Examiners report 2011

Transcription

1 Examiners report 2011 Examiners report Land law Zone B Introduction In this introductory section you will find general observations on examination performance, and also an indication of some of the Examiners expectations. The aim is to guide your thinking about how to prepare for a Land law examination. It is also hoped that these comments will assist you in developing productive techniques for writing good answers under timed conditions. The remainder of the report is devoted to feedback and suggestions that focus on each of the eight questions on the 2011 paper. Although the comments are designed to help you both with the substance of, and techniques for, approaching each question, they are merely pointers. Therefore they are not to be taken as being model answers. Similarly, although the comments may mention specific cases, statutes or other secondary sources, such references are not intended to be exhaustive or definitive. You are reminded that there is a wealth of resources you can access to assist you with your study. Apart from the subject guide and study pack you can find a range of online VLE resources (such as the Land law online audio presentations) to support your learning. There are also annual publications of Recent developments, and Newsletters on current cases and topics of interest, which can help you in keeping up-to-date with significant judicial and other developments. In addition, it is recommended that you make a careful study of Chapter 1 of the subject guide, and the references it contains to other sources. They offer ful ideas on productive study methods to adopt during the year, and ways of preparing effectively for the examination. You will also find a helpful Newsletter (October 2007) devoted to the topic of preparing for the examinations. Good answers come in many different forms. However, features that might commonly be found in a good answer to a problem question are: identification of the relevant legal issues, and accuracy in stating the relevant law and its careful and considered application to the material facts. If the law is unsettled then it will be valuable to advise on such alternative possibilities that may lead to different outcomes on the facts. As far as possible, you should give your answer a systematic structure, ideally one that reaches a concluded view on each issue before moving to deal with the next. It may be that an issue in the problem question will expose a gap in the law, or be one where the law is contested (perhaps beca there are conflicting authorities ). This illustrates an opportunity for you to add a reasoned, critical component to your answer. In doing this you may find that it will help to refer to secondary sources, such as Law Commission publications or scholarly books and articles. A good answer to an essay question may contain many similar features. However, it is essential that you pay close attention to the precise terms of the essay title, and engage with the language and ideas explicitly (or implicitly) found in the title. It is also important that you take the utmost care in expressing your ideas, so that your meaning is plain and unambiguous. Examiners will undoubtedly be grateful and impressed by attention to detail and by neatness in presentation beca these are attributes that help to show you have put thought into your answer and the presentation of your work. Of course, all the advice above assumes that a good answer will show that you have a sound knowledge of the law. Examiners will always seek to award marks to 1

2 Land law answers that contain accurate and detailed legal information. As in recent years, a significant number of candidates clearly possessed a reasonable and competent level of knowledge. All too often however, many candidates failed to capitilise on their knowledge by applying the material they had memorised to answer the specific question. You should keep in mind that the examination is designed to test understanding, not regurgitation. There were also a worrying number of candidates who did not complete four answers. It is hard to be certain if this is cad by question-spotting or time mis-management. The examination is designed to test your understanding of the whole syllabus and requires good management in dividing the time available between the four answers. Otherwise the effect can be to lower the (pass) mark achieved or, worse, may result in a failure to reach pass standard. It is therefore in your best interests that you attempt the required number of questions. Specific comments on questions Question 1 The current law on freehold covenants is defective in a number of respects. The law fails to allow the burden of positive covenants to run with the land, and its rules relating to the running of the benefit of covenants is unduly complicated. However, rather than simply addressing these two defects we need a wide-reaching and fundamental reform of the law on freehold covenants. Discuss. One of the challenges of this question on freehold covenants (subject guide, Chapter 9) is that the question contains a number of different propositions that require discussion. These can be d to structure the answer but too many answers ignored them completely. Rhone v Stephens (1994); Federated Homes Ltd v Mill Lodge Properties Ltd (1980); Crest Nicholson Residential (South) Ltd v McAllister (2004); ss.78 and 79 of the Law of Property Act 1925; Law Commission, Easements, Covenants and Profits à Prendre (Law Com CP No 186, 2008); Cooke [2009] 73 Conv 448. included writing generalised answers which did not relate material to any part of the essay question and the inclusion of legal material about leasehold covenants. Select the important terms from the quotation and identify and respond to the different aspects of the topic that call for discussion. Show an understanding of the relevant legal issues and the many suggestions made for its reform over the years particularly the most recent work by the Law Commission. 2

