LEVEL 6 - UNIT 9 LAND LAW SUGGESTED ANSWERS - JUNE 2015

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1 Note to Candidates and Tutors: LEVEL 6 - UNIT 9 LAND LAW SUGGESTED ANSWERS - JUNE 2015 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 2015 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. Question 1 SECTION A (a) In order to claim title to either a registered or an unregistered 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, 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 (1887)). In registered land a squatter who satisfies the basic requirement of adverse possession (possession of land with the necessary intention and without consent) can, per Schedule 6 of the Land Registration Act 2002, apply to be registered as proprietor after ten years. 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 e.g. the squatter lacks the necessary Page 1 of 15

2 intention); consent to the squatter's registration; or respond requiring the Registrar to deal with the application in accordance with Sch 6. If such a response is received, the squatter can only be registered as proprietor of the land if the 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 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. The RP has a further two years to take action to repossess 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). A claim of adverse possession of registered land will only succeed, in the face of objection from a person interested in the land, on narrow grounds. In the absence of an abandonment of the estate by the RP, or his or her failure to remove the squatter within two years of the first application, a claim is doomed to fail. It should also be noted that the squatting of residential premises is now a criminal offence (s144(1) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012). This may make it easier for the paper owner to remove a squatter, but does not impact on any claim to ownership (Best v Chief Land Registrar (2014)): if the squatter s claim is made out, the illegality will not prevent registration of his or her title. (b) For unregistered estates, once the squatter has been in adverse possession for the period required by the Limitation Act 1980 (usually 12 years (s15), although subject to exceptions for Crown land, foreshore, and land owned by patients under mental health legislation), the paper owner s title is extinguished, and the squatter becomes the legal owner. If the basic requirements of factual possession and intention to possess are made out, and the requisite period has passed, a claim to adverse possession of an unregistered estate is all but indefeasible, even if that is based on the illegal possession of residential property (Best). Question 2 Where an estate in land is owned by more than one person, a trust of land will arise (s1 Trusts of Land and Appointment of Trustees Act 1996). That trust might be express, resulting, or constructive. An express trust of land will be recognised so long as the relevant formality requirements are satisfied (s53 Law of Property Act 1925): it is made in writing Page 2 of 15

3 and signed by the settlor or settlors. It is often the case that such trusts appear on the face of the transfer of the property to the trustees. Where such an express trust is not found a resulting or a constructive trust may be implied. There is a presumption of resulting trust on the basis that the people who advance the purchase money at the time of acquisition of property are entitled to a proportion of the value of that property equivalent to the proportion they paid towards the purchase price (Dyer v Dyer (1788)). The presumption can be rebutted by evidence that the money was a gift or loan, or by express wording to the contrary (Re Sharpe (1980), Cowcher v Cowcher (1972)). A constructive trust is, in theory, imposed when it is unconscionable for the legal owner to deny the beneficial interest. According to Lloyds Bank plc v Rosset (1990), the person claiming to be the beneficiary of a constructive trust must show either: an express common intention at the time of purchase that the property be owned jointly together with detriment; or a common intention implied from the circumstances together with a contribution to bricks and mortar. Thus in Grant v Edwards (1986), the express intention was manifested by the defendant s assurance that the legal estate would be in joint names but for that it would complicate his divorce, and detriment was shown by bringing money in to the household and paying some of the bills (note that there was not direct contribution to bricks and mortar ). It seems that the detriment required following proof of an express common intention need not be great. In Hammond v Mitchell (1991) it amounted to demurring in the legal owner granting a charge over the property, although in the absence of the claimant having a demonstrable interest in the property before that point, it is difficult to see how she might have prevented the property being charged. Where there is no express common intention, the courts will look at all of the circumstances to see if such an intention can be implied. Here the claimant will have to show a direct contribution to bricks and mortar. In Passee v Passee (1988), making payments towards the mortgage was sufficient, but, tellingly, in Burns v Burns (1984) giving up work to look after the house and raise children was not. More recent decisions (Oxley v Hiscock (2004) and Stack v Dowden (2007), for instance) have demonstrated a greater willingness by the courts to impose a constructive trust (even where a resulting trust might normally be presumed) on the breakdown of cohabiting relationships. In those cases the courts seemed to recognise that the imposition of a resulting trust was a blunt instrument in determining the distribution of the asset. This, however, can only be done where the common intention and detriment or contribution can be demonstrated. If the parties have never discussed the matter, no express common intention arises and thus the claimant faces the high hurdle of showing contribution; this creates problems in the cases which seem most to require justice, where one party has given up work and career to raise a family. Earlier decisions concerned the sole ownership cases. More difficult have been the situations where the parties are joint legal owners, but where no express trust is in place. Historically, equity would follow the law, and the parties were deemed to be beneficial joint tenants. Following Stack, this approach could be Page 3 of 15

