Registered land

Question 1

Roots of title

Answer 1

In the Abstract of title, it will include the roots of title which details the conveyance which conferred the fee simple to X

Question 2

Types of equitable interests

Answer 2

1) Family
2) Commercial
3) Residual

Question 3

Equitable interests are dealt with by type

Answer 3

Family = Overreaching

Commercial = Registration under Land Charges Act 1972.

Residual = Doctrine of notice

Question 4

Overreaching

Answer 4

Refers to a situation where a person’s equitable property right is dissolved, and detached from a piece of property, and reattached to money that is given by a third party for the property.

Question 5

Overreaching Requirements

Answer 5

Law of Property Act Section 2(1)(ii) and section 27.

1) Purchaser must obtain the receipt for purchase prise from at least two trustees.

1) State Bank of India v Sood
2) Shami v Shami

Question 6

State Bank of India v Sood

Answer 6

Property was held in trust for 5 others, they had incurred debts with the bank, the bank had been happy to accept those debts without security but eventually they required security, so they required the trustees to create a mortgage over the home in favour of the bank, this would provide security. When the debts reached over 1 million pounds, the bank then sought repossession of the house. The owners said that their equitable ownership interests had not been overreached because no money had changed hands. Court rejected this, overreaching can take place even where money does not change hands.

Question 7

Shami v Shami

Answer 7

the requirement for the purchaser to deal with two trustees only applies where capital money does change hands. Therefore, do not need to comply with the two trustee rule where money does not change hands, only need one trustee. This undermines the protection given to the trustees. Proposition made from Sood case.

Question 8

Commercial interests

Answer 8

1) List in section 2 is an exhaustive list of registrable interests.
2) Ð Register of names. Land charge register is of names not property, you cannot look up a specific property, just the names of people who are currently/previously owned the property.
3) Ð Effect of registration is set out in LPA 1925, s 198(1): this says if you register your interest and do it properly, this is deemed to provide actual notice of that interest for all person for all interests and this will be binding.

Question 9

Registration of commercial interests section

Not registering commercial interests section

Answer 9

1) Land Properties Act 1925 Section 198(1)

2) Land Charges Act 1972
Section 4

Question 10

If you fail to register your interest under section 4 land charges act

Answer 10

¥ Land charge class A, B, C(i)-(iii), E, F - section 4(2),(5),(8) – the land charge will be void against any purchaser of land in question

¥ Land charge class C(iv), D(i)-(iii) - section 4(6) – narrow class of purchasers and will only be void against purchaser of legal estate for money.

Question 11

Midland Bank Trust v Green (1981)

HL

Answer 11

father owned a large land under fee simple. In 1961, the dad granted to the son an option to purchase the land. The son paid the sum of £1 and the price would have been £22,000. The son acquired an estate contract which could have been protected by a class C land, but the son failed to register due to negligence towards solicitor. Nevertheless, the father wanted to withdraw the option, the farther knew that the son had not registered the property. The farther then transferred the land to the wife for £500. Green argued that the son had an estate contract which could have been registered but failed to do so.

HoL said: this interest could have been registered, but was not so under section 4(6) it will be void.

Question 12

Promissory Estoppel cases

Answer 12

1) Taylors Fashions v Liverpool Victoria Trustees (1982)

2) Ives Investment v High (1967)

Question 13

Taylors Fashions v Liverpool Victoria Trustees

Answer 13

option to renew a lease, was not protected by registration but purchaser represented that the option was still alive and enforceable, he did improvements he would not have made if he knew the option was not available, therefore purchaser was estopped.

Question 14

Ives Investment v High (1967)

Answer 14

The defendant, discovered that the foundations of another flat encroached onto his land. In return for leaving the land still, they agreed that he could have access to the yard behind the flat in order to build a garage.

Overtime, the block of flats changed hands, it was an equitable agreement, so could have been protected by section d(3) land job, but he did not.

Held: the successive owners of the flat represented that he could use this right of access (even though it wasn’t protected). High acted to his detriment, and relied on it. Therefore, Ives was estopped from enforcing this.

Question 15

Lloyds Bank v Carrick

Answer 15

C1 was owner of long lease. He and C2 agreed that C2 will buy the lease, he then moved into property, but no formal transfer of the lease. The estate contract between C1 and C2 was not registered, consequently C1 still paper owner of lease, used the lease as security for mortgage. Bank then wanted to sell property in order to recover long, did C2 have interest enforceable against bank, accepted she had an estate contract which could have been protected if she registered her interest. But she had another interest because she had paid the full purchaser price to C1, C1 held the property on trust, she then had an equitable ownership. The bank had notice of this and therefore they are bound by it. The Court rejected this argument because beneficial interest under the trust had no existence exist for being the equitable consequence of the contract, so the equitable interest was not independent of the contract, it emerged from the contract. Therefore, not independent so could not be enforced against the bank.

