LEVEL 6 - UNIT 9 – LAND LAW SUGGESTED ANSWERS - JUNE 2016

Note to Candidates and Tutors:

The purpose of the suggested answers is to provide students and tutors with guidance as to the key points students should have included in their answers to the June 2016 examinations. The suggested answers set out a response that a good (merit/distinction) candidate would have provided. The suggested answers do not for all questions set out all the points which students may have included in their responses to the questions. Students will have received credit, where applicable, for other points not addressed by the suggested answers.

Students and tutors should review the suggested answers in conjunction with the question papers and the Chief Examiners’ reports which provide feedback on student performance in the examination.

SECTION A Question 1 (a)

Section 205 of the defines ‘land’ as including, inter alia, all corporeal and incorporeal hereditaments. This includes the land itself, buildings, and things forming a physical part of the land and buildings, as well as rights appurtenant to the estate. Assuming that the transfer is of only the estate (i.e. there is no provision in the contract for the transfer of fixtures and fittings), the purchaser will acquire, in terms of corporeal hereditaments, fixtures (but not fittings)and fructus naturales (not fructus industriales).Incorporeal hereditaments are those rights which benefit the estate, such as easements and restrictive covenants. The benefit of these rights will be deemed to form a part of any conveyance of the estate in the absence of words to the contrary (s62 Law of Property Act 1925).

The courts have developed two tests to decide whether particular items are fixtures or fittings, although this will be a matter of fact in each case.

The original test to distinguish fixtures (land) and fittings (chattels) is the ‘degree of annexation test’, although problems can arise with ‘temporary’ or ‘lean to’ buildings. Other things attached to land were seen as land so long as they were firmly attached. Thus if a one ton statue was bolted down, it was land, if not, a chattel (compare Holland v Hodgson (1872) and Berkeley v Poulett (1977)). The courts recognised the problem and addressed issues with consideration of whether things on the land formed a part of an ‘architectural scheme of décor'. Thus a tapestry nailed to the wall which was in keeping with a theme of decoration was land, whilst one simply nailed to the wall so it could be seen, was not (Compare Leigh v Taylor (1902) and Re Whaley (1908)). The narrow application of the idea of a ‘scheme of décor’ is of limited utility in the context of modern home ownership, however. The degree test is very binary in nature and can lead to irrational results.

Page 1 of 14 The more modern and more subtle test is the ‘purpose of annexation’ test. This test asks why the object has been attached: for its own purpose, or for the enhancement of the land. The case of TSB Bank plc v Botham (1996) casts some light on its application to things one expects to find in a modern home. Botham invites the court to distinguish fixtures and fittings on the basis of permanence & lasting improvement and relevance or utility and ease of removal. In that case, kitchen and bathroom units were considered fixtures, whereas white-goods and gas fires, given their limited annexation and short working lives, were considered fittings. Similarly, unless recessed (that is ‘built in’) light fittings were to be considered fittings. The case of Elitestone v Morris (1997) confirms that a common sense approach should be taken to the application of the degree and purpose tests. In that case, a free-standing wooden bungalow was held to be a fixture, not least because it would be destroyed if any attempt was made to remove it. It should be noted that the court took an objective approach in this case – the intention of the party annexing the item is of limited relevance. While a useful guideline, Elitestone and the other cases in the area are difficult to apply as general rules as they are extremely fact-sensitive.

Following the decision in Duppa v Mayo (1669), it is accepted that fructus naturales (naturally growing plants) form land, but that fructus industriales (cultivated plants) do not. The distinction is drawn by human cultivation; thus, for example, ‘wild’ mushrooms deliberately grown are not land.

The sometimes rather inappropriate degree of annexation test has given way in part to the purpose test, which it is clear is governed by a ‘common sense’ approach leading to fewer obviously perverse results. In cases such as Botham, the courts have also suggested that items installed by a builder are likely to be fixtures, while self-installed items are more likely to be fittings. It should be noted that in modern conveyancing, the use of ‘tick-lists’ has reduced the amount of legal disputes in this area. Therefore the extent to which a purchaser is entitled to physical objects relates directly to the purpose of the vendor in attaching the object. Decisions in the related line of cases regarding objects found in or on land also support this view. In Parker v British Airways Board (1982) the occupier was held to have considerable rights over objects embedded in or attached to land (as fixtures traditionally are also) but needed to demonstrate an element of control (and thus a mental element analogous to a purpose) to claim objects found unattached to the land.

