4.1.3 Registration of Title: Minor Interests and Overriding Interests – Hands on Example
The following questions are designed to test your knowledge about several of the most important aspects of registration of title with overriding interests and minor interests. The answers to the questions can be found at the bottom of the page, however you are encouraged to attempt to answer the questions first based on your own recall or notes of the topic before looking at the answers.
Always think about the facts, the relevant statutory provision, the cases that interpret that provision, and what the outcome will be based on how those principles and cases apply to the question. As you may have gathered, the LRA 2002 is especially important, so make sure to go through your statute book and highlight the relevant provisions. Although you would not be expected to give the full citations of cases you cite (just the names of the parties and the year is usually sufficient, the name of the judge giving the ratio is even better!), you will be expected to accurately cite the relevant sections and subsections of the LRA. Simply citing ‘Land Registration Act 2002’ in your exam without the corresponding section and subsection will not be sufficient!
Q1. Aaron had entered into an estate contract with Bella. Under that contract, Aaron was permitted to occupy Bella’s land, Blackacre. Bella passes away, and Conglomerate Ltd express an interest in purchasing the registered title of Blackacre from Bella’s executors. The executors inform them of Aaron’s occupation of the property. After some haggling, Conglomerate agree to acknowledge his occupation but at a lowered purchase price. Conglomerate are now trying to evict Aaron. Aaron is in occupation for the entire duration of these negotiations.
Q2. Daisy has bought Whiteacre with some money lent to her by her father Eric and via a mortgage loan from Fickstons Ltd, making Daisy the registered proprietor. Eric decides to take up occupation at the property, and Daisy does not disagree. Fickstons tell Daisy they intend to register a charge over the property, and Daisy tells Eric. He says he has no objection, though he never communicates with Fickstons directly. Subsequently, Eric thinks this was a bad idea, and enquires as to whether his occupation of Whiteacre would nullify that charge.
Q3. Gina and her husband Harry own equal shares in Greenacre. Gina is heavily pregnant. She goes into hospital to await the birth. Harry knows she will be in hospital and will not be leaving the hospital for several days. Harry then discusses selling off his share of Greenacre to Irvine without Gina’s knowledge. When Gina leaves hospital with her baby and returns to Greenacre, she finds the locks have been changed. When she makes enquiries, she discovers what has happened between Harry and Irvine. She hopes to challenge this arrangement, not least because she cannot get access to much of her furniture that is still in Greenacre.
Q4. James and Karen have a minor interest in Redacre. The land Redacre is owned by Laurence. Laurence informs James and Karen that he intends to sell Redacre to MegaCorp Ltd. James and Karen have not yet entered their interest in the register for Redacre. They decide that it would be easier to inform MegaCorp Ltd of their minor interest. MegaCorp Ltd acknowledge their claim, but when they purchase Redacre, they take steps that effectively ignore the minor interest.
Advise James and Karen.
A1. You may recall that this fact-pattern is similar to that of Lloyd v Dugdale. As you will recall, there is a possibility of constructive trust estoppel, but only in the event that the facts support the establishment of such an estoppel. Because this was a for a reduced purchase price, that should indicate the outcome will be different to that in Lloyd. The final sentence is intended to confirm that Aaron was in occupation at the relevant time.
A2. Like question 1, the case here is a case of estoppel, except the roles are effectively reversed. Eric is hoping to use his occupation as evidence of overriding occupation to take priority against the charge held by Fickstons. However, because he is both aware of the intended charge and impliedly consents to it – he never tells Fickstons otherwise – his claim to an overriding interest is estopped. Look to Paddington Building Society v Mendelsohn for guidance on this question.
A3. This is a reflection of the case of Chhokar v Chhokar, including the deceptive husband and the new mother locked out of the house by the party who had purchased the husband’s interest. As you will recall from that case, given the circumstances, the wife was held to have an overriding interest against the interest of the purchaser.
A4. This case goes to the question of fraud and protectable yet unprotected minor interests. As you will remember, the case law indicates that the courts take a relatively dim view about unprotected minor interests. When answering a question of this type, you would help your answer by stating the rationale; namely that, as per Lloyd v Dugdale, taking property, even if unconscionably (i.e. taking property with express notice of the minor interest while also seeking to deny its operation), would not make the minor interest an interest that takes priority against the registered estate. If there was fraud in this case, however, what would be the outcome? How severe would it need to be for James and Karen’s minor interest to be safe?
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