3 Examiners report 2011 Contained only general information on freehold covenants and paid insufficient attention to the precise ambit of the question provided by each of the propositions in the quotation. Question 2 Eastern County Council owns the registered freehold title to Dalton Manor, which it occupies until 1996 before it moves its administrative headquarters to a new site. Dalton Manor is about four hectares of land, comprising a large building, a cottage and a garage. Eastern County Council now wants to sell Dalton Manor to raise capital funds. When Oliver, their surveyor, visits the property he discovers the following: (a) Jolene is occupying the cottage, and claims to be a squatter. She tells Oliver that she broke the lock of the front door in January 2000, and then moved in. She immediately mended the roof and installed a new heating system. She admits to Oliver that although she has lived in the cottage ever since, she fully expects that one day Eastern County Council may ask her to leave, or pay rent. (b) Tom is making of the garage. Tom shows Oliver a copy of a contract for sale (dated 1998) by which Eastern County Council agreed to sell him the garage. Tom also produces a receipt for the purchase price. (c) the boundary fence between Dalton Manor and the neighbouring Willow Farm appears to be in a different place from that shown on the plans Eastern County Council gives Oliver. Consequently, a small part of land that belongs to Dalton Manor is on the wrong side of the fence. Oliver speaks to Pat, the owner of Willow Farm. She explains how, in 1999, she put the fence up in place of a fire-damaged hedge, erecting it where her lawyer told her the boundary lay between Willow Farm and Dalton Manor. Advise Eastern County Council as to whether Jolene, Tom or Pat can make a successful claim to be registered as proprietors of the parts of Dalton Manor they occupy. Indicate briefly how, if at all, your advice about Jolene s claim would be different if her legal position was governed by (i) unregistered land law rules; and (ii) the Land Registration Act The main focus of this question is on the post-2003 regime on adverse possession as it applies to freehold title under the Land Registration Act 2002 (subject guide, 11.3). This was a popular question with candidates. Schedule 6 to the Land Registration Act 2002 (LRA 2002); s.75 Land Registration Act 1925; ss.15 and 17 of the Limitation Act 1980; and JA Pye (Oxford) Ltd v Graham (2003). Failing to engage with the detailed statutory provisions contained in the LRA 2002, especially the provisions in Sch 6, para 5. 3

4 Land law Identify the (common law) elements of a successful claim to adverse possession (especially factual possession and intention); and draw on relevant case law to apply each element of the claim to the facts most notably those relating to Jolene s of the cottage. Consider the potential application of the relevant legislative exceptional circumstances which indicate if/when a claim might succeed even if Eastern County Council were to object to Jolene, Tom or Pat s applications to the Land Registry. Cover the final part of the question by disposing of (i) and (ii) as they apply to Jolene s claim briefly as the question indicates. Included descriptive material that had little or no relevance to the question, such as adding a lengthy account of the developments in the case law concerning the (now settled) question of compatibility between the law on adverse possession (before and since the LRA 2002) and the Human Rights Act Question 3 In 2005 Carlos purchased a shop in which to sell carpets. He d his savings to pay 5% of the purchase price. Although the Big Bank declined to make Carlos a loan, one of his regular suppliers, Rugland, advanced the balance of the purchase price, subject to having a registered charge over the title to the shop. The mortgage was for a period of 15 years. Carlos signed a mortgage deed, in which he agreed to: (i) pay 10% above the highest rate of interest charged by the Big Bank; (ii) buy all his supplies of carpet adhesive from Rugland; and (iii) give Rugland an option, exercisable for the first 10 years of the loan period, to buy the car park at the rear of the shop. In 2011 Carlos s business began to fail and he was therefore unable to make two monthly repayments to Rugland. Last month he decided to leave the premises and move abroad. He handed the keys to Rugland. Carlos also removed a glass display cabinet, which his late father made especially to fit in the shop, and to which he has a sentimental attachment. Last month Rugland s estate agent valued the shop at 400,000. One of Rugland s managers, Sandie, has expressed an interest in buying the shop if she can get it for a good price. Discuss whether: (a) Carlos has any legal basis to challenge the validity of the terms of the mortgage; (b) Carlos is entitled to remove the glass display cabinet; and (c) Rugland may sell the shop to Sandie. There were a number of competent answers to this question. There are a considerable number of issues that can be legitimately discussed. Part (a) requires an examination of the different ways in which the mortgagor s equity of redemption may be protected by the application of different legal grounds, such as clogs and fetters and unconscionability (subject guide, 10.2; study pack, pp ). This is a rich area in terms of relevant case law. In part (b) the discussion should be narrowly trained on the possible application of the legal guidelines in discussing if the cabinet is a fixture or chattel. Part (c) is concerned with the validity of a 4