1(b)

The theory that the owner of land owns the estate to the depths of the earth (ad inferos) and to the heavens above (ad coelum) was long an unquestioned maxim, but in more recent years has proved problematic, particularly since the advent of manned flight.

The original common law position was that the owner of land owned everything beneath and above that land. Examples of this approach are that the owner, not the finder, would receive any items found in the land (Elwes v Brigg Gas Company (1886); that minerals found in the ground were traditionally the property of the freehold owner (apart from gold and silver); and that overhead signs would constitute trespass (Gifford v Dent (1926)).

However, in Bernstein v Skyviews (1978) the court held that an estate owner had no greater right than any member of the public to altitudes above that ‘necessary for the ordinary and reasonable enjoyment of the land.’ Furthermore, s76 Civil Aviation Act 1982 provides that no action in trespass lies against

Page 2 of 14 aircraft flying over the estate at a reasonable height. This will, of course, depend on the use of the land and the height of any buildings on it.

The law recognised that mines and minerals, certain water-courses and ‘treasure trove’ (now ‘treasure’ governed by the Treasure Act 1996) were not a part of the estate. Statutory powers for utility and transport organisations to lay pipes, wires and tunnels further mitigated the notion that the estate ran to the depths of the earth. However, it should be noted that in Bocardo v Star Energy (2010) the Supreme Court held that drilling a well to extract oil over a thousand feet below the surface would still constitute a trespass to land unless the landowner had given consent.

However, it should be noted that the Infrastructure Act 2015 ss.43-48 allows energy companies to exploit resources underneath an owner’s land without notice, as long as these are at least 300 metres below the surface. However, while the Act allows such companies to leave the land in a different state, there are pre-conditions to exercise the right and there is scope for the Secretary of State to introduce regulations requiring notice to the land-owner.

Therefore the maxim is still technically true, in that the estate owner owns it to the depths and to the heavens. But the reality is such that his or her ownership rights are illusory beyond a reasonable height or depth given the number of circumstances which can arise in which those rights are unenforceable.

Question 2

An easement is a right to do something on someone else's land falling short of a right to possession. In order to be an easement a right must fall within the criteria laid down in Re Ellenborough Park (1955). The right must:

• relate to a dominant and servient tenement; • which are owned or occupied by different persons; • accommodate the dominant tenement; • and ‘be capable of forming the subject matter of a grant’.

An easement will accommodate the dominant tenement where there is sufficient proximity between dominant and servient tenements and where the rights benefit the estate (and any owner of it) rather than being a personal right. Thus in Hill v Tupper (1863), where the claimed right benefited the dominant tenement owner’s business rather than the land, the right was incapable of being an easement. The final point takes in both the capacity of the grantor and grantee and that the right claimed falls within the range of rights recognised by the courts as being capable of amounting to easements. Such rights must not be vague or indefinite (Webb v Bird (1863)). An easement can be created by grant, where a landowner grants an easement over his own land to another, or by reservation, where a landowner retains an easement over land that he sells to another.

In the absence of an express grant of an easement the courts may imply a grant of easement under one or more of four heads. First, an easement will only be implied by necessity where the estate cannot be used at all without it (Union Lighterage Co v London Graving Dock Co (1902), Nickerson v Barraclough (1981), Wong v Beaumont (1965)). Necessity claims are usually based on claims to a right of way to land-locked land. Wong, where the right was for egress of fumes through a ventilation system, can be distinguished on the basis that the estate was a leasehold with a restrictive user covenant (and thus the leasehold estate could not be used at all). Page 3 of 14 Secondly, an easement will be implied by common intention (e.g. Liverpool City Council v Irwin (1977)), where it is objectively the common intention of the parties that the estate be used in a particular way, the courts will be willing to imply easements necessary to that use (thus in Irwin the right to use the stairs and lift to access a ninth floor flat). Necessity and common intention, based on the presumed intentions of the parties are, however, vulnerable to express wording in the grant demonstrating a contrary intention: in Nickerson v Barraclough, the conveyance expressly precluded the grant of any rights, and the estate remained landlocked.

