LANDLAW NOTES

LECTURE # 4
The registered title system is supported by statute that authoritatively declares under a guarantee of
indemnity that the title is vested in a named person(s) called the ‘Proprietor(s)’ and is subject to such
encumberances as may be endorsed on the title.

There are three distinct principles associated with this system these are:

1. Mirror Principle: the proposition is that electronic conveyancing system is geared to being a
reflection that accurately, completely and beyond all reasonable doubt state the current facts that
are material to a person’s proprietorship. It therefore, ‘mirrors’ the facts on which the proprietor is
relying to substantiate ownership.
2. The Curtain Principle: proposes that the register is the sole source of information regarding
proprietorship and anyone searching title need not concern himself with any interests that lie
behind the curtain.
3. Insurance Principle: the register is deemed to give the absolute correct reflection of
proprietorship but, if through human error anyone suffers loss, that person must be put in the
same position as far as money can do it, as he would have been had the reflection been a true one.

The object of this system as articulated by Lord Watson in the Privy Council decision of Gibbs v
Messer (1891) A.C. 248 is:

“… to save persons dealing with registered proprietors from the trouble and expense of going
behind the register, in order to investigate the history of their author’s title and to satisfy
themselves of its validly. That end is accomplished by providing that everyone who purchases, in
bona fide and for value, from a registered proprietor and enters this deed of transfer or mortgage
on the register, shall thereby acquire an indefeansible right, notwithstanding the infirmity of this
author’s title.”

The categories of titles that can be issued are:

1. Absolute/Indefeasible
2. Qualified/Provisional

ABSOLUTE TITLE

Absolute means that the fee simple is held equivocally by the owner, notwithstanding encumbrances. This
does not mean that the title is indefeasible.

QUALIFIED TITLE

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Handout prepared by Mrs. Nicola-Ann Brown-Pinnock
This type of title to land may be issued in special circumstances where the true owner is not available for
one reason or other to take title. For e.g. in the case of an executor who cannot find the beneficiary of an
estate in land may obtain Qualified title in his name. Qualified title can subsequently be upgraded to an
Absolute Title.

EXCEPTIONS TO THE INDEFEASIBLIITY PRINCIPLE

Registered title may be defeated by showing that:

1. It was obtained by fraud. In order to prove fraud, however, there has to be an intention to
permanently deprive.
2. Adverse possession/rights of prescription have been acquired against the land since the date of
first registration by being in occupation for 12 years or more. NOTE for example Wills v Wills
PC decision dated December 1, 2003; 2004
3. An equitable interest claimed, albeit unregistered, which the proprietor is stopped from
denying.eg. Where one spouse is registered on title and he uses this against the other, the other
will be protected due to the principle of a constructive trust which will entitle the spouse not on
the title to claiming an equitable interest in the land. Note for example Cook v Head (1972) 1
WLR 518
4. Where the registered proprietor may be denied any legal rights that are due to him because of his
unconscionable behaviour.

It is to be noted that these exceptions that are in existence can cause a registered proprietor to lose his
interest in land and if this occurs, the registered proprietor will not be compensated for this loss. However,
if the registered proprietor’s loss was caused by some human error on the register, then, though he would
lose his /her interest, he/she would be duly compensated monetarily as far as money can do so. The latter
will be t he case due to the insurance principle.

RECTIFICATION AND INDEMNITY

The LRA 1925 s 82(1) sets out the various grounds on which the register may be rectified and section 82
(2) provided that the register shall not be rectified so as to affect the title of the proprietor who is in
possession, except for the purpose of giving effect to an overriding interest or in certain other cases.
Section 83 gave a right of indemnity to persons who suffer loss by reason of any rectification or who
suffers loss by reason of an error by reason of any error or omission in the register which is not so
rectified. So normally, one party or the other will be compensated. Note, however, that where the register
is rectified to give effect to overriding interest, no indemnity is payable because no loss has been suffered.
Re Chowood’s Registered Land and Hodgson v Marks.

