Posted by: RM | December 30, 2009

2010: The Year of the New Town or Village Green?

It looks as though 2010 could well be another very significant year for the development of the law on the registration of new town and village greens (now governed by the Commons Act 2006, previously the Commons Registration Act 1965). In January the Supreme Court of the United Kingdom will hear the appeal in R (on the application of Kevin Lewis) v Redcar & Cleveland Borough Council & Persimmon Homes (Teeside) Limited [2009] EWCA Civ 3. This will be the fourth appeal in the context of the law on the registration of new town and village greens to come before the UK’s highest court in a little over a decade, the forerunners being Oxfordshire County Council v Oxford City Council [2006] UKHL 25,  R (Beresford) v Sunderland City Council [2003] UKHL 60 and R v Oxfordshire County Council Ex parte Sunningwell Parish Council [1999] UKHL 28. The decision will hopefully provide some welcome clarity on the question of the relevance of deference by the qualifying user to the landowner’s use of his own land and the relationship between such deference and the user as of right test which test is central to any prescriptive claim. Update: the decision in Redcar was handed down on 3 March 2010 – for a post on that decision see here.

The following month the High Court will judicially review the correctness of a registration authority’s decision to register land as a new green. One of the issues likely to be determined in that case is what constitutes a “neighbourhood” for the purposes of the statutory test. Section 15 of the Commons Act 2006 provides that any person may apply to the registration authority to have land registered as a new green where it can be demonstrated that a significant number of the inhabitants of any locality, or a neighbourhood within a locality, have indulged as of right in lawful sports and pastimes on the land for a period of at least 20 years.

The question what constitutes a neighbourhood has caused considerable confusion, particularly in the context of new green registration applications concerning land within a densely populated environment (usually a city or very large town). Unlike in rural settings where one might normally rely upon a parish as being the relevant locality, within large towns and cities, unless one can point to a specific administrative area as being the relevant neighbourhood, it can be quite difficult to coherently define one’s neighbourhood within a locality. There has been a limited amount of judicial guidance on what constitutes a neighbourhood for these purposes. In R (Cheltenham Builders) v South Gloucestershire Council [2003] EWHC 2803 (Admin) Sullivan J said that a neighbourhood cannot be any area drawn on a map, it must have some degree of cohesiveness. In Oxfordshire County Council v Oxford City Council [2006] UKHL 25, however, Lord Hoffmann said the phrase “any neighbourhood within a locality” (the wording of the relevant provision in the Commons Registration Act 1965 which is replicated in the 2006 Act) was obviously drafted with deliberate imprecision.

These cases promise to provide an interesting start to 2010 as far as the development of the law of new town and village greens is concerned.

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Posted in Commons Act 2006, Commons Registration Act 1965, Deference, New Green Registration, Prescription, Town & Village Greens, User As of Right

Posted by: RM | December 27, 2009

Public Rights of Way: Inference of Dedication at Common Law

The Court of Appeal delivered its judgment in Wild v (1) Secretary of State for Environment, Food and Rural Affairs & (2) Dorset County Council [2009] EWCA Civ 1406 just before Christmas. The case concerned a claimed public right of way over land in Dorset. The ownership of the land was never determined in the proceedings although the Appellant, Mr Wild, claimed that he owned the land over which the right was claimed as manorial waste.  There had been previous unsuccessful applications in respect of the claimed way but in 2003 Dorset County Council, the surveying authority, made an order under section 53(2)(b) of the Wildlife and Countryside Act 1981 that the path the subject of this litigation be added to the Definitive Map and Statement. This decision was confirmed by an inspector who held a public inquiry into the same. The decision was the subject of judicial review proceedings in the High Court where Keith J refused to quash the order. However, the Court of Appeal reversed the decision of Keith J.

There are two methods by which a new public right of way can come into existence. First, section 31 of the Highways Act 1980 provides for the presumption of dedication of a highway after 20 years use. That provision was held not to apply in this case. In the alternative the common law rules still apply, the statutory rules having been introduced to supplement rather than replace the common law. The main difference being that at common law it is not necessary to prove 20 years use which is a pre-requisite for the operation of the statute. This case was concerned with the application of the common law rules.

Ultimately the Court of Appeal determined that the order for the modification of the Definitive Map and Statement be quashed, the requisite test having not been met. Crucial to this decision was the fact that at a previous public inquiry in 1978 there had been objections to the registration of a bridleway along the same route as the claimed footpath. It is not clear whether either of the parties who made the objections were the owners of the land over which the way passed. However, Scott Baker LJ, giving the judgment of the Court of Appeal in this case, concluded that it was possible they could have been the landowner. If that was the case then the objections would have been sufficient to demonstrate that the landowner had no intention to dedicate the way as a public right of way. Unlike in other contexts in which the rules of prescription operate, in the context of public rights of way (as distinct from say easements or new town or village greens) if the landowner does something which amounts to evidence that he did not intend to dedicate a right of way, that will prove fatal to the claim, even where use is otherwise use ‘as of right’.

The end result is that whilst the possibility that one of the 1978 objections was made by the landowner remains alive, there can be no prospect of a public right of way being established. Of course, if the ownership of the land is determined and it becomes apparent that none of the objections came from the then landowner, the door will be open for modification of the Definitive Map and Statement at some later date.

