Merciless Application of section 2 1989 Act
The Law of Property (Miscellaneous Provisions) Act 1989 requires not just that a contract to sell land is in writing but that all the terms agreed are contained in the document. The decision in Sukhlall v Bansoodeb  EWHC 952 (Ch) emphatically illustrates once more that the absence of a provision from such a document will cause the agreement to be unenforceable even if completion has taken place. Yet again Rimer LJ’s description of the application of section 2 as “merciless” has been fully justified. A fuller consideration of the decision is set out in this article Merciless application of section 2 1989 Act – September 2013 Corporate Briefing [PDF]
(a) completion of the contract will not cause section 2 to cease to operate. The Courts appear to have set their face against any revival of what use to be called the Tootal principle;
(b) constructive trust should have rescued the position but was denied so that at best there is considerable uncertainty and at worst unfair harshness
Construction of registrable documents – the Court of Appeal in Cherry Tree v Landmain has radically changed the treatment of background information when construing conveyancing documents which are registered at HM Land Registry. It introduces a major qualification in property cases to the principles set out by Lord Hoffman in Investors Compensation Scheme v West Bromwich Building Society.
It follows with modification the approach adopted in Australia as stated in Westfield Management v Perpetual Trustee. Background information which will not be expected by a reasonable person at the time of execution to be available in the future for persons relying on the register will not have any weight attached to it when construing the conveyancing document.
Scope of decision – it will not be limited to legal charges but will also cover
- leases – will this reverse the decisions in cases such as KPMG v Network Rail and Holding Barnes v Hill House);
- easements – will cases on the construction of easements such as Peacock v Custins (reliance on plan attached to prior agreement) and Partridge v Lawrence (reliance on architect’s original plan) no longer be followed?
- restrictive covenants – will it apply to restrictive covenants as they do not need to be completed by registration and if it does will it mean that it is no longer possible to establish building schemes relating to registered land by use of the surrounding circumstances?
- transfers – will this decision reverse the very strong trend to take into account all background information and conduct subsequent to the transfer (as in Ali v Land and Cameron v Boggiano)
Impact of decision
- Far reaching change – much background material no longer has weight attached to it;
- Applies to all conveyancing documents which intended to appear on register;
- Applies regardless of date of execution – means that will have to reconsider correct construction of existing registrable documents?
- Need to reconsider division of information between documents in multi document transactions
A consideration of some of the consequences of this decision are set out in this article Construing conveyancing documents – a major change in the Court’s approach
A fuller consideration is contained in my CLT webinar on this topic and the supporting notes given on 6th March 2013
Adverse possession – there have been a number of recent developments with regard to adverse possession particularly relating to registered land.
An update is provided in Adverse Possession Update which covers:
- Para. 5(4) – The Court of Appeal has twice considered para. 5(4) Sch. 6 LRA 2002 (where the applicant owns land next to the land claimed due to adverse possession) in IAM Group plc v Chowdrey and Zarb v Parry and this is likely to an area in which further issues will arise.
- Reinstated applications – Franks v Chief Land Registrar had to consider the knotty problem of the effect on priority when a cancelled application for title is reinstated.
- Acknowledgment – the House of Lords in Ofulue v Bossert had to consider two issues with regard to acknowledgment alleged to arise from pleadings and without prejudice correspondence
- Public highways – an attempt to claim title by adverse possession to part of a public highway was rebutted in R v Land Registry (Cambridgeshire CC).
- Failure to serve a counter-notice when an application is made by a claimant based on adverse possession is not the end of the matter. Baxter v Mannion holds that an application for rectification is an available course of action.
- Damages for trespass – the Court of Appeal in Ramzan v Brookwide and Enfield BC v Outdoor Plus has considered the measure of damages to be awarded against trespasses and it is not good news for trespassers.
- Residential squatters – section 144 Legal Aid Sentencing and Punishment of Offences Act 2012 makes it an offence to squat in a residential building. The consequences of this new criminal offence on claims for adverse possession are considered in this article which appeared in the New law Journal Can a criminal squatter acquire title by adverse possession?.
Co-habitation – the combined effect of Stack v Dowden and Jones v Kernott has set out a regime for determining ownership when properties are held in the joint names of co-habitants. The position is much less clear when the property is in the sole name of one co-habitant. The impact of the Supreme Court decisions when property is held in a sole name is discussed in this paper Has Supreme Court affected beneficial ownership of property in single legal ownership?
- the similarities and differences between property held in joint names and a sole name
- recent decisions such as Gallarotti v Sebastianelli; Geary v Rankine; Aspden v Elvey; Thompson v Hurst; Chapman v Jaume.
Actionable interference with Easements – Easements are an important part of the nitty gritty of property life governing the relationship of land or buildings with individuals, other land and other buildings. Unlike with public rights not all interferences will give rise to a cause of action. This paper explores when an actionable interference will arise. Consideration is given to cases such as Celsteel Ltd v Alton House Holdings and B & Q plc v Liverpool & Lancashire Properties Ltd and the recent authorities on agricultural easements relating to the width of such ways and claims to swing and verge space. Actionable Interference with Easements.
Sales of leasehold interests conditional on landlord’s consent to assign – whether under an open contract or governed by standard conditions of sale interesting obligations are imposed on the vendor and the buyer to such conditional contracts. What constitutes consent for these purposes remains a continuing problem as illustrated in Aubergine Enterprises Ltd v Lakewood International Ltd and Alchemy Estates v Astor. These obligations and the issues arising from applications for landlord’s consent in the context of vendor and purchaser are considered in this paper Sales Subject to Landlord’s Consent.
Easements – class still open
Lord Scott doubted that a right to use a neighbour’s swimming pool could qualify as an easement. The decision in Regency Villas Title Limited v Diamond Resorts has shown that in the appropriate circumstances such a right can be an easement.
This decision applied to expressly granted rights to use a swimming pool, gym, golf course and squash court. Such rights would not have been enforceable unless they qualified as an easement.
The decision is considered more fully at Easements – class still open [PDF].
If you have any queries please contact me.