Question 3

A few months ago in July 2017 Jake decided to purchase Whiteacre from Godfrey.Whiteacre
comprised of a house, a garage and large field. Jake, who is taking an internet course on law,
decided to do the convenyancing work himself and moved into Whiteacre after title was
registered in his name.
In the last few days Jake has noticed Larry, a local farmer, moving sheep into the large field.
When confronted, Larry explained that in January 2013 Godfrey granted him a seven-year lease
of the field.

On the same day, Jake saw Mo, his neighbor letting herself into the garage and removing a
lawnmower. When Jake asked her what she was doing, Mo told him that she bought her house
from Godfrey several years previously. Mo is not sure but she thinks she may have a written
document authorizing her to use the garage to store her lawnmower. She also explained that
she stored her lawnmower in the garage at Whiteacre in exactly the same place that Godfrey
had kept his own lawnmower.
Yesterday, Jake was shocked when Kitty let herself into the house. Kitty, Godfrey’s former
partner, claimed that Whiteacre was still her home. She told Jake she had paid the purchase
price when she and Godfrey acquired Whiteacre. Kitty had been away for the last three months
looking after her infirm mother who died last week. Before purchasing Whiteacre, Jake asked
Godfrey about the women’s clothing he had seen in the large walk-in closet leading off the
master bedroom in Whiteacre. Godfrey said that he was storing them for his former partner.
(a) Advise Jake about what rights, if any Larry, Mo and Kitty have to Whiteacre.

Answer:

Introduction (102)

Following the transfer of title via registration, S58 LRA 2002 officially enables Jake to be the
registered land owner. It is irrelevant if it was done in a fraudulent manner, as seen in
Fitzwilliam v Richard Holdings the title will still be valid. It is important to enunciate the fact that
Jake is a purchaser in value and will be subject to any interest that appear on the register and
any overriding interest as per S29 LRA 2002. Furthermore, it is important he has provided
valuable economic consideration as according to S132 LRA 2002, nominal and matrimonial
consideration will not be sufficient.

1) Larry and Jake (614)

Larry claims to have a seven year lease. As defined by Street v Mountford, a lease will be a
proprietary right as long as Larry is in exclusive possession of the land for a fixed term and a
rent. The facts of the question does not indicate that Larry pays any sort of rent, however, as
displayed in Ashburn Anstalt v Arnold, the statutory definition of leases provided by S205(1)
(xxvii) LPA 1925 does not require there to be rent.

Therefore, it can be stated that Larry has a proprietary right. Now, it must be determined if that right is
legal or merely an equitable interest.

As per S27(2) LRA 2002, a lease of seven years and below does not need to be registered to be
considered legal. However, it does need to be conveyed via deed as per S1 LP(MP)A 1989. OTF Larry
claims, Godfrey had "granted" him the lease. The term granted often indicates the use of a deed, and
therefore, it may be presumably that Larry does in deed have a legal lease.

However, if upon inspection the document turns out not be a deed, then it may fall within S2(1) and (3)
LP(MP)A 1989, suggesting that Godfrey had given Larry an estate contract. If so, then Larry will have an
equitable lease.

In the event it is a legal lease, Larry's lease will have an overriding interest that is binding onto Jake
thank to Schedule 3 Para 1. This is illustrated in CPBS v Miller, where legal elase created by deed that do
not exceed seven year automatically override. Thus, Jake cannot ask Larry to leave.

If Larry has an equitable lease, he will be expected to enter into a notice as per S32 LRA 2002. As
explained in Dominion Homes v Prince Evan Solicitors, my doing so, the interest will take priority and
bind a subsequent purchaser via S29 LRA 2002.

However, if Larry fails to protect his interest via a notice, he will have to rely on Schedule 3 Para 2 LRA
2002 and attempt to establish that he has an overriding interest that will bind Jake. In order to do so, he
will need to satisfy two conditions; First that he has an interest in the property, since Larry has a lease
this would be satisfied. Secodnly, he would need to show that he is in actual occupation.

Actual occupation has been defined by Lord Wilberforce in Williams v Glyns Bank v Boland as
"physical presence on the land", not some entitlement in the law. This was further expanded by
Lord Oliver in Abbey National BS v Cann as he described physical presence to be an act that
involved some degree of permanence and continuity.