One interesting aspect of the judgment concerned Scott Baker LJ’s criticism of the reasoning of Keith J at first instance. Keith J had concluded that whilst there had been objections in 1978, one of which may have been an objection by the landowner, any failure thereafter to continue to object to the public’s use of the way “neutralised” the effect of the objection made at the 1978 inquiry as far as any inference of dedication was concerned. Such failure to take active steps to prevent continuing user might well be insufficient to render user vi and, therefore, no longer use as of right, which would be insufficient to prevent a prescriptive claim succeeding in the context of a private right of way or new green claim. However, it is the need to infer dedication of the public right of way which enables any expression of contrary intention to have such a dramatic effect on the potential success of a prescriptive claim where public rights of way are concerned.

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Posted in Definitive Map and Statement, Highways Act 1980, Modification Orders, Prescription, Property Law, Public Rights of Way, Wildlife & Countryside Act 1981

Posted by: RM | November 25, 2009

Mortgage Lenders Still Exercise Insufficient Caution

The recent decision of the High Court in HSBC Bank plc v Dyche & Collelldevall [2009] EWHC 2954 (Ch) illustrates that mortgage lenders are, despite cases such as Williams & Glyn’s Bank Ltd v Boland [1981] AC 487 in which it was established that a failure by lenders to make proper enquiries of those in actual occupation rendered those lenders exposed to interests which might potentially override their own interests, still not always sufficiently careful so as to avoid the ramifications of overriding interests and issues of priority which arise out of such interests being established.

In HSBC v Dyche property was conveyed to Mr and Mrs Dyche in 1994. The property had belonged to Mrs Dyche’s parents, Mr and Mrs Collelldevall, who had lived there since 1976. In 1988 Mr Collelldevall was made bankrupt. At that time he and his wife owned the property as beneficial joint tenants. The bankruptcy had the effect of severing that beneficial joint tenancy. Following Mr Collelldevall’s bankruptcy his Trustee in Bankruptcy obtained, in 1992, an order for sale of the property which order was not enforced. The then mortgagee subsequently obtained a possession order in 1993. That order was also not enforced. Mr Collelldevall was discharged from his bankruptcy at some time in early 1994.

In January 1994 the property was transferred by Mr and Mrs Collelldevall to Mr and Mrs Dyche with the agreement of Mr Collelldevall’s Trustee in Bankruptcy (“the 1994 Transfer”). The mortgage outstanding at the time was discharged upon completion of the transfer. A sum was also paid the Mr Collelldevall’s Trustee in Bankruptcy, thereby increasing the dividend in the bankruptcy. The purchase price was set to meet the Collelldevall’s immediate financial needs and commitments and bore no relation to the actual value of the property which was, at that time, much more than the £25,000 apparently paid by Mr and Mrs Dyche.

At the time of the transaction Mr and Mrs Collelldevall were unable to secure a mortgage against the property in their own names as a result of his bankruptcy. Hence, it was argued, and accepted, that the Dyche’s acquired the property on their behalf. The Dyche’s obtained a mortgage of £17,000 from Lloyds Bank and Mr Dyche was said to have borrowed the balance of £8,000 from a friend. However, the judge accepted Mr Collelldevall’s evidence that it was he who had borrowed the £8,000 from a friend. There was an agreement that Mr and Mrs Collelldevall would pay Mr and Mrs Dyche in monthly installments amounts which corresponded with the amounts due under the Lloyds mortgage. The judge accepted that following the 1994 Transfer the property was held on constructive trust for the Collelldevalls.

Later in 1994 Mrs Collelldeval died and the judge accepted that her interest in the property passed to Mr Collelldeval under the right of survivorship. Whilst the bankruptcy had had the effect of severing the joint tenancy the judge concluded that the effect of the 1994 Transfer was to put the Collelldevalls, as far as possible, back into their pre-bankruptcy position. Thus it was concluded that the Dyches held the property on trust for the Collelldevalls as beneficial joint tenants.

In 1995 Lloyds Bank advanced more monies to the Dyches which sum was repaid with later borrowings from HSBC. Lloyds did not take a further charge against the property in respect of this advance. In 2002 the property was transferred into the sole name of Mrs Dyche by herself and her husband in connection with divorce proceedings (“the 2002 Transfer”). This was said to be pursuant to a court order under which Mrs Dyche had paid to her husband the sum of £5,000 (the only consideration which passed in relation to the 2002 Transfer). On the same date as the 2002 Transfer Mrs Dyche gave HSBC a first legal charge over the property in order to secure an advance against that property. In order to obtain the mortgage Mrs Dyche had provided HSBC with what purported to be an assured shorthold tenancy agreement naming herself as landlord and Mr Collelldevall as tenant. The judge accepted that Mr Collelldevall’s signature was a forgery. Mr Collelldevall knew nothing of this mortgage and had not authorised it. A further advance was acquired by Mrs Dyche under a second mortgage from HSBC in 2003.

Mr Collelldevall gave evidence that he knew the property was going to be transferred into Mrs Dyche’s sole name but that she had promised to transfer the property to him thereafter. The judge found that Mrs Dyche had clearly perpetrated a deception upon her father; she was unable to transfer the property so long as monies remained outstanding in respect of the HSBC mortgages. Mrs Dyche had, it was concluded, acted in breach of trust. Whilst it was not established that Mr Dyche had anything to do with the forgery of Mr Collelldevall’s signature on the tenancy agreement the judge concluded that he must have known that he too was acting in breach of trust in transferring the property to his wife in return for £5,000 given that the property was beneficially owned by Mr Collelldevall, pursuant to the agreement at the time of the 1994 transfer.

