1. Registration + Other Formality Rules
Before, the question was whether you have legal or equitable title and whether you had notice (constructive or actual) but now we do not
care about notice (nb s 32 different notice) but we do care whether interest legal or equitable.
For Legal Interests to be valid (if they fall within s 27 LRA 2002):
- (1) Deed: all legal interests in land must be made by deed (s 52(1) LPA 1925)- nb short lease exception; always start with a deed
when you create a legal interest (operating at law).
- (2) Completion by registration: s 27 LRA 2002 must complete by registration to create a legal interest. Land register is not a
record of what happens but the place where transfers occur (therefore must complete by registration)- until then transaction
cannot operate at law- that is why write ‘completed by registration’, not just ‘registration’.
Legal estates not requiring to be completed by registration mostly still need a deed- an implied grant of an easement (legal right) by s 62
LPA 1925 needs a deed (implied into deed of acquisition) but no need to complete by registration (s 27(7) LRA 2002). Very occasionally
need no deed or registration required- short leases under s 54 LPA 1925.
Equitable Interests:
- Writing: to create any equitable interest in land, must be in writing (s 53(1a) LPA 1925) and to dispose of any equitable interest,
must be in writing (s 53(1c) LPA 1925).
- Contract for disposition of land: must be made in writing under s 2 LP(MP)A 1989. Thus, for equitable interests to take effect,
there must be writing so that equity sees an estate contract.
- Walsh v Lonsdale: if deed + registration not complied with, no effect at law, there is no effect at law. However, in equity, an
informal transaction of a legal estate, something may happen. Equity looks to substance and not form so often equity sees
what you were trying to do, and it will treat it as an estate contract (must be in writing (s 2 1989 Act)- a contract to
grant/transfer- but equity doesn’t see it as an ‘equitable fee simple’ or ‘equitable lease’. If you fail to complete by
registration but complete by deed the transfer of a fee simple, equity gives effect to this transaction; this does not give you an
‘equitable fee simple’ but it gives you an estate contract to obtain a fee simple/lease/easement which can be enforced as long
as it is in writing in s 2 LC(MP)A 1989 (Walsh v Lonsdale) s 2 1989 Act says that there is no contract if there is no writing so
equity cannot see an estate contract if no writing.
Priority:
- Basic Rule: s 28 LRA 2002 is a calendar rule so the interest that came first in time has priority- in Midland the rule says son’s
option to purchase came first. But priority gets altered by certain types of disposition in ss 29-30- ‘if a registrable disposition
of a registered estate is made for valuable consideration, completion of the disposition by registration has the effect of
postponing to the interest under the disposition any interest affecting the estate immediately before the disposition whose
priority is not protected at the time of registration’ (29(1)). Thus, in Midland, son’s option loses priority unless he protected by
it and if he does, can enforce his estate contract and if not he concedes his priority to the registered disposition of the fee
simple to the wife. Thus, to postpone interest, it must be a registrable disposition for valuable consideration and completed
by registration.
- Protecting Priority of Interest : s 29(2) LRA 2002 outlines how to protect priority of interest.
o Notice: you can enter a notice on the register (doesn’t have to be valid but if interest valid then its priority will be
protected by the notice (s 32(3))- this way you can protect the priority of an equitable interest (e.g. estate contract
in Midland) but s 33 gives interests that cannot be protected by notice (including trust of land (33(ai) and short lease
(33b) and restrictive covenant between a lessor and lessee so far as relating to demised premises (33c)).
o Schedule 3: Para 1 for short leases (but only legal leases- City Permanent v Miller) and Para 3 for legal easements
(those that arise without need for completion by registration and implied into deeds- e.g. Wheeldon or s 62 LPA
1925). Para 2 protects ‘actual occupation’:
For priority protection need: (1) an interest in land (if not, nothing to protect- Ainsworth); (2) to be in
actual occupation at the time of disposition; (3) not fall under exceptions in para 2(a-d). If satisfied,
priority of interest protected by actual occupation.
