Экзамен зачет учебный год 2023 / ELC, Land Registration
.pdfprotected on (and therefore apparent from) the register143 for the following reasons¾
(1)Those who enjoy such rights tend to know that they have them.
(2)Such rights can be very valuable and must therefore detract from the value of the land which is subject to them.
(3)Many manorial rights are of a kind that could have been the subject of an express grant, such as a right to fish, shoot or take minerals. It is not apparent to us why their manorial origin should give them a special status when it comes to the issue of whether or not they should be registered.
(4)Similarly, as we explain below,144 franchises originate in a royal grant, actual or presumed. There is no reason why such rights should not be registered.
For these reasons, we have concluded that the overriding status of franchises and manorial rights should be phased out over a period of 10 years.145
8.41As regards manorial rights, we explained in the Consultative Document that¾
(1)the meaning of “manorial rights” was a precise one: the rights in question were listed in some detail in paragraphs 5 and 6 of Schedule 12 of the Law of Property Act 1922,146 provisions that have since been repealed;147
(2)such rights could no longer be created after 1925;148 and
(3)on first registration, the existence of such rights is normally apparent from the deeds so that the burden of them is noted on the register in most cases.149
8.42Franchises arise by royal grant (actual or, in cases of prescription, presumed).150 Indeed it would still be open to the Crown to grant new franchises.151 Under the
143Cf, above, para 8.6.
144See para 8.42.
145See further, below, para 8.88.
146In Law Com No 254, para 5.84, we summarised the main manorial rights as (1) the lord’s sporting rights; (2) the lord’s or tenant’s rights to mines or minerals; (3) the lord’s right to hold fairs and markets; (4) the tenant’s rights of common; and (5) the lord’s or tenant’s liability for the construction, maintenance and repair of dykes, ditches, canals and other works.
147Because the provisions of the 1922 Act have been repealed, it has not been possible in the Bill to define “manorial rights” by reference to them. However, it may be taken that the list found in Schedule 12 of the 1922 Act is a comprehensive statement of these rights.
148Law Com No 254, para 4.7.
149Ibid, para 5.85.
150Ibid, para 5.86. Cf above, para 3.19.
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Bill, it will be possible for a franchise holder to apply for the voluntary registration of the franchise with its own title.152 The grant or reservation by the Crown of a new franchise out of unregistered land is not, however, to be a trigger for compulsory registration.153 Many existing franchises are of ancient origin. They are analogous to customary rights and some ¾ particularly franchises of market ¾ are of some economic importance. So far as we are aware, the overriding status of franchises has not been a cause of particular difficulty. However, given the potential value of such rights, we consider that they should be protected on the register, whether by registering them with their own titles154 or by the entry of a notice on the register of the title affected.155
Crown rents
8.43At present “crown rents” take effect as overriding interests under section 70(1)(b) of the Land Registration Act 1925. In the Consultative Document, we explained that we had had some difficulty in ascertaining precisely what Crown rents might be. We concluded that they were¾
probably the rents payable on land held in ancient demesne, that is, land of the manor that belonged to the Crown at the time of the Norman Conquest and which was then granted by the Crown to a subject in return for the payment of a rent.156
On the evidence then available to us, we considered that such rights had probably been obsolete for many years and that their overriding status should, therefore, be abolished.157 Although this recommendation was supported by almost all of those who responded to the point on consultation, we received further evidence from the Crown Estate which has prompted us to reconsider the position. This may be summarised as follows.
(1)A “crown rent” might refer to¾
(a)the rent payable to the Crown for freehold land in a manor of ancient demesne; or
(b)the rent reserved to the Crown under the grant of a freehold estate, whether or not that estate was situated in a manor of ancient demesne.
151In this sense, franchises differ from manorial rights.
152See Cl 3(1)(c); above, para 3.19. This would be so in relation to an existing franchise or on the grant or reservation of a new one.
153Cf Cl 4(1); above, para 3.23. By contrast, the grant or reservation of a franchise out of registered land is a registrable disposition: see Cl 27(2)(d); above, para 4.24.
