The Purchase of Rose Cottage

Legal Disputes Surrounding The Purchase Of Rose Cottage

Executive Summary:

This report relates to the area of property law, and summarises the details of the communications and disputes with regards to the purchase of Rose Cottage by Roberta, located in a small village called Little Hampden, in rural Nottshire from Agnes Randall, who is the Roberta’s grandmother.

This report discusses the right of way of Dora Sidcup, the competing claims between Roberta and David Appleby, the transfer of engagement rings and gold coins by Agnes Randall, the enforcement of third parties’ rights, the use of Rose Cottage’s garage, the transfer of the writer’s grandfather’s car, the gift of historical books, the transfer of share certificates as well as the right of the writer to the oak kitchen.

Introduction

Roberta purchased the house last month from her grandmother, Agnes Randall, using her student loans as well as holiday wages and inheritance to fund the transaction. Therefore, at this time the land may not be subjected to first mortgage of title of the land, However, this will “trigger” a compulsory first registration of the title at Land Registry and any further subsequently newly created registered title will be added to Land Register.

The following are details of the scenario, as well as the legal issues surrounding the transaction. On the 25th of September 2009, Agnes offered to sell Rose Cottage to Roberta at a price of £20,000, a price which is highly reduced from the actual value of the house. The house is situated on an unregistered land, this simply means; viz, that title to the land is not located in the Land Register established by the Land Registration Act, but rather it is located in the old fashioned title deeds. In short, land title which is not registered.{Dixon, 2002}. Which she leaves up to Roberta to settle the details to be signed the consequences of Roberta failing to register the title when required will revert back to her grandma who is the transferor {see s7 Land Registration Act 2002}.

On the 10th of November 2009, Agnes Randall wrote to Roberta providing the details of the lease as well as the agreement with regards to the shortcut agreed upon with her neighbour.

Legal Issues

Right Of Way Of Dora Sidcup

The first issue relates to the right of way of Dora Sidcup, a neighbour of Agnes. On the 20th of November, she wrote a letter explaining that she had used the garden of Rose Cottage for a long tithe as a shortcut, and that there is an agreement which allows her to use the shortcut for the rest of her life. The issue relating to this is whether Dora may nevertheless continue to use the short cut despite the change of ownership.

There are four characteristics of an easement were defined by the Court of Appeal in Re Ellenborough Park ([1956] Ch. 131|). Firstly, there must be a dominant and a servient tenement (the dominant tenement carries the benefit of the easement and the servient tenement carries the burden); secondly, the easement must accommodate, or benefit, the dominant tenement; thirdly, the dominant and servient tenement must not be both owned and occupied by the same person; finally, the right must be capable of forming the subject matter of a grant – the owner of the servient tenement must not be deprived of too many of their rights.

In this instance, the particular law which governs this dispute is with regards to easements. Easements are a right possessed by a non-owner of a land to use or do something over another person’s land. An example of an easement is in the case of Kelk v Pearson (1871) LR 6 Ch App 809, 811 where the court held that there exists a right to allow natural sunlight to pass into a person’s property. An effect of this easement is that the owner of a property is not allowed to prevent the passage of sunlight by building a structure which has the potential to do as such.

In relation to the formalities, section 1(2) of the Law of Property Act 1925 states that an easement is a right ‘that is capable of subsisting or of being conveyed or created at law’, this simply means, that it is capable of being a legal interest, but can only be legal if ‘for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute’. Furthermore, section 52 of the Law of Property Act 1925 provides that a conveyance of land or of an interest in land is void for the purpose of conveying or creating a legal estate unless it is made by deed.

These two requirements would seem to be satisfied in this particular instance. A legal easement is overriding and hence binding on the purchaser of a property as provided under section 70(1)(a) of the Law of Property Act 1925. However, it should be noted that in this case, since the land is unregistered, it is necessary for a notice to be put on the charges register for the purpose of making the easement binding on the purchaser. In this case, there only exist an agreement, and not a notice put out on the charges register. Further, for the easement to be a legal easements it must be granted by deed. However, the question indicates that the easement is for “life” but an easement cannot be created for an indeterminate period other than in perpetuity, thus can only take effect in equity. Even if the document found at the property constitutes as a Deed the registration of the easement is merely an equitable easement. Registration will take place in the Property Register of the title to the dominant tenement and the Charges Register of the title to the servient tenement.