The LRA 2002, Schedule 4 does amend the relevant provisions of the 1925 Act, but is more of a
clarification of the existing law and cases than a change to its principles. A key feature of Schedule 4 is
that ‘rectification’ of the register is now confined to a change ‘which prejudicially affects the title of a
registered proprietor’. This refers to situations where a registered proprietor ‘loses’ something registered
in his name. Rectification only now occurs when due to a mistake, someone has been wrongly registered
as owner. All other changes on the register are now called ‘alterations’. Rectification will only be given
against a registered proprietor who is in possession of the land if:-

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 1. He has by fraud or lack of proper care caused or substantially contributed to the mistake; or
2. It would be for any other reason be unjust for the alteration [rectification] not to be made.
(Schedule 4, paragraph 6(2)).

Schedule 8 of the 2002 Act covers indemnity. Generally a registered proprietor against whom
rectification is ordered will be entitled to compensation, to the value of the interest he loses; the
Chowood rule will still apply. Further, under Schedule 8 paragraph 5 (1), no indemnity is payable
where the claimant’s loss is wholly or partly due to his own fraud, or wholly due to his lack of proper
care. It is to be also noted that if a person is denied rectification, he may still receive an indemnity
payment under Schedule 8 paragraph 1 (b).

TUTORIAL ASSIGNMENT

Jess Thomas migrated to the England over 40 years ago and is now planning on returning home to retire.
She recalls that as a girl her family lived on several acres of land in the UK, which her grandfather always
declared to be “Landless property”.

Jess is anxious to find out the status of this property so that she can build her retirement home on part of
the land. She specifically wants to know at this stage, what the title to the interest in the land reveals, if in
fact there is title in some form that he can access and has written to your firm seeking advice on how he
should proceed.

ADVISE him on:-

1. The distinction between registered and unregistered title to land

2. The procedural steps to be taken to register unregistered land.

And

W lives in Rose Cottage the matrimonial home of which her husband H was the registered proprietor with
absolute title. In 1990, H deserted W and mortgage the cottage to B Bank. The mortgage payments are
well in arrears and B Bank now seeks possession of the cottage. W, who had given H $4,000,000 towards
the purchase – price of the cottage, refuses to leave. DISCUSS

How to ANSWER:-

 What is the nature of W’s interest in the cottage?

 Does it bind the bank?
 Does her contribution to the purchase price give her an equitable interest behind a trust for sale
(now a trust of land governed by the Trusts of Land and Appointment of Trustees Act 1996) If so,
could she have protected her interest on the land register?
 Could she rely on her own occupation of the cottage to give her an overriding interest?
 Consider Boland and the effect of the Land Registration Act 2002

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 LANDLAW

LECTURE # 5
SETTLEMENT

Settlements are beneficial interests in land created in favour of a series of persons. Put another
way, a settlement may be defined as a disposition of land or other property, made by deed, will,
or very rarely by statute, under which trusts are created by the settler designating the
beneficiaries and the terms on which they are to take the property.

Settlements are of many kinds namely, marriage settlements, strict settlements, voluntary
settlements and particularly settlements under the Settled Land Act 1925. However, despite the
aforementioned, all new settlement of lands in England now takes effect (since 1997) as trusts of
land.

It is to be noted, that the rules for settlement have changed greatly in 1925, this was so as to
partly prevent the creation of long-lasting settlements and partly to overcome various problems
with the old doctrine of strict settlements. As a result of this therefore, almost all settlements in
England today takes effect as a trust of land under the Trusts of Land and Appointment of
Trustees Act 1996 (TLATA).

BACKGROUND

The main reason for a settlement is to create a series of beneficial interest in favour of a
succession of persons. Historically, settlements were used by the elites in society in order to keep
land within their family for a very long time, preventing its fragmentation.

In the 1925, there were several reforms instituted to deter the creation of these family
settlements. Such reforms included:

1. Limiting the time period that a settlement could last for;

2. Imposing punitive tax regulations; and
3. Establishing a statutory restriction by virtue of the Settled Land Act 1925.

