#16152 - Registration Applications - Land Law

Textbook 2

Law Comm 254, Parts I, II, III.39-50, VI, XI 6

Reasons for the need for new legislation 6

Objectives of reform 7

Differences between registered and unregistered land 7

Protection of Minor Interests 7

Recommended reforms 8

Law Comm No 148, [16]-[20] 9

Arguments for preserving closed register 9

Responses to these arguments 9

Arguments for open register 9

Smith, “The Role of Registration in Modern Land Law” 10

Concurrent Interests 13

Law Comm 158, [2.6]-[2.8], [2.63]-[2.64] 13

Williams and Glyn’s Bank v Boland 14

Leaseholds 14

Law Comm 271 [3.10]-[3.17] 14

Leases that can be registered with their own titles 14

Law Comm 254 [3.7]-[3.10] 15

Easements and Licenses 15

Law Comm 254 [5.6] – [5.24] 15

Law Comm 271, [4.24]-[4.26], [8.65]-[8.73] 16

Easements and profits are registrable dispositions 16

Overriding interests 16

1. INTRODUCTION

1. Opening the register

   1. For a long time the register was closed to the public, reflecting the inherent privacy of unregistered conveyancing. However, it was opened by the LRA 1988 (now s66 LRA 2002 provides access)

   2. Advantages of an open register:

      1. Owners of land are identified (who to make offers to, whom to sue for nuisance)

      2. Discloses rights over one’s own land (eg. tenants will know whether their landlord is the freeholder or a head tenant)

      3. E-conveyancing is only viable with an open register

2. Three principles underpin the registration system (Ruoff, An Englishman Looks at the Torrens System)

   1. Three principles

      1. Mirror principle: the register reflects all current facts material to title – i.e. a title is free from all adverse burdens, rights and qualifications not mentioned on the register.

         • In an imperfect world this principle isn’t always reliable:

           1. Fraud (rights gained by fraud must never be recognized)

           2. Well-recognized burdens easily discoverable outside the register though they cannot conveniently be registered

      2. Curtain principle: purchasers need not look behind the register

      3. Insurance principle: any flaw in the register leads to compensation for loss

   2. (Smith) The principles are ideals rather than reality (eg. overriding interests are an exception)

      1. NOTE: Is this always true? Is it really an ideal that we should strive for? Is the best registration system one where the three principles have fewest exceptions?

2. TYPES OF INTERESTS

Registration recognizes four types of interest:

1. Registrable interests: interests that can have their own files (legal fees simple, leases)

   1. Fee simple

      1. Any fee simple owner can apply for registration; those worried that their interests will be prejudiced by subsequent registration can record protected interests under a land charge

      2. Most registration results from compulsory registration

         1. S4-8 LRA 2002 provides for compulsory registration of conveyance of fee simple (sale or gift) within two months

         2. Justifications:

            1. Solicitors are involved so need for registration is unlikely to be overlooked

            2. Quicker approval by land registry, because the conveyance would likely have been approved on an unregistered land purchase

      3. Three forms of registered title

         1. Fee simple absolute (registration without flaws)

         2. Qualified title (registration with a specific problem, meaning no guarantees about that particular respect)

         3. Possessory title (no proof of documentary title; title depends on adverse possession)

      4. Effect of first registration

         1. Title vested in proprietor subject only to interests protected on the register and overriding interests (Sch 1) except:

            1. If proprietor is a trustee, the beneficiaries’ interests bind him if he has notice

            2. Adverse protection claims bind proprietor with notice

         2. If registered proprietor didn’t own the land…

            1. Previous owner can assert ownership by overriding interest (Epps v Esso Petroleum)

            2. Claim for alteration of the register

            3. (Controversially) Palk argues that first registration might transfer only legal (and not equitable) title to the proprietor, so that the previous owner might be able to claim the equitable interest by overriding interest. But this is difficult to defend (Palk, Smith) and at any rate purchasers from registered proprietors definitely do get the equitable interest

   2. Leases

      1. Legal leases > 7 years can be registered like fee simple

      2. Therefore there can be two (or more: subleases) titles to the same plot of land, but they must cross-refer to each other

         1. Justifications for separate titles:

            1. Many long leases with unregistered freeholds

            2. Leases can be bought and sold, mortgaged, etc.

      3. Same compulsory registration (two month deadline, loss of legal estate if failure to register)

         1. Leases granted before 2002 are not compulsorily registered, but if they are assigned after 2002 with > 7 years left, then they must be registered

      4. Future leases (irrespective of length) must be registered (s4(1)(d) LRA 2002) because they are undiscoverable by purchasers; thus they are no longer overriding interests

      5. If the fee simple isn’t registered, it’s common to use a good leasehold title to guarantee the lease, but not against defects in the landlord’s title. If the freehold is later registered then this defect is cleared away and the lease title becomes absolute.

