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

2.Formal requirements

[7.05] When a deed is made by an individual the essentials are: (1) a document; (2) a formal statement of the intention to create a deed; (3) signature and attestation by a witness; and (4) delivery.20

A deed must be written21 – which includes typing or printing – though there is no longer any restriction of the substances on which a deed is made; it could be the archaic parchment, prosaic paper,22 or avant garde glass, metal, or set concrete.23 Why not enter a set of deeds for the Turner prize? The document must contain on its face a formal expression of an intention by each person making it to create a deed. This requirement is new.24 It may be manifested by the formal description of the document (“This deed”) or by stating that the document is executed or signed as a deed (“Signed by me as a deed”).

Sealing was the hallmark of a deed before 1989,25 the classic mantra being “Signed, sealed, and delivered”.26 Many medieval people were unable to write, so a deed had to be authenticated by dripping wax onto the document and impressing a seal into the wax, but now that everyone can write, a signature is much better way of ensuring authenticity. Sealing remained essential until mid-1990,27 but it was often symbolic, in the shape of a small red wafer of paper28 or a printed black circle.29 Even this truncated form was too much to sit comfortably with the generation of documents by computer. So the 1989 Act abolished the requirement to attach a seal to a deed,30 though sealing is still allowed.31

3.Execution by an individual

[7.06] A deed or land registry transfer32 requires valid execution when it is made and again when it is altered.33 In the case of an individual this means signature, witnessing

20Before August 1990, the requirements were: a document, writing or typing, on the proper substances, signature after 1925 (LPA 1925 s 73), sealing, and delivery.

21LP (MP) A 1989 s 1(3)(a) (signature required).

22Goddard’s case (1584) 2 Co Rep 4b, 5a, 76 ER 396; Fox v. Wright (1598) Cro Eliz 613, 78 ER 855; G Virgo & C Harpum [1991] LMCLQ 209, 210.

23HW Wilkinson [1990] Conv 321.

24LP (MP) A 1989 s 1(2)(a); Law Com 163 (1987), [2.16].

25Goddard’s case (1584) 2 Co Rep 4b, 5a, 76 ER 396.

26JE Adams [1987] Conv 12.

27Re Sandilands (1871) LR 6 CP 411; Re Balkis Consolidated Co (1888) 58 LT 300; National Provincial Bank of England v. Jackson (1886) 33 Ch D 1.

28Stromdale & Ball v. Burden [1952] Ch 223, 250, Danckwerts J.

29First National Securities v. Jones [1978] Ch 109, CA; D Hoath (1980) 43 MLR 415; JE Adams [1988]

Conv 86.

30LP (MP) A 1989 s 1(1)(b), Law Com 163 (1989), [2.4]. It is clearly intended that the new form of deed should be a specialty so as to attract a 12 year limitation period; this point is to be clarified for companies: LCD CD 09 (2002), point K.

31HW Wilkinson [1990] Conv 1.

32DLRR 2003 sch 8.

33Lombard Finance v. Brookplain Trading [1991] 1 WLR 271, CA; Bank of Credit & Commerce International v. Aboody [1990] 1 QB 923, CA (execution in blank of dubious validity).

and delivery.34 Signature first became a formal requirement in 1925,35 using the mantra “Signed as a deed by . . .” or some similar formulation.36 Permanent ink should be used.

A person unable to sign may make a mark,37 but a blind or illiterate person38 usually directs another to sign in his presence, that other usually using his own signature but adding to it the words “at the direction of and on behalf of” the real party.39 Words of execution are essential to avoid land registry requisitions explaining, for example that a document has been read over to and approved by a blind person.40 In such cases two witnesses are required.41

A copy of a deed is now admissible in evidence without distinction from originals and at however many removes.42

4.Attestation

[7.07] Attestation is required by a person who is physically present at the time of signing and who adds his signature as a witness.43 Except for land registry transfers this was not essential before the 1989 Act,44 though it builds on earlier practice.45 Words of attestation which state that signature of the deed occurred “in the presence of” the witness avoid the need for other proof of proper attestation.46 Safety first: only non-parties should be used as witnesses.47