154See Cl 3(1); above, para 3.19.
155For notices, see above, paras 6.5 and following.
156Law Com No 254, para 5.35.
157Ibid, paras 5.35, 5.36.
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(2)As regards (b), there were many examples of such rents in conveyances of the foreshore made by the Board of Trade up to 1949.
(3)Even though the significance of such rents in monetary terms might not be substantial, the Crown could not say that they were obsolete, particularly as, in some cases, the Crown had sold on and was no longer the recipient of the rents.158
8.44In the light of this, and with considerable reluctance, we have decided that crown rents should retain their overriding status for 10 years. The Bill therefore provides that a right to rent which was reserved to the Crown on the granting of any freehold estate (whether or not the right is still vested in the Crown), overrides first registration.159
Certain rights in respect of embankments and sea and river walls
8.45Under section 70(1)(d) of the Land Registration Act 1925, liability in respect of embankments and sea and river walls is an overriding interest. In the Consultative Document, we explained the nature of this rather esoteric form of liability.160 It is a liability falling on a person whose property fronts on the sea or a river that has arisen by prescription, grant, a covenant supported by a rentcharge, custom or tenure. We were satisfied that such liability still existed and we recommended that it should remain an overriding interest. That view was supported by most of those who responded and the Bill preserves the overriding status of a non-statutory right in respect of an embankment or sea or river wall.161 However, once again, that overriding status will cease after 10 years.162
A right to payment in lieu of tithe
8.46The rarest and most obscure of the overriding interests found in the Land Registration Act 1925 is found in section 70(1)(e), namely¾
...payments in lieu of tithe, and charges or annuities payable for the redemption of tithe rentcharges.
158We take the view that crown rents are “rentcharges” for the purposes of the Rentcharges Act 1977, s 1. As such, they will be phased out in 2037: see s 3. It has been suggested to us that this is not so and that crown rents are excluded from the Act because they fall within the exception in s 1(a) of the Act, “rent reserved by a lease or tenancy”. However, we consider that such words are intended to cover leases or non-feudal lease-like arrangements, such as tenancies at will. It is not a normal use of language to suggest that a tenancy includes a fee simple held of the Crown in feudal tenure.
159Schedule 1, para 12.
160Law Com No 254, paras 5.38¾5.39.
161Schedule 1, para 13. A statutory liability in respect of an embankment or sea wall cannot be an overriding interest. It is simply a liability under the general law.
162Cl 115(1). See below, para 8.88.
158
We explained in the Consultative Document163 that¾
(1)there is in fact only one surviving class of right that now falls within this rubric, namely payments that are commonly called “corn rents”;
(2)not all “corn rents” are within this class of overriding interest: it is only where there is a liability to make payments by any Act of Parliament other than one of the Tithe Acts, out of or charged upon any land in commutation of tithes;164
(3)the principal beneficiary of corn rents are the Church Commissioners, who no longer collect them because it is uneconomic to do so; and
(4)corn rents are payable to persons other than the Church Commissioners and although the sums involved are normally negligible, we discovered one case where the sums were substantial.
In the light of this we recommended the retention of liability to pay corn rent (in the sense explained in (2) above) as an overriding interest. Our recommendation was supported, but there was dissent and a strong view expressed for the abolition or phasing out of this class of overriding interest. In the light of this, “a right to payment in lieu of tithe” remains an overriding interest under the Bill,165 but it joins the list of those that are to lose their overriding status after 10 years after the Bill is brought into force.166
UNREGISTERED INTERESTS WHICH OVERRIDE REGISTERED DISPOSITIONS
Introduction
8.47As we explained in Part V of this Report, under Clauses 29 and 30, a registered disposition for valuable consideration of a registered estate or a registered charge takes subject to those overriding interests affecting the estate or charge that are listed in Schedule 3.167 These overriding interests are, therefore, relevant to priority, because any disponee of registered land will take subject to them.
Categories of overriding interest that are the same as those that apply on first registration
8.48As with unregistered interests which override first registration, there are 15 unregistered interests which override registered dispositions, all but one of which
163See Law Com No 254, para 5.40.
