the consent of the land owner had been forged. Without principles of land registration, the mortgage would have been totally invalid and Swift’s mortgage would be worthless – because it was forged. However, s.58 operated to ensure that the charge was valid and so Swift were entitled to compensation (an “indemnity”) from the Registry when the charge was removed from the register (the forgery was not their fault).
Fitzwilliam v Richall Holdings : Fitzwillaim’s land had been fraudulently transferred to Richall Holdings Services as a result of a forged power of attorney. Could Fitzwilliam have the register corrected? Yes. Although the court (High Court) was bound by Malory Enterprises v Cheshire Homes [2002] (Court of Appeal), it criticised the outcome as a backwards steps in ensuring the certainty of the land register.
Walker v Burton : The parties had bitterly disputed the Lordship of the Manor of Ireby. The defendants had purchased the former Hall, and had been registered as proprietors of the Lordship. The claimants having succeeded before the Land Registry adjudicator, they now appealed against an order for costs which substantially reduced the sums they could claim. Held: The appeal succeeded.
Gold Harp Properties v Macleod : The company appealed against an order re-instating to the register leases which the company said it had forfeited for non-payment of rent. After the forfeiture, the landlord had granted new leases. It appealed saying that exceptional circumstances existed to justify the non-rectification, and that the judge had erred in giving the revived leases priority.
Held: The appeal failed. The Court (and the Registrar) had the power to remove from the Register a derivative interest created by a person who at the material time was, albeit as the result of a mistake, the registered proprietor, and in that sense – without prejudice to whether this is a relevant sense – to make a ‘retrospective’ order.
Baxter v Mannion : A land owner who, due to illness, failed to respond to a trespasser's claim under the provisions contained in the Land Registration Act 2002 within the requisite time period, and thus lost his registered title, was able to have the land re-registered in his name after it was found that the trespasser had not been in adverse possession for a period of ten years ending on the date of the application. Issue of Adverse possession.
- Distinction between Proprietary and Personal Rights
Proprietary rights
- Owner has these rights
- They are enforceable against 3rd party in rem (owner can take action as has property in thing itself)
- Non-owners of land can have proprietary rights in it
- No need to settle for damages
Piece of land may be subject to a hierarchy of possessions, whether leasehold or freehold. Holder does not own the land but possession in the land subject to lesser rights he has granted
Personal rights
- Not rights in property itself
- Enforceable only in personam, against person that granted the rights, the grantor
- Never enforceable against a 3rd party
Lease vs. License : A lease is a form of ownership of land, however, unlike freehold ownership which lasts forever, leasehold ownership lasts for a specified period of time. A lease may take the form of a legal estate (s1(1)(b) Law of Property Act 1925) or it may be an equitable interest depending on the formality used to create it. It is important to distinguish a lease from a licence. If a person occupies under a lease they have more protection than one who occupies under a licence. Leases created prior to January 1989 are protected by the Rent Act 1977 which provides tenants some protection from eviction and also provides that tenants are only obliged to pay a fair rent which may be less than market value. Tenancies created after January 1989 have less protection under the Housing Act 1988. Licensees, however, have limited protection, in many instances they may be evicted at will or in the event of a contractual licence the term of notice provided in the contract. Licensees have no interest (legal or equitable) in the land.
Easement vs. License : By definition, an easement is an interest in land that lasts either indefinitely or for some specified period of time. A license, on the other hand, is permission to use land that can be revoked at any time.
Because both easements and licenses involve the use of another person’s land, they can look similar. If the parties’ agreement doesn’t clearly specify whether the landowner can revoke
registered land, it may be considered as a form of overriding interest and, as such, can be protected by registering a caution or notice. Also called a 'licence coupled with an equity
Formalities : A register operated for the county of Middlesex (excluding the City of London) since 1709. but the first national system of land registration was first attempted in England and Wales under the Land Registration Act 1862. This voluntary national system proved ineffective and, following further attempts in 1875 and 1897, the present system was brought into force by the Land Registration Act 1925. It is operated by the HM Land Registry. Over time various areas of the country were designated areas of compulsory registration by order so in different parts of the country compulsory registration has been around longer than in others. The last order was made in 1990, so now virtually all transactions in land result in compulsory registration. One difference is land changing ownership after death, where land is gifted rather than sold; these became compulsorily registrable only in April 1998. Similarly it became compulsory to register land when a mortgage is created on it in 1998.