Outside parties are able to reply on a common law estoppel which prevents the parties to a deed which appears to be perfect on its face from disputing that the manner of execution was correct after they have delivered it. In Shah v. Shah48 this estoppel was used to uphold a deed of guarantee. Proof that the witness signed after the borrowers and not in their presence did not affect the bank’s right to enforce the guarantee. Attestation has the purpose of limiting the scope for disputes about whether the document has been signed. Pill LJ considered that the legislators intended to allow the common law estoppel to continue to operate.49

34 LP (MP) A 1989 s 1(3). “Execution” is used inconsistently but usually so as to exclude delivery: Longman v. Viscount Chelsea [1989] 2 EGLR 242, 245E, 246F, Nourse LJ; G Virgo & C Harpum [1991] LMCLQ 209, 209 n 4.

35LP (MP) A 1989 s 1(3)(a); LPA 1925 s 73(1). At common law: Goddard’s case (1594) 2 Co Rep 4b, 5a, 76 ER 396 (unnecessary); Goodman v. J Eban [1954] 1 QB 550 (rubber stamp ok on solicitor’s bill of costs).

36LP (MP) A 1989 s 1(2)(a); Encyclopaedia FP (5th ed, 1994 reissue) vol 12, [1691–1745].

37LP (MP) A 1989 s 1(4); the execution clause should be amended to state that the document has been read over and explained.

38Thoroughgood’s case (1584) 2 Co Rep 9a, 76 ER 408.

39Or the deed could be signed in the name of the party to the deed, adding “by his agent”.

40The deed may be void for Non est factum, as described below [30.80].

41LP (MP) A 1989 s 1(3)(a)(ii).

42Civil Evidence Act 1995 s 38.

43LP (MP) A 1989 s 1(3)(a)(i).

44Buckeridge v. Flight (1826) 6 B & C 49, 108 ER 371; Law Com 163 (1987), [2.12].

45HW Wilkinson [1990] Conv 321, 323.

46Wright v. Wakeford (1811) 17 Ves 455, 34 ER 176.

47HW Wilkinson [1990] Conv 321, 323.

48[2001] EWCA Civ 527, [2002] QB 35; PH Kenny [2001] Conv 443.

49At [33], Pill LJ.

5.Delivery

[7.08] Deeds are always dated. What is written on the deed is presumed to be correct, but it is not decisive about when a deed is brought into force,50 since this depends upon delivery.51 In rare cases a deed may have immediate effect, in which case it should be “Signed and delivered as a deed”.

Otherwise the operation of a deed is delayed by the requirement of delivery.52 Whether this principle retained a valuable function was hotly debated.53 Physical handing over of the deed,54 the original basis, has now given way to reliance on the underlying intention to be bound, either inside or outside the deed.55 Modern law thus permits constructive delivery of a document without any change in its physical control. In Longman v. Viscount Chelsea56 Nourse LJ identified two means of delayed delivery. One is as an escrow, that is a conditional deed which depends upon some later event for its force,57 such as payment of the purchase price. Satisfaction of the condition brings the deed into full effectiveness.58 Two problems are that the deed is backdated59 and that the validity of the deed during the period of suspension precludes a change of mind by the person making it.60 These problems do not arise if the deed is handed to an agent with authority to deliver, leaving it in a state of suspense until the agent acts.61 Before the 1989 Act authority to deliver a deed could only be given by deed,62 but that rule is now abrogated.63 Ordinary workaday agency principles now apply. Purchasers64 may assume that professional conveyancers have authority to deliver a document in the course of a transaction with land, and so the land registry will assume that a document lodged by a purchaser is a valid deed.

Practice on the sale of a house has evolved to take account of the fact that a person who is moving house cannot attend on completion to execute the transfer, so signature takes place a few days in advance but on the basis that that the deed will only become effective on completion day with the money safely in the bank. Pre-1989

50Hedley v. Joans (1572) 3 Dyer 307a, 73 ER 693; Goddard’s case (1584) 2 Co Rep 4b, 5a, 76 ER 396; Oshey v. Hicks (1610) Cro Jac 263, 79 ER 227.

