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

raised between the holder of a burden and a subsequent owner of the land, that is between B and C. Priority is introduced below.

It cannot be emphasised sufficiently how important it is to determine which set of questions are being raised. The key is this: has the land potentially affected by the right changed hands?

4.Assignability

[6.06] If the burden of a property right endures it is usually also true that the benefit is assignable.6 A leasehold estate or the right to receive a secured loan or the benefit of a contract to buy land can all be sold. But this is less fundamental. Property rights can be envisaged that can be enjoyed only by an original party, such as a lease with an absolute covenant against assignment.

C. BURDENS ON REGISTERED AND UNREGISTERED LAND

[6.07] Proprietary status is awarded in unregistered conveyancing to all legal estates, legal interests, equitable interests and equities, that is to the class of rights recognised at law and in equity.

Registered land law can only dovetail properly with its older sister if it operates on the same set of property interests.7 Interests that were proprietary should not lose that status on first registration, nor, conversely, should registration of the title act to confer endurability on rights that previously lacked this status. Two principles ensure that substantive property law runs in tandem. (1) Entries can only be made in the register in respect of a burden8 or, in old money, where a person was “interested in any land or a charge”.9 If a right is incapable of binding a purchaser there is nothing to warn him about so personal rights have never been protectible.10 (2) Overriding status is conferred only on “an interest”11 or in the older terms if an overriding interest had to “subsist in relation to the land.12 The Land Registration Act 2002 states that a right of pre-emption is proprietary,13 as is an equity created by proprietary estoppel and an equity of rectification.14 These are intended to be declaratory of the unregistered land law but there is a severe risk that the two systems may become decoupled.

Classification of burdens in the two systems also matches, actually much more closely than is generally believed.

6LPA 1925 s 4(2).

7Elias v. Mitchell [1972] Ch 652, 659F (on LRA 1925); this more or less remains true under the LRA 2002, but see immediately below.

8LRA 2002 s 32(1).

9Old law for cautions: LRA 1925 ss 54(1), 55(1); Murray v. Two Strokes [1973] 1 WLR 823 (preemption); Observatory Hill v. Camtel Investments [1997] 1 EGLR 140, Ch D (party wall award).

10Calgary & Edmonton Land Co v. Dobinson [1974] Ch 102, Megarry J (shareholder’s right to company’s land); Barnes v. Cadogan Developments [1930] 1 Ch 479 (indemnity); Cator v. Newton [1940] 1 KB 415, CA (maintenance of estate roads).

11LRA 2002 s 29(1).

12LRA 1925 s 70(1); see below [15.32].

13LRA 2002 s 115; contrast under the old law: Murray v. Two Strokes [1973] 1 WLR 823, 827H, Goulding J. For unregistered land law see below [24.08].

14LRA 2002 s 116.

D. DIVISION BY BURDENS

[6.08] The transactional power of the landowner contains an inherent contradiction, for the landowner with full powers of disposition can create rights which destroy the value of the land for future owners.15 Curiously, given the invalidity of direct restrictions on saleability, it is possible using the property law powers of disposition to cripple the estate completely. A freeholder may grant a lease for 3,000 years16 at a rent of £5017 with an absolute prohibition on sale of the lease. Freehold land worth £100,000 is used as security for a loan of £150,000, the negative equity of the owner ensuring that all the value in the land resides in the lender. A restrictive covenant could impose an obligation not to occupy a house. A building estate developer may grant a strip of land giving access to the development site to another person without reserving access rights, shifting much of the value of the site to the ransom strip. A freeholder may grant an option to purchase land worth £1 million at a price of £1.

E. NEW PROPERTY RIGHTS

1.New burdens

[6.09] So a balance is required. Property law must make available all rights needed for full enjoyment of land ownership, while ensuring that land is not so burdened by adverse rights as to discourage its sale.18 It does this by limiting the range of accepted property rights.19 Landowners may not dream up their own burdens, as Pollock CB said in Hill v. Tupper:20

“A new species of incorporeal hereditament cannot be created at the will and pleasure of the owner of property . . . A grantor may bind himself to allow any right he pleases over his property, but he cannot annex to it a new incident . . .”.

The facts show why. Hill, who owned a tea rooms on the bank of the canal, obtained from the canal company the grant of an exclusive right of hiring out pleasure boats on it. This right was like a business franchise, rather than an easement which must benefit the land to which it is attached.21 So when the court asked whether Hill has an easement (a recognised property right) or merely a licence, the decision fell on the personal side. Tupper, the interloper, had not infringed any property right of Hill so Hill’s trespass action against him failed.

15JF Garner (1958) 22 Conv (NS) 33.

16Long terms have always been valid: Lamb v. Archer (1692) Carth 266, 90 ER 758.

17Above the financial limit of the compulsory enlargement provision: LPA 1925 s 153; see below [25.89].