The Land Registration Act 2002 leaves the 1925 system substantially in place but enables the future compulsory introduction of electronic conveyancing using electronic signatures to transfer and register property. The Land Registry is connected to the European Land Information Service EULIS. Details of registrations are available to any person upon payment of the prescribed fees. Precautionary measures have been introduced in recent years to verify the identity of persons attempting to change records of title. No details will be on record for any land which has not had a relevant transaction recorded as will often occur if, for example, ownership was last transferred before the introduction of compulsory registration in a particular area.
Tulk v Moxhay : Tulk sold a plot of land at Leicester Square to a purchaser, who covenanted not to build on the Square (restrictive covenant). Moxhay, after several transfers, became the rightful owner of the land sold by Tulk. Moxhay refused to comply with the restrictive covenant, even though he knew of its existence when he purchased the land. Could Tulk obtain an injunction to prevent Moxhay from building on the square? Yes, as where a purchaser has actual notice of a restrictive covenant, he will be bound by it. Note: this requirement has now been replaced with a requirement of registration for covenants created after 1925. Unregistered land – record as a class d(ii) land charge under the Land Charges Act 1972. Registered land – record as a notice on the charges register of the burdened land.
Manchester Airport plc v Dutton : A second runway was being built and trees had to go on National Trust land. The National Trust gave Manchester Airport plc authority to let subcontractors enter. Mr Dutton and environmental protestors tried to stop the work in protest, and occupied the land. Manchester Airport plc had not put any people on site yet, but still claimed an injunction under Order 113 of the Rules of the Supreme Court for their removal.
Judgment
Laws LJ held that although Manchester Airport could remove the protestors, ejectment under old law could only be claimed by someone with title or an estate in land. Also, the Airport
was not in occupation, and did not have title, but the court could grant possession to a licensee as part of its power to give relief as a way to give effect to the licensee's right of occupation.
Kennedy LJ concurred.
Chadwick LJ dissented. ‘In the latter case (which is this case) the plaintiff must succeed by the strength of his title, not on the weakness (or lack) of any title in the defendant.’
Gave rights to licensees.
3. Proprietary Estoppel
Proprietary estoppel is a legal claim, especially connected to English land law, which may arise in relation to rights to use the property of the owner, and may even be effective in connection with disputed transfers of ownership. Proprietary estoppel transfers rights if,
- someone is given a clear assurance that they will acquire a right over property,
- they reasonably rely on the assurance, and,
- they act substantially to their detriment on the strength of the assurance
- (^) it would be unconscionable to go back on the assurance
If these elements of assurance, reliance and detriment, and unconscionability are present, the usual remedy will be that the property will be transferred to the claimant, if the court views the reliance to warrant a claim in all the circumstances.
Acquisition of Rights : Proprietary estoppel is one of four principal mechanisms to acquire rights over property, seen particularly in the case of land (the others being a contract, an implied trust, and adverse possession). Unlike a contract or gift, which depend on consent, or resulting and constructive trusts that depend primarily on the fact of contribution, a proprietary estoppel arises when a person has been given a clear assurance, it was reasonable of them to rely on the assurance, and they have acted to their detriment. This threefold pattern of proprietary estoppel (clear assurance, reasonable reliance and substantial detriment) makes it consistent with its partner in the law of obligations, "promissory estoppel".
Although English law has not yet recognised promissory estoppel as giving rise to a cause of action, (as has been done under the American Restatement (Second) of Contracts §90 and by the Australian High Court in Waltons Stores (Interstate) Ltd v Maher ) in Cobbe v Yeoman's Row Management Ltd Lord Scott remarked that proprietary estoppel should be seen as a sub- species of promissory estoppel. In all cases it allows people who act on others' assurances about legal rights, even without them attaining express agreement. For example, in Crabb v Arun DC a farmer acquired the right to a path over the council's land, because they had assured him that if he sold off one portion an access point would remain. In all cases, the minimum pattern of an assurance, reliance and some form of detriment is present.
