A System of Land Law

A system of land law has developed over many centuries, over which there has been significant reforms to the law. William the Conqueror established a feudal system in which he claimed, as the Crown, ownership of all the land in England which was granted to the public in return for services; this established a “hierarchy” in the society called the “feudal pyramid” (FN). The significant economic and social changes that began after 1066 paved the future for land law in such a way that the most imperative concepts and principles of land law developed as a result of these changes, thus inaugurating a system of land law. These concepts and principle were refined and further codified for centuries until the beginning of 1926 which embraced a noteworthy surge of legislative reforms, including the Law of Property Act 1925 (LPA 1925) (FN) and the Land Registration Act 1925(FN) (which has seen further reform and has been replaced by the LRA 2002(FN)). Although it may not be clear cut, Section 205 (1) (ix) of the LPA 1925 (FN) contains a definition of land which includes “land of any tenure, and mines and minerals, whether or not held apart from the surface, buildings or parts of buildings…and other corporal hereditaments and an easement, right, privilege or benefit in, over, or derived from land” (FN lpa 1925) Since the definition for land is fairly complex and fairly wide, it is essential to establish whether the land includes all items that are on/in it, whether the property is deemed to be personal property that can be taken away, when a property is exchanged in a sale or leased, or it is ‘real' property that cannot be taken away. The two types of property are known as fixtures and chattels. Fixtures are assets that are installed or fixed in or to a property and therefore become part of that property in law. Fixtures are land and form part of it and in the event of a sale, cannot be removed from the property without any conditions stating it can in the contract. The second type of property are chattels which are not land but are simply personal property that may be taken away if the seller wishes to do so. A chattel is usually tangible and moveable, although they are capable of becoming fixtures if they are fixed in or onto a building. It is imperative to distinguish between the two as in the event of an exchange of land taking place and a fixture not being included; the seller can be taken to court. The courts have developed two tests in order to determine whether an item of property is a fixture or a chattel, these are known as the degree and method of annexation test and the purpose of annexation test. The degree of annexation test was first questioned in Holland v Hodgson (FN) in which fixtures were defined as objects that are attached other than resting on their own weight, if the object is annexed to the land it is, prima facie, a fixture. Blackburn LJ also suggested that although an item may be very heavy and resting on its own weight, if it doesn't become securely fixed to the land, it still remains a chattel (FN). This case was significant and further the decision was applied in the case of Berkley v Poulett (FN) in which the vague test in Holland v Hodgson was refined. This case concerned a marble statue and pictures that were taken from a property when it was sold. It was held that the pictures were not fixtures as there was no intention of making them part of the land and they were simply there for the personal enjoyment as pictures. The marble statue was also deemed to be a fixture because it was simply resting on its own weight and there was no evidence that there was the intention for it to form part of the land or the architectural design of it. The degree of annexation test is fairly inconclusive and simply looks at how securely an item is attached to the land or building, traditionally if the item is fixed securely to the land, such as a bath, then there is a presumption that it is a fixture. If the item is resting on its own weight and is not securely attached to the land, such as a vase, there is a presumption that it is a chattel. This case brought about the two-fold classification of fixtures and chattels, questioning that although an object may be simply resting on its own weight, there is a possibility that it can become a fixture. The purpose of annexation test is conclusive and this limb will outline if a fixture at first look is actually a chattel. If an object passes the first test regarding the degree of annexation; the first test can be rebutted by the purpose of annexation test. This test looks at the specific purpose of annexation of the item, i.e. why the object was placed there. If an item is not securely attached to the land and is easily moveable but it forms part of the architectural design of the property there is a presumption that it will be regarded as a fixture. To fully understand the concept of these two tests, it is essential to contrast two leading cases, Leigh v Taylor (FN) in which tapestries were taken from the property after the sale and D'Eyncourt v Gregory (FN) in which statues were removed from a property after sale. The tapestreies in Leigh v Taylor (FN) were