18Keppell v. Bailey (1834) 2 My & K 517, 535-536, 39 ER 1042, Lord Brougham LC.

19The common law equivalent of the civilian “numerus clausus”.

20(1863) 2 H & C 121, 127-128, 159 ER 51; Bankhart v. Tennant (1870) LR 10 Eq 141, 148-149; Megarry

&Wade (6th ed), [4.090-4.091], [13.005] n 53.

21See below [32.20].

2.Equitable child-bearing

[6.10] A snapshot of any legal system taken in three dimensions inevitably suggests that the categories of property rights are fixed, but a moving picture that adds the fourth dimension of time reveals a completely different picture. Medieval owners cared much about manors22 and advowsons, but had to make do without the lease. Leases were let in during the late medieval period, but the common law could not expand further afterwards, and this early onset of inflexibility23 passed the task of development to equity. Flexibility was restored by equity’s preparedness to fashion new remedies and to grant remedies in novel situations, a dose which, if repeated, gradually crystallises particular sets of facts into a new right. Boy though, does equity work slowly, adding trusts in the seventeenth century and the equity of redemption in the eighteenth, with restrictive covenants as a nineteenth century24 response to the Victorian fashion for suburban development.

Birkenhead capped the overall range of property rights,25 so that statutory additions apart, Edwardian case-law should be decisive of the property law of the second Elizabeth. “Equity”, said Harman LJ extra-judicially, “is past the age of childbearing.” In National Provincial Bank v. Ainsworth,26 Mrs Ainsworth was deserted by her husband and left in occupation of the matrimonial home with her children. As a non-contributor she had to rely on her right as a deserted wife to the provision of a house by her husband. This right was held to be personal, valid against her husband and not capable of binding a lender, the focus of the decision being the fact that proprietary status had not previously been recognised. Contractual licences were another innocent slaughtered in infancy.27 But proprietary estoppel was conceived, hatched, and brought to maturity during Lord Denning’s tenure as Master of the Rolls,28 so it would be wrong to diagnose equity as having become totally infertile and somehow or another a blind eye has been turned to the legislative prohibition on equitable procreation.

3.Interests lacking proprietary status

[6.11] Piecemeal development has left one remarkable gap – the inability of one property owner to impose a financial burden on his land in the shape of a positive covenant to spend money so that the burden would bind future owners.29 Our law is tilted rather too much towards the conservative.

22It is an irony that the last substantive speech on the LRB 2002 was about its impact on manors.

23Now confirmed by LPA 1925 s 1(1)-(2).

24Tulk v. Moxhay (1848) 2 Ph 774, 41 ER 1143.

25LPA 1925 s 4(1) proviso; JS Anderson, Lawyers and the Making of English Land Law 1832–1940

(Clarendon Press, 1992), 309.

26[1965] AC 1175, HL.

27Ashburn Anstalt v. Arnold [1989] Ch 1, CA; see below [19.76].

28Inwards v. Baker [1965] 2 QB 29, CA; see below [23].

29Rhone v. Stephens [1994] 2 AC 310, HL; see below [32.34].

4.Quasi-property

[6.12] Reich identified a new property in the American law of the 1950s,30 consisting of rights to occupation without ownership (licences31), and entitlement to security of tenure and social security benefits. A similar development in the agricultural field is the milk quota, a vital adjunct to dairy land of which the proprietary status is now recognised.32

F. A TAXONOMY OF BURDENS

1.Forms of burdens

[6.13] There is no universal agreement about how to classify burdens, since so much depends upon what is convenient in a particular context but there are broadly three main types.

2.Overreachable interests

[6.14] Many adverse interests are removed from land when it is sold by the process of overreaching. A full list will be given in the chapter of this book relating to trusts33 but of course the most important are beneficial interests under a trusts of land on a sale by two trustees. Protection is inappropriate for rights which will be swept off the land on sale: such interests do not fall into the classes of land charge, and neither is a land registry notice allowed.

3.Redeemable money charges

[6.15] A mortgage secures the payment of a sum of money on land. If that sum is not repaid, the proprietary character of a secured loan becomes all important. The lender has the right to sell the land and to take the money owed out of the proceeds of sale (another form of overreaching34), so the debt is secured in the sense that a first charge is given on the value of the land. In technical terms an arrangement by which money is secured on land is a charge, but this book uses the term “money charge” to avoid possible ambiguity. These interests can be redeemed – the land can be freed of the burden by repayment of the money secured.

4.True burdens

[6.16] True burdens are interests which cannot be overreached or redeemed so they bind the land in the hands of a purchaser.

30CA Reich (1964) 73 Yale LJ 733. The article has generated a substantial volume of commentary.

31See below [19].

32Faulks v. Faulks [1992] 1 EGLR 9, Chadwick J; and numerous later cases.

