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

O. MEANS OF ENFORCING POSITIVE OBLIGATIONS

1.Estate rentcharges

[32.53] The Rentcharges Act 1977 prevents the creation of new rentcharges as a source of profit,315 but it allows “estate rentcharges”. These are imposed in three forms to secure the enforcement of positive covenants316 – widely used and the best method currently available for freehold housing estates.

(1) Nominal rentcharges designed to secure enforceability of covenants

[32.54] Estate rentcharges of purely nominal value can be used as a vehicle “for the purpose of making covenants to be performed by the owner of land affected by the rentcharge enforceable by the rent owner against the owner for the time being of the land”.317 Covenants could not be made to run with a rentcharge as such,318 so it is arguable that the Act only removes perpetuity problems from rights of entry.319 However, the point of re-entering is not to secure a money profit but because the underlying positive obligation has been broken, so the rentcharge itself is a sufficient peg on which to hang a scheme of positive covenants, and to render the covenants annexed to a nominal rentcharge inherently proprietary.

(2) Variable rentcharges to reflect the cost of work

[32.55] Repairing obligations can be made to bind successive owners by reserving the cost as a rentcharge. Pre-Act validity320 is preserved. The legislation refers to reasonable amounts for “meeting or contributing towards the cost of performance by a rent owner of covenants for the provision of services, carrying out of maintenance or repairs, effecting of insurance or the making of any benefit of land affected by the rentcharge of the benefit of that and other land.”321 Provided the rentcharge commences immediately, subsequent fluctuations in amount under an agreed formula create no perpetuity problems. A covenant to pay 10% of the gross rateable value as a contribution to the cost of maintenance of roads is valid indefinitely.322 Adoption of the roads raises no perpetuity issue. Also within the Act is a covenant to pay rates.323 Benefit must be commensurate with the price to ensure that the obligation is a true estate rentcharge.324

315See above [3.29ff].

316Rentcharges Act 1977 s 2(3)(c), (4); S Bright [1988] Conv 99.

317S 2(4)(a).

318Haywood v. Brunswick PBS (1881) 8 QBD 403, CA; Torbay Hotel v. Jenkins [1927] 2 Ch 225, 239; W Strachan (1921) 40 LQR 344.

319S Bright [1988] Conv 99, 103–104.

320Beachway Management v. Wisewell [1971] Ch 610, Plowman J; Morland v. Cook (1868) LR 6 Eq 252.

321Rentcharges Act 1977 s 2(4)–(5).

322Beachway Management v. Wisewell [1971] Ch 610, Plowman J; Re Cassel [1926] Ch 358, Russell J; Rentcharges Act 1977 s 2.

323Orchard Trading Estate Management v. Johnson Security [2002] EWCA Civ 406, [2002] 18 EG 155; S Bright [2002] Conv 507.

324At [29], Peter Gibson LJ.

(3) Statutory charges

[32.56] Also exempted from the creation and extinguishment provision of the Rentcharges Act 1977 are statutory charges to pay for work, or commuting obligations to pay for work, and rentcharges created under court orders.325

(4) Remedies to secure payment of rentcharges

[32.57] Rentcharges must be enforced within the limitation period.326 The major remedy is re-entry327 which is usually an express right. If lenders jib at lending on a terminable freehold estate the right of re-entry can be excluded,328 but such a concern is illogical, since lenders happily accept forfeiture provisions in leasehold schemes, and lenders can obtain relief against unreasonable forfeitures.329 Less important remedies are distress330 and taking possession.331 A contractual action in debt is available against the “terre tenant”,332 but not by333 or against future owners.

(5) Sale

[32.58] Transfer of a registered title subject to a rentcharge is complicated by the need to deal with the covenants for payment.334

(6) Ending estate rentcharges

[32.59] Redemption procedures do not apply to estate rentcharges, which in their nature are designed to be perpetual burdens,335 and indeed there is no procedure to modify positive covenants which have become obsolete.336 Termination depends upon release337 or merger.338

325Rentcharges Act 1977 s 2(2)(d)–(e).

326Now 12 years from the last acknowledgement of title: Owen v. De Beavoir (1847) 16 M & W 547, 153 ER 1307; Shaw v. Crompton [1910] 2 KB 370 (personal and real remedies both extinguished).