Actual occupation meaning: in Boland, Wilberforce says it has ordinary meaning; wife held in actual
occupation (not a ‘chattel’ or ‘shadow’ of husband)easy to see on those facts she was in actual
occupation. Children were held to not be in actual occupation in Robinson but likely to be overruled.
Other cases more difficult like when actual occupation begins (day you move in? Boxes are there?
Workers renovating?) and ends. It is a Q of fact and cases don’t have much precedential value- must
weigh up both sides, draw on case law and reach conclusion.
Exceptions: sometimes actual occupation does not protect priority of interest if it falls in para 2(a-d)- if
you make an inquiry in land about any other person with an interest and it is not reasonably disclosed by
that person, interest is not protected (para 2b)- unclear when it is reasonable to require a person to
disclose his right. Para 2c strange as it requires you had no actual knowledge of the interest and the
occupation was not obvious on a reasonably careful inspection of the land at the time of disposition-
what does reasonably careful inspection mean- how nosy do you have to be?
,If interest unprotected, interest’s priority postponed (not made any worse- son in Midland can still sue father on estate
contract but estate has no money). Interest does not become void or lose capacity to bind someone over whom it has
priority. But failing to protect priority of interest is not the only way of losing priority:
- Agreement to postpone interest: in mortgages, you could contract to postpone your priority since possession
can only be sought if you have priority against the interests if all occupants. Sometimes a beneficial tenant in
common makes a contract with bank to give up his priority so that bank can assert possession if payments
defaulted on. Express contract is clearly possible. Implied contract is more controversial- one line of reasoning
in Cann was that even if she was in actual occupation, her interest came after the charge (implausible) or that
she implicitly consented to the charge (knew mortgage taken and bank would require priority) this is weak
part of judgment and almost incomprehensible since on the facts, she thought he was borrowing a small sum but
he lied to her about the amount of money.
- Overreaching: in co-ownership context, beneficial tenant in common in actual occupation can have his interest
overreached by a transaction made by 2+ trustees or a trust corporation (s 2(2) + 27 LPA 1925)- you do not lose
priority but interest in land transforms into an interest in money and interest in land is overreached and binds
transferee regardless of actual occupation (actual occupation not relevant as no interest in land anymore). Trust
interest cannot be protected by notice on the register (s 33 LRA) as beneficiary’s interest is supposed to be
overreached (Flegg)- nb also TOLATA 1996. Overreaching does not have to be for full value and takes place
even where transfer nominal (Sood).
o Lambert [CA]: Lambert was fraudulently induced into a sale to fraudsters who mortgaged it and C
lender sought possession; C argued she could set aside transaction and get her flat back free from the
mortgage. CA held that right to set aside transaction is a clear ‘equity’ and s 116 LRA 2002 shows this
is an interest in land and can be protected by actual occupation but held she was not in actual
occupation since when inquiry was made before completion of mortgage, she did not disclose the
fact that she was in occupation and in any event, the fraudsters granted a valid mortgage and so the
overreaching requirements was met- her right did not bind lender.
o Baker v Craggs [CA]: owner of adjoining property agreed to sell prop to Craggs and omitted to reserve a
right of way in favour of remaining properties. Sale completed and Craggs took occupation but there
was a delay in registration of transfer as required by (s 27(2a) LRA 2002). Original owner sold other
property to Baker which included a right of way over Craggs’ property and Baker’s title was registered.
CA held Baker’s right of way did not prevail over Cragg’s right to be registered as legal owner-
overreaching only applies to the sale and purchase of freehold or leasehold land. At the time of
creation of right of way, Craggs was in actual occupation which overrides a later registered
disposition, including a right of way. Overreaching thus only applies to sale/mortgage of freehold and
leasehold!
Actual Occupation Cases
- Cann [HL]: for actual occupation, must be a degree of ‘permanence and continuity’.
