Overriding Interests: Occupation of Part of the Land

Date01 January 2000
Published date01 January 2000
Overriding Interests: Occupation of Part of the Land
Jonathan Hill*
In Ferrishurst Ltd vWallcite Ltd1the Court of Appeal was confronted with what at
first sight appears to be a narrow point concerning the interpretation of section
70(1)(g) of the Land Registration Act 1925. On further examination, however, the
case raises more general questions concerning the ‘exigibility’2or ‘durability’3of
property interests. In particular, the case invites consideration of the principles
which underpin the rules for determining whether or not an encumbrance is
binding on the purchaser of a superior interest in the property in question. The
Court of Appeal’s decision is given added interest by the fact that it takes a
different approach from that provisionally recommended by the Law Commission
in its most recent consultation document on land registration.4
The dispute between the parties related to a single storey building which
comprised office premises, amounting to three-fifths of the site, and an adjoining
lock-up garage. The offices were occupied by Ferrishurst under a subunderlease
which had been granted by Wallcite’s predecessor in title. Under the terms of the
subunderlease Ferrishurst had an option to purchase the underlease of the whole
site. Although freehold title to the building was registered – as were the head lease
and the underlease – Ferrishurst failed to protect its option by an entry against the
title of the underlessor. In due course, Wallcite acquired the freehold and the
underlease and the question arose as to whether the option was binding on Wallcite
as an overriding interest. At first instance, the judge dismissed Ferrishurst’s claim
to specific performance of the option on the ground that section 70(1)(g) assisted
Ferrishurst only in respect of the occupied part and specific performance could not
be granted in relation to part of the building. Ferrishurst appealed.
In moral terms Wallcite’s position was not very meritorious as, when it acquired
the underlease, Wallcite was fully aware of the option. However, it is a truism that
one of the purposes of the land registration system was to replace the doctrine of
notice by a less capricious system for resolving disputes between parties with
competing interests in land. As far as the legislative scheme is concerned, the issue
was whether Ferrishurst could claim an overriding interest, not whether Wallcite
had notice of Ferrishurst’s rights. More specifically, the question was whether
Ferrishurst’s actual occupation of part of the building was sufficient to bring the
option within the scope of section 70(1)(g) which provides protection for ‘the
rights of every person in actual occupation of the land’.
ßThe Modern Law Review Limited 2000 (MLR 63:1, January). Published by Blackwell Publishers,
108 Cowley Road, Oxford OX4 1JF and 350 Main Street, Malden, MA 02148, USA. 113
*Department of Law, University of Bristol.
2 The term is used by P. Birks, ‘Before We Begin: Five Keys to Land Law’ in S. Bright and J. Dewar
(eds), Land Law: Themes and Perspectives (Oxford: Oxford University Press, 1998) p 457 at p 473.
3 See J. Hill, ‘Intention and the Creation of Proprietary Rights: Are Leases Different?’ (1996) 16 LS
200, 202.
4Land Registration for the Twenty-First Century: A Consultative Document, Law Com. No. 254

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