The question for the court, therefore, was whether Mr Collelldevall’s beneficial interest in the property was overreached by HSBC’s interest under the terms of the mortgage(s). The judge reviewed the relevant provisions of the Law of Property Act 1925 (section 2(1)(ii) regarding the effect of a conveyance of land by trustees; section 205(1)(xxi) regarding the definition of a purchaser in good faith; and sections 2(1)(ii), 2(2) and 27, which require the conveyance to be made by at least two trustees) and, applying the law to the facts of the case, determined that the doctrine of overreaching did not here apply (for detailed analysis and reasoning see the judgment, paras [37] – [46]). It was held that Mr Collelldevall had a beneficial interest which overrode the registration of the HSBC mortgages pursuant to Paragraph 2, Schedule 3 to the Land Registration Act 2002.

The judge concluded that “HSBC could have avoided the present position by making inquiries of Mr Collelldevall, but, though a Letter of Consent was considered, they chose not to proceed down that route, as the documents appeared to be in order … By not making inquiries of Mr Collelldevall direct, they assumed the risk of the tenancy agreement turning out to be a forgery. The risk may have seemed remote, but has now come to pass, and HSBC misses out because of it”.

Once again, this is a clear reminder of the consequences of mortgage companies not making sufficient inquiries of propsective mortgagors where there is evidence that there is someone else occupying the property concerned. However, there is nothing in the facts to suggest that HSBC was or could have been aware that Mr Collelldevall and Mrs Dyche were related. On the face of it he was no more than a tenant with the benefit of an assured shorthold tenancy. It would have been plain from the nature of the tenancy agreement what rights Mr Collelldevall would or would not have had as a consequence of his shorthold tenancy. Without any reason to suspect that there was a familial relationship between Mrs Dyche and Mr Collelldevall this decision seems to suggest that any potential lender should make inquiries of shorthold tenants in order for their lending to be secure. This does, on the face of it, seem to be a particularly onerous obligation to impose upon all lenders, particularly given the recent increase in the acquisition of  ‘buy to let’ properties together with a tendency for property owners to switch their mortgages much more frequently, reflecting an inclination to always be in pursuit of the best deals on offer.

Postscript: For another view on this decision see here.

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Posted in Beneficial Ownership, Co-ownership, Constructive Trusts, Mortgages, Overreaching, Overriding Interests, Property Law, Trusts

Posted by: RM | November 24, 2009

Intestacy & Family Provision Claims on Death

The Law Commission has recently published its Consultation Paper on this topic: Consultation Paper 191. It can be viewed here. It runs to 190 pages so any kind of comment upon or assessment of its contents is beyond the scope of this blog. However, it is perhaps worth reiterating the importance of the issues which this consultation paper addresses. It considers the intestacy rules which are currently governed predominantly by the Administration of Estates Act 1925. It also addresses provision (or alleged lack thereof) for family members and dependants and the court’s jurisdiction to modify the distribution of a deceased’s estate under the Inheritance (Provision for Family and Dependants) Act 1975. The Consultation Paper invites views on possible reform of the law governing these issues.

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Posted in Family Provision, Intestacy

Posted by: RM | November 23, 2009

Testamentary Disposition & Subsequent Assent: One Transaction

The Court of Appeal has recently delivered its judgment in Thompson v Bee & Anor [2009] EWCA Civ 1212. The case concerns a right of way which is annexed to a property devised by the will of Mrs Edith Thompson, which was executed in September 1974 (the testatrix died in 1975). By her will Mrs Thompson left her house, Pear Tree House, to her grand-daughter (who became Mrs Bee), the respondent, “subject … to a right of way as existing at the date of [her] death to the Garth at the rear thereof…”. Mrs Thompson left the Garth (about an acre of “back land”, situated to the rear of Pear Tree House, on which stood a rather dilapidated old slaughterhouse – unused – and piggery – occasionally used, primarily for storage), which she also owned, to her son, Mr George Thompson, which he later transferred in 1989 by Deed of Gift to Mr Stephen Thompson, the appellant. The Garth is accessed by way of a rough hard core track which is situated on the land of Pear Tree House and which also gives access to the garage of that property. At the end of the track there is a steep drop over rough land with a gate leading into the Garth.

At the time Mrs Thompson wrote her will Pear Tree House and the Garth were in her common ownership. Whilst the track was clearly visible on the ground it cannot be said that an easement (right of way) existed over the track because it is trite law that “an easement is some right which a person has over land which is not his own … you cannot have an easement over your own land…” (per Lord Esher MR, Metropolitan Railway Co v Fowler [1982] 1 QB 165, 171). In her will she gave Pear Tree House to her grand-daughter subject to the right of way detailed above. She also bequeathed the Garth to Mr George Thompson “… together with the right of way … across the rear of Pear Tree House at all times and for all purposes connected with the said garth …” (ie over the track).

