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Registration, Fraud and Notice

Published online by Cambridge University Press:  16 January 2009

M. P. Thompson
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Extract

For a considerable period of time, statutes have existed which require the registration of deeds, third party incumbrances affecting land, or title to the land itself. In general, the sanction for non-compliance with these registration requirements is that a purchaser for valuable consideration takes free from any interest which should have, but has not, been registered. Throughout the period when registration statutes have been in force, however, a tension has existed between literal compliance with them on the one hand, and seeking to read into them general equitable principles on the other. The effect of introducing these principles is to bind a purchaser by notice of an unregistered interest that is not protected in the appropriate manner by registration.

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Articles
Information
The Cambridge Law Journal , Volume 44 , Issue 2 , July 1985 , pp. 280 - 302
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Copyright © Cambridge Law Journal and Contributors 1985

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References

1 [1982] 1 W.L.R. 1044.

2 (1722) 4 Bro.P.C. 189.

3 Cheval v. Nichols (1725) 1 Str. 664; Blades v. Blades (1727) 1 Eq.Cas Ab. 358.

4 (1748) 3 Atk. 647.

5 Mine v. Dodd (1741) 2 Atk 275, 276.

6 (1748) 3 Atk. at p. 651. In the un registered land context, this seems untenable in the light of section 199(1) of the Law of Property Act 1925. In the context of registered land, see Land Registration Act 1925, section 74.

7 Ibid, at p. 654.

8 Ibid.

9 (1815) 19 Ves.Jr. 436. See also Rolland v. Hart (1871) L.R. 6 Ch.App. 678.

10 (1815) 19 Ves.Jr. 436, cited with approval in Chadwick v. Turner (1866) L.R. 1 Ch.App. 310, 319, per Turner L.J.

11 [1982] I.R. 161.

12 Ibid, at pp. 176, 176–177. See also Sheridan (1950) 9 N.I.L.Q. 33.

13 See Wylie, Irish Land Law, pp. 111–112.

14 Section 7 of the earlier 1967 Act used notice as opposed to knowledge. The latter expression is preferable. Cf. section 24(1) of the Law of Property Act 1969, overruling the so-called rule in Re Forsey and Hollebone' Contract [1927] 2 Ch. 379.

15 Anderson (1977) 40 M.L.R. 600, 606.

16 [1915] 1 Ch. 643.

17 Ibid, at p. 656.

18 Ibid, at pp. 662–663.

19 Hollington Bros. v. Rhodes [1951] 2 All E.R. 578; Midland Bank Trust Co Lid. v. Green [1981] A.C. 513.

20 Re Monolithic Building Co. Lid. [1915] 1 Ch. 643, 669–670.

21 [1980] Ch. 590.

22 Cf. Miles v. Bull [1969] 1 OB. 258, where contract and conveyance took place on the same day.

23 [1980] Ch. at p. 625.

24 It should be pointed out that the Land Charges Act 1972, section 4 differentiates between types of value given by a purchaser, depending upon which land charge is in issue.

25 [1981] A.C. 513, 530–531. Cf. Green (1981) 97 L.Q.R. 518, 520, who finds this approach rather limp.

26 [1977] 1 W.L.R. 285. Cf. De Lusignan v. Johnson (1973) 230 E.G. 499. See [1979] Conv. 389. This case rejected the importation of good faith but contained a tantalising reference to fraud, without any indication of what was meant by this.

27 Hayton [1979] C.L.J. 227; Barnsley' Conveyancing Law and Practice (2nd ed.), pp. 72–73.

28 Hayton, Registered Land (3rd ed). p. 134. See also Efstratiou v. Glantschnig [1972] N.Z.L.R. 594.

29 Martin (1978) 42 Conv.(N.S.) 52, 58.

30 (1915] Ch. 643, 669–670, not cited in Peffer v. Rigg.

