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”.

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.

Rather fortuitously a case popped up in my Lawtel updates this week which coincides with my teaching of the sometimes obscure topic of trust powers. The case is Howell & Ors v Lees-Millais & Ors [2009] EWHC 1754 (Ch). The case concerns a family settlement which was established in 1968 (“the 1968 Settlement”) by Major Joicey of Blenkinsopp Hall in Northumberland. A substantial amount of real property which forms part of the Blenkinsopp estate (“the Estate”) was conveyed into the 1968 Settlement. This property had been enjoyed by the settlor and his predecessors for many years. Clause 3 of the 1968 Settlement created a power of appointment in the trustees and Clause 4 made gifts in default of any appointment made under the authority of Clause 3. The gifts in default of appointment under Clause 4 meant that the property the subject of the 1968 Settlement would be likely to become divisible, the result being that the Estate would undoubtedly be broken up.

In 1977 an appointment (“the 1977 Appointment”) under Clause 3 was duly exercised by deed. The 1977 Appointment provided, in the absence of any trust expressly created as described therein, for a series of gifts in default, each being to one person only (which would avoid the possibility of the Estate having to be broken up to share it amongst numerous parties) with successive gifts to another one person only. The material provision of the 1977 Appointment is as follows:

2. As from the date hereof the Trust Fund and the income thereof shall be held upon such trusts and with and subject to such powers and provisions (including discretionary trusts or powers vested in any person or persons) in favour of any one or more exclusive of the other or others of the children and remoter issue of the Settlor as the Trustees shall from time to time during the Trust Period (but during the life of the Settlor only with his consent in writing) by deed or deeds revocable or irrevocable appoint…

…In default of and subject to any such appointment the Trust Fund shall be held upon trust for the first or only son of Lucinda who shall attain the age of twenty five years during the Trust Period absolutely or if there is no such son of Lucinda then upon trust for the first or only daughter of Lucinda who shall attain the age of twenty five years during the Trust Period absolutely and if there is no such daughter of Lucinda then upon similar trusts for the first or only son or if there is no son for the first or only daughter of Sabina then for such son or daughter of Fiona or if there are no such sons or daughters then upon trust for such of Lucinda Sabina and Fiona as shall attain the age of twenty five years during the Trust Period absolutely and if more than one in equal shares but if none of them shall attain that age then upon trust for the survivor of the said daughters of the Settlor absolutely

The eldest son of Lucinda, Alexander Newall (the sixth defendant), will attain the age of twenty five in late October of this year. The question for the court was whether a gift in default to Alexander in accordance with the 1977 Appointment would render any overriding power to appoint impotent, thereby making a gift in default to Alexander absolute and indefeasible. In essence, the court was being asked whether a gift to Alexander in default of the trustees exercising their overriding power of appointment could subsequently be undone.

Sir John Lindsay, sitting as a High Court Judge, reviewed what little authority exists, none of which is precisely on point. He went to some lengths to make it clear that in such cases as these, context is vitally important. It was argued by the trustees that upon attaining the age of twenty five and in the absence of any earlier appointment, Alexander would acquire an indefeasible interest in the whole of the 1968 Settlement, the trustees retaining no power thereafter to revoke that default appointment and appoint elsewhere. Relying upon the dictum of Sir John Pennycuick V-C in Re Sharp’s Settlement Trusts [1973] 1 Ch 331, 338, where he stated

The word “absolute” in its ordinary use in legal language denotes complete beneficial ownership and dominion over property, and I should have thought it an entirely unnatural use of the word to apply it to an interest which can be destroyed at any time by the exercise of a power or the fulfilment of a condition with the consequence that the property must be retained by the trustees until the power or the condition is spent…

it was suggested that the use of the word “absolutely” in the default provision of the 1977 Appointment was indicative that the interest which anyone acquired under that default provision was to be indefeasible. However, for some of the defendants it was argued that in Re Sharp’s ST the Vice-Chanellor recognised the possibility of some contexts requiring a meaning other than that which he described as the natural one (see para [20]). Re Sharp’s ST was concerned with the proper interpretation of “absolutely” within section 31(2)(i)(b) of the Trustee Act 1925. The Vice-Chancellor had qualified his acceptance that the word “absolutely” should be given its natural meaning  by saying that it should be so “apart from [in] some larger context”.

