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Land Charge Registration Reviewed

Published online by Cambridge University Press:  16 January 2009

H. W. R. Wade
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Extract

It is not often that an expert committee, asked to report on a technical problem, have to admit defeat. But the Lord Chancellor's Committee on Land Charges, in their recent Report, confess that to rectify the 1925 machinery of registration, now that it is more than thirty years old, is a task beyond the wit of man. When so eminent a committee as that which sat under Mr. Justice Roxburgh reach such a conclusion, one may be sure that the law has thrown up an exceptionally tough conundrum. And it is of general interest that such things can happen. If the inventions of one generation of legislators fail to justify themselves, the next generation should be able to amend them, at any rate where the difficulties are purely technical and there are no questions of policy. But Lord Birkenhead and Sir Benjamin Cherry appear to have succeeded in creating the conveyancing equivalent of a Franckenstein's monster, which with the passing years would become not only more dangerous but also more difficult to kill.

The Report nevertheless contains plenty of valuable suggestions. In the first thirty years of the new system of registration many defects have come to light, and the Committee have attacked a number of familiar conveyancing problems. Of outstanding interest are their conclusions that registration of restrictive covenants should be discontinued, that the so-called rule in Re Forsey and Hollebone's Contract should be abolished, and (more tentatively) that the reversal of the rule in Patman v. Harland by section 44 (5) of the Law of Property Act, 1925, was a mistake.

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Research Article
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The Cambridge Law Journal , Volume 14 , Issue 2 , November 1956, pp. 216 - 234
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Copyright © Cambridge Law Journal and Contributors 1956

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References

1 Cmd. 9825, July, 1956. Subsequently cited as “Report.”

2 [1927] 2 Ch. 379.

3 (1881) 17 Ch.D. 353.

4 Cmd. 424, 1908, p. 7.

5 Report, para. 1. The Committee was constituted on October 1, 1954.

6 Report, para. 21.

7 Ibid.

8 Report, paras. 4, 22.

9 If this was the assumption, it was optimistic, since it was intended that nothing should be done in the first ten years: see next note.

10 Surrey (S.I. 1952, No. 395); Oxford (S.I. 1953, No. 881); Canterbury and Kent, to become effective by stages in the period 1957–1961 (S.I. 1955, Nos. 956, 957); Oldham (S.I. 1955, No. 1804); Leicester (S.I. 1956, No. 826). The pre-war compulsory areas were London, Middlesex, Eastbourne, Hastings and Croydon. The memorandum prefixed to the Law of Property Bill, 1922, proposed that there should be a ten-year standstill in which the merits of registered and unregistered conveyancing might again be compared. But the order for Hastings was made in 1928 (S.R. & O. 1928, No. 253).

11 The Scott Committee consulted the Ordnance Survey but were not told that mapping would present great difficulties: Cmd. 424, 1919, p. 23. But see Stewart-Wallace, , Principles of Land Registration, 81, and Chap. VII.Google Scholar

12 The Times, December 29, 1954.Google Scholar

13 See the table of charges in Garner, , Local Land Charges, 99–106.Google Scholar Numerous additions are proposed by the Committee on Local Land Charges: Cmd. 8440, 1952, p. 41.

14 Garner, , Local Land Charges, 36.Google Scholar But this does not extend to conditions imposed by the Minister as opposed to the local authority: see Report of the Committee on Local Land Charges, Cmd. 8440, 1952, p. 62.

15 Cmd. 8440.

16 Report, paras. 18, 19.

17 Report, paras. 10, 18.

18 Report, para. 18.

19 Ibid.

20 Report, para. 20.

21 Ibid.

22 Ibid.

23 Report, para. 22.

24 Ibid.

25 But since these are almost certain to be options contained in leases they come on to the title and in practice need no additional protection: see below, note 42.

26 Report, para 9.

27 It is of interest that Sir A. Underhill proposed to the Scott Committee that restrictive covenants should become unenforceable after 50 years: Cmd. 424, 1919, p. 38; but the Committee preferred the scheme now embodied in s. 84 of the Law of Property Act, 1925; Ibid., p. 7.