31 But see Miles v. Bull (1968) 1 O.B. 258, 264, per Megarry J.

32 Snook v. London and West Riding Investment Co. Ltd. [1967] 2 O.B. 786, 802.

33 Miles v. Bull [1969] 1 Q.B. 258, 265. See also Megarry (1981) Law Lectures for Practitioners (Hong Kong) 55, 67–69.

34 [1962] 1 W.L.R. 832.

35 Ibid, at p. 836, per Russell J.

36 [1952] 2 All E.R. 233.

37 The case was decided on the basis of the purchaser being bound by the deserted wife' equity. Although this doctrine was abolished by the House of Lords in National Provincial Bank v. Ainsworth [1965] A.C. 1175, Ferris v. Weaven was approved on the ground that the transaction was a sham. See at p. 1223, per Lord Hodson and at p. 1257, per Lord Wilberforce.

38 Miles v. Bull [1969] 1 Q.B. 258,264. To similar effect, see Wicks v. Bennett (1921) 30 C.L.R. 80, 94, per Higgins J.

39 [1982) 1 W.L.R. 1044.

40 As to whether the bank was entitled to do this, see P. Jackson [1983] Conv. 64, 67. For a valuable discussion of the duty of a mortgagee to get the best reasonably obtainable price, see Davies and Palmer [1981] Conv. 329.

41 [1972] Ch. 359.

42 [1948] 2 All E.R. 133.

43 [1897] 1 Ch. 196.

44 Goff and Jones, The Law of Restitution (2nd ed), pp. 46. 322–323.

44a See Pettit, Equity and The Law of Trusts (5th ed.), p. 157.

45 For a similar argument to Dillon J.' see Green, loc. Cit. n. 25, supra, p. 520. The same criticism can be levelled at Lord Denning M.R.' judgment in Binions v. Evans, supra. See also Harpum (1983) 42 C.L.J. 54, 56 and Duggan (1983) 127 S.J. 166.

46 For a more expansive approach in the sphere of taxation, see Ramsey (W. T.) Ltd. v. I.R.C. [1982] A.C. 300, I.R.C. v. Burmah Oil Co. Ltd. [1982] S.T.C. 30 and, especially, Furniss (Inspector of Taxes) v. Dawson [1984] A.C. 474.

46a See generally Youdan (1984) 43 C.L.J. 306; Pettit, loc. Cit. n. 44a, supra, pp. 79–81.

47 Second Report, p. 36. See D. C. Jackson (1978) 94 L.Q.R. 239, 244.

48 Frazer v. Walker [1967] 1 A.C. 569, 582. per Lord Wilberforce.

49 [1972] N.Z.L.R. 594, applying Waimiha Sawmilling Co. v. Waione Timber Co. [1926] A.C. 101.

50 [1972] N.Z.L.R. at p. 599.

51 [1967] 1 A.C. 569, 585: a case concerning forgery. See D. C. Jackson loc. cit., n. 47, supra, p. 252.

52 Ibid.

53 [1913] A.C. 491.

54 Ibid, at p. 500, per Lord Moulton.

55 Ibid, at pp. 504–505.

56 The issue of notice was relevant on the facts due to the provisions of the Specific Relief Enactment Act 1903, section 3.

57 See Oakley, Constructive Trusts, pp. 31–65.

58 [1905] A.C. 176, 204–205.

59 Ibid, at p. 210.

60 (1888) 6 N.Z.L.R. 744, affirmed (1889) 7 N.Z.L.R. 528.

61 Assets Co. Ltd. v. Mere Roihi [1905] A.C. 176, 198–199.

62 Ante, p. 286.

63 See to the same effect Miles v. Bull (No. 2) [1969] 3 All E.R. 1585, 1590, per Bridge J. and Wicks v. Bennett (1921) 30 C.L.R. 80, 94, per Higgins J.