Of course, the will simply passed the title of the properties to the executors. There were two assents made by the executors in 1977 which gave effect to the terms of the will. Hence, it is the assents and not the will which had the effect of passing title to the respondent and the appellant’s predecessor in title. The trial judge held that the clauses referred to in the will which granted / reserved the right of way across the track for the benefit of the Garth were to be read into the later assents, thereby recognising that this was all part of one transaction. In contrast, the respondent’s contention, which was, according to Mummery LJ, a “contention  … rooted in the remorseless logic of conveyancing law and practice”, was that the will caused the title of the properties to pass to the executors; this was one transaction. The assents, which vested the title of the properties in the beneficiaries, were, according to the respondent, a second and separate transcation. The assent of Pear Tree House took place a few days before the assent of the Garth. The significance of this distinction is concerned with the fact that no express right of way for the benefit of the Garth as retained land (by the executors, at the time the assent of the title to Pear Tree House was made) was reserved in the assent of Pear Tree House to the respondent. The absence of an express reservation was, it was argued, fatal to the claim that an easement of the character referred to in the will of Mrs Thompson had been created for the benefit of the Garth over the track. Thus, the only right of way which could have been impliedly reserved by law was one of necessity (which would be interpreted very narrowly).

The Court of Appeal rejected the approach advocated by the respondent because “without any legal justification, it requires the court to ignore totally the relevant intentions expressed by the testatrix in her will on the very matter of a right of way over the track for the benefit of the Garth. The fact that the assent is the document of title to Pear Tree House does not consign the will to the scrap heap when ascertaining the intentions of [the testatrix]”. By reference to both statute (section 36(2) of the Administration of Estates Act 1925) and common law (Phillips v Low [1892] 1 Ch 47; George Attenborough & Son v Solomon [1913] AC 76) the Court of Appeal held that the will and the subsequent assents, giving effect to the terms of the will, were to be treated as a single transaction. Thus, the respondent’s highly technical approach to this question was rejected.

Having determined that the right of way over the track for the benefit of the Garth was to be treated as having been created by the will and the subsequent assent, it was then necessary to determine the nature and extent of that easement. At the time of the transfer of the Garth to the appellant’s predecessor in title, the property was little used except for occasional grazing and for storage in the dilapidated buildings. At the time of this litigation the appellant had secured planning permission to develop part of the Garth by erecting one detached dwelling and two semi-detached dwellings. At first instance the judge had held that the right of way along the track was limited to use connected to agricultural purposes (and he granted an injunction forbidding use of the right of way for purposes other than agricultural purposes). The judge had made this finding because reference to the right of way being “for all purposes connected with the said Garth” he had interpreted as meaning circumstances existing at the time of the death of the testatrix. At the time of her death the Garth was identified as being subject to agricultural use which would have necessitated access by the odd car, van, tractor or agricultural vehicle. The track was also used, of course, for access to the garage of Pear Tree House. The judge concluded that recognising the right of way as permitting access to and from a residential development of the sort proposed by the appellant would seem to be excessive and more than likely to cause a nuisance to the owners of Pear Tree House and other owners and occupiers of the houses on the Garth trying to exit or enter their properties.

In the appeal, whilst the court thought that the judge was not justified in interpreting “all purposes connected with the said Garth” as being restricted to agricultural purposes, it was held that a right of way for the purposes intended was too excessive. In conclusion, the Court of Appeal substituted the judge’s declaration for a declaration to the effect that the appellant’s right of way does not permit user for the three residences proposed to be erected on the Garth. The injunction was varied to reflect the substituted declaration.

This case presents an interesting illustration of the difficulties which can arise where relatively aged and imprecisely determined rights are relied upon to facilitate new uses of land; in particular uses which reflect the current trend for developing pockets of unused agricultural land (where planning permission can be obtained) with a tendency for relatively high density schemes. Mummery LJ concluded by saying that “in light of the judgments … the parties will have to reconsider their positions. They should seriously consider settling any further differences about the right of way without yet more litigation. As this case shows litigation of the neighbour kind is sometimes uncertain in outcome, often punishing in costs and, win or lose, is always, for those who are still neighbours (in this case relatives), far from the Swiftean ideal of “sweetness and light”.” Sobering stuff.

From a purely legal perspective, this decision confirms that the terms contained in the will and the assents which facilitate the testamentary bequests should be read together, as one transaction, rejecting the idea that the testamentary provision and the subsequent assent should be viewed as two distinct transactions, each being independent of the other.

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Posted in Assent, Easements, Excessive User, Right of Way, Testamentary Disposition

Posted by: RM | October 20, 2009

Trespass, Adverse Possession & Section 62 LPA 1925

I recently came across a case on my Lawtel updates which is unreported and, to date, I have been unable to obtain a copy of the full transcript (if anyone can assist, I’d be grateful!). The case concerned is Stadium Capital Holdings (No 2) Ltd v St Marylebone Property Company Plc (2009) which was heard before Sir Donald Rattee in the Chancery Division on 15 October 2009. From the little information available it appears to raise a couple of interesting issues. The limited background facts follow.

The claimant (“C”) claimed damages for trespass against the first defendant (“D1”) in relation to a hoarding which had been erected on a shared boundary wall between C and D1’s properties (D1 was a long leaseholder who subsequently appears to have acquired the reversionary interest in the freehold). The C’s land had originally been owned by the Railway Executive which had granted D1’s predecessors in title consent to erect such a hoarding. The second defendant third party (D2) had obtained planning permission to erect the hoarding (which permission had previously been refused by the planning authority) and D1 had granted D2 an exclusive licence for D2 to do so. D2 removed the hoarding when requested to do so by the C’s predecessor in title and played no part in the proceedings.