considered to be chattels under the degree of annexation test as they were easily moveable and further the purpose of annexation test concluded this as there was no specific reason for them to be there, as the only reason they were there was for personal enjoyment. Contrast this decision with D'Eyncourt v Gregory in which the statues were held to be chattels due to their degree of annexation, although this was rebutted by the purpose of annexation test as the statues were held to be part of the architectural design of the land and therefore were held to be fixtures and weren't allowed to be removed. The courts in Holland v Hodgson (1872) (FN) and further Lord Lloyd of Berwick in Elitestone v Morris (1997) (FN) suggested a three-fold classification that included fixtures, chattels and a third classification known as “part and parcel of the land itself”. Lord Lloyd suggested a three-fold classification in Elitestone v Morris as he felt that the two-fold test was inconclusive and too confusing. This case concerned a bungalow that was resting on concrete blocks. This bungalow was rented out to an occupier and the landowners considered that the bungalow was the property of the occupier and not themselves. This bungalow fell into the third category of the classification as “part and parcel” (FN) of the land as it appeared that it could not be removed from the land without destruction and the fact that it was not physically fixed to the land was insignificant. Section 1(1) of the LPA 1925(FN) also states that only two estates that are capable of subsisting or being created at law as “freehold” or “leasehold” estates. A freehold estate, also known as an estate in fee simple absolute in possession is an estate that is capable of and has no restrictions on who can inherit it, has no conditions attached to the ownership of the estate and is being currently enjoyed. A leasehold estate, also known as a term of years absolute is a much more limited estate than a freehold, such as a lease which has a fixed duration which is agreed upon at the start. When the lease expires, the estate will regress back to the initial person who granted the lease. The leaseholder will have gained an equitable interest, which are defined in Section 1(3) of the LPA 1925(FN), in the property during the time of his/her occupation as leaseholder. An interest is a right over land that is occupied or owned by another person. Interests can be created by common law or statute under s30 of the Family Law Act 1996 (FN)or in equity. A set of five legal interests are capable of being legal and these are listed in Section 1(2) of the LPA 1925(FN), the most important are; easements, landlord's right of re-entry, charges by way of legal mortgages, a rentcharge or any similar charge. Easements will be discussed later in light of Rene's interests in the house. A rentcharge is a periodic payment charged for land and is usually an annual sum. Rentcharges do not include rent paid in terms of a landlord and tenant relationship under a lease, but includes other arrangements where a periodic sum is charged on land. If this money is not paid, it can enable a landowner to use his rights of entry to enforce payment. A landowner has the right of re-entry in “respect of a legal term of years absolute, or annexed, for any purpose, to a legal rentcharge” (FN). This gives them the right to forfeit the lease in the event of a tenant breaching covenants in the lease, or to enable the landowner to recover a debt in terms of rentcharges. A mortgage is a transfer of an interest in a property to a mortgage lender in return for a loan of money where the interest in the property is held as a security on the debt. The interest in then returned to the borrower once they have paid the loan back, if they fail to pay the loan or fail to provide sufficient consideration, the lender will retain the interest in the property. In addition to rentcharges and mortgages, the final legal interest contained in Section 1(2) of the LPA 1925(FN) is “any other similar charge on land which is not created by an instrument”.(FN) Whereas the above interests are capable of becoming legal, it is stated in Section 1(3) of the LPA 1925(FN) states that “all other states, interests, and charges in or over land take effect as equitable interests”(FN), which is a right held in equity and in the event of a violation, it is remedied by an equitable remedy. Marie has been living in the house as Lowry's estranged partner of five years and is refusing to move out of the property. It is not known whether or not Marie has contributed to the estate and therefore whether or not she has a legal interest in the property. However, she is able to argue an equitable interest known as ‘Actual Occupation'(FN) which takes the literal meaning and it was held by the Court of Appeal in Hodgson v Marks (FN) that ‘actual occupation' simply means the physical presence of someone on land that is not owned by them. If a person has actual occupation, under s70 (1) (g) of the LRA 1925(FN), this person will have an overriding interest in the estate which does not need to be registered and will bind Vincent, meaning Marie is able to continue to live in the main