#16153 - Registration Theory - Land Law

Unregistered land 4

Hunt v Luck [1902] 1 Ch 428 5

Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783 5

Law of Property Act 1925 ss 198, 199 5

Land Charges Act 1972 ss 2, 4(5)(6), 10(4), 17 6

Midland Bank v Green [1981] AC 513 6

Introduction 6

Gardner (2014) 77 MLR 763 6

Purchasers with actual notice 7

Smith, Pp 250 – 257 7

L.R.A s23, 26, 29 9

Law Com 254, Para 3.39-3.50 9

Law Com 271, paras 5.16-21, 5.1-5, 5.6-5.13 10

(previous law) Peffer v Rigg [1977] 1 W.L.R. 285 11

Lyus v Prowsa [1982] 2 All E.R. 953 11

Thompson, “Registration, Fraud and Notice” [1985] C.L.J. 280 11

Howell, “Notice: A broad view and a narrow view” [1996] Conv 34 at pp 40-43 13

Farah Constructions V Say-Dee (2007) 81 ALJR l 107 at [190]-[198] (High Court of Australia) 13

Midland Bank v Green[1981] AC 513 14

Forgery 14

Swift 1st Ltd v CLR [2015] EWCA Civ 330 14

Lees (2015) 131 LQR 515 14

Milne [2015] Conv 356 15

Smith [2015] CLJ 401 16

Overriding interests (Introduction) 17

Smith, 257 – 275 17

LRA, s 115-116, Schedule 3 19

Law Com 254, Parts IV and V 19

Law Com 271, Part VIII (we study Schedule 3, though some of the material is discussed in relation to Schedule 1 - first registration) 20

Overriding Interests (Paragraph 1) 20

City Permanent BS v Miller [1952] Ch 840 20

Overriding interests (Paragraph 2) 20

National Provincial Bank Ltd v Ainsworth [1965] AC 1175 at pp 1226-1227 and 1259-1262 20

Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] Ch 216 21

Epps v EssO Petroleum [1973] 2 All E.R. 465 21

PAlk (1974) 38 Conv. 236 21

Swift 1st Ltd v Chief Land Registrar [2015] EWCA Civ 330 22

Williams and Glyn's Bank v Boland [1980] 2 All E.R. 408 22

Smith [1981] L.Q.R. 12 23

Sydenham [1980] Conv. 427 23

Martin [1981] Conv. 219 24

Lloyds Bank v Rossett [1988] 3 All E.R. 915, 924-927, 938-942, 945-948 (only actual occupation issues) 24

Smith, (1988) 104 L.Q.R. 507 25

Sparkes [1989] Conv. 342 25

Abbey National v Cann [1990] 1 All E.R. 1085 25

Smith 106 L.Q.R. 32 26

Hypo-Mortgage Services Ltd v Robinson [1997] 2 FLR 71 26

Link Lending Ltd v Bustard [2010] EWCA Civ 424 26

[2010] 28 E.G. (Estates Gazette) 86 26

Chaudhary v Yavuz [2011] EWCA 1314; [2013] Ch 249 26

McFarlane, “Eastenders, Neighbours and Upstairs Downstairs: Chaudhary v Yavuz, 2013 Conv 74 (Comment on Chaudhary v Yavuz 27

Jackson, Title by registration and concealed overriding interests: the cause and effect of antipathy to documentary proof, 119 LQR 660 28

City of London BS v Flegg [1988] AC 54 29

Scott v Southern Pacific Mortgages Ltd [2015] A.C. 385 29

Mortgage Express v Lambert [2016] 3 WLR 1582 29

Dixon, Priority, overreaching and surprises under the Land Registration Act 2002, 133 LQR 173 (Comment on Lambert) 29

Bristol and West BS v Henning [1985] 1 WLR 778 30

Paddington BS v Mendelsohn (1985) 50 P & CR 244 30

Alteration and indemnity 30

Textbook 30

LRA, Schedule 4, paras 1-4, 8, s 131, Schedule 8, paras 1, 5-9, 11 32

Law Com 254, Part VIII 32

Law Com No 271, Part X 33

Baxter v Mannion [2011] 2 All ER 574 33

Gold Harp Properties v MacLeod [2014] EWCA Civ 1084 33

Goymour [2015] Conv 253 33

Smith [2015] CLJ 10 35

Swift First Ltd v CLR [2015] EWCA Civ 330 35

Goymour [2013] CLJ 617 35

Cooper, “Resolving Title Conflicts in Registered Land, (2015) 131 LQR 108 36

Electronic Conveyancing 37

Land Registration Act 2002 ss 91-93, Schedule 5 paras 1-2, 6-9 37

Law Com No 254, Part XI (in outline) 37

Goals of e-conveyancing 37

Concerns regarding E-Conveyancing 37

Law Com No 271, Part XIII, especially paras 13.1-20, 13.47-54, 13.72-84 37

General Issues 37

Benefits of E-Conveyancing 37

How effective is Law Comm at restricting overriding interests? 38

benefits of registration 38

Actual occupation overriding interests: issues 38

Tutorial Questions (and answers) 38

Tutorial Notes 40

Questions 41

Problem Question 41

Rule: legal rights automatically bind the world (all subsequent purchasers, squatters etc.) and equitable rights bind all other than the bona fide purchaser of a legal estate for value without notice. Role greatly diminished by the increase in registration, and even rules of unregistered land are overlaid by registration of land charges and overreaching.

