Equity AND Unregistered LAND PDF

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EQUITY AND UNREGISTERED LAND

What is property law? Definition of land: s.205(1)(ix) of the LPA 1925: “land … and mines and minerals, whether or not held apart from the surface” ★ Not just the actual surface, but also the land below and space above to an unlimited extent ★ SPACE BELOW:Bocardo SA v Star Energy UK Onshore Ltd (2010): Energy Star had a licence to search for and get petroleum. Its predecessors had drilled three wells diagonally which entered the substrate below the land owned by Bocardo, at depths of up to 2.900 feet below ground level but this did not interfere with Bocardo’s enjoyment of its land. Nevertheless, Star Energy has held liable for trespass. One issue was the extent to which rights of landowners extended beneath the surface. Lord Hope referred to arguments that the rights should only extend to 1,000 feet below but rejected any definite limit. ★ SPACE ABOVE: Civil Aviation Act 1982, s.76(1) provides that no action shall lie in respect of trespass or nuisance, by reason only of the flight of an aircraft over any property at a height above the ground, by which having regard to wind, weather and all the circumstances of the case is reasonable. ○ Bernstein v Skyviews General Ltd (1978): a claim by a landowner for trespass in respect to flights over his house for aerial photography was rejected. The court held that a landowner only owns such airspace necessary for the reasonable enjoyment of his land. ★ Corporeal hereditaments: the land and what is attached to the land ★ Incorporeal hereditaments: rights over land - easements and profits ★ Fixtures and Fittings: Fixtures are objects fixed to the land (sold with the land), fittings are not (chattels)  Property law regulates legal relationships between persons with respect to things (2 persons, 1 thing). ★ I.e if I have a car, and you try and take said car from me, that is a property law relationship  The primary purpose of property law is to facilitate trade, commerce etc  Usage of ‘property’: ★ Property as an object - lost property ★ Collective term for possession of an individual - my property ★ Property as the right of ownership - property in a house (proprietary interest/ claim/ right, not the washing machine etc) intangible sense  Statutory definition: Law of Property Act 1925, s.205(1)(xx): ‘ p  roperty’ includes anything  in action, and any  interest in real or personal property. ★ Interest = proprietary rights, property is not limited to tangible objects i.e a mortgage is property  

Property Rights Property Right: held by one person against another person over property Personal Right: applies to a person against another person without a thing ★ These are not mutually exclusive or interdependent so you can have a personal right in real property or personal property and you can have property right in personal property or real property ○ Personal right in personal property: you borrow a phone from a friend and watch a video on it ○ Property right in personal property: ownership of a car ○ Personal right in real property: land i.e you're invited to a friends house for dinner you have the right to be there ○ Property right of real property: lease, ownership

EQUITY AND UNREGISTERED LAND  ★ 2 main hallmarks of Property right: ○ Transmissible ( alienability) - assignment to 3rd party without consent of others (so basically cannot accept something if it is not transmissible and they cannot give it away to someone else YOU MUST BE ABLE TO GIVE IT AWAY) ■ The less transmissible and enforceable, the more likely it is to be a personal right ○ Enforceable ( Exigibility) - binding on third party without consent of others (if someone owes you £100 you can go after them, and the only reason for that is because that person has previously consented to that obligation)  Hill v Tupper (1863) 2H&C 121, 159 ER 51: Hill was granted a lease of a canal for the sole use of his pleasure boats to run a monopoly type thing. Tupper (D) owns a boat house on the bank of the private canal and puts a pleasure boat of his own on the canal for the use of his guests. That breached the exclusive right to the canal - this was rejected by the court because this is not a recognised property right, it is a personal right and you can only enforce a personal right against someone you’re contracting with.  Numerus Clausus - a closed list of recognised property rights, as influenced by equity (anything not on this list is personal): ★ Ownership ★ Lease ★ Trust ○ Settlor - Trustee - Beneficiary ○ Legal title held by trustee ○ Equitable title held by beneficiary ○ Beneficiaries have both personal rights and proprietary rights against the trustee and third parties ★ Mortgage ★ Easement ★ Profit-a-prendre ★ Restrictive covenant ★ Rentcharge  Equity  Meanings: ★ Capitalized: refers to the jurisdiction of several principles developed by previous court or lord chancellor ★ ‘Equitable to do something’ = justifiable/ fair, avoid using this as it leads to misunderstanding ★ Equity as ownership i.e i have equity in this firm eg shares  History of equity: ★ Norman conquest (1066) ★ King’s bench - common law ★ Lord chancellor’s court  Nature of Equity: ★ Conscience ★ Complementary or conflictive ★ Chancellors foot