Reliance : Proprietary estoppel case law has, however, divided on the question of what kind of assurance and what kind of reliance must be present. In Cobbe v Yeoman's Row Management Ltd , a property developer claimed an interest in a group of Knightsbridge flats after his expense in obtaining council planning permission. Mr Cobbe had made an oral agreement with the flat owner, Mrs Lisle-Mainwaring, to get the flats at £12m, but once permission was obtained, the owner broke her oral promise. Even so, in the House of Lords Mr Cobbe failed in his claim for anything more than the expense (£150,000) of getting the planning, because in this commercial context it was clear that formal deeds were needed for completion of any deal. By contrast, in Thorner v Major , David (a second cousin) worked on
The House of Lords was unanimous in allowing A's appeal, and finding that B had no proprietary estoppel claim. Given the rejection of B's proprietary estoppel claim, the House of Lords had to consider B's other claims. It was also held that no constructive trust had arisen; and that A's enrichment at B's expense did not include the increase in value of A's land caused by the grant of planning permission. the decision that B had no proprietary estoppels claim might have been reached relatively easily by applying the pre-existing test for proprietary estoppel. On the facts, it could perhaps have been said that A had not made the necessary commitment that B had, or would get, a right in relation to A's land. Such a commitment could not be spelled out from the parties' oral agreement, even when coupled with A's encouragement of B. After all, B was an experienced businessman and knew that further negotiations had to be completed before any legally binding agreement could be concluded. Lord Hoffmann and Lord Brown each agreed with Lord Scott; Lord Mance also agreed with Lord Scott's analysis of proprietary estoppel.
Lord Scott's approach was based on seeing proprietary estoppel as a form of evidential estoppel and therefore as depending on A's being prevented from denying a matter of fact or of law. On this view, B's claim could not succeed as he could not identify a matter of fact or law that A was prevented from denying. For example, B could not show that A had told him that B already had a right in A's land; B could only argue that A had made a commitment to act in a particular way in the future.
The House of Lords has recently handed down its judgment in Thorner v Majors and others [2009] UKHL 18; The Times, 26 March 2009. The case concerns the doctrine of proprietary estoppel and will henceforth be the leading case on the application of that doctrine in the non-commercial context.
It is to be contrasted with the House of Lords' decision in Cobbe v. Yeomans Row Management Ltd [2008] 1 WLR 1752 which concerns the application of proprietary estoppel in a commercial context.
The case of Thorner v. Major was concerned with whether the Claimant could rely on proprietary estoppel against the estate of the deceased, who had died intestate, based on an assurance given by the deceased to the claimant that he would inherit the deceased's farm. The House of Lords was unanimous in allowing B's appeal. Lord Hoffmann, Lord Walker, Lord Rodger and Lord Neuberger found that A had made the necessary commitment to B and that B did therefore have a proprietary estoppel claim. Lord Scott was content to concur, but preferred to find that A's duty to B arose under a remedial constructive trust. The decision of the first instance judge was re-instated, and A's estate was thus under a duty to transfer the farm to B. Thorner gave the House of Lords the chance to consider, and perhaps to re- consider, its decision in Yeoman's Row. Lord Scott essentially stuck to his position in the earlier case, weakening it only slightly to allow proprietary estoppel to operate where B believes that he has, or will very shortly acquire, a right in A's land. On this view, in Thorner , B had no proprietary estoppel claim. Instead, according to Lord Scott, B could be protected by means of a remedial constructive trust, attaching to A's farm The primary significance of Thorner v. Major lies in the House of Lords' affirmation of “the beneficial principle of proprietary estoppel” and the confirmation that that principle has not been emasculated by the decision in Yeoman's Row v. Cobbe.
It is also clear, following Thorner v. Major , that testamentary proprietary estoppel has survived Yeoman's Row, as has the established body of law in relation to proprietary estoppel more generally.
However, the decision in Yeoman's Row remains important where the relationship between the parties is commercial and the person raising the estoppel is an experienced businessman.
In such circumstances the Court will generally expect the parties to enter into a contract and will be unsympathetic to attempts to rely on estoppel.
