LAND LAW

CRACKS ON THE MIRROR

SANDUNI JAYANETTI

LAND LAW
CRACKS ON THE MIRROR

SANDUNI JAYANETTI
LLB 2nd YEAR
LAND LAW

SANDUNI JAYANETTI

As we shall see, the mirror principle does not operate fully in the system of
registered land in England and Wales, even under LRA 2002.

Martin Dixon, Modern Land Law (8th Ed. Routledge 2012) page 33

Critically consider this statement in the light of the decided case law with
particular attention to the changes introduced by the LRA 2002.

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The concept of land as registered means that the title to it (the estate, a right of
ownership) is recorded in a register maintained by HM Land Registry and
accessed through a number of district land registries around the country of
increasingly online.1Land Registration Act (LRA) 1925 which governed the system of
registered land was replaced by the LRA2002, which mainly came into action on 13th
October 2003.
LRA1925 occupied several difficulties for the purchaser: had to take time and expense
to read the title deeds, risked the deeds being forged or inaccurate, moreover risked
that unnoticed and therefore binding effect of an equitable interest, or the binding effect
of a legal one. LRA2002 was introduced in order to impose compulsory registration on
most dispositions of interests in land and therefore ensure good title. The essential
principle underlying the Act was the mirror principle.
The mirror principle of land registration is one of the three fundamental principles
identified by former chief land registrar 2. Mirror principle states that the register of title is
a mirror that reflects accurately and completely the current facts pertaining to a title.
There are two flaws in the mirror principle that avoid the land register. One is that
certain third-party rights (or overriding interests) may affect a piece of land even though
they are not registered; second one is that unenforceable or obsolete rights continue to
be registered.
Unfortunately, LRA1925 failed to eliminate all cracks in the mirror, instead preserving
the certain interests which may override registration. These overriding interests
burden registered land by operating on a superior plane to other registrable interests,
binding purchasers outright and disproportionately empowering the overriding interestholder. Amongst others related to overriding interests the argument has surrounded the
overriding status of interests belonging to persons in actual occupation of the land.

1
2

Martin Dixson, Modern land law (12th, Routledge, England 2012) 28

(TBF Rouff, An Englishman Looks at the Torrens System(Law Book Co of Australia,1957,p8)

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The aim of the LRA2002 is described as total registration, in other words to ensure that
as much as possible the ownership of land in England and Wales takes the form of title
by registration.
On the other hand the register will never be a perfect mirror, as everything cannot be
expected to be entered on a register. Such as informally created rights where no
property professional has been involved are unlikely ever to be registered by the parties
and short-term rights or rights fundamental to the good use of lands 3are either too
transient or too important to be subject to a registration requirement.4However, there is
an undeniable improvement in LRA2002 by comparing with LRA1925 the reflection of
the mirror. Number of interests will be brought onto the register through operation of econveyancing.
The intention of the LRA2002 was that need for purchasers of land to make additional
title investigations should be kept to a minimum. Overriding interests are the exception
to these principles.5 Moreover can lead to alteration of the register with no
compensation being payable to the purchaser. 6 Overriding interests are defined as
those interests which bind the registered proprietor of registered land even though he
has no knowledge of them and no reference is made to them in the register. 7LRA2002
(S.29(2)(a)(ii)) gives priority to overriding interests even though they are not protected
on the register.

Crucial part is whether the third party interest in land is one which overrides or one
which requires protection on the register. They are hence a hazard for the purchaser:
not visible on the register but binding upon the purchaser regardless of notice. No
compensation is payable if the register is altered to give effect to an overriding interest
since, the purchaser has suffered no loss.
3
4
5

(rights benefiting the general public)

Martin Dixson, Modern land law (12th, Routledge, England 2012) 34
Ed Colreavy, 'Overriding interests: The deadline for registration approaches' [05.03.13]

<http://www.wragge.com/analysis_9736.asp#.UrKP-_QW3ek>
6

Rojer J Smith, Property Law (7th, Pearson education Ltd, England 2011)
Malcolm McKenzie PARK, 'The effect of adverse possession on part of a registered title
land parcel' [January 2003] 29
7

<http://www.csdila.unimelb.edu.au/publication/theses/MMP_PhD_Thesis.pdf>

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LRA1925 provided only one list of overriding interests, s70 (1) which did not
distinguish between first registration and registration of a disposition, there is an actual
difference in LRA 2002. LRA2002 provides separate statements about the relevant
overriding interests are provided in the two schedules; Sch1 lists interests which
override first registration and Sch3 lists interests which override a registered
disposition.8 Process to find out overriding interest is an entered to land physically or by
conducting an investigation. After a failure of such attempt, the case of Petti V Petti9
held that regardless of the failure purchaser bound by the overriding interest and not
provided a process to be compensated