2. Registrable dispositions: dispositions that legislation requires to be registered (transfers, charges, leases, mortgages)

   1. Powers of registered proprietor are essentially the same as unregistered proprietors (s23), and these powers are free of limitations but proprietors remain liable for any breach of duty where limitations are disregarded (s26) – most important for trusts of land (eg. exclusion of trustees’ power to sell)

      1. Limitations protected by entry on the register are exempt from s26

      2. No exemption for overriding interests

   2. Registrable dispositions (s27):

      1. Transfers: legal title won’t pass until registration (s27(1)), but equitable interest passes on payment of consideration (provided formalities are satisfied) or if it’s a gift then the principle that donee has done everything in his power can be used (Mascall v Mascall)

      2. Leases over 7 years: no two-month period (unlike for leases granted by unregistered landlord)

         1. Pre-2002 used to be 21 years

            1. Decrease justified because of rising prevalence of shorter commercial leases and decrease in costs of registration

         2. 7 years is to identify short leases relatively unlikely to be sold or mortgaged (registration of these is not beneficial and can be unrealistic/unnecessarily bureaucratic)

         3. Anticipated reduction to 3 years when e-conveyancing is fully in force (Law Comm 271, para 3.17)

         4. Further reduction unlikely (leases < 3 years can be created orally, meaning less likely to be legal advisors)

         5. But future and discontinuous leases are always registrable dispositions

         6. Because leases are new titles, a notice will be entered onto the grantor’s title

      3. Registered charges (eg. mortgages): don’t have their own titles (entry onto existing title) mortgages of unregistered land cannot be registered

      4. Easements and profits: (legal) easements and profits (by express grant) must be registered on the title of the benefited land and a notice on the burdened land; implied and prescriptive easements don’t need to be registered

         1. Failure to register means easement can only be equitable so that registration is essential to bind purchasers (reverses previous law: Celsteel v Alton House Holdings)

            1. Therefore easements in short leases have to be registered, even if the lease itself is an overriding interest (justified because easements bind adjoining land whereas short leases only affect the landlord’s title to the land)

         2. Profits in gross have their own titles (while profits appurtenant are registered in the same way as easements)

   3. Effect of registration

      1. S29 LRA 2002: Earlier unprotected (non-overriding) interests are defeated, as long as there is (valuable) consideration (Midland Bank v Green)

      2. Contrasts with first registration:

         1. Valuable consideration is needed

         2. No special protection for trust interests or adverse possession

      3. Problems:

         1. Must the transferee be in good faith?

         2. Can a purchaser be bound by a personal unprotected interest?

         3. What is the effect of forged transfers? Three situations:

            1. A forges original owner’s signature in a transfer to himself, and then registers: A cannot be protected (though not clearly stated in legislation)

            2. A forges original owner’s signature in a transfer to himself, registers, and then sells the land to B (unaware of forgery). B obtains good title on registration because s29(1) provides that unprotected interests (original owner’s claim) are defeated by a registered transfer

            3. A forges original owner’s signature on a direct transfer to C, C registers, and believes in good faith that he is buying from the original owner.

               1. C wasn’t duped by the register, but by a supposed dealing with the original owner; protecting him would remove the incentive to ensure that documents are genuine

               2. But C is also registered; it can be argued that having paid for registration, C should obtain the same guarantees as any other register (Torrens systems in Australia and New Zealand favour the purchaser: Frazer v Walker. This is IMMEDIATE INDEFEASIBILITY, contrasted with DEFERRED INDEFEASIBILITY which protects only subsequent purchasers, preferred in Scotland (LR (Scotland) A 2012, ss50, 86)

               3. If C tries to rely on s29, there are two problems:

                  1. Malory Enterprises v Cheshire Homes: under pre-2002 law, there is no disposition where there is a forgery. Applied to the 2002 Act in Fitzwilliam v Richall Holding Services

                  2. S29 protects against unprotected interests “affecting the...