EQUITY AND UNREGISTERED LAND ★ Maxims of equity ○ equity sees that as done what ought to be done ○ one who seeks equity must do equity ○ Equity follows the law ○ In a conflict between equity and law, equity prevails ○ Equity will not suffer a wrong to be without a remedy - would not work in court  Development: ★ Lord Chancellors between 1560s and 2012: every LC before 2012 were lawyers ★ Judicature Acts 1873-1875 ★ Fusion ○ Procedural fusion i.e you do not need to go to separate courts ○ Substantive fusion - happens when you no longer distinguish between common law and equity ★ Nature and influence today ○ Property law ○ Trusts  Tenanture, Estate and Title Estate All land is owned by the crown, the most anyone can have is an estate in land (right to control and use land) ★ Estates in land muse be created by deed, except in the cases of leases for up to three years (s.54(2), LPA 1925)  ★ How long is tenanture for? ★ Freehold estate (time is not determined)/ non-freehold estate (estate which the duration is set for) ★ Co-existence of estates ○ Fee simple + lease  ○ Fee simple + life estate (co-existence of 2 freehold estates) ○ Fee tail +life estate + lease ★ Only two types of legal estates since 1st January 1926 (Law of Property Act 1925, s.1(1)) ○ Fee simple (simple means no restriction, can be passed down to anyone) a  bsolute(absolute means unconditional) in possession (in possession means current not future) (freehold) - something which can be passed down or inherited ■ It is possible to have other freehold estates (e.g for life) but they can only exist behind a trust A life estate, a fee tail or a base fee can only take effect in equity ○ Terms of years absolute (leasehold) ○ All other estates of land can now only exist in equity    Land and Land ownership Features of land ★ Valuable ★ Indestructible - cannot be created or destroyed ★ Derivative ★ Subject to multiple use, both successively and concurrently

EQUITY AND UNREGISTERED LAND  Proving land ownership → trace it to 1066 (hard to prove and never done in practice) or accept more recent status quo  Title ★ A right or claim of estate in land ★ A title may be good or invalid; it may be stronger or weaker than another title ★ Issue of relativity of title ★ Limitations of actions   Interests in unregistered land Interest in land: a right which a person has over another’s land.  Common Law and Equity Nature and Characteristics ★ Formality ★ Publicity  Importance ★ Fundamental question for property law pre-1925 ★ Still fundamental today for all personal property ★ Important for unregistered land since 1925 ★ Prima facie i rrelevant for registered land today  Legal Title ★ Title deeds + possession for a long time ○ A good “root of title” ○ Possession often presumed in practice ○ Limitation Act 1980, s.15 - sets current limitation period for any action in relation to recovery of land to 12 years ★ Exclusive, (historically) difficult to forge ○ Deed: Law of property (Miscellaneous Provisions) Act 1989, s.1 ★ All titles relative / ”good against the world” i.e should be in a strong position to defeat any claim 

TYPES OF INTEREST IN LAND: Note that these are proprietary rights (capable of binding third parties i.e legal estes) in land and different from PERSONAL rights (not capable of binding third parties i.e licences): Difference: ★ Example 1: Z has an easement over X’s land. This is an example of a proprietary right and so is capable of binding Y when X sells his land to Y. ★ Example 2: Z has permission from X to sit in X’s garen and paint the view of the hills. This is only a licence and so is a personal right that cannot be binding on Y  ★ Legal interests - deeds!! ○ Legal Interest is binding on the WORLD.

