LAWW2013-E1 LAND LAW

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1.Archie is the owner of Knowle Grange. He purchased Knowle Grange in 1985 with title being transferred to him alone. However, the purchase was made with assistance from his wife, Betty. Betty contributed half of the asking price, and Archie the balance. The two moved into Knowle Grange. Unknown to Betty, Archie had to raise some of his share of the purchase price via a secured loan from the Midshire Bank; the security is a charge over Knowle Grange.

In 1988, Betty and Archie won £50,000. They used the money to buy The Old Barn, a small property on the opposite side of the road to Knowle Grange, from Edna. In this instance the title was again transferred into Archie’s name alone. There was no need for a loan from a bank. Betty set up the barn as a space for her and Archie to produce pottery sculptures, this being their mutual hobby.

Earlier this year, Archie started to find himself in financial difficulties. In April he therefore sold and conveyed The Old Barn to Claire for £200,000. Archie made no reference to Betty. When Claire visited the barn, she saw the equipment and Betty at work, but she assumed (without making any enquiries) that the whole set up was Archie’s because he had once said he liked to sculpt in clay, and that Betty must be a friend who was allowed to drop in from time to time. Claire intended to convert the barn into living accommodation.

Archie’s financial problems are so bad that he could not keep up with the mortgage payments and the Midshire Bank has just successfully obtained an order for possession as a pre-cursor to selling Knowle Grange at auction next month. Archie has disappeared, and Betty has just received a notice from the Midshire Bank that she must vacate Knowle Grange immediately. Her initial emergency plan is to move into the barn, but on looking out of the window she sees builders erecting fencing around the barn and Claire directing them to clear out the equipment and unfinished sculptures. She goes to ask Claire what she is doing, only to be told that Claire now owns the barn and is converting it into a new home. In desperation Betty runs to her next-door neighbour, Donald, and tells him what is happening. He is supportive, but also concerned because he tells Betty that he had been granted a restrictive covenant in 1980 by the previous owner of The Old Barn (Edna), whereby Edna promised that the barn could not be used as residential accommodation. Betty looks puzzled, saying their solicitor never found a record of such a covenant when they bought The Old Barn in 1988.

Advise Betty and Donald about the enforceability of any interests they may have against the Midshire Bank and Claire, assuming that title to the two properties was at all relevant times unregistered.

2.In what circumstances will a transferee of registered title be bound by interests not discoverable by inspection of the register of title? To what extent does your answer suggest the need for any reform?

3.In January 2018, four siblings, Anna (21 years old), Beatrice (23 years old), Carol (15 years old) and Derek (28 years old) received a large inheritance on the death of their grandmother, Florence. They used this money to purchase Nightingale Hall in Nottingham, in conjunction with Eric (45 years old), an old family friend. The transfer document stated that each of the siblings bought Nightingale Hall as joint tenants at law and in equity, while Eric was to be a tenant in common over 1/5 of the property in equity only. Shortly thereafter, the parties were also joined at the Hall by Gareth, the siblings’ elderly uncle, who had recently been diagnosed with vascular dementia and was no longer able to live independently.

In January 2022, Carol hosted a party at Nightingale Hall to mark her 19th birthday. At the party, she announced that she had just sold her share in the Hall to Eric. Shocked by this news, Beatrice revealed to the other partygoers that she had just discovered that Eric had been sleeping with Carol for several months. Enraged, Anna angrily confronted Eric about his actions and shoved him in the chest. Unfortunately, Eric fell backwards and hit his head on the fireplace. He died shortly thereafter.

Broken by guilt, Beatrice felt unable to remain at Nightingale Hall. After checking into a nearby hotel that night, she resolved to send a text message to Derek stating that she wanted to sever her share in the Hall immediately and that she would be putting her share in the property on the market as soon as possible. Unfortunately, however, she actually sent this message to Anna (and not to Derek) by mistake.

The next morning, Beatrice realised that she had mistakenly messaged Anna the previous evening. She therefore immediately rang Derek on his mobile and repeated the same message to him which she had mistakenly sent to Anna. In response, Derek stated that after reflecting on the events of the previous night, he felt the same way as Beatrice and that the two of them should therefore meet up in the coming weeks in order to sort out how exactly they wished to proceed. Before such a meeting was possible, however, Derek was declared bankrupt following the collapse of his business in light of the adverse publicity he had received following Carol’s party, most notably due to the death of Eric.

The Trustee in Bankruptcy now wishes to sell Nightingale Hall to help to satisfy Derek’s creditors. Anna is also supportive of such a sale, as is Beatrice. Gareth has, however, recently been diagnosed with chronic osteoarthritis and has medical evidence that this and his vascular dementia are likely to be exacerbated if he is required to move away from the familiar surroundings of Nightingale Hall.