28 The covenant is against incumbrances “other than those subject to which the the conveyance is expressly made,” although the covenantor is not answerable for incumbrances created by predecessors in title if there was an intervening purchase for value: Law of Property Act, 1925, Second Schedule, Part I.

29 Report, para. 11.

30 Ibid.

31 See s. 200 of the Law of Property Act, 1925, concerning land held on a common title with other land.

32 Report, para. 9.

33 Report, para. 7.

34 Report, para. 13.

35 Land Charges Act, 1925, s. 10 (1) Class C (iii).

36 An unregistered general equitable charge is void against a purchaser of the land or of any interest in it (Land Charges Act, 1925, s. 13), notwithstanding notice (Law of Property Act, 1925, s. 199 (1) (i)). The severity of this rule is criticised below.

37 Settled Land Act, 1925, s. l (1) (v).

38 Report, para. 16.

39 “Any contract by an estate owner or by a person entitled at the date of the contract to have a legal estate conveyed to him to convey or create a legal estate…”: Land Charges Act, 1925, s. 10 (1) Class C (iv).

40 An equitable mortgage by deposit of deeds is commonly accompanied by a memorandum of charge which contains a promise to execute a legal mortgage if required by the mortgagee.

41 As early as 1926 it was pointed out that express undertakings required registration: Prideaux, , Precedents in Conveyancing, 22nd ed., ii, 259Google Scholar (Sir B. Cherry was a joint editor of this edition); the question whether all equitable mortgages are registrable was discussed by Lightwood in (1930) 69 L.J.News. 227 and by R. E. Megarry in (1940) 7 C.L.J. at 250–251. Lightwood's opinion was that registration ought not to be required, even where there was an express undertaking, since the whole transaction was primarily an equitable charge, not an estate contract, and equitable charges protected by deposit of deeds are not registrable. But Mr. Megarry points out that the statutory definition is hard to escape, especially where there is an express undertaking. Nevertheless it is possible that the equitable mortgage, though it began life as a contract for a legal mortgage, has by now become a distinct form of charge; it would be a tempting conclusion, since it would protect “protected” mortgages, and preserve the evident scheme of the Land Charges Act. (S. 13 of the Law of Property Act, 1925, does not assist since it does not extend to the Land Charges Act.)

42 Report, para. 15.

43 Report, para. 16.

44 See Lewisham B.C. v. Maloney [1948]Google Scholar 1 K.B. 50 (C.A.); Cross, G., The Bell Yard, No. XVGoogle Scholar; Davidge, C. V. (1937), 53 L.Q.R. 359Google Scholar; and also (1948) 64 L.Q.R. at p. 58, note 6.

45 Report, para. 9.

46 Judgments Act, 1839, s. 7; Lis Pendens Act, 1867, s. 2.

47 Land Charges Registration and Searches Act, 1888, s. 5.

48 Ibid., s. 7.

49 Ibid., s. 4 (defining “land charge”).

50 Judgments Act, 1855, ss. 12, 14.

51 Annuities created by marriage settlement or will were excluded.

52 17 Geo. 3, c. 26, reciting that “the pernicious Practice of raising Money by the Sale of Life Annuities hath of late years greatly increased and is much promoted by the Secrecy with which such transactions are conducted.” This Act was replaced by 53 Geo. 3, c. 141 (1813), repealed along with the usury laws by 17 & 18 Vict. c. 90 (1854). But after a short interval registration was restored by the Judgments Act, 1855 (above, note 50).

53 Sir John Stewart-Wallace in (1931) 75 S.J. 807. It may be observed that registration on this sweeping scale was no part of the original Underhill-Cherry scheme as recommended by the Scott Committee. They suggested registration only for death duty charges, petitions in bankruptcy and disentailing assurances: Cmd. 424, 1919, pp. 44, 46. Disentailing assurances are of course no longer enrollable: Law of Property Act, 1925, s. 133.