Thirdly, the rule in Wheeldon v Burrows (1879) requires evidence of a ‘quasi- easement’. A quasi-easement is the use by the owner of a single estate or parts of that estate in a manner such that an easement would be required if the use of those parts in that manner was to continue if one part was sold. Where a part of that estate is sold, the continued user (assuming the user ‘crosses’ both estates) will be implied as an easement where the quasi-easement was ‘continuous and apparent’ and where its continuation as a ‘full’ easement is ‘reasonably necessary for the enjoyment’ of the dominant tenement (the part of the estate sold). What is ‘reasonably necessary’ is not necessarily a high threshold. A right claimed by way of access will not be ‘reasonably necessary’ if it is simply more convenient (Goldberg v Edwards (1950)). However, in Borman v Griffith (1930), where the estate benefited from an express right of access to the rear of the property, the courts held that a right of access to the front was reasonably necessary as it was the only way to get to the front door of the premises. The rule in Wheeldon, too, is vulnerable to evidence of a contrary intention. In Squarey v Harris-Smith (1981), a standard term in the contract for sale excluded implied rights. The Court of Appeal, declined, on that basis, to find an implied right.

Finally, s62 Law of Property Act 1925 can imply easements into the transfer of an estate. It was traditionally seen to operate only where there is already diversity of occupation between the dominant and servient tenements (for instance on the purchase of a reversion by the tenant) and thus not relevant to the sale of part of land, however Wood v Waddington (2015) appears to have removed this requirement of diversity if the right was in regular use and ‘apparent’. In any event, it is of particular use where part of the land was leased prior to sale. It is long settled law that the operation of s62 can be expressly excluded in a transfer or conveyance. It should be noted that the Law Commission has been very critical of s62 and suggests abolition.

The implication of easements can therefore provide the purchaser of part of a piece of land with wide-ranging rights, particularly if they have been exercised over the land prior to purchase. However, it is no substitute for express easements. Implied easements are conditional, and are vulnerable to a clear contrary intention. Moreover, an implied easement in registered land, if not on the register, is reliant on over riding status (Sch 3 Land Registration Act 2002), and the right may, therefore, be lost if a third party purchases the servient estate.

Question 3

A trust of land arises on any occasion where land is owned or purchased by more than one person (Trusts of Land and Appointment of Trustees Act 1996).There are two ways in which estates can be held where a trust of land arises: joint tenancy and tenancy in common.

A joint tenancy requires four unities (time, title, possession and interest). Each joint tenant ‘owns the whole yet owns nothing’. On the death of a joint tenant, Page 4 of 14 the rule of survivorship applies and the estate is held by the remaining joint tenants: this applies irrespective of the will of the deceased or of the intestacy rules.

A tenancy in common requires only the unity of possession. A tenant in common has an alienable and discrete share in the estate.

The legal estate cannot be held other than by joint tenants (s1(6) Law of Property Act 1925)(LPA 1925). A joint tenancy in law cannot practically be severed (resulting in a tenancy in common): the land itself could be partitioned, or one or more trustees can retire and be replaced. Thus a legal estate cannot be severed to give an identifiable share unless the estate is physically divided.

A joint tenancy in equity can be severed by various means. The severance will result in the joint tenant effecting the severance thus acquiring a share as tenant in common equal to 1/n, where n is the number of joint tenants.

S36(2) LPA 1925 provides a statutory procedure for an equitable joint tenant to provide notice of severance. The method is entirely unilateral and thus does not require any consent by the other joint tenant(s), however certain formalities must be complied with. The notice must be in writing (although need not be in a specific form, see Re Draper’s Conveyance (1969) where the notice was acceptable despite being contained in divorce proceedings and did not specifically refer to severance), must be served to all other joint tenants and if served by post must comply with S196 LPA 1925. S196 requires the notice is in writing, and if sent by post as a registered letter or delivery not returned by the post office. It is sufficient is the notice is sent to the last known address of the other joint tenant(s), see Kinch v Bullard (1998). This case also demonstrates that even if the notice is destroyed after delivery without the recipient actually seeing it, it will still constitute severance. This emphasises the unilateral character of this method.

Severance can also take place at common law, by one of three methods ( (1861)). Two of these methods, mutual agreement and mutual conduct, require some measure of agreement or at least a course of conduct by the other joint tenant(s), as evidenced in 1975). A joint tenant can unilaterally sever his or her share at common law by acting upon it, for example by selling or mortgaging his share (First National Securities v Hegarty (1985)) or commencing court proceedings regarding the joint tenancy (Re Draper’s Conveyance (1969)).

It should be noted that bankruptcy will also sever a joint tenant’s share, but that severance cannot take place after death through a will.