5 Examiners report 2011 proposed exercise of the mortgagee s power of sale by Rugland in favour of one of its employees (subject guide, ). Among the wealth of relevant case law and statutory provisions that would be worthwhile to draw on in discussing this question are: Multiservice Bookbinding Ltd v Marden (1978); Cityland & Property Holdings v Dabrah (1968); Kreglinger v New Patigonia Meet & Cold Storage Co Ltd (1914); Samuel v Jarrah Timber & Wood Paving Co Ltd ((1904); Reeve v Lisle (1902); Jones v Morgan (2002); Farrers v Farrers Ltd (1880);Tse Kwong v Wong Chit Sen (1983); Holland v Hodson (1872); Elitestone v Morris (1997)); as well as the Law of Property Act 1925, ss.101 and 103. There were no common errors but see below for details of both good and poor answers. Explicitly adopt the structure (a), (b), (c) which is suggested by the question, without adding a lengthy general introduction. Explore as many different cas of action (or alternative arguments) that may possibly be raised in the advice (for example on the validity of each of the three terms of the mortgage in (i), (ii), and (iii)) even if some cas of action are unlikely to succeed. It can be a worthwhile technique, which helps to make the answer comprehensive, to raise and dismiss potentially relevant grounds of legal challenge. Be structured so that the more tricky/moot points are dealt with in relative detail and depth whilst the more straight-forward matters (such as part (b)) are discussed quite briefly. Question 4 Dot owns the registered freehold title of a large terraced ho, Mon Repose, which is subdivided into four separate flats. She lives in the basement flat. In 2007 Dot writes to her sister, Ethel, and invites her to move into the first floor flat free of charge. Ethel moves in. She is grateful for Dot s offer beca she has been homeless since her husband s death. Dot s letter tells her that she may stay in the flat until I sell Mon Repose. In 2008 Dot agrees to lease the ground floor to Grant for five years at 150 per week. She allows Grant to move in. In 2010 Dot allows two students, Woody and Terri, to move into the one bedroom attic flat. Dot, who wrongly believes them to be a couple, gets them both to sign identical agreements. Woody s lecture timetable means he signs his agreement a day later than Terri. Each document is headed: Licence Agreement, and provides that Dot will retain a key to the attic flat to allow her to change the bed linen each Friday between and am. Under the terms of the agreement, Woody and Terri also agree to be liable for the whole of the rent. After a few weeks, Dot starts to leave the fresh bed linen outside the attic flat door beca Woody and Terri like to sleep late and so ask her not to disturb them. 5

6 Land law What, if any, rights do Ethel, Grant, Woody and Terri have to occupy their respective flats in Mon Repose? This proved to be a very popular question. It raises a range of issues concerning the nature of any rights Ethel, Grant, Woody and Terri may have to occupy the three parts of Dot s ho. This involves discussing different permutations concerning licences (subject guide, Chapter 7) and leases (subject guide, ). As a rule, candidates answers dealt with these with a reasonable measure of success. Thorner v Major (2009); Walsh v Lonsdale (1882); Street v Mountford (1985); Antionades v Villiers (1990); Prudential Assurance Co Ltd v London Residuary Body (1993); Ashburn Anstalt v Arnold (1989); Walsh v Lonsdale (1882); s.2 Law of Property (Miscellaneous Provisions) Act 1989; s.54(2) Law of Property Act Errors occurred when candidates misinterpreted the facts about Dot s arrangement with Grant so as to see it as creating a lease rather than an agreement for a lease. Maximise the potential to give advice on alternative legal possible solutions whenever the facts and/or law permit. For instance, if Dot s letter to Ethel cannot create a valid lease (beca the maximum duration is not stated with sufficient certainty), the advice might consider what other legal basis Ethel may (or may not) to be able to claim property or other rights to occupy the flat (such as via proprietary estoppel). Failed either to have a detailed grasp of the relevant principles and case law and/or to take enough care when applying the law to the specific facts. Question 5 Ty Du is a small cottage with its own garden, which forms part of Brian s extensive estate, Whiteacre. The main farm ho belonging to Whiteacre benefits from its own tarmac drive leading to the main road, but Brian finds it quicker to cross through Ty Du s garden whenever he needs to walk to the main road. Ty Du s drains connect to the main sewer by running under Whiteacre, although Ty Du is also served by a cesspit at the bottom of its garden. In 2008 Brian grants Rory a three year lease of Ty Du. Rory does not object when Brian continues to cut through Ty Du s garden to reach the main road. Three months later, Brian gives Rory permission to leave his camper van in one of Whiteacre s disd stables during the winter months. In 2011 Brian sells Rory the freehold title of Ty Du. A month later, Brian sells Whiteacre to Jennifer. Jennifer wants to remove all the underground drains beneath Whiteacre, and she also asks Rory to stop using the stable belonging to Whiteacre. Rory is so annoyed at Jennifer s behaviour that he padlocks his garden gate to stop her from walking through Ty Du s garden. Advise Rory. 6

