Priorities

Question 1

Basic and special priority rules

Answer 1

• Basic priority rule = first in time is given priority [s.28]
• Special priority rule = s.29 shows that anything that must be registered under s.27 for valuable consideration can postpone any unregistered interest. However, the interest can be protected [notice and actual occupation s.29(2)] and there are exceptions to protections.
  = complicated

Question 2

Problems with priorities

Answer 2

• Court’s discretion, so uncertainty = Proprietary estoppel must be proportional
• Not all proprietary estoppels are proprietary if they are not given a proprietary remedy, yet when the equity arises the owner exercises the right as if it was proprietary = McFarlane argues as not all proprietary estoppels give you a proprietary right, they should not be proprietary
• Right to rectify the register is a proprietary rights = as a concequence of Mallory and not overturned by Swift
• Very complicated [to laypeople] = Lambert - did not declare actual occupation which must be obvious for it to be enforceable
  = you must disclose an overriding interest when ‘reasonably expected to do so.’

Question 3

Advantges of priorities

Answer 3

• Law Commission held that rights are ‘not necessarily destroyed’ but postponed and resume, such as after a lease is over, so still protected
• Overriding interests, with exceptions, means that there are many chances to prove priority = Boland - bank did not check who was in AO, so as wife did not consent to mortgage, she postpones the interest
• so, Bank’s protected = all they have to do is check + there is consent if the charge and interest arose at the same time [Mendelsohn]
• Buyers and sellers protected by the Brocklesby principle [wishart]
• purchaser protected in overreaching cases as beneficial interests go after trustees

Question 4

Are priorities complicated?

Answer 4

+ Just declare interest and check if there is an interest = Boland - bank did not check who was in AO, so as wife did not consent to mortgage, she postpones the interest
+ Bank’s protected = all they have to do is check
+ Overreaching protects purchasers as beneficiaries go after trustees and not them

VS. - Very complicated [to laypeople] = Lambert - did not declare actual occupation which must be obvious for it to be enforceable
= you must disclose an overriding interest when ‘reasonably expected to do so.’
- when do you actually occupy? Intention?
- complicated to judges due to Mallory mess
- vs. Swift cleared this up

Question 5

Overreaching

Answer 5

= paying 2 trustees to defeat beneficial interests - sch 3 LRA 2002
+ protects purchaser = the beneficiaries fight the trustees for money, not the purchaser
+ some restriction: legal easements is not a legal estate so cannot do the overreaching
- vs. = “all interests are vulnerable to being overreached” - Flegg - even when you do not consent to mortage and in AO so overriding interest, as long as two trustee paid, it can be overreahced

Question 6

Actual occupation advantages and disadvantages

Answer 6

Advanatges:
- second homes don’t count, as can’t occupy two homes [Turner]
- intention looked at [Tizard = frequnency of visits of separarted couple + intention to return = Bustard - sectioned but retained links and wanted to return]
- just check [Boland] and just declare [Lambert]
- agent acts on behalf
Disadvanatges:
- intention cannot be seen and AO must be clear as a protected interest
- AO doesn’t matter and can be overriden - agent but beyond authority but authority given = Wishart - Brocklesby principle