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

6.Authority to conduct e-conveyancing

[7.23] Conveyancers will generally authenticate electronic documents on behalf of their clients.126 Further when an agent uses the network to register a document which states that he is acting on the authority of a principal, that principal for whom he purports to act is presumed to have given his authority.127 So the buyer will not need to see the seller’s solicitor’s authority to act for the seller, and vice versa.128 The risks are greatly increased because there is no outside key to lock or unlock access to the register, the function formerly performed by the land certificate.

The Law Society found it unacceptable that conveyancers should take the risk of misuse of the key code.129 Non-repudiation will be the principle: a client must accept responsibility for what his conveyancer has done. Any one licensed can certify that he has authority and so a client could be bound by a contract of which he is unaware.130 Conveyancers will have to ensure that they obtain written authority from the client,131 probably by getting the client to sign a paper copy of the contract.132

7.Safety of e-conveyancing

[7.24] The one imponderable is whether e-conveyancing will be safe. Under the paper based system it is believed that each District Land Registry had about five fraud cases a month and a very sharp rise must be expected. If it is possible to hack into the Pentagon computer system, one has an uncomfortable feeling that the e-register may provide an opportunity for cyber-crime on a vast scale.

E. DOCUMENTS EXECUTED BY COMPANIES

[7.25] Formalities for execution of deeds by companies133 were reviewed at the same time as the rules of individual execution,134 but they remain complex,135 and are now subject to deregulatory reform.136 Execution by sealing or signing is distinguished from the process of delivery of a deed to bring it into effect.137

126Law Com 271 (2001), EN [676–677].

127LRA 2002 sch 5 para 8; cases disapplied are: Smith v. Webster (1876) 3 Ch D 49; H Clark Doncaster

v.Wilkinson [1965] Ch 694, 702.

128Law Com 271 (2001), [13.60–13.62], EN [677].

129HC Standing Committee, December 11th 2001, col 42; Hansard HL, vol 626, July 17th 2001, cols 1611–1620.

130M Dowden [2001] 41 EG 180.

131Hansard HC vol 380, February 11th 2002, col 24.

132R Perry [2002] 11 LSG 43.

133On the position of contract by a company in course of formation see Companies Act 1985 s 36C; Braymist v. Wise Finance Co [2002] EWCA Civ 127, [2002] 2 All ER 333; PH Kenny [2002] Conv 304.

134Companies Act 1985 s 36A, introduced by Companies Act 1989 s 130; DN Clarke [1990] Conv 85, 91–92; as from the end of July 1990: SI 1990/1392. Similar rules for Scottish (s 36B), foreign (SI 1994/950) and unregistered companies (SI 1990/2571).

135RT Oerton (1990) 134 SJ 1118; [1992] 01 LSG 28; DN Clarke [1990] Conv 85, 412; [1991] Conv 243; G Virgo & C Harpum [1991] LMCLQ 209, 225.

136LCD CD 09 (2002).

137LCD CD 09 (2002), point I.

1.Signature as a deed by two officers

(1) Execution

[7.26] This method, new in 1989, mirrors the new formalities for deeds made by individuals – that is signature as a deed by officers of the company. A document138 can be executed by the company signature being either by a director and secretary or by two directors. Either form of signature will work if the document is expressed in whatever form of words to be executed by the company.139 Execution specifically as a deed is achieved by making clear on its face that it is intended to be a deed.140

A company can only act by its officers, so it is important to establish that people executing a document have authority to act. The easiest way to create a deed is to have it executed in this form:

“Signed141 as a deed by [C] and [D] acting as two directors.”

This is beneficial because there is a presumption in favour of a purchaser142 that a deed has been duly executed if it purports to be signed by a director and secretary or by two directors.143

(2) Delivery

[7.27] Proof is required that an executed deed has been delivered as a deed, and that this was authorised by the company. A purchaser144 is protected by a presumption145 that delivery occurred immediately on the execution of a new-style deed signed by the officers. Preventing delivery is, therefore, more of a problem than achieving it, since a company risks being bound by deed immediately unless positive steps are taken to prevent this. The document should omit to state that it is delivered and should include a statement,146 such as “Executed as a deed but not delivered until this deed is dated”.147

Statutory presumptions do not validate a forgery.148

138Widely defined by Companies Act 1985 s 744.

139S 36A(4).

140S 36A(5).

141“Signed and delivered” if delivery is intended on execution.