A comparison of Cobbe and Thorner reveals a sharp dividing line between the application of proprietary estoppel in the commercial and non-commercial contexts. In the former, it will generally be difficult for a claimant to succeed because the court's emphasis is likely to be on the need for certainty in commercial dealings. The arrangements between the parties are more likely to be reduced to writing, and so there is less scope for relying upon assurances arising out of indirect statements and conduct. Moreover, as Cobbe demonstrates, it is not generally reasonable for a businessman to rely upon an agreement which he appreciates is not legally binding.
In contrast, a proprietary estoppel claim in a non-commercial context will generally be easier to establish. The court in that context is more likely to emphasise the need for fairness. Whether an oral representation is sufficiently clear will depend upon the context in which it is given, but Thorner suggests that the court is likely to take a fairly generous approach. It is also likely to be easier to argue that a claimant who does not have commercial experience was reasonable in relying on an assurance.
4. Implied Trusts
Where there is no express trust, for example where the trust was created by a constructive or resulting trust or the parties simply failed to state the extent of their ownership on conveyance, the law will imply or presume beneficial entitlement from their conduct.
Where the land was conveyed into the names of more than one person and no express declaration as to how ownership is divided, the law raises a presumption of joint tenancy.
Stack v Dowden : Ms Dowden and Mr Stack were co-habitees. They purchased a house in their joint names but made no declaration as to entitlement of the beneficial interest in the property. The purchase price of £190,00 came from £129,000 of MS Dowden’s savings and sale of her previous property. The remainder came from an interest only mortgage and two separate endowment policies. Mr Stack paid the mortgage instalments totalling £27,000, Ms Dowden paid £38,000. Ms Dowden paid the majority of the utility bills. They had separate bank accounts and made separate investments. The parties then separated and Mr Stack brought an action for sale of the property and distribution of the proceeds in equal shares.
Held: The starting point for determining beneficial interests where the legal title was held jointly is that beneficial interest will also be held jointly. This presumption may be displaced where there is evidence that this was not their intention.
Baroness Hale: “In the cohabitation context, mercenary considerations may be more to the fore than they would be in marriage, but it should not be assumed that they always take pride of place over natural love and affection. At the end of the day, having taken all this into account, cases in which the joint legal owners are to be taken to have intended that their beneficial interests should be different from their legal interests will be very unusual.”
“This is, therefore, a very unusual case. There cannot be many unmarried couples who have lived together for as long as this, who have had four children together, and whose affairs have been kept as rigidly separate as this couple's affairs were kept. This is all strongly indicative that they did not intend their shares, even in the property which was put into both their names, to be equal (still less that they intended a beneficial joint tenancy with the right of survivorship should one of them die before it was severed.) Before the Court of Appeal, Ms Dowden contended for a 65% share and in my view she has made good her case for that.”
(5) Each case will turn on its own facts. Financial contributions are relevant but there are many other factors which may enable the court to decide what shares were either intended (as in case (3)) or fair (as in case (4)).’
5. Easements
Easements in English law are rights within English land law that one individual has over another's land. Rights recognised as easements most frequently include rights of way or light, and extend as far as the right to use a neighbour's lavatory, or to park a car on their land.
The necessity of easements can be recognised by the Law Commission's recent findings that there are easements over at least 65% of registered freehold titles. In some circumstances for example, it may be impossible for one land owner to access a public highway without an easement of a right of way. The creation of easements is usually done expressly by deed, but easements may be implied where they are necessary, or would be reasonably expected to be held by a land owner, an approach which is not altogether uncontroversial, and has been the subject of recent reform proposals.
Characteristics : Whilst an easement is essentially a right over another's land, any right claimed as an easement must satisfy the common law definition, outlined in the case of Re Ellenborough Park. Here, Danckwerts J laid out essential characteristics of an easement:
- There must be a dominant and a servient tenement;
- The easement must accommodate the dominant tenement, that is, be connected with its enjoyment and for its benefit; 3.The dominant and servient owners must be different persons;
- The right claimed must be capable of forming the subject-matter of a grant.
The first requirement – that there must be two distinct plots of land affected – is central to the definition of an easement. A right of way granted to an individual is granted in their capacity as a land owner; if a right of way is granted to an individual who is not a land owner, it is merely a license.
