Property Law

 

Mr White claims that Mr. Brown covenanted with him that neither he nor his successors in title would build any construction. A covenant is an obligation entered into by deed which restricts the use of land for the benefit of another, which can be positive or negative in nature. Mr. Brown is the covenantor carrying the burden and Mr. White is the covenantee carrying the benefit. This is a negative covenant as it prohibits specific activity and development of the covenantor’s land. The Green’s are successors in title to Mr. Brown and may also carry this burden of the covenant.

The burden of a covenant cannot run at law, as it would be contrary to the common law to make somebody liable on a contract to which they were not a party. Cotton LJ held in Austerberry v Oldham that the burden of a covenant cannot run at common law, which was explained in Rhone v Stephens.

In equity however a doctrine does permit the passing of the burden of covenants to successors in title, the principle was initially introduced by the decision in Tul1k v Moxhay. Later case law restricted this rule by requiring four conditions to be satisfied. Firstly the covenant must be negative in nature, this was confirmed in the above cases. It must be the common intention of the parties that the burden of the covenant shall run with the land of the covenantor. This is assumed under s79 LPA, which states that the burden shall run unless the contrary is expressed. At the time of covenanting both parties agreed that the burden not only applies to Mr. Brown but also to his successors. The covenant must touch and concern the dominant land, and also be for the benefit of that land. The covenant concerns Rainbow Cottage and Mr. Whites land is the adjoining property for which the covenant benefits. Finally the covenantee must, at the date of the covenant, have owned land benefited by the covenant. This is illustrated in the case of LCC v Allen, where the council had never owned the land to be benefited from the covenant.    

All four conditions have been satisfied, the covenant is a negative one, the burden was intended to run, the covenant concerns the land and the covenantee owns the adjoining property.  As well as satisfying this rule, the purchaser must have notice of the covenant. In registered land this would have been a minor interest until LRA, but now will take effect as an interest requiring protection on the register and must be entered by way of notice agreed or unilateral against the title of the covenantor’s land. If the four conditions are satisfied and the Green’s have notice they will carry this burden and cannot build the annexe.                 

          

Mrs. Gray claims that the strip of land adjoining the property belongs to her, Mr. Twit advises to ignore the lady as the Greens have squatter’s rights. Adverse possession means that rights of ownership are acquired by taking possession of the land. S 15(1) of the Limitation Act provides ‘no action shall be brought by any person to recover any land after the expiration of twelve years’. The LRA changes the rules on adverse possession in relation to registered land, under S.96(1) of the act no limitation period under s15 shall apply. Schedule 6(1) provides a squatter may be registered as proprietor of an estate if he has been in adverse possession for ten years. Schedule 6(2) states that notification shall be given to the paper title owner, who has two years to object to the application. If there is a boundary dispute then under the act, if the squatter believed the land to be his for the last ten years he will be entitled to be registered. However in any case the claimant must satisfy the requirements of adverse possession.                   

There are three requirements before the rights are gained, the claimant must prove factual possession, an intention to possess and both of these requirements must be exercised over a sufficient length of time. To establish factual possession the courts will apply an objective test. The claimant must intend to exclude all others including the paper owner, signs and fences are the most conclusive proof of possession. In Powell v McFarlane Slade J stated that the acts could be interpreted as mere temporary use rather than indicate ownership. In Buckinghamshire v Moran land belonging to the council was adversely possessed, his successor in title had fenced it and also placed a gate. This was believed to be evidence of factual possession. Mr. Brown had used the land to grow vegetables and also built a fence, this may be seen as constituting factual possession. Such possession must be for an unbroken period of time and can pass with the transfer of property. In Buckinghamshire v Moran the additional land passed each time with the purchase, however there were no breaks in possession of the property. Possession must be open and not concealed, the paper owner does not need to know of this, and all that is important is that if the owner had visited the property it would be clear. The factual possession must also be adverse to the paper title owner, so occupying the land with legal right will not be adverse.  

The intention to possess the land must also be proved, the rules are similar to those establishing factual possession. Notices, fences and locked gates are a prime example as in Buckinghamshire v Moran, were such evidence was held to be sufficient. In Pye v Graham HL held the Graham’s had sufficient interest as at all times they intended to use the land for their own benefit, they also maintained the land and used it as their own along with the rest of their property. The squatter cannot acquire the land unless he has occupied the land for a sufficient length of time. Earlier this was governed by the Limitation Act, but LRA 2002 now applies to registered land.

If a ten year period can be proved, along with the requirements of adverse possession, the Green’s can apply to be registered as proprietor. However Mrs. Gray will have two years to reject once notified unless an exception applies. If there is a break in possession and a failure in establishing the requirements of adverse possession Mrs. Gray can evict the squatters and retain her title.              