Paragraph1 of schedule3 represents short leases which can be overriding from not
exceeding 7 years. Paragraph1 provides that leases which are not independently
registrable10take effect as overriding interest binding the landlords estate.Under
LRA1925,s70(1)(k) it was held in City Permanent BS v Miller11that the word used
granted excluede equitable leases, they are not the subject of grant. It proves that this
interpretation only apply equally to the terms of paragraph1.
With regard short legal leases not exceeding seven years and any proprietary interest
belonging to a person in actual occupation of the land (LRA2002, ss11(4)(b), 12(4)(c),
Sch1,s29(1)-(2)(a)(ii), Sch3 , such entitlements automatically bind any proprietor of a
registered title and thereby detract, at least marginally, from the completeness of the
mirror image which the Land Register is meant to reflect. Although the LAR2002 does
not explicitly retain the terminology of overriding interest (compare LRA1925,ss
3(xvi),70(1)), the LRA2002 nevertheless speaks also of the overriding status of these
rights (LRA2002,s133,Sch11,para26(4)). For clarity of the exposition, therefore, it
seems both convenient and justifiable to revert occasionally to the familiar shorthand of
the overriding interest.12 Schedule3 excludes from being implied that there will be

Judith-Anne MacKenzie & Mary Philips , land law (13th, oxford university, oxford 2010) 109

[1970] AC (parties entitle to joint ownership under equity)

(noted land lords title)
11
1952
12
Kevin Gray & Susan Francis Gray, land law (7th, Oxford, University of Oxford 2011) 96
10

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situations where it is not reasonable to expect someone to respond to an inquiry by
revealing their right.

LRA2002, requires that new easements and profits a prendre with regard to a
registered land, to be granted and expressly established under it must be registered. All
expressly granted easements must be entered on the register in order to be legal and
so have no need to override. 13 Once e-conveyancing is operative, all easements which
are expressly created will be entered on the register and so problems will occur only in
relation to implied easements. Legal easements and profits under s70(1)(a)were
overriding, Celsteel v Alton14

With regard to the s 70 (1) (g) in the case of Ferrihurst LTD v Wallcite15where the
claimants overriding interest in respect of the property was undiscoverable because of
his actual occupation extended only to part of that property. In the sense, whose right is
not reasonably discoverable by inspection of the land or that anyone who is in actual
occupation but unreasonably fails to disclose his right when asked about it, will lose the
right if person does not protect it on the register under the scheme of LRA2002.

Some recent cases have also expanded the protection of overriding interests
(schedule3 para2(c). In the case of case of Malory Enterprises v Cheshire Homes16,
actual occupation of derelict land did not require residence but physically presence,
with some degree of permanence and continuity. In Ferrishurst v Wallcite17, actual
occupation of part of the land was sufficient to protect the entire land in which the
plaintiff had an interest; but this case has been reversed by the LRA2002.

13
14

(If they are not so entered, they become equitable and are still outside Sched. 3)
Celsteel Ltd v Alton House Holding Ltd (1985)

15
16
17

Ferrishurst Ltd -v- Wallcite Ltd(1998)

[2002]
[1999]
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Under the 2002 act, there are two types of entry which can be used to protect 3rd party
rights: notice and restrictions. A notice is an entry in the register of the burden of an
interest affecting a registered estate 18 in the sense combination of the caution and
former notice, and shows any third party rights in the land .This removes
inconsistencies and overlaps in the previous system. Restriction is a blend of the
former restriction and inhibition, and shows any limitations on a registered proprietors
ability to deal with the land.

To further strengthen the idea of the register as a mirror of all rights in the registered
land, under Schedule3 the rights of a person in actual occupation will not override a
purchaser where either: enquiries have been made of the right-holder and he has failed
to disclose the right in circumstances where he could reasonably be expected to
disclose it; or the right-holders actual occupation is not obvious on a reasonable
inspection of the land, and the person potentially bound did not have actual knowledge
of the interest at the time of the disposition.

Though it did not include purely personal rights, for instances, the deserted wifes
equity in National Provincial Bank Ltd v Ainsworth, this important category placed a
substantial burden on a purchaser, not least because of the difficulty in discovering
whether there is a person in actual occupation. In Abbey National Building Society v
Cann HL held that the relevant date for determining whether a person is in actual
occupation is the date on which the disposition is executed, not the date on which it is
registered.