7 Examiners report 2011 This question calls for advice on the ability to establish an entitlement to three easements: the right of way through Ty Du; the underground drains; and the right to park the camper van in the stable (subject guide, 8.1; study pack, pp ) The advice also requires a consideration of one or more of the available methods of implied creation (necessity; common intention; the rule in Wheeldon v Burrows and s.62 of the Law of Property Act 1925). It might, or might not be available to argue that the three rights have actually been created as easements (subject guide, 8.2.2; study pack, pp ). All in all, there are therefore a considerable number of issues about which Rory needs to be advised. It is important to find ways of avoiding repetition when dealing with each of the three rights being claimed, and to ensure that due weight is given to those issues specifically prompted by the facts. Amongst the cases that might be ful are Re Ellenborough Park (1956) and Moncrieff v Jameson (2007). Stating the four traditional characteristics identified in Re Ellenborough without advising on their potential application to the facts. Failing to identify correctly which are claims to implied reservation and which are implied grant. Find an efficient order for making the individual points in the advice into a coherent answer. Make the coverage as comprehensive as possible, raising all the potential arguments for and against available methods of creation. Were deficient in one or more of the following: limited coverage of the issues, the detail of the law, or in its application to the facts. Question 6 In 2004 Adam and Ian decided to buy a small cottage and live together. Adam s parents gave them 5,000, which they d to pay the deposit. Adam took out a mortgage, in his sole name, to cover the balance of the purchase price; the title to the cottage was also registered in his sole name. Adam also paid all the mortgage instalments while Ian d the wages from his job as a hotel chef to pay towards the hohold energy bills, buy food and meet all the costs of running the motorcycle they share. In 2007, when Ian s father died, he d a small legacy to renovate and refit the kitchen. He and Adam also invited Ian s mother, Jean, to come and live in the cottage with them. Initially, Jean was reluctant to give up the tenancy of her flat in Dublin, but Adam and Ian assured her that she could think of the cottage as her home for as long as she liked. Before moving in, Jean paid for an extension to be built at the back of the cottage. 7

8 Land law Last year Adam left Ian and moved out of the cottage. Debbie has expressed an interest in buying the cottage from him. Advise Debbie (a) whether Ian and Jean can claim any proprietary rights in the cottage; and (b) how, if she decides to buy the cottage from Adam, she can ensure she successfully obtains the title free from any such rights. A significant number of candidates attempted this question with markedly differing degrees of success. This question requires a secure and thorough awareness of one of land law s most complex and fast-moving areas of judicial activity regarding claiming equitable ownership via trusts/proprietary estoppel. Part (b) allows advice on overreaching and the priority of interests of those in occupation if land is sold. This is an area of land law rich in important case law. Relevant authorities can be found in the subject guide ( , and 7.3) and also in the 2011 Recent developments. See also State Bank of India v Sood (1997). Key statutory provisions are ss.2 and 27(2) of the Law of Property Act 1925; s.116 and Sch 3, para 2, of the Land Registration Act Incomplete consideration of the various facets of the potential for Jean and Ian to make their respective claims to equitable property interests in the cottage. Failure to advise Debbie on how she might proceed with the sale by insisting on the appointment of a second trustee so as to successfully overreach beneficial rights of the occupiers; and the consequences if she decides to pay the purchase price to Adam. Confusing unregistered and registered land ideas of priority. Provide thorough and carefully argued advice on the various ways in which the parties may claim the creation of property rights, and on their protection pleading alternatives whenever gaps in the law or the facts permit. Offered narrative accounts of the topic, or relied on sweeping assertions (unsupported by authority) of the basic principles. Question 7 Critically assess the view that the provisions in Schedule 3 of the Land Registration Act 2002 relating to so-called overriding interests manage to strike an appropriate balance between the rights of registered proprietors and those who hold competing interests over their land. This essay question holds a number of significant challenges. First it requires a critical assessment. Second, it calls for you to identify what is meant by the phrase appropriate balance. Third, the question does not concern all the land registration provisions in the LRA Rather, it is quite specifically about the unregistered interests which override that are found in Sch 3, and most particularly on short 8

