Land Law

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Registered Land based on 3 principles

Describe the mirror principle

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1) Mirror -Register is intended to reflect accurately all the material facts to a title.The mirror principle states that the register of title should reflect the totality of the interests affecting the land, so that anyone purchasing it can see from the register any interests by which he may be bound.

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Describe the curtain principle

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2) Curtain -The curtain principle states that certain interests, which a purchaser would not be bound by and so would not need to know about, such as certain interests under trusts, should be kept off the register in order to make it clearer.

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Describe the insurance principle

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The insurance principle states that a person buying registered land should be entitled to rely on the accuracy of the register and should be indemnified against any loss suffered in the event of an error.

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The register shows estates in land under three parts:

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the property register, the proprietorship register and the charges register.

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Overriding Interests

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Overriding interests are an exception to the three principles mentioned above. They are interests which are capable of binding the land even though they are entered on the register. They include such things as the rights of an occupier.

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Is Registration Compulsory?

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It is compulsory to register any previously unregistered land though only after a disposition (a sale, gift, mortgage, assent etc). Failure to register within 3 months will mean that the disposition has no legal effect. It is also compulsory to register any disposition of land that is already registered.

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what is capable of registration?

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Fee simple absolute in possession; term of years absolute over 21 years AND listed in LRA 2002 fee simple; lease over 7 years; expressly created easements where servient land has RT; expressly created profits

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Overriding interests

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‘overriding interests’ are unregistered interests which override first registration, or registered dispositions as listed in Schedules 1 and 3, LRA 2002. Overriding interests are interests to which a registered title is subject, even though they do not appear in the register. They are binding both on the registered proprietor and on a person who acquires an interest in the property.

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On first registration, any legal easement or profit a prendre is an overriding interest. Any exceptions? Since 13 October 2006, there have been some exceptions.

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An unregistered legal easement or profit will now only override registered dispositions if it is: obvious on a reasonably careful inspection of the land;known to the person to whom the disposition is made; (if a profit) registered under the Commons Registration Act 1965

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Thatcher v Douglas (1995) 146 NLJ 282

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Judgment handed down on 19th December 1995.
An oral agreement to use that part of a slipway which had inadvertently been built on a neighbour's land was held to be an equitable easement enforceable against the neighbour's successor in title. The Court of Appeal confirmed the ratio in Celsteel Ltd. v. Alton House Holdings Ltd.1 that an unregistered equitable easement that was openly exercised and enjoyed could be an overriding interest under s.70(1)(a) of the Land Registration Act 1925.

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National Provincial Bank v Ainsworth 1965
Husband deserts wife and takes mortgage on property - defaults. Bank seeks possession. Result? This decision is now mitigated by Matrimonial Homes Act 1967.

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The bank was entitled to possession, the wife having no property right in the former matrimonial home. The deserted wife's equity was a mere equity, a personal right enforceable only against her husband, and not against third parties generally. LRA 70(1)(g) only protects people in actual occupation of land (which she was) who have interests in the land (which she did not).

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Abbey National Building Society v Cann [1990]
George defaults om mortgage payments - is Daisy in actual occupation?

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The House of Lords held that Daisy was not only not in actual occupation, but also that when the house was purchased with the mortgage, Daisy’s proprietary interest could not realistically be seen to arise before the building society’s. Actual occupation had to have some degree of permanence or continuity and acts of a preparatory nature, carried out by courtesy of the vendor, were not enough. ''Does not require constant personal presence, but ‘some degree of permanence and continuity’ '' per Lord Oliver,

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Lyus v Prowsa - LRA does not effect constructive trust it cannot be used as a tool for fraud! Dillon LJ

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Where obligation has been accepted by the purchaser then seems only sensible to give effect to it . Whether in contract or in trust Debate • Results stand in opposition to Land Registration Principles o McFarlane: Means that purchasers can't be entirely sure of what they're getting if courts follow Binions or Ashburn If a judge decides, rather subjectively, that you've acted badly, then you find rights you thought were okay to ignore being imposed on you.Equally, undermines the certainty of the Land Register. Battersby: At the moment Land Registration has no ethical dimension - present rule provides temptation for judges to try and get round it • Clear that the problem arises from the unconscionable conduct of the person relying on the non-registration defence • But while we should avoid constructive notice being inserted into LRA 2002, the system would be just as efficient if proof of actual notice led to Lack of Registration Defence being withdrawn.