Question 16

Option to purchase

Answer 16

the option to purchase is where if you want to buy the property, you have the option and I agree to sell it to you, but there is no obligation to buy. The C(4) land charge would be protected by register if it is registered.

Question 17

Right of Pre-emption

Answer 17

This arises when x hasn’t decided to sell property, but if I do, you have the first right to buy it. When I decide to sell, in effect it becomes an option to purchase. Nevertheless, a right of pre-emption, it is a registrable class due to C(4)

Question 18

Restrictive covenant

Answer 18

It is an agreement between two landowners where landowner A agrees with landowner B will not do certain things on his land. Landowner B not only has a contractual right against A but is also a proprietary interest in A’s land which can be protected as a restrictive covenant by D(2). Therefore, anyone who buys A’s land will be restricted by it. But you can only register a restricted covenant if it was entered into after 1925. If the convent was entered into before 1926 the enforceability of the covenant depends on the doctrine of notice.

Question 19

The Land Charges Act only applies if the classes fall under section

Answer 19

2

Question 20

Section 2 class F:
Class F:		Matrimonial or civil partnership home rights (Family Law Act 1996)

Answer 20

The decision of house of lords prompted the matrimonial homes act which is now amended and called the family law act. It confers statutory rights of occupation in the family home on a spouse who is not on the legal title to that home. It is irrelevant whether the spouse has an equitable ownership, as long as spouse is not on legal title they are given statutory rights of occupation due to class F. Since 2004, civil partners now have these rights. These rights are:
1) Right against spouse not to be evicted from the family home
2) Right with the leave of the court to enter to occupy the family home.
These rights are regulated by the courts and can be protected as a class F land charge and if they are protected, in accordance with section … these rights will be enforceable against a purchaser against the legal owner.

Question 21

Shiloh Spinners v Harding (1973)

Answer 21

Spinners were the leaseholders of a property, they decided that they did not need the whole property which was subjected to the lease so they signed the lease in respect of part of the premises to T limited. They assigned some of the lease to T limited. Subject to a right of re-entering so if T limited did not apply with the covenant they can get the property back. T limited then assigned lease to Harding. Re-entering or covenants were not registered but Harding knew about them. Harding then breached the covenants, so Shioh then re-entered, question was right of re-entering was enforceable against Harding. Harding argued that this right of re-entry was an equitable easement which was registrable as a class D(3) land charge, but had not been registered so were void against the purchasers of the legal estate. They argued that the right of entry is an equitable right so is subjected to notice, not under land charges act. HOL said right of entry was equitable, they looked under section 2 LCA, and decided that it didn’t fall within any categories, but they said it didn’t matter because it would be wrong to say that there is only two categories of interests in land – either registrable or overreaching, they said that there is a residual category which enforceability requires the doctrine of notice. Since Harding had notice of the right, they were bound by it.

Question 22

Ives Investment v High (1967)

principle

Answer 22

COA, Lord Denning: decided that right of access, such of that of Mr High, was not protectable as an equitable easements. This commercial equitable interest was excluded from registration by courts.

Question 23

Cases where interests are residual interes

Answer 23

1) Commercial’ equitable interests expressly excluded from registration by courts:
Such as equitable easements

2) Over reachable but non-overreached ‘family’ interests:
1) Caunce v Caunce (1969)
2) Kingsnorth Finance v Tizard (1986)

Question 24

Sainsburys v Olympia Homes (2006)

Answer 24

claimant sought to protect an option to purchase by the lodging of a caution against first registration but did not also register a land charge. Held: this was insufficient. The effect of section 4(6) of LCA 1972 would be that the option would have become void for non-registration on the occasion of the conveyance for money or money’s worth which would have preceded the application for first registration.

Question 25

Barclays Bank Plc v Guy (2008)

Answer 25

Although the register is to be considered as conclusive, charges registered by mistake may be removed. Guy failed to show that the charge concerned in the case was registered by mistake.