4 rebutted by strong evidence of a contrary intention between the parties. Judged against the unusual facts of that case (that the parties had punctiliously separated their respective finances throughout their relationship), it seemed that few couples would be in a position to rebut. In Jones v Kernott (2011), the Supreme Court made it clear that a resulting trust should not be applied to disputes concerning the family home (whether solely or jointly owned). Instead, the starting point in joint ownership cases would be a joint tenancy, but the bar appears to be lowered in comparison with Stack. If the objective common intention is otherwise, the presumption will be rebutted and a constructive trust applied. In sole ownership cases, a constructive trust will be applied where the claimant can demonstrate a right to beneficial ownership (whether by contribution to purchase price or pursuant to a common intention constructive trust). Once the court is satisfied that a constructive trust should be imposed, the claimant s remedy is a share that is fair having regard to the whole course of dealing between the parties (per Lord Walker and Lady Hale in Jones). Significantly, the Supreme Court held that the parties intentions could change through the course of the relationship and the ownership of the property, and that the parties respective shares could change in consequence. The application of resulting trusts to ownership of land was further eroded by the decision in Gallarotti v Sebastianelli (2012), which extended the application of Jones to all land purchased for the residential accommodation of the purchasers (in that case, two friends). This is not to say, however, that resulting trusts have no application to joint purchases of land. Purchases for commercial purposes do not fall into the Jones classification; nor would the Gallarotti approach appear to extend to, for instance, the part funding of purchases of homes for children or parents by a non-residing parent or child respectively. Question 3 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 a claim derived from the probanda in Wilmott v Barber (1880), which required that: (i) the claimant made a mistake as to their 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. Modern cases have tended to be less strict about the Wilmott probanda, preferring to address issues of representation or assurance; reliance; and detriment (Thorner v Major (2009)). Difficulties have arisen where the facts of a proprietary estoppel claim are based on a commercial agreement between the parties which does not comply with the Page 4 of 15