Hence, the writer would like to submit that Roberta should not be bound by the agreement to provide for the easement. Aside from the deed which established easement, there is no necessity for such an easement, as the neighbouring land is not landlocked.

Transfer Of Engagement Rings And Gold Coins

On the 10th of November, Grandma left a note leaving her wedding as well as engagement rings which belonged to her mother, but which her mother left and did not return to take it back. Agnes also left some gold coins she found from the garden. The issue is whether the writer is entitled to take them as the writer’s possession.

The Latin maxim, which was coined by Accursius in the thirteenth century Cuius est solum, eius est usque ad coelum et ad inferos {the owner of the land owns everything up to the sky and down to the centre of the earth} may apply here because, in certain circumstances as the landowner Roberta will be entitled to things which are found in or on her land even if they were lost or hidden.

Although it should be noted that under section 2(a) of the Theft Act 1968, anything which is lost and left behind by a person will still be considered to belong to the original owner. A result of this provision is that to keep such property will be a commission of theft.

If the issue an abandonment of property it will therefore compromise n a res nullius.

Because we are not given the full fact of the case it therefore difficult to determine whether or not Roberta’s Mother has hidden the chattel there, believes the chattels to be lost {Rv. Ellerm [1997] 1NZLR 200} or has simply abandoned them {Hibbert v. McKiernan [1948] 2 KB}. Nevertheless, although may be difficult to establish if Roberta can demonstrate a pre-existing intension to assert effective territorial control Roberta may acquire “special Property” in any chattel found on her land. It is hence argued that the engagement rings belong to Roberta’s mother and as of such the Roberta has no claim over the engagement rings.

With regards to gold coins found from the garden, what must be considered is whether these gold coins may be considered as treasure trove.

In the United Kingdom, gold coins are considered to be treasure trove, in so far as it had been previously hidden and rediscovered and which belongs to no one, or there is no proof of ownership by anyone. The gold coins must however be more than 50% gold to be considered as a treasure trove.

If the circumstances can be shown that it was not meant to be hidden, then the finder has a right to ownership of the treasure trove. However, in other instances, there is a prima facie presumption that a treasure trove is hidden, and in such situations, under the common law, the Crown has a prerogative right towards such treasure trove. The Crown may nevertheless entitle to award these finders.

A concern about this matter is the fact that Agnes did not report the find to the relevant authorities given she believes or has reasonable grounds to believe that these coins are treasure then she must notify the coroner for the district in when the treasure trove was found this can be 14 day from the date it was found of 14 days are from they believe that the treasure trove was treasure

Under S.8 Treasure Act 1996 failure to comply with these requirements or even Under the English law, concealing the discovery of a treasure trove is a misdemeanour which is punishable with a fine as well as imprisonment. Hence, it is argued that both of these items do not belong to Roberta.

If it is established that the treasure was vested in the crown then coins will be transferred to a museum furthermore the secretary of state will determined whether or not to issue reward to museum or Roberta. However, the amount of the reward will not exceed the market value of the treasure.

Transfer Of Share Certificates

The next issue is with regards to the transfer of share certificates by Agnes to Roberta. For share stocks to be transferred, it must be executed by way of a stock transfer form. Under the Companies Act 1985, a transfer of share certificates should be delivered to the company which the shares belong to in order for a new certificate to be issued to the new shareholder. In this case, the problem is that Agnes had already left to Spain and would be unable to execute the stock transfer form.

It is however argued that as Agnes had allowed Roberta to act on her behalf, the shares should appropriately belong to the Roberta, with the document which Agnes had written as proof of such promise to transfer.

Gift Of Historical Books

The next issue is whether the gift of historical books which belonged to Uncle Fred by Agnes given to Roberta is legal, and whether the writer can obtain possession of them. According to Fred’s will, his daughter Jane is to receive the collection, but as he did not get along with Jane, he handed the books to Agnes, asking her to give it to someone else. What needs to be considered is whether the passing of these books is rightly made to the writer.

This relates to oral wills, and at present, it is made during the deathbed of Fred. This is a nuncupative will, and can only deal with distributions so long as it relates to personal property. It is generally non-operational if there exist an existing legal will, which is the case here.