Finally, a joint tenant can potentially sever their share in the specific circumstances of homicide. Where a joint tenant unlawfully kills another, the deceased’s share is severed to prevent the joint tenant from benefitting from the crime, although it has been suggested that this is not true severance – the killer receives the share through survivorship but holds in trust for the estate of the deceased. The court also has the discretion to award relief where there is little moral blame attached to the killing under the Forfeiture Act 1982.

Therefore the statement is at best partly true. A joint tenant can indeed sever at any time, and unless via mutual agreement or conduct this does not require consent or assistance from other co-owners. The law upholds the right of an equitable joint tenant to sever at the time of his or her choosing. However, formalities are required, most notably when severing by notice. Technically the Page 5 of 14 two situations when a joint tenant can unilaterally sever are when acting on own his share and homicide, but in reality, short of homicide, a joint tenant attempting to sever through acting upon his share will need to comply with other formalities, such as the requirement for the sale agreement to comply with s2 of the Law of Property (Miscellaneous Provisions) Act 1989.

Question 4

As between the original covenantee and covenantor, all covenants affecting a freehold estate are enforceable pursuant to privity of contract. Ordinarily, a covenant can only be enforced against an assignee of the original covenantor where the subsequent owner of the dominant tenement has the benefit and the assignee has taken the burden. The benefit and burden must have both passed either at law or in equity.

The benefit of a covenant will pass at law where the covenant ‘touches and concerns’ (that is, it is not personal, but affects the mode of user or occupation of the servient tenement), where the covenantee had the legal estate of the dominant tenement and the assignee derives title therefrom, and where there was an intention that the covenant bind the land (although now see s78 Law of Property Act 1925 (LPA 1925), which deems such an intention).

The burden of covenants does not, however, subject to some exceptions, run with the servient tenement's ownership in law (Austerberry v Oldham Corporation (1885), affirmed in Rhone v Stevens (1994)). It follows, prima facie, that the burden of the various obligations/covenants will not run to successors of the original covenantors at law. The exceptions to this rule include circumstances where there is an estate rentcharge, or where the rule of mutual benefit and burden applies. This last rule, deriving from the case of Halsall v Brizell (1957), provides that a covenant to pay the cost of maintaining a facility on the dominant tenement binds the owner of the servient tenement where the servient tenement benefits from rights to use that facility. It is clear from Thamesmead v Allotey (1998) that the cost must relate directly to the facility. In Thamesmead, a covenant to pay for the maintenance of landscaping had insufficient nexus with the right to use estate roads for the rule to apply.

That the benefit at law may, however, have some utility as it may be possible to enforce covenants indirectly where there is a chain of indemnity covenants by successive assignees of the servient tenement. The dominant tenement owner can take enforcement action against the original covenantor, who, in turn, will seek an indemnity from his or her successor and so on. There are two weaknesses inherent in chains of indemnities: first, that the chain ‘breaks’, in that one or more assignees in the chain has died, become insolvent or undiscoverable; and secondly that the dominant tenement owner’s only remedy is damages, where it is actual compliance with the covenant which is sought. Furthermore, it is possible to incorporate a further obligation by which the transferor of the burdened estate procures a direct covenant from the transferee in favour of the dominant tenement owner, thus maintaining privity of contract. This method is, however, unusual and unwieldy.

Commonhold is a way of holding a freehold estate where that estate forms a part of a matrix of interdependent properties (for example a block of flats, dependant on each other for support, and containing common parts used by all flat owners). It was introduced by the Commonhold & Leasehold Reform Act 2002, with a view to providing a means of enforcing positive covenants against successors of the original covenantor, whilst retaining freehold ownership (as opposed to the grant of a long lease; a wasting asset). A commonhold can be designated by a Page 6 of 14 developer or with the consent of all of the owners of ‘units’ in interdependent properties. Such a designation means, inter alia, that purchasers of units automatically are bound by both positive and restrictive covenants. A commonhold unit cannot, however, be forfeited on breach by the unit owner, rendering the enforcement of such covenants potentially problematic. The commonhold regime goes some way to providing for the enforceability of positive covenants in freehold land (albeit only where properties are interdependent), but the regime has not proved popular with mortgagees, who have been reticent to lend, and with purchasers, who face limits on their ability to let units, combined with the need to ensure that the Commonhold Association overseeing the development operates and remains solvent.