- Malory v Cheshire Homes: company dishonestly obtained a land certificate in respect of some land and sold it to
DDs who were registered as new proprietors. Land contained a derelict block of flats. C, original owner, used this
premises for storage and erected fences and boarded up windows. D partially demolished the property and C
sought rectification of the register. Held, the right to seek rectification did not stop C from having an overriding
interest due to the fact they were in actual occupation of the prop. If prop was uninhabitable, it could still be
actually occupied as long as there was some physical presence and a degree of permanence and continuity.
Thus, C were in actual occupation and their overriding interest bound the defendants.
- Scott v Southern Pacific Mortgages [2014 SC]: Scott let NEPB buy her prop under condition they let it back to her
at discounted rent and if she stayed for 10 years she would get a loyalty payment of 15 000; NEPB then defaulted
on mortgage and possession claim made against her by Southern Pacific Mortgages. Held, Scott’s interest did
not have priority against D. Land registration meant to be the complete record of title although occupiers
continue to be protected. Must be a prop interest to be overriding- she acquired only a personal right against
the buyers for occupation (because the contract would only become prop when perfected by completion by
purchase but Cann meant that it was an indivisible transaction so mortgage first in time and priority to Scott’s
potential prop interest). Noted that Cann can be extended and applied here even though the execution of the
conveyance and the mortgage and contract were not all on the same day as they are indivisible parts of the
transaction thus Lord Collins noted that even if Scott had equitable rights of a prop nature, mortgage would
have priority (nb Televantos argument that Cann extended).
, 2. Concurrent and Successive Interests-
Conveyance into 1 name: If conveyed into one name but with contribution by many (e.g. Flegg), statute says there is no co-ownership (s
34(1) LPA 1925). Cannot be a joint tenancy in equity because there is no unity of title- the other people get their title not from the
conveyance but from some agreement with the sole proprietor! Statute has in mind that co-ownership in equity only happens where
there are 2-4 people holding a legal estate which fits as then when the trustees deal with the land, the interests of any beneficiaries will
be overreached (fits together with s 2 LPA 1925). This is why statute says that if you convey to 1 person, there is no co-ownership.
- Co-ownership arising: since Bull, co-ownership must be possible even where there is a sole registered proprietor. Bridge in
Rossett says for a tenancy in common, there must be (1) agreement to share ownership; (2) detrimental reliance. Reason for
this is because statute says there is no co-ownership, but if there is detrimental reliance, court will enforce the agreement
(because otherwise would be using statute- s 34 LPA- as a vehicle for fraud). It is the detrimental reliance that allows the
court to enforce the agreement and avoid s 34 LPA. Bridge further says to find agreement, must be either express agreement
of inferred through contribution to purchase price or mortgage but not anything else (harsh) and detriment could be
anything, not only money. Always must find agreement and detrimental reliance to show why you are getting out of statute (in
Bull, son relied on s 34 to get out of co-ownership).
- Consequence: tenancy in common arises as a result- there is a sole owner who holds it on trust for both parties and
overreaching does not work as there is only one trustee (s 2 + 27 LPA 1925) so Qs of priority protection become relevant to
transfers of land, etc. When deciding shares tenants in common hold in, 2 approaches- (1) see how much money put in; (2)
more creatively, ascribing value to other contributions (as a matter of intentions as to shares which reflects other
contributions) or simply a Q of doing what is fair.
- Proprietary estoppel: if no agreement to share ownership found (no monetary contribution or express agreement e.g.), there
is no co-ownership but prop estoppel could come into play where one party has to his detriment been encouraged to do
something, but it is impossible to find true co-ownership. Thus, prop estoppel similar to the detrimental reliance CT for co-
ownership but comes into play where there is no clear agreement but encouragement to act to one’s detriment. C can get
discretionary relief (subject to rules of prop estoppel)- clear agreement is the boundary between co-ownership and estoppel.
