Экзамен зачет учебный год 2023 / Sparkes, A New Land Law

initial 31 year term expired it became necessary to obtain a private Act131 to facilitate the sale of this plot to the hotel. The Crown realised £100,000 and this suggests that there is considerable value to be unlocked by relaxing the controls on the disposal of Crown land.

3.Categories of Crown land

[3.38] Government is a major landowner, with an asset base worth £14 billion, not counting the £4 billion or so of land held by the Crown as such. This last falls into a number of overlapping categories:132

(1)Ancient lands of the Crown.

(2)Land such as Buckingham Palace held by the Crown in its political capacity.

(3)Private estates of the Crown, notably Sandringham and Balmoral, held under legislation which creates a private capacity by which the sovereign can own landed estates.133

(4)Royal Duchy of Lancaster. This ancient Dukedom now contains 20,000 hectares, including such prime sites as Regent Street – where rentals were £450 a square metre in 2001 – and, out of London, the Worcester Crown Gate shopping centre. The Duchy was once held by the sovereign in person to provide funds for running the kingdom, but any income is now handed over to the Government in return for civil list payments of £8 million a year.134

(5)Royal Duchy of Cornwall. Another ancient Dukedom, this one designed to provide an income for the heir to the throne. It covers 60,000 hectares including Dartmoor, the Oval cricket ground, and the Prince’s interesting experiment in rural suburbanisation at Poundbury, Dorchester. The Duchy is sub-infeudated to the Prince of Wales as a tenant in chief, who sells the houses developed by the Duchy by normal substitution.135

4.Crown privileges

[3.39] Favourable treatment for the Crown survives in fields such as planning law, adverse possession, and prescription.136 These privileges may be vulnerable to human rights challenges.

5.Foreshore and sea bed

[3.40] Foreshore forms part of the Crown Estate, unless it falls into the half which has been granted away to private owners.137 Also included are tidal waters such as estuaries and the seabed out to the limit of the territorial waters. These last do not form

131Land at Palace Avenue, Kensington (Acquisition of Freehold) Act 2002, c ii.

132Law Com 271 (2001), [11.3].

133Crown Private Estate Act 1800.

134See also LRA 2002 s 84, below [3.42].

135Law Com 271 (2001), [11.5] n 13.

136J Sweetman (1988) 132 SJ 1016.

137Saundersfoot beach Pembrokeshire was put on the market for nearly £380,000 in autumn 2002.

part of the administrative districts into which local government is organised and so have traditionally fallen outside the ambit of the land registration legislation, but there is now138 provision to extend the scope of the register to cover sea beds as and when they are mapped. Profit lies ahead in the shape of profits to be extracted from companies laying communications cables.

6.Registration of the Crown as landowner

[3.41] Before 2003, registration was restricted to legal estates, a fact which precluded applications by the Crown,139 but this meant that the register could never be satisfactory since vast swathes of the Crown estate were off limits.140 A strong incentive now exists for Crown registrations, since registered land is secure against encroachments by adverse possessors.141 A programme of registration will take place over the next 10 years or so.142

The Crown may now grant itself a freehold estate, thus creating a registrable estate.143 Her Majesty may grant an estate in fee simple absolute in possession out of demesne land either to herself or to herself on trust for another.144 The whole process is voluntary in the sense that the Crown decides whether to implement the procedure,145 but having progressed to the stage of making a grant registration is then compulsory.146 Rest assured that she will not need to grapple with the forms herself. The mechanics will be undertaken by the appropriate authority which may, depending upon the particular type of land, be a Government department, the Chancellor of the Duchy of Lancaster, a person appointed by Duchy of Cornwall,147 or a nominee appointed to act for the Queen. The usual two months available for the application may be extended.148 Rules will enable others claiming rights against the Crown to caution against first registration.149

7.Effect of registration

[3.42] As a registered proprietor the Crown will have absolute powers of disposal unless there is a restriction on the register noting some limitation. Legislation affecting the Duchies of Lancaster or Cornwall will not impact on a purchaser in the absence of such a restriction.150

138LRA 2002 s 128; Law Com 271 (2001), EN [555–558].