house. Overriding interests can be seen as incompatible with the ‘mirror principle'(FN) which suggests that the register provides an exact mirror-image of the title, this ties in with the ‘Insurance Principle'(FN) in which the state have guaranteed the information on the register to be correct. Overriding interests may not be perceptible upon looking at the register and are usually only perceptible when the land is inspected. These overriding interests largely support the ‘curtain principle' (FN) mechanism as they are ‘hidden' from the title and can only be seen upon inspection. These interests such as actual occupation are binding unless they are ‘overreached' in the event of the purchaser paying a sum to convert the overriding interest into a monetary value meaning the occupier would not then be able to claim the interest as was stated in Birmingham Midshire v Sabherwal (FN) in which the process of overreaching will amount to an overriding interest failing to succeed. This sum must be paid to two or more trustees in order to convert the interest by adding a monetary value to it using the doctrine of Equitable Conversion, which would render the Marie's right automatically terminated. Looking at the scenario, Marie has received no payment and therefore under the 1925 LRA (FN) she is able to retain her interest under actual occupation. Although the 1925 LRA (FN) Act states actual occupation as an overriding interest, it contained very limited information and the LRA 1925(FN) has now been abolished and replaced by the LRA 2002(FN) which has set out conditions for when actual occupation can be an overriding interest, these are listed in schedule 3 paragraph 2 of the LRA 2002(FN). This refined Act (FN) now has a more restrictive set of elements that need to be fulfilled before Marie can rely on her interest of actual occupation. Previously, people who had propriety interests were ‘in possession' (FN), which included ‘receipt of rent and profits' as well as in ‘actual occupation' (FN) had an overriding interest, whereas today, only people with propriety interests who are in actual occupation have an overriding interest. Paragraph 2 of Schedule 3 of the Land Registration Act 2002 (FN) states a list of exceptions where actual occupation will not override. One exception that concerns Marie is that it will not override where someone has failed to disclose the right if they were asked and were reasonably expected to do so, Marie, or Lowry may not have told Vincent about Marie's occupation and therefore in this case it would not override and she would not be able to continue staying there. Also, if Marie or Lowry had hidden away Marie's possessions, or in any way made it so that during the inspection it was not obvious of Marie's inspection, so that Vincent had no knowledge of the actual occupation, it will not override and therefore she will forfeit the right to exercise actual occupation. From the conditions laid out in the Land Registrations Act 2002 there is a presumption that Marie will not have a right to continue to stay in the house after the sale went through, which could be backed up by a condition that as his spouse, a non-owning spouses right of occupation under Section 31 of the Family Law Act 1996 would not constitute an overriding interest. There may be the possibility that due to Vincent undertaking the task of conveyancing and therefore could have failed to see the interest himself as he may have been careless and therefore it could be possible that Marie's interest of actual occupation may override, subsequently meaning she can continue to live in the main house. It can also be argued that Marie has an interest in the property under a trust. A trust would occur if Lowry as a ‘Trustee', having a legal title of the property, holds an estate in the land on trust for Marie as a ‘Beneficiary' who would hold an equitable title in the property. If there is a trust in this case, it would mean that the land would be registered in the name of Marie also, having an equitable title of the property. A trust can be in the form of an express trust, in which there must be a signed declaration in writing as stated by Section 53(1) of the Law of Property Act 1925, or it may be implied by the courts as was adopted in Chokkar v Chokkar (FN). There are two types of implied trust, resulting and constructive. A resulting trust would apply if Marie has contributed to the purchase price of the property (this excludes contributions as a gift) and would lead to the presumption that Lowry is holding the land on trust for himself and also for Marie in proportion to her contributions. A constructive trust would apply if Lowry has agreed that Marie would have a share in the property and in return she would make some kind of indirect contribution. It is unclear whether Marie has contributed to the purchase price or in any way and subsequently this would lead to the assumption that she does not have an interest in the land in the form of a trust. The final possibility that can occur is that Marie has a licence in the property, although this would not be an overriding interest and subsequently as a result of a license, she would not have an estate in the property.

