Therefore the DN still has a place in land law but one which is being slowly eliminated. The DN has no effect on registered land and only some effect on unregistered land over residual interests which have not been registered on the land charges register. The aim of the system of land charges is to eventually list all land in England and Wales on the land charges register, which will inevitably render the DN a policy of the past.
Prior to the LPA all equitable interests were binding except those subject to equity’s darling. Observing the requirements of Equity’s darling, the lack of notice can be divided into two segments; actual notice and constructive notice. Under constructive notice, the interest could be discovered by looking at the title deeds. This consists of flawed logic as quite clearly a seller (being the sole owner of the deeds), whom not wanting a purchaser to know of any existing interests which may potentially discourage them from buying the property has the power to simply omit to surrender the deeds, therefore leaving the purchaser powerless to discover any third party interests without asking surrounding neighbours to the property. Thus the requirement of the lack of notice not only empowers a person looking to become Equity’s darling but inhibits others from discovering and declaring the interests on the register.
Land charges were therefore invented under the LCA to create permanent interests in (unregistered) land and to protect interests which otherwise would be vulnerable to the DN. This appears to be a more just and well defined system which gives holders of equitable interests over land security and the chance to protect land which the previous system had not allowed. The LCA puts these principles into clear cut categories; the Registration of a land charge amounts to actual notice of the interests registered and Non-registration of an interest would be rendered void against certain types of purchaser.3
2Law of Property Act 1925, s.198.
3Land Charges Act 1972, s.4.
The LCA created five registers which are now computerized4 and consist of the register of land charges; the register of pending land actions; the register of writes and orders affecting the land; the register of deeds of arrangement affecting the land and a register of annuities. The most important register for the matter of this question would be the register of Land Charges, which are further separated into 6 classes. This provides a simple method of establishing whether an interest over land (for example an easement under Class D(iii) of the register or options to purchase under class C (iv) of the register) can be registrable as land charge, consequently giving the proprietor of the interest the benefit of being able to protect the interest. So clearly from the evidence above although the LCA does give the impression of being a more efficient approach to equitable interests, it is not a system without faults of its own.
One of the first significant flaws is the complexity of the system. Extensive research has to be made by any potential purchases into the land as, as stated previously the DN provides that the purchaser will be bound by any prior interests of which he has had actual or constructive notice of. The purchaser will have constructive notice if the interests ‘would have come to his knowledge if such inquiries and inspections had been made as ought reasonable to have been made by him.’5 This therefore, would increase the cost and time of conveyancing and become a complex matter as well as being an inconvenience for the purchaser.
A second weakness of the system is in the deeds for the land. This vital proof of ownership relies entirely on a piece of paper and should this be lost or forged, it becomes much more difficult to prove their interests and ownership over the land. This aspect of land registration seems very outdated and something which is not an entirely reputable design. The DN however, does not solve this issue, and an entirely new reformation of land is required rather than reverting back to previous laws.
Perhaps one of the greatest reasons for the criticism of the land charges registration system is the manner in which the land is registered. This is by the name of the person whom created the land6 and therefore it is very difficult for one to discover the previous owners of land and
4 Oak Co-operative Building Society v Blackburn [1967] Ch 730 at 741(Russel LJ).
5Law of Property Act 1925, s.199.
6Land Charges Act 1972, s 3(1)
the rightful owners to it without asking the current owners of the land for the root of the title (as one must have the root of the past 15 years of the title) 7 – a seemingly very unofficial system.
An example of the inadequacy of this requirement can be seen in Diligent Finance Co. Ltd v Alleyne8 where it was shown just how meticulous one must be when searching for names under the register. In this case a wife tried to register a Class F land charge (a spouse’s statutory right of occupation) against her husband using his name as she knew it, however unbeknownst to her he had a middle name, which had the effect of rendering the search of land under that name clear as only full names can be searched, and therefore her attempted registration failed. This also demonstrates another issue; those with common names for example, ‘Jack Smith’ may appear thousands of times upon the register and without a clear description of the property, it may be nearly impossible to find particular properties on the register.
A further flaw can be identified here as if the land was originally registered mistakenly or purposefully under the wrong name, then the land charge again will not be discoverable. Therefore one of many suggested reforms is land should be registered under the land itself rather than under the estate owner, as searching a particular property would become much easier and a far more logical approach to take.
Another issue following this is that a purchaser may legally have notice of a land charge which is simply undiscoverable to him. For example over a period of one hundred years, a property may be conveyed from person to person a set amount of times, and along the way an equitable easement may be have been registered against the name of the person who owned the land at the time, and thus, searching for land charges against a person who currently owns the property may not provide any results, however the easement may still exist, and therefore would bind those that purchase the property even though they have taken reasonable steps to discover the land charge by investigating the root of the title as mentioned previously.
Prima facie the system seems to be fairly simple implying that if a land charge is registered then the interest holder is protected and if not, then the purchaser is protected as they can claim to be Equity’s Darling. However the system has also led to some uncertainty in law,
7Law of Property Act 1969, s 23.
8 Diligent Finance Co. Ltd v Alleyne (1972) 23 P. & C.R 346.
where the courts have ostensibly attempted to reach a just result using methods which are somewhat ultra vires. For example in Midland Bank v Green9 the Court of Appeal very controversially attempted to protect a son whose father had originally given him an option to purchase his farm from him, but sold the farm for a substantial undervalued price of £500 to his wife before the option to purchase had expired. Although generally, in cases such as this, the law states that as the land charge was not registered so the sale would be valid, the Court of Appeal held the option was enforceable, for a few reasons. One reason being that, the wife was ‘not a purchaser for money or money’s worth’10 as the farm was substantially undervalued. Alternatively, the courts considered also whether the act of the mother and father was fraudulent; Lord Denning stated that this would constitute ‘any dishonest dealing done so as to deprive unwary innocents of their rightful dues’.11 Unfortunately for the son, this decision was very famously reversed by the House of Lords holding that the option was void as it was not registered. This case has been very controversial, and generates questions about how ethical this area of the law is, and whether indeed the DN which although is flawed, provides an all-round more reasonable set of rules.
Conclusively neither the doctrine of notice nor the land charges registration provides flawless regulations. Both sets of laws are subject to their own benefits and downfalls, however the doctrine of notice remains overall more outdated than the land charges registration system which whilst flawed, is one which can be salvaged with reform of a few technicalities, whereas the doctrine of Notice is subject to many more issues. Incorporation of both protections of the purchaser and of the interest holder are held by the Land Charges Registration and therefore it provides a balanced arrangement, and for this reason the doctrine
9Midland Bank v Green [1981] AC 513.
10Midland Bank v Green [1980] Ch. 590 at 624 (Lord Denning).
11Midland Bank v Green [1980] Ch. 590 at 625 (Lord Denning).
by
freyachaney (student)
