Suggested Answer to Exercise 4.3
A Detailed Answer Plan
Introduction
Title to the land was already registered when Jake entered into the transaction with Agnes. This means that the relevant rules are contained in the LRA 2002. The general rule is that the register is conclusive (LRA 2002, s 58). However, certain interests are capable of overriding the register (listed in LRA 2002, Sch 3). It is possible for the register to be altered in certain circumstances (LRA 2002, s 65 and Sch 4).
Agnes’ Failure to Register the Transfer
A disposition of a registered estate does not operate at law until completed by registration (s.27(1) LRA 2002). Consequently, the deed alone will not be sufficient to transfer the title of Albatross Cottage to Agnes (s.27(2)(a)).
Equity ‘regards as done that which ought to be done’. The effect of the unregistered deed of transfer is to give Agnes a beneficial interest in the land.
Alteration/Rectification
[This is not a major element of answering this specific question. A brief reference to it may be appropriate to makes it clear to the examiner that you understand why it is not relevant. Other questions may require much more attention to be given to the rules of rectification.]
Is Agnes entitled to have the register corrected in her favour (see LRA 2002, Sch 4)? Para 2(1) and para 5(1) allow alterations to be made in order to:
- correct a mistake,
- bring the Register up to date,
- to give effect to an interest excepted from the effect of registration, or
- (by the Registrar) to remove superfluous entries.
This case does not fall within categories (2) or (4). Category (3) applies only to titles registered with good leasehold, qualified or possessory title (title in this case is title absolute). Neither is this a case of mistake. There was no error as to the nature of any of the parties’ interests (as in both Sainsbury’s Supermarkets Ltd v Olympia Homes Ltd [2006] 1 P & CR 17 and Baxter v Manion [2010] 1 WLR 1965): the problem was due to the failure of Agnes to register her title to the land as required by the LRA 2002.
Does the Transfer of the Title to Maria have Priority over Agnes’ Interest?
The general rule is that the first interest in time will have priority over later interests. However, this rule is significantly modified by sections 29 and 30 of the LRA 2002.
Maria’s acquisition of Albatross Cottage is a registrable disposition of a registered estate which has been completed by registration (LRA 1925, s 29(1)). Consequently, Agnes’ interest will only have priority if it falls within one of the categories in section 29(2); that is, it must be protected by a notice in the Title Register or it fall within Schedule 3 of the Act (interests capable of overriding the Register).
What interest does Agnes have in the land?
Almost certainly a beneficial interest arising out of an incomplete attempt to transfer the legal title.
Was the interest entered on the Title Register?
In cannot be (see LRA 2002, s 33(a)(i)).
Is Agnes’ interest capable of overriding the Register?
The most appropriate paragraph to use in this case is LRA 2002, para 2 of Sch 3.
- Interest: beneficial interest is sufficient ( Williams & Glyn Bank Ltd v Boland [1981] AC 487.
- Actual occupation:
- Question of fact (Williams & Glyn Bank Ltd v Boland).
- Does not require constant personal presence, but ‘some degree of permanence and continuity’ (per Lord Oliver, Abbey National Building Society v Cann [1991] 1 AC 56 at 93).
- Need sufficient physical presence to put the purchaser on notice that there is someone in occupation (Malory Enterprises Ltd v Cheshire [2002] Ch 216).
- Agnes is almost certainly in actual occupation. Temporary absence with intention to return is not inconsistent with actual occupation (see, for example, Chhokar v Chhokar [1984] Fam Law 269).
- Para 2 (b) and (c)
- Did Agnes fail to disclose her interest when she could reasonably have been expected to do so (para 2(b))? If so, her interest will not be overriding. Maria briefly met Agnes and enquired of her. One might reasonably expect Agnes to give more information, but did she understand the circumstances and the meaning of the question? Should Maria have pursued the question? Is Agnes’ age relevant?
- Would Agnes’ interest have been obvious on a reasonably careful inspection of the land (para. 2(c)(i))? It seems unlikely (although not impossible) that Agnes’ occupation would not have been obvious on a reasonable inspection when the land was transferred to Maria. How many of her belongings had she left in the cottage? Had Jake taken any action to conceal them or explain them away (compare Kingsnorth Finance v Tizard [1986] 1 WLR 783, perhaps – but take care as it is a case concerning concerned unregistered land)?
- Did Maria know about Agnes’ interest at the time of the transfer of the land to Maria (para 2(c)(ii)? This seems unlikely, but needs to be eliminated and might be relevant in other circumstances.
Transfer from Two Registered Proprietors
Maria would be much more secure if she had paid the proceeds of sale to Jake and Josephine. This would have overreached Agnes’ beneficial interest in the Cottage because the transfer would almost certainly satisfy the conditions in sections 2 and 27 of the LPA 1925 (conveyance of a legal estate in land by two or more trustees); London Building Society v Flegg [1988] AC 54. It does not seem to matter that Jake and Josephine would have been acting in breach of trust (see State Bank of India v Sood [1997] Ch 276).