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EQUITY AND UNREGISTERED LAND Defined in LPA 1925 s.1(2): (a) An easement, right, or privilege in or over land for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute - This includes both easements and profits a prendre. - Easement: gives the right to use the land of another is some way, or to prevent it from being used for certain purposes e.g rights of way and rights of water and light - Profits: gives the right to take something from the land of another, eg. peat, fish, wood or grazing rights - To be legal, the right must be held either for an indefinite time (fee simple) or a definite time (term of years), thus an easement for life or a right of drainage granted until the road is adopted by the local authority cannot be a legal interest and must be equitable. (b) A rentcharge in possession issuing out of or charged on land being either perpetual or for a term of years absolute - Rentcharge: gives the owner the right to a periodical sum of money secured on land independently of any lease or mortgage e.g where the seller of land reserves an annual payment for it secured by a rentcharge - No new rentcharges can be created after 22/07/1977, with exceptions, and most will be extinguished on 22/07/2037 (60 years from creation) (c) A charge by way of legal mortgage - Mortgage: charge on land to secure a debt (d) (land tax, title rentcharge) and any other similar charge on land which is not created by an instrument - Common feature of any charges coming within this provision is that they are periodical payments with which land was burdened by law. The specific charges that fell within this provision have been abolished (e) Rights of entry exercisable over or in respect of a legal term of years absolute, or annexed, for any purpose, to a legal rentcharge - Right of re-entry in a lease, e.g if the tenant fails to pay rent  Assuming that the interest is within this list, then in order for it to be legal it must be created by a deed. A deed is a document which, if made before 31/07/1990, had to be sealed but this is no longer necessary LPA 1925, s. 52(1): requires the use of a deed to create or convey a legal estate or interest in land. Law of property (Miscellaneous Provisions) Act 1989, s.1(2) and (3) An instrument shall not be a deed unless - It makes it clear that it is intended to be a deed - It is signed by the person executing it and by a witness present at the same time who also signs it - It is delivered by the person executing it or by someone on his behalf  Example 1: X agrees with Y by a deed that Y can have a right of way across X’s land for the rest of Y’s life. - Step 1: identify the right - easement - Step 2: is it legal or equitable? As it is for life, it is equitable, even if done in deed.  Example 2: X agrees with Y that Y can have a right of way across X’s land. - Step 1: identify the right - easement

EQUITY AND UNREGISTERED LAND - Step 2: is it legal or equitable? As it does not say that the easement is only for Y’s life, we can assume it is forever. Therefore it is a legal easement. - Step 3: Is it in deed? Yes, so it is legal.  ★ Equitable interests - prior  tempore potior iure (earlier in time better in right/ law - older law is binding) ○ This means that the right was originally only recognised by the Court of Chancery which dealt with equitable rights, and not by the Courts of Common Law ○ Equity is often applied where the application of the strict rules of the common law would not have produced a just result. The effect was that the equity often did not insist on the observance of formalities, such as the need for a right to be granted in a deed (above). ★ Interaction between legal and equitable interests  Equitable rights must be - Registered in Land Charges Registry - Overreached OR - Doctrine of Notice  If a person is not the purchaser, but has acquired the land by gift or by inheritance, then that person takes the land with all the equitable rights.  Interests under trusts: Arises when a property is held by one person (trustee) on trust for another (beneficiary). Example: X  contributes to the purchase of land but legal title is held in the name of Y. Y will hold the land on trust for X in the absence of a contrary intention.  Interests not created formally: If a contract has been made to create an interest in land then equity may enforce it by a decree of specific performance or restrain breach by an injunction (lawful act to be done to restrain an unlawful act). Example: X  agrees to grant Y a right of way over his land. This is not a deed. As in the above examples, we can assume that it is to last forever, as it does not say it is for life. However, the lack of a deed would still be fatal to it being a legal easement. However, equity may come to the rescue and declare it to be an equitable easement. Another example is an agreement for a lease. (Walsh v Lonsdale)  Distinguishing between a deed and an agreement: ★ The word ‘grants’ usually indicates a deed: the right of way os GRANTED by X to Y and not agreed by them ★ The term ‘agrees to grant’ indicates JUST an agreement as it points to the future, and this fits with the idea behind equity: it enforces a contract to grant an interest in the future.  Law of Property (Miscellaneous Provisions) Act 1989, s.2(1): provides that contracts for sale or other disposition of an interest in land made on or after 27/09/1989 MUST: be in writing, contain all the terms agreed by the parties and be signed by all the parties s.2(5): n  othing in this section affects the creation or operation of resulting, implied or constructive trusts ★ Equity will e.g enforce a contract for an equitable easement provided that it satisfies these requirements. Ntracts made before that date do not require writing. Another example of an equitable interest in this connection is an estate contract, which is a contract to convey a legal estate.