139Scmlla Properties v. Gesso Properties (BVI) [1995] BCC 793, 798.

140Law Com 271 (2001), [11.10].

141See below [11.28ff].

142Law Com 271 (2001), EN [363].

143LRA 2002 ss 79–85; Law Com 271 (2001), EN [351ff].

144LRA 2002 s 79(1).

145Law Com 271 (2001), [11.13]. Draft rules will be subject to a consultation exercise.

146Compulsion does not apply to mines and minerals held apart from the surface: LRA 2002 s 80. The triggers may be amended.

147LRA 2002 s 83; Law Com 271 (2001), [11.31–11.32].

148LRA 2002 s 79(2)–(5).

149LRA 2002 s 81; Law Com 271 (2001), [11.17].

150LRA 2002 s 84; Law Com 271 (2001), [11.33].

M. ESCHEAT TO THE CROWN

1.Nature of escheat

[3.43] Escheat was the process by which on the expiration of the duration of time for which land had been granted to a vassal, the land reverted to the feudal lord. Ownership shifted in an undocumented way. Escheat was highly inconvenient in that mortgages burdening the estate fell when the land escheated, a risk against which no title was wholly safe until statutory protection was provided.151 Ending escheat was a vital stage on the road to modern commercial ownership. No escheat occurs on a criminal conviction after 1870,152 nor on intestacy without heirs, nor on breach of the mortmain legislation which regulated gifts to charities.153 Freehold estates became more or less perpetual. If the vassal’s interest can never end, one might as well ignore his feudal status and call him a freehold owner. But beware the very exceptional cases now discussed.

2.Intestacy without next of kin

[3.44] A grant in fee simple was made by a feudal lord to A so long as he had heirs. This could be a lengthy period, but it was always delimited, as a duration of time during which the current holder154 of the fee simple would be succeeded on his death by an heir. Termination was easily avoided by making a will, but it was not always possible to forestall it in the case of an unexpected death. Death intestate without an heir led to the expiration of the duration of the estate, causing the land to revert to the feudal lord, usually that is to the Crown.155

This final impediment to the perpetual freehold was removed by the Administration of Estates Act 1925. All relatives descended from a person’s grandparents are potential next of kin.156 If all these fail, the land passes as bona vacantia to the Crown, the ultimate next of kin of every subject.157 The change is largely cosmetic in that the destination of the land is unchanged, but it is conceptually important: expiration of the time limited for an estate (when there are no more heirs) cannot occur on death intestate since 1925.158 Termination of the estate is avoided because the land no longer passes to the Queen in person but rather it vests in the Treasury Solicitor159 for the

151Hackney LBC v. Crown Estates Commissioners (1990) 72 P & CR 233, Knox J (local land charge lost on escheat).

152Corruption of Blood Act 1814; Forfeiture Act 1870.

153Re Suarez (No 2) [1924] 2 Ch 19, 24, Romer J (registered land); FW Hardman (1888) 4 LQR 318, 336.

154Descent used to be traced from the last “purchaser”, a person who acquired title under a deed.

155Att-Gen of Ontario v. Mercer (1883) 8 App Cas 767, 771–772, Selborne LC; Intestate Estates Act 1884 ss 4, 7 (equitable interests); FW Hardman (1888) 4 LQR 318, 330–336.

156The Times, leader, January 1st, 1926, criticised this as being too restrictive.

157AEA 1925 s 46(1)(vi). Depending on the location of the land, it may pass to the Queen, the Duchy of Lancaster, or the Duchy of Cornwall: s 46(1)(ix).

158Att-Gen v. Parsons [1956] AC 421, 437.

159ND Ing, Bona Vacantia (Butterworths, 1971) ch 2. In some parts of the country it will be the Solicitor to the Duchies of Lancaster or Cornwall.

benefit of the Crown, and he takes the pre-existing estate in the land as formerly held by the deceased.160

3.Escheat

[3.45] A true escheat occurs in an estimated 500 cases a year of insolvency or corporate dissolution. Until 2002, the unfortunate and anomalous result was that registered land had to be removed from the register,161 but escheated land will now be kept on the register,162 subject to a restriction entered to prevent any dealing without an order of the court, at least until the land is sold.