Next, it must be shown that the right is connected with the enjoyment of the dominant tenement in some way. It is important to this end that the right must benefit an individual in their capacity as a land owner, and not merely form a personal right. For example, it has been judicially stated that a right of way over a plot of land in Northumberland to an estate in Kent would not form the requisite benefit, the proximity of the two pieces of land being too remote. It was recognised in Re Ellenborough Park however that an easement need not be over an adjacent property, though there must clearly be some reasonable connection in which the dominant tenement can be benefitted.
An easement can not be recognised where it the dominant and servient tenement are under common ownership. However, rights may be recognised as 'quasi-easements', which can then be implied as full easements upon the conveyance of the land in question.
The most problematic characteristic of an easement is that it must be capable of forming a grant by deed. The right must therefore be certain and definite in its purpose, and more importantly, that the courts are willing to recognise it as a right capable of being an easement.
Many claimed rights fail this last criterion, for example, rights which require positive action by the owner of a servient tenement are unlikely to be granted, as are negative rights, which restrict the use of land. Rights which are excessive in nature are equally unlikely to be upheld. In Copeland v Greenhalf a claim to store unlimited vehicles on a neighbour's land failed, with the interference and right claimed being too great to be allowed as an easement.
Creation of Easements :
Express grant: Section 1(2) of the Law of Property Act 1925 states that easements are an interest capable of being legal, with S52 of the 1925 Act stating that all conveyances will be void unless created by deed. Therefore, for an express legal easement to be formed rather than simply equitable it must have been created by deed. A legal easement must be registered against both the dominant and servient tenements, if their titles are registered, in order to take effect. The benefit of legal easements pass automatically on the transfer of the dominant tenement or part of the dominant tenement.
Implied easement: Easements may also arise by implication where a vendor sells one plot of land but retains another neighbouring plot. Easements may arise in favour of the retained plot (reservation) or the sold plot (grant). Because a presumption operates that a vendor will have had ample opportunity to insert into the documents of sale a clause in his favour, the scope of implied reservation is much smaller than that of implied grant. Where the vendor sells two neighbouring plots (as determined by time of contract, not of conveyance) both plots will fall under the rules of implied grant with regard to the other. Two plots sold at the same auction will fall under provision, for example, but a period of a month between contracts is too long. Implied easements act at law, not in equity, because the effect is the same as if the provision had been express. Any requirement of registration would clearly be incompatible with the concept of an implied easement, so none is applied.
Implied grant: There are several circumstances where the grant of an easement may be implied, usually occurring on the conveyance of land. Where land is transferred, subject to contrary intention, existing easements are automatically conveyed under Section 62 of the Law of Property Act 1925. Additionally – and controversially in some cases – 'precarious' rights, such as licenses or personal rights may be transformed into legal easements, as demonstrated in International Tea Stores Co v Hobbs. In this case a right of way granted as a license by a land owner was transformed into an easement, following the conveyance of land into a legal estate. A limitation of Section 62 is that it does not act to imply reservation easements; for example, a land owner in common ownership of two plots of land could not claim that, after selling one plot, his remaining plot should have an easement for right of light implied. Other circumstances where easements may be implied are where they are necessary for the enjoyment of land.
Implied reservation: For reserved easements to be implied, they must be necessary either for the use of the land in general or for the use which the parties together intend the land to be put.
The first of these categories covers those cases where the land would be landlocked but for the proposed easement, but seems to extend no further than that. It has long been the case that
Three requirements for the rule:
- Right must be continuous and apparent, i.e. visible on inspection and neither transitory not intermittent (doesn't have to be 24/7) ...worn tracks etc.
- Must be necessary to the reasonable enjoyment of the land, i.e. contributes to the enjoyment of the property for which it was transferred, in the case of Wheeldon an extra right of was deemed not necessary to the reasonable enjoyment of the land, may be different if the right of way sought was much more convenient.
- Must be used at the time of the grant by the previous owner for the benefit of the part granted.
Section 62, LPA 1925 : - You take an easement with a plot of land. A conveyance includes all "privileges, easements, rights and advantages appertaining to or enjoyed with the land"
- Converts a licence into an easement
- Can be excluded (s 62(4)) Limitations: Requires prior diversity of occupation of dominant and servient land. ( Sovmots Investments Limited v SOS Environment ). However no prior diversity is required if the right was continuous and apparent. ( P & S Platt Limited v Crouch ) Only applies to grants not reservations or contracts. Licence still need to meet the Re: Ellenborough Park criteria.