I – Land charges

LCA 1925 (consolidated into LCA 1972) introduced a means of publicity and certainty by providing for statutory notice of certain interests affecting an unregistered estate: they are those burdens on unregistered land that are appropriate for long-term enforcement irrespective of the identity of the estate owner.

The Act modifies the traditional doctrine of notice by providing that registration in the Register of Land Charges is “deemed to constitute actual notice … to all persons and for all purposes” (LPA 1925 s198(1)).

The effect of non-registration is usually voidness of the registrable interest against most kinds of purchasers (but never as between the original parties or their donnees (recipient under a will or intestacy)

1. Class A, B, C(i-iii), F: void against a purchaser of the land charged with it, or of any interest in such land (purchaser = anyone who gives valuable consideration, precluding any enquiry into adequacy (Midland Bank v Green, Lord Wilberforce)

2. Class C(iv), D: void against a purchaser for money or money’s worth of a legal estate in the land charged (s4(6) LCA 1975)

Note: this statutory immunity can be defeated by arguments of constructive trust or estoppel (ER Ives v High).

Voidness of registrable but unregistered charges make it irrelevant that the purchaser had actual express knowledge of the existence of the interest (s199(1)(i) LPA 1925) – this effects a change “from a moral to an a-moral basis” in the protection of equitable interests in land (HWR Wade).

Briefly thought that taking a conveyance at an undervalue in a deliberate attempt to free the estate of some known but unregistered incumbrance commits a form of fraud which disables him from pleading the fact of non-registration, but in Midlande Bank v Green this was denied – the only form of notice relevant to land charges is that constituted by entry in the register, thus, there is no criterion of good faith in the operation of LCA (“it is not fraud to take advantage of legal rights, the existence of which may be taken to be known to both parties” Lord Wilberforce).

Classes of land charges:

1. Class C(iv): estate contract (contracts for the sale of a fee simple, contracts for a lease)

2. Class D(ii): restrictive covenant (a covenant or agreement other than between a lessor and lessee restrictive of the user of land)

3. Class D(iii): equitable easement (but the very persons in whose favour such charges commonly arise are those who tend to be unaware of the need to secure protection by registration: see ER Ives v High)

II – Bona fide purchaser rule (equitable doctrine of notice)

Strategy of 1925 Act to eliminate the uncertainty of the doctrine by dividing equitable rights affecting unregistered land into ‘specific’ (registrable land charges) and ‘general’ (overreachable) burdens. But there is a third category of equitable rights whose effect can only be determined by a residual application of the bona fide purchaser rule.

Content of the rule:

The purchaser must demonstrate, in order to be released from pre-existing equitable rights:

1. Bona fides (a “genuine and honest” absence of notice: Lord Wilberforce, Midlande Bank v Green)

2. Purchaser of legal estate (purchasers of equitable interests are in principle subject to all prior equitable interests irrespective of notice: London and South Western Railway Co v Gomm)

3. Purchaser for value (must give valuable consideration (so no donnee or squatter), but the adequacy is irrelevant)

4. Without notice (actual or constructive or imputed (matters of which the solicitor or agent was aware or should reasonably be aware))

Surviving applications:

1. Beneficial interests hidden behind an implied trust of land, in the context of a dealing by a sole owner of an unregistered legal estate (i.e. Williams and Glyn’s Bank v Boland)

Thus, a purchaser of an unregistered legal estate takes subject to:

1. Any other pre-existing legal estates

2. Any registered land charge

3. Any overreached equitable interest of which he has notice (actual, constructive or imputed)

4. If leasehold, certain covenants and obligations arising under the lease

Held: A purchaser will have constructive notice of any rights reasonably discoverable by inspection of the property, and, in particular, from enquiry of any occupier as to his interest and those of which he holds it. This does not extend to the rights of a landlord.

Vaughan Williams LJ : ‘if a purchaser or mortgageee has notice that the vendor or mortgagor is not in possession of the property, he must make enquiries of the person in possession, of the tenant who is in possession, and find out from him what his rights are, and if he does not choose to do that then whatever title he acquires as purchaser or mortgagee, will be subject to the title or right of the tenant in possession. I do not think that there is, for the purpose of ascertaining the title of the vendor, any obligation on the purchaser to make enquiries of a tenant with reference to anything but the possession and interest of the tenant.’

Mr Tizard was the sole registered proprietor of the matrimonial home in which his wife had a beneficial interest. The marriage broke down and Mrs Tizard moved out but returned each day to look after their twin children and would stay the night if her husband was away. Mr Tizard mortgaged...