5 statutory requirements for the creation or transfer of interests in land (s2 Law of Property (Miscellaneous Provisions) Act 1989) (LP(MP)A89). Such difficulties did not arise prior to the 1989 Act, as s40 of the Law of Property Act 1925 (LPA) recognised such contracts without writing if evidenced by part performance (and such part performance was recognised by equity as a detrimental act). Section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 requires that contracts for the creation or transfer of an estate or interest in land must be in writing, contain or refer to all of the express terms, and be signed by or on behalf of all parties to the transaction. Subsection 2(5) contains limited exceptions. These include certain short leases, contracts made at auction, and, most significantly implied resulting and constructive trusts. Since the coming into force of that Act, the courts have had a number of opportunities to consider the relationship between proprietary estoppel and s2, and the relationship between proprietary estoppel and constructive trusts. In Godden v Merthyr Tydfil Housing Association (1997), the claimant pleaded that the defendant was estopped from denying the validity of an informal agreement for a right of way. The Court of Appeal, citing Halsbury s Laws, demurred, and stated that, "The doctrine of estoppel may not be invoked to render valid a transaction which the legislature has, on grounds of public policy, enacted is to be invalid." In Yaxley v Gotts (2000), there was an informal agreement that Gotts would purchase land for redevelopment by Yaxley, in return for which Yaxley would receive two of the six flats constructed on the property. No point was taken on formality requirements at first instance, and the claimant succeeded in his proprietary estoppel claim. On appeal, the court considered the formality requirements, but held that, If an estoppel would have the effect of enforcing a void contract and subverting Parliament s purpose, it may have to yield to the statutory law which confronts it, except so far as the statute s saving for a constructive trust provides a means of reconciliation of the apparent conflict. In this case, the pleading of an estoppel was held successful, as it gave rise to a constructive trust. This led to proprietary estoppel and constructive trusts seeming synonymous and being applied in unlikely situations such as mortgages (Kinane v Mackie-Conteh (2005)). The House of Lords in Cobbe v Yeoman s Row (2008) had some opportunity to review the relationship of estoppel and constructive trusts, but, as the claimant could not make out an estoppel on the facts (for want of certainty), the comments are obiter. Here, the Lords 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, positing that there was a distinction between proprietary estoppel and constructive trust cases and that a simple plea of estoppel would not be rubber stamped as a constructive trust. It is fair to say, however, that some inferior judges were quick to distinguish Cobbe (see, for instance, Herbert v Doyle (2010)) and to permit the claim of estoppel to succeed notwithstanding the informality of the agreement. Page 5 of 15

6 In its later decision in Thorner v Major (2009), a proprietary estoppel case based on the claimant working his father s cousin s farm for no pay on the expectation of receiving it on the owner s death, the Lords sought to distinguish the classic farm and family proprietary estoppel case, which has no contractual connection from the more commercial, contractual claims such as in Cobbe. It seems that the Lords and the Supreme Court s more recent decisions have sought to resolve the uncertainty surrounding the application of the provisions of s2 in cases based on proprietary estoppel. In the farm and family cases, s2 has no part to play, and if made out, the estoppel will be enforced. Even in commercial cases, a plea based on proprietary estoppel can succeed provided a constructive trust arises, as was the case in Yaxley. Whilst the decisions in Cobbe and Thorner may have limited the utility of a proprietary estoppel claim in some commercial cases, it cannot be said that s2 precludes such a claim in most circumstances. Question 4 The extent of interests to which someone acquiring a registered estate takes subject is determined by the rules for determining the priority of interests affecting a registered estate. Section 28 Land Registration Act 2002 (LRA 2002)) simply provides that interests rank in order of creation, irrespective of whether they are on the register or not. A person acquiring a registered estate who is subject to this section, will, then, take subject to all prior interests affecting the estate. However, where the transaction is a registered disposition for value completed by registration, s29 LRA 2002 provides that the new registered proprietor takes 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 of the LRA 2002 (including freehold transactions; the grant of a lease of more than seven years; the transfer of a registered lease; or 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). Interests which override such registered dispositions are listed in Schedule 3 of the LRA They include certain short legal leases (not exceeding seven years, but 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). It should be noted, however, that the process of moving in to property is not sufficient. In Abbey National v Cann (1990), Mrs Cann claimed priority over the building society s charge by actual occupation: she commenced moving in a short time before completion occurred. The court held that these were merely acts preparatory to taking occupation. Page 6 of 15