D1 defended the claim on the basis that (1) the Railway Executive’s original consent had lapsed and D1 had, by operation of the doctrine of adverse possession, acquired possession of what was otherwise C’s airspace; and (2) in the alternative, D1’s right to maintain a hoarding on the boundary wall had passed to D1 by operation of section 62 of the Law of Property Act 1925 upon conveyance of the reversionary interest in the freehold to D1.

Both defences were rejected by the court. In response to (1) it was held that the consent originally granted by the Railway Executive (a previous owner of C’s land) was not limited in its terms and subsisted until such time as it was expressly revoked by C’s immediate predecessor in title (who had assigned any right to damages arising from an action in trespass to C). Therefore, even if possession of airspace was theoretically possible, in this case such possession was by consent and, therefore, not adverse to the owner. The limited analysis which I have been able to find (Lawtel and Westlaw) says that there was obiter to the effect that it was doubtful whether title to an area of airspace not contiguous to land under it could exist at law; the right to airspace was contingent on the right to own the land under it. These responses by the court raise a couple of interesting questions (the absence of a full transcript of the judgment makes it impossible to determine whether these issues were fully explored by the court). Firstly, can the consent which was given by the Railway Executive really be said to have endured (at least) two subsequent changes in ownership, unless expressly renewed? And secondly, why would there be doubt that is it theoretically possible to be in possession of airspace?

In answer to the first point, clearly it would be necessary to know the full facts but it seems unlikely that a permission which is personal and revocable could survive a change of ownership without something more (say, the operation of section 62 which I will come to shortly). Regarding the second point, if real property is capable of ownership, it is surely capable of being adversely possessed, subject to the test for actual possession which is adverse to the paper owner and the requisite animus possidendi being met. Whilst they are rare in practice, flying freeholds demonstrate that it is not necessary, in order to own property, to own the actual soil over which the property concerned is situated.

In respect of (2) the court held that section 62 could not be established to have applied because the conveyance concerned (ie the conveyance of the reversionary interest in the freehold) had not been put in evidence and it was, therefore, impossible to determine whether there was anything in the conveyance to expressly exclude the operation of section 62 as required by section 62(4). It was also said that, in any event, even if the section did apply (which it had been held not to), the enjoyment of the right would not have afforded itself to D1 as lessee (which it was prior to acquiring the reversionary interest in the freehold) but would have been for the benefit of the freehold owner.

It is very difficult to make any further comment on this case given the woeful lack of information available. However, it does appear that it may well raise some extremely interesting points which might warrant further consideration if the transcript of the judgment ever becomes widely available. If anyone out there finds it before I do, please pass it on!

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Posted in Adverse Possession, Easements, Land Law, Section 62 LPA 1925, Trespass

Posted by: RM | October 12, 2009

Proprietary Estoppel Revisited

Fairly hot on the heels of the House of Lords’ decision in Thorner v Majors [2009] UKHL 18 (for earlier discussions of this case see here and here) the High Court has, in MacDonald & Anor v Frost [2009] EWHC 2276 (Ch), revisited the topic of proprietary estoppel. Geraldine Andrews QC, sitting as a High Court Judge, acknowledged that Thorner v Majors is now to be regarded as the leading modern authority on proprietary estoppel.

The facts of this case, although a little convoluted, can be relatively briefly stated. The claimants were sisters who brought a claim against their step mother as executrix of the estate of their father. They claimed that they were entitled to his estate because he (and their mother, when she was alive) had given assurances that they [the claimants] would inherit their parents’ estate in equal shares upon the death of the last surviving parent. Their mother pre-deceased their father by a number of years (she died in 1995) and he remarried in 2002. Shortly after his marriage their father changed his will leaving his entire estate to his new wife with substitutionary gifts in the event that she pre-deceased him in favour of the grandchildren then living.

Wills are, of course, ambulatory. In the absence of some agreement which prevented the claimants’ father from changing his will, he was clearly entitled to do so. The claimants claimed that in 1986 an agreement was made whereby each of them would pay their parents (and, latterly, their father following their mother’s death) £100 per month, which they each did until their father died in 2006. They claimed that in reliance upon a representation that they would inherit their parents’ estate in equal shares they acted to their detriment in making these monthly payments without reference to their parents’ need to receive the money or their ability to pay.

The court found, as a matter of fact, that the monthly payments were connected to a property transaction which was completed at the time the payments began (in 1986) and were referable to that transaction rather than being some form of detrimental reliance based upon any assurance of future inheritance. The court did not dispute that there were conversations when it was undoubtedly true that future testamentary intentions were spoken of. However, the court found that those discussions were not linked to the payments made by the claimants.

The interesting point discussed (very briefly) in this case concerned the continuing sustainability of Re Basham as an authority in this area of the law (or, more accurately, equity). In Thorner v Majors the House of Lords was invited to determine that Re Basham had been wrongly decided on the basis that the subject matter of the proprietary estoppel claim in that case (the residuary estate of the representee) was not “identifiable property” (in contrast to the farm in Thorner v Majors). Their Lordships, however, declined that invitation. In the present case Geraldine Andrews QC did state that “in light of the decision in Thorner … I consider that Re Basham is a decision that now has to be treated with the utmost caution”. It was unnecessary for her to say more than that because, on the facts, the argument that the claimed detrimental reliance, represented by the monthly payments, was connected to a representation about their future inheritance was rejected which meant that no close analysis of whether or not their father’s estate could constitute the subject matter of a properietary estoppel claim was engaged in. However, Geraldine Andrews QC did then go on to say that whilst “the reasoning in Re Basham is difficult to reconcile with the requirement reiterated in Thorner that the property should be sufficiently identified, it is important to bear in mind Lord Neuberger’s warnings about approaching cases of this nature practically and sensibly”.