The benefit of a covenant, provided it touches and concerns, will run in equity where it is annexed or assigned. A covenant will be deemed annexed in the absence of words to the contrary, by s78 LPA 1925. Following the decision in Federated Homes Ltd v Mill Lodge Properties Ltd (1980), assignation is of limited significance but can be used where annexation has not occurred, such where the land is not identified as benefiting from the covenant (Crest Nicholson Residential (South) Ltd v McAllister (2004). Finally, the benefit of a covenant can run through a building scheme where a common vendor imposes mutually enforceable restrictions on parcels of land sold as part of a development scheme (see Elliston v Reacher (1908))

The burden will run in equity pursuant to the rule in Tulk v Moxhay (1848): the covenant must be restrictive in nature (determined by the ‘hand in pocket’ test - a test of substance not form); the covenant must ‘accommodate the dominant tenement’, in effect ‘touch and concern’; the covenantee must have owned the dominant tenement at the date of the covenant's creation; and, the covenant must have been intended to run with the land, although this will be deemed to be so by s79 LPA 1925 in the absence of words to the contrary. It should also be noted that the covenant will need to be protected in order to bind a purchaser, either by notice (s34 LRA 2002) in registered land or as a class D(ii) land charge in unregistered land. Without such protection, the covenant will have no effect.

Covenants that do affect the estate (in that they touch and concern) will run at law and in equity to the successors of the original covenantee with comparative ease; the burden of the covenant, unless restrictive, is unlikely to run, and then only in equity. Positive covenants, unless falling under the rule in Halsall or in commonhold land, are highly unlikely to be directly enforceable; the dominant owner will be reliant on a damages claim against the original covenantor (assuming that he or she can be found and has funds), who in turn might ‘persuade’ the extant servient owner by way of threat of indemnity proceedings. Even there, a break in the chain of indemnities can be fatal.

SECTION B

Question 1

The rules for determining the priority of interests affecting a registered estate (ss28 and 29 Land Registration Act 2002 (LRA 2002)) are that interests rank in order of creation unless the instant transaction is a registrable disposition for value completed by registration, which is subject only to those matters on the register or which override (per Schedule 3 LRA 2002).

A registrable disposition is one of the transactions listed in s27(2) of the LRA 2002 (including freehold transactions; the grant or transfer of a lease of more Page 7 of 14 than seven years; the grant of a legal charge or of a legal easement). A failure to register such a transaction means that it takes effect in equity only (s27(1)).

Here, Akintunde’s is a registered disposition, which is assumed to be completed by registration. He will take subject to the various interests only to the extent that they override.

Interests which override a registered disposition are listed in Schedule 3 of the LRA 2002.

They include certain short legal leases (subject to exceptions including ‘reversionary leases’ - leases which give the tenant a right to possession three months or more after the date of the lease)(para 1).

The interests of persons in occupation are protected by the actual occupation of the person with the benefit of that right (para 2).

Actual occupation is determined as a matter of fact, and the occupation must have commenced prior to the transaction (the date of the transaction; not the date it was registered). The occupation must be ‘obvious on a reasonable careful inspection’ or known of by the purchaser. It is important to note that the occupation is not protected itself. It is the fact of occupation which provides protection to any interest the occupier has.

In determining whether a person is, as a matter of fact, in actual occupation, the courts will consider the nature and purpose of the property in determining what form occupation would take (Abbey National v Cann (1990)), but will require the occupation to involve some permanence and physical presence (Mallory Enterprises v Cheshire Homes Ltd (2002)). ‘Normal’ absences, for reasons such as a holiday or for a hospital visit will not result in the occupation being vitiated (Hoggett v Hoggett (1979); Chhokar v Chhokar (1984)).

Barbara’s lease over Garage 1 is one requiring registration to take effect at law, as its terms at grant exceeded 7 years. It follows (as it does not appear on the register), that it takes effect in equity only. It cannot be protected by para 1, but will be protected by her actual occupation, assuming that this would be obvious on a reasonably careful inspection. Akintunde is likely to be bound.

Barbara’s lease over Garage 2 also requires registration and thus takes effect in equity only. In the absence of protection under paras 1 or 2 (as she is clearly not in occupation), Akintunde will take free of this lease. However a legal lease may be implied following the payment of rent. If this is the case, Barbara has a quarterly periodic tenancy which requires no formalities, nor registration to take effect at law, and is protected by para 1. She can, though, be given a quarter’s notice to quit.

Eman, the occupier of Garage 3, as a squatter of registered land, has no interest in the estate. Even assuming she can make out actual occupation, it protects nothing without an interest and she can be evicted.

