Notice, this refers to the way in which someone can be made aware of any equitable interests which apply, obtaining this information if possible is key. ‘the operation for the title deeds system for conveyances of estates and interests means that obtaining information is a priority.’ They can be split up into three different types, actual notice, this is when the purchaser has the actual knowledge that these equitable interests exist, this would even count if the person found out from a person who had nothing to do with the course of dealings. Constructive notice ‘a purchaser shall not be prejudicially affected by notice of any.... instrument or matter or thing unless it is within his own knowledge, or would have come to his knowledge if such inquiries and inspections had been made as ought reasonably to have been made by him’. And finally imputed notice , this is where a purchaser of the title is thought to have notice due to his/her agent having actual or constructive notice, for example if an estate agent had actual notice then the purchaser would also be thought of as also having notice. These three notices are vitally important ,as discussed before, the BFP would take the land free of any equitable interests which he/she has not been made aware (does not have notice of). Even if another person then took subsequent ownership from the purchaser, they would also take it free of an equitable interest even if they knew about it. The doctrine of notice applied up until the introduction of the LRA 1925(Land Registration Act 1925) which then gave us Section 70 (1)(g) of the LRA 1925 which defined to us ‘liability of registered land to overriding interests’.
The LCA 1972 is a system which has been made in order to police the conveyance of land, and has also been created so that there is a better confidence in the way in which land affected by someone else’s equitable interests are dealt with. The most important change that came with the introduction of the LCA 1972 was the fact that equitable interests had to be registered to bind the purchaser .Most importantly , the land that is covered by the LCA 1972 is only ‘unregistered’ land and therefore falls outside of the LRA 1925 and the LRA 2002. There is however a very clear criticism of the LCA 1972, and that is ,the owner of the equitable interest has to take the time to register it against the name of the estate owner, this can sometimes be very difficult indeed.
In looking at the second part of the quote ‘In registered land, it plays no part at all – not even with regard to the rights of those in actual occupation’ it would be best to explain the difference between registered and unregistered land, which is quite easily explained, registered has been registered with the land registry and unregistered has not. The important area of registered land that the questions concerns is the area ‘Interests which override a registered disposition’(formerly known as overriding interests). Overriding interests are interests which the registered title is subjected to, even though they do not actually physically appear on the register. These allow the holder of the overriding interest to apply it over the land, without taken account of who the registered owner is. Overriding interests can be split into two categories. Those which bind the proprietor who seeks first registration of title (Sch1) and those which bind on a subsequent disposal of land, the title to which is already registered (Sch3). There are a very broad range of overriding interests that could be discussed here, the one of main concern for this specific question are the rights of those in actual occupation, interests of persons in actual occupation ( Sch 1, para 2, Sch 3, para 2 ). Section 70 (1)(g) of the LRA 1925 was the first provision to deal with actual occupation as a right, this must be understood, even though it has been modified in the LRA 2002. Section 70 (1)(g) defined and overriding interest as ‘ the rights of every person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed’.The reason for this was so there was some safeguard for people who actually had occupation and who had rights in the property. Lord Denning M.R. agreed ‘to protect a person in actual occupation from having his rights lost in the welter of registration’. There are two separate gears to Section 70 (1)(g) ,these are The person must be in actual occupation, and also have a right to the property of which he is in actual occupation of. These remain even under the adapted versions, in the LRA 2002.
In a simpler view, a person must ascertain that he has a right in the property, and that he is in actual occupation of it. In trying to understand what rights would ‘override’ registration ,it would help by looking at the case of National Provincial Bank Ltd v. Ainsworth, in this case the House of Lords held that a woman who had be left deserted by her husband had no proprietary interest what so ever in the property, this decision stopped the wife from being able to ascertain any overriding interest in the property. There was an amount of obscurity in trying to decide whether certain rights were proficiently sufficient of existing ad overriding interests, These worries came from the area of equitable estoppels. There are also rights which are incapable of being overriding, and cannot be applied to overriding registration. The LRA 2002 gives us two interests which are not proficiently sufficient to be capable of overriding registration. The first is an interest which came about under the Settled Land Act 1925,. The second being a reversionary lease which takes effect in possession more than three months beginning with the date of the grant and which has not taken effect at the time of the disposition cannot override a registered disposition . There are also another two interests which cannot override , firstly the statutory right of a spouse to occupation. And secondly the right to what is termed and overriding lease is not capable of being an overriding interest .