(1) Land left after corporate dissolution

[3.46] Corporations are not usually dissolved until all the land that it owns has been sold, but problems of escheat arise when land owned beneficially163 has been overlooked. When a company is removed from the register, unsold land passes to the Crown as bona vacantia.164 The same occurs on the dissolution of corporations incorporated by charter and or otherwise, but in such cases there is no legislative assistance. Blackstone’s opinion – that a corporation held land for a determinable fee coterminous with its corporate status165 – is now known to have been wrong, and dissolution does cause an escheat.166

(2) Land burdensome to owner, but of value to another

[3.47] Land may lose its value because burdens divert the real value to someone other that the estate owner. For example, freehold land may be let at such a low rent that the freehold is worthless, or leasehold land may be held subject to a very high rent or burdensome repairing covenants. Negative equity arises when land is mortgaged for more than it is worth so that the borrower owns nothing but debt.167 In such cases a trustee in bankruptcy of an individual168 or the liquidator of a company may disclaim the land, causing it to pass to the Crown as bona vacantia. Others interested in the land retain their rights, and will probably apply to the court for an order vesting the property in them on such terms as the court thinks fit.169

160Re Lowe’s WT [1973] 1 WLR 882, CA (death before 1926).

161Law Com 271 (2001), [11.5].

162LRA 2002 s 85; Law Com 271 (2001), [11.29–11.30], EN [369].

163Re Strathblaine Estates [1948] Ch 228; Walji v. Mount Cook Land [2002] 1 P & CR 13 at 163.

164Companies Act 1985 ss 618–620; Toff v. McDowell (1995) 69 P & CR 535, Evans-Lombe J; Bath & Wells DBF v. Jenkinson [2002] EWHC 218, [2002] 3 WLR 202, Etherton J (school site reverting to dissolved company).

165Blackstone’s Commentaries vol 1, 298; WS Holdsworth (1933) 49 LQR 160; FE Farrer (1933) 49 LQR 240; MW Hughes (1935) 51 LQR 347; FE Farrar (1935) 51 LQR 361.

166LPA 1925 s 7(2); Re Wells [1933] Ch 29, 54, CA.

167See below [29.01].

168British General Insurance Co v. Att-Gen [1945] LJNCCR 113; RE Megarry (1946) 62 LQR 223 (this pre-dates the modern legislation).

169IA 1986 ss 178–182 (company), 315–321 (individual bankruptcy); Hackney LBC v. Crown Estates Commissioners (1996) 72 P & CR 233, Knox J; Lee v. Lee [1998] 1 FLR 1018, Fam D (surplus after sale by secured lender to be divided between wife and husband’s trustee in bankruptcy, since disclaimer only affects rights between bankrupt and his trustee).

(3) Land without value

[3.48] Land may lose all its value, for example if it consists of a cemetery full to capacity and with onerous maintenance obligations,170 or a listed building worth £200,000 which is subject to a statutory obligation to spend £1m on its maintenance.171 Disclaimer of such property will pass it to the Crown as bona vacantia burdened by the repairing obligations.172 Subordinate interests survived, however illogical that was.173 There is no longer an inquisition,174 but the Crown only accepts liability on the burdens if it takes possession or manages the land,175 and even then the Treasury Solicitor can serve a notice to disclaim it,176 which ends the former estate in the land. If he does so it will then return once more to the Crown, this time by escheat and shorn of the onerous obligations formerly attached to the estate.177

4.Other cases of escheat

[3.49] Escheat could also occur178 on a breach of the conditions attached to a conditional Crown grant or as a Crown reverter after the expiration of an entail.

170Re Nottingham General Cemetery Co [1955] Ch 683.

171Hackney LBC v. Crown Estates Commissioners as above.

172Companies Act 1985 s 654.