It is submitted that Roberta would be unable to claim for these historical books. According to the case of Ayling v Summers [2009] EWHC B21 (Ch), Peter Langan J held that an oral will is upheld only so far as it applies to a mariner or seamen, in accordance with English law which only allows privileged wills to members of the British Merchant Navy. This is in accordance with section 11 of the Wills (Soldiers and Sailors) Act of 1918.

Return Of Oak Kitchen To Jeremy Hopcroft

The next issue to consider is whether Roberta is obliged to give the oak kitchen handcrafted by Jeremy back to him, If she was not aware of such an agreement between Agnes and Jeremy to exchange the kitchen units out and fit a cheap ‘flat pack’ kitchen in its place. This letter was written on the 10th of November 2009. On the 5th December, Jeremy had written a letter showing his desire to conclude the contract.

If that the items were not expressly mentioned in the convincing documents, whether Jeremy can legally recover the kitchen cabinets will depend on whether they are classed as a fixture or a chattel.

Section 62 of the Law of Property Act 1925 confirms this distinction in English law.

Fixtures are physical objects which assent to the realty. Any physical object classed as a fixture as a matter of law merges with the land furthermore title to it will automatically vests in the owner of the freehold. The object itself cannot be severed from the land by anyone other than the freehold owner.

Prima facie, Roberta is entitled to all fixtures on the land at the date of exchange of contracts. Therefore, if Roberta can show that the items are fixture then she should be able to recover the Kitchen as title would vest in them.

Chattels are physical objects which retain their independent character as personality regardless of the close association with realty. Thus they do not attach to the land and do not pass with a conveyance of the land except if it is stipulated in the conveyance. Therefore, if the kitchen cabinets are judged to be chattels, title to the Kitchen cabinets would have been Jeremy’s throughout. He would have been perfectly entitled to remove the items and Roberta would not be able to recover them.

The fixture and chattel distinction has two distinct but connected tests which attempt to assess the intention of the original owner of the object at the time it was bought into close association with the realty.

The first test concerns the physical degree of annexation to the land. The more irreversibly and permanently the Kitchen is affixed to the land the more probable it is considered a fixture.

A form of gravity test for a chattel has developed out of this, viz, an object that merely rests on the land due to their own weight will be classed a chattel, and furthermore one more permanently fixed will be classed as a fixture.

In the case of Holland v Hodgson (1872) spinning looms bolted to the floor were classed as fixtures, in contrast to Hulme v Bingham (1943) heavy machinery otherwise unattached was considered a chattel.

The question indicates that there is a range of the kitchen which is “Built-in” depending on how it is attached say to the floor or walls. It would seem that based on the application of this test, that range of the kitchen would be considered fixtures.

But in turn would base on how they rested on the land. In Botham v TSB Bank PLC (1996) kitchen appliances that were only connected electrically to the land which remained in position by their own weight were considered to be chattels by applying this test. Therefore, where the question indicated the range of the kitchen to be “free standing”(regardless how it is connected) would more than likely to be considered to be chattels, The more permanent manner the a range of the kitchen which is “Built-in” would likely be fixtures. (Botham v TSB Bank PLC (1996) 73 P & CR D1, CA).

Gray and Gray argue that the trend in recent case law suggests the above test is being overtaken by an alternative test concerning the objectively ( Elitestone Ltd v Morris (1997) 1 WLR 687, HL) understood purpose of the annexation.

The key question is whether the installation of the kitchen was intended to effect the permanent improvement to the realty or was merely a temporary addition to the realty intended to enhance the enjoyment of the chattel.

It is submitted that the oak kitchen is hence a fixture and not a chattel. As of such, It is further submitted that the fixture would pass to the Roberta as a bona fide purchaser and Jeremy is not entitled to take possession of the oak kitchen as the writer was not made aware of the prior agreement between Jeremy and Agnes.