54 M.R., Jessel in Greaves v. Tofield (1880) 14 Ch.D. 563 at 565.Google Scholar

55 Le Neve v. Le Neve (1747) 436Google Scholar; another such decision is Greaves v. Tofield (above). But in some cases notice was made irrelevant by statute, e.g., Judgment Registration Act, 1855, ss. 4, 5, 10.

56 Hardwicke, Lord Chancellor in Le Neve v. Le Neve (above) at p. 442.Google Scholar

57 For examples of the rights of tenants in possession being defeated by later purchasers see Wright v. Dean [1948] Ch. 686Google Scholar; Sharp v. Coates [1949]Google Scholar 1 K.B. 285 (C.A. The decision is open to question on grounds not here material); Hollington Bros., Ltd. v. Rhodes [1951]Google Scholar 2 All E.R. 578, note. In each of these cases the later purchaser had actual notice of the tenant's rights. The first and last of them throw much of the hardship on to the lessor, by holding him to be in breach of contract, although if the tenant had registered (or if his interest had not been registrable) he would have lost nothing. In the last case, furthermore, the sale was expressly made subject to the rights of the tenant, but Harman J. held that even this could not affect the penalty imposed by s. 13 (2) of the Land Charges Act, 1925. Thus all parties suffer except the one who is equitably responsible, viz. the purchaser who bought with clear notice of the tenant's rights.

58 Land Registration Act, 1925, s. 70 (1) (g). See Mornington Permanent Building Society v. Kenway [1953] Ch. 382.Google Scholar

59 s. 14 applies only to Part I of the Act, i.e., ss. 1–39, none of which are here material.

60 Denning, L.J. in Bendall v. McWhirter [1952]Google Scholar 2 Q.B. 466 at 483; criticised by R. E. Megarry in (1952) 68 L.Q.R. at p. 385.

61 Harman, J. in Coventry Permanent Economic Building Society v. Jones [1951]Google Scholar 1 All E.R. 901 at 903–904.

62 [1927] 2 Ch. 379.

63 [1954] C.L.J. 89.

64 See the article above referred to.

65 Report, para. 25.

66 Report, para. 30.

67 Report, para. 31.

68 Report, para. 32.

69 (1881) 17 Ch.D. 353.

70 Wolstenholme, and Cherry, , Conveyancing Statutes, i, 298.Google Scholar

71 s. 2.

72 (1881) 17 Ch.D. 353.

73 Cmd. 424, 1919, p. 7.

74 Megarry, , Manual of Real Property, 2nd ed., 80.Google Scholar

75 [1937] Ch. 610 at 619 (affirmed [1938] Ch. 351, C.A.). The learned judge's opinion was criticised by Dr. D. W. Logan in (1940) 56 L.Q.R. at p. 368 on the ground that subsection (5) should protect the lessee. With all respect, it would seem to be wrong to extend the subsection to any kind of notice obtained aliunde; and the narrower the scope of the subsection the better.

76 It is possible for two mortgages to be protected by deposit of deeds; but normally if the first mortgagee takes the deeds, the second mortgage will be unprotected and so registrable.

77 Land Charges Act 1925, s. 10 (1) Class D (ii).

78 Shears v. Wells [1936]Google Scholar 1 All E.R. 832.

79 White v. Bijou Mansions, Ltd. [1937] Ch. 610.Google Scholar

80 Report, para. 41. In para. 12 the Committee also remarked that if their recommendation for the deregistration of restrictive covenants was to be effective, the rule in Patman v. Harland would have to be restored, otherwise owners of restricted land could defeat covenants by granting long leases. Owners of land subject to pre-1926 covenants can do exactly that as the law now stands.

81 Report, para. 41.

82 The learned judge said “…it may perhaps be a blot, that the lessee, unless he makes some bargain to that effect, is not permitted to inspect the register”: [1937] Ch. at p. 621.

83 Report, para. 42.

84 The current forms of inquiry were set out in Appendix C to the Report of the Committee on Local Land Charges, Cmd. 8440, 1952, and the system received their blessing (pp. 8–11). New forms were brought into use on October 1, 1953; and see J. F. Garner in (1953) 17 Conv.(N.S.) 349.