173Scmlla Properties v. Gesso Properties (BVI) [1995] BCC 793; Att-Gen of Ontario v Mercer (1883) 8 App Cas 767; Toft v. McDowell (1993) 69 P & CR 535, 539, Evans-Lombe J (failure to disclaim within 12 months).

174Crown Estate Act 1961.

175Halsbury’s Law (4th ed) vol 12(1), [234].

176Companies Act 1985 ss 656–658; Friendly Societies Act 1992 s 23(1), sch 10 part II para 68(1)–(3); Companies Act 1985 s 686; DW Elliott (1954) 70 LQR 25 (Eastville Cemetery, Bristol).

177Hackney LBC v. Crown Estates Commissioners (1996) 72 P & CR 233, Knox J (local land charge lost on escheat).

178Law Com 271 (2001), [11.20–11.32].

4

HOUSES, FLATS AND COMMONHOLDS

Absolute ownership. Fragmentation of ownership. Houses. Flats.

Commonholds.

A. FRAGMENTATION AND ABSOLUTE OWNERSHIP

1.Can land be owned?

[4.01] Of pre-1926 law, Joshua Williams wrote that:

“The first thing the student has to do is to get rid of the idea of absolute ownership.”1

Maitland added that “the next thing the student has to do is painfully to reacquire it.”2 Today this circuitous voyage can be avoided. Ordinary people understand what is meant by saying that they own a house to a level quite sufficient to guide their day to day conduct, so ownership must be at bottom a very simple concept. Why should lawyers deny what every client knows?

2.Full liberal ownership

[4.02] Ownership of land is a slippery concept because it varies so much from case to case, a product of the ease with which the totality of ownership can be divided between different people, perhaps a freeholder and a leaseholder granted a 99 year term. Each is in some sense an “owner”. English jurisprudence suggests that this fissility argues against any commonality in the concept of an owner. Property is not a thing but a power relationship, relative, defeasible, with gradations, and susceptible of multiple claims.3

Professor Honoré suggested a very simple side step in an essay at once simple and profound.4 All one needs to do, Honoré pointed out, is to concentrate on one particular exemplar of ownership, the kind that is “absolute” or, in other words:

1His reasons were the system of Crown tenure and the pre-1926 rule that paper ownership was useless unless supported by possession: FW Maitland (1886) 2 LQR 481, 482; Grays’ Elements (3rd ed), 21; SFC Milsom [2002] CLJ 561.

2Megarry & Wade (6th ed), [3–041] n 53, [3.115–3.126]; TC Williams 75 SJ 843; Cheshire & Burn (16th ed), 172–183.

3Grays’ Elements (3rd ed), ch 2; K Gray and SF Gray “The Idea of Property in Land” ch 1 in Bright & Dewar, 1; CB Macpherson, Property Mainstream & Critical Positions (Toronto, 1978), 9–11; JE Penner The Idea of Property in Law (Clarendon, 1997), 23–31; A Pottage (1998) 18 OJLS 331; Panesar’s General Principles ch 2.

4P Kohler [2000] CLP 237.

“the greatest possible interest in a thing which a mature system of law recognises.”5

Ownership consists of the rights given in this paradigm case.6 Suppose that a squatter moves in to a house and the owner seeks to evict him. First, we should establish the right of action when the house is owned outright and then we can use this case to guide us where, say, the house has an outstanding mortgage of £50,000 or it is subject to a trust. Fragmentation will not alter the answer to many simple questions.

3.Absolute ownership in English law

[4.03] Our paradigm of outright ownership consists of land registered with freehold title absolute held by a proprietor as beneficial owner free from incumbrance – that is without any entries in the charges register or overriding interests. Before first registration its equivalent is holding an unregistered estate in fee simple absolute in possession as beneficial owner free from incumbrances. Almost all land has some adverse interest on the title so a full Honoré owner will be rare in real life.

4.Basis of reform

[4.04] Alexander Pope thought that the world created by God was,

“a mighty maze, but not without a plan”7

He might have characterised property law in the same way, and in fact there is a very clear plan in the first few sections of the Law of Property Act 1925, the very pith and marrow of the legislation.8 In essence the basis is:

(1)A special role for an absolute ownership interest called an estate in fee simple absolute in possession, the novelty lying in the sense that an indivisible estate should exist in every piece of land.