Question 26

Halifax Plc and Bank of Scotland v Popeck 2009)

Answer 26

a legal fee simple and an estoppel interest arose which was enforceable against legal fee simple, this estoppel interest is subjected to the priority rules (Subject to 115 and 116 act, this is in interest subjected to the rules of priority) but not been protected on register. There was then a transfer of legal fee simple but this transfer was not for valuable consideration. Following transfer another equitable interest which was a charge was crated over legal fee simple but not protected on register. Did the esstopel have priority over the charge? The basic rule would be esstopel has propirity because it came first, the question is whether under section 29, the transfer of land took prioty. Under section 28, the estopell would have had priority over the charge because the estopell was created first. But is this effected by section 29? Held: no  because required element was not satisfied because no valuable consideration and therefore estoppel interest was unaffected by legal fee simple so maintained its priority over that interest and charge.
Section 29(1) had pre existing interests been protected? Answer depends on section 29(2) tells us for purposes for section 29(1) the prioriry of interest is protected if interest is:

Question 27

Peffer v Rigg (1977

Answer 27

A property with registered title was purchased without good faith. Held: A lack of good faith may override registration
This case is now to be treated as overruled
The Law Commission assumed in 2001 that the case had been overruled, and it was severely criticised in Chaudhary v Yavuz [2011]

¥ plaintiff and first defendant were married so had common mother in law, they decided to buy a house to initially accommodate the mother-in-law, the first defendant was the registered sole proprietor although plaintiff had contributed to purchase right, therefore he had a share in equitable ownership. He could have protected this interest by restriction but no such interest was registered. When first and second defendant got divorced, the first defendant transferred house to his ex-wife. Plaintiff said no, the ex-wife knew this interest too, so she cannot claim to hold the house free of this interest. Has plaintiff lost his propriety? No overreaching, no in actual occupation and no entry of register. Held: he did not miss out because second defendant could only take land free of interest if second defendant acted in good faith. As she knew about the interest was ‘negative good faith’. Interest which had not been on registered was binding on purchaser because purchaser was not in good faith, even though should have been registered. Need good faith which is negative by the mere fact of actual notice. This is regarded as a fair decision but reached on grounds difficult to reconcile.

Question 28

Law Com No 254, para 3.44

Answer 28

1987, the law commission recommended that a purchaser would only take advantage of provisions in act if purchaser was in good faith. Good faith is vital. Rejected view in Peffer v Rigg that a purchaser lacks good faith merely because they have actual knowledge of the interest. However, in its subsequent report, the law commission signified greater commitment and in 1998 said that issues of good faith, knowledge and notice should have no application in relation to dealings in registered land. Law commission thought it was important that the new act contained an express statement, they did not follow this recommendation nor does 2002 act include such statement, but assumed that notice and good faith are irrelevant in context of registered land. However, the law commission acknowledged that there ought to be a safety valve to operate in these circumstances, overriding interests largely provided this safety, but also circumstances where owner of interest losses that interest has some personal remedy against purchaser.

Question 29

Lyus v Prowsa Developments (1982)

Answer 29

Plaintiffs had a contract with builders under which builders would construct a house for them. Builders at the time owned land and mortgaged land, builders went bankrupt so in exercise of powers, bank sold land to defendant expressly subject to original contract between plaintiffs and builders. Defendants refused to perform contract to perform the house, accepted that they knew about contract but no relevant entry on register. Held: defendants contracted to purchase property expressly subject to C’s contract and to not follow this undertaking would constitute fraud, to prevent fraud the court made a constructive trust – this was not case that defendants, legal owners and plaintiffs were equitable interests. Although contract not protected in register in order to prevent fraud, purchaser is bound to constructive trust.

Question 30

Lloyd v Dugdale (2002)

Answer 30

Both cases narrowed down Lyus v Prowsa so that register is not undermined. If you make a purchaser bound by unprotected interest, you have to show that the purchaser undertook a new obligation at time of purchase to give effect to that interest. AND although it is not an essential requirement, this will often be reflected by the fact that the purchaser will pay a lower price, agreeing right to third party. Have to show purchaser made an undertaking.

Question 31

Chaudhury v Yavuz (2011) –

Answer 31

Narrowed Lyus v Prowsa, approved the principle in Lloyd v Dugdale, they went on to say that Lyus v Prowsa was an exceptional case because the third party interests were set out explicitly in the contract. In addition, the bank which sold the land could not be bound by the performing contract so the inclusion of the clause could not be explained that the bank was covering themselves. Thirdly, on the facts it would have been difficult for plaintiffs to use register to protect their contract. Not all these factors have to be present but in Lyus, they were present, set of facts unlikely to occur very often.

Question 32

National Provincial Bank v Ainsworth

Answer 32

Qualifying interest must be a proprietary interest, giving courts flexibility.

Question 33

Blacklocks v J B Developments [1982] Ch

Answer 33

agreement to transfer land but when the purchaser registered his purchase the registration mistakenly included more land than the parties intended. Under these circumstances the seller had a right to have the contract/register rectified. This was held to be a qualifying right, procedural right to get it rectified.