It would seem that the installation of Kitchen was temporary addition to facilitate the enjoyment of Rose Cottage whilst the Grandma was in occupation. Rather than a permanent improvement to the realty, Thus Fred and Wilma appear to have a strong chance of establishing that half of the items as fixtures, title to which then passed to them with the conveyance of Rose Cottage, and thus they would be entitled to recover that element from Jeremy. However, in reality it would be impractical to have a half a kitchen to the functionality as a whole kitchen. The options available under the circumstance would be to either ask Jeremy for a like for like swap for part of the kitchen which is “free standing” or even whole of kitchen on the other hand she could keep the kitchen as a whole and compensate Jeremy for the “free standing” elements of the kitchen.

Transfer Of The Grandfather’s Car To Nottinglea Classic Car Club

The issue with regards to the passing of property is the passing of Granddad’s car, where he had left his entire estate to Agnes, who now wishes to give Roberta her Granddad’s car. However, the Nottinglea Classic Car Club claims that the car has been donated by Granddad to the club. The question is hence whether the writer is entitled to the car.

It is argued that in the absence of any proof of car having been donated to the club, and that as Agnes Randall is the rightful successor of the state of Agnes, Agnes has the right to transfer the car to Roberta.

Alexander Reynolds’ Claim for the Use of Rose Cottage’s Garage

On the 27th of November, a letter from Alexander’s solicitor came, with regards to an agreement made three years ago for the sole use of the garage above Rose Cottage for a period of three years. The issue is whether such a contract will pass along with the transfer of Rose Cottage to Roberta.

Roberta would put forth the argument that as a bona fide purchaser who was not made aware of Alexander’s claim for the use of garage above Rose Cottage, she then should not be bound by the contract. It would be up to Alexander to claim against Agnes for damages for breaching the contract by selling the house to the writer as a bona fide purchaser.

Third Parties’ Rights Against Jenny Wright And Agnes Randall’s Contracts

The next issue to consider is whether Roberta may claim from Jenny Wright the sum of £ 3, 000 which was loaned by Agnes to Jenny in 2005. This document was signed on the 20th of November 2009.

In this case, the issue relates to whether a third party to a contract may enforce such a contract. This relates to the doctrine of privity of contract under contract law. Under the doctrine, a contract can only confer rights as well as obligations to parties of the contract and no one else. Similarly, only parties to a contract may enforce their rights under said contract or to claim for contractual remedies. In the case of Tweddle v Atkinson(1861) 1 B&S 393, 121 ER 762, the court refused to grant contractual remedies despite an express provision in the contract between her father and father in law to each provide a sum of money to the claimant.

However, it is submitted that the Contracts (Rights of Third Parties) Act 1999 may be used for a claim under section 1(1)(b) of the Act which provides that a third party may sue to enforce a contract where the contract purports to confer a benefit on the third party, unless the parties did not intend for it to be enforceable.

As of such, it is argued that this contract is enforceable, and the Roberta would be able to make a claim under the contract for the sum of £ 3, 000 loaned by Agnes to Jenny.

Competing

On the 2nd December, the writer’s cousin David wrote to inform that he had been living with Agnes for 3 years, on the understanding that he is to give up his flat and live with her to supervise the renovation work, and in return, David was promised a share in the property based on the amount of tithe, expertise and effort put in the restoration project. David now wants to claim an appropriate sum to reflect his interest in the cottage.

The writer would like to argue that as a bona fide purchaser with no notice of David’s claim to the property prior to the writer’s purchase of the house, The writer is hence entitled to take good title towards the house regardless of David’s competing claims on Rose Cottage. The writer has taken the appropriate action to conclude this sale with regards to the land, taking into account the nature of the land as an unregistered land.

It is also submitted that while David could not claim his interest in the cottage from the writer, he may nevertheless take an action against Agnes for fraudulently conveying the land to the writer without giving notice as to his competing interest.

Constructive Trust

The original transaction between Roberta Grandma and David appears to purely oral. There is a logical differences between Roberta Grandma saying “ I promise to grant you this land” and “I grant you this land”. Thus begs the question of two possible interest in land either there will be two limitation Broad principles namely, that a contract or informal grant of right whether or not it will create a right in Rose Cottage or a constructive trust both will be discussed in the alternative.

