Unit 9 Land Law –
Suggested Answers - June 2010 Paper
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SECTION A
Question 1
“There is nothing in the authorities which prevents me from giving s2 the
meaning which I consider to have been the clear intention of the
legislature…the plain purpose of s2 [Law of Property (Miscellaneous
Provisions) Act 1989] was, as I have said, to prescribe the formalities for
recording the assent of the parties.”
Hoffman J, Spiro –v- Glencrown Properties Ltd & Another (1991)
To what extent have Parliament and judicial intervention mitigated the
rigours of s2 Law of Property (Miscellaneous Provisions) Act 1989?
Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires that
contracts for the creation or transfer of an estate or interest in land must be in
writing, contain or refer to all of the agreed terms, and be signed by or on behalf of
all parties to the transaction.
Subsection 2(5) contains limited exceptions. These include certain short leases,
contracts made at auction, and, most significantly, “implied resulting and
constructive trusts”.
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Since its enactment, the interpretation of the section has been subject to
considerable judicial decision making.
Early decisions seemed to relate to matters falling outside the section. Thus,
provided an option agreement complies with s2, the notice to exercise needs not
(Spiro –v-Glencrown). It would seem perverse otherwise.
An exchange of letters which were not identical (McCausland –v- Duncan Lawrie)
does not satisfy s2, nor does the deposit of title deeds to secure a loan (United Bank
of Kuwait –v- Sahib). A lock-out agreement creates no estate or interest, and thus
does not need to comply (Pitt –v- PHH Asset Management).
The courts have permitted parties to avoid the rigours of the section by arguing
collateral contracts (Record –v- Bell); that the instant agreement did not create or
transfer an estate, but was merely the settlement of a boundary dispute (Joyce –vRigoli); and that an informal agreement did not need to be pleaded where another
document created an express trust to which the legal owner of the estate was
subject (Singla –v- Bashir).
More significantly, the courts held in Tootal –v- Guinea that the section applies only
to executory contracts. Once the agreement has been performed, no argument
about formalities will be heard by the courts.
Most significantly, the courts have struggled to resolve the question of whether a
claim of proprietory estoppel stands alone, and thus avoids s2 altogether, or
whether the estoppel must give way to statute unless a constructive trust arises
(thus falling within the exception is s2(5)).
The judiciary seems in earlier cases to have seen proprietory estoppel as
synonymous with constructive trusts.
In Goden –v- Merthyr Tydfil Housing Association, the claimant pleaded that the
defendant was estopped from denying the validity of the informal agreement. The
Court of Appeal, citing Halsbury Laws, demurred, and stated that, "The doctrine of
estoppel may not be invoked to render valid a transaction which the legislature has,
on grounds of public policy, enacted is to be invalid."
In Yaxley –v- Gotts, there was an informal agreement that Gotts would purchase
land for redevelopment by Yaxley, in return for which Yaxley would receive two of
the six flats constructed at the property. No point was taken on formality
requirements at first instance, and the claimant succeeded in his proprietory
estoppel claim. On appeal, the court considered the formality requirements, but
held that, “If an estoppel would have the effect of enforcing a void contract and
subverting Parliament’s purpose, it may have to yield to the statutory law which
confronts it, except so far as the statute’s saving for a constructive trust provides a
means of reconciliation of the apparent conflict.” In this case, the pleading of an
estoppel was held successful, as it was held to give rise to a constructive trust.
This has lead to proprietory estoppel and constructive trusts seeming synonymous
and being applied in strange situations – such a mortgages (Kinane –v- MackieConteh).
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The House of Lords in Cobbe –v- Yeoman’s Row had some opportunity to review the
relationship of estoppel and constructive trusts, but, as the claimant could not make
out an estoppel on the evidence, the comments are obiter. Here, the Lords
suggested that there was a distinction between proprietary estoppel and contructive
trust cases and that a simple plea of estoppel would not be “rubber stamped” as a
constructive trust. This obiter dictum was not, though, followed by the High Court in
Herbert –v- Doyle.
It seems clear that there is still some way to go in finding a certain interpretation of
s2. Recent decisions should narrow the application of proprietary estoppel in
situations of informal commercial agreements. Judicial intervention has produced a
number of evasions and avoidances of the formality requirements, but the signals
from the House of Lords in Cobbe, seem to signal the beginning of the end of liberal
interpretation.
Question 2
“[A lease is] a contract for the exclusive possession and profit of land for
some determinate period.” Lord Templeman, Prudential Assurance Co Ltd v
London Residuary Body (1992)
(a)
Critically evaluate the above statement in light of the common law
requirements of leases.
There are said to be three requirements for an agreement to be recognised as a
lease: certainty of term; certainty of rent; and exclusive possession.