Conveyance into 2 names
- At Law: obviously, there is a trust of land- when land conveyed into 2-4 names, people hold the estates as joint tenants (s 1(6)
LPA 1925)- legal estate cannot be held in an undivided share in land. Result is always a joint tenancy at law. If communicated
as being to them as tenants in common, still a joint tenancy at law (s 34 LPA 1925) so intention does not matter. This is
because gain/profit depends on beneficial title in land so in a joint tenancy at law, there are max 4 people to deal with so
dealing is relatively easy (joint tenancy cannot be severed s 36(2) LPA). If we had tenancies in common at law, it would be very
tough to deal and transfer land managerial reasons.
- In Equity: either joint tenants (hold collectively as a unity but need 4 unities satisfied) or tenants in common (undivided
shares)- issue that law does not address where parties are not clear. Express trusts are easy as parties’ words decisive even if
different contribution subject to rescission of declaration (coercion, misrep, undue influence) Goodman v Gallant. Thus, if
joint tenancy in equity, severance results in equal shares. If nothing is said, orthodox analysis that they will hold as joint
tenants in equity as a matter of presumption-Jones, Stack. Issues:
(1) Parties have no choice at law as it’s always joint tenancy at law, but equity tries to see what intentions are.
(2) If they really are joint tenants, they can only turn into tenants in common by severance (s 36(2) LPA 1925) but if
they don’t sever they remain joint tenants in equity which makes Jones inexplicable as the court in this case say
that the parties start as joint tenants and finish as tenants in common in shares of 9:1 without severance
(severance not mentioned)!
(3) Court in Jones seems to suggest looking at domestic accounting (who cared for the house and was working, etc) but
none of this is important in a joint tenancy (as no shares!) so all this accounting has no part to play in an equitable
joint tenancy. SC probably were wrong and meant to say the parties were tenants in common at equity in equal
shares- then you can take account of what happened which then settled at 9:1. They probably just meant tenants
in common.
- Survivorship is key sensible thing about joint tenancy- sometimes this works but mostly last century since today marriages have
no reason for survivorship. If tenants in common, can recreate the economic effect of joint tenancy by will, without unhappy
surprises like in Goodman (on the facts, she clearly did not understand what joint tenancy was and did not want it). Maybe
tenancy in common in equity would be best, reflecting intentions. But SC says default option is joint tenancy because equity
follows the law so this is authorityseverance in equity always to equal shares. The one thing that makes joint tenancy in
equity sensible is if survivorship is meant: sometimes this works (especially last century). Today, this is less likely as not many
want survivorship. If they are tenants in common, you can recreate the economic effect of a joint tenancy by will instead of
survivorship and without any unhappy surprises as in Goodman. Maybe we would be much better if we just had a tenancy in
common at equity, reflecting your intentions. But still SC says default option is joint tenancy because equity follows the law.
In Q, make the argument, but stick to SC authority. Thus, severance after joint tenancy is always into equal shares.
Stack v Dowden [2007 HL]: C + D bought property in joint names but no express declaration of beneficial interest; purchase price mostly came from Ms
Dowden’s savings and remainder by mortgage (he paid for some of it). Held, starting point was that beneficial interest followed legal interest so joint
tenancy which can be displaced by evidence of common intention.
Jones v Kernott [2011 SC]: C + D had children and bought house in joint names exclusively with her money + no declaration of beneficial ownership. Mortgage
of house shared between them and they took loan to build extension (he did some work himself). Relationship deteriorated and he (Kernott) moved out and
bought his own house. Jones applied for TOLATA s 14 declaration that she owned entire beneficial interest in prop. SC upheld that initial presumption of joint
beneficial ownership was displaced and it fell to court to divide property interest into shares as was reasonable and fair so his share was 10%. Case showed
that common intention could be ascertained by later intention following purchase of property and the search is for common objective intention.