327Perpetuity is not an issue: LPA 1925 s 121(6), as amended by Perpetuities and Accumulations Act 1964 s 11(2); this was so even before 1964: SM Tolson (1950) 14 Conv (NS) 350, 354–357.

328N Dyer [1994] 27 LSG 16; J Snape (1994) 33 LSG 15.

329Shiloh Spinners v. Harding [1973] AC 691, 722A–725F, Lord Wilberforce.

330LPA 1925 s 121, dating from 1730, as amended in 1881 and 1911. A rent without a power of distress is a “rent seck”: Re Lord Gerard & Beecham’s C [1894] 3 Ch 295.

331LPA 1925 s 121(3)–(4).

332Thomas v. Sylvester (1873) LR 8 QB 368; Christie v. Barker (1884) 53 LJ QB 537; Searle v. Cooke

(1890) 43 Ch D 519, CA; Pertwee v. Townsend [1896] 2 QB 129; Re Herbage Rents [1896] 2 Ch 811, Stirling J; T Cyprian Williams (1897) 13 LQR 288; Cundiff v. Fitzsimmons [1911] 1 KB 513 (lender in pre-1926 form liable).

333Grant v. Edmondson [1931] 1 Ch 1, CA; W Strachan (1931) 47 LQR 380 (critical).

334DLRR 2003 r 70.

335Rentcharges Act 1977 s 8(4).

336Contrast restrictive covenants; see below [34.37ff].

337Booth v. Smith (1884) 14 QBD 318, CA.

338Now depends on intention: W Strachan (1911) 27 LQR 341, 344.

2.Free-standing rights of entry

[32.60] A right of entry may be reserved to take back property if a breach of covenant occurs, even if the covenant it supports is unenforceable.339 In Shiloh Spinners v. Harding340 a right of forfeiture was created on the sale of part of a leasehold mill to conserve the seller’s right to support of the buildings he retained. This was enforceable when a subsequent buyer removed support, and without needing registration.341 There is power to relieve against loss of the land – but forfeiture will be allowed after flagrant breaches. However, there is little point in adopting this dubious technique when estate rentcharges are so convenient.

3.Conditional benefits

(1) Benefit and burden

[32.61] In its pure form the doctrine of benefit and burden asserted that “anyone who takes the benefit of a deed must accept its burden”,342 but there is in fact no such rule.343 Rhone v. Stephens shows that a right to support for a roof may be enjoyed by Walford Cottage, independent of the obligation on the owner of the House to repair the roof.344

(2) Doctrine of conditional benefits

[32.62] There is, however, a conditional benefits principle, first described by Lord Coke, that a person who takes the benefit of a deed is bound by a condition affecting it.345 When exercising any right, one must observe any condition imposed at the time of its creation. Pre-eminent among the case-law illustrations346 is Halsall v. Brizzell.347 Cressington Park was developed in 1851 as a building estate with 174 plots on the basis that each owner agreed by deed to pay a fair proportion of the overall expenses incurred by the builders in repairing the sea wall, estate roads and sewers. The interest of the case lies in Upjohn J’s obiter discussion of the basis on which the 1851 covenants were binding. If the owner of a house wished to use the roads and the

339However, perpetuity is an issue: Perpetuities and Accumulations Act 1964 s 12; Re Trustees of Hollis’ Hospital & Hague’s C [1899] 2 Ch 540; Re Da Costa [1912] 1 Ch 337.

340[1973] AC 691, HL; SM Tolson (1950) 14 Conv (NS) 354; PB Fairest [1971] CLJ 263. Free standing rights must be limited to a perpetuity period.

341At 717F, Lord Wilberforce; Doe d Freeman v. Bateman (1818) 2 B & Ald 168, 106 ER 328; Hyde v. Warden (1877) 3 Ex D 72, 84, CA.

342Tito v. Waddell (No 2) [1977] Ch 106, 289–310, Megarry V-C.

343Rhone v. Stephens [1994] 2 AC 310, 322E, Lord Templeman; Law Debenture Trust Corp v. Ural Caspian Oil Corp [1993] 1 WLR 138, 146E–147G, Hoffmann J; on appeal [1995] Ch 152, CA.

