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Law3101 Coursework Question 2016/2017 Following her divorce, Maria needed to find somewhere to live. In March 2015, she bought Trafalgar House, title to which was already registered, and she was registered as the sole legal owner. She moved in with Philip who contributed £75,000 to the purchase price. An express trust was drawn up confirming Philip’s interest. On 6 March 2016, Maria leased to Saeed an extension to the property which comprised a self-contained bedroom, bathroom and kitchen. The lease was to commence on 5 August 2016 and was to last for one year. Maria lived next to the local church. Maria’s neighbour, Davinia, claims that on 28 March 2016, Maria gave her an easement over the back of Maria’s garden, which was a shortcut to the church. Maria’s friend, Hilary, claims that on 15 April 2016, Maria entered a contract to sell the house to her. On 4 July 2016, Maria sold the house to Kenneth. Philip was in South Africa when the house was sold. Philip was living for three months every year in South Africa for his work as a diamond dealer. Advise Kenneth what interests are binding on him.

Considering Philip’s contribution to the purchase of the house, the first issue which needs to be dealt with is of Phillips potential interest. When Philip moved in, a valid express trust was drawn up as stated under section 53(1)(b) 1 trusts on land must be written by a deed, and the express trust here is clearly shown, it has been created in writing, therefore we have a valid express trust. Phillip, who is a beneficiary under the trust of land, should place a restriction in the proprietorship in the register under section 402 to protect his interest. The restriction acts as a warning to the new buyer, Kenneth, that they may have to overreach Philips beneficial interest. This means, Philips interest will be overreached only if Kenneth pays to at least two owners under section 23. If Phillips interest has been overreached, then his proprietary interest is defeated and shall be turned into money interest. However, Phillips interest in the land is still intact as there is only one legal owner, Maria as in the case of Williams & Glyn’s Bank v Boland4. However, if Phillip has not overreached, his proprietorship still exists. To protect, in terms of priority against Kenneth, we can apply Schedule 3 Paragraph 2 referring to interests of persons in actual occupation. 1 Law of Property Act 1925 2 Land Registration Act 2002 3 Law of Property Act 1925 4 Williams & Glyn’s Bank v Boland [1981] AC 487 Word Count: 1,200 Words

The paragraph of this schedule states an interest belonging at the time of the disposition to a person in actual occupation, as far as relating to land of which he is in actual occupation5, except for an interest which belongs to a person whose occupation would not have been obvious on a reasonably careful inspection of the land at the time of the disposition.6 Therefore, if on a reasonably inspectional land, it is reasonably obvious Phillip’s presence is evident it would be likely enough for Kenneth to be bound. Phillip holds proprietary rights seeing as he is a beneficiary, as in National Provincial Bank v Ainsworth7. Phillip needs to be in actual occupation for it to be binding on Kenneth at the time of sale and transfer as in Abbey National BS v Cann8. At the time of sale, Phillip was in South Africa, however, it is not necessary for him to be present at the time, if evidence of physical presence with intention to return is provided as in the case of Thompson v Foy9. The meaning of actual occupation under the 2002 Act had been considered at some length in this case. The case of Thompson v Foy has questioned whether actual occupation must also exist at the date of registration. As the land, had been registered beforehand, there is no criteria of actual occupation required. As Phillip lives in South Africa for 3 months every year, he has the intention to return and the evidence of presence is evident. To conclude, it would seem more likely than not that Kenneth could be bound by Phillip.