Looking at both Wheeldon v Burrows & S 62:
- Wheeldon v Burrows applies where owner/occupier subdivides land.
- S.62 applies where there is prior diversity of occupation, unless Platt v Crouch applies.
- Only Wheeldon v Burrows applies to contracts.
- Both only apply to grants. They don't apply to reservations. 6. Beneficial Interests
A beneficial interest is "that right which a person has in a contract made with another" (third) person. The typical example is "if A makes a contract with B that A will pay C a certain sum of money, B has the legal interest in the contract, and C the beneficial interest."
More generally, a beneficial interest is any "interest of value, worth, or use in property one does not own," for example, "the interest that a beneficiary of a trust has in the trust." More specifically, it could be:
- "A property interest that inures solely to the benefit of the owner," or
- Property that "remains of an estate after the payment of debts and the expenses of administration", or
- The right of a person having a power of appointment to appoint himself."
Black's Law Dictionary defines beneficial interest as "Profit, benefit or advantage resulting from a contract, or the ownership of an estate as distinct from the legal ownership or control." Examples of beneficial interests in mining claims include unrecorded deeds and agreements to share profits, but not mortgages and other liens. A beneficial interest is also "distinguished from the rights of someone like a trustee or official who has responsibility to perform and/or title to the assets but does not share in the benefits."
An interest in the economic benefit of property. The ownership of land in England and Wales is dealt with in two ways: the legal ownership and the economic benefit, which is also commonly referred to as the beneficial ownership. The legal ownership is separate from the beneficial ownership and the legal owner or owners will not necessarily be the same as the beneficial owner or owners. The legal owner is said to hold the beneficial interest in the property on trust for the beneficial owner. The beneficial owner of the land will have a right to the income from the property or a share in it, and a right to the proceeds of sale of the property or part of the proceeds. A beneficial interest in property is an equitable interest.
Overreaching - Overreaching is a mechanism aimed at achieving conveyancing efficiency with minimal regard to protecting interests held in land. Overreaching applies where there exists a trust of land in both registered and unregistered land. Overreaching is the process by which the rights of beneficiaries under a trust of land, become detached from land on conveyance and attach to the proceeds of sale. Thus a person holding only beneficial ownership can be said to have rights in the value of the land rather than the land itself. In most situations those with equitable ownership rights will also hold legal title so overreaching will not be a problem; since a conveyance of the property will require consent. However, difficulties arise where the beneficial owner does not hold legal title as the trustees may convey the property without their knowledge or consent. Overreaching ensures the purchaser of land takes the property free from any beneficial interests and applies irrespective of notice. It thus favours the interest of the purchaser over that of the beneficial owner and is capable of producing unjust results.
Overreaching stems from S.2(1) Law of Property Act 1925 which provides: "A conveyance to a purchaser of a legal estate in land shall overreach any equitable interest or power affecting that estate, whether or not he has notice thereof"
S.2(3) Law of Property Act 1925 excludes certain equitable interests in land, consequently overreaching is generally restricted to operating only where there is equitable ownership behind a trust.
Transactions to which overreaching applies : Overreaching applies where there is a conveyance to a purchaser of a legal estate.
A conveyance is defined in s.205 (1) (ii) Law of Property Act 1925 as including "a mortgage, charge, lease, assent, vesting declaration, vesting instrument, disclaimer, release and every other assurance of property or of an interest therein by any instrument, except a will;"
The restriction to purchase of a legal estate includes purchase of the freehold or a legal lease. S.205 1 (xxi) Law of Property Act 1925 extends the definition of purchaser of legal estate to include a charge by way of legal mortgage. Therefore overreaching may operate in favour of a bank advancing a mortgage as seen in City of London Building Society v Flegg [1988] AC 54.