344Rhone may cast doubt on ER Ives (Investment) v. High [1967] 2 QB 379, CA.

345Coke on Littleton, [230b]; Elliston v. Reacher [1908] 2 Ch 665, 669, Cozens-Hardy MR; Rhone [1994] 2 AC 310, 322F–323A.

346R v. Houghton-le-Spring (1819) 2 B & Ald 375, 106 ER 403; Chamber Colliery Co v. Twyerould [1915] 1 Ch 268n, HL; Kidner v. Stimpson (1918) 35 TLR 63, CA; Westhoughton Urban DC v. Wigan Coal & Iron Co [1919] 1 Ch 159; Naas v. Westminster [1940] AC 366, 373, Viscount Maugham (settlement); Montague

v.Long (1972) 24 P & CR 240, Graham J; Tito v. Waddell (No 2) [1977] Ch 106, 289–310; FR Crane (1977) 41 Conv (NS) 432; EP Aughterson [1985] Conv 12.

347[1957] Ch 169, Upjohn J; HWR Wade [1957] CLJ 35; RE Megarry (1957) 73 LQR 154.

33

NEIGHBOUR BURDENS

Unregistered land: legal burdens; land charge. Registered land: neighbour burdens on the register; overriding interests.

[33.01] Property rights are needed to regulate the relationship between neighbouring land owners but from the point of view of the land affected it is simply a burden just like a mortgage or a lease – and there is the usual concern to ensure that a person buying the land becomes aware of the burden and values the land he is buying taking its burden into account. The subject of this chapter is that minus. It considers first unregistered land where the rules are relatively simple and then registered – where the categories are more confused but the practical operation is much simpler.

A. LEGAL BURDENS ON UNREGISTERED LAND

1.Legal easements

[33.02] Whilst title is unregistered burdens are either legal or equitable. Legal rights bind the world. So it is a matter of no interest whether a buyer knows of a right. All that matters is that a legal right is first created. Legal easements are automatic burdens, though generally there will be a deed of grant or conveyance of part with the title deeds.1 Possible rights are severely limited. In terms of legal easements, the interest must be for a term matching one of the legal estates – either in fee simple or for a term of years absolute2 though there is no need for strict words of limitation.3

2.Non documentary easements

[33.03] Easements can be implied when land is divided,4 the grant or reservation being non-documentary and based on the demonstration of a necessity or use at the time of division. If title is unregistered, the conveyance effecting the division remains part of the title and one can identify readily enough the potential for an implied grant (or more rarely for an implied reservation). Grants or reservations implied at the time

1LPA 1925 s 52(1); Wood v. Leadbitter (1845) 13 M & W 838, 842, 153 ER 351, Alderson B; Dodd v. Burchall (1862) 1 H & C 113, 120, 158 ER 822, Pollock CB; McManus v. Cooke (1887) 35 Ch D 681, 686–689, Kay J.

2LPA 1925 s 1(2)(a); JF Garner (1948) 12 Conv (NS) 202; see above [21.04].

3A Underhill (1908) 24 LQR 199; TC Williams (1908) 24 LQR 244.

4See below [35].

of a legal conveyance are themselves legal easements, automatic in their effect against later owners. Prescriptive burdens are created by long use,5 and these informal rights necessarily operate off the documentary title. The easement created by prescription is a legal interest, binding all comers with or without notice.6

3.Other legal interests

[33.04] Rentcharges and some old rents can also exist at law.7

B.LAND CHARGES (EQUITABLE BURDENS ON UNREGISTERED LAND)

[33.05] Land charges are the matters requiring registration against the name of the unregistered estate owner who creates them. Registration binds all later owners.8

1.Easements

[33.06] Many easements are legal, but others are equitable. Registration was not retrospective, and pre-1926 land obligations may continue to affect the land indefinitely, equitable rights binding according to the doctrine of notice.9 Registration applied from 1925 onwards.

Registration under class D(iii) applies to any post-1925 equitable easement, and also to easement-like rights and privileges affecting land.10 A true easement must benefit the land of a neighbouring owner. In London & Blenheim Estates v. Ladbroke Retail Parks11 a right to park could be extended to benefit further land by a notice, but in advance of an extension notice this potential right was not registrable.