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Posted in Property Law, Proprietary Estoppel

Posted by: RM | July 27, 2009

Beneficial Interests in the Family Home: The Rot Sets In

A recent decision of the High Court, on appeal from the County Court, has revisited the proper application of the principles expounded in Stack v Dowden [2007] UKHL 17 and Oxley v Hiscock [2004] EWCA Civ 546. The case is Jones v Kernott [2009] EWHC 1713 (Ch). The facts are as follows:

Ms Jones and Mr Kernott bought a property, 39 Badger Hall Avenue, in 1985 and the property was conveyed into their joint names. The purchase price was £30,000 of which £6,000 was contributed by Ms Jones. The remainder was financed by an interest only mortgage, supported by an endowment policy. The mortgage and endowment policy payments were shared between the couple. The following year a further loan of £2,000 was taken out against the property for the purpose of building an extension and this was built and paid for largely by Mr Kernott. This is estimated to have enhanced the value of the property by almost 50%, from £30,000 to £44,000. Ms Jones and Mr Kernott shared the household expenditure (including bills and mortgage repayments) until the couple split up and Mr Kernott moved out of the property in 1993 (some 8 years later). Thereafter, Ms Jones made all of the interest only mortgage payments together with the payments against the endowment policy and met all expenditure in relation to the upkeep of the property. There were two children of the relationship who remained with Ms Jones. Mr Kernott made little or no contribution to their maintenance and none had been sought by Ms Jones.

Some time after the relationship had ended a life insurance policy was cashed and the proceeds split between the parties. In part this was to enable Mr Kernott to purchase a property for himself which he did in 1996, acquiring 114 Stanley Road, which he then financed alone. It is undisputed that Ms Jones never acquired any interest in the Stanley Road property. It is also undisputed that until the couple split up and Mr Kernott moved out of the property in 1993, the beneficial shares in the property were owned equally. The question for the court was whether, following the couple’s separation in 1993, the beneficial shares in the property were altered. At first instance the judge held that they had altered and concluded that Ms Jones was entitled to a 90% beneficial interest in the property on the basis that it was “fair and just”.

On appeal, Nicholas Strauss QC (sitting as a Deputy Judge of the High Court) reviewed the main authorities quite extensively. Unsurprisingly, he undertook a fairly lengthy analysis of the Oxley v Hiscock and Stack v Dowden decisions. On the facts Jones v Kernott was contextually more similar to Stack v Dowden given that the property with which the litigation was concerned had been conveyed into the joint names of the couple and the question for the court was whether the presumption of joint beneficial ownership in circumstances where there was joint legal ownership could be rebutted, as it had been in Stack v Dowden. The relevance of Oxley v Hiscock, despite being factually distinct because the property there had been conveyed into the sole name of one of the parties, was the extent to which the decision in Stack v Dowden had endorsed (to a large extent) the approach of the Court of Appeal in Oxley v Hiscock in respect of the proper approach to quantification of shares in the family home.

The starting point, according to Stack v Dowden, is that where property is conveyed into joint names there is a presumption that the beneficial shares are owned equally (in the absence of any express declaration to the contrary). Establishing that the shares are held other than equally will depend upon identifying a common intention that the shares should be so held; only in very unusual cases is this likely to be established according to the House of Lords in that case. The reality, of course, is that such a common intention is very unlikely to have ever been expressly stated and agreed upon; it will be for the court to look at the evidence and determine whether the facts speak to there having been such an intention. In so doing the courts will look at the whole of the parties’ conduct.

There is a fine distinction between inferring the intention of the parties from the facts and imputing their intention. This is a line which Lord Neuberger (dissenting as to the reasoning but not as to the result in Stack v Dowden, para [125]) thought ought not to be crossed. The former being the product of some objective analysis and the latter being essentially an invention of the court where no such intention could be identified from examining the parties’ actions and statements.

Of course, in Stack v Dowden the parties had never really had a domestic partnership in the financial sense, the finances having been kept separate throughout their relationship, whereas until the time Ms Jones and Mr Kernott separated there appears to have been a clear financial partnership between them. Even after Mr Kernott moved out of the property, until 2008 the Badger Hall Avenue property continued to be held under a beneficial joint tenancy, Mr Kernott serving a notice of severance of the joint tenancy in May of that year.

Given that the financial contributions of the parties to the property were clearly very different once Mr Kernott had left the property it is not at all surprising that Ms Jones should acquire a greater interest in the property, thus rebutting the presumption of beneficial joint ownership. However, the quantification in this case is open to question. On appeal Nicholas Strauss QC said that whilst he is not sure that he would have arrived at exactly the same result (in terms of the proportions apportioned to the parties) as the judge he did not think that the attribution of 90% of the property to Ms Jones was unjustifiable. On the facts it is clear that Mr Kernott had contributed far more than 10% to the purchase and increased value of the property. The fact that Ms Jones had paid all of the mortgage payments and household expenses once Mr Kernott had left the property is only to be expected; she also enjoyed the whole benefit of the property. A point which had been pursued on behalf of Ms Jones in the County Court was a suggestion that once Mr Kernott had acquired his own separate property he did not intend to have a subsisting interest in the Badger Hall Avenue property. This was not pursued on appeal. Also, it was clearly a feature of the case that Mr Kernott had made no payment for the maintenance of the children although Ms Jones had never pursued such contributions from him. It is, however, something which both the trial judge and the judge on appeal thought would be a legitimate consideration.