Mrs Silver claims she has a right in the property as she provided half of the purchase money. There are both legal and equitable rights in land and can exist over the same property. Mr Brown is the legal owner as it is his freehold house, he has all the legal rights over the property and holds the land in trust for himself and Mrs Silver. Overreaching allows land under trust to be sold free of equitable rights, regardless of whether the purchaser has notice of such rights. S27(2) LPA states overreaching will only apply were there are two or more trustees and the purchase money is paid to both of them. This principle is highlighted in the case of Flegg where the rights of the Parents in-law had been overreached as the sum had been paid to two trustees. In Williams v Boland the wife’s right was not overreached as the purchase money had been paid to a sole trustee. As the purchase money has been paid to Mr Brown he may be statutorily obliged to transfer the capital money to the beneficiary as their interests lie in the sale proceeds. However it is the responsibility of Mr Brown to register the right of Mrs Silver as he is the legal owner.

Overriding interests are binding on the proprietor despite not being on the register s70(1) LRA states the types of interests further s70(1)(g) requires proof of an interest in land and actual occupation of the land for such an interest to be binding. This is now contained in Schedules 1&3 of LRA Mrs Silver must show that she has an interest in the land, in Ainsworth it was held that the wife’s right was personal and could not be classed as on overriding interest. Actual occupation must also be proved in order to protect such a right. The case of Chhokar suggests that brief absences will not interfere with actual occupation of the land. If Mrs Silver can prove she has a right in rem rather than a personal right, and can also prove actual occupation the overriding interest will be binding. A purchaser can acquire land without being subject to equitable rights in the land if he can claim to be a bona fide purchaser without notice of the rights. If this can be proved then the purchaser will have an absolute, unqualified and unanswerable defence against an equitable title. A bona fide purchaser is also known as equity’s darling and can only take free if he is without notice of such rights.

PART B  

In relation to the disputed strip of land, if the title is unregistered The Limitation Act will continue to apply.  The paper owner can take action to evict the squatter before he is time barred under S 15(1) which states a twelve year period. After this period the title of the paper owner will be extinguished and the adverse possessor is able to assert superior title to the land. However the rules of adverse possession as discussed above will still apply before such a title can be asserted.

As we are now looking at unregistered land there are two areas that need to be identified these are a bona fide purchaser and constructive notice. A purchaser can acquire land without being subject to equitable rights in the land if he can claim to be a bona fide purchaser without notice of the rights. If this can be proved then the purchaser will have an absolute, unqualified and unanswerable defence against an equitable title. A bona fide purchaser is also known as equity’s darling and can only take free if he is without notice of such rights. Types of notices include actual, constructive and imputed. Constructive notice requires a purchaser to act on his own behalf, checking would include all enquiries which ought to have reasonably been made. This would either be by checking the land charges register or by visiting the property itself. If Mr Green makes reasonable investigations as to check for any charges or rights on the property and the rights of Mrs Silver are not apparent then Mr Green can take free from them, if however by using the reasonable discovery test such rights are discoverable then Mr Green will have notice and will take the property subject to the rights of Mrs Silver. See also the case of Tizzard it was held the finance company could not take free of the wife’s rights as it had constructive notice.

Bibliography

Table of Cases

Austreberry v Corporation of Oldham (1885) 29 Ch D 750

Berkley v Poulett (1977) 241 EG 911

Buchinghamshire County Council v Moran [1990] Ch 623

City of London Building society v Flegg [1988] AC 54

Chhokar v Chhokar [1984] FLR 313

D’Eyncourt v Gregory (1866) LR 3 Eq 382  

Holland v Hodgson (1872) LR 7 CP 328

J A Pye (oxford) Ltd v Graham (2002) Ch 804

Kingsnorth Finance Co Ltd v Tizard [1986] 1 WLR 783

LCC v Allen [1914] 3 KB 642

National Provincial Bank Ltd v Ainsworth [1965] AC 1175

Powell v McFarlane (1979) 38 P & CR 452

Rhone v Stephens (1994) 2 AC 310

TSB v Botham [1996] EGCS 149

Tulk v Moxhay (1848) 2 Ph 774

Whaley v Roehrich [1908] 1 Ch 615

Williams & Glyn’s Bank v Boland [1981] AC 487

Table of Statutes

The Law of Property Act 1925 S27(2)

The Law of Property Act 1925 s79

The Law of Property Act s62(1)

The Law of Property Act s62(4)

The Law of Property Act 1925 s205

The Land Registration Act 2002 Schedule 1 & 3

The Land Registration Act 1925 s70(1)

Land Registration Act 2002 Schedule 6 paragraph (1)

Land Registration Act 2002 Schedule 6 paragraph (2)

Land Registration Act 2002  

Limitation Act 1980 S 15 (1)

Land Registration Act 2002  S.96(1)

Books

M. P. Thompson ‘Modern Land Law’, 3rd edition, Oxford University Press, 2006.

M. Dixon, ‘Principles of Land Law’, 3rd edition, Cavedish Publising Ltd, 1999.

E. H. Burn ‘Chesire and Burn’s Modern Law of Real Property’, 16th edition, Butterworths, 2000.

K. Gray, S. F. Gray, ‘Elements of Land Law’, 4th edition, Oxford University Press, 2005.

Unlocking Land Law Judith Bray series editors Jacqueline Martin & Chris Turner 2004

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