Class D(iii) is vague and uncertain of definition.12 Clearly within it fall easements for life or other periods which cannot be legal.13 Lord Denning MR narrowed the class in ER Ives Investment v. High14 to this type alone, and hence excluded any equitable easement created by use of contractual formalities.15 This drastic constriction is inconsistent with the plain wording of the definition of class D(iii), but the solution is just since the formality of registration is inappropriate for informally created rights.16

5See below [36].

6LPA 1925 s 12.

7See above [21.05ff].

8LPA 1925 s 198; Newman v. Real Estate Debenture Corp [1940] 1 All ER 131; Marten v. Flight Refuelling [1962] Ch 115, 140, Wilberforce J; Wrotham Park Estate Co v. Parkside Homes [1974] 1 WLR 798, 809, Brightman J; see above [21.26].

9Class D charges are never registrable if created before 1925: LCA 1972 s 4(7).

10Lewisham BC v. Maloney [1948] 1 KB 50, CA (requisition not an equitable easement).

11[1994] 1 WLR 31, CA.

12Law Com 18 (1969) nevertheless recommended no change; S Cretney (1969) 32 MLR 477, 487.

13LPA 1925 s 1(2)(a).

14[1967] 2 QB 379, 395, CA; Poster v. Slough Estates [1969] 1 Ch 495, Cross J; AG Guest & J Lever (1963) 27 Conv (NS) 30, 33. Contrast registered land below at [33.21].

15CV Davidge (1937) 53 LQR 259; HWR Wade [1956] CLJ 216, 225–226.

16[1967] 2 QB 379, 395; Roxburgh Committee (Cmnd 9826, 1956), [16]; HWR Wade [1956] CLJ 216; Law Com 18 (1969), [63]; S Cretney (1969) 32 MLR 477, 487; G Battersby (1995) 58 MLR 637, 645–648.

A better way to achieve the same contraction is to exclude from Class D(iii) any interest created by estoppel,17 a tenant’s right to remove fixtures at the expiration of the lease18 and equitable rights of re-entry.19

2.Restrictive covenants

[33.07] Restrictive covenants are usually created by a deed of covenant, though Tulk v. Moxhay20 shows that formality is not essential. The burden is proprietary if (1) the covenant is restrictive, (2) the wording is proprietary, and (3) the neighbour principle is complied with – there must be land to be benefitted and actual benefit of it. If these requirements are met, there is a restrictive covenant which is an equitable interest in the land, and so one which is protectible and if unprotected is vulnerable to a protected purchaser.

Class D(ii)21 requires registration of any “covenant or agreement restrictive of the user of land” against the name of the landowner burdened by it. Unfortunately this name has often slipped off a modern unregistered title making the registrations almost undiscoverable.22 Restrictive covenants entered into with local authorities require entry as local land charges instead.

3.Pre-1926 restrictive covenants affecting unregistered land

[33.08] Registration was not retrospective, and notice continues to apply to pre-1926 restrictive covenants.23 Many towns were developed in the Victorian or Edwardian periods, and those restrictive covenants will not appear on the register. Notice doctrine to pass the burden of restrictive covenants so as to bind later owners24 of unregistered titles developed by analogy with equitable easements.25 “No one purchasing with notice of the equity can stand in a different situation from the party from whom he purchased.”26 Buyers usually get notice because a memorandum of the covenants is endorsed on the conveyance creating a division,27 because sellers disclose them,28 and because covenants are always repeated in later sales of the burden land.29

17ER Ives at 405C–F, Winn LJ; see above [23.41].

18Poster v. Slough Estates [1969] 1 Ch 495, Cross J.

19Shiloh Spinners v. Harding [1973] AC 691, HL; D Yates (1974) 37 MLR 87; PB Fairest [1971] CLJ 258, [1973] CLJ 218.

20(1848) 2 Ph 774, 778, 41 ER 1143; Brooker v. Drysdale (1877) 3 CPD 52, 57–58; Westacott v. Hahn [1918] 1 KB 495, 504, Pitchford LJ.

21LCA 1972 s 2(1)(ii); RG Rowley (1956) 20 Conv (NS) 370.

22See above [21.32].