Certainty of term requires that the date on which the lease comes to an end must
be certain on the date on which lease takes effect. Thus in Lace –v- Chandler, a
term stated to be “for the duration of the war” lacked certainty, and the agreement
amounted to a mere licence.
Certainty of rent requires that the amount of rent must be certain on the date it
falls due for payment (Greater London Council –v- Connelly), although it is not a
requirement that every lease charges a rent or has a premium (Prudential): merely
that if a rent is charged, it be certain.
Finally, a lease must have exclusive possession: the right for the tenant to exclude
the world including the Landlord (Street –v- Mountford). It is to be noted, though,
that there can be circumstances where there is exclusive possession but no lease
(service occupancies, family arrangements and “acts of generosity” (although in the
latter respect, see Bruton).
Lord Templeman’s statement is, then, a fair statement of the law.
(b)
Explain the extent to which the description of a written contract as a
lease or a licence influences the court in determining whether or not
there is exclusive possession.
The identification of exclusive possession has troubled the courts for many years.
Since the 1950s, and the advent of statutory protection for both residential and
commercial tenants, the courts have recognised that landlords would prefer to grant
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a licence and that tenants would usually prefer a lease.
Thus the labelling of an agreement as a licence will not prevent the court from
seeking to determine whether or not the agreement creates exclusive possession: it
is a matter of construction not nomenclature (Addiscombe Gardens).
Following Marchant –v- Charters and Somma –v- Hazelhurst, the parties’ intentions,
in the absence of a clear “sham”, were key. It was inevitable in most cases, then,
that the intention of the landlord to grant a licence would trump any subjective
intention of the tenant.
The problem inherent in this was recognised in the leading case of Street –vMountford, where the court held that the application of the “intention” test would
allow landlords to “drive a coach and horses” through the Rent Acts. The court held
that the existence of exclusive possession as a matter of fact, as opposed to
intention, was key, and that with exclusive possession, in the absence of one of the
Errington exceptions (service occupancy, lack of intention to create legal relations,
lack of power to grant, and purchaser moving in prior to purchase) a lease would
arise where there was exclusive possession. It is interesting to note that the “lack of
power” point has been ignored or overlooked subsequently (see, for instance,
London & Quadrant HA –v- Bruton). The courts approach to identifying whether
exclusive possession exists as a matter of fact can been seen in the joined appeals
in Antoniades –v- Villiers and AG Securities –v- Vaughan.
Recent authorities have, perhaps, seen a rise in the influence of the label, but only
in commercial leases, where both parties have received legal advice (see, for
instance, NCP –v- Trinity).
The description of the nature of the agreement is a factor in determining the
existence of a lease as opposed to a licence, but is only one of a number of factors,
and one which the courts will closely scrutinise.
Question 3
“The registration of land charges concerns land where title is still evidenced by
deeds. Registration of title is a system of land ownership whereby the actual
title to the land is registered and where recourse to the deeds is no longer
necessary.” Thompson, Modern Land Law
Critically compare the systems for registered and unregistered conveyancing.
The purchaser of an unregistered estate must satisfy himself as to title to the
property, and any incumbrances to which it is subject, by examining the title deeds
and inspecting the estate. Even then, he may find himself subject to undisclosed
and undiscoverable interests.
The title itself is demonstrated by “good root of title”: evidence in the deeds of the
succession of title over at least 15 years (ideally a conveyance dealing with the legal
and beneficial estate: One which would have been investigated by a solicitor or
Legal Executive). As to any encumbrances, he will be bound absolutely by legal
interests (a first mortgage of the legal estate by deed, for instance), whether he
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knows of them or not, as legal interests “bind the world”. This means it is possible
for him to be bound by legal interests of which he was unaware because the seller
“hid” the relevant document, or because they are documented beyond the root.
Unless he is equity’s darling, he will also be bound by any third party equitable
interests (for instance a restrictive covenant).
Equity’s darling is the “purchaser for value of the legal estate without notice”. The
key aspect is notice. If the purchaser actually knows about the third party interest
(for instance because it is referred to in the title deeds) he will have actual notice
and be bound. Such actual notice can be imputed to him if his legal advisor is aware
of the interest but does not tell him (Strover –v- Harrington).
It is possible for him to be deemed to have notice constructively. The law dislikes
the idea of people remaining wilfully ignorant, and s199 of the Law of Property Act
1925 deems a purchaser to be on notice of any interest which would have been
revealed had reasonable investigations and inspections been made. Thus in
Kingsnorth Trust –v- Tizard, the purchaser was on notice of the possibility the wife’s
beneficial interest as her clothes and other personal items were at the premises.