In the present case it was noted that there was a possibility that some contexts would require a meaning to be attached to the word “absolutely” other than that which had been described in Re Sharp’s ST as being the natural one. Referring to a passage from Fearne, Contingent Remainders and Executory Devises, 10th ed (1844), vol 2, p30, Sir John Lindsay noted that the word “absolute” was considered there to have varying meanings, one of which when referring to “the quality of interest” means interest which comprises entire ownership and another which, when being used “with reference to the certainty of duration” of an interest, means indefeasible. It was also noted that the V-C’s reference to the word’s use “in ordinary use in legal language” was in the context of construing a statutory provision as to which the presumed intention of Parliament is relevant.

It was not submitted that Re Sharp’s ST was binding upon the court in this case and the court felt free to arrive at a different conclusion as to the proper interpretation of the word “absolute” should a “larger context” so require. It was argued for the defendants that the power contained in Clause 3 of the 1968 settlement was an overriding power, this power having been exercised in 1977 in the execution of the Deed of Appointment. However, the power exercised in 1977 was not expressed to be irrevocable, the power therein having been described as being exercisable “from time to time during the Trust Period…by deed or deeds revocable or irrevocable”. The Trust Period runs from the date of settlement for 80 years, the conventional period for a trust. Hence, at the date of this litigation there is still a considerable proportion of the trust period still left to run. It was further noted that there is no provision that the power shall not, in whole or in part, be thereafter exercisable if an interest under the trusts in default of appointment has become vested.

Most importantly, however, Sir John Lindsay identified that the default trusts of Clause 3 are exactly that – default trusts. They are in default of and subject to any valid appointment made by the trustees during the Trust Period. There is nothing which provides that any further appointment, subsequent to any vesting of trust property in default, should not take effect in relation to that particular property. It was concluded that the appointors should not be taken to have lost the power to make further appointments, even in the context of property which has vested under the exercise of powers authorised by Clause 3, unless the ability of the appointors to do so is excluded by express provision or necessary implication, neither of which was be found in the present case.

The result is that if the trustees do not make any appointment under the 1977 Appointment, in late October of this year Alexander Newall will acquire a vested interest in the property of the 1968 Settlement. Despite this, if the trustees consider it proper at some later date to make some alternative appointment, thereby defeating the interest which Alexander will acquire later this year, they may, apparently, freely do so.

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!

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!

Posted by: RM | June 2, 2009

Adverse Possession of River Bed

In a recent decision of the High Court, Port of London Authority v Ashmore, it was held that a claim to title of part of the river bed of the River Thames should succeed on the basis that the defendant, Mr Ashmore, had been in adverse possession of it for 26 years.

Mr Ashmore owned a flat bottomed boat, Atrato, which he had moored at Albion Wharf (now Albion Riverside), close to Battersea Bridge, from 1983 until the present day. During that time the boat was permanently moored there with the exception of a two month period five years ago when the boat was moved to dry dock for an overhaul. Otherwise the boat was secured in position by way of an anchor and tethering to the bank. Atrato would come to rest on the river bed twice a day at low tide.

The Port of London Authority wished to register title of the bed of the Thames. However, Mr Ashmore objected to the registration of that part of the river bed upon which his boat had come to rest twice a day. He objected on the basis that he had adversely possessed that part of the river bed for the requisite period prescribed by section 15(1) of the Limitation Act 1980 which contains the relevant provisions regarding unregistered land.

Mr Stephen Smith QC, sitting as a Deputy Judge of the Chancery Division, rejected the notion that a squatter must prove some physical contact with the land at all times. He observed that when the land which is the subject of the claim is part of the bed of a tidal river which is flooded twice a day, the fact that the squatter’s boat rises and falls does not constitute the relinquishment of physical possession of the land upon which the boat comes to rest at low tide. Concluding that Mr Ashmore had demonstrated both factual possession and the intention to possess the land, he succeeded in his claim to title of the land by adverse possession.

Two points which were not addressed in the judgment were (1) the question whether the public right of navigation will be obstructed by Mr Ashmore’s successful claim to title of the part of the river bed of which he had been in possession, and (2) whether the riparian owner (who is not the Port Authority) could prevent Mr Ashmore from gaining access to his boat from the river bank or from tethering his boat to the mooring rings thereon.

Postscript:

For another (more detailed!) discussion of this case see Nearly Legal’s blog here and for discussion of a claim of adverse possession of a highway, see here.

Posted by: RM | May 31, 2009

What’s New?

I cannot possibly hope to give an overview here of what’s new in all of property law. However, I can bring this blog a little more up to date with a brief commentary on some recent decisions which have interested me and which I have written about, together with a brief explanation of what is so interesting about them. Looking also to the future, however, I keep a pretty close eye on new decisions, reports and consultations of one sort or another and will discuss them as and when they appear on my regular updates, so the commentary should very soon begin to cover a broader range of topics than those which are within my immediate range of research interests.

