Land Law Problem Question; Adverse Possession, Easements, Covenants and Overriding Interests.

As well as establishing possession, it must be shown that the possession has been for an unbroken period of time, as indicated by the aforementioned case of Buckingham County Council v Moran. We know from the facts given that Mark had lived on the land for 15 years without the previous owner objecting, which would indicate that Mark’s period of possession is unbroken. Mark’s possession appears to be openly exercised as his dwelling seems reasonably discoverable by Nigel, therefore Mark’s possession would be clear had Nigel happened upon his hut in the woods.

It can be inferred that Mark has factual possession of the land as he lives on the land and intends to exclude all others. The fence shows his intention to possess, and the period of fifteen years is longer than that of ten years as laid out by the Land Registration Act 2002, thus Mark satisfies all three requirements for adverse possession.

According to Schedule 6 of the Land Registration Act 2002, Mark may apply, by writing to the Land Registry, to be a registered proprietor of the registered estate in land as he has been in adverse possession for longer than 10 years. The registered proprietor (Nigel) then has 65 days to object to Marks application. If Nigel does not object then Mark is entitled to be registered as owner. If Nigel does object then Mark’s application will be rejected unless one of three exceptions apply; estoppel, a legal entitlement to the land or a boundary dispute. As there is no evidence of any of these exceptions, Mark’s claim would likely be rejected. In the eventuality of this the paper title owner (Nigel) would have two years to evict the squatter (Mark). If Nigel fails to this then Mark will have another opportunity to apply to be registered as proprietor and Nigel will be unable to defend the application.

If we were dealing on the basis that Manor Range was unregistered title, then the doctrine of ‘bona fide purchaser for value (of a legal estate) without notice’ would apply as adverse possession is not covered by the Land Charges Act.

Essentially this means that Nigel must have acted in good faith, something of value (not necessarily money) must have been given in consideration for the exchange of the legal (as opposed to equitable) estate. The notion of being means the purchaser must be without notice of the equitable rights. Notice can fall under three categories. First is that of actual notice, i.e. Nigel had been told of the rights or had found out for himself. Secondly is constructive notice; would Nigel have been aware of any interests had he carried out a check of the estate himself? Thirdly is imputed notice; Nigel would have imputed notice had his legal agent carried out all the reasonable checks.

Notice is difficult to prove as there must be a line drawn between knowing something that would have sparked an inquiry and ‘wilfully abstaining from inquiry to avoid notice’. Therefore, in the event of the land being unregistered we could conclude that had Nigel carried out thorough checks of his property he would have discovered Mark’s hut on his land and had constructive notice of the equitable interest. In this case Nigel would not be able to rely on the ‘bona fide purchaser’ rule as the courts will not protect those who have notice of any encumbrances on their land. However if the courts deemed that Nigel had no notice of the interest then he would become ‘equity’s darling’ and the interest would not be enforceable against him as the court will protect those who have no notice of any burdens and thus Nigel would take free of any encumbrances. This rule also applies to interests created pre 1926.

Andrea’s taking of the mushrooms from Nigel’s land presents a profit a prendre (the right to enter the land of another person and to take some profit of the soil, or a portion of the soil itself, for the use of oneself). A profit a prendre is comparable to an easement in nature as there must be a dominant and servient tenement, as set out in Re Ellenborough Park. However, unlike an easement, a profit a prendre can exist without ownership of land. So a profit can be of benefit purely to the person rather than the land.  Given that Andrea is taking the mushrooms from Nigel’s land lends itself to the conclusion that a profit a prendre is created.

It must be examined whether Andrea’s profit is a legal or equitable interest. For the profit to be legal it must satisfy two requirements; firstly that it is equivalent to one of the two legal estates and secondly that it is created by deed (under s 52 of the Law of Property Act 1925). The fact that no limitations are placed on Andrea’s right to take the mushrooms could suggest that the grant is of a perpetual nature, this would satisfy the first requirement as it would be equivalent to a fee simple absolute in possession. However, the letter from Manor Range’s previous owner to the previous owner of Andrea’s estate would need to be created by deed in order for it to take effect at law. To satisfy this, the letter would need to clearly state it was intended to be a deed, be signed and witnessed by two people other than the grantor, in accordance with the formalities set out in s 1 of the Law of Property (Miscellaneous Provisions) Act 1989. As there is no indication of such a deed being presented, Andrea’s profit a prendre can take effect in equity only. Prior to the Land Registration Act 2002, equitable interests were overriding interests. However, under the new act they are minor interests only and cannot be overriding under any circumstances whatsoever. This was done in an aim to limit the number of overriding interests that exist in land. As Andrea’s profit is an equitable interest it must be protected by entry of a notice on the register of the servient land. If Andrea fails to protect her equitable interest, it is not binding on the purchaser, (Nigel), and he takes free.

Had Nigel’s title been unregistered then Andrea would likely be required to register her interest on the Land Charges Act, Class D (111) (provided her profit was granted post 1926). Her failure to register her interest would result in Nigel taking free of the interest. If Andrea’s easement was granted before 1926, then the doctrine of notice would apply. As Andrea is presumably not continually picking mushrooms then it could be deduced that Nigel would have no reasonable awareness of her profit and as such the courts would protect him and free him of the encumbrance.