23In operation a purchaser with actual knowledge of a restrictive covenant is often unfairly to defeat it for non-registration.

24Tulk v. Moxhay (1848) 2 Ph 774, 41 ER 1143, Cottenham LC; Mann v. Stephens (1846) 15 Sim 377, 60 ER 665; Jay v. Richardson (1862) 30 Beav 563, 54 ER 1008.

25S Gardner (1982) 98 LQR 279; W Strachan (1930) 46 LQR 159; JF Garner (1962) 26 Conv (NS) 298; DJ Hayton (1971) 87 LQR 539; S Robinson (1974) 38 Conv (NS) 90; JDA Brooke-Taylor [1978] Conv 24.

26Tulk at 778, Cottenham LC; McLean v. McKay (1873) LR 5 PC 327, 336; Haywood v. Brunswick PBS (1881) 8 QBD 403, 409, CA; Rogers v. Hosegood [1900] 2 Ch 388, 401; Re Nisbett & Pott’s C [1906] 1 Ch 386, CA; Wilkes v. Spooner [1911] 2 KB 473; London CC v. Allen [1914] 3 KB 642, 665.

27Conveyancing Act 1911 s 11 (now superseded by registration).

28Faruqi v. English Real Estate [1979] 1 WLR 963, Walton J (registered land).

29Rogers v. Hosegood [1900] 2 Ch 388, 394, Farwell J.

4.Landlord and tenant

[33.09] Covenants entered into between landlord and tenant are not registrable as restrictive covenants, since they run as leasehold covenants and anyway a person buying the lease will read the lease and obtain notice in that way.30 This is so even if the benefit of the covenant attaches to neighbouring land of the landlord,31 though this kind of covenant is much more like a true restrictive covenant and should surely be treated as such.32

C. NEIGHBOUR BURDENS ON THE REGISTER

[33.10] If title is registered, any burden should be protected on the register by a mutual or unilateral notice.33

1.Legal easements

[33.11] The benefit of a legal easement is recorded and guaranteed on one register and the corresponding burden is recorded by notice on another. Other easements are recorded as burdens without any guarantee of the benefit; examples are “legal” easements created against unregistered owners or where only the burdened title is registered, equitable easements created by a contract for an easement,34 and other equitable easements.35

2.Rentcharges, franchises and profits

[33.12] These interests are substantively registrable, but the burden appears by notice against the title bound.36 Examples are rentcharges (until extinguished in 2038),37 franchises, profits, and any other interest or charge which benefits or burdens an interest with a registered title.

Profits are rights to use another’s land for activities such as grazing or fishing; if they are used in common they are registrable under the Commons Registration Act 1965, but individual profits will be registrable for the first time. Rights may exist in gross, that is without specific land to benefit and such profits as fishing rights may

30LCA 1972 s 2; Newman v. Real Estate Debenture Corp [1940] 1 All ER 131; DW Logan (1940) 56 LQR 361, (1940) 4 MLR 51; AK Kiralfy (1949) 13 Conv (NS) 173; Langevad v. Chiswick Quay Freeholds [1999] 1 EGLR 61, 62L–M, Buxton LJ; Oceanic Villages v. United Attractions [2000] Ch 234, Neuberger J (void for non-registration).

31Dartstone v. Cleveland Petroleum Co [1969] 1 WLR 1807, Pennycuick J.

32Compare registered land, see LRA 2002 s 33(c).

33See above [20.01ff].

34East India Co v. Vincent (1740) 2 Atk 83, 26 ER 451; McManus v. Cooke (1887) 35 Ch D 681, Kay J; Cory v. Davies [1923] 2 Ch 95, PO Lawrence J; Mason v. Clarke [1955] AC 778, HL; HWR Wade [1955] CLJ 161; G Williams (1955) 18 MLR 408; G Williams (1961) 25 Conv (NS) 497.

35CV Davidge (1937) 53 LQR 259; P Jackson (1968) 32 Conv (NS) 135.

36See above [20.04].

37Rentcharges Act 1977 s 3.

have considerable economic value. Franchises are things like grants of market rights or toll bridges; this provision is new.