Counties’ mortgage is another registrable disposition, and, again, in the absence of registration, its interest will take effect in equity. As it is not on the register, and does not fall into any of the categories of overriding interest, Akintunde will take free.

Page 8 of 14 Question 2

Proprietary estoppel is an equitable device by which a person with a legal estate in land is estopped from denying the interest of another. The basic requirements for such claim derive from Wilmott v Barber (1880), and require that:

(i) the claimant made a mistake as to his or her legal rights; (ii) the claimant expended money or did some act on the faith of that mistaken belief; (iii) the defendant was aware of the true position; (iv) the defendant was aware of the claimant’s mistake; and (v) the defendant encouraged the claimant in making the expenditure of money or acts of reliance.

The mistake on the part of the claimant is inevitably the claimant’s ignorance of the need to comply with statutory formality requirements for the creation or transfer of the claimed interest.

Modern cases have tended to be less strict about the Wilmott requirements, preferring to address issues of representation or assurance; reliance; and detriment (Thorner v Major (2009)).

The representation or assurance can be active (in Inwards v Baker (1965) a father encouraged his son to build a house on the father’s land) or passive (in Steed v Whitaker (1740) the defendant mortgagee stood by whilst the claimant built on land he did not own) and must relate to the property itself (Layton v Martin (1986)).

The assurances have come from the owner and relate to the property. A person must show an expectation of some right over another’s property and this can be tied in with the assurances they have been given that the property will be left to them. The representation is only present if the representor intended his assurance to be relied upon. The facts can be distinguished from the case of Taylor v Dickens (1998) as the promise is of the house itself, not merely for Harriet to alter her will. Following Thorner v Major (2009) all that is required is more than a mere statement of present intention. Here there is a sufficiently unambiguous statement that Frances will inherit the property on Harriet’s death.

In Greasely v Cooke (1980), detriment was made out by the claimant nursing the defendant’s daughter, and in Pascoe v Turner (1970) acting as unpaid housekeeper and mistress.

Difficulties can arise where the claimant obtains some benefit from the arrangement. Where that is the case, according to the Court of Appeal in Gillett v Holt (2000), a balancing act must be performed, to determine if the detriment outweighed the benefit.

Frances and Gerald have obtained little, if any, benefit from the arrangement with Harriet. The housekeeping expenses are likely to have been used in caring for Harriet, and are a minimal benefit when compared with the detriment. Frances has been forced to leave her employment, and has spent longer and longer hours caring for her mother without pay. She has also been unable to spend time with her children. It is likely that she will be considered to have acted to her detriment. Gerald has similarly suffered a serious detriment, most notably in being unable to take the better job five years ago, which would have also given Frances and Gerald the chance to own their own property.

Page 9 of 14 Reliance is presumed once the claimant has made out detriment (Grant v Edwards (1986)).

That Harriet’s will purportedly left the property to charity will be no bar to a claim. If Frances and Gerald can persuade a Court that they have suffered a greater detriment than the advantage they gained, the claim will most likely succeed.

In the past, the remedy awarded to a successful claimant was based on the claimant’s expectation, which in turn derived from the promisor’s promise or representation. Thus in Pascoe, the claimant received the fee simple having been promised, ‘the house and everything in it’. More recently, following the decision in Jennings v Rice (2002) the Courts have recognised that the remedy should be ‘the minimum required to satisfy the equity’. In that case, the award to the claimant reflected his detrimental acts, and not what he was promised by the promisor. It appears, following Henry v Henry (2010), that any advantage the claimant received should be taken into account in determining the remedy.

In this case, it would appear that the minimum required to satisfy the expectations of Frances and Gerald would be a lifetime interest in the house, or even the fee simple estate. Considering the level of detriment suffered, this would not be excessive although the value of the house would be extremely important in determining a remedy. Potentially, a sum of compensation sufficient for Frances and Gerald to purchase their own property could be awarded instead.

It should be noted that the House of Lords in Cobbe v Yeomans Row (2008), albeit obiter, suggested that, in future, Courts should be reticent to permit the use of equitable concepts such as estoppel and unconscionable conduct to evade formality requirements; such is required to provide certainty in commercial relations. However, the Court made it clear that such would not be an appropriate approach to what have become referred to as the ‘farm and family’ cases and this has been borne out in more recent decisions. Here, then, the want of formality should be no bar to the parties’ claims.