There question does not give us any dates as to when David occupied the property. If David entered into this contract prior to 27th September 1989 for contract of formal grant which, will be deemed to be a contract. Therefore, an equitable interest which will be enforceable against the new owner {Roberta} The contact or the formal agreement must be in writing or evidence in writing or oral but with part performance

A fairly modern example of this illustration can be found in Mason v Clarke (1954) 1 QB 460 (1937) 57 CLR 555. Therefore if the nothing further had happened, David will be may be able to claim an equitable interest. However the fundematal factor in Mason was the traps. Therefore if it is based amount of time, expertise and effort which that David had put into the restoration project this may constitute on part performance an therefore he would have a claim.

However if contract was created after the 26th of September 1989 all contract and transfer of interest will be governed by Law of Property (Miscellaneous Provisions) Act 1989. The contrat or informal grant must be in writing signed by both parties. Any contracts or other land transcation which are oral in nature and unsigned will be void. Furthermore any subsequent events will not validate the contract.

If the latter scenario is true then David would not acquire an equitable profit. If there was an oral agreement between them it would be void. For there to be an enforceable equitable interest the agreement between David and Roberta Grandma will need to be in writing and signed by both parties.

Moreover David activities may give rise to a constructive trust interest “Discusses the repercussions of a recent House of Lords’ ruling, particularly with regards estoppel.

Cobbe v Yeoman’s Row Management Ltd [2008] UKHL 55, has highlighted again the complex inter-relationship between estoppel and constructive trusts in the contest of informal land transactions which do not comply with the requirements of writing contained in the Law of Property (Miscellaneous Provisions) Act 1989, s 2(1).

claimant, an experienced property developer, reached an ‘in principle’ oral agreement to buy a block of flats in Knightsbridge, London, from the defendant for redevelopment. Despite there being no legally binding contract, the claimant incurred considerable expenditure in obtaining planning permission for the redevelopment of the property, with the knowledge of the defendant and in reliance on various assurances the sale would be honoured if he obtained the requisite permission.

The principles under which a non-owning cohabitee may acquire a beneficial interest in property which is in the sole legal ownership of his/her partner are well-rehearsed in the landmark cases of Lloyds Bank plc v Rosset and Another [1991] 1 AC 107, HL, [1990] 2 FLR 155 and Oxley v Hiscock [2004] 2 FLR 669, CA.

The twofold requirements of common intention (express or inferred) coupled with detrimental reliance, necessary to support a constructive trust, are now firmly rooted in our law of property. The recent House of Lords’ ruling in Stack v Dowden [2007] UKHL 17, [2007] 1 FLR 1858 has also sought to clarify the relevant principles to be applied in assessing beneficial entitlement in the context of a family home which has been purchased in the joint names of the parties where one joint owner is seeking to establish that he (or she) owns more than a joint beneficial interest.

Although much of the recent case law has focused on the issue of assessment of the parties’ beneficial ownership, there is still remarkably little guidance on what detriment is required to support a constructive trust at the initial (or threshold) stage of the court’s inquiry into the claimant’s claim. This is particularly so when it comes to improvements carried out to the property by either or both of the parties subsequent to acquisition.

Single Ownership

Express Common Intention

It is evident that, in the express common intention category, very little detriment is required and a wide range of conduct may qualify to support a constructive trust: Stokes v Anderson [1991] 1 FLR 391, at p 400, CA. In Grant v Edwards [1986] 1 Ch 638, at p 657, CA, Sir Nicholas Browne-Wilkinson V-C opined that:

‘… once it has been shown that there was a common intention that the claimant should have an interest in the house, any act done by her to her detriment relating to the joint lives of the parties is, in my judgment, sufficient to qualify. The acts do not have to be inherently referable to the house.’

This liberal approach to the meaning of detriment in the specific context of an express common constructive trust is echoed in Rosset where Lord Bridge referred to the required detriment in this category as being merely a ‘significant alteration in position’ by the claimant: ibid, at p 132. In Grant, however, Nourse LJ (taking a stricter approach than that taken by Sir Nicholas Browne-Wilkinson) concluded that the detrimental conduct must be such upon which the non-owning partner could not reasonably have been expected to embark unless he (or she) was to have an interest in the house: ibid, at p 648. On either formula, however, it is submitted that expenditure on improvements or undertaking physical labour may count towards establishing a constructive trust in this category. In Eves v Eves [1975] 1 WLR 1338, CA, for example, the female partner had done considerable work, some of it very heavy, to the house and garden and was held to have entitled her to a quarter beneficial share despite the absence of any financial contribution by her to the initial purchase price of the property: see also, Briggs v Rowan [1991] EGCS 6, where the common intention was that the deceased would occupy a cottage for the remainder of her life and who had advanced just under £30,000 to enable the legal owner to construct an extension for this purpose.