142Who must act in good faith and provide valuable consideration.

143Companies Act 1985 s 36A(6).

144In favour of the company delivery at the time of execution is presumed unless a contrary intention is proved: Companies Act 1985 s 36A(5).

145S 36A(6).

146Derby Coal Co v. Wilmot (1808) 9 East 360, 103 ER 610.

147DN Clarke [1990] Conv 412, but see [1991] Conv 243. The account in the text assumes that the presumption in s 36A(6) is rebuttable.

148Ruben v. Great Fingall Consolidated [1906] AC 439, HL.

2 Affixing company seal

(1) In presence of a director and the secretary

[7.28] Since deeds can now be signed by the officers, a company no longer needs a common seal.149 The old practice was to create a deed by affixing the company seal in the presence of the officers of the company,150 there being no requirement for outside witnesses. The deed will state that: “The Common Seal of AB Ltd151 was affixed in the presence of [C] Director and [D] Secretary.” Those outside the company are assisted by the internal management rule, a common law presumption in favour of innocent purchasers that acts have been properly carried out.152 Its statutory reincarnation applies where a document purported to be executed in the presence of a director and the secretary of the company.153 A seal retains utility in creating a contract under seal which is not intended to be a deed.154

(2) Affixing company seal in presence of two directors

[7.29] If the corporate seal was affixed in the presence of two directors, before 1989, there was no statutory presumption about due execution, and delivery, and it remains problematical to this day with a document executed with the company seal. Proof of the director’s authority to execute is a vital part of the title, either under the articles of association of the company or by delegation by the board of directors. Consultation is taking place on a proposal to amend the law to remove this anomaly.155

(3) Delivery

[7.30] Proof is required that an executed deed has been delivered as a deed, and that this was authorised by the company. It is presumed that an old fashioned deed made under the common seal of the company is delivered immediately on the execution of a deed.156 Execution of a deed in the presence of a director and the secretary gave rise to a rebuttable157 presumption of delivery on affixing the company seal.158 This did not assist where two directors executed or any other authorised signatories and in such cases proof of delivery was required.

149Companies Act 1985 s 36A(3).

150S 36A(2).

151On the use of incorrect names see W Evans [1994] Conv 384.

152Royal British Bank v. Turquand (1856) 6 El & Bl 327, 119 ER 886; Mahony v. East Holyford Mining Co (1875) LR 7 HL 869.

153LPA 1925 s 74; G Virgo & C Harpum [1991] LMCLQ 209, 214.

154LCD CD 09 (2002), point J.

155LPA 1925 s 74; Law Com 253 (1998); LCD CD 09 (2002), point A.

156This is presumed in favour of a purchaser by Companies Act 1985 s 36A(6).

157LPA 1925 s 74; Longman v. Viscount Chelsea [1989] 2 EGLR 242, 245M–246C, 246H–K, Nourse LJ; Longman overruled two dicta of Buckley J: (1) Beesly v. Hallwood Estates [1960] 1 WLR 549, 562; (2)

D’Silva v. Lister Homes Developments [1971] Ch 17, 29D–30A.

158Staple Merchants Co v. Bank of England (1887) 21 QBD 160, 165, 166 Wills J; Venetian Glass Gallery

v.Next Properties [1989] 2 EGLR 42, 45M, Harman LJ. This is to be extended to any document (not just a deed) and LPA 1925 s 74 will be aligned in wording with Companies Act 1985 s 36A(6): LCD CD 09 (2002), point D.

8

TRANSFER

Dematerialisation of the register. Title by registration. Information. Searches. Off register matters. LR Forms. Transfer. Application for registration. Queues. Electronic applications. Derivative transactions.

[8.01] Transfer is the process by which the ownership of land held by A is passed by A’s act to B. If the law imposes the transfer there is said to be a transmission – for example because A dies or becomes bankrupt. Most transfers are sales in which money is paid for the land, but in many ways gifts are similar.1 The word itself is usually reserved for the switch of a registered estate from A to B,2 the word transfer referring both to the process and to the document that carries it out. Transfer is essentially a matter of changing the name of the registered proprietor if attention is confined to dealings with a whole title. Additional complexities are associated with a transfer of part, these topics being relegated to the chapter on physical division.3