The lack of certainty of the notice provisions is mitigated somewhat by the Land
Charges regime. Now enacted by the Land Charges Act 1972, the land charges
regime provides that a purchaser will be deemed to have notice of any matter
registered as a land charge. The Act lists those interests which are capable of be
registered as a land charge, and include second and subsequent legal charges
(puisne charges), equitable charges, and easements and restrictive covenants
created after 1st January 1926.
Moreover, if an interest is capable of being registered as a Land Charge, but has not
been, depending on the type of interest, a purchaser or a purchaser for value make
take free even with notice (see Midland Bank Trust Company –v- Green).
A flaw in the scheme is that the land charge is registered against the name of the
legal owner of the estate at the time of the creation of the relevant interest (in
theory using the spelling shown on the conveyance to that person (Diligent Finance
–v- Alleyne)). Problems can arise where the legal owner uses alternate spellings of
their name. Similarly, if the legal owner is an institutional land owner, such as a
local authority or the National Trust, a search against their name will reveal far
more land charges than the ones affecting the purchased estate, and considerable
time must be taken determining which, if any, affect that estate.
The registered regime is premised on ownership being by registration of title. The
legal owner is the person shown as registered proprietor: proof of registration is
proof of ownership. Under the current regime (Land Registration Act 2002), a
purchaser for value of the registered legal estate whose purchase is registered will
take subject only to those interests which are registered, noted on the register or
which override (ss28-30 LRA02).
The scheme of registration is designed to remove the uncertainty and risk of the
unregistered regime. It is underpinned by the mirror, curtain and indemnity
principles. The indemnity principle provides that the register is “state guaranteed”.
A person who suffers loss because of mistakes on the register, who has no fault in
that loss, will be compensated by the government. This is a significant advantage
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over the unregistered regime, where a purchaser suffering loss because, for
instance, the seller subverted a legal mortgage, will have little recourse.
The mirror principle provides that the register should be an accurate reflection of
the incumbrances affecting the estate. However, over-riding interests, which bind a
purchaser even though not on the register, are a “crack in the mirror”. These
include certain short leases not capable of registration (Sch 3 para 1 LRA02). In
theory these should be easily discovered on inspection of the estate, but even if not,
the purchaser is likely to be prejudiced only for a relatively short time. Also overriding are easements created impliedly or by prescription (Sch 3 para 3 LRA02).
These should be discovered by inspection as the Schedule requires them to be
“obvious on a reasonably careful inspection” if they are to over-ride, although the
Schedule excepts easements which have been used within the last year, meaning a
purchaser could take subject to an undiscoverable easement by way, for instance,
of drainage. Some commentators have suggested that this marks something of a
return to interests binding by notice.
The most significant category of overriding interest is the interest protected by
actual occupation (again subject to a requirement that it is “obvious on a reasonably
careful inspection). This requires actual occupation coupled with an interest in the
land.
The curtain principle provides that a purchaser does not have to look beyond the
legal estate and worry about taking subject to a beneficial interest (the same
applies to the beneficial interest in an unregistered estate). The doctrine of
overreaching mitigates any concerns about this where the purchaser gets a capital
receipt from all of the trustees, provided that there are at least two of them. The
risk is, then, purchasing from a single legal owner without inspecting to see if a
beneficiary is in actual occupation.
The registered system is not perfect, given the risk of taking subject to an
undisclosed over-riding interest, but that risk is considerably less than in
unregistered land. Further protection is provided to purchasers of registered estates
by the government guarantee and indemnity. It is fair to say, then, that the
registered regime, even with its faults, is immeasurably preferable to the uncertain
and fragile unregistered regime.
Question 4
"If two or more persons purchased property…and there was no declaration of
trusts on which they were to hold the property, they held the property on a
resulting trust for the persons who provided the purchase money in the
proportions in which they provided it, unless there was sufficient specific
evidence of their common intention that they should be entitled in other
proportions, that common intention being a shared intention communicated
between them and made manifest at the time of the transaction itself."
Springette v Defoe (1992)
Critically evaluate the application of constructive and resulting trusts to
property owned by cohabiting couples.
A presumption is raised that the people who advance the purchase money at the
time of acquisition of property are entitled to a proportion of the value of that
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property equivalent to the proportion they paid to the purchase price (Dyer –vDyer). The presumption can be rebutted by evidence that the money was a gift or
loan, or by express wording to the contrary (Re Sharpe, Cowcher-v-Cowcher).
Thus where cohabiting couples have considered the division of property on sale or
the breakdown of the relationship and have expressed the nature of the trust, there
can be little problem.
In the first flush of love and of living together, however, cohabiting couples are
loath to consider the possibility of the break up of their relationship, and, in the
absence of a statutory regime dealing with the distribution of assets on the
breakdown of an unmarried cohabiting relationship, resulting and constructive trusts
inevitably come in to play. Married couples and civil partners have fewer such
concerns, as statute provides for re-distribution of assets on the breakdown of the
relationship.