Purchaser: The definition of purchaser applicable to overreaching is "a person who acquires an interest in or charge on property for money or money's worth" (S.205(1)(xxi) Law of
Essay on To what extent does the Land Registration Act 2002 meet the Law Commission's objective of replacing 'registration of title' with 'title by registration'? (Relevant for Q1)
Barwick CJ described the Torrens system in 1971, as “not a system of registration of title but a system of title by registration,” and this system was the foundation of what was suggested by the Law Commission Report 271, which resulted in the 2002 Land Registration Act being implemented. For many years prior to the Act, possession was all that was required for title. However, the switch to the “title by registration” system had the goal of protecting the ownership of land, as well as allowing ownership of land in England to become a more organized, coherent system. This was also to be done by introducing E-Conveyancing, an electronic system, aimed to provide a “complete and accurate reflection of the state of the title of the land at any given time.” Additionally, the Act has clauses present with the end goal of eliminating the issue of unregistered land, with the Law Commission having stated that “unregistered land has had its day.” Further, the Act also focuses on the issue of adverse possession, trying to ensure greater protection for owners of land. Whether the act has been successful at ensuring the modernizing of land registration is an issue that has been discussed often over the past 15 years, and I would have to argue that it has only been partially successful. In some respects, the act has done what it intended to- the Act is fairly clear in its composition and has largely helped in terms of coherency, and has also certainly brought the issue of adverse possession into more open and legitimate avenues, such that it is no longer “off the record.” On the flipside though, the Act has not been severe enough in eliminating overriding interests, which prevent the Act’s original goals from actually being achieved. A purchaser could still be at risk of being bound by interests that they aren’t aware of. Further, there have been issues with the shift to E-conveyancing since the Act was implemented, and the system has never really found its feet. There have also been cases of the Act being misinterpreted by the courts, which takes away from the clear system that the implementers of the Act envisioned.
The move to a system where ownership of land comes from registration as opposed to the application to register is a major change brought about by the LRA 2002. There are various reasons behind doing this, namely that such a change would bring about a far more detailed and thorough register of ownership and interests that reflect reality. Such information is crucial to protect purchasers and to prevent fraud. Bringing all this information out into the open was also necessary given the desire to switch to an electronic system; having a lot of the information behind the scenes would have undermined the system otherwise. Rectification is a big part of the act, allowing for the state to indemnify owners of land that lost out due to mistakes, as we will see in the Swift case below.
A good case to consider as an example of the Act possibly being misinterpreted is Fitzwilliam v Richall Holdings Services Ltd (2013). Here, Richall claimed a third party had sold Fitzwilliam’s property to him, and that the third party supposedly had the power of attorney granted by Fitzwilliam to sell, while Fitzwilliam claimed this never happened. There was evidence that the power of attorney was forged, and as per Section 58 of the LRA which only deals with the vesting of a legal estate, and through the application of Malory
Enterprises Ltd v Cheshire Homes Ltd(2002), it was held that the beneficial ownership was not Richall’s, and the register was ordered to be altered under Schedule 4 of the LRA. However, applying Malory didn’t necessarily appear to keep in line with the LRA 2002, as that case, along with Section 58 deal with legal ownership and not beneficial ownership. In Malory it was held that if there was an error in the register, the legal title could be transferred, but the owner of that legal title would still hold the estate on trust for whoever the actual owner of the property was. As Newey J who delivered the judgment in the Fitzwilliam case said, referring to Martin Dixon’s Modern Land Law, “acceptance of the Malory approach would be to import principles of unregistered conveyancing into registered land and that would wholly contradict the system of registration of title and the move to E-conveyancing that the LRA 2002 is designed to facilitate.” And yet at the same time, it’s difficult to question how else Newey J could have applied the act especially keeping in mind existing precedent.
And yet, in more recent cases, the decisions made in both Malory and Fitzwilliam were essentially overturned. In Walker v Burton (2013), the registered proprietors had been registered by mistake and had thus acquired title to fairly large moorland. There were no grounds under LRA 2002’s rectification provisions to remove their title. It was held that there was no lack of care by the defendants and so it wasn’t unjust to refuse to alter the title. This principle, known as conclusiveness was further confirmed in Swift 1st v. Chief Land Registrar (2015) where Swift had registered a mortgage but with the land owner’s forged consent. The same Section 58 of the LRA 2002 ensured that the charge was a valid one, and as a result, Swift was able to obtain an indemnity as a form of compensation when the charge was removed from the register.