A. COMPUTERISATION OF THE REGISTRY

1.The paper and postal register

[8.02] Registration on the sale of land throughout England and Wales inevitably requires a bureaucracy to carry out the detailed work, including a staff of nine thousand,4 to cope with the sheer volume of business. The year 2000–20015 saw approximately 300,000 first registrations, over 3.4 million dealings, and more than 9.6 million requests for preliminary services, with a corresponding volume of enquiry work. The Land Registry has gone to great lengths to reduce processing times to very short periods, so that dealings take only eight days on average6 and 80% of first registrations are completed within 25 days.7

Day to day contact is with the appropriate District Land Registries, of which there are more than 20, each one allocated land in particular London boroughs, counties,

1A voluntary transfer is presumed to be a gift of beneficial ownership unless it is made clear that a resulting trust is intended: LPA 1925 s 60(3); Hodgson v. Marks [1971] Ch 892, CA; Lohia v. Lohia [2001] EWCA Civ 1691, affirming [2001] WTLR 101, Ch D; Ali v. Khan [2002] EWCA Civ 974, [2002] 30 EG 131 (CS).

2An unregistered estate is conveyed by a conveyance.

3See below [31].

4LRA 2002 sch 7 para 3; CLR Report 1995–1996, 13.

5LR Annual Report 2001–2002, 83.

6CLR Report 1995–1996, 10.

7LR Annual Report 2001–2002, 8.

and unitary authorities, each one controlled by a District Land Registrar.8 It is vitally important to deal with the correct office when making postal applications for registration: sending papers to the Plymouth District Land Registry to register land in Birmingham is ineffective and the papers will be returned, possibly causing loss of priority.

Conventional applications to the land registry are by post to the appropriate District Land Registry.9 Higher tech variants are by fax, by telephone, or by direct computer access. Rules lay down a general framework, which is fleshed out by means of notices issued by the registrar, under which the land registry provides additional services.10 Personal attendance at the public counter of a land registry office remains possible.

2.Dematerialisation of the register

[8.03] Computers and registration were made for each other. When the land registry was first set up in 186211 scriveners wrote out indentures by quill pen on pig skins, business was conducted at a leisurely pace by post, and it was envisaged that completions would occur at the registry. Successive registrars have responded to the invention of telephones, typewriters, and faxes. Now, at last, computer technology is available to provide a truly efficient conveyancing system. A programme of computerisation12 started in 1988 and all titles will be available on-line by 2005.13

Registers on blue cards are being converted to a digital format, and held on a computer, the process known as dematerialisation.14 Some 98% of plans have been scanned into electronic form, and the remainder will be digitised.15 It will take rather longer to scan in all the deeds held by the registry – a mammoth task involving some 90 million pages.16

3.Land Registry Direct

[8.04] A conveyancer can obtain direct access to the register via a computer terminal in his office linked to a secure computer by a network called LR Direct, a system developed since the register was opened in 1993.17 Conveyancers connected to it can pay for download details of any register and also print out official copies, conduct searches, or transact any other business involving the open register. Current usage is for preliminary services, but some experiments are also being made with the delivery of substantive applications over the Network. As at 2001, about 40% of services are capable of electronic delivery,18 a percentage which may explain the low take-up of

8LRA 2002 s 100(3); SI 2001/3424; the list and explanatory leaflets are available from the LR website.

9DLRR 2003 rr 14, 130.

10DLRR 2003 sch 2; LR website.

11Land Registry Act 1862 s 64.

12CAPS Computerised Application Processing System.

13LR Annual Report 2001–2002, 8; LR Annual Report 2000–2001, 12, 23.

14LRA 2002 s 1(2); DLRR 2003 r 2.

15LR Annual Report 2000–2001, 20; LR Annual Report 2001–2002, 20.

16LR Annual Report 2000–2001, 20.

17LRA 2002 sch 5; DLRR 2003 r 131, sch 2; LR Practice Leaflet 13 (1999).