7 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). The occupation must involve some permanence and physical presence (Mallory Enterprises v Cheshire Homes Ltd (2002), although 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). Such absences can be extensive: in Link Lending Ltd v Bustard (2010), the claimant had been absent from the property for some months, having been compulsorily detained under mental health legislation, but was held to be in actual occupation nonetheless. Longer, and voluntary, absences may, however, vitiate any occupation. In Stockholm Finance Ltd v Garden Holdings Inc (1995), an absence of more than a year whilst the claimant was abroad was not consistent with her being in actual occupation. It is important to note, though, that the mere storage of possessions at residential premises occupied by a third party will not amount to actual occupation (Strand Securities v Caswell (1965)). The occupation must be "obvious on a reasonable careful inspection" or known of by the purchaser. In Thomas v Clydesdale Bank Plc (t/a Yorkshire Bank) (2010), the court suggested that the presence of builders at a property undergoing renovation, coupled with the claimant s daily visits, was likely to amount both to actual occupation (taking in the nature and purpose point from Cann) and made that occupation obvious on a reasonably careful inspection (noting that an inspection carried with it the obligation to make enquiries of people at the property). 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. Prescriptive or implied legal easements will override provided they would be obvious on a reasonable inspection of the estate; or have been exercised in the year prior to the transaction in question (para 3). A person other than a purchaser of a legal estate for value who is subsequently registered as proprietor will take subject to all prior interests. That purchaser of the legal estate for value is in a somewhat better position as he or she will only take subject to those interests not shown on the register which override. These will likely have been obvious on a reasonably careful inspection, so that purchaser could or should have known of them, or, in the cases of short leases, are not likely to be terribly onerous (they are short lived interests and are likely to be income producing in any case). Question 1 (a) SECTION B The rules for determining the priority of interests affecting a registered estate (ss28 to 30 Land Registration Act 2002 ( LRA02 )) are that interests rank in order of creation (irrespective of whether they are legal or equitable interests) unless Page 7 of 15

8 the instant transaction is a registered disposition for value, which is subject only to those matters on the register or which override (per Schedule 3 LRA02). A registrable disposition is one of the transactions listed in s27 of the Act. A failure to register such a transaction means that it takes effect in equity only (s27). A legal mortgage over registered land can only be created by deed (s23 LRA02). In order to be effective, the deed must comply with s1 Law of Property (Miscellaneous Provisions) Such a charge amounts to a registrable disposition. Thus, in order to take effect at law, it must be substantively registered. If it is not so registered, it can take effect only in equity. It is assumed, in the absence of suggestion to the contrary, that the deeds in the instant case are compliant with s1. A contract to mortgage is not capable of being a legal interest, but may take effect in equity provided that it complies with the requirements of s2 Law of Property (Miscellaneous Provisions) Act Bilal s charge is a registrable disposition and, therefore, in the absence of registration it takes effect in equity only. It is, however, protected by notice on the register. The wording here implies that the absence of registration makes the charge equitable. It takes effect in equity because it is a contract to grant a charge not because of an absence of registration, (provided that s2 LP(MP)A has been complied with). Similarly, Barchester Bank s charge is a registrable disposition. As it has not been registered it takes effect in equity, and is otherwise unprotected. Both Wagontrail s and Xanadu s charges are registrable dispositions, and both have been completed by registration. Both take free of Barchester s unprotected charge, but subject to Bilal s. Xanadu s charge has priority over that of Wagontrail, despite the deed for the latter being earlier executed, as Xanadu s charge was registered first. The final order of priority is, first, Bilal s charge, followed by that of Xanadu Bank Ltd, then that of Wagontrail Ltd, and finally Barchester Bank s charge. (b) Xanadu, as mortgagee, could enforce the loan in a number of ways. First, it is settled law that a secured lender cannot be in a worse position that an unsecured lender. Thus the lender could simply sue on the covenant to repay (Palk v Mortgage Services Funding (1993)). This is unlikely to be a viable option if Anwar has no other assets. Traditionally, a secured lender might foreclose, but this is now rare. This involves the debt being satisfied by the transfer of the whole of the beneficial interest in the property to the lender. This might appeal to Xanadu if the property is in positive equity, but any attempt to foreclose is likely to be met with a successful application by Anwar under s91 of the Law of Property Act 1925 (LPA 1925) for an order for sale. It is most likely that the Xanadu will wish to realise the security by selling it. Page 8 of 15