Where there has been contribution to the purchase price by both parties, the use of
the resulting trust provides some remedy to both parties. The resulting trust,
however, may not provide a fair division of value where the purchase price was paid
wholly or mostly by one party, or where the other party has made a significant
contribution to the running of the household after purchase.
The use of the constructive trust goes some way to providing a degree of fairness in
such instances.
A constructive trust is, in theory, imposed when it is unconscionable for the legal
owner to deny the beneficial interest. According to Lloyds Bank plc-v-Rosset, the
person claiming to be the beneficiary of a constructive trust must show either; an
express common intention at the time of purchase that the property be owned
jointly together with detriment: or a common intention implied from the
circumstances together with a contribution to “bricks & mortar”.
Thus in Grant –v- Edwards, the express intention was manifested by the
defendant’s assurance that the legal estate would be in joint names but for that it
would complicate his divorce, and detriment was shown by bringing money in to the
household and paying some of the bills (note that there was not direct contribution
to “bricks and mortar”).
It seems that the detriment need not be great. In Hammond –v- Mitchel it
amounted to demurring in the legal owner granting a charge over the property,
although in the absence of her having a demonstrable interest in the property
before that point, it is difficult to see how she might have prevented it.
Where there is no express common intention, the courts will look at all of the
circumstances to see if such an intention can be implied. Here the claimant will have
to show a direct contribution to “bricks and mortar”. In Passee –v- Passee, making
payments towards the mortgage was sufficient, but, tellingly, in Burns –v- Burns
giving up work to keep the house and raise children was not.
More recent decisions (Oxley-v-Hiscock, Drake-v-Whipp, Midland Bank-v-Cooke,
Stack–v-Dowden) have demonstrated a greater willingness by the courts to impose
a constructive trust (even where a resulting trust might be normally be presumed)
on the breakdown of a cohabiting relationship. In those cases the courts seemed to
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recognise that the imposition of a resulting trust was a “blunt instrument” in
determining the distribution of the asset. But this can only be done where the
common intention and reliance or contribution can be demonstrated. If the parties
have never discussed the matter, the claimant faces the high hurdle of showing
contribution: this creates problems in the cases which seem most to require justice,
where one party has given up work and career to raise a family.
The use of constructive and resulting trusts is
property on such a breakdown, particularly in
purchase price or to bricks and mortar after
legislation, the doctrines are the only thing filling
not an ideal way of dealing with
the absence of a contribution to
purchase, but in the absence of
the void.
SECTION B
Question 1
Carlos purchased “Bowerdean Cottage” with the aid of a loan from Hampdenshire
Bank. The loan was secured by way of a repayment mortgage over Bowerdean
Cottage. Both Carlos’ freehold and Hampdenshire’s legal mortgage are registered at
the Land Registry.
Some months later, Carlos lost his job and was unable to keep up repayments. He
decided to “run away”. He removed and stored the contents of the cottage,
including the kitchen units and white-goods, valuable Victorian iron fireplaces, all of
the internal doors, and a number of ornamental statues from the garden.
The mortgage repayments are now four months in arrears.
1.
Advise Hampdenshire Bank how it might enforce its security.
A mortgagee has a number of options available to it. The principal ones are: to sue
on the covenant to repay; to repossess; to exercise a power of sale; to appoint a
receiver; or to foreclose.
It is settled law that a secured lender cannot be in a worse position than an
unsecured lender, and can therefore raise a simple debt action (C&G –v- Johnson &
Sunshine). If Carlos has no job and is in default of his repayments already, the
Bank would likely take the view that suing a “man of straw” would be fruitless.
More likely, the lender will wish to repossess and to sell the property to realise
funds to repay the outstanding loan. The right to repossess arises as soon as the
mortgage is executed (s95(4)Law of Property Act 1925). Common law intervenes,
however, to provide that possession can only be claimed “bona fide” by the lender
and only then for the purposes of enforcing the charge (Quennell –v- Maltby).
Furthermore, where the property is residential, s36 Administration of Justice Act
1970 gives the court a wide discretion to vary or suspend any order for possession
of that property (see C&G –v- Norgan). Such an order is likely to be necessary for
the repossession of residential property, given the provisions of the Protection from
Eviction Act 1977.
Here, there is nothing to suggest that Carlos is likely to be able to pay the arrears.
Coupled with the fact that he has run away, it seems likely that a court would order
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possession in the Bank’s favour.
The power of sale arises, per s101 LPA 25, where the mortgage is by deed, contains
no contrary provision, and where the date for redemption has passed. The date for
redemption is the earliest date on which the lender can demand repayment of the
whole outstanding sum. In most institutional mortgages for the purchase of
residential property, this is the date the mortgage is executed, or a few months
later. It seems reasonable to assume that this section is satisfied if Carlos
purchased with a loan secured by a standard acquisition mortgage.