LRA 1925,s.70(1)(g)) protects an interest in land where its owner is in actual

occupation on the land. Ferrihurst LTD v Wallcite.19 To establish overriding interest its
necessary to establish actual occupation and ownership of interest. LRA2002
introduced two instances where its impossible to achieve overriding interest under
18
19

Section 32(1)of the LRA2002

Ferrishurst Ltd -v- Wallcite Ltd(1998)

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actual occupation to limit the scope. Where enquiries were made of the right holder and
he failed to disclose the right in circumstances where he could reasonably be expected
to do so20 Considerably can limit the scope of overriding interest. Anyhow this will
depend on reasonableness introduced under LRA2002.
Further where the right holders actual occupation would not have been obvious on
reasonably careful inspection of the land and person who might be bound did not have
actual knowledge of the interest at the time of the disposition. 21 this circumstances
would applicable in practice and is it effective to avoid being bound in relation to
undiscoverable overriding interest.
The case of Williams &Glyn Bank v Boland22 House of Lords held that Mrs Bolands
constructive trust interest was an overriding interest by virtue of s.70 (1)(g).Furthermore
Chhokar v Chhokar23 held that furniture can constitute adequate occupation which
amounted to an overriding interest.

The discoverable criteria applied to these cases resulted, the innocent party bieng
punished.

Therefore failure

to include

in

which circumstances consider as

undiscoverable created a controversial background. First case which analyses actual

occupation under 2002 LRA were Thompson V Foy24 Court held that her intention to
leave the property permanently was fatal to actual occupation. 25 and then agreed in
Link Lending V Bustard26 that it is hard to identify her actual occupation, after
recovering mental illness supposed to return home. In both these situation focused on

20

Martin Dixson, 'The Reform of Property Law and the Land Registration Act 2002: A Risk
Assessment' [] The Reform of Property Law and the Land Registration Act 2002 19, 19
21

Martin Dixson, 'The Reform of Property Law and the Land Registration Act 2002: A Risk
Assessment' [] The Reform of Property Law and the Land Registration Act 2002 19, 19
22

1979
1984
24
2009
25
P.262 property law
26
2010
23

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intention of the party. Further in City of London Society V Flegg can protect the buyer
from overriding interest.27

J.A.Pye(Oxford)Ltd v Graham28brought the matter of adverse possession to the head,

it is prove that the LRA2002 granted guard against squatters' rights. Under s96 the
squatter can relate to the registered proprietor after 10years of adverse possession.
The registered land owner will then be notified of the claim and will have an opportunity
to protest it. Act restores a sense of balance between the squatter and land owner.
Under s.70(1)(f)rights acquired or in the process of being acquired under the Limitation
Acts, for instance the rights of an adverse possessor these will generally not override
under the 2002 Act.

The equity arising from estoppel stands as authority for the proposition that licenses in
respect of unregistered land can bind third parties, including a purchaser for value, and
the decision as a whole was referred to with approval in Thatcher v Douglas.29It is also
worth nothing obiter dicta in Carrick case,30in which Morritt LJ, referring to counsel
argument that proprietary estoppels cannot give rise to an interest in land capable of
binding successors in title.31
Where the title to the land is registered, not only has it been accepted that an equity
arising by estoppels coupled with actual occupation could be an overriding interest 32but

27

[1988] AC 54

28

(2000)
(1995)

29
30
31

Lloyds Bank plc v Carrick (1996)

Judith-Anne MacKenzie & Mary Philips , land law (13th, oxford university, oxford 2010) 454

32

Lee-Parker v Izzet (No 2) [1972] 1 WLR 775, 780, obiter. Cf Habermann v Koehler (1996) 73 P 96
& CR 515, where the Court of Appeal remitted a case for a retrial to determine inter alia whether
an equity arising by estoppel could bind a purchaser as an overriding interest under Land
Registration Act 1925, s 70(1)(g).

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it is already the practice of the Land Registry to allow such equity to be registered as a
minor interest.33
Conversely it is possible that proprietary estoppel will be used to cure defects of title
caused by lack of the proper electronic formalities, moreover this possibility has been
foreseen by the legislature: LRA2002 s116 recognizes rights created by estoppel as
proprietary and able to bind purchasers of land under Sch1 and 3 in blend with actual
occupation.
There is a Human Right aspect also involved in the scenario. Interests which remain
overriding for a period of 10years (Paragraph 10-14 of Sch3 range of interests) are
illustrated as miscellaneous. Their overriding interest could not be abolished as once,
as there were a doubt that this might contravene the HRA 341998. Final change to
overriding interests is that under s117, they will cease to be overriding for 10years once
the Act has been in force,35 Some of the less common varieties will cease to have
overriding status. Therefore there should be no hardship in requiring registration of
those that do exist. An attack on the basis of human rights is possible.