Rene

Rene has used the path in Lowry's property to walk his dog for the last twenty two years and up to the completion of the sale and therefore Rene may have an interest as this appears to be an easement as listed as a legal interest in Section 1(3) of the Law of Property Act 1925 (FN). There is no specific definition of easements as they are hard to define but they encompass “rights which one landowner may enjoy over the land of their neighbour” (FN modern land law 6th edition, martin Dixon). Easements can be negative or positive, the first being a right to stop a person's neighbour from doing something such as receiving light without interference or a positive easement which gives someone a right to do something such as having a right of way on a path of their neighbour. An easement is an incorporeal hereditament which means that it doesn't entitle the dominant owner, who is Rene as he benefits from the land, possession of the land of the servient owner, who is Lowry as he bears the burden of this easement. It does however, entitle Rene to use Lowry's land for specific purposes. A requirement from Phipps v Pears states that the servient owner, Lowry, must not be obliged to spend money as a result of the easement, this does not seem relevant to the case because it seems that Lowry isn't obliged to spend money as a result of allowing Rene to walk his dog on the path on his property. The case of Re Ellenborough Park (FN) concerned the validity of easements and laid out a set of conditions that require fulfilling before an easement can be deemed valid, these conditions were taken from Cheshire's ‘Modern Real Property' (FN). The first of the four rules state that there must be a dominant and servient tenement; in this case, Rene's land is the dominant tenement as it is benefiting from the easement, and Lowry's land is the servient tenement as it is bearing the burden of the easement. With this condition fulfilled, the second condition is that the easement must accommodate the dominant tenement; Rene's land. The easement must benefit the tenement and a simple personal advantage to the owner is known to be ‘in gross' and subsequently cannot amount to an easement. It is not expressly stated that Rene's land is benefiting as a result of using Lowry's path to walk his dog, however the fact that he is using other land than his own does imply that this easement is benefiting Rene's land, as he may not walk his dog in his own land due to the fact that it may damage his own land, or land around the area and therefore she uses a path which gives the assumption that this path may not be subject to destruction as easily as his own land from walking his dog, there may also be inconvenience caused to Rene if he wasn't to use Lowry's path. The third requirement is that the dominant and servient owners must be different people, as stated in Roe v Siddons (FN) a person owning two pieces of land cannot effect an easement in terms of a right of way across his own land; this condition is fulfilled because the owners of the adjoining houses are different, Rene and Lowry. The final condition is that the easement must ‘be capable of forming the subject matter of a grant' (FN). This means that it must be capable of being expressly conveyed by deed and simply meets the standard, clarity and certainty meaning that it can be ‘granted'. This requires there to be a capable grantor and a capable grantee. This condition is fulfilled because Lowry is legally competent to create the easement as he is the owner of the land where the path lies, and Rene is a capable grantee because the easement is in favour of him and is subsequently possible to be granted to him. There is however a final condition in terms of granting an easement, which is that the rights of that are capable of forming the subject matter of a grant must be sufficiently certain, meaning that there easement must be clearly defined and described so that Rene knows the full extent to his rights; there is a presumption that Rene and Lowry would have discussed the extent of his rights prior to Rene using Lowry's path to walk his dog. With these conditions fulfilled, it can be presumed that the easement will be binding on Vincent. This easement seems to have been created by the process of prescription which indicates the acquisition of a right from long use because Rene has used the path for twenty two years. There are three types of prescription, prescription under the Prescription Act 1832 (FN), prescription under common law and prescription at common law by fiction of lost modern grant. It seems that Rene's interest of an easement has been created by a fiction of a lost modern grant because it has been in use for over 20 years. The courts would use the length as an acceptable amount of evidence to presume that a grant by deed had been granted to Rene but this fictitious grant has been lost. This simply states that the fact that an easement has been enjoyed for over 20 years and therefore this is enough to establish an easement by prescription, recognizable in law and therefore Rene's easement would be binding on any future owner of Jorvik, such as Vincent. For an easement to be created created, there are further conditions that need to be met. From the decision in Dalton v Angus (FN), it is essential that Lowry, or whoever the owner was at the time Rene first exercised this easement, had the knowledge of Rene using the path, had the power to stop him to do so although still allowed him, implicitly consenting to the use. It is fairly clear that Rene has not been prevented from using the past in twenty two years. As Rene has fulfilled the above criterion and it is fairly clear that he enjoyed the right as a right to walk his dog on the path and not anything else, the use was continuous and the rights seemed to have been given to him by a fee simple absolute owner, Rene seems to have the right of a legal lease, although if the rules from Re Ellenborough were not fulfilled, because it is hard to determine whether it is capable of being the subject matter of a deed an therefore Rene would only acquire an equitable interest of easement.