64 Green, loc. Cit. n. 25, supra, p. 521.

65 See Thompson [1984] Conv. 43, 44–48.

66 Barnsley, Land Options, p. 27; Tromans [1984] C.L.J. 55, 67–71.

67 See the seminal article by Smith (1977) 41 Conv.(N.S.) 318.

68 Esso Petroleum Co. Ltd. v. Harper' Garage (Stourpon) Ltd. [1965] A.C. 269, applying the restraint of trade doctrine to a solus agreement in a mortgage. See also Alec Lobb (Garages)Ltd. v. Total Oil (Great Britain)Ltd. [1983] 1 W.L.R. 87; on appeal [1985] 1 W.L.R. 173.

69 [1980] 1 Ch. 590, 625 and 626–627 respectively. The point was not canvassed in the House of Lords.

70 Midland Bank Trust Co. Ltd. v. Green (No. 3) [1979] Ch. 496, 512; affirmed [1982] Ch. 529.

71 Esso Petroleum Co. Ltd. v. Kingswood Motors (Addlestone Ltd.) [1974] Q.B. 142. See Smith, loc. cit. n. 67, supra, p. 321.

72 [1965] Ch. 1140, reversed on the facts [1967] 1 A.C. 501.

73 Smith, loc. cit. n. 67, supra, p. 319. On the facts in Sefton v. Tophams Ltd. no damage would ensue.

74 Warminglon v. Miller [1973] O B. 877. Cf. O’Connor v. McCarthy [1982] I.R. 161.

75 Lonrho Ltd. v. Shell Petroleum Co. Ltd. [1981] 2 All E.R. 456, 463, per Lord Diplock.

76 Lonrho Ltd. v. Shell Petroleum Co. Ltd., supra, at p. 464. Clerk and Lindsell, Torts (15th e d. ), p. 767.

77 [1981] A.C. 513, 531.

78 Clerk and Lindsell, op. cit. 702–704; Heydon, The Economic Torts (2nd e d ), pp. 33–34.

79 This argument is equally applicable to registered land, owing to the Land Registration Act 1925, sections 20, 59(6).

80 Even were these arguments rejected, then, in a case like Green, a powerful defence of contributory negligence could be set up under the Law Reform (Contributory Negligence) Act 1945, section 1(1). The defence is available to an intentional tort: Murphy v. Culhane [1977] Q.B. 94 and consists in P’s failure to take reasonable care of himself; Davies v. Swan Motor Co. (Swansea) [1949] 2 K.B. 291, 324–325. As no damage could occur unless P fails to register, it is arguable that damages should be substantially reduced under the 1945 Act on account of the failure to register.

81 [1972] Ch. 359, 371, per Megarry J.

82 See Smith [1973] C.L.J. 123; Thompson [1983] Conv. 50, 53.

83 [1952] 1 K.B. 290. The literature is vast. See, e.g., Hargreaves (1953) 69 L.Q.R. 446; Maudsley (1956) 20 Conv.(N.S.) 281; Crane (1967) 31 Conv.(N.S.) 323; Hayton (1972) 36 Conv.(N.S.) 277; Martin [1980] Conv. 207; Todd [1981] Conv. 347; Moriarty (1984) 100 L.Q.R. 376.

84 King v. David Allen [1916] 2 A.C. 54; Clore v. Theatrical Properties Ltd. [1936] 3 All E.R. 483. See, however, Moriarty loc cit., n. 83, supra, p. 404.

85 Smith (1977) 41 Conv.(N.S.) 318, 322; Megarry's Manual of the Law of Real Property (6th ed. by D. J. Hayton), p. 82.

86 Megarry's Manual, p. 82

87 Social Trends No. 14 (1984) Central Statistical Office, H.M.S.O. See also Murphy and Clarke, The Family Home, pp. 1–14.

88 See Robson and Watchman [1980] Conv. 27.

89 Facchini v. Bryson [1952] 1 T.L.R. 1386

90 Which were, of course, made overreachable by t he 1925 legislation.

91 Perusal of the types of interest encompassed within the Land Charges Act 1972, section 2 tends to confirm this view. The recent addition of the Class F land charge does not, but this form is used most frequently on the breakdown of marriage when legal advice has been taken.