Proprietary Estoppel

The recent House of Lords decision in Thorner v Majors is a significant one in the sense that it reconfirms the fact that the doctrine is alive and well, despite last year’s decision in Yeoman’s Row Management Ltd v Cobbe which, it had been suggested by some, signified the near death of the operation of the doctrine of proprietary estoppel. In Thorner their Lordships were concerned to point out the appropriateness of a context sensitive approach which should be adopted by the courts, especially where familial relationships are at the centre of the claim, these being factual scenarios which are notorious for their lack of any kind of formal agreement. Their Lordships, Lord Neuberger in particular, were also careful to distinguish Cobbe and to articulate the general limitations of the circumstances in which the approach adopted in that case is to be applied. Most notably, it was recognised that in Cobbe it was not clear what right or interest Mr Cobbe had expected to receive, pursuant to any representation made on behalf of YRM Ltd. It was also considered very pertinent to that decision that the parties were both commercial entities who had struck a commercial bargain at arm’s length.

Much of this is unsurprising but the Thorner decision did re-introduce some clarity to a topic which had undergone a temporary moment of uncertainty. One of the more interesting and rather more surprising aspects of the decision was introduced by Lord Scott who, when considering the remedies which were available to Mr Thorner, considered that he would be more comfortable regarding the claimant’s equity as being established under a remedial constructive trust (para[14]). Lord Scott referred to Gissing v Gissing as being a case in which the courts had recognised the remedial constructive trust as being created by the common intention or understanding of the parties. This is not correct. The type of constructive trust which was recognised in Gissing v Gissing became commonly known as the common intention constructive trust. The common intention constructive trust has, on occasion, been roundly criticised as being an example of a trust arising on the basis of imputed intention rather than inferred intention. However, it was never referred to in that case as being a remedial constructive trust and the English jurisdiction has never accepted that a constructive trust is a recognised species of judicial remedy. This is entirely consistent with the orthodox position that remedial constructive trusts do not exist in English Law, Re Polly Peck (No 2) [1998] 3 All ER 812.

Postscript: To view a piece I wrote for the New Law Journal on this decision click here.

New Town and Village Greens

This is likely to be the first of many posts on this topic over the coming months and years. To the uninitiated among my readers it may seem a rather eccentric topic and may also be perceived as narrow and unlikely to produce much in the way of “new developments”. This, in fact, could not be further from the truth. The law relating to the registration of new greens has, in recent years, been an area of unusually intense judicial activity for reasons which I will explain more fully at a later date. However, a recent judgment of the Court of Appeal has, depending upon which way you choose to look at it, clarified or confused the test for succeeding in an application for the registration of a new green.

To succeed in an application for registration it is necessary to establish that user of the land has been “as of right”. This is the standard test for the acquisition of rights over land by prescription. However, it has become clear in recent years that, in the context of new greens at least, the as of right test is more complicated than requiring use which is simply nec vi, nec clam, nec precario (without force, without stealth, without permission). The Court of Appeal’s recent decision in R (On the aplication of Kevin Lewis) v Redcar & Cleveland Borough Council has confirmed the relevance of the deference of the recreational users to the landowner’s use of his land in the context of such a claim. In fact, in Lewis v Redcar, despite the fact that the recreational use was nec vi, nec clam, nec precario and was trespassory, another requirement of the as of right test, the deference of the recreational users was sufficient to defeat the application for registration. This decision and its reasoning merits closer scrutiny which I will endeavour to provide at some later date, but it is still possible at present that this decision will be appealed to the House of Lords. If it is it will be the fourth new green registration case to come before the highest court in the land in a decade.

Postscript: I have written about the relationship between user as of right and deference here.

Forfeiture of Deposits

This is a topic about which there is an earlier post, specifically referring to the decision in Aribisala. Since that decision of the High Court the Court of Appeal has had an opportunity to consider this topic in the case of Midill (97PL) Limited v Park Lane Estates Limited. This recent decision of the Court of Appeal is useful in that it clarifies the approach which the court should take, namely that a deposit paid in repsct of the sale of land should not normally be returned in the case of default by the purchaser unless there are very special circumstances for ordering its return. This represents a pretty strict application of the law but one which is entirely consistent with the fact that a deposit paid in relation to a sale of land was always regarded as an earnest for perfomance and should not be returned where the purchaser fails to complete the sale. I wrote a short piece on this for the NLJ (“Show me the money“) but I also wrote a longer, more detailed analysis for publication. As is often the way of things, when it was submitted I had been pipped at the post by the editor of the journal to whom I submitted! Once I have figured out how to create a page onto which I can upload the text of that piece I shall do so and put in a link from this post.