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Strand Securities v Caswell [1965] Ch 958

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The Court of Appeal rejected the tenant's claim that he had an overriding interest under s 70 (1)(g), because although he had rights in the property (the lease) he was not in occupation. The presence of his belongings at the property did not amount to occupation for the purpose of the Act. The stepdaughter was of course in occupation of the property, but unfortunately she did not have any recognized property interest in the flat and so had no rights which were capable of being overriding. (She was not paying rent)
S 70(1)(g) LPA 1925 also provide that a person in receipt of the rents and profits can have an overriding interest. So if Caswell had charged his step-daughter a rent (even a nominal rent) he would have been ‘in receipt of rents' and therefore would have had an overriding interest under s. 70(1)(g)

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Chhokar v Chhokar and another [1984] FLR 313

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Temporary absence with intention to return is not inconsistent with actual occupation (see, for example, Chhokar v Chhokar [1984] Fam Law 269 - In this case, a husband transferred the matrimonial home, in which his wife had a beneficial interest, whilst she was in hospital having a baby.).

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Williams and Glyn’s Bank Ltd v Boland [1981] AC 487
''On the plain meaning of the words “actual occupation”, what is required is “physical presence, not some entitlement at law” these words are ordinary words of plain English, and should, in my opinion, be interpreted as such” and “the word “actual” merely emphasises that what is required is physical presence, not some entitlement in law” and ‘undivided shares in land can only take effect in equity, behind a trust for sale upon which the legal owner is to hold the land.”
Lord Wilberforce

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Held : Her equitable interest was not only a `minor interest’ within section 3(xv) LRA 1925, but was also protected as an overriding interest because she occupied the land

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Kling v Keston Properties Ltd (1985) 49 P & CR 212,

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The plaintiff had and exercised a right of pre-emption entitling him to take a long lease of a garage. He was at the time also licensee of the garage.
Held: The use of the garage amounted to actual occupation, thereby protecting the right as an overriding interest as regards the garage. His right was protected under section 70(1). The court rejected a submission based on section 59 of the Act.

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City of London Building Society v Flegg and Others

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The House of Lords held (reversing the CA), that the Fleggs had no interest in the house once the payment had been made to the Maxwell-Browns, since their interest had been overreached. Therefore they could not bring themselves within s.70 of the Land Registration Act 1925. The purpose of the 1925 legislation was to make conveyancing easier, and the decision of the CA, which had accorded priority to the Land Registration Act overriding interest provisions over the Law of Property Act overreaching provisions, was inconsistent with this approach.

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Registered land - general scheme

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Equitable interests are either registrable or over-reachable and legal interests will bind a purchaser if they are applicable see William and Glynns bank v Boland (Wifes interests overriding as overreaching had not occured as purchase money paid to one trustee) also Flegg (overreaching occured due to money paid to two trustees)

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1) The fee absolute in possession 2) The term years absolute

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1)The holder is effectively the owner of the estate
2) i.e.the lease
The only interests that may subsist at law are listed in LPA 1925 205 s1 (1) (2)
A deed in most cases necessary LPA 1925 s52

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The scheme of the 1925 legislation - purchaser bound by legal interests. What of equitable?

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Equitable rights would be either overreachable or registrable.Overreachable rights are generally those of a family nature (such as interests existing behind a trust)registrable rights are those of a commercial nature (such as easements, covenants and options).

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What happens when overrreaching occurs?

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The system of overreaching, whereby on the conveyance of a legal estate by way of sale certain equitable third party rights were transferred to the purchase- money and the purchaser obtained a good title

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According to Robert Walker LJ in Birmingham Midshires Mortgage Services Ltd v Sabherwal [2000] 80 P&CR 256,

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‘The essential distinction is....between commercial and family interests. [A commercial interest] cannot sensibly shift from the land affected to the proceeds of sale. [A family interest] can do so...since the proceeds of sale can be used to acquire another home.’

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land charges registration - applicable to EI's of a commercial nature e.g. estate contracts, restrictive covenants etc.

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Prior to 1925 governed by Doctrine of Notice - binding on whole world except bona fide purchaser of legal estate without notice. Land Charges Registration 1925 then Land Charges Act 1972 - set out in s2 puisne mortgage, general equitable charge, estate contract, restrictive covenant, equitable easement, spouses right of occupation. Registered against the name of the estate owner whose estate is intended to be affected.

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If a land charge is not registered before completion of a purchase?

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an estate contract or a restrictive covenant or an equitable easement will be void for non-registration against a purchaser of a legal estate for money or money’s worth. A puisne mortgage or a general equitable charge or a spouse’s right of occupation of the matrimonial home will be void for non-registration against any purchaser for value of the land or any interest in the land (whether legal or equitable estate or interest is purchased).

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1) ‘Money’s worth’ 2) ‘value’

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'anything which is worth money'
'is a broader term which means money, money’s worth or marriage consideration'

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Midland Bank Trust Co. Ltd v Green –

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Does the purchaser have to be in good faith and does the consideration have to be more than nominal for him to be able to rely on the protection of LCA 1972 s.4(6)?
Case concerning son buying farm from father - he failed to register an interest - farm sold for less than its true value to his fathers wife when they fell out!