33LPA 1925 s 2; see below [13.10].

34See below [29.20ff].

(1) Leases

[6.17] If a freeholder grants a lease to a tenant the leasehold estate is from the point of view of the landlord a burden detracting from his freehold ownership.

(2) One trustee trusts

[6.18] A one-trustee trust may arise where land is registered in the name of T with the aid of a contribution to the purchase price by B. Sale by a single trustee will not overreach the beneficial interest, which acts as a burden against the legal title.35

(3) Neighbour obligations

[6.19] An important group of property rights regulate the relationship between neighbouring owners. Easements are rights to use land, for example to gain access along a right of way. Restrictive covenants limit the use to be made of the land, for example maintaining the residential character of a neighbourhood by limiting building to houses. These rights are distinctive because the minus represented by the burden of one neighbour’s obligation is matched by a plus consisting of the benefit to an adjoining neighbour, that plus also being attached to the land.

(4) Rights to transfer

[6.20] An important group of rights consist of the right to acquire and estate – such as the rights under a transfer of registered land not yet registered, a contract to buy, a claim to a transfer of rights in the matrimonial home, or, conversely, a right to upset a transfer on the grounds of misconduct practised on the previous owner to induce him to make the transfer. By extension the right may be to obtain an interest in the land, for example a contact for a lease. These give rights to the land itself and are not overreachable.

(5) Pure burdens

[6.21] A small calls of residuals do not fall into the above classes such as rentcharges, which bind and encumber land without any functional reason to do so. These incorporeal hereditaments are gradually being extinguished.36

G. PRIORITY

1.Priority

[6.22] A proprietary right is capable of binding a purchaser, but whether it will actually do so depends upon which interest has priority.37 Land law determines which of

35See below [15].

36See below [34.05].

37Burdens are overridden by a compulsory purchase: R v. City of London Corp ex p Mystery of the Barbers of London (1997) 73 P & CR 59; Shewu v. Hackney LBC [1999] 1 EGLR 1, CA.

two competing interests prevails, with the loser relegated to taking any scraps left after the winner has been satisfied, or pursuing his complaints in the lesser legal subjects of contract, restitution and tort. As Captain Scott wrote at the South Pole after finding the Norwegian flag left by Amundsen:

“Great God! this is an awful place, and terrible enough for us to have laboured to it without the reward of priority.”38

Much as the English psyche adores a gallant loser, the truth is that second is nowhere. Once the claim with the highest priority is satisfied there is often nothing left to satisfy secondary claims. There is no balancing act. One person wins and the other is deferred. At least clear cut definitive advice can be given on the state of a title for, as that great adherent of fixed rules, Alfred Denning, once said:

“In land, certainty is of paramount importance. It does not matter so much what the rule is, so long as it is certain.”39

Property law priorities can be varied by agreement40 or by estoppel.41

2.First in time

[6.23] There are two approaches to priority, one crude and the other more sophisticated. The former is to line interests up in a queue based on the order of their creation. The first in time prevails. This applies to

legal interests in unregistered land (other than mortgages); equitable interests between themselves;

interests noted against a registered title between themselves; overriding interests as against later registered interests; and overriding interests between themselves.

To describe this as crude is to say that it can be very unfair in operation. If you want to buy land it is impossible to know whether you will get a good title or whether the land will turn out to be subject to earlier interests that you are unaware of. In other words one does not necessarily get what has been paid for.

3.Protected purchasers

[6.24] Most interests are subject to a more sophisticated system which provides a balance between the interests of the members of our property law triangle:

38Journal, January 17th 1912.

39(1952) 5 CLP 1, 8; Otter v. Norman [1989] AC 129, 146, Lord Bridge.

40Cheah v. Equiticorp Finance Group [1991] 4 All ER 989, PC; Re British & Commonwealth Holdings (No

3)[1992] 1 WLR 672; Re Maxwell Communication Corp (No 2) [1993] 1 WLR 1402.

41See below [23].

mortgages of unregistered land – check that the seller holds the title deeds and that these have not been deposited with a lender;

land charges affecting unregistered land – conduct a land charges search; and registered land – conduct an official search and check for occupiers.

(4) Honesty

[6.29] Sometimes a purchaser cannot be protected if he knows of an earlier interest. That is the rule for notice doctrine affecting unregistered land. But registration schemes tend to focus on whether or not an adverse interest is registered and not to care what a buyer knows off the register. Hence honesty is not a requirement for reliance on a land charges search nor on an official search of a registered title.

7

DEEDS

Legal formality of a deed. Deeds made on “paper”. E-Documents. E-trans- fers. Documents executed by companies.