The power of sale can only be exercised if s103 is satisfied. This requires default of
repayments for three months after notice has been served; or two months arrears
of interest; or breach of any other covenant. There is nothing to suggest that notice
has been served, but, assuming that this is a standard acquisition mortgage with
monthly interest payments, the second condition will be satisfied.
If the power is exercised, the mortgagee has a duty to take reasonable care to
secure the market value of the property (Cuckmere –v- Mutual Finance) and the
proceeds are held on trust by the mortgage to be distributed in accordance with
s105 LPA25.
The appointment of a receiver to manage the property can be made if, again, ss101
& 103 are satisfied. This would be unlikely unless the property had a regular income
from a tenant or a business.
Foreclosure means that any outstanding loan is extinguished, but that the
mortgagee becomes the legal and beneficial owner of the property. As this could
permit the lender to make a “windfall” if the borrower has positive equity, s91
LPA25 permits the court a discretion to order a sale in lieu of foreclosure. Assuming
that there is some “equity” in the property, a court would be likely to order sale in
lieu.
In this case, neither the appointment of a receiver, foreclosure, nor an action on the
covenant to repay seem likely or viable. An order for possession should be sought
with a view to selling the property pursuant to the Bank’s power of sale.
2. Advise Hampdenshire Bank whether the various items removed by Carlos were
covered by its security.
Section 205 of the Law of Property Act 1925 defines “land” as including, inter alia,
all corporeal hereditaments. This includes the land itself, buildings, and things
forming a physical part of the land and buildings.
Assuming that the mortgage gave no more than the estate as security, that security
will be made up of the land and buildings, together with things forming a part of
that land and buildings. In simple terms, the mortgage secures the fixtures but not
the fittings.
The original test to distinguish fixtures (land) and fittings (chattels) being the
"degree of annexation test", although problems can arise with "temporary" or "lean
to" buildings. Other things attached to land were seen as land so long as they were
firmly attached. Thus if a one ton statue was bolted down, it was land, if not, a
chattel (compare Holland –v- Hodgson and Berkeley –v- Poulett).
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The courts recognised the problem and addressed issues with consideration of
whether things on the land formed a part of an "architectural scheme of decor".
Thus a tapestry nailed to the wall which was in keeping with a theme of decoration
was land, whilst one simply nailed to the wall so it could be seen, was not (Compare
Leigh –v- Taylor and Re Whaley). This idea seems somewhat incongruous in an age
where "schemes of decor" are the result of a trip to the DIY shop and a weekend's
painting.
The more modern test is the "purpose of annexation" test. This test asks why the
object has been attached: for its own purpose, or for the enhancement of the land.
The recent case of TSB Bank plc –v- Botham casts some light on its application to
things one expects to find in a modern home. Botham invites the court to
distinguish fixtures and fittings on the basis of permanence & lasting improvement
and relevance or utility and ease of removal. In that case, kitchen and bathroom
units were considered fixtures, whereas white-goods and gas fires, given their
limited annexation and short working lives, were considered fittings. Similarly,
unless recessed (that is “built in”) light fittings were to be considered fittings.
Thus in the instant matter, the kitchen units will be held to be fixtures, the whitegoods as fittings (assuming that the white-goods are not “built in”). The fireplace,
being decorative and presumably well fixed, may be deemed to have a high degree
of annexation and thus a fixture – a matter relevant to the utility of the fireplaces
might arguably be the presence or otherwise of an independent central heating
system. It seems conceivable, but unlikely, that they might be considered as a part
of an architectural scheme. Internal doors are highly likely to be fixtures based on
both degree and purpose of annexation – they can hardly be said to be hung for
their own use. Ornamental statues are dependant largely on degree of annexation.
If they are fixed, they will probably be fixtures, if not, fittings. There is, again, some
possibility that an argument might be raised that they form a part of an
architectural scheme.
The Bank is entitled to seek to recover the fixtures, or damages for their removal.
Whether this is a viable action is another matter.
Question 2
Derek has owned the registered freehold of Kimber House since 1970. Kimber
House is adjacent to an industrial estate, the freehold of which is owned by
Peterborough Estates Ltd.
Since moving in to Kimber House, Derek has parked his car in the car park forming
a part of the industrial estate, and has used the bins on the industrial estate for his
excess household rubbish. A local bye-law passed in 1995 makes it a criminal
offence to deposit without lawful authority household rubbish on public or private
land not owned by the person depositing that waste.
Last year, Peterborough Estates Ltd erected a large warehouse which has blocked
the light to Kimber House.
Derek has complained to Peterborough Estates Ltd about the warehouse and the
company, now aware of his parking and depositing of rubbish, has threatened legal
proceedings if he continues to use its land.
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1.