164Some corn rents are unrelated to tithes and are not, therefore, within Land Registration Act 1925, s 70(1)(e).
165Schedule 1, para 14.
166Cl 115(1). See below, para 8.88.
167See above, para 5.11.
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are listed in Schedule 3.168 Of these 15, 12 are identical to those which override first registration, and nothing more need be said of them¾
(1)a PPP lease;169
(2)a customary right;170
(3)a public right;171
(4)a local land charge;172
(5)certain rights to coal;173
(6)where title to land was registered before 1898, rights to mines and minerals created before 1898;174
(7)where title to land was registered between 1898 and 1925, rights to mines and minerals created before registration;175
(8)a franchise;176
(9)a manorial right;177
(10)a crown rent;178
(11)a non-statutory right in respect of an embankment or a river or sea wall;179 and
(12)a corn rent.180
Of these, those mentioned in (8) ¾ (12) are to lose their overriding status after 10 years.181 This is explained more fully below. 182
168The one exception is PPP lease: see below (1).
169Cl 90(5); cf above, para 8.11.
170Schedule 3, para 4; cf above, para 8.26.
171Schedule 3, para 5; cf above, para 8.26.
172Schedule 3, para 6; cf above, para 8.29.
173Schedule 3, para 7; cf above, para 8.32.
174Schedule 3, para 8; cf above, para 8.33.
175Schedule 3, para 9; cf above, para 8.33.
176Schedule 3, para 10; cf above, para 8.40.
177Schedule 3, para 11; cf above, para 8.40.
178Schedule 3, para 12; cf above, para 8.43.
179Schedule 3, para 13; cf above, para 8.45.
180Schedule 3, para 14; cf above, para 8.46.
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Categories of overriding interest that differ from those that apply on first registration
8.49Three categories of unregistered interest that override a registered disposition are in some way different from those that override first registration. These are¾
(1)short leases;
(2)interests of persons in actual occupation; and
(3)easements and profits à prendre.
We explain each of these in turn.
Short leases
8.50Under the Bill, a leasehold estate granted for a term not exceeding seven years from the date of the grant, overrides a registered disposition,183 just as it overrides first registration.184 To this general principle there are eight exceptions. The first three are identical to those that apply in relation to first registration and have already been explained.185 These are¾
(1)a reversionary lease granted out of unregistered land to take effect in possession more than three months after the date of the grant of the lease;
(2)a lease granted out of an unregistered legal estate under the right to buy provisions of Part V of the Housing Act 1985; and
(3)a lease granted by a private sector landlord out of an unregistered legal estate to a person who was formerly a secure tenant and has a preserved right to buy.186
In these three cases, a lease granted out of an unregistered legal estate for a term of seven years or less is a disposition that is subject to the requirement of compulsory registration.187 It is not, therefore, an overriding interest.
8.51The five remaining exceptions188 apply in respect of a lease granted by a proprietor of a registered estate or charge where that grant constituted a registrable disposition that was required to be completed by registration. Some
181Cf above, para 8.38.
182See paras 8.81 and following.
183Schedule 3, para 1.
184See above, para 8.9.
185See above, para 8.10.
186Schedule 3, para 1.
187See Cl 4(1)(d)¾(f) respectively. See above, paras 3.32¾3.34.
188Schedule 3, para 1.
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leases which are granted out of a registered estate for a term of seven years or less are registrable dispositions and are not therefore overriding. These are¾
(1)a reversionary lease granted to take effect in possession more than three months after the date of the grant of the lease;189
(2)a lease under which the right to possession is discontinuous;190
(3)a lease granted in pursuance of the right to buy provisions of Part V of the Housing Act 1985;191
(4)a lease granted by a private sector landlord to a person who was formerly a secure tenant and has a preserved right to buy;192 and
(5)a lease of a franchise or a manor.193
8.52The Bill contains straightforward transitional arrangements for leases that were granted for a term of more than 7 but not more than 21 years. They remain overriding interests.194 Those who hold under such leases will not, therefore, be prejudiced by the reduction in the length of leases that do not require legislation. However, any assignment of such leases will trigger compulsory registration if the term has more than 7 years to run at the time of assignment.195
Interests of persons in actual occupation
Introduction
8.53As we have explained,196 we recommended in the Consultative Document that the rights of persons in actual occupation should remain as a category of overriding interest. Our reasoning was as follows¾
...it is unreasonable to expect all encumbrancers to register their rights, particularly where those rights arise informally, under (say) a constructive trust or by estoppel. The law pragmatically recognises that some rights can be created informally, and to require their registration would defeat the sound policy that underlies their recognition. Furthermore, when people occupy land they are often unlikely to appreciate the need to take the formal step of registering any rights that they have in it. They will probably regard their occupation as the only necessary protection. The retention of this
189Cl 27(2)(b)(ii); above, para 4.20.