Question 3 (a)

In a 1990 lease the running of covenants is governed by the common law and the Law of Property Act 1925.

The original landlord and tenant are liable, as privy to the original contract, for breaches of their respective covenants for the full term of the lease (unless it is varied) as, even in the absence of express wording, they are deemed by s79 of the Law of Property Act 1925 to have covenanted on behalf of their successors in title. It follows that incumbent successors of either can sue the original landlord or tenant (as the case may be) for breaches by their respective successors. The disadvantage of such an action is that, having parted with their interests, the original parties are liable only in damages.

The position of an original party is ostensibly protected by indemnity covenants or the rule in Moule v Garrett (1872). Indemnity covenants would permit the original party to seek an indemnity from his or her successor, whilst the rule in Moule v Garrett permitted an original party to raise an indemnity action against the incumbent successor. In either case, however, the action would only be successful to the extent that an assignee was not a ‘tenant (or landlord) of straw’.

Page 10 of 14 The benefit and burden of leasehold covenants would run to assignees of the lease according to the rule in Spencer’s Case (1582), where there is privity of estate between the parties, and where the relevant covenant ‘touches and concerns’ the estate.

According to P & A Swift Investments v Combined English Stores Group plc (1989), a covenant will touch and concern where a) it benefits the estate owner for the time being and would cease to benefit if separated from the ownership of the estate; b) it affects mode, use or value of the benefited estate, and; c) it is not a personal covenant. Thus personal covenants and terms by way of option for the tenant to purchase the reversion would not run (Woodall v Clifton (1905)).

On an assignment of the reversion, covenants which ‘touch and concern’ the estate, and which ‘have reference to the subject matter of the lease’ will pass to the purchaser of the reversion (ss141 and 142 Law of Property Act 1925). According to Re King (1963), the effect of s141 is such that the assigning landlord can no longer enforce any covenants, that right passing to the purchaser of the reversion.

The first covenant has not been breached by Jiro or Kelly.

The second covenant ‘touches and concerns’ the property and ‘has reference to the subject matter’, as it affects the ‘nature mode and quality of user’ (P & A Swift Investments v Combined English Stores Group). Thus Marie has the benefit, and the burden has passed to Kelly and then Laurence. Marie can also enforce the covenants (for a claim in damages only) against Jiro (who, in turn, can seek indemnity from Laurence or Kelly).

The third covenant is personal in nature, and the benefit does not pass to Marie, nor indeed has the burden passed to Kelly or Laurence. It cannot be enforced.

3(b)

The Landlord and Tenant (Covenants) Act 1995 governs the running of covenants in a leases created in after 1st January 1996, and therefore applies in this situation.

The Act provides that the benefit and burden of all covenants contained in the lease run on assignment of the lease or the reversion unless they are expressly stated to be personal (s3).

Section 30 provides that s79 LPA25 shall not apply to ‘new’ leases, and also repeals those parts of the LPA implying indemnities.

The original tenant (and any subsequent tenant assigning his or her estate) is automatically released from the burden of the tenant's covenants unless the lease provides for an Authorised Guarantee Agreement (AGA) (ss5 & 16).

An AGA provides an indemnity from an assigning tenant to the landlord, but only for breaches committed by the tenant to whom the lease was immediately assigned. The AGA ceases to have effect on a subsequent assignment (although the outgoing tenant may him or herself be required to provide one) (s16).

Thus the original tenant is liable at most for his or her own breaches and for those of the tenant to whom he or she assigned, unless such assignment is in

Page 11 of 14 breach of covenant (for instance without the landlord’s consent if that is required by the lease) or by operation of law (for instance on the death or bankruptcy of the tenant) (s11).

The first two covenants run per s3. Marie has the benefit and Laurence the burden. The first covenant, not to assign without consent, has not been breached. In any event, section 23 of the 1995 Act prevents a new landlord (from an assignment of the reversion) suing for breaches which occurred before the reversion was assigned to them unless the right has been expressly assigned to them.

The second covenant has been breached by Laurence. Jiro and Kelly have been released from their obligations on assignment and so cannot be sued for this breach unless they have entered into an AGA. However, as this is a qualified covenant against assignment the landlord is entitled to insist on an AGA and therefore it is likely to be present, which leaves Jiro and Kelly liable for Laurence’s breach.

The third covenant will be considered to be personal. On that analysis the benefit will not run to Marie and the covenant cannot be enforced.