9 Examiners report 2011 leases; impliedly created legal easements; and the interest of those who are in actual occupation of the land (subject guide, 3.3.1; study pack, Chapter 3, , pp.62 82)). In most cases this question was not answered well. Apart from Sch 3 of the LRA 2002, there are a range of primary sources covered and/or mentioned in the subject guide (Chapter 3). In addition cases in the 2011 Recent developments, such as Thompson v Foy (2009) and Link Lending v Bustard (2010), would have been ful inclusions. Writing without depth about the regime introduced by the LRA 2002 without focusing on Sch 3. Including references to case law and concepts that concern unregistered land principles (such as land charges and the doctrine of notice). Use the introduction to establish the remit and/or the lines of argument to be explored. Ensure that the answer makes a critical assessment of the view expressed in the question rather than merely describing the provisions in Sch 3. Poorer answers tended to be narrative-dominated and overly general in their treatment of the LRA Question 8 In 2006 five brothers and sisters, Alex, Ben, Candice, Danny and Edith, pool their savings to purchase Seaview, a large ho by the sea which they want to as a holiday home. They each pay different sums towards the purchase price of the ho, and title to Seaview is conveyed into the names of Alex, Ben and Candice. The conveyance also states that all five of them own the ho as beneficial joint tenants. A few months later, Edith divorces her husband. The others agree to Edith and her daughter, Fiona, moving in and living in the annex at Seaview. In 2007 Alex agrees to sell his interest to Candice, but they later decide against going ahead with the transaction. In 2008, when Ben needs to raise money for his business, he secures a loan with the Royal Bank by creating a mortgage over his interest in Seaview. In 2009 Candice telephones the others in turn to tell them that, as she is re-locating to New York, she wants to sell her interest in Seaview immediately. Alex says he is interested in buying Candice s interest from her but will first need to discuss the proposed price with his accountant. The next day Alex is killed in a boating accident. In his will, Alex leaves all his property to Candice. In 2011 Danny decides he no longer wants to keep Seaview as a holiday home. Candice agrees to his proposal that the ho is sold, but Edith objects beca her doctor has highlighted the therapeutic benefits of living on the coast to help control Fiona s asthma. 9

10 Land law Advise Edith as to: (a) who has beneficial interests in Seaview; and (b) the likely success of an application for a court order that Seaview is sold. How, if at all, would your advice on (b) differ if Ben defaults on his loan repayments and the Royal Bank is making the application for the sale of Seaview? A considerable number of candidates who answered this question did not seem to fully appreciate just how many issues on severance (subject guide, 5.3; study pack, pp ), and the judicial resolution of disputes over the trust of land under the Trusts of Land and Appointment of Trustees Act 1996 (subject guide, 5.5; study pack, pp ) are suggested by the facts. Williams v Hensman (1861); Harris v Goddard (1983); Neilson Jones v Fedden (1975); Burgess v Rawnsley (1975); First National Securities Ltd v Hegerty (1985); Bank of Ireland v Bell (2001); First National Bank plc v Achampong (2004); Edwards v Lloyds TSB Bank plc (2005); s.1(6) of the Law of Property Act 1925; s.34(2) of the Trustee Act 1925 and ss.14 and 15 of the Trusts of Land and Appointment of Trustees Act 1996 (TOLATA 1996). Asserting the existence of a beneficial tenancy in common when Seaview was first acquired in 2006, thereby removing a necessary assumption for the need to offer advice on severance. Stating that a joint tenancy of the legal estate may be severed. Demonstrating a lack of accurate knowledge/understanding of the different ways a joint tenant may act on his/her own share so as to sever his beneficial joint tenancy. Failing to consider the significance of Royal Bank s claim as a secured creditor as a factor in determining if the court should order the sale of Seaview under s.15 of TOLATA (study pack, pp ). Establish that there are (three) legal, and (five) owners of the beneficial joint tenancy when Seaview is acquired in 2006, and the existence of a statutory trust of land. Work through the sequence of events between 2007 and 2011 chronologically to determine if and when severance may have occurred by one or other of the common law methods outlined in Williams v Hensman. Identify which of the considerations in s.15 of TOLATA, and the associated case law, may be relevant, and how they are relevant, in determining if the court might decide to its broadly based discretion to order the sale of Seaview. Contained insufficient knowledge and understanding of the various legal methods and case law on severance. 10