18LR Annual Report 2001–2002, 21.

electronic services. Of 4 million office copies supplied in 2001–2002, 2.3 million were ordered by post, another 1.4 million by telephone and less than 200,000 by computer.19 There is, however, a growing use of the facility for registry views, including index map searches.20 On line searches are currently running at about 400,000 a month.21

4.Land Registry Network

[8.05] E-conveyancing will involve preliminary services provided on line followed by on-line applications. It will require a superior electronic communications network, to be called the LR Network.22 This will provide secure procedures for the following aspects of conveyancing:

communication;

posting or retrieval of information;

making of changes to the register and the cautions register; issue of official search certificates;

issue of official copies of the register; and other facilities decided by the registrar.23

Network transaction rules will lay down the procedures to be followed,24 that is the technical framework within which electronic conveyancing is to be conducted.25 Terms will include monitoring, official management, and ongoing training.26 Practitioners will be enabled to set in chain the changes to the register caused by a transaction.27

Conveyancers28 will be able to connect to the LR Network under the terms of a network access agreement, will be entitled to access if they meet published criteria,29 and may then be required to use the network.30 A conveyancer using the Network will have to adopt a quasi-official position, not unlike the continental notary, with duties to the users of the Network which override those to his client.31 Breaches will not directly affect the validity of the transaction.32 Rather they will call into question the conveyancer’s continued use of the Network, but given how serious the consequences of the withdrawal of the facility will be for a practitioner there will be a rigorous procedure and an appeal to the Adjudicator.33

19LR Annual Report 2001–2002, 83.

20Around 2.2 million a year.

21LR Annual Report 2001–2002, 83

22LRA 2002 s 92, sch 5.

23LRA 2002 sch 5 para 1(2).

24LRA 2002 sch 5 para 5.

25Law Com 271 (2001), [13.52], EN [669].

26Law Com 271 (2001), [13.66–13.71], EN [681].

27LRA 2002 sch 5 para 1(3); Law Com 271 (2001), [13.66–13.71].

28Solicitors and licensed conveyancers and possibly, in future, mortgage lenders: DLRR 2003 r 215.

29LRA 2002 sch 5 para 1; Law Com 271 (2001), [13.37].

30Law Com 271 (2001), EN [651–658].

31LRA 2002 sch 5 para 6; Law Com 271 (2001), [13.58–13.59], EN [672–673].

32Law Com 271 (2001), EN [670].

33LRA 2002 sch 5 paras 3–4; Law Com 271 (2001), [13.55–13.57], EN [659–668]; LRA 2002 s 108.

5.Electronic payment system

[8.06] Computerised completions will require a system of electronic settlement,34 that is procedures for the electronic transfer of funds, the exact details of which are yet to be agreed with the banks. Legislation will be required to provide for documents to be e-stamped.35

6.DIY conveyancing

[8.07] Do it yourself conveyancers will be provided with access to the network, registry staff carrying out the transaction as instructed in return for a fee.36 Nevertheless, the system will create a substantial and undesirable barrier to independent conveyancing.

B. TITLE BY REGISTRATION

1.Registered titles

[8.08] The Land Registration Act 2002 effects a radical shift. The ultimate proof of ownership of registered land becomes the register itself. Title by registration replaces the concept of registering titles obtained in other ways. A person selling the land can prove definitively his entitlement to sell by showing that he is on the register as proprietor. Previously registration as proprietor was not conclusive because there was the possibility that someone else had acquired title, but as adverse possession of registered land declines in importance, the need to check that the proprietor has possession of the land will be progressively reduced. Control of the land certificate was previously a vital prerequisite of the ability to sell, but it will no longer be necessary to produce the land certificate on a dealing. So registration emerges as the one key determinant of title.

2.Substantive proof of title

[8.09] Title to land means the right to an estate in the land. Proof is required that the seller has the ownership he claims, the substance of which has to be proved does not change in any way once the title is registered,37 but the mechanics of proving title are vastly superior to the unregistered system. Good title must be shown to the estate. The contract states whether a freehold or a leasehold estate is being sold and in what land and it is then up to the seller to prove that he is the holder of that estate and is entitled to sell it. If title is registered this means that he is registered as proprietor and, unless the contract says otherwise his title must be absolute.38 Title is established by the fact

34LRA 2002 s 94; Hansard HC vol 1916, February 11th 2002, col 23; PH Kenny [2002] Conv 431; e-conveyancing (LR CP, 2002), [5.6.3], [7].

35The promised framework has not materialised in the Finance Act 2002.

36LRA 2002 sch 5 para 7; Law Com 271 (2001), [13.72–13.73], EN [674–675].

37Re Evan’s [1970] 1 WLR 583.

38For possessory and qualified titles see below [11.09].

of registration and even wrongful registration gives title to sell.39 Physical proof of title is also simplified since the register gathers together all the relevant information in two or three pages and almost all the necessary information can be provided by official copies of the register.