Advise Derek whether he might continue parking his cars on the industrial
estate and depositing his rubbish in the estate’s bins.
In order to advise, it is necessary to determine first whether the user could amount
to an easement and, second, to determine if they have arisen by long user
(prescription).
An easement is a right to do something on someone else's land falling short of a
right to possession. In order to be an easement a right must fall within the criteria
laid down in Re Ellenborough Park. The right must: relate to a dominant and
servient tenement; which are owned or occupied by different persons;
accommodate the dominant tenement; and "be capable of forming the subject
matter of a grant". The final point takes in both the capacity of the grantor and
grantee and that the right claimed falls within the range of rights recognised by the
courts as being capable of amounting to easements.
There is clearly a dominant and servient tenement in diverse ownership. There is
nothing to suggest that either party (or their predecessors) lack capacity. A
purported right “accommodates” if it benefits the land itself, as opposed to
benefiting the incumbent estate owner personally. In the round, any owner of the
House (and thus the estate itself) would benefit from a right to park and, arguably,
a right to store rubbish off-site.
Rights of storage, provided the user does not amount to an exclusive one, have long
been held capable of being an easement (Wright –v- Macadam). One might surmise
that the domestic rubbish from one house is unlikely to give rise to exclusive user of
bins on an industrial estate.
As the other points are made out, it seems that the user of the bins may be capable
of being an easement.
Rights to park have troubled the courts. In simple terms, a right to park cannot
amount to an easement if the right refers to a specific parking space (Newman –vJones). Rights to park in a larger area are more problematic. London & Blenheim
Retail Parks –v- Ladbrokes and Batchelor –v- Marlow and other recent authorities
seem to suggest that the key is whether the user is exclusive and whether it
deprives the servient tenement owner of the reasonable use of his land. If Derek
has been parking in a “random” space forming a small part of a larger car park, he
may be able to persuade a court that the right is capable of being an easement. If
the car park is small, or he parks in one particular space, his claim is likely to fail at
this hurdle.
A prescription claim has three basic requirements. The user must be nec per vi
(without force), nec per clam (without secrecy), and nec precario (without
permission).
There is no evidence that Derek’s user has been “secret” or with permission. The
apparent illegality of the dumping of rubbish since 1995 raised the possibility that,
since then, his user has been “by force”. Such was the decision in Hanning –v- Top
Deck. The precise position has since been clarified by Brandwood –v- Bakewell. That
case concerned driving on a common, which, since the 1930s has been a criminal
offence if without lawful authority. It was held that such a user would not be “by
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force” as the words “without lawful authority” admitted the possibility of a grant for
that user, which is the basis for the “fiction” of a prescription claim.
If Brandwood is followed, then Derek’s user, given that this is a prescription claim,
will not be considered to be by force.
To bring a claim, Derek must also show that he falls within one or more of the three
prescription doctrines: Common law, lost modern grant, and the Prescription Act.
Under the common law doctrine, if the claimant can show twenty years user, a
presumption is made that the easement has arisen. This is easily rebutted by
evidence that the user cannot have existed since time immemorial (since 1189)
(See, for instance, Duke of Norfolk –v- Arbuthnot). Here, it seems unlikely that an
industrial estate (or, for that matter, the cottage) would have existed in 1189.
Perhaps more to the point, regular rubbish collection and cars were not in existence
in 1189.
The doctrine of lost modern grant relies on the fiction that a grant was once made,
but that the deed has been lost. Provided the claimant can show twenty years user,
and the defendant cannot show that such a grant was impossible (in theory, that
the legal owner of the servient tenement was incapable during that period would
do), the claim is made out. Here such a claim seems likely, and, even if the courts
hold that Derek’s user of the bins is by force since 1995 (barring a claim under the
Prescription Act), he could rely on the period 1970 to 1990.
The Prescription Act 1832 has two periods of user. Section 2 of the Act provides that
where twenty years’ user without interruption in the period “next before action”
(immediately prior to the claim), then the claim can only be defeated by one of the
common law grounds (force, permission or secrecy). Here, and subject to the force
point, both users are likely to be made out under the Act. If, in the Summer of
2010, he can make out 40 years user, his claim under the Act is indefeasible in the
absence of evidence of a written permission.
Thus Derek will be able to claim prescriptive easements for parking (subject to the
exclusive user point) and for the use of the bins the company will not be able to
prevent his continuing use.
2.
Advise Derek whether he can take any action in respect of the blocking of light
to his house.
Section 3 PA provides that a right to light can be established as an easement on
evidence of twenty years uninterrupted user in the period next before action. The
claim is indefeasible in the absence of evidence of permission in writing or by deed.
A right to light is capable of being an easement so long as the right is claimed
through a defined aperture (in simple terms, a window) (Wheeldon –v- Burrows).
