What is a Property Right?

Question 1

Williams & Glyns Bank v Boland

Answer 1

• A right arising under a trust is recongized as an equitable property right
• If you make a financial contribution (must not be a gift or a loan) to a property, a trust will arise and thus the acquisition is satisfied

Question 2

Lack of registration defence

Answer 2

• Lack of registration defence (cc Land Registration Act 2002): C can rely on this defence when acquiring legal property rights from A unless B is in “actual occupation” of the land
  
  • W&G Bank v Boland: use the normal meaning of occupation

Question 3

Order that a property be sold

Answer 3

• Trust of Land and Appointment of Trustees Act 1996: the bank can apply to court for an order that a property be sold, even if the current occupant has a pre-existing equitable property right over the property
  
  • The fact that a beneficiary of a trust does not consent to a sale will not dissuade the court from approving the request. However, the beneficiary is entitled to receive a share of the proceeds of sale, with the size depending on their beneficial interest under the trust

Question 4

Overreaching defence

Answer 4

• Law of Property Act 1952, s2
  
  • Allows the party acquiring a later property right to take priority over a party with a pre-existing property right
  • Where the party acquiring the later property right acquires it in the land in return for paying money, they can establish the defence only if that money is paid to at least 2 of the trustees of the land (or to a trust corporation)

Question 5

Overriding interest

Answer 5

• A property right in land that cannot be defeated by a ‘lack of registration’ defence
  
  • Any property right held by a person that is actually occupying the property
  • The occupant needs to have a legal or equitable property right in the land
  • This is still vulnerable to the statutory overreaching defence

Question 6

Personal v Property rights

Answer 6

• A personal right cannot bind any person, but a property right is capable of binding 3^rd parties

Question 7

Identifying property rights

Answer 7

• Start off with the approach that B’s right is merely a personal right against A and it thus is not capable of binding 3^rd parties
• In order to be a property right, B must show that the content of the right matches the recognized type of property right in land
• Lord Wilberforce in Ainsworth: “before a right or an interest can be admitted into the category of property, or of a right affecting property, it must:
  
  • “be definable
  • “be identifiable by third parties
  • “be capable in its nature of assumption by third parties
  • “have some degree of performance or stability.”
  • Not an exhaustive list
• Lord Wilberforce’s judgement is problematic
  
  • It does not explain all property rights
  • Some are not definable, such as ‘mere’ equities
  • Some are not identifiable by 3^rd party’s
    
    • Trusts of land
    • ‘Mere’ equities
    • Short leases
    • ‘Overriding interests’
  • It is a tautology: it merely says that a property right is binding because it is a property right

Question 8

Licenses

Answer 8

• A licence is a personal right to something which “makes an action lawful which, without it, had been unlawful” [Thomas v Sorrell]
  
  • Vaughan CJ: “A licence properly passeth no interest nor alters or transfers property in anything”
  • Refers to cases where B has permission to make some use of A’s land but does not have a recognised legal or equitable property right in A’s land
• A licence is antithetical to a right, it is permission
• A license is only a personal right of B against A
  
  • E.g. in National Provincial Bank v Ainsworth, Mrs A’s personal right (deserted wife’s equity) was only binding on her husband, not the bank
• A licence can sometimes become a proprietary right
  
  • E.g A owns adjacent houses 1 and 2. A leases house 2 to B. As a favour, A gives B permission regularly to cross the garden of house 1 to get to work. A renews B’s lease, and then tells B to stop taking the shortcut across the garden. A cannot prevent B from doing this, because the renewal of the lease turned the licence into an easement; B has a proprietary right that they can exercise against A and anyone who buys A’s land
    
    • Disposition – s62 Law of Property Act 1925
  • E.g. A owns the house in which A and B cohabit in unmarried bliss. B is allowed to occupy under licence from A. A then says to B, “Of course the house and everything in it is half yours because we are a couple”. B then goes about spending life savings in redecoration. A then leaves B and attempts to get B out of the house. B by now has a proprietary interest and cannot necessarily be moved (see Pascoe v Turner, Grant v Edwards)
    
    • Proprietary estoppel + constructive trust

Question 9

Bare licenses

Answer 9

• Arise where B has permission to make some use of A’s land, but there is nothing to prevent A from revoking that permission
• If B has a bare licence and is in sole possession of A’s land, this can give B a legal property right of that land
• Merely a defence to trespass [Snook v Mannion]
• Revocable by the grantor at will
  
  • But must give ‘reasonable notice’ for licensee to leave. Reasonability depends on the circumstances:
    
    • Licensee allowed grace period before assuming status of trespasser
    • Casual visitor – almost instant
• Simply permission to use another’s land

Question 10

Statutory licence

Answer 10

• Arises where A is under a statutory duty not to revoke B’s permission to use their land
• B’s right to occupy A’s land is capable of binding a third party, but only if B has been entered on the register
  
  • Even if B is in actual occupation of the land, the occupation will not make up for a failure to protect the right through registration, and the right will not bind C

Question 11

Contractual licence

Answer 11

• Founded on consideration
• Enforceable as a matter of contract law against the grantor
• Revocation must be indicated by terms in contract
• The contractual or estoppel licence itself cannot bind a third party later acquiring a right in A’s land [King v David Allan]
  
  • Lord Buckmaster: a licence creates nothing but a personal obligation
  • Remedy for the revocation of licence gives rise to action for damages [Verral v Gt Yarmouth Borough Council]
  • In Ainsworth, Mrs A had a right against her husband that he would not revoke her from the land. This right did not affect third parties
• Where the grantor breaches a contractual license, the licensee may:
  
  • Claim for damages
  • Claim that A should be compelled by a court not to revoke B’s permission (specific performance, this is the default remedy. It is usually assumed that damages are not sufficient)
• Even if B has not yet taken exclusive possession of A’s land, if B has a right against A to take such possession, that right alone can give B a claim against X (a stranger who later interferes with A’s land) [Manchester Airport v Dutton]
• Ashburn Anstalt v Arnold: “contractual licence does not create a property interest,” it only gives B a personal right against A
• A promise made by C to A, when acquiring land from A, could be enforced by B [Binions v Evans]
  
  • If C has merely promised to allow B’s licence to continue, then any new, direct right that B acquires against C as a result of that promise can amount to no more than a licence (and so must be only a personal right of B against C)

Question 12

Can a licensee bring an action for trespass?

Answer 12

• Hunter v Canary Wharf: in order to bring an action for trespass you must have a proprietary right, you cannot be a licensee
• Clore v Theatrical Properties: a licensee, as opposed to a lessee, cannot bring an action for trespass. However, they can exclude those who would interfere with their occupation

Question 13

Licence coupled with a grant

Answer 13

• These are attached to property rights. They are enforceable because of proprietary interest the licence is linked to, not because of the licence itself
• Not revocable
• Manchester Airport v Dutton: MA had licence to enter adjacent National Trust land in order to work on new runway. Before MA could enter the land, however, environmental activists got in to mount protest. MA succeeded in its action for trespass.
  
  • A much criticised* decision allowing B to evict C even though C had entered the land before B.
  • Danger is that the decision appears to allow a non-proprietary right to bind a third party. The majority makes error in assuming that because B could evict C if he had got in first, he must be able to do so in every case.
    
    • This is a weak proprietary right (a possessory title) which has nothing to do with the licence
  • Chadwick LJ’s dissent to be preferred: you must have a possessory right in order to evict