Question 34

Thompson v Foy

Answer 34

Confirm that a right to set aside a conveyance for undue influence is a qualifying right for purposes of paragraph 2.

Actual occupation, in the establishment of a successful claim under Schedule 3, paragraph 2 of the Land Registration Act, must have present both at the time of completion and registration of a transaction

Question 35

Webb v Pollmount

Answer 35

option to purchase was a qualifying interest, combined with actual occupation could be an overriding interest.

Question 36

Hodgson v Marks

Answer 36

equitable fee simple under trust could be qualifying interest.

Question 37

Williams & Glyn’s Bank v Boland [1981]

Answer 37

The wife had a contribution-based equitable interest under a trust for sale but, although she could have protected that interest as a minor interest by the entry of a restriction or caution on the register, she had failed to do so. Held: overriding interest if combined with actual occupation

Question 38

City of London Building Society v Flegg

Answer 38

Three people contributed to the purchase price of an estate
Two of these people mortgaged the house
The mortgage was defaulted upon, and the bank sought possession
Held: As the mortgage had been provided by two people, two trustees were present and Mrs Flegg’s interest was overreached upon the default of the mortgage payments
Mrs Fleg would have personal claims against the two mortgagors

Once overreaching operated to detach the beneficial interest from the land to the proceeds of sale there is no longer an interest in land capable of being an overriding interest.

Question 39

Scott v Southern Pacific Mortgages Ltd [2014] UKSC

Answer 39

prospective purchaser of land in anticipation that purchase would go ahead entered into various contracts to create proprietary rights over the land. Was the rights under the contract were qualifying interests for purposes of paragraph 2. SC said no, contractual rights granted by prospective purchaser are not qualifying interest.

Question 40

Link Lending Ltd v Bustard [2010] EWCA

Answer 40

relevant factors for determining actual occupation.

1) degree of permanence and continuity of presence of the person concerned
2) intentions and wishes
3) length of absence from property and reasons
4) nature of property
5) personal circumstances

Question 41

Williams & Glyn’s Bank v Boland [1981]

Answer 41

there is no need for continued and uninterrupted occupation, nor does person have to actually be there at relevant time. All that is required is that the person establishes some degree of permanence and should intend to return to property if not currently there.

Question 42

Chhokar v Chhokar

Answer 42

Wife went to hospital for 3 weeks, question arose was whether she remained in actual occupation during 3 weeks. Held: yes most belongings still there and she intended to go home afterwards.

Question 43

Abbey National Building Society v Cann [1991]

Answer 43

The claim to an overriding interest depends upon whether the claimant was in actual occupation during the period of 35 minutes before transaction was completed. During the 35 minutes’ agents of plaintiff brought in carpets and belongings. Held: insufficient to be actual occupation.

Question 44

Stockholm Finance Ltd v Garden Holdings Inc (1995) -

Answer 44

Occupation in London hadn’t been in flat for 14 months and although she left belondings, the court held she was not still in actual occupation after 14 months even though she intended to go back.

Question 45

Malory Enterprises v Cheshire Homes

Answer 45

Court held errection of parameter fence on land constituted actual occupation.

Question 46

Lloyds Bank v Rosset

Answer 46

this concerned a semi derelict house which was in the course of renovation. Held: the presenence of builders on site who were the agents of the owners and the occasional overnight stay of owner, held to amount to actual occupation of owner.

Question 47

Thompson v Foy [2010]

Answer 47

lived in extension. Mrs Thompson found it difficult to live in house following husband so considered moving to Spain, the Foy’s would then buy out her interest in property, Thompson signed documents which gifted property to daughter. The Foys then mortgaged the property, completion of mortgage took place on 5th April then registered on 10th April. Question: did Thompson have interest in property which was enforceable against mortgage company, she sought to have gift transaction set aside on undue influence. Held: failed, judge went onto conside if there was undue influence and if Thomson would have had an overriding interest against mortgagee. If you do have a right with undue influence you do have an overriding interest. Therefore, question would have been was she in actual occupation, between 5-10th april Thompson had come to express decision that she did not want to return to the house. Did this stop her from being in actual occupation?

Question 48

Link Lending Ltd v Bustard [2010] EWCA

Answer 48

Bustards suffered from psychiatric condition and she was inpatient hospital treatment, she transferred ownership of property to third party although she had no recollection of transaction. Held: she had transaction set aside on grounds of undue influence. In meantime, third party had mortgaged property and the question was whether Bustards rights to have contract set aside was an overriding interest? This depending on actual occupation. Although Bustard had been sectioned and had difficulty in rationalising thoughts, she did clearly have a persistent intention to return from hospital to property. Medics said this was a wholly unrealistic proposal but she did entertain the thought. Held: this was sufficient; she was in actual occupation of property.