EQUITY AND UNREGISTERED LAND ★ If an agreement does not satisfy these requirements (s.2(1)), it may enforceable under the principles of constructive trusts (s.2(5)) ★ Keay v Morris Homes (West Midlands) Ltd [2012]: held that any agreement to vary the sale agreement had to be contained in a document satisfying section 2 because by agreeing to vary the contract, the parties were in effect entering into a new contract. Lees (2013) argues that the effects of this case will reduce opportunities to rely on estoppel where a written agreement was varied by a later one.  Electronic Conveyancing LRA 2002, s.91: in order to pave the way for the introduction of electronic conveyancing, electronic documents will be capable of satisfying the formality requirements for deeds and contracts set out above.  Restrictive Covenants Where a person covenants/ agrees in a deed not to use his land in a certain way or to do something on his land e.g keep fences in repair or not to build on the land. These have only ever been enforced in equity. 

Overreaching The process by which equitable rights that exist under a trust of land are removed from the land and transferred to the money (capital money) that has been paid to purchase the land. The effect is to give the purchaser automatic priority over equitable interests under a trust. It can ONLY take place if the transaction is made by at least 2 trustees or a trust corporation. LPA 1925, s.2(1): A conveyance to a purchaser of legal estate in land shall overreach any equitable interest or power affecting the estate, whether he has notice thereof. There are various instances of where overreaching can take place but the most important ones are s.2(1)(ii): where the provisions of LPA 1925 s.27 regarding the payment of capital money are complied with i.e the capital money is paid to at least two trustees or a trust corporation. Example 1: Y  may be bound by Z’s interest.

 Example 2: H  ere Y is not bound by Z’s interest as the transaction was entered into by two trustees (X and W) and so Z’s interest in the property is overreached and is transferred to the proceeds of sale. The effect is that Y need not concern himself about Z’s interest but Z may claim against Z and W for any share of the proceeds of sale which she feels belong to her

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EQUITY AND UNREGISTERED LAND Overreaching the beneficial interests in a trust of land: City of London Building Society v Flegg [1987] 3 All ER 435 (HL) ★ FACTS Mr and Mrs MB were the registered proprietors of a house, but over half the purchase price had been raised by Mr and Mrs F, the parents of Mrs MB, who were also to live at the house. Accordingly, the house was held on trust for all four of them. Mr and Mrs MB then, without the knowledge of Mrs MB’s parents, raised two further charges over the property and then defaulted on the repayments. The lender sought possession and it was held that the interests of the parents had been overreached by the charges and that their rights now only existed in the proceeds of sale. ★ LEGAL PRINCIPLE The interests of beneficiaries in a trust are overreached if the transaction is, in this case, entered into by two or more trustees.  Other scenarios where overreaching can take place: ★ State Bank of India v Sood (1997): overreaching applies not only where capital money is actually paid, but also where the mortgage was created as security for both existing and future liabilities. Thus, at the time, no capital money (mortgage finance here) changed hands. ★ Shami v Shami (2012): held obiter that even where the sale is by one owner beneficial interests can be overreached where no capital money arises on the sale ★ Mortgage Express v Lambert (2016): not only beneficial interests under a trust can be overreached but also a right to set aside the sale on the grounds that it was an unconscionable bargain, known as ‘mere equity’ ★ Baker v Craggs (2016): overreaching was triggered by the grant of an easement by two trustees to X rather than, as in all other cases, the grant of a freehold or leasehold.  Land Law and HRA 1998 ECHR Article 8 (respect for family and private life) has been relied on by tenants against landlords seeking possessions because Art 8 requires the courts to engage in a proportionality exercise (as provided by Art.8(2)) in addition to applying any statutory protections available to the tenant. Manchester City Council v Pinnock [2011] UKSC 6 (Art 8 ECHR to possession proceedings): ★ FACTS Manchester City Council sought to evict Pinnock from a property owned by them because of a number of incidents of serious anti-social behaviour caused by members of this family. ★ LEGAL PRINCIPLE A person at risk of being dispossessed of her home by a public authority should have the right to question the proportionality of this interference with her Art.8 ECHR right to respect for t...