51LP (MP) A 1989 s 1(2)(b).

52JE Adams [1987] Conv 325, 325.

53Law Com 163 (1987), [3.4].

54Blackstone’s Commentaries vol 2, 307.

55DEC Yale [1970] CLJ 52; Goddard’s case (1584) 2 Co Rep 4b, 5a, 76 ER 396; Xenos v. Wickham [1866] LR 2 HL 296, 323, Lord Cranworth; Vincent v. Premo Enterprises (Voucher Sales) [1969] 2 QB 609, 619E, Lord Denning MR, 622, Winn LJ.

56[1989] 2 EGLR 242, 245E.

57Xenos at 323, Lord Cranworth; Alan Estates v. WG Stores [1982] Ch 511, 520, Lord Denning MR; JT Farrand (1961) 25 Conv (NS) 126.

58This is presumed after physical transfer of the deed: Hare v. Horton (1833) 5 B & Ad 715, 110 ER 954.

59Alan Estates v. WG Stores [1982] Ch 511 (rent payable); PH Kenny [1982] Conv 409; Graham v. Graham (1791) 1 Ves 272, 274–275, 30 ER 339.

60Beesly v. Hallwood Estates [1961] Ch 105, CA.

61Foundling Hospital Governors v. Crane [1911] 2 KB 367, CA.

62Powell v. London & Provincial Bank [1893] 2 Ch 555, 563, Bowen LJ, 565, Kay LJ; Windsor Refrigerator Co v. Branch Nominees [1961] Ch 88, 98, Cross J; Phoenix Properties v. Wimpole St Nominees

[1992] BCLC 737. Query the converse dictum in Longman v. Viscount Chelsea [1989] 2 EGLR 242, 246F–H; G Virgo & C Harpum [1991] LMCLQ 209, 222.

63LP (MP) A 1989 s 1(1)(c); Law Com 163 (1987), [2.11].

64LPA 1925 s 205(1)(xxi), LP (MP) A 1989 s 1(5)–(6).

authority treated execution of a transfer as a delivery in escrow, the condition being that the price should be paid.65 However, Nourse LJ ruled in Longman v. Viscount Chelsea66 that a deed handed over to a solicitor before completion was handed over complete, undelivered certainly, but so that the solicitor had authority to deliver it. It remains a non-deed, until the conveyancer gives life to it on completion.

Leases create special problems, because there is generally no contract in advance of completion. Arrangements should not become binding on either party at the instant that the landlord executes the lease.67 Two cases have treated leases as executed in escrow and so not recallable,68 but a change of heart was allowed in Longman v. Viscount Chelsea.69 A tenant on the Cadogan Estate who wished to extend his lease had agreed all the terms informally, the tenant had executed a surrender of his existing lease and the counterpart of the new lease, and the original lease had been executed by the landlord. At the last moment the landlord withdrew unless the premium and ground rent were increased eightfold! Successfully so, because the failure to effect delivery meant there was as yet no lease.

Unilateral alteration of a deed by one party does not invalidate a deed after it has been properly executed.70

C. E-DOCUMENTS

1.Replicating paper formalities electronically

[7.09] Once titles are available online at the registry, it is one short and inevitable step to full electronic conveyancing. A conveyancer will create a document in his word processor, insert a smart card into a reader on his computer, start the signature software, click to sign and then transmit it to the recipient. Hey presto! A deed is created, the land is transferred and, even better, the transfer is registered automatically and instantaneously. The dream is to switch from paper-based documentation to documents created and authenticated electronically.71

Signature of a paper based document fulfils a number of important functions, above and beyond the obvious one of providing a record of the terms of the transaction. The signature authenticates the document in the sense that it shows that the party signing affirms and accepts the transaction recorded. Documents are dated so as to make it clear when the document is to have effect. Signature also provides a guarantee against tampering since it is usually obvious that a signed document has been

65Beesly v. Hallwood Estates [1960] 1 WLR 549, Buckley J; on appeal [1961] Ch 105, CA; Kingston v. Ambrian Investments Co [1975] 1 WLR 161, CA; Glessing v. Green [1975] 1 WLR 863, CA.