(2)Legal division is permitted between landlord and tenant. The facility is exploited in flat management schemes, but it can be avoided by setting up a commonhold.

(3)Other legal divisions by time are prohibited.

(4)Division by time is permitted in equity under the vehicle of a trust of land.9

So after a consideration of ownership and titles to houses the scheme of this chapter is to consider in turn the divisions between

ground landlord and leaseholder;

flat management company and leaseholder; and commonhold association and commonholder.

5AM Honoré “Ownership” ch 5 in AG Guest Oxford Essays in Jurisprudence (OUP, 1961), 108.

6At 110–111.

7Essay on Man, Epistle i.

8A Concise Explanation of Lord Birkenhead’s Act (Butterworths, 1922), 1.

9See below [18.01ff].

B. COMPONENTS OF “ABSOLUTE” OWNERSHIP

[4.05] Ownership, Honoré asserts, is best defined by describing its standard incidents. Ownership is what you can do with the land.10

1.Recoverability

[4.06] A baby instinctively holds on to its own toys. Landowners are the same, only bigger.11 They wish to exclude outsiders and to do so require an action by which the right to the land can be asserted against an intruder or anyone else and which leads to an order for recovery of the land itself. A quirk of history has left an action in tort to achieve the recovery of land, being that form of trespass formerly called quare clausum fregit or ejectment.12 One size fits all. It is used to evict a squatter13 and also resolves disputes about the substance of ownership, this last use depending on the rule that trespass is actionable per se without proof of damage.14 Trespass asserts a better right to possession, but a better right to possession is conferred by a freehold estate and, conversely, legal ownership can be equated with the best right to possession.15 Although personal against an individual defendant, the judgment in trespass is real – for recovery of the land.16 Further, a true vindication of the title can be achieved in equity, not least by a declaration of ownership17 or a declaration that a title is registrable.

2.Right to value represented by the land

[4.07] Land is a repository of wealth which can be realised (turned into money) by letting it or by sale – the owner being entitled both to income and to capital.18

3.Use

[4.08] Land has a value above and beyond the financial. A person with a half share in a £100,000 home has a home to live in whereas his share of £50,000 would not buy a comparable home. Use is a cardinal feature. A house is of value precisely because it meets the human need for accommodation. Farmland can be nurtured and value added by manuring and so forth precisely because the owner is secure in the knowledge that he will be safe to reap the benefits of his own work. Absolute ownership

10AM Honoré “Ownership” ch 5 in AG Guest Oxford Essays in Jurisprudence (OUP, 1961), 112–123.

11At 114–116.

12Megarry & Wade (6th ed), appendix; Grays’ Elements (3rd ed), 287 ff.

13An order for possession may be coupled with an order for damages for the value of the occupation called mesne profits.

14Entick v. Carrington (1765) 19 St Tr 1029, 1066.

15Apparently a true owner wrongly excluded from the register of title can sue without first obtaining rectification of register: Malory Enterprises v. Cheshire Homes (UK) [2002] EWCA Civ 151, [2002] Ch 216, [65], Arden LJ.

16See above [2.10].

17PBH Birks [2000] King’s College LJ 1.

18AM Honoré “Ownership” ch 5 in AG Guest Oxford Essays in Jurisprudence (OUP, 1961), 118.

would imply an absolute power of destruction. If Sutherland paints an unflattering portrait why not destroy it, as Lady Churchill did? An eighteenth century owner might move an entire village to improve the view from the main house, and trees might be cut and left to rot or a house pulled down for no reason.19 A note of caution is required because Honoré defines ownership is the greatest degree of freedom allowed within a particular society, recognising that the use of land is always controlled and in fact many acts would be constrained by twentieth century planning legislation,20 and this would certainly impact on the demolition of a home.

