NOTES OF CASES
| DOI | http://doi.org/10.1111/j.1468-2230.1980.tb01616.x |
| Date | 01 November 1980 |
| Published date | 01 November 1980 |
NOTES
OF
CASES
WIVES,
CONVEYANCERS
AND
JUSTICE
THE
Land Registration Act
1925
provides that the rights of every
person in actual occupation of registered land shall constitute
overriding interests
l
binding the registered proprietor and anyone
claiming under him save where inquiry is made of such an occupier
and the rights are not disclosed. In
Williams
&
Glyn’s
Bank
Ltd.
v.
Boland
a husband was registered proprietor. In order to finance his
business activities he charged the matrimonial home to the bank. The
business went wrong and the bank sought to enforce its security.
The wife, who had at all material times been living in the
matrimonial home with her husband, claimed (and her claim was
not disputed) that she was entitled to
a
proprietary interest in the
house by reason of the contributions she had made to the purchase.
The bank had made no inquiry
of
Mrs. Boland, but nevertheless
claimed not
to
be bound by her rights. First (it argued) a wife living
with her husband in the matrimonial home was not a person
“
in
actual occupation” of that land for the purposes of the Land
Registration Act. Secondly, even if she were held to have been in
actual occupation of the land, her interest as
a
concurrent owner
was merely an interest in the proceeds of sale of the land; it
was
argued that such interests could not be said to be subsisting “in
reference
”
to the registered land, and were thus incapable of taking
effect
as
overriding interests. These arguments were accepted at first
instance4; but they were decisively rejected both in the Court of
Appeal and the House of Lords.”
In this note it will be suggested, first, that the appeal courts
seriously misjudged the impact
of
their decision
on
conveyancing
practice. Secondly, it will be suggested that the decision is, contrary
to
the assumptions made by the appeal courts, unlikely effectively
to promote the interests of married women in preserving their rights
in
the matrimonial home. Thirdly, it will be suggested that even if
the decision were to have that result, it is far from clear that this
would necessarily be socially just.
‘‘
Let the conveyancers
look
after themselves
’’
’
The
relevant date for determining whether or not an overriding
interest exists is the date of registration,* and not the date on which
1
s.
70
(1)
(R).
3
[19801 2 All
E.R.
408
(H.L.).
4
(1978)
36
P.
&
C.R.
448.
6
C19791
Ch.
312.
6
[I9801
2
A11
E.R.
408.
Per
Lord
Denning
M.R.,
Bn‘kom Znvestments
Ltd.
v.
Curr
nnd
Others
119791
2
Land
Registration
Act
1925,
ss.
20
(1)
(b),
23
(1)
(c).
2
All
E.R.
753, 760.
8
Re
Boyle’s
Claim
C19611
1
W.L.R.
339 (Wilberforce
J.).
692
Nov.
19801
NOTES
OF
CASES
693
the purchase was completed or any earlier date on which the
property was inspected. It follows that if there is at the date of
registration a person in actual occupation of the land (whether
the spouse, mistress, child, or merely the friend of the registered
proprietor) any proprietary interest which he can assert (by reason,
for example,
of
having made
a
contribution to the purchase price,
or even installing central heating)
lo
will bind the registered
proprietor. More to the point, it will bind the building society or
other mortgagee which has provided the
funds
to enable the purchase
to take place.” It is not clear whether this was appreciated by those
(like Lord Scarman
”)
who considered that the difficulties likely to
be caused by the decision had been
“
exaggerated.” Lord Scarman
stated confidently that bankers and solicitors could
“
as they have
successfully done in the past, adjust their practice, if it be socially
required
”
13;
but it is unfortunately not easy to see what conceivable
change in practice will now enable
a
lender wholly to protect himself
against the risk that his security will be thus disastrously eroded in
terms of value and realisability. However assiduously he
may
check
that the property
is
vacant at the time when he hands the mortgage
money over
on
completion he
is
liable
to
find himself bound by
adverse interests of whose existence he had no means of knowledge.
It would seem that only by keeping the purchaser/mortgagor out of
possession until the documents had been delivered
to
the Land
Registry could full protection be obtained. One may doubt whether
such
a
solution would be acceptable
or
practicable. The House of
Lords seems to have had no perception of the magnitude
l4
of the
consequences of the decision. It should in particular
be
noted that
the machinery of the official search (which is designed to protect
a
9
i.e.
the day on which the application is delivered at the proper office
of
the Land
Registry: Land Registration Rules 1925, r. 83,
as
substituted by Land Registration
Rules 1978,
r.
8.