So long as Derek can demonstrate that the right is claimed through a particular
window or windows, he seems likely to satisfy both Wheeldon and the Act, and thus
make out his claim.
That said, he may have waited too long to get an injunction to prevent interference,
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as he has stood by whilst the company went to the expense of the construction
work: the equitable doctrine of laches stands in his way. His claim will be limited to
damages.
Question 3
Bambera Developments Ltd purchased and developed a site in Kerlow. Three houses
were built on the site.
The legal freehold of the first was sold to Amanda in July 2002. Amanda has since
sold her estate to Bob.
The legal freehold of the second was sold to Chris in August 2002. Chris has since
sold to David.
The legal freehold of the third (amounting to all of the remaining land owned by
Bambera Developments Ltd) was sold to Edna in September 2002. She has since
sold to Frank.
Each of the transactions complied with formality requirements and was properly
registered.
The transfers to Amanda, Chris and Edna each contained the following:
“The transferee hereby covenants on behalf of himself and his successors in title for
the benefit of the transferor’s retained land:
i)
Not to use the property other than for residential purposes by one family;
ii)
To keep and maintain the gardens of the property is good condition;
iii)
Not to build or construct any building or extension at the property without
the written consent of the transferor or his successor in title.”
Bob has begun to build an extension to the first house.
David has allowed the gardens at the second house to become overgrown and
untidy.
Edna is running a second-hand car business from the third house.
1.
Advise the parties as to whether, and if so by whom, the respective covenants
might be enforced to; prevent the building of the extension at the first house;
compel the maintenance of the garden of the second; and stop the second-hand car
business being run from the third house.
The benefit of a covenant will pass at law where the covenant "touches and
concerns" (that is, it is not personal, but affects user of value - Smith and Snipes
Hall Farm Ltd –v- River Douglas Catchment Board), where the covenantee had the
legal estate of the dominant tenement and the assignee derives title therefrom, and
where there was an intention that the covenant bind the land (although now such
intention is deemed by s78 LPA 1925).
The burden of covenants does not, subject to some exceptions (including the rule of
mutual benefit and burden), run with the servient tenement's ownership at law
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(Austerberry, affirmed by Rhone –v- Stephens) (although it may indirectly be
enforced, to the extent of a damages claim, where there is a chain of indemnity
covenants).
The benefit will run in equity where it is annexed or assigned. A covenant will be
deemed annexed in the absence of words to the contrary, by s78 LPA 1925
(Federated Homes Ltd –v- Mill Lodge Properties Ltd). Otherwise, the covenant must
be expressly annexed (by wording in the deed creating it – for example see Newton
Abbot Co-Operative Society –v- Williams –v- Threadgold) or assigned (by wording
in the transfer from the original covenantee to the next owner of the dominant
tenement) (Miles –v- Easter).
The burden will run in equity pursuant to the rule in Tulk -v- Moxhay: the covenant
must be restrictive in nature i.e not requiring expenditure - a test of substance not
form); the covenant must "accommodate the dominant tenement", in effect "touch
and concern"; the covenantee must have owned the dominant tenement at the date
of the covenant's creation; and, the covenant must have been intended to run with
the land, although this will be deemed to be so by s79 LPA 1925 in the absence of
words to the contrary.
Here, the first and third covenants are ostensibly restrictive, and the second is
positive, as it requires expenditure of money to comply. All affect user and/or value,
and therefore are not personal.
As to Bob’s building of an extension at the first house, it seems that both David and
Frank (as the ultimate successors of Bambera Estates Ltd to the extent that they
now own the land which purports to benefit from the covenant) have the benefit at
law (the covenant touches and concerns, and s78 will deem the intention to run)
and in equity (the wording of the covenant amounts to an express annexation,
which would be deemed in any case by s78). The benefit at law will only assist them
if they choose to pursue the original covenantee (who may rely on any indemnity in
the sale to Bob), as the burden will not run at law.
The burden seems likely to run in equity as the requirements of Tulk are made out.
Thus both David and Frank, as owners of the second and third properties, could
seek an injunction and or damages in equity.
As to the want of maintenance of the garden of the second property, there is no
possibility for Bob to enforce it, as his estate never benefited from the covenant (it
had already been sold by Bambera at the time the covenants affecting the second
property were created, and therefore did not form a part of Bambera’s “retained
land”).
Frank’s, the third property, formed a part of the estate owned by Bambera at the
time of the creation of the covenant. The benefit will have run to Frank at law, via
Bambera and Edna, at both law and equity (for the same reasons the benefit of the
first covenant over the first property ran to David and Frank).
The burden, however, cannot run at law, and will not run in equity (as the covenant
is positive it fails the Tulk test). It cannot, therefore, be enforced directly. It is
possible for Frank to sue the original covenantee (who may, in turn, sue David in
reliance on an indemnity covenant), but his action will be limited to damages.
