BONA FIDE PURCHASERS OF REGISTERED LAND
| Date | 01 January 1973 |
| DOI | http://doi.org/10.1111/j.1468-2230.1973.tb01352.x |
| Published date | 01 January 1973 |
BONA
FIDEL
PURCHASERS
OF
REGISTERED
LAND
1.
INTRODUCTION
THERE
are few who fail
to
admire the overall success of the
1925
property legislation. However, some problems have recently arisen
which, if not fully appreciated and dealt with, may cause great
confusion in the present system
of
registered conveyancing.
The matter is currenkly under consideration by the Law Com-
mission and their deliberations are reported in Working Papers
Nos.
87
and
45;
but for the purpose of the present discussion
I
take the law as
it
now stands. The thesis of this article is tha.t,
in taking decisions upon matters which affect the basis
of
the
conveyancing system, the principles underlying the whole
of
the
1925
legislation must
be
appreciated and applied. The system
must be allowed
to
work.
If
a subsection can be construed
so
as
to be consistent with the system
or
so
as to make
a
nonsense
of
it,
it
should
be
construed in favour
of
the working of the system.
Of course, a court cannot reach a decision contrary
to
the words of
the statute.
It
cannot say that the statute is wrong. But, in my
submission, it should strain for a construction which
is
consistent
with the system as a whole. This indeed is the way in which courts
in recent years have moved in the construction
of
statutes.’ The
strict remorseless grammatical construction is less in favour than
it
used to be.
Such
a
proposition requires an analysis
of
what
I
have referred
to as the system of conveyancing under ,the
1925
legislation.
I
will
attempt this is due course; but first
of
all
it
might be helpful
to
explain the context in which these broad statements become
relevant.
T,he context is that
of
the competition between a bona fide
purchaser of a legal estate
for
value without notice and the owner
of an equitable interest. This competition is as old as trusts
themselves. Unaided by statute, equity’s answer was clear and
simple; though difficult in application,
of
course, in practice.
An
equitable interest was valid against all the world, except for the
bona fide purchaser
of
a legal estate for value without notice actual,
constructive
or
imputed. The onus was on the purchaser
to
establish himself as such; and it was
a
heavy burden
to
discharge.2
1
See
e.g.
the liberal construction
of
the
Law
of
Property
Act 1925,
88.
34
end
36
in
Bull
V.
Bull
[1955
1
Q.B.
234:
Re
Buchanan-Wollaston’s
Conaeyance
[l939] Ch. 217; /193’3] Ch. 738;
Maudsley and
Bum,
Land Law:
Cases
and
Materials
(2nd
ed.),
p.
183.
2
Pilcher
.v.
Rawlins
(1872)
7
Ch.App.
259.
25
26
THE MODERN LAW REVIEW
Vor..
36
The simple purity of this rule was altered by the Settled Land
Act
1882
and the
1925
legislation. Some interests may now be
overreached; some may be registered. The purchaser knows what
he must look out for, and he hopefully assumes that if he does all
that is expected of him by way of searches and inquiries, he will
take the estate free from interests and incumbrances which are not
disclosed to him. The cases however, show a remarkable disparity
of result which, to say the least, could not have been intended by
the draftsman,
nor
by anyone who contemplated the working
of a rational system.
The purchaser
or
mortgagee in
Weston
v.
Henshaw,S Caunce
v.
Cai~nce,~
liodgson
v.
Marks,5
and the lessee in
Re Morgan’s Lease
did all that was asked of them. Their various fates are interesting
to
compare. The mortgagee lost in
Weston
v.
Z€enshaw,s
the
~mrchaser won in
Caunce
V.
Caunce
and
lost
in
ZIodgson
v.
Marks,J
and in
Re Morgan’s Lease,O
the lessee won. The cases show a
complete range of possible solutions to what
is
essentially the
same problem; essentially the same, that is, to the purchaser
(or
mortgagee
or
lessee).
In
all these cases, he supposed,
from
all the evidence available to him, that the vendor
(or
mortgagor
or
lessor) was absolute owner in fee simple. The outcome however,
seems to depend on whether these is a mortgage
or
a lease, whether
the land is settled land and whether the title is registered
or
not.
And the final irony, from ,the point of view of one searching for a
foolproof system of conveyancing is that the registration of the
title-which is intended
to
be the guarantee
of
a good title to a
purchaser-seems ‘to put him in
a
worse position than he would
be in if it was unregistered. They will be
examined in detail
in
due course.
This is by way
of
introduction to the cases.
2.
THE
PRINCIPLES
OF
THE
1925
LEGISLATION
Many
of
the defects of the old system of conveyancing were due
to the fact that if there were equitable interests affecting the
land a purchaser was bound by them; both beneficial interests
under settlements and also by legal and certain equitable incum-
brances. The task was to develop
a
system which was fair to a
purchaser in
the
sense that ha was able to purchase a fee simple
free from any beneficial interests which affected it, and that he
knew about any interests
or
incumbrances subject to which he would
take; and fair
to
the beneficiary in that his interest was not at
risk of destruction on a sale to a purchaser. The system which
developed through the Settled Land Acts
1882--1925
and the Land
Charges
Act
1925
is that, generally speaking, those interests
or
incumbrances which prejudicially affect a purchaser are over-
3
119501
Ch.
510.
4
[1969]
1
W.L.R.
286.
5
[I9711
Ch.
892.
0
[1972]
Ch.
1.
7
Which
will
be replaced
by
tho
Land
Charges
Act
1972.
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