The Settled Land Act (SLA) as a deterrent introduced complex and costly rules for the running
of strict settlements. It also required a strict settlement to impose a trust that would confer
beneficial interest in land. Despite this restriction, strict settlements were beset by problems for
all involved and they were largely replaced by ‘trust for sale’.

The terminology strict settlement (which can no longer be created) describes a chain of
successive interests in land that will keep the land in the settlor’s family. Its replacement, that is a
trust for sale, which is a trust in which the trustees have an obligation to sell the property and

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hold the proceeds of sale in trust for the beneficiaries, until 1997, operated whenever concurrent
interests were created in land (e.g. where it was held by a cohabiting couple, co-ownership) or
where the term trust for sale was applied expressly to a settlement creating consecutive interests.

Again, this creation eventually was found to not be the most appropriate mechanism for family
arrangements which created beneficial interest in land, as:-

1. The trustees under these trust, had a duty to sell the land which was the subject matter of
the family arrangement and by extension of the trust. The trustees also in addition to this
duty had the power of postponing the sale of the said land;

2. Family members rarely view land only as a financial asset, and far more frequently buys
land for the primary purpose of retaining it as a home rather than selling it.

Though attempts were made to address the initial problem that existed, it seems as if the reforms
created new problems of itself. Another change was therefore needed.

This change came in 1997 when a key 1996 statute came into existence. While formerly a
settlement of land was created either by a strict settlement where the purchaser took his title from
the tenant for life under the SLA 1925 or by way of a trust for sale, where he took it from the
trustees for sale, today, all settlements take effect as trusts for land under the Trusts of Land and
Appointment of Trustees Act 1996 (See Sections 2, 4 and 5).

Students are to be mindful of the fact that:-

1. Existing SLA settlements are unaffected and will continue and will be governed by the
rules under the SLA;
2. No new settlements can be created;
3. All trusts for sale (existing and future, whether express or implied) now takes effect as
trusts of land and are governed to a large extent by TLATA);
4. Strict settlements are obsolete except for the very few historical ones which are still in
existence; and
5. There are no longer any trust for sale.

STRICT SETTLEMENT

What is a settlement?

Section 1 of the SLA defines a settlement as “…any instrument under which land stands limited
in trust for any persons by way of succession or for an infant in possession for an estate in fee
simple or for a term of years absolute”. This means that whatever successive interests in land

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were created, a strict settlement arose. An example of a strict settlement is: To Nicola for life
with remainder to Dionne.

How can a settlement be created?

After 1925 a settlement under the SLA must be created by two deeds, namely:

1. A vesting deed –this vest the legal fee simple in the tenant for life (i.e. a person owning
land for an equitable interest that subsists for the whole of his life but terminates on his
death ), describes the property, and names the trustees; and
2. A trust instrument –this will declare the trust arising under the settlement. Where a will
make the settlement, this will stand as the trust instrument.

If there is no executed vesting deed the tenant for life or statutory owner could require the
trustees of the settlement to execute one (SLA s 9 (2)), and until this was done no disposition of
the land inter vivos could operate to pass a legal estate, unless it was made in favour of a
purchaser without notice of the fact that the tenant for life or statutory owner had become entitled
to have a vesting deed executed in his favour (SLA s 13).

Who is a tenant for life?

The tenant for life is define in section 19 and 20 of the SLA. Such a person is deemed to be the
holder of the legal estate of a settlement. A tenant for life can be any person who is of full age
and beneficially entitled to possession of a settled land. A tenant for life can be a minor, if this
case exists, then the legal estate of this tenant for life will be vested in the trustees who are
deemed to be the statutory owner of the settlement. This is also true, where there is no tenant for
life.

What are the powers of a tenant for life?

The powers of a tenant for life are the powers to sell, mortgage, lease, partition land to name a
few.

Are there any restrictions on the powers of the tenant for life?