66[1989] 2 EGLR 242, CA; HW Wilkinson [1990] Conv 1; P Luxton [1990] JBL 242; DN Clarke [1990] Conv 85; G Virgo and C Harpum [1991] LMCLQ 209, 221–222 (strong criticism).

67Vincent v. Premo Enterprises (Voucher Sales) [1969] 2 QB 609, CA; Venetian Glass Gallery v. Next Properties [1989] 2 EGLR 42; DN Clarke [1990] Conv 85.

68Beesly v. Hallwood Estates [1960] 1 WLR 549; on appeal [1961] Ch 105, CA; D’Silva v. Lister House Developments [1971] Ch 17; M Albery (1978) 89 LQR 14.

69[1989] 2 EGLR 242, CA; HW Wilkinson [1990] Conv 1; P Luxton [1990] JBL 242; DN Clarke [1990] Conv 85; G Virgo & C Harpum [1991] LMCLQ, 209, 221–222.

70Raiffesien Zentralbank v. Cross-seas Shipping [2000] 1 WLR 1135, CA.

71Smith’s Property Law (4th ed), 104–107; D Capps [2002] Conv 443.

altered. Confidentiality is easy to achieve since a paper document can be sent using a secure postal system.

Procedures for the electronic creation of documents must seek to secure these same objectives:72

to establish the identity of the person executing a document;

to make clear their consent to the transaction and understanding of its import; to create clear proof of receipt;

to ensure confidentiality; and to guarantee against tampering.

It may seem from the description that follows that the procedures are more complex, but much is done automatically by computer, and the procedures should be simplicity themselves to operate.

2.Basis of e signature is logical association

[7.10] A European Directive promotes inter-operability of electronic signatures across Europe.73 The Act applying it in the UK defines an electronic signature as anything in electronic form:

(1)incorporated in or logically associated with any electronic communication;

(2)purporting to be incorporated or associated for the purpose of establishing the integrity, authenticity or date, of the communication; and

(3)acting as a guarantee of these things.74

A signature is a series of symbols just like any other part of a computer file, so the crucial thing is the intention with which that code is linked to the document.

3.Proof of identity

[7.11] Entry of a numerical code into a computer can never by itself prove that a particular person assented to the contents of a computer file, without additional third party validation of identities. Two functions are involved – registration and certification – which may be carried out by one authority or which may be split. Registration is the process of investigation to confirm the identity of the person seeking access to a digital signature. His address will be checked using bills from utility companies, with cross checks against electoral rolls, council tax records, and so on. Once identity is established, certification will be carried out by certification authorities which will issue the keys and certificates necessary to conduct electronic conveyancing. A person will be entitled to apply for the issue of a signature and supporting documentation after his identity has been established by registration. The UK will rely on industry self regulation,75 the main player at present (2003) being t-Scheme,76 which involves the

72T Travers [2001] 36 LSG 45.

731999/93/EC, OJ L013, 12–20. English law does not yet provide fully for advanced digital signatures.

74Electronic Communications Act 2000 s 7.

75Residual powers of compulsion are included in the Electronic Communications Act 2000 part I.