Misdescription is unlikely on the sale of a complete plot to which title is absolute. What is sold is whatever land is included within the title, which means that the physical extent of the land sold must correspond to the extent of the land to which title is shown. The seller has to do no more than to show that he is registered as proprietor to the title referred to in the contract.

3.Other aspects of proof of title

(1) Right to vacant possession

[8.10] Land is sold with the right for the buyer to take occupation of it unless the contract says otherwise. The land must not be subject to any undisclosed lease. Vacant possession can be obtained on the basis of the register if no lease is noted against it, though the land itself has to be checked for the presence of a tenant under a short term lease since such a tenancy is overriding.40 Any beneficial interest will be overreached if there is a restriction41 or overridden if there is none,42 though again a check needs to be made for occupiers.43

(2) Freedom from incumbrances

[8.11] Burdens affect the land in the hands of future owners, and most land will be affected by some adverse rights. Mortgages are redeemable, that is the loan can be paid off and the land discharged from the mortgage, and it is assumed that this will occur at the time of completion. If so a mortgage need not be abstracted. Other rights such as contracts, easements and restrictive covenants continue to bind the land indefinitely, and the land must be sold subject to them. A seller must prove his right to the land free from all incumbrances which are not disclosed in the contract. Adverse burdens are listed on the charges register and must be disclosed; the land will be transferred free of any right which is not entered. However, there is a category of overriding interests which bind off the register and it will be necessary to show that such a right exists.

Evidence of benefitting rights may also be necessary.

C. INFORMATION FROM THE REGISTER

[8.12] We must now turn to the physical means of proving a registered title.

39LRA 2002 s 24.

40See below [25.55ff].

41Hence it is not necessary to provide an abstract of a trust or settlement; see below [13.30ff].

42See below [13.09].

43See below [15.33].

1.Official copies

[8.13] Official copies44 are copies of an individual register45 generated in such a way as to be authenticated by the land registry and within the registry guarantee. Originally called office copies, they took the form of official photocopies with a registry stamp obtained by postal application but already now, and increasingly so in future, official copies will be generated by a conveyancer using a computer to secure direct access to the register.46 A complete set consists of copies of the register, the filed plan,47 and any documents filed at the registry. If office copies are sought of land for which there is a pending application, the buyer has a choice either to accept official copies backdated to the position before the pending application or to wait for completion of the registration process.

Official copies are admissible in evidence as to the state of the register, and conveyancers are entitled to assume their accuracy, but the register remains decisive against inaccurate copies, however official.48 Reliance on inaccurate copies will give rise to an indemnity for any loss suffered in consequence,49 but there are few claims of this type.50 It is an offence to tamper with official copies.51

2.Proof of title by official copies

[8.14] Access to the register is now open,52 and there is no longer any provision about the title to be shown to registered land. It is intended to replace the old law which is prescriptive and heavy handed53 with a much simpler rules framework.54 All will be left to the contract between the parties. No doubt buyers will continue to insist on official copies, including the entries on the register, the filed plan, and documents referred to on the register. It is invariable practice to supply a copy of the register entries before exchange of contracts. There seems to be nothing to prevent a buyer insisting on the pre-registration title.55 A search updates the picture provided by the office copy entries just before completion, and the buyer must then complete within the priority period of the search.56

44DLRR 2003 r 133; DLRR CD ch 9, [32–34]; LR Form OC1; DLRR 2003 r 133(3) (application covering several titles).

45For caution titles see below [9.15].

46Law Com 271 (2001), [9.44–9.47].

47On building estates a title plan is lodged at the registry and buyers of individual plots rely upon a certificate of inspection of the title plan: DLRR 2003 r 143; see below [31.01].

48LRA 2002 s 67.

49LRA 2002 sch 8 para 1(1)(d)–(e).

50CLR Report 1995–1996, 20.

51LRA 2002 ss 123–125; Law Com 271 (2001), [16.26–16.33], EN [532–546].

52There is no longer any need to give a buyer any authority to inspect the register.

53Law Com 271 (2001), [12.7].

54LRA 2002 sch 10 para 2; Law Com 271 (2001), [12.2], EN [760–764].

55This is an unintended consequence of the repeal of LRA 1925 s 110. This might be way over the top for a suburban semi; but it might be sensible for a valuable development site to guard against the risk of becoming embroiled in rectification proceedings. A provision like s 110 is needed.

56See below [8.21].