10
See (in relation to a claim by a spouse) Matrimonial Proceedings and Property
Act 1970, as interpreted in
Re
Nicholson deceased.
[1974] 1
W.L.R.
476.
11
Pending registration the lender would be in the position of an equitable
mortgagee: see
Barclays Bank Ltd.
v.
Taylor
C19741 Ch. 137, and might thus be able
to argue that his equity was first in time, and prevailed over advcrse equitable
interests. This argument would, however, rarely be available against a claim based
on
a contribution to the purchase price, since that will almost inevitably have been
made at least a
scintilla remporis
before the grant of the mortgage:
Church
of
England Building Society
v.
F’iskor
119541 Ch. 553.
12
C19801
2
All E.R. 408,416.
13
Zbid.
At first instance, Templeman
J.
(a judge with lengthy experience of con-
veyancing practice at the Chancery Bar, and a member of
the
Royal Commission
on
Legal Services [Cmnd. 7648 (1979)l which was very much concerned with
the
convepcing process) had
said
the
constructim
favoured in the appeal courts would
have and produce
a
result which would be
“quite intolerable
14
See
e.g. per
Lord Wilberforce at 119803
2
All E.R. 415: “what
is
involved
is a departure from an easy-going practice
of
dispensing with inquiries as
to
OCN-
pation beyond that
of
the vendor and accepting the risks of doing
so.
To substitute
for this a practice
of
more careful inquiry as to the fact
of
occupation, and if
necessary, as to the rights of occupiers, cannot, in my view
of
the matter, be
considered as unacceptable except at the price
of
overlooking the widespread develop-
ment
of
shared interests of ownership.”
wide and a,Ft catastrophic effects
:
see (1978) 36
P.
&
C.R. 448, 454.
694
THE MODERN
LAW
REVIEW
[Vol.
43
person intending to deal with registered land provided that he
completes the transaction during a priority period) has no relevance
and affords no protection. An official search merely gives
a
purchaser
priority over any
“
entry which is made in the register
”
during the
priority period.
l5
It thus provides no protection against overriding
interests which, by definition,16 do not derive their validity
from
the
making of an entry in the register. In these circumstances, it seems
probable that mortgagees lending to finance the acquisition
of
property will wish to protect themselves by seeking waivers from
any member of the purchaser’s household who may be thought likely
to
have acquired an interest by contributing to the purchase cost.
This will inevitably result, not only in
a
proliferation of paper, but
also in the need to make detailed and potentially embarrasing
inquiries
as
to
precisely who is going to live in the house. Further-
more, the purchaser’s solicitor may be put in
a
position of
professional difficulty: should he not, for example, advise the
purchaser’s wife that she should be separately represented before
signing any waiver?
Greater security
for
wives?
The appeal courts assumed that the effect of their decision would
be to strengthen the protection of the rights which married women
have to occupy the matrimonial home.” It is suggested that the
effect of the decision in this respect may well be considerably less
than at first sight appears. First, it should be noted that in the
present case the existence of the wife’s beneficial interest was
conceded. It is perhaps unlikely that such concessions will be
so
readily made in the future, and wives may anticipate being put to
proof both of the existence and extent
of
the interest claimed.
A
direct contribution to the acquisition costs will no doubt suffice to
justify the inference of a common intention that the wife should
share in the beneficial interest
l8
in accordance with the principles
laid down
by
the House
of
Lords in the two leading cases of
Pettitt
v.
Pettitt
l8
and
Gissing
v.
Gissing
zo;
but there will be many cases in
which the only contributions will be merely indirect-“ such as to
relieve the other spouse from expenditure which he would otherwise
have had to bear.”
*l
It is difficult to reconcile the view that such
15
Land Registration (Official Searches) Rules
1978,
r.
5.
18
Land Registration Act
1925,
s.
3
(xvi).
17
See particularly,
per
Lord
Scarman
at note
416:
“The
courts
may not, there-
fore, put aside, as irrelevant,
the
undoubted fact that if the two wives succeed the
protection of the beneficial interest which English law now recognises that a marricd
woman has in the matrimonial home will be strengthened, whereas, if they
Fse,
this
interest can be weakened, and even destroyed by an unscrupulous husband.
18
Hanlon
v.
The
Law
Society
C19801
1
All E.R.
763, 778,
per
Sir
J.
Arnold
P.
(C.A.).
18
C19701
A.C.
777.
20
Ci97ii
A.C.
887.
21
Per
Lord
Denning M.R.,
Hazel1
v.
Huzell
[19721
1
W.L.R.
301, 304.
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