Nicholas Strauss QC recognised that the trial judge, in coming to the conclusion which he did, had attributed to the parties a common intention which they did not have, or at least did not express to each other. In other words, he had imputed to the parties an intention which was not apparent from their conduct. This, he said, was the right thing to do in this case. This, whilst being consistent with the approach advocated by the majority in Stack v Dowden, really is to be questioned. If the courts are entitled, in the absence of any evidence, and arguably in defiance of the evidence, to invent common intentions and graft those onto the minds of the litigating parties, we are left with a level of discretion which will provide unacceptably high levels of uncertainty when it comes to the quantification of shares in the family home upon the dissolution of relationships. It is precisely this sort of outcome which Lord Neuberger warned against in his dissenting speech in Stack v Dowden and he was right to be concerned; the rot is setting in.

Postscript

For another view on this decision, see here. See also a piece I wrote for the NLJ on this here.

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Posted in Beneficial Ownership, Common Intention, Family Home, Joint Tenancy, Land Law, Trusts, Trusts of Land

Posted by: RM | June 15, 2009

New Town & Village Greens

As previously noted, I have a particular interest in the law relating to the registration of new town and village greens and this is a topic upon which I am likely to write many more posts. In the absence of anything terribly new to write about at the moment this is a perfect opportunity to set out a little of the context in which the law on the registration of new greens operates. Whilst this topic may seem, to the uninitiated, relatively unimportant in the grand scheme of property law it is, in fact, an area in which there is a rapidly increasing amount of legal activity.

The relevant legislation

Originally new greens were registrable under the Commons Act 1965. There are still some applications proceeding under this legislation. However, the Commons Act 2006 has repealed the 1965 Act and section 15 of the new Act provides a more generous test which applicants have to meet (more generous because it permits the bringing of an application to register land as a new green even where the qualifying use of that land has stopped prior to the application whereas under section 22(1A)(a) of the 1965 Act use had to “continue” which was judicially interpreted by the House of Lords in Oxfordshire County Council v Oxford City Council – sometimes referred to as the “Trap Grounds Case” – to mean “continue until the date of the application”). Notwithstanding this obvious distinction, both pieces of legislation provide(d) for the registration of new greens on the basis of statutory prescription. The acquisition of rights by prescription is, of course, not limited to new greens: it is relevant to the creation of easements, profits and public rights of way too.

This is a very brief, general overview of the legislation. The statutory test is actually quite detailed and there has been much judicial scrutiny of it. I will endeavour to deal with more specific aspects of it in later posts.

The doctrine of prescription

The doctrine of prescription requires that qualifying use be “as of right”. This means that use must be nec vi, nec clam, nec precario (without force, without stealth and without permission) which is discussed briefly below in the context of a recent decision of the Court of Appeal in Lewis v Redcar. However, rather more is required, in the context of new green registration at least, than the simple tripartite test. Use must also, according to Lord Walker in R v City of Sunderland (ex parte Beresford), be trespassory. At one point it was suggested that qualifying users had to believe that they were using the application land pursuant to an imagined legal right to do so but the House of Lords in R v Oxfordshire County Council (ex parte Sunningwell Parish Council) rejected any suggestion that the subjective beliefs of the users was relevant. Following the Court of Appeal’s decision in Lewis v Redcar the qualifying users’ deference to the landowner’s use of his own land may well be a relevant factor in determining whether use is as of right because it has a bearing on the outward appearance to the reasonable landowner whether the qualifying use was an assertion of the legal right claimed. If the qualifying use were to give the impression to a reasonable landowner (an objective test) that the users were using his land as if by right, in the event that the landowner fails to take some action to stop the qualifying use he will be deemed to have acquiesced in it. This is an important aspect of the as of right test.

New green applications in context

Why have applications to register new greens become so popular in recent years? The answer is two fold. Firstly, the 1965 legislation introduced the first system of formal registration of town and village greens. There was a cut off date in July 1970 for the registration of greens which were already in existence (certain criteria had to be met). Thereafter, even land which may have qualified as a green at that time but which had not been registered would have lost the opportunity to be so registered. There were criteria provided in the legislation which enabled the registration of new greens coming into existence following the cut off date to be registered. However, the period of precriptive user was 20 years which meant that no application for registration could be made until after July 1990, less than 20 years ago. This explains why the law on the registration of new greens was unheard of until very recently, because it simply did not exist.

Secondly, the aim of any application to register land as a new green is to preserve a space which has been used by a community for informal recreation over a long period. Much of this land is becoming subject to proposed development. Where the local users have failed to prevent development through the usual process of objection to the planning authority, a successful application for registration as a new green has the desired effect. All registered greens are subject to the Inclosure Act 1857 and the Commons Act 1876 which, between them, prevent inclosure of or building upon a town or village green. Hence, new green aplications have become an effective weapon in the arsenal of the anti-development movement where there has been informal recreational use over the requisite period.