1. These powers can only be exercised when notice has been given to the trustees of the
settlement.

2. There are statutory restrictions on the exercise of powers and dispositions by the tenant
for life which do not comply with the requirements of the Act, and to this extent, the
exercise of these powers and dispositions are void. (SLA s 18) However, provided that
the tenant for life acts bona fide, the court nor the trustees can interfere with the exercise
of such powers.

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 3. The powers of the tenant for life are not assignable and although the settlement may
confer upon him additional powers, any provision designed to cut down his powers is
void (s 106)

Who is a trustee under the settlement?

A trustee under a settlement is either a person appointed under the successive document, or a
person appointed by the court (s 30)

What are the powers and functions of a trustee under a settlement?

1. The legal estate is vested in them for the purposes of carrying out important functions
imposed on them by the successive instrument or by the SLA.

2. They are to give consent to certain transactions and they are to receive notice from the
tenant for life of his or her intentions to effect certain transactions.

3. The most important function of the tenant for life is to hold capital money arising from
the sale, lease, or mortgage of the settled land.

PURCHASERS OF SETTLED LAND

A purchaser is not entitled to see the trust instrument and he is entitled and bound to assume that
the particulars in the vesting deed are correct (SLA s 110(2))

A purchaser dealing with settled land are taken to have given the best price that could reasonably
be obtained and to have complied with all the requisitions of the Act (s 110 (1))

Provided that a purchaser pays the money to the trustees of the settlement or to a trust
corporation or into court, he gets a good title and the beneficial interest under the settlement are
overreached and take effect into the purchase money. This acts as a form of protection for the
beneficiaries under the trust.

Are there any problems with strict settlements?

Yes there are problems with strict settlements and these problems were previously mentioned.

TRUSTS FOR SALE

Between 1925 and the beginning of 1997, the concept of a trust for sale was coined so as to
avoid the effects of a strict settlement and to override some of the effects of the problems they
might cause.

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A trust for sale essentially gave the trustees of the land a duty to sell it and a power to postpone
the sale.

This was an artificial way of looking at most land ownership since the equitable interests behind
the trust was attached not to the land but rather to the proceeds of the sale of the land.

Since the duty for sale was paramount, if one trustee wanted a sale then he could impose his
decision on the others.

It must be noted that though trustees had the duty to sell the land, the court had discretion by
virtue of section 30 of the Law of Property Act 1925 to decide whether the sale should be
imposed in spite of contrary wishes. A great deal of case law was generated on the issue of how a
court should balance competing desires of beneficiaries to sell the land or reside on it.

There was also until 1955 a denial that beneficiaries had any right to occupy the land held on
trust for sale.

Note Bull v Bull [1955] 1 All ER 253 where the beneficiaries were held to be able to occupy
land. This has since been held to be a universal principle.

Again there were problems with a trust for sale. The main problem was that its nature was
incompatible with a family trusts for land.

TRUST OF LAND

A trust for land is “… any trust of property which consists of or includes land…,” whether such a
trust is express, implied, resulting or constructive and whether created before or after the Act
itself came in force, Except for existing strict settlements.

Where a settlement takes effect as a trust for land, the legal estate is vested in the trustees of land.

All trusts for sale are converted into trust of land.

Trustees of land have broader powers than trustees of sale under the LPA s 28 and 29 (TLATA
1996 s 6-9).

Trustees of land are under no duty to sell the land (TLATA s4 and 5) however, it is to be noted
that the overreaching principle is retained.

Beneficiaries under a trust of land have a right to occupy the trust land. (TLATA s 12 and 13).

The rules relating to consents and consultation are similar to those under a trust for sale,
however, the TLATA goes further than the LPA s 30 and makes provisions allowing a trustee or
beneficiary to apply to the court for an order relating to the exercise of the trustees’ functions and

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in the provisions setting out the matters to be considered by the court in determining such an
application.

NOTICE TO STUDENTS

Please be advised that students are to read through the provisions of the TLATA as we will be
looking at it in more details next week when we look at Co-ownership.

Students are also advised to read Chapters 9 and 11 in Gray and Gray (this students MUST DO)

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Handout prepared by Mrs. Nicola-Ann Brown-Pinnock