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The use of the third property to run a business is ostensibly in breach of the third
covenant. However, at the moment when the property was sold to Edna, Bambera
retained no more land (it was the final plot to be sold). Therefore the covenants are
personal to Edna (London County Council –v- Allen) as there is no dominant
tenement, and cannot run to Frank even in equity. Moreover, the benefit of the
covenants remains with Bambera. Bambera could only sue Edna (based on privity of
contract who may, in theory, seek an indemnity from Frank), but its action would
not be worth powder and shot, as they have suffered no loss (because they have
not retained land the value of which might be affected).
Question 4
Magdalen purchased the registered freehold of Lincoln Cottage in 1995. The
registered freehold of the neighbouring property, Piggotts Farm, is owned by Neil.
Unbeknownst to Magdalen, her predecessor in title to Lincoln Cottage, Alex, re-built
a part of the boundary wall separating the cottage from the Farm. When Alex rebuilt the wall, he misread the title plan to the property and it encroaches several
feet onto Piggotts Farm.
In 1996, knowing that it formed a part of the farm, Magdalen fenced-off a part of
Piggotts Farm, incorporating it into the cottage, and has used it as a vegetable
garden ever since.
Neil recently had the farm surveyed and valued. His surveyor has pointed out to
him the discrepancy in the boundary and that the vegetable garden forms a part of
Piggotts Farm. Neil insists that Magdalen move the wall and leave the vegetable
garden.
1. Advise Magdalen of whether she must comply and of any other steps she might
take to retain the wall where it is and to keep the vegetable garden.
In order to make out a claim to an estate by adverse possession, the claimant must
first show factual possession, together with the intention to posssess (that is
exclusive possession of the land together with the intention exclude the world
including the paper owner: not necessarily an intention to own) for the requisite
period. See Powell –v- MacFarlane and JA Pye –v- Graham. The notion of “adverse”
in modern application simply means without the permission of the true owner.
In this case, the clear incorporation of the “boundary” land into Lincoln Cottage (by
the fencing itself), together with Magdalen’s ignorance of the “true” ownership,
would seem to demonstrate both the fact of possession and her intention to
possess. There is no evidence that her possession is with consent.
The fencing of the “vegetable patch” and the use of it to grow vegetables would
seem to demonstrate factual possession. Her intention to possess is not negatived
by her knowledge that the land belonged to someone else, and thus the relevant
intention would seem to be made out.
The land which she would claim by adverse possession is registered, and thus the
Land Registration Act 2002 regime for adverse possession claims over registered
estates applied.
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Schedule 6 of the Act provides a regime whereby a person who can show
possession of land (with the necessary intention) can apply to be registered as
proprietor after ten years. When the application is made, the registered proprietor is
given notice of the application (as are any other interested parties: mortgagees, for
instance). The Registered Proprietor has 65 days within which he or she can object
(perhaps on the basis that adverse possession is not made out: the squatter lacks
the necessary intention) or consent to the squatter's registration. If there is no
objection, but the Registered Proprietor responds to the notice, the squatter can
only be registered as proprietor of the land if the registrar is satisfied that he or she
should be registered on one of three bases (per Sch 6 para 5): first, entitlement by
some estoppel; secondly, some other reason (perhaps an un-completed contract for
purchase where the money has changed hands - if it was a long time ago, the
Limitation Act 1980 may prevent the occupier enforcing the contract itself); or,
thirdly, where the matter amounts to a claim over the boundary between two
estates. If the Registered Proprietor makes no response, the squatter will be
registered as proprietor.
Here, there seems to be no grounds for Peter to object to the basic claim that she is
in adverse possession (she has in excess of ten years possession with the necessary
intention).
He seems likely to respond to the notice he will be sent on any application by
Magdalen, in which case the matter would be considered under para 5. There is no
evidence of an estoppel or other reason as to either piece of land (the “boundary
land” or the “vegetable patch”).
Magdalen may be successful as to the boundary land (so long as the boundary line
has never been determined by the Land Registry) as it seems that she reasonably
believed that the land belonged to her (per para 5 (4)) for at least ten years, and
that the estate has been registered for at least a year. There is nothing to suggest
that this is not made out. The extent will be removed from Peter’s title and a new
title created showing Magdalen as registered proprietor with possessory title.
There seems to be no basis on which any claim she makes to the vegetable patch
will be successful – this is not a boundary matter, and there is no evidence of an
estoppel or other reason. Her application will be rejected if Peter responds to the
notice.
However if Peter fails to take action to repossess the vegetable patch in the two
years following any application by Magdalen, she can reapply and will be registered
as proprietor as a matter of course (such an application is not effective if there are
unresolved possession proceedings ongoing).
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