We now know that actual occupation of the land is not sufficient in creating and overriding interest, and the actual possession of a right alone is also not sufficient. The Term ‘actual occupation’ in reference to paragraph (g) has always caused debate . Russell L.J. controversially disagreed with the meaning Thomas J. Gave and in doing so reversed the decision in Hodgson v. Marks, Russell L.J decided to give the definition of ‘actual occupation’ its unembellished meaning. The term and the way it was viewed by Russell L.J. was then applied in Williams & Glyn’s Bank Ltd v. Boland, the facts behind this case were, a wife who had been sharing the matrimonial home , obviously with her husband, was in actual occupation of it. The interest must also relate to the land which is being occupied, this can be seen in the case of Ferrishurst Ltd v Wallcite Ltd , where the question of whether a person holding rights affecting both the premises and the garage was held to have an overriding interest affecting both the premises and the garage. In Thompson’s book Modern Land Law ,he used the example of a person who was a tenant of a flat, and was offered a freehold of the whole complex , then in being given that option, it turned into an overriding interest. This was held as ‘unacceptable’ by the Law Commission, and now the situation has changed and will only affect the part of land which is actually occupied. Another important issue of actual occupation is the date when a person claiming to have a right overriding a registered disposition, must be in actual occupation, this, also post LRA 2002 caused problems due to there being a space of time between the 2 stage process where a third person may take actual occupation , furthermore this would create and interest overriding the registered disposition. This issue also existed in section 70(1)(g) of the LRA 1925, but fortunately the HOL found a solution in Abbey National Building Society v. Cann , the solution from this was that the date that would count would be the date of transfer, and would not be from the date of registration.
The protection of occupiers has always been a key point, especially after the decision of the HOL in Boland, this case put forward, that occupiers of property could establish an interest (overriding) in the property even if the registered proprietor was also in occupation. Obviously the consequences of this were serious, it meant that the dependability of the register has been put to the test. The HOL in this decision clearly paid attention to the fact that there was a tension surrounding overriding at this current time, and came to the conclusion that protection those whose principal interest was in the property as use as a house was the best way forward.
The LRA 1925 went about dividing interests in registered land up into two categories, minor interests and overriding interests. The view of Lord Wilberforce was that, a person who had a minor interest in land and was in actual occupation had every right to attain an overriding interest. So the formula that, Minor Interest + Actual Occupation = Overriding Interest was formulated. This however was abandoned under the LRA 2002 , the division that now exists is ‘interests which are subject to an entry on the register and interests which override first registration or a registered disposition’. An important point to make is that even though this has been changed , the decision in Boland still remains and is often referred to. The LRA 2002 act seeks to make a distinction between interests which override first registration and interests which override registered dispositions. This is governed by Para 2 of Sch 1.
My own personal view on the quote used in the question is that , the doctrine of notice will and always would have played a decreasing role in unregistered land, there is one clear reason for this without even looking at what has been discussed previously, Unregistered land in general should hopefully be slowly becoming extinct, this was one of the key aims of the LRA 2002, less and less unregistered land should exist, year after year, more and more people should now be registering their land and reaping the positive benefits gained from registered land. Especially with regards to adverse possession. The main aim of the LRA 2002 was to modernise and set out better the LRA 1925, the LRA 2002 still contains overriding interests but as discussed earlier in the essay they are now known under a different heading. In reading books journals and many articles on LRA 1925, the LRA2002, the doctrine of notice, overriding interests and many more subjects in the past few weeks, my main concern is that, I personally believe that this whole theory of making things ‘clearer’ and ‘simplifying’ hasn’t had the desired effect. My head is still spinning from the ‘simplifying’ of the law. I do however have a firm conclusion on the doctrine of notice, and that is to say, if every single piece of land in the country were to be registered, which eventually one day should happen, then the doctrine of notice should and would seek to exist, we can already see that the doctrine of notice is swiftly playing less and less of a role in the modern land law. But the question then arises will every piece of land ever become registered?
Word Count:
3,111
Websites And Internet Resources:
Bibliography:
THOMPSON, M : ‘Modern Land Law’,3rd Edition, (Oxford University Press)
DIXON,M : ‘Modern Land Law’, 5th Edition , (Cavendish Publishing)
GRAY,K . GRAY,S : ‘Land Law – Core Text Series’, 4th Edition, (Oxford University Press)`
Journals and Articles:
P.J. Omar, ‘Equitable interests and the secured creditor: determining priorities’ [2006] Conv 509
M. Dixon, [2003] Conv 136, especially section B(iii): ‘Actual occupation under the LRA 2002’
Black's Law Dictionary. Second Pocket Edition. p. 241. 2001 West Group. (editor in chief).
S.2 (4) LCA 1972 ‘a legal mortgage which is not secured by a deposit of documents relating to the legal estate effected’.
http://legal-dictionary.thefreedictionary.com/bona+fide+purchaser
P.J. Omar, ‘Equitable interests and the secured creditor: determining priorities’ [2006] Conv 513
Lloyd V Banks (1867 – 68) LR3 Ch App 488.)
By s.199 (1)(ii)(a)LPA 1925.
Jared V Clements [1903] 1 Ch 428.
Property Law , Lecture Outline 2008/2009
Modern Land Law, Mark Thompson.
Strand Securities Ltd v. Caswell [1965] Ch. 958 at 979
Land Registration Act 2002, Sched. 3, para. 2 (d).
Family Law Act 1996, s31 (10) (b)
Section 20(6) Landlord and Tenant Act 1995
(2001) Law Com. No. 271, para. 8.58.
Modern Land Law, Mark Thompson.
‘an interest in belonging to a person in actual occupation, so far as relating to land of which he is in actual occupation, except for and interest under a Settled Land Act 1925’