Question 4(a)

In order to claim title to a registered estate by adverse possession, the claimant must first show that the basic requirements for such a claim have been met.

Powell v MacFarlane (1979) confirms that the claimant must demonstrate factual possession (effectively exclusive possession), together with the intention to possess (that is to exclude the world: not necessarily an intention to own (Pye v Graham (2002)) for the requisite period, without the consent of the true owner, to be entitled to the estate. The intention must be demonstrated by evidence of outward conduct (Prudential Assurance Co Ltd v Waterloo Real Estate Inc (1999)).

Factual possession requires evidence that the claimant has an appropriate degree of physical control of the land, and has been using it as an occupying owner would (Powell v MacFarlane). The ‘degree’ required will depend on the nature and quality of the land in question (West Bank Estates Ltd v Arthur (1967)). The strongest evidence of factual possession is likely to be enclosure by a fence or wall (Seddon v Smith (1987)). It should be noted, however, that the purpose of fencing is relevant. In Inglewood Investment Company Ltd v Baker (2003), where the fencing was erected to keep livestock in (as opposed to keeping the world out), the claimant’s acknowledgment of this proved fatal, as the court held that he lacked the necessary intention.

The possession must be adverse: this connotes only that possession is without the consent of the paper owner.

Here there is clear evidence that Rufena has used the land as if it were her own. It is unlikely that simply playing with her son and walking her dog would constitute acts of ownership, but planting of flowers and bushes and particularly the use of fencing to keep others out make it clear that Rufena is in adverse possession by the end of 2004. That Peter had no immediate use for the land and planned to exploit it in future is irrelevant, as the doctrine of ‘implied consent’ was disapproved in Buckinghamshire County Council v Moran (1990).

Page 12 of 14 Overall, she appears to make out the basic requirements. Schedule 6 of the Land Registration Act 2002 (Sch 6) now disapplies the Limitation Act 1980, and provides that a person can apply to be registered as proprietor after ten years provided he or she can show possession of land (with the necessary intention and without consent). When the application is made, the Registered Proprietor (RP) is given notice of the application (as are any other interested parties: mortgagees, for instance). The RP has 65 days within which he or she can object (perhaps on the basis that adverse possession is not made out: the squatter lacks the necessary intention); consent to the squatter's registration; or respond requiring the Land Registrar to deal with the application in accordance with Sch 6.

If such a counter notice is received the squatter can only be registered as proprietor of the land if the Land Registrar is satisfied that he or she should be registered on one of three bases: first, entitlement by some estoppel; secondly, some other reason (perhaps a non-completed contract for purchase where the money was paid over - if it was a long time ago, the Limitation Act 1980 may prevent the occupier enforcing the contract in itself); or, thirdly, where the matter amounts to a claim over the boundary between two estates (the schedule provides that the claimant must reasonably have believed the land belonged to him; and that the boundaries have not been determined by the Land Registry).

If the RP (or other interested party) makes no response, the squatter will be registered as proprietor.

Under the circumstances, Peter should be advised to object, and, at this point, Rufena’s application would fail, as there is nothing to suggest that it falls within any exception. The ‘disputed boundary’ exception may prima facie appear relevant, however Rufena is fully aware that she does not own the land in dispute.

The RP has a further two years to take action to repossess (or invite the police to remove) if the application is rejected. If the squatter is still in possession after two years, he or she is entitled to be registered as proprietor (subject to limited exceptions, including ongoing possession actions). Peter will need to seek possession within that period. Rufena is not a squatter under s144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 as the property is not residential, however removing her from the land should be straightforward.

4 (b)

Where the relevant estate is unregistered, ss15 and 17 Limitation Act 1980 have the effect of extinguishing the paper owner’s title after 12 years’ adverse possession (in most cases, but subject to exceptions for crown land and mentally ill paper owners etc).

Best v Chief Land Registrar (2015) has made it clear that s144 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 does not prevent time from running (and in any event the Act may not apply, as explained above).

As noted above, Rufena would appear to have satisfied the common law requirements of factual possession and the intent to possess. What may be in dispute is whether she has been in adverse possession for a sufficient period of time. If planting on the land is sufficient, she may have extinguished Peter’s title, however if time only began to run when the fencing was erected, Peter has until October to remove Rufena from the land.

Page 13 of 14 If Rufena has been in possession for 12 years, Peter has little chance of resisting her application to be registered as proprietor. If however time began when the fencing was erected, Peter should be advised to act quickly to remove Rufena from the land before October.

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