With regards to Alex and the promise Nigel’s predecessor made to not carry out further building works on Manor Range we are faced with the issue of a restrictive covenant. We know this is a covenant as it presents an obligation for the title holder (Nigel) to do something with or on his own land for the benefit of another. In this case, as the obligation is the non performance of an act, i.e. to not carry out further building, we know this is a restrictive covenant as it is negative in nature. In freehold land, the burden of a covenant is not passed on by law. Equity on the other hand, allows the burden of a restrictive or negative covenant to pass with the land, as long as the covenant ‘touches and concerns’ land. We can infer that restrictive covenants are not capable of being legal as they are not set out in LPA 1925 s1 (2), therefore they take effect in equity only as indicated in LPA 1925 s1 (3).  As previously mentioned, equitable interests are no longer capable of being interests that override so Alex’s interest is a minor one only. In order to protect his interest it must be entered as a notice on the register. If Alex has failed to do this, the covenant will not be binding on Nigel and he will take free of it.

If Manor Range was unregistered title and providing the covenant was created post 1926, Alex would be required to register his interest in accordance with the Land Charges Act 1972 under Class D (11). Alex’s failure in his doing this would result in him losing his interest and Nigel taking free of it as the court will not aid those who do not protect their rights.  Had the covenant been created pre January 1926 then the doctrine of notice would apply. We could not reasonably expect Nigel to have any awareness of a restrictive covenant as it is not continuous in use and as such not easily discoverable. Therefore, Nigel would once again become ‘equity’s darling’ and the courts would protect him.

The problem regarding the wife of the previous title owner of Manor Range (hereinafter referred to as Mrs. Range) presents the topic of actual occupation. At common law it is deemed that personal rights in land cannot bind third parties and cannot be overriding, as seen in the famous case of National Provincial Bank Ltd v Ainsworth. Also, we can deduce that persons in actual occupation do not have a legal interest in land as actual occupation is not set out under the Law of Property 1925 s 1. Therefore, Mrs. Range’s interest in Manor Range can be equitable only.

Under schedule 3 paragraph 2 of the Land Registration Act 2002, interests of persons in actual occupation are classed as ‘interests that override registered dispositions’.  However, an overriding interest will only be binding if the claimant is in actual occupation at the time of the disposition.  If we apply the rule in Chhokar v Chhokar, where even though the husband completed the transfer of the sale when his wife was in hospital, it was held that she was still in actual occupation, despite her temporary absence. As such her rights were binding on the third party purchaser. So seemingly the fact that Mrs. Range was on holiday at the time of the transfer of the property would have no bearing on her claim. We could also apply the case of Williams & Glyn’s Bank v Boland, where a husband was deemed to have held a matrimonial home on trust for his wife despite the fact that he was registered as the sole legal owner. In this case the wife had not registered her rights in equity as a minor interest but she was deemed to have had an overriding interest, as she was in actual occupation. Therefore we could conclude that Mrs. Range has an overriding interest in the land. Even if she has not registered her minor interest by entry of a notice on the register, Nigel could still be bound by it. Nigel being bound by Mrs. Range’s overriding interest will depend upon whether he made appropriate inquiry of the property (according to the proviso made for inquiry under schedule 3, paragraph 2). This can be Nigel’s only fall back position, as overriding interests are usually binding upon a purchaser for value. Nigel will not be able on rely on the fact that Mrs. Range was on holiday at the time of the sale transfer due to the rule in Chhokar. There may have been other ‘clues’ in or around the property that would lead Nigel to believe a woman was occupying the property, e.g. women’s clothes or personal effects. If the courts deem that Mrs. Range’s occupation was reasonably discoverable then Nigel will have no ‘fall back’ and be bound by her interest. As Mrs. Range was not present at the time of the disposition, she could not have reasonably disclosed her right to Nigel during his inquiry, so Nigel would more than likely be bound by Mrs. Range’s equitable interest.

Had Manor range been unregistered, Mrs. Range would be required to protect her interest under the Land Charges Act, Class F. Her failure to do this would result in her losing her interest and Nigel taking free.

Although it can be said that a tentative conclusion must be reached in regards to the law, the general consensus regarding equitable interests is; failure to register them will result in them being lost, and a purchaser for value taking free of them (with the exception of overriding interests).  

Word count:  2704

Bibliography

Books

Bray, J., (eds) (2007), Unlocking Land Law, 2nd Ed. , London: Hodder Arnold.

Burn, E.H. (2000), Modern Law of Real Property, 16th Ed., London, Edinburgh, Dublin: Butterworths.

Goo, S.H. (1997), Source Book on Land Law, 2nd Ed., Great Britain: Cavendish Publishing.

Mackenzie, J. & Phillips, M. (2008),  Textbook on Land Law, 12th Ed., Oxford: Oxford University Press.

Oakley, A.J. (2002), Megarry’s Manual of the Law of Real Property, 8th Ed., London: Sweeth & Maxwell Limited.

Thomas, M. (2008), Blackstone’s Statutes on Property Law 2008-2009, 16th Ed., Oxford: Oxford University Press.

Thompson, M. (2006), Modern Land Law, 3rd Ed., Oxford: Oxford University Press.

Wilkie, M., Luxton, P. & Malcolm, R. (2007),  Land Law, 6th Ed., Oxford: Oxford University Press.

Web Pages

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