76<www.tscheme.org>; E Thompson, J Kelsey & R Chapman [2001] 48 EG 142; T Travers [2001] 36 LSG 45; M O’Conor and E Brownsdon [2002] NLJ 348.

participation of over 250 members including Microsoft, BT, and the CBI. Inaccurate certification will give rise to liability based on common law contract principles.77

4.Method of signature

[7.12] “Keys” are codes, similar to but longer than the PIN numbers used with cash cards. Each key will be stored on a smart card78 provided by a certification authority which can be inserted into a reader on the computer and which will allow access to the e-conveyancing functions. This procedure is much less vulnerable to hacking than if the code were stored on the computer’s hard disk, and provides a guarantee that the owner of the signature was the person who attached the code to a document. The owner of a signature will be responsible for the security of the card:79 if it is stolen the certification authority must be notified, just as Barclaycard must be told if their credit card is stolen. After creation of a document in a word processor, the signature smart card will be inserted into a reader on the computer, the signature software opened and a click with the mouse will act to sign the document. After that it can be scrambled and sent to the recipient.

5.Authenticating the signature

[7.13] What is to prevent the person receiving a document reading the signature code and then using it to sign a version of the document that has been tampered with or indeed to sign a completely different document? The answer lies in the use of dual key cryptography. There private and public keys are asymmetric, different from each other but related mathematically. With the public key the recipient can authenticate that the sender’s private key was used to effect the signature, but it is not possible with present computing capabilities to work out the sequence of numbers which make up the private key working only from the public key, but it is easy and quick to relate them in the reverse direction. Not even the certification authority keeps the private key.80 The public key cannot be used to deduce the code contained on the private key.

6.Confidentiality

[7.14] Encryption involves scrambling information using an algorithm (that is a mathematical function) to keep it private. Normal text in a document is coded into a set of symbols.81 No system of coding can ever be completely secure, as the Bletchley enigma team so happily proved, but it should be infeasible to break the system with current mathematical knowledge and current computing capacity. Encryption procedures are secure enough, for now,82 to safeguard the confidentiality necessary for conveyancing. The key used to scramble documents will be distinct from the one used

77T Travers [2001] 36 LSG 45.

78D Capps [2002] Conv 443, 445.

79E Thompson, J Kelsey & R Chapman [2001] 48 EG 142.

80T Travers [2001] 36 LSG 45.

81S Singh, Digital Signature Guidelines (Judicial Studies Board, <www.jsboard.co.uk>, 2000), appendix 1.

82T Travers [2001] 36 LSG 45.

for signature so that a secretary can be given the encryption key in order to conduct private correspondence without giving away the power to make a signature. After a sender has encrypted text with his private key, it will only be possible for the recipient to de-jumble it using the sender’s public key, obtained from the certification authority.83

7.Authenticity

[7.15] What is to prove that a document to which an electronic signature is attached is still in the same form as it was when signed? An independent check is needed that a document has not been tampered with as it is transmitted over the internet. The check is a “fingerprint”, scrambled, and then attached to its document as a means of verification. Authenticity is guaranteed if the fingerprint re-emerges when the document is unscrambled. It works like this.

After a document has been prepared in electronic form, it is passed through a hash function which converts it to its digital fingerprint. This is unique to the document but much shorter, allowing faster processing. It is encrypted using the sender’s private key. The recipient passes it once more through the hash function to recreate the digital fingerprint, which is then decrypted using the sender’s public key. Two techniques used in this process are factorisation of numbers based on multiples of primes, and modular arithmetic – taking the remainder left over after a number is divided by a base number. Both are difficult to crack and yet two similar documents give very different fingerprints, so that any tampering is self-evident.84

8.Certificate and public signature key

[7.16] Electronic signatures do not require to be witnessed because they are authenticated. This is done by certification,85 the process which links together the key and the person who uses it, a process guaranteed by the certifying authority which confirms that the electronic signature is the one allocated to the person who purports to make use of it.86 Digital certificates take the form of a computer file in a format marked out into a number of fields, for which there is an accepted international standard.87 One field will indicate the permitted key usage – probably for a single use within a narrow completion window.88 Others indicate financial limits on transactions and identity attributes.

What if the signature smart card is stolen? The thief could use it to sign transactions and it would appear to be the true owner who had signed. The owner of the digital signature will not be allowed to repudiate liability on documents to which the signature is attached. The issuer must be notified of the theft immediately and they will cancel it. The currency of the certificate (that is non-revocation) will need to be checked online at the time of completion.

