Plaintiffs taking conveyance of small area of land comprised in registered title of larger property – No application made for registration – Plaintiffs commencing work – X taking registered transfer of entire property comprised in title – X transferring small area to defendant – Defendant registering small area under separate title number – Plaintiffs applying for rectification of register – Effect of section 123(1) Land Registration Act 1925 – Whether plaintiffs had overriding interest under section 70 at material time – Rectification ordered
Each of the owners of three terraced cottages known as 1, 2 and 3 Back Street, Thornborough, Buckinghamshire, additionally owned two or three outbuildings standing on an area of land (the plot) that lay close to the plaintiffs’ cottage at no 3. In or about 1987 the plaintiffs, wishing to extend their cottage and garden over the plot, secured the agreement of the other two owners for the transfer of their outbuildings to the plaintiffs in return for the plaintiffs’ participation in the creation of a new means of access to serve all three cottages. On 6 November 1987 the then owners entered into a deed of grant and release that extinguished certain existing rights of way and created new rights. At that time the title to no 2 was unregistered. In August 1988 no 2 was acquired by a Mr Bowhay, who became the first registered proprietor of that cottage as well as a shed and a toilet standing on a part of the plot (the disputed land) adjoining no 3. On 10 April 1990 Mr Bowhay purported to convey the disputed land to the plaintiffs in exchange for a boundary adjustment. However, the plaintiffs’ solicitors failed to appreciate that the transfer by Mr Bowhay should have been effected by a registered disposition.
On 8 June 1992 Mr Bowhay transferred his registered title to no 2 (which still included the disputed land) to the first defendant. On 1 December 1992 the first defendant transferred the disputed land to the second defendant, who, in due course, was registered as the proprietor of that land under a new title number BM 183552. In the meantime, however, the plaintiffs, having acquired the outbuildings previously appurtenant to no 1, and believing that they now owned the entire plot including the disputed land, had demolished the shed and toilet and had laid a concrete base where they previously stood. Work on the extension was in progress at all material times. Following objections by the second defendant, the plaintiffs sought an order that title number BM 183552 be rectified so as to show themselves as the registered proprietors. The second defendant contended that: (i) the 1990 transfer, having been rendered “void” by section 123(1) of the Land Registration Act 1925, was incapable of creating an interest in favour of the plaintiffs; (ii) if such an interest had arisen, it was not protected as an overriding interest under section 70(1)(g) of the 1925 Act, as the plaintiffs were not in “actual occupation” of the disputed land at the date of its transfer to the first defendant; rectification should be refused in the court’s discretion.
Held The plaintiffs’ application was granted.
1. Although ineffective to pass the legal estate, the effect of the 1990 transfer in equity was that the sellers of the disputed land and their successors held it on bare trust for the plaintiffs. The beneficial interest arising under that trust was unaffected by section 123(1), which rendered the transfer void solely as regards the legal estate.
2. The conveyances to the first and second defendants took effect subject to the plaintiffss’ interest in the disputed land because: (i) that interest was capable of subsisting as an overriding interest under section 70(1)(g): see Hodgson v Marks [1971] Ch 892; and (ii) the plaintiffs were at the material times in occupation of that lnad by reason of the demolition of the buildings and the laying of the concrete base.
3. In all the circumstances, the discretion conferred by section 83(1) of the 1925 Act should be exercised in the plaintiffs’ favour: Epps v Esso Petroleum Co Ltd [1973] 1 WLR 1071 considered.
Owen Rhys (instructed by Wynne Baxter Godfree, of Lewes) appeared for the plaintiffs; the second defendant appeared in person.
Alan Cooklin, barrister