92 Increase of Rent and Mortgage Interest (Restrictions) Act 1920, section 12(2). See now Rent Act 1977, section 5(1).

92a [1967] 2 Q.B. 379.

93 See E. C. S. Wade (1926) 42 L.Q.R. 139, 140.

94 See Thompson [1983] C.L.J. 257.

95 Inwards v. Baker [1965] 2 Q.B. 29, 37, per Lord Denning M.R.

96 Crabb v. Arun D.C. [1976] Ch. 179, 193, per Scarman L.J.; Snell's Principles of Equity (28th ed), pp. 561–562. Cf. Moriarty, loc. cit., n. 83, supra, who sees estoppel as either a consideration-substitute or as perfecting an imperfect gift. This does not accord with the reasoning in the English cases. See Thompson [1983] C.L.J. 257, 275–277.

97 (1978) 248 E.G. 947.

98 See Appleby v. Cowley, The Times, 14 April 1982.

99 See Briggs [1981] Conv. 212 and [1983] Conv. 285; Thompson [1983] Conv. 50 and 471. See also Maudsley (1956) 20 Conv.(N.S.) 281, 287–288, D. C. Jackson (1965) 81 L.O.R. 84, 223 at 234–235; Todd [1981] Conv. 347, 350; Moriarty, loc. cit., n. 83, supra, pp. 391–394.

1 Land Registration Act 1925, sections 20, 70(l)(g).

2 Strand Securities Ltd. v. Caswell [1965] Ch. 958, 979, per Lord Denning MR.

3 Section 14 of the Law of Property Act 1925 extends protection to people in actual occupation but only so far as matters in Part 1 of the Act are concerned. Section 199 is not in that Part. See also H. W. R. Wade [1956] C.L.J. 216, 228; Moriarty, loc. cit., n. 83, supra, p. 407.

4 Ruoff and Roper, Registered Conveyancing (4th ed.), pp. 723–724. He utilises section 49(1)(f) of the Land Registration Act 1925.

5 For an interesting discussion, see Furmston (1981) 1 L.S. 37.

6 Smith (1977) 93 L.Q.R. 341. 343–344.

7 [1976] Ch. 288.

8 Ibid, at p. 295. Italics supplied.

9 Ruoff, An Englishman Looks at the Torrens System, p. 83. Despite Walton J.’s criticism of the decision to rectify in Freer v. Unwins, there is no hint of any acceptance of it by the two former Chief Land Registrars: Ruoff and Roper, op. cit., n. 4, supra, p. 794.

10 [1977] 1 W.L.R. 347. Affirmed without reference to this point: [1978] A.C. 95.

11 Due to Land Registration Act 1925, section 20.

12 (1977) 41 Conv.(N.S.) 210, 212. See also D. C. Jackson (1978) 94 L.Q.R. 239, 243.

13 Hayton op. cit., n. 28, supra, p. 170.

14 (1978) 94 L.Q.R. 239, 251

15 Williams and Glyn's Bank v. Boland [1981] A.C. 487, 504.

16 This is well illustrated by the reaction of distinguished commentators to Peffer v. Rigg. Although the actual reasoning is criticised, various alternatives are suggested for indirectly achieving the same result: Crane (1977) 41 Conv.(N.S.) 207, 210 (constructive trust); Hayton, op. cit., n. 28. supra, p. 134 (in personam liability); Smith (1977) 93 L.Q.R. 341, 343–344 (rectification).

17 Midland Bank Trust Co. Ltd. v. Hett, Stubbs and Kemp [1978] 3 All E.R. 571.

18 See Lloyd v. Banks (1868) L.R. 3 Ch.App. 488, 490.

19 See Smith v. Morrison [1974] 1 W.L.R. 659, 676.