83See below [7.16].

84E Thompson, J Kelsey & R Chapman [2001] 48 EG 172.

85Electronic Communications Act 2000 s 7.

86R Perry [2001] 39 LSG 45; E Thompson, J Kelsey & R Chapman [2001] 48 EG 142.

87International Telecommunication Union’s X509 v3.

88T Travers [2001] 36 LSG 45.

There is a problem of potential misuse by third party.89 Revocation of the certificate may not be in time if theft of signature not apparent.90

9.Proof of execution or exchange

[7.17] In e-conveyancing it will be important to know the precise date and time at which a particular document is completed. The clock on the computer of the person signing will not be a reliable guide, since clocks can be changed easily enough. So the date of a document will have to be certified by passing it through a trusted third party (the certification authority) who will date stamp all communications.

D. E-TRANSFER

1.Electronic conveyancing

[7.18] Electronic formalities for transfers, conveyances leading to first registrations, and registrations are a key component of the Land Registration Act 2002. Part 891 makes greater changes than any other part of the Act for, as the Lord Chancellor said when introducing it into Parliament:

“In a few clauses the Bill will also hugely increase the attractions of registration. It will open the way for radical changes in the way in which formal documents required in conveyancing are prepared, in the quality and speed of services which conveyancers are able to provide and in the relationship between conveyancers and the land registry.”92

In truth the cost savings may be a paltry £16 per conveyance.93 But, just as the CREST scheme has revolutionised the stock exchange,94 so new technology will revolutionise conveyancing. The timescale is slipping, but thinking current at the time of writing is that there should be an operational pilot in 2005 with widespread use set for 2006.95 No date has been given for the introduction of compulsion.

2.E-transactions

[7.19] If a transaction affecting registered land satisfies the technical rules laid down, the e-document will meet all formality requirements.96 Where a person97 attaches his electronic signature to a file, the document is deemed to be in writing,98 to be signed by the party executing him, and to have effect as if it was a deed.99 Modes of

89R Perry [2002] 11 LSG 43.

90R Perry [2001] 39 LSG 45.

91LRA 2002 ss 91–95; Law Com 271 (2001), Part XIII, EN [396–431].

92Hansard HL, July 3rd 2001, cols 777–778, Lord Irving LC.

93D Capps [2002] Conv 443, 444.

94Megarry & Wade (6th ed), [1.001] n 6.

95e-conveyancing (LR CP, 2002), [2.4], pilot version early 2006 to be “rolled out” in 2006; D Capps [2002] Conv 443, 455.

96LRA 2002 s 91; Law Com 271 (2001), EN [398 ff]; e-conveyancing (LR CP, 2002), [8.2].

97Or his agent, who need not be appointed by deed: Law Com 271 (2001), EN [410].

98LRA 2002 s 91(4)(a).

99LRA 2002 s 91(5).

execution will be the same for a deed, a written contract,100 and a declaration of trust,101 these documents being distinguished merely by their wording. E formality will be sufficient for transactions of the following kinds:102

a transfer or other disposition of a registered estate; a disposition of a registered charge;

postponement of a charge;103

a disposition of an interest protected by notice;104

a disposition triggering compulsory first registration; and

any other transaction for which electronic disposition is authorised by rules.105

Unregistered land may thus be transferred electronically to the extent that the completed disposition will call for first registration of the title, but electronic means will not be available for transactions which will leave the land unregistered, such as the grant of a second mortgage or the creation of a restrictive covenant.106

Rules will determine how e-documents are communicated and stored.107 Electronic forms will be based on the existing paper forms, with a standardised electronic element.108 Other conditions will be introduced in response to the experience of computerising particular forms of disposition.109

E-documents are likely to lead to greater logic in the development of conveyancing forms. When, for example, land is transferred to joint proprietors, the existing practice is to include the declaration of trust, stating how the buyers will hold beneficially, in the transfer document, whereas it will be more sensible to use two separate electronic documents, the transfer e-signed by the sellers and the declaration of trust e-signed by the buyers.110

3.Signature, certification and commencement

[7.20] Each person executing a transfer must attach his electronic signature,111 which must be authenticated by proper certification,112 after which it is deemed to be executed as a (deemed) deed.113 There is no role for attestation by a witness. If an agent authenticates a document the written authority of his principal will be presumed.114

Dating and delivery are concepts inapplicable to an electronic document which is completed when all parties attach their electronic signatures and these are authenti-

100Law Com 271 (2001), EN [399].