Procedure

All new green applications are made to the registration authority (a local council). Once received the authority will notify the landowner who will, almost certainly, object to the application. Both parties will put their case and if there is any contention then it is likely that a public inquiry will be held. This is usually held in the area local to the application site. It is common for a very experienced barrister (with expertise in the law of new greens) to be appointed to chair such an inquiry (s/he is called the Inspector) and the inquiry takes a similar form to a trial. There will be formal exchange of evidence, submission of legal arguments, opening submissions, examination and cross examination of witnesses on both sides and, finally, closing submissions. Whilst witnesses give their evidence unsworn, the process of examination and cross examination is essentially the same as one would see in a court room. Solicitors and barristers are frequently instructed to represent the parties and, given the technicality of the law in this area, this is to be recommended. Notwithstanding this, however, it is not uncommon for Applicants to appear in person because of the obvious problems of funding. Landowners are more likely to have access to the necessary resources and, in the protection of potentially valuable land, are more inclined to pay for properly qualified representation.

Once the public inquiry has closed the Inspector will write a report which is provided to the registration authority. The report will analyse all of the evidence and the legal arguments made by all parties and will make a recommendation as to whether the application should succeed or fail. Reasons will be comprehensively given. Registration authorities tend to follow the recommendation of the Inspector although they are not under any legal obligation to do so. Either of the parties may apply for a judicial review of that decision if they have grounds to do so.

Public inquiries can last for anything from a couple of days to a few weeks (rare though). The Inspector’s report can take a number of months to be produced. Not only does it require considerable work to put together a comprehensive report, the popularity of new green applications is keeping specialist practitioners very busy! The new legislation which makes it easier to apply for registration is only likely to increase this trend as is the increasing pressure upon local authorities to find space for new developments.

That’s it for now

There are very many components of new green law which provide interesting points of contention. These will be discussed in more detail in future posts but, for now, welcome to the law on new greens, albeit in very  brief outline only!

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Posted in Commons Act 2006, Commons Registration Act 1965, New Green Registration, Prescription, Town & Village Greens

Posted by: RM | June 5, 2009

Easements Conundrum

The topic of this post has a bit of a history to it and I shall indulge myself a little in recounting it. It stems from a problem question which was posed for tutorial discussion with undergraduate students (straightforward stuff then one might expect). The essence of the dilemma is concerned with whether section 62 of the Law of Property Act 1925 will have the effect of crystallising a contractual licence into an easement upon conveyance (it can be taken as read that the requisite test for the operation of s62 is met). I have asked every land lawyer I know for their views on the proper answer to this conundrum and the response has been a mixed one. It continues to drive me nuts, so I am now opening up the debate for anyone interested to participate. The more people to whom the question is posed, the more chance that someone can point to THE answer! Here’s hoping…

The question which arose is this: If consideration has been paid for the exercise of a right, thereby making the right pursuant to a contractual (as distinct from a bare) licence, can that right become an easement by virtue of the operation of s62? I have fundamental doubts that it can. However, the textbooks which I have consulted (Megarry & Wade, Cheshire & Burn, Gray & Gray, Gale) have not really assisted. They all refer to licences being converted by the operation of s62, but they do not distinguish between different types of licence. The authorities which these books refer to as being authority for the proposition that a licence will be converted by s62 are all bare licences, eg International Tea Stores v Hobbs [1903] 2 Ch 165, Wright v Macadam [1949] 2 KB 744, Goldberg v Edwards [1950] Ch 247. Not helpful!

My own view is that a contractual licence is an agreement which is already “clothed” with a legal character and cannot, therefore, be turned into something else which has an entirely different legal character (ie proprietary as opposed to personal), and something which is clearly contrary to the intention of the parties (if they had wanted it to be an easement and not a contractual licence which creates a personal right the parties would have surely created one), by virtue of s62. A fellow land lawyer from a different institution pointed to the unreported case of Dewsbury v Davies (1992 – available on Lexis) as being authority that a personal right is a personal right and nothing more, which, of course, it is. He said that Dewsbury v Davies was concerned with a gratuitous licence, but it seemed to him that if there is consideration it is almost inevitably going to push the agreement over into the realm of the personal rather than the proprietary and that he has never heard of an easement which includes with it the obligation to pay for the privilege of using it. All very helpful stuff and, in my view, completely right, but still not conclusive … yet.

Another land lawyer friend suggested that the case of IDC Group Ltd v Clark (1992) 65 P & CR 179 might shed some light on the question. This case does concern whether or not something which is a licence can be an easement and concludes that it cannot. However, the case does not concern the operation of s62, so is not really on point. Gale on Easements does not directly deal with the point either, although it does say at para 3-135 (newest ed):

“It is settled that general words in a conveyance to a sitting tenant will operate to grant him, as an easement, any right or advantage which is exercised by him, as tenant, over other land of the grantor, and is capable of being granted as an easement, including ‘rights’ exercised by permission and not of right”.

The interesting point which can be extrapolated from this is that a right being exercised pursuant to a contractual licence is surely a right which is being exercised “of right” and therefore cannot be caught by s62. However, arguably a right being exercised pursuant to a bare permission is also a right being exercised “of right”, although any such right is, of course, precarious and can be revoked by the grantor at will without the grantee having any means of redress.

So, that’s where I am with this one at present. I have a pretty firm view that contractual licences cannot be caught by s62 (but there are those that disagree). This may, of course, become academic if the Law Commission’s provisional proposals that s62 should be abolished are ultimately adopted. However, if anyone can point to something which draws this debate to a definitive conclusion I, and no doubt all of the other land lawyers I have been bugging relentlessly with this conundrum, would be very grateful!

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Posted in Easements

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