9 The mortgagee s power of sale arises, per s101 LPA 1925 if the mortgage is by deed; there is no contrary provision in the deed; and the legal date for redemption (not for making of repayments) has passed. If this is an ordinary institutional mortgage, the first two points are likely to be made out, and the redemption date is likely to be the date of the deed or a few months after. The power is likely, then, to have arisen. It cannot be exercised, though, until s103 LPA 1925 has been satisfied. This requires either three months default of payment after a notice has been issued; two months default of payment of interest; or a breach of some other covenant. Assuming that this is an interest bearing mortgage, so long as there has been two months default of payment, Xanadu can exercise the power of sale. If it exercises the power, it holds the proceeds of sale on trust to pay expenses and the outstanding debts secured against the property in order of their respective priorities, with any balance reverting to the mortgagor. The difficulty Xanadu might face is if the amount owed to Bilal leaves insufficient funds to satisfy its own outstanding sums. If ss101 and 103 are satisfied, Xanadu could consider appointing a receiver to manage the property and to receive the income until the outstanding amounts are satisfied. The property is commercial, and presumably has income from its tenants, but Xanadu faces the same difficulty as exercising the power of sale: Bilal s charge has priority for any payments (s109 LPA 1925). Should Xanadu seek to exercise its power of sale, it will be unlikely to sell the property without vacant possession, so may wish to exercise its inherent right to possession of the property securing the debt (s95(4) LPA 1925). Common law states that this right may only be exercised bona fide for the purposes of enforcing the security (Quennell v Maltby (1979)). It is clear that Anwar is in arrears, so such possession would probably be considered appropriate. If Anwar does not surrender the property voluntarily, no court order will be needed to evict him, as this is a commercial property. Similarly, Anwar will not be able to seek a postponement under s36 Administration of Justice Act 1970, as this applies only to residential property. Xanadu is advised to determine whether there would be sufficient equity in the property after satisfaction of Bilal s charge before seeking possession and exercising the power of sale. Question 2 In order for the various obligations to be enforceable against the purchasers of the houses, and against their successors, it will be necessary first to incorporate the obligations as covenants into the transfers of the houses. As between the original covenantee and covenantors, the obligations 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 passed to both in 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 Page 9 of 15

10 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, which deems such an intention). In this instance, as Catherine is retaining land to be benefited she will retain the original benefit. When she assigns her retained land, the assignee will also have the benefit of all of the covenants at law. She will be able to enforce them against the original covenantees so long as she remains the servient tenement owner. The burden of covenants does not, subject to some exceptions, run with the servient tenement's ownership at law (Austerberry (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. Provided the transfers of the houses contain rights to use the service roads and sewer, then the obligation to pay a share of the cost of maintenance will run to successors of the original covenantors and be enforceable by Catherine or her successors. The benefit 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 Thus, per the ratio in Federated Homes Ltd v Mill Lodge Properties Ltd (1980), the benefit will run unless the conveyance states otherwise. Per Crest Nicholson v McAllister (2004), the extent of the benefited land must also be clear. Any successor of Catherine will, then, take the benefit of all of the covenants in equity. The burden will run in equity pursuant to the rule in Tulk v Moxhay (1848): the covenant must be restrictive in nature (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. Finally the purchasers must have notice (the covenant must be registered). Both an obligation not to use the properties for business purposes, and to seek permission for building works are restrictive in nature, and, assuming the other aspects of Tulk are made, will run in equity to any successors of the original covenantors. Page 10 of 15

11 It may also 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 compliance with the covenant which is sought. 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, but this can be unwieldy, and, it would appear, unnecessary in this case. An alternative approach would be to create a building scheme. For a building scheme to be effective, the rule in Elliston v Reacher (1908) must be satisfied: Claimant and defendant must both derive title from a common owner The common owner must have, prior to the sale of plots, laid out a definite scheme of development There existed an intention to impose a scheme of mutually enforceable restrictions on all owners of land in the development Every buyer of land knew of the scheme and intended to be bound by the covenants Following the decision in Reid v Bickerstaff (1909), the area affected by the scheme must be clearly defined. An advantage of a building scheme is that restrictive covenants are mutually enforceable. This means that Catherine could still be sure that the owners could enforce the obligations should they wish to, even if she parted with her estate. If a building scheme were created, the obligation to contribute to the cost of maintaining the road would be effective in law per the rule in Halsall v Brizell, and the user and building covenants mutually enforceable. As with direct covenants, establishing a building scheme would not appear to be necessary in this instance. Catherine is advised to incorporate the three requirements as covenants in each of the transfers of the five homes to be sold. Question 3 (a) 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. The legal estate cannot be held other than by joint tenants (s1(6) Law of Property Act 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. Page 11 of 15