101LPA 1925 s 53(1)(a); Law Com 271 (2001), EN [412].

102LRA 2002 s 91(1)(a), 91(2).

103LRA 2002 s 93(6).

104LRA 2002 s 91(2)(b); Law Com 271 (2001), [13.22–13.23], EN [427].

105LRA 2002 s 91(2).

106Law Com 271 (2001), EN [396].

107LRA 2002 s 94. PISCES is a protocol for the exchange of information between conveyancing software packages launched in 2002

108Law Com 271 (2001), EN [402]; DLRR 2003 rr 56-61, sch 1.

109LRA 2002 s 91(3)(d); Law Com 271 (2001), [13.32], EN [403(iv)].

110Law Com 271 (2001), EN [403(ii)].

111LRA 2002 s 91(10), adopting the definition in Electronic Communications Act 2000 s 7(2)–(3).

112LRA 2002 s 91(3)(b)-(c).

113Law Com 271 (2001), [13.18–13.19].

114LRA 2002 s 91(6); Law Com 271 (2001), [13.20–13.21].

cated. It will therefore be essential for an electronic transfer to provide a time and date on which it is to take effect.115

4.Making e-transfer compulsory

[7.21] The perils of the registration gap will be eliminated by a further step – validity will be removed from the conveyancing document and attached instead at the time of its registration. Sequential completion and registration will be replaced by a unified stage in which both steps are instantaneous.116 Electronic transfer will then be compulsory. This power will not be exercised lightly.117 Any transitional period during which the two systems operate side by side will be kept to a minimum in order to assist the development of electronic chain management.118 Rules will introduce compulsion in relation to specific types of dispositions.119 From that time forwards a disposition will only have effect if it:120

is made electronically;

is communicated electronically to the registrar when it purports to take effect; and meets the relevant registration requirements.121

A document which does not meet these e-formality requirements has effect neither at law nor in equity.

5.Registration gap

[7.22] Electronic conveyancing will finally close the registration gap. It will no longer be possible to create or transfer any interest in registered land except by simultaneous registration of the electronic instrument that effects the transaction.122 Hence there will no longer be any room for a Walsh v. Lonsdale123 equity arising under a defective transfer since without formality and registration there will be no property interest in the land.124 As and when the new system becomes compulsory, it will address the problem of Brown & Root Technology125 – that the registered proprietor remained legal owner after he had completed a sale of the land until the buyer had made a proper application to register his title. Instantaneous creation and registration will leave no gap.

115LRA 2002 s 91(3)(a); Law Com 271 (2001), [403].

116Law Com 271 (2001), EN [423]; Law Com 254 (1998), [11.2].

117Law Com 271 (2001), EN [421].

118See below [22.21].

119LRA 2002 s 93.

120LRA 2002 s 93(2).

121LRA 2002 s 93(2)(b), 93(3), sch 2; DLRR 2003 rr 51–79. A model is described in e-conveyancing (LR CP, 2002), [6].

122Law Com 271 (2001), EN [396–397]; e-conveyancing (LR CP, 2002), [3.4].

123(1882) 21 Ch D 9, CA.

124LRA 2002 s 93(4), disapplying s 27(1); Law Com 271 (2001), EN [429]. Presumably an estoppel might arise if the right had been acted on. If so the effect of the change might be very small.

125Brown & Root Technology v. Sun Alliance Ass Co [2001] Ch 733, CA; Law Com 271 (2001), [13.754–13.77], EN [428]; Law Com 254 (1998), [11.5–11.6].