190Cl 27(2)(b)(iii); above, para 4.20.
191Cl 27(2)(b)(iv); above, para 4.20.
192Cl 27(2)(b)(v); above, para 4.20.
193Cl 27(2)(c); above, para 4.23.
194Schedule 12, para 12.
195Cl 4(1)(a), (2)(b); above, para 3.24.
196See above, para 8.16.
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category of overriding interest is justified... because this is a very clear case where protection against purchasers is needed but where it is “not reasonable to expect or not sensible to require any entry on the register”.197
By contrast, it is in principle reasonable to expect that expressly created rights which are substantively registrable should be registered, and these should no longer enjoy the protection of this category of overriding interests. Although this goal will not be achieved at once, the introduction of electronic conveyancing will in time bring it about, because registration will become a necessary adjunct of the express creation of many rights.198
The general principle
8.54An interest belonging at the time of the registered disposition to a person in actual occupation is an overriding interest, so far as it relates to land of which he or she is in actual occupation.199 For these purposes, a person is to be regarded as in actual occupation of land if he or she, or his or her agent or employee, is physically present there.200 As we have explained, this does no more than restate
the present law. 201 To this general principle, there is one qualification and there are also four exceptions.
Qualification: Protection is restricted to the land in actual occupation
8.55It will be noted that actual occupation only protects a person’s interest so far as it relates to land of which he or she is in actual occupation. We have already explained that this limitation was one that was proposed in the Consultative Document and was supported by all those who responded to the point.202 A person’s actual occupation will not therefore protect his or her proprietary rights except in relation to the land that he or she actually occupies. So far as he or she has rights over other registered land, those rights will not be protected in the absence of an appropriate entry on the register.
8.56At the time when we made the recommendation in the Consultative Document, it did no more than reflect the way in which section 70(1)(g) of the Land Registration Act 1925 had been interpreted by the Court of Appeal in Ashburn
197Law Com No 254, para 5.61. The quotation is from Law Com No 254, para 4.17. See above, para 8.6.
198See Cl 91, below, paras 13.74 and following.
199Schedule 3, para 2(1). Cf above, para 8.14. Under Cl 87(3), none of the following rights is capable of falling within Schedule 3, para 2: a pending land action, a writ or order affecting land issued or made by any court for the purpose of enforcing a judgment or recognisance, an order appointing a receiver or a sequestrator of land or a deed of arrangement. For the reasons for this, see above, para 8.14. For the rights in question and their protection, see above, paras 6.59 and following.
200Schedule 3, para 2(2).
201See above, para 8.22.
202See above, para 8.19.
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Anstalt v Arnold.203 However, after the Consultative Document had been published, the Court of Appeal reconsidered the matter in Ferrishurst Ltd v Wallcite Ltd,204 but without reference to the Consultative Document.205 The Court declined to follow its earlier decision. In that case, Ferrishurst was in actual occupation of part of a registered leasehold title as an underlessee. It had an option to purchase the whole of the immediate leasehold title, but had not protected that option by a notice or caution on the register. It was held that this option was binding on a buyer of the leasehold title in respect of the whole title and not merely that part which Ferrishurst occupied.