At this point Saeed here has a lease. The question here is whether it is an equitable lease or a legal lease. Considering the lease is for less than 3 years, it is automatically a legal lease under section 27 10. For there to be an overriding interest, a possession should be made within 3 months, therefore it is known as a reversion lease. Per Schedule 3 Para 2(d) reversionary leases are leases which take effect in possession more than 3 months after the date of grant and should be registered under Section 27(2)(b)(ii). To protect his reversion lease, an application for the entry of a unilateral notice by Saeed, who claims to be entitled to the benefit of an interest affecting the registered estate or charge11 shall be made under section 34(2)(b) 12 and can be entered as a notice on the register either as agreed or unilateral way of entering it, meaning Saeed would have done it on his own, or with Maria. Either way it needs to go on the register as a notice to be binding. If this was a notice on the register on Maria’s property then Kenneth will be bound, on the other hand, if the notice had not been placed on the register on Maria’s property then Kenneth will not be bound. With regards to Davinia, here we can determine Maria might have given Davinia a licence only which is permission to be on land, and not an easement. This will not be binding to Kenneth as a license is not binding to third parties as in the case of Lloyds 5 Schedule 3, paragraph 2 6 Schedule 3, paragraph 2 (c)(i) 7 National Provincial Bank v Ainsworth [1965] 3 WLR 1 HL 8 Abbey National BS v Cann [1991] 1 AC 56, HL 9 Thompson v Foy 2009 EWHC 1076 Ch 10 Land Registration Act 2002 11 Martin Dixon, Modern Land Law, (9th Edition, Routledge 2014) pg79 12 Land Registration Act 2002 Word Count: 1,200 Words

v Dugdale13. However, if Maria did grant an easement, it would have legal proprietorship under section 1(2)(a)14 which tells us an easement is capable of being a legal proprietary right. The first condition is to fit within a certain time frame, either fixed, certain or forever and must first be created by deed. Looking at the scenario, there is no evidence of a deed in writing. Although, if there was a deed created by writing it must be by contract which requires no timeframe and so it will be equitable. However, if it was to be entered as a deed, it must be entered on the register under section 27(1)(d)15. If it was equitable it does not get registered as an easement but gets entered as a notice. If it is not entered as a notice, it will not be binding. Schedule 3, Paragraph 316 states if there is an implied, legal easement there may well be binding as an overriding interest. It also provides, first, that no equitable easements and profits will override, and second, that only certain legal easements and profits may override17. It will only be an overriding interest if one of three things happen, when Kenneth bought the property he knew the easement was being used by Davinia or on a reasonably exceptional inspection of the land when he bought the property it was obvious the land was being used by Davinia or thirdly, the third subsection 3 paragraph 3, if anytime in the last 12 months Davinia was using it, then it is binding but it must be an implied legal easement. With regards to Hillary, this could simply be a contract however; it seems more of a right of pre-emption or right of first refusal or an estate contract. Section 115 18 stated rights of pre-emption in registered land takes place as an equitable interest from the time of creation. An estate contract is an equitable right which needs to be drawn up as a proper contract in writing with consideration for it to be binding. The estate of contract then needs to be entered on the register as a notice. If this is the case, then Kenneth will be bound. Where option to purchase or right of pre-emption is protected by a notice, a restriction can also be entered to prevent breach of agreement, so the owner will be unable to sell the property to someone else. However, if there was a notice, the registrar would have seen it and would have refused Kenneth to buy the house. This shows there was no notice on the register and so Kenneth is not bound by Hillary.

13 Land Registration Act 2002 14 Law of Property Act 1925 15 Land Registration Act 2002 16 Schedule 3, paragraph 3 17 Martin Dixon, Modern Land Law, (9th Edition, Routledge 2014) pg69 18 Land Registration Act 2002 Word Count: 1,200 Words

Bibliography Books Martin Dixon, Modern Land law, (9 th Edition, Routledge, 2014)

Cases Abbey National BS v Cann [1991] 1 AC 56, HL National Provincial Bank v Ainsworth [1965] 3 WLR 1 HL Williams & Glyn’s Bank v Boland [1981] AC 487

Thompson v Foy 2009 EWHC 1076 Ch Legislation Law of Property Act 1925

Word Count: 1,200 Words

Land Registration Act 2002 Schedule 3

Word Count: 1,200 Words...