3.Restrictive covenants

[33.13] Covenants are proprietary if (1) the covenant is restrictive, (2) the wording is proprietary, and (3) the neighbour principle is complied with – there must be land to be benefitted and actual benefit of it.38 An equitable interest is created in the burdened land, which is protectible by notice.

4.First registration of unregistered titles

[33.14] On first registration of title adverse interests apparent from the title from searches or from disclosure to the registrar should be transferred to the register and protected by notice.39 Entry of a notice on the register does not create a building scheme.40 Restrictive covenants are often not disclosed at the time of first registration, and if so there is a problem about whether to alter the register to include them.41 Positive covenants do not create burdens,42 and the covenant may only be recorded against the individual proprietor affected and not as a burden on the charges register.43

5.Removal of entries

[33.15] Entries are discharged on production of adequate evidence that the right has ended,44 whether by formal release, informal release by contract, or circumstances that amount to abandonment of the right.

D. OVERRIDING INTERESTS

1.Interests overriding first registration

[33.16] First registration takes effect subject to any legal easement or profit a prendre.45 On first registration this is not limited in any way – easements will override whether the easement is formal or created by informal grant or by prescription. However, unregistered rights should be disclosed on first registration when a notice will be entered, and it is vitally important as will appear below to get easements on to the register if at all possible. If easements are omitted from the first register, this can be altered later to bring on the rights omitted.46

38See above [32.40ff].

39DLRR 2003 rr 32–34; Hodges v. Jones [1935] 1 Ch 657; see above [9.32].

40Willé v. St John [1910] 1 Ch 84; on appeal [1910] 1 Ch 325, CA.

41See above [11.44ff].

42Cator v. Newton [1940] 1 KB 415, CA; Barnes v. Cadogan Developments [1930] 1 Ch 479.

43See above [32.52].

44See above [20.12].

45LRA 2002 sch 1 para 3; Law Com 271 (2001), [8.23–8.25], EN [584–586].

46See above [11.40].

2.Formal easements

(1) Created before the 2002 Act commencement

[33.17] The wide scope of the definition of the overriding interest under the old legislation was astounding. Strictly it is unnecessary to enter any legal easement on the register of the burdened land,47 since it would take effect anyway as an overriding interest. Express easements created before the 2002 Act could continue to be overriding.

(2) Express easements and profits granted out of registered titles

[33.18] Overriding status can no longer be claimed for an easement or profit created out of a registered title after the 2002 Act commencement; only legal rights override and legal status is dependent upon completion of the registration requirements.48 Indeed in future no right will exist unless electronic formality has been followed by automatic registration.49 Overall therefore there has been a profound and welcome change of emphasis from the days when interests were removed from the register if they would in any event be overriding interests.50

3.Easements created on division or by prescription

[33.19] After first registration it is not easy to tell from the title the sequence of divisions and hence whether there has been a case for implied grants or implied reservation, and if so with which neighbours. Any easement that is implied will override, despite being detectable only from their use.51 Information about the history of a title can now be obtained from the registry.52

Prescriptive burdens create rights which operate off the documentary title. The legal rights created against an unregistered title are matched by an interest that overrides a registered title.53

4.Undiscoverable easements excluded

[33.20] Easements will not be able to override a transfer if they are undiscoverable. Overriding status is withdrawn from an easement54 if it is:

registered under Commons Registration Act 1965; within the actual knowledge of the purchaser;

one that would have been obvious on a reasonably careful inspection of the land; or one that has been exercised within the year before the transfer.

47An easement appurtenant to an interest that overrides will itself continue to override.

48LRA 2002 s 27(1), sch 2 para 7.

49Law Com 271 (2001), [8.2], [8.53].

50Willies-Williams v. National Trust (1993) 65 P & CR 359, 362, Hoffmann LJ.

51LRR 1925 r 258; M Davey [1986] Conv 296.

52LRA 2002 s 69; Law Com 271 (2001), [9.58–9.60], EN [306–309]; DLRR 2003 rr 144–145; C Hood [2002] 28 EG 124; see above [8.16].

53LRA 2002 schs 1/3 para 2; [2002] 09 LSG 42.

54LRA 2002 sch 3 para 2; Law Com 271 (2001), [8.68–8.72], EN [623–625]; C Hood [2002] 28 EG 124.