A. LEGAL FORMALITY OF A DEED

1.Utility of and requirement for a deed

[7.01] Land lies in grant,1 meaning that it is transferable by document. Medieval law considered that land lay in livery, which meant that a physical transfer of possession was required to give or sell it.2 Holding a public ceremony on the land to transfer possession was a sound method of proving that a sale had occurred at a time when many landowners were unable to write, but it was inconvenient for major landowners were often too busy to visit their land for minor conveyancing transactions. Subterfuges were needed to evolve a method of documentary conveyancing and so to undermine the requirement for a physical transfer of possession.3 This coincidentally achieved privacy in ownership. Deeds-based conveyancing was a long-established fact when it was legitimised by Act in 1845. Ownership is too serious a matter to be left to “depend on the slippery testimony of human memory.”4 Formality maintains a record of transactions and ensures that documentary titles are comprehensive.

Creation or transfer of legal estates and interests can only be accomplished by deed.5 Section 52 of the Law of Property Act 1925 provides that:

“All conveyances of land or of any interest therein are void for the purpose of conveying or creating a legal estate unless made by deed.”

Land is widely defined,6 so as to include within section 52 the grant of a mortgage, rentcharge or other interest.

1LPA 1925 s 51, replacing Real Property Act 1845 s 3; PBH Birks “Before We Begin: Five Keys to Land Law” ch 8 in Bright & Dewar, 482–486; A Critchley “Taking Formalities Seriously” ch 9 in Bright & Dewar.

2Possession of the freehold estate was described as “seisin”; a leaseholder enjoyed possession but not seisin. The repeal of the Statute of Uses 1535 in 1925 has robbed this distinction of all significance.

3AWB Simpson, A History of the Land Law (Clarendon, 2nd ed, 1986), 119–143, 188–190.

4Hill v. Hill [1897] 1 QB 483, 492, Chitty LJ.

5Or of course by statute, eg Land at Palace Avenue, Kensington (Acquisition of Freehold) Act 2002,

c ii.

6LPA 1925 s 205(1)(ix); “conveyance” is also widely defined by para (ii); s 201(1) includes as “land” manors and other incorporeal hereditaments.

2.Exceptional cases of informality

[7.02] Three groups of informal transactions are allowed to impact directly on the legal estate. Some transactions have always required a document other than a deed and these survive as anomalies in modern law, examples being assents by personal representatives,7 disclaimers on bankruptcy, and receipts.8 A useful simplification would be to require a deed in each of these cases. Transmissions pass a legal estate automatically, a situation which obviously makes any documentary formality impossible. One example is the surrender by operation of law – when a landlord grants a new lease to his existing tenant causing the old lease to terminate.9 Others are the transfer made by a deceased landowner to his personal representatives on his death or by a bankrupt to his trustee in bankruptcy, corporate insolvency, and court vesting orders.10 Finally, a short lease for a term not exceeding three years can be created orally.11

3.Failure to use a deed

[7.03] Formality favours the monied, the strong and the well advised, so flexibility is required to correct the imbalance created against the poor and weak. Failure to use a deed renders a conveyance void at law, a phrase which seems to presuppose that it can operate in equity.12 Much ingenuity has been directed, first to evading the requirements, and second, to keeping the techniques of evasion within limits:13 formality cannot be displaced completely without destroying the value of the register.

B. DEEDS MADE ON “PAPER”

1.Deeds

[7.04] A deed is a particularly formal type of document used to mark some “solemn and authentic act”14 such as entry into a covenant,15 a land registry transfer,16 or any dealing with a legal estate. Section 1 of the Law of Property (Miscellaneous Provisions) Act 198917 carries into effect Law Commission proposals18 “to make new provision with respect to deeds and their execution”.19

7Transferring legal title to a beneficiary entitled under a will or on an intestacy.

8LPA 1925 s 52(2) paras (a), (b) and (e), as amended.

9See below [25.63].

10LPA 1925 s 52(2) paras (c), (f), (g).

11LPA 1925 ss 52(1)(d), 54(2); LP (MP) A 1989 s 2(5)(a) (contracts); for the exact requirements see below [25.24].

12Parker v. Taswell (1858) 2 De G & J 559, 44 ER 1106 (acts as contract); Walsh v. Lonsdale (1882) 21 Ch D 9, CA; see below [24.05].

13See below [17].

14Blackstone’s Commentaries vol 2, 295.

15PJ Horn [1992] 32 LSG 25.

16DLRR 2003 sch 8.

17HW Wilkinson [1990] Conv 1; G Virgo & C Harpum [1991] LMCLQ 209; R Oerton (1990) 134 SJ 1089, 1118; RE Annand (1989) 105 LQR 553, 553–555; Smith’s Property Law (4th ed), 91–92.

18Law Com 163 (1987); Law Com WP 93 (1985); JE Adams [1987] Conv 325.

19Preamble; in force July 31st 1990: s 1(11); SI 1990/1175.