12 On the purchase of an estate, law and equity raise certain rebuttable presumptions about the ownership. As to the legal estate, this will be held by the first four named purchasers capable of owning the legal estate, unless the deed specifies otherwise (s34 Trustee Act 1925). Here the express wording will prevail, and in the absence of information to the contrary, the legal estate will be held by Derek, Eugenie, Frankie and George on trust for themselves as joint tenants in equity. 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, 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. 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. The various means of severance include: Notice s36 LPA 1925; mutual agreement Burgess v Rawnsley (1975); course of dealing Re Draper s Conveyance (1969); alienation (including bankruptcy) Brown v Randle (1796), First National Securities v Hegarty (1985); homicide Re Crippen (1911) (subject to relief under the Forfeiture Act 1982: see Re K (1985)). The agreement between Derek and Eugenie, whilst unenforceable (there is nothing to suggest a contract compliant with s2 Law of Property (Miscellaneous Provisions) Act 1989), does amount to a mutual agreement, and will result in Derek s share being severed. His estate, therefore, holds ¼ of the beneficial estate as a tenant in common, with the remaining parties holding ¾ of the beneficial estate as joint tenants inter se. Survivorship applies to the legal estate, which is now held by Eugenie, Frankie and George. Assuming that the sale of Eugenie s share was compliant with s2 Law of Property (Miscellaneous Provisions) Act 1989, it will effect severance by alienation, with Harvey acquiring ¼ of the beneficial estate as tenant in common. Derek s estate retains its ¼ share as tenant in common, with Frankie and George holding ½ as joint tenants inter se. The transaction will, of itself, have no effect on the legal estate, which remains held by Eugenie, Frankie and George. Whilst charged with murder, Frankie has been acquitted, and it would follow that there has been no severance by homicide. She acquires George s share by survivorship, and holds ½ of the beneficial estate. Harvey and Derek s estate hold ¼ each as tenants in common. Survivorship also applies to the legal estate, which now vests in Eugenie and Frankie. (b) The relevant provision of the Trusts of Land and Appointment of Trustees Act 1996 include the prima facie right for a beneficiary to occupy (subject to the intentions of the settlor) (ss12 & 13) and the right of any party with an interest in the property to apply to the court for an order for, inter alia, sale (s14). The Act lists various factors the court will take into account (s15). There is also a requirement that the trustees consult the beneficiaries (s11). Page 12 of 15

13 Frankie has, then a prima facie right to occupy (it seems likely under the circumstances that there is room). If Harvey applies to the court to order sale, the court may take the view that the purpose of the trust has all but failed (in that most original parties have left or died) and that the interests of the other of the beneficiaries are no longer served by the retention of the property. Moreover, it is likely that the remaining beneficiaries, if consulted, would wish the property sold to realise their assets (Derek s estate is unlikely to want to retain). Question 4 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 (see Webb v Bird (1863)). A right of way has long been recognised as a right capable of amounting to an easement. Indira should have no difficulty here. Rights to park are less certain. It is long settled law that a right claimed by way of easement cannot exclude the servient tenement owner from his own land (Copeland v Greenhalgh (1952)). Thus it was held in Newman v Jones (1982) that a right to park cannot amount to an easement if the right refers to a specific parking space. Rights to park in a larger area are more problematic. London & Blenheim Retail Parks v Ladbrokes (1993) suggested, albeit obiter, that a right to park in a nonspecified space, in common with others, in a larger parking area may be capable of being an easement. The decision in Batchelor v Marlow (2001) held that the key is whether the user is exclusive and whether it deprives the servient tenement owner of the reasonable use of his land. This approach was not followed by the Lords in the Scottish case of Moncrieff v Jamieson (2007). If the ratio is followed by English courts, a right to park may qualify as an easement provided the servient tenement owner retains possession and control of the land (even if he cannot practically use the land). Page 13 of 15