4.Management and disposition

[4.09] Today these elements can be considered together since implies both the power of decision and the power to implement that decision by carrying out a transaction and now brought together in the person of an estate owner.21 Management involves the power to decide how land will be used, to decide when and if transactions should be carried out, and to make contracts to give effect to those decisions. The transactional power is the power to execute the document which gives effect to the transaction. Estate ownership includes the power of transfer on sale, the power of gift, the power to enter into derivative transactions such as leases and mortgages, and the power to choose a successor to take after one’s death – positively by making a will or negatively by allowing the land to pass to the next of kin on intestacy.22

C. HOUSES

1.Freehold

[4.10] A house can be seen in two dimensions, a building on a plot of the good earth with boundaries in a vertical plane. So long as no part of the house is above or below any part of one adjoining the title is quite straightforward. Most houses are more or less isolated from their neighbours in legal terms. Communal facilities are limited to a shared garden fence, access drive or telephone line, matters which can be dealt with by easements and covenants. Freehold tenure is also used for much farmland, moorland and some business premises.

2.Leasehold

[4.11] There are 9000,000 leasehold houses, half in the Northwest and Merseyside region.23 A leasehold estate is the ownership interest created in the tenant by the grant of a term of years absolute – a period of years. It is therefore permissible to have a freehold estate in the ground landlord but his right to possession is removed by the

19Re Denton [1981] 1 WLR 1446, 1448G, Lord Lane CJ; Phipps v. Pears [1965] 1 QB 76, 83E–F, Lord Denning MR.

20See below [5.05ff].

21AM Honoré “Ownership” ch 5 in AG Guest Oxford Essays in Jurisprudence (OUP, 1961), 116–123.

22See below [14.25].

23Commonhold CP (DETR, 1998), [1.4]

existence of a grant of the right to possession to a leaseholder for a number of years. Terms used for houses might be 99 or 999 years, generally in return for a small annual rent called a ground rent.24 The law allows this well recognised division between the freehold which confers the right to receive rent and also to possess the land at some time in the future, along with the right of the leaseholder to possess the land now in return for ground rent. Both freehold reversion and leasehold estate are commerciable interests – they can be valued, bought and sold – but most of the value resides in the leasehold.25 There is a problem of leakage of value from any leasehold house which can become acute if the examining term falls below 90 years or so. Hence there are statutory procedures for enfranchisement26 which enable the leaseholder to acquire the freehold by compulsion.

D. FLATS

[4.12] There are one million flats,27 half of them in London and the South East. A flat28 is a part of a building constructed so that it lies above or below other flats in the block, perhaps a substantial villa converted into separate units or a monster new build residential complex. No one flat has any value in isolation and to secure proper repairing obligations it is essential to use a leasehold flat management scheme. We must now explain successively the problem and the solution – commonholds.

1.Individual flats and the problem of wastage

[4.13] Leasehold tenure is not markedly inferior to freehold ownership provided that the lease is very long and the ground rent is low. However a serious problem of wastage of value affects shorter leasehold terms – where the outstanding term is less than about 100 years. This difficulty is addressed by the individual enfranchisement scheme which allows a leaseholder to obtain a 90 year extension of his existing term.29

2.Block ownership

[4.14] In some blocks of flats freehold estate may be retained by the original developer or vested in an outside investor. Such a ground landlord may become a nuisance if he exploits his ownership by demanding excessive interest on arrears of ground rent or by extracting large commission payments on the premiums to insure the block. Properly organised blocks avoid these problems by ensuring that the freehold in the block, the grounds and other common parts are vested in a management company controlled by

24Contrast renting of residential premises for a short term (less than 21 years) which is generally at a market rent (rack rental) – in this book the parties to such a relationship are called landlord and tenant; P Sparkes NLT chs 1–13; see below [26.01ff].

25See below [26.03].

26L Ref A 1967; Chold and L Ref A 2002; James v. UK, 8795/97, (1986) 8 EHRR 123; P Sparkes NLT ch 15.

27Consultation CP (DETR, 1998), [1.4]

28A maisonette is a flat on several levels.

29P Sparkes NLT ch 15.