OTF it is unclear what Larry and the sheep do on the field. If there is evidence of permanence,
through for example housing for the sheep then the fact may align with Malory Enterprises v
Cheshire homes, and Larry would be said to have an overriding interest which will then bind his
equitable lease onto Jake.

If it is merely grazing then it could be argued that the presence may lack permanence since the
sheep could be chased away and it may not look like anyone is in occupation of field when the
sheep are not grazing. If this is so, then similar to how the court in Rock Ferry Waterfront Trust
v Penninstone Holdings held there to be no actual occupation since it looked like non one was
there, Larry will not satisfy the second requirement and will fail in obtaining an overriding
interest.

In this event, Larry will not have a binding lease and Jake may ask Larry to stop using the field.

2) Mo and Jake (432)

Unlike Larry, the nature of Mo's interest on the land is not identified. However, the facts
suggest that she may posses an easement which is a property right.

Now in order to be an easement, she must satisfy the four requirements laid down by Re
Ellenborough Park; There must be a dominant and servient tenement, the easement must
"accomodate" the dominant tenement, the dominant and servient owners must be different
person and the right omust be capable of forming a subject matter of a grant.

Based of the facts, it can be argued that Mo posseses an easement of parking. Whilst the law is
still unclear whether to employ either the reasonable use test established in Batchelor v
Marlow or the possession and control test in Moncrieff v Jamieson to determine if it is a
parking easemnt. The factor that both test require is exclusive possession.

Meaning that as long as Mo can prove that she has a high degree of territorial control over the
garage then she can be argued to have a parking easment. Since the facts indicate that she does
store her landmower there, she can be argued to satisfy exclusive possession.

In order to be a legal easment, the document that Mo claims to habe must be a deed, which
must hen be registered as per S27 LRA 2002. However as she is unclear what type of document
she possess, it could be argued that she has not registered her right and therefore she may
posses an equitable lease.

Alternative, the document could be a mere state contract, fulfilling S2 LP(MP)A 1989, and is
also therefore an equitable lease. In this scenario, Mo will be expected to enter into a noitce
under S32 LRA 2002 to bind her lease onto Jake.

If she fails she cannot rely on overriding interest, as Schedule 3 Para 3 LRA 2002 only provided
for impliedly created legal easements by virtue of Wheeldon v Burrow. Mo may raise Celesteel
v Alton where it was held an easement will satisfy actual occupation. However, this was
overruled by Chaudhary v Yavuz where th Court of Appeal held that the occupation in an
easement was insufficient to satisfy a personal physical presence required of actual occupation.
Alternatively, if it was found that the document did not amount to estate contract or a deed,
then Mo will only have a bare licence which amounts to a personal right.

Therefore, if Mo fails to register her right via notice or has a licence, Jake may ask her to
remove her landmower and refrain from using it as a storage space.

Kitty and Jake

Kitty will have found herself in an unfortunate position. As she is a former patker, she has no
rights of a spouse that may bind Jake. Furthermore, despite payignt he purchse price, she was
denied a legal title.

Fortunately, by virtue of S53(2) LPA 1925, Kitty may claim to have an implied interest in the
property, either by implied or constructive trust.

If Kitty were to rely on constructive trust, she would need to satisfy the two stage test laid down
in Lloyd's Bank v Rosset; Kitty would have to prove common intention and detrimental reliance.

However, following Lord Bridge in Lloyd's Bank, if there is implied common intention through
direct financial contribution, then this factor alone may give rise to an interest. Therefore, Jake
will be warned that Kitty will most likely have a proprietary right.

However, S53(2) LPA 1925 only allows Kitty's interest ot exist an equitable interest.

In order to protect that right, Jake should have requested for Godfrey to help him invoke the
doctrine of overreaching. As illustrated in City of London BS v Flegg, overreaching is the process
whereby the purchaser may take a legal estate fee of pre-existing equitable right by converting
the rights into corresponding shares that he will pay to two trustees as part of the purchase
money. However, Jake has clearly failed to invoke this right.

Instead he must hope that Kitty has not entered into a restriction under S40 and 41 LRA 2002.
Kitty cannot enter into a notice to protect her right as S33 LRA 2002 excludes protections for an
interest under a trust of land. By entering into a restriction Kitty will be able to prevent
disposition of the land unless there has been a compliance with the terms of her restriction.
However, since both Jake and Kitty were surprised by their presence, it can be argued that Kitty
had not entered into a restriction since she would know.