Meanwhile those entitled to these rights will be able to protect them. Free of charge, by
entering a notice or, where title to the burdened land is not yet registered, a caution
against first registration36 under the HRA 199837if so, because LRA2002 such as to
trigger a human rights challenge. 38The list of time-limited overriding interest followed HL
decision in PCC of Aston Cantlow v Wallbank39,the enforcement of liabilities did not
infringe the ECHR40 and so enforceable.
33
34
35
36

http://lawcommission.justice.gov.uk/docs/lc254_land_registration_for_21st_century_consultative.pdf
Human Rights Act

(i.e. in October 2013),

Judith-Anne MacKenzie & Mary Philips , land law (13th, oxford university, oxford 2010) 110

37

The Law Commission discuss the impact of human rights law on overriding interests that are phased
out over a period of time (Report No. 271 para. 8.89), but not in respect of rights lost because of the
differences between in Schedules 1 and 3 and caused by successive sales of the land. Of course, the
fact that only a small number of persons may be affected by this problem does not mean that the
provisions will be human rights compatible
38
Dixon, M, The Reform of Property Law and the Land Registration Act 2002: A Risk Assessment [2003] 67 Conv
136 <http://papers.ssrn.com/sol3/papers.cfm?abstract_id=911326 >
39
2003
40
European Convention on Human

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There are some reasons why overriding interest should be retained as follows. First;
Overriding interests provide a means of accommodating rights which can be created
informally and where it is unrealistic to register at the time of creation, for example rights
of a person in actual occupation. Secondly; some rights are either pointless or
inconvenient to register according to the Law Commission specifically the short leases.
Finally; there some rights which are otherwise protected and it would therefore be
unrealistic to expect them to be registered. An example of such rights would be local
land charges which are registered at the Local Land Charges Register. 41

In conclusion once e-conveyancing is a realism, it will get rid of the gap between
transfer and registration42 also accordingly moving towards the ideal that the register
should be a "complete and accurate reflection of the state of the title of the land at any
given time", considerably bound the lots of interests created off register' As we shall
see, the mirror principle does not operate fully in the system of registered land in
England and Wales, even under LRA 200243 tranquilly this statement is correct as I
analyzed above, under special circumstances its necessary to exist the legal validity of
the overriding interest. On my perception overriding interest ought to be to retain, yet it
cracks the mirror, as it will protract the properties of unfortunates. though, there are still
highlights "cracks" in the mirror with due to overriding interests; it yet be seen whether
the reforms were adequate to cope and conceive with a modern society and the
developments in terms of e-communication.

41
42
43

J. Bray, Unlocking Land Law (3rd, Hodder Education, London 2010) P. 71

(along with the inherent problems),

M. Dixon, Modern Land Law (7th, Routledge, Oxon 2010) P.33

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BIBLIOGRAPHY
BOOKS

B. Judith, Unlocking Land Law (3rd ed, Routledge- Cavendish, Oxon 2010)

C. Sandra & G. Sarah, Land Law. Directions (3rd ed, Oxford University Press, Oxford 2012)

D. Mark, Land Law (7th ed, Palgrave MacMillan, United Kingdom 2011)

D. Martin, Modern Land Law (8th ed, Routledge -Cavendish, Oxon 2012)

M. Judith-Ann and P. Mary, Land Law (14th ed, Oxford University Press, Oxford 2012)

Maudsley and Burn's, Land Law (9th ed, Oxford University Press, Oxford 2009)

S. Roger, Property Law (7th ed, Longman Law Series, England 2011)

S. Roger, Property Law Cases And Materials (5th ed, Longman Law Series, England 2012)

JOURNAL ARTICLES

Linda Chamberlain, 'The Land Registration Act 2002: a Conveyancing Revolution'

[2002] Pt I 152 NLJ, 1093

Melten Kanli, trainee solicitor and lecturer in law, 'The mirror cracked the contradiction
between the idea behind registered land and the concept of overriding interests' [1994] LS
Gaz 91, (35)

Dixon, M, The Reform of Property Law and the Land Registration Act 2002: A Risk Assessment
[2003] 67 Conv 136

LEGISLATIONS

Land Registration Act 1925

Land Registration Act 2002

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