Question 49

Thomas v Clydesdale Bank plc [2010] EWHC

Answer 49

Thomas was frequently at property supervising builders and she occasionally stayed over (Facts close to Lloyds Bank v rosset), following Rosset, physical presence on property and builders was of the nation and what you would expect of the occupation having regards of the property and context. Sufficient to have actual occupation. He reiterated a broader approach.

Question 50

Chaudhary v Yavuz [2011] EWCA

Answer 50

Claimants have an equitable easement, lived on upper story of two story building, access to this was upper and outside staircase, he had a right of way, this was equitable, nothing protected on register. Question did he have a protection of his equitable interest as an overriding interest, this would only be so if he was in actual occupation of staircase. Held: no because he was just passing, such use does not equate to actual occupation.

Question 51

Thomas v Clydesdale Bank plc [2010] EWHC

Answer 51

Ramsey:

A reasonably careful inspection:
suggests what has to be obvious is the relevant visible signs of occupation upon which a person who asserts an interest by actual occupation relies.

No requirement for enquires

Question 52

Ferrishurst Ltd v Wallcite Ltd [1999] Ch

Answer 52

A set of offices and a garage were leased to a tenant the offices and garage were then sublet to different people, in particular the office was sublet to claimant. This included an option to purchase the lease over both bits of the property, nothing noted on register so claimant argued that he had an overriding interest which was binding on later purchaser. Claimant had a qualifying interest (option to purchase) he was in actual occupation of offices, but did this protect his interest as he was not in actual occupation of garage. Held: this is sufficient; his occupation of office was sufficient to protect his interest.

Question 53

Strand Securities v Caswell

Answer 53

claimant had an equitable lease of property, claiming overriding interest under paragraph 2. He had qqualifying interest but he moved out of flat and allowed step daughter and children to live in flat rent free, step daughter was not there on behalf of claimant, she was there in own right so claimant was not in actual occupation.

Question 54

Lloyd v Dugdale [2002] EWCA

Answer 54

company occupied properties, manging director of company negotiated to purchase premises for himself. He claimed to have overriding interest and that overriding interest was based on proprietary estoppel claim and his actual occupation of premises, claimed occupation because company was his agent. Court rejected argument, company was occupying in its own right, if anything claimant was agent of company, arguemtn failed

Question 55

Hypo-Mortgage Services Ltd v Robinson

Answer 55

Young children cannot be in actual occupation as They are only there as shadows of their parent.’ and ‘No inquiry can be made of minor children or consent obtained from them in the manner contemplated by [s 70(1)(g)], especially when they are, as here, of tender years at the material date.

inheritance from grandparents two young children contributed to purchase price of property owned by parents so they had qualifying interest, question, did these interests have a overriding interest under paragraph 2? Can a minor be in actual occupation. Court held no on facts of case because a purchaser wont be able to ask sensible questions to child about whether they had an interest in property, if purchaser is precluded from asking of interest this puts purchaser in a disadvantage. While children cannot be in actual occupation, it might apply to young children but does it apply to older children who are still in law classified as minors. What about 16/17 year olds living with partner and contributed to purchase price is it sensible to say this person is not in actual occupation?

Question 56

Abbey National Building Society v Cann

Answer 56

decided that acquisition of legal title by purchaser and the creation of the mortgage by purchaser in favour of lender, those two transactions are bound together. This not only means that the purchaser of legal estate only ever request legal estate subject to mortgage but also involves that anyone who contributes to purchase price and acquires an equitable ownership interest, acquiring subject to mortgage, this means that a blanket rule occurs, in case of acquisition mortgage the mortgagee will ALWAYS have priority over claimant such as Mrs Boland.

Question 57

Fitzwilliam v Richall Holdings Services Ltd [2013] EWHC

Answer 57

decided under old legislation, in cricumstances where reister gives ownership to X hen you might say true owner is Y in these cases effect of registration was that X was holding property on trust to Y therefore section 58 transfers legal interest but equitable interest is held in Y.
End result is that true owner holds propery. But using trust route discards balancing that takes place in scheme of rectifying.

Question 58

Abbey National Building Society v Cann

Answer 58

Cann decided that where a purchaser relies on a loan for the completion of a purchase, the transfer of the property and the grant of the charge are one indivisible transaction with no gap in between the two. The effect of this was that the occupier could not assert an equitable interest which arose on completion of the sale of the house against the lender.