8.57This leads to a strange result. Under an ancient common law rule, a person in possession of unregistered land can protect some of his or her rights by virtue of that possession against a buyer.206 This protection does not extend to rights which are registrable under the Land Charges Act 1972 but have not been so registered.207 Nor has it ever been extended to protect any rights that the person might have over other land which was also acquired by a buyer. The effect of the Ferrishurst decision is that, in relation to land with registered title, “the burden on a purchaser to make inquiries is now heavier than before”,208 and considerably heavier than it is in relation to unregistered land. First, a person who is acquiring registered land other than with vacant possession (whether as purchaser or registered chargee) must ascertain who is in actual occupation of any part of the land that he or she is purchasing. Secondly, that buyer or chargee must then make inquiries as to the extent of the occupier’s rights, in relation not only to the land occupied but also to the entirety of the title to be acquired or charged. Where there is (say) a series of leases or underleases, such inquiries may be complex and onerous. If the disponee fails to make what a court may subsequently consider to be adequate inquiries, he or she may be held bound by some undiscovered right.209
8.58The decision in the Ferrishurst case runs counter to two of the principal objectives of the present Bill. The first is the creation of a faster and simpler electronically based conveyancing system, where title can be investigated almost entirely online with only the minimum of additional enquiries.210 The second objective is to
203Ashburn Anstalt v Arnold [1989] Ch 1, 28, where Fox LJ, giving the judgment of the Court, commented that “[t]he overriding interest will relate to the land occupied but not anything further”.
204[1999] Ch 355.
205In his judgment (at pp 368, 369), Robert Walker LJ referred to the Law Commission’s Third Report on Land Registration (1987) Law Com No 158, para 2.55, but not to Law Com No 254, paras 5.70, 5.75.
206See Megarry & Wade’s Law of Real Property (6th ed 2000), 5-019, 5-020.
207See, eg, Midland Bank Trust Co Ltd v Green [1981] AC 513. Cf Megarry & Wade’s Law of Real Property (6th ed 2000), 5-121.
208Ferrishurst Ltd v Wallcite Ltd [1999] Ch 355, 372, per Robert Walker LJ.
209Cf below, para 8.60.
210See above, paras 1.5, 8.1.
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lay to rest the notion, on which the decision in Ferrishurst is premised,211 that it is somehow unreasonable to expect those who have rights over registered land to register them.212 Protection of rights by registration is not difficult to accomplish. The move to electronic conveyancing will make it still easier and, indeed, as we explain elsewhere, it will in time become impossible to create or transfer many interests in registered land without simultaneously registering them.213 The Bill therefore reverses the Ferrishurst decision and does so in furtherance of these two objectives.214
Exception 1: No protection for settled land
8.59The first exception to the general proposition stated in paragraph 8.54 is the same as that which applies on first registration, namely where the person has an interest under a settlement under the Settled Land Act 1925.215 This involves no change in the law and has already been explained.216
Exception 2: Rights not disclosed on reasonable inquiry
8.60The second exception is a reformulation of one that presently applies.217 An interest of a person of whom inquiry was made before the disposition and who failed to disclose the right when he or she could reasonably have been expected to do so will not be protected under the general principle stated above in paragraph 8.54.218 This exception operates in effect as a form of estoppel. Our proposal to retain this exception in the Consultative Document219 was supported by all of those who responded to the point. We have explained above that this exception cannot apply on first registration but only where there is a registered disposition.220 It is only where there is a registered disposition that any issue of priority arises and where there is any occasion to make inquiry.
Exception 3: Rights of persons whose occupation is not apparent
8.61The third exception is new and it derives from a recommendation in the Consultative Document.221 An interest¾
211Cf [1999] Ch 355, 360H.
212See above, para 1.9.
213See below, paras 13.74 and following.
214Cf [1999] Ch 355, 372A, B.
215Schedule 3, para 2(1)(a).
216See above, para 8.17.
217Cf Land Registration Act 1925, s 70(1)(g), “...save where enquiry is made of such person and the rights are not disclosed”.
218Schedule 3, para 2(1)(b).
219See Law Com No 254, para 5.69.
220See para 8.21.
221See Law Com No 254, paras 5.71¾5.73. Cf above, para 5.21.
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