In regard to adverse possession, the LRA 2002 has done its part, ensuring that more people register titles, and also ensuring that registered landowners will come to be made aware of any attempts at adverse possession. Prior to the LRA 2002, an adverse possessor could simply gain title if he was in occupation for a period of a dozen years, and this happened more than one would imagine, such as in the case of JA Pye Ltd v Graham (2002), in which the Graham’s obtained possession of Pye’s land by occupying the land for the requisite period, and it was found that English law in regard to adverse possession is human rights compliant under the European Court of Human Rights as well. The legislation simply allowed for adverse possession to take place. Under the LRA’s 2002 rules, the registered proprietor has the ability to evict the adverse possessor. Instead of the rule that required a dozen years of occupation in order to bring about adverse possession that used to exist, now after a decade adverse possessors can request to be registered as the proprietor. The existing owner is notified then and can assert their legal title. By allowing for this to happen and for the warning to take place, it becomes far harder for adverse possessors to actually gain a registered title to the land. Further, by recording transactions on register, a purchaser actually has access to the necessary information. Adverse possession is now far more legitimate than it was prior to the LRA 2002. And as Ben Mowli puts it, “Registered land is now virtually impervious to the rights of squatters in the hands of a well advised land owner.”
Sometimes referred to as a “crack in the mirror”, overriding interests are not required to be registered, and yet continue to bind anyone with interest in the land. The Law Commission
1. Land Registration a) Midland Bank v. Green (Unregistered land. Farm had cheap land charge which son and wife didn’t register. Dad sells land to mom which destroys option and mom sells it back. Wife should’ve sued for breach of contract. Registered land would’ve had a safety net for overriding.) b) Street v Mountford (C granted D right to occupy rooms with exclusive possession. C made D sign a license, not a lease. D argued it was a lease- exclusive possession for term of rent. Court held it was a lease. Put an end to sham licenses.) c) National Provincial Bank v Ainsworth (Husband died, property in his name transferred to company, took out a mortgage in the name of company. Said wife only had personal right, but would be different today post Family Law Act 1996.) d) William & Glyn’s Bank v Boland (Husband sole owner, wife made contributions but didn’t register rights. Court held her interest was protected as overriding- equitable interest and in actual occupation.) e) Flegg (Title of land in name of couple, wife’s parents paid for it. Couple took out mortgage and defaulted. Parents found to have interest in the land, but were overreached as money had been transferred to trustees) f) Abbey National v Cann (RP took out mortgage. C (his mom) was living there at the time. C went on holiday. Court held C wasn’t in actual occupation when bank wanted to repossess, nor when carpets were being installed. Overriding interest could only happen when occupation was obvious at the time of disposition.) g) Thomas v Clydesdale Bank (Couple contributed to house, registered in name of the man. Man took out mortgage after builders started work. Held wife had actual occupation from the time builders came.) h) Chhokar (Husband held title of home for him and wife in equal shares. Agreed to transfer title to a friend. Husband disappeared with proceeds. Court held wife was in actual occupation despite being at the hospital having a kid. Her possessions were at the house.) i) Link Lending v Bustard (C was at hospital being treated. Court held she was in actual occupation, she intended to return, her stuff was there, she owned the furniture, etc.) j) Scott v Southern Pacific (Scott said she had a proprietary interest in property. She’d been living there so said it was overriding. Judges held promises made by a sale and rent back purchaser did not mean proprietary interests.) k) Thompson v Foy (Thompson’s daughter, Foy built an extension to Thompson’s house. Agreement that Foy would buy her out. Foy tried to mortgage property to bank prior to purchase. Thompson gifted house to Foy, payments defaulted, bank sought repossession. Gift not set aside for undue influence- criteria set out in RBS v Etridge not satisfied. Foy had beneficial interest by proprietary estoppel.) l) Baxter v Mannion (Mistake can be in the register. Renewed application for leave for a second appeal against refusal of a request to the Land Registry to rectify a register entry. Leave was given.) m) Gold Harp v McLeod (What the court can rectify. Landlord fraudulently told registry that lease for tenant didn’t exist and sold it. Tenant said it was a mistake. Judge said unjust not to rectify. Purchaser said tenant could be put back on register, but after him. Court says mistake must be solved, so rules in favour of T.) n) Paton v Todd (Reasons to rectify are only exceptional when truly remarkable)