14 Even if the industrial estate car park is relatively large, and Indira does not always use the same parking space, any claim may fall at this hurdle unless a court can be convinced to follow the obiter dictum from London & Blenheim, or the persuasive authority of Moncrieff. In the absence of an express or implied grant a claimant may rely on long user to claim a prescriptive easement. A prescription claim has three basic requirements. The user must be nec vi. That is without force; this connotes unlawful acts, rather than violence per se. In Brandwood and others v Bakewell Management Ltd (2004), a claim for a prescriptive right of way was resisted on the basis that the user, involving driving on common land, was unlawful. The court took the point that it was an offence to drive on common land only in the absence of lawful authority. The fiction of prescription gave the user lawful authority. There is no suggestion of force in Indira s use of the car park, and her use of the track would appear to fall within the exception in Brandwood. The user must be nec clam (without secrecy; this connotes that the user is readily apparent to the servient tenement owner, rather than any intent to deceive see, for instance, Diment v NH Foot Ltd (1974)), and, finally nec precario (without permission). The user must also be continuous (infrequent user will not suffice: Hollins v Verney (1884)) and by the fee simple owner of the dominant tenement against the fee simple of the servient tenement. There is nothing to suggest that Indira cannot make out these points as to the use of the track, but if the car park is unpoliced by the estate owner, and is used by a significant number of vehicle owners, including visitors, it could be argued that her user would not be readily apparent. Once the basic requirements are made out, a claim may be brought under one or more of three bases. Under the common law doctrine, if the claimant can show twenty years user, a presumption arises that there is a prescriptive easement. This is easily rebutted by evidence that the user cannot have existed since time immemorial (since 1189). Thus in Duke of Norfolk v Arbuthnot (1880), the presumption of a right of way to a church was rebutted by evidence that the church was built (only) in Since it is most unlikely that any piece of land has been used in the same way for nearly 1000 years, a claim at common law is almost inevitably doomed to failure. The doctrine of lost modern grant relies on the fiction that a grant was once made, but that the deed has been lost. Provided the claimant can show twenty years user, and the defendant cannot show that such a grant was impossible (perhaps because at the relevant time there was no capable grantor) the claim is made out. The requirements for a claim under the Prescription Act 1832 depend on whether the claimant can show 20 or 40 years long user. Where a user has been enjoyed without interruption for 20 years next before action, it will not be defeated by Page 14 of 15

15 proof that it commenced later than 1189, but it may be defeated in any other way possible at common law, for instance by establishing that the use had not been as of right (s2 PA 1832). Where an easement has been enjoyed without interruption for a period of 40 years next before action, it will not be defeated unless it appears that the user was enjoyed by some consent or agreement expressly given for that purpose by deed or in writing (s3 PA 1832). Interruptions must be hostile (in that they interfere with and prevent the exercise of the claimed right) and of at least a year in duration. Indira can evidence user of the track from 1990 to date. She can make out her claim based on both lost modern grant and under the shorter period of the 1832 Act. She must, though, act promptly to save her claim under the Act, as the concrete posts amount to an interruption. Her claim to park cannot succeed in an action under the Act irrespective of any issues of capability or fulfilment of the basic requirements, as she has acquiesced in the interruption of the user for more than a year. Subject to those issues of capability and basic requirements, she might succeed based on lost modern grant, as she can evidence 20 years user prior to the land being gated (see Hayling v Harper (2003)). Page 15 of 15