Advise Derek whether the court is likely to order a sale and, if it does, how the proceeds of sale will be divided.

4.“In 2004, the Law Commission said of the law of forfeiture of leases that ‘it is complex, it lacks coherence, and it can lead to injustice’, and that it is therefore ‘in urgent need of reform’.”

Discuss. LAWW2013-E1

5.“The modern development of the doctrine of proprietary estoppel is unfortunate. The attempt to achieve fairness for individual litigants has in fact had the effect of making the law unnecessarily complex and unpredictable.”

Discuss.

6.Rachel, who owns Blackacre, and Sarah, who owns Greenacre, are neighbours. Title to both properties is registered. Rachel wishes to be able to produce more of her own food, but in order to do this in a cost-effective manner, she needs to grow her own vegetable plants. That would be easier if she had access to a greenhouse. She tells this to Sarah who responds:

“If you are willing to pay for the restoration costs, we could renovate the derelict greenhouse which stands on Greenacre up against your fence. We can put a door on your side of the building so that you can get in from your garden, and I’ll have a door on my side for me to get in. You can then use it for growing your vegetable seedlings until such time in the future as I need it back.”

Wishing to avoid the costs of a lawyer, Sarah and Rachel simply write their agreement down on a piece of paper and both sign it.

Rachel duly renovated the greenhouse at a cost of £10,000 and used every available space in it during the 2020 and 2021 spring growing seasons to produce vegetable seedlings for later planting out in her garden. Then in the winter of 2021, Sarah sold Greenacre to Titchmarsh. Because of the time of the year of the sale, the greenhouse was empty, though Titchmarsh knew about Rachel using it through conversations at the local “grow-your-own-veg” society. He, however, has plans for Greenacre that mean he needs the greenhouse, and he accordingly tells Rachel that she may no longer use it.

Advise Rachel as to whether she has an easement, and if it were found that she does, whether it is enforceable against Titchmarsh.

7.“The entry into force of the Law of Property Act 1925 has resulted in the courts, without justification, being too generous when it comes to finding that the benefit and burden of freehold covenants has run with the land in equity.”

Discuss.

8.Married couple Owen and Beru own “The Lars’ Homestead”, a large property consisting of a small moisture farm and a substantial residential building in which they live with their young nephew, Luke. In January 2022, Owen, Beru and Luke visited the local branch of the Empire Bank in the nearby town of Anchorhead to meet with Jabba, the Bank’s Branch Manager. At this meeting, Owen and Beru offered the Bank a 20-year mortgage over The Lars’ Homestead in exchange for the funds to enable them to buy a shop in Anchorhead town centre. Owen and Beru stated that they would use this shop to sell water from their moisture farm to the town’s inhabitants. During a break in their meeting, Jabba overheard Luke asking Owen for information about the shop. Owen hurriedly replied to Luke: “No, that money is really for Beru to pay Kenobi the cash she lost to him playing chess last month, but don’t tell anyone, or we will both get into trouble.” Jabba nonetheless told Owen and Beru that he was prepared to grant them a mortgage, but only after he confronted Owen and made him promise to see the Lars’ family lawyer before signing the mortgage paperwork. Due to a drought now affecting the Anchorhead region, Owen and Beru are currently in arrears on the repayment of their loan and the Bank is seeking possession of The Lars’ Homestead to sell the land.

Chalmun is also a client of the Empire Bank having agreed a 10-year mortgage with the Bank in January 2022 to enable him to acquire a new commercial property in the town of Mos Eisley. This mortgage contains a clause requiring Chalmun to use his new premises as a restaurant and bar during the mortgage period. Mos Eisley is a major transportation hub, and the bank believes this will be the most profitable use of the premises for the foreseeable future. The mortgage also contains a clause requiring Chalmun to purchase all the food and drink supplies he uses on the premises during the mortgage period from Hutt Enterprises, a long- standing subsidiary of the Empire Bank. This is again because the Bank believes that this is the best way for it to ensure that the premises are as profitable as possible. Chalmun has, however, recently decided that he would prefer to use the premises as a souvenir shop going forward. If this is not possible, he would, in any event, like to change his food and drink supplier to a cheaper competitor company as Hutt Enterprises has recently dramatically increased its prices.

Advise:

(a)the Empire Bank as to whether it can take possession of the Lars’ Homestead and sell it; and
(b)Chalmun as to whether he can: (i) convert his premises into a souvenir shop; and/or (ii) change his food and drink supplier from Hutt Enterprises.

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