Posted by: RM | May 29, 2009

Going Live

Welcome to this new blog which aims to provide a commentary on issues of property law as and when they arise. I hope to be able to provide regular updates although the success of this endeavour will no doubt fluctuate with the varying demands of my work! You will see that despite this being a new blog, there are some preceding posts. These are copied from an earlier blog of mine which is no longer in existence. Whilst the dates of publication of the posts are recent, the posts were originally written and published in 2008, hence the rather dated nature of the subject matter. Going forward this blog will concentrate on discussion of current developments in the broad field of property law but will also address interesting, although not necessarily new issues relating to property law as and when they occur to me.

Posted by: RM | May 29, 2009

“Dog-Leg” Claims

A fascinating case has recently come before the High Court: Gregson v HAE Trustees & Others. The case addressed two issues, the most interesting being whether or not a “dog-leg” claim could succeed. A beneficiary under a trust brought an action against a private trust company together with a number of directors of the company. The claimant sought damages for breach of trust as a consequence of the trust in which she had a beneficial interest becoming illiquid, consequent upon a family company, the shares of which made up the whole trust property, going into liquidation. The claimant won on the point that the trustees were under a duty to review the investments within the trust, but lost the essential point regarding a “dog-leg” claim.

So, what is a “dog-leg” claim? It is a claim by a beneficiary under a trust against the directors of a private trust company which is trustee of the trust. Why not sue the trust company? Very good point, but if they have no assets or insurance, it would be a pointless exercise. So what’s the problem with suing the directors? Separate legal personality, in short. All companies are independent legal entities and it is only in very rare circumstances that the corporate veil will be pierced, this not being one of them. Directors owe a duty to their company and shareholders, but the remedy for any breach lies with the company or the shareholders (in some circumstances at least, too complicated to recite here). So, why doesn’t the company sue the directors? This was a private trust company, established for the purposes of managing family trusts. Many of the directors are family members or friends. One disgruntled beneficiary (also a family member) cannot compel the company to sue its own directors if it doesn’t want to.

The concept of a “dog-leg” claim is a bit ingenious. The idea is that the directors of the trust company owe a duty to the trust company and in the event that the directors breach that duty the right of action which is vested in the trustee company becomes the property of the trust itself. Therefore, in the event of the trust company refusing or failing to bring an action against the directors, the beneficiaries may do so.

There is very little authority on this type of claim and what little there is seems to point to a “dog-leg” claim being a non-starter. It is quite understandable given that to allow such a claim would appear to offend the rule that the company is the appropriate defendant. However, the case does identify a problem in relation to the liability of trustees who act in breach of trust but are to all intents and purposes untouchable in any meaningful way.

Postscript: For a full case commentary on this case see the Denning Law Journal, 2009; full text available from Hein online

Posted by: RM | May 29, 2009

Joint Tenancy: Equal Shares?

I’m a bit late on this one, but workload has conspired against me. The recent decision in Fowler v Barron addresses the question which was comprehensively dealt with by the House of Lords in Stack v Dowden, namely, in what circumstances will a joint tenancy not give rise to a presumption of beneficial ownership in equal shares?

In this case, Mr Barron, a retired fireman, and his partner, Miss Fowler, purchased a property in Bognor Regis in 1998. They had an unmarried relationship from 1983 to 2005 and had two children together. The couple consciously decided to put the property into joint names but there was no agreement or discussion between them as to how the property should be held. The (unsigned) transfer document did not contain any declaration of trust but stated that the survivor of them could give a valid receipt for capital money arising on the disposition of property, implying that the right of survivorship was intended to apply. However, the declaration was held not to be dispositive.

Mr Barron paid the mortgage repayments and other house related expenses out of his pension. He also paid for most other things including the weekly shopping bill. While Miss Fowler went out to work Mr Barron looked after the children. Her income was spent largely on herself and the children. Eventually the relationship broke down and the couple separated.

It will be recalled that in Stack v Dowden the presumption of joint tenancy was rebutted on the basis that the evidence showed there had been unequal financial contributions to the property. It is perhaps a little ironic that in this case, where one party has made no obvious contribution to the property she should find herself better off, enjoying a 50% share, than Mr Stack who had contributed financially to the acquisition of the property. This is, of course, a gross over simplification of the case, but serves to illustrate a slightly curious result.

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