The post-Rosset case of Drake v Whipp [1996] 1 FLR 826, CA is in the same category. In this case, there was a common understanding between the parties that they were both to share beneficially despite the property (a barn) being purchased in the sole name of the male partner. The female claimant had contributed to the initial purchase price and also to the later conversion works. Both parties also contributed to the conversion by way of direct labour. Having overcome the initial hurdle of establishing a common intention by evidence of express discussions, the claimant was awarded a one third share in the property based on the court’s broader approach to quantification which looked at the parties’ entire course of conduct together. This meant taking into account not only direct contributions to the acquisition and conversion costs but also their respective contributions to labour.

A more recent example of the court taking into account a broad range of factors (including improvement works) is to be found in Cox v Jones [2004] EWHC 1486, [2004] 2 FLR 1010 where Mann J, applying Oxley above, held that the female claimant was entitled to a quarter share of the beneficial ownership. In this case, as in Drake, above, the parties had had an express common intention to share the property, but there was no express agreement as to the claimant’s actual share.

Inferred Common Intention

In the absence of any finding of an agreement or arrangement between the parties to share beneficially, the court may alternatively rely on the parties’ conduct both as a basis from which to infer a common intention and as the detrimental conduct relied on to give rise to a constructive trust. The relevant conduct, therefore, serves a dual purpose when determining whether the claimant has surmounted the first hurdle of establishing a constructive trust under Lord Bridge’s scheme in Rosset.

Improvements Alone

There is also case law which suggests that a subsequent improvement by one of the parties may qualify on its own to create a beneficial share even in the absence of any financial contributions to the initial purchase or subsequent mortgage instalments. In Bernard v Josephs [1982] 1 Ch 391, CA, Griffiths LJ said (at p 404):

‘It might in exceptional circumstances be inferred that the parties agreed to alter their beneficial interests after the house was bought; an example would be if the man bought the house in the first place and the woman years later used a legacy to build an extra floor to make more room for the children. In such circumstances, the obvious inference would be that the parties agreed that the woman should acquire a share in the greatly increased value of the house produced by her money’.

The point is also addressed by Fox LJ in Burns v Burns [1984] FLR 216, CA:

‘… while, initially, there was no intention that the claimant should have any interest in the property, circumstances may subsequently arise from which the intention to confer an equitable interest upon the claimant may arise (e.g. the discharge of a mortgage or the effecting of capital improvements to the house at his or her expense)’.

There are also suggestions in Pettit v Pettit [1970] AC 777, HL, that later improvements to the property will give rise to an inferred common intention provided they are substantial in nature. Thus, in Lord Reid’s view (at 796):

‘If a spouse provides, with the assent of the spouse who owns the house, improvements of a capital or non-recurring nature, I do not think that it is necessary to prove an agreement before that spouse can acquire any right.’

Unfortunately, a different conclusion was reached by Lord Hodson, who found himself unable to agree with Lord Reid’s observation notwithstanding the latter’s open acknowledgment that there is a fine distinction between financial contributions to purchase and improvements subsequently made to the property which increase its value: ibid, at p 811. In Pettit itself, the husband’s claim failed largely because the improvements comprised merely redecoration to the house and, therefore, was characterised as having been done for the benefit of the family without altering the wife’s title or interest in the property which had been registered in her sole name. In the words of Lord Diplock (at p 826):

‘It is common enough nowadays for husbands and wives to decorate and to make improvements in the family home themselves, with no other intention than to indulge in what is now a popular hobby, and to make the home pleasanter for their common use and enjoyment. If the husband likes to occupy his leisure by laying a new lawn in the garden or building a fitted wardrobe in the bathroom while the wife does the shopping, cooks the family dinner or bathes the children, I, for my part, find it quite impossible to impute to them as reasonable husband and wife any common intention that these domestic activities or any of them are to have any effect upon the existing proprietary ri