Paul transfers the unregistered title of Whiteacre to Samantha for GBP 10 000. Will Samantha be bound by the following interests, all of which arose prior to the sale of Whiteacre to Samantha?
a. An easement granted by Paul to his neighbour Bethany?
This depends on whether Samantha knew about it or not. Bethany should have registered this as a land charge. If so that constitutes notice to the world and it will bind Samantha who is Paul’ successor in title. It is not an easement of necessity – because that would have not have been granted – which would have been binding regardless of notice. The easement is overreachable. This is unregistered land so the doctrine of notice applies.
Legal rights bind the world in unregistered title. The word granted implies that there was a deed and a deed would have created a legal right. Bethanty would need to register it as a land charge to make her case water tight because if it was not a legal easement but an equitable easement it would be overreachable.
b. A restrictive covenant granted by Paul to his neighbour Saskia?
This hangs on whether or not it was registered as a land charge. IIf yes then yes. If no then no it is not binding. A restrictive covenant can only be equitable. If granted before 1925 then it will be governed by the doctrine of notice and that would bind Samantha unless she is equity’s darling. If granted after 1925 then Saskai should have registered it as a land charge. That determines whether or not it is binding.
c. Eloise’s beneficial interest in Whiteacre arising from her contribution to the purchase price Paul paid when he bought the property?
This like Kingsnorth Finance Ltd v Tizard. This is a resulting trust which is even more advantageous to the beneficiary than a constructive trust. She contributed to the purchase price. If she has registered her interest it is inassailable. If not then it will still prevail if supported by actual occupation as in Tizard – though that was a constructive trust. If she is not resident then it is overreachable. Her occupation – if at all – is discoverable.
Her interest is not registrable under the Land Charges Act 1972. It will not have been overreached as Paul is the only trustee – the purcahse money needs to be paid to two or more trustees to be overreached. Whether this is binding depends upon the equitable doctrine of notice.
d. Tamara’s licence to occupy Whiteacre?
No. Licences are never binding. IIt is not a property interest. It exists in personam.
e. The option to purchase Whiteacre Paul granted to Chris?
This is like Green v Midland Bank. It is registrable. If registered this equitable interest will prevail. If it is not registered then it will be defeated. It can be a land charge of class C iv.
f. How, if at all, would your answer to each one of the questions change in each of the following alternative circumstances?
– Samantha paid ten pounds for Whiteacre
Yes, she is the bona fide purchaser of legal estate for value and if she is without notice then she is equity’s darling. In this case she can defeat all the interests above if she has no notice of them. She iis still a buyer as per Midland Bank v Green as this is value.
– Samantha gave a peppercorn for it
This is nominal consideraton but it is still valuable. As this is unregistered title it makes no difference. In registered title it would be different.
– Samantha gave no consideration
This is not valid consideration since it has no economic worth. It is derisory and an insult to the courts. Therefore she is a donee. She can defeat the licence and nothing else. As she got it for free she is not losing out as much as if she had paid for it. Courts are less sympatheitc to donees that buyers. She is not a purchaser under the Lan Charges Act in terms of registrable interests. She is not equity’s darling and cannot defeat overreachable interests.
– The legal title to Whiteacre was co owned by Paul and Gordon who jointly conveyed it to Samantha.
They had joint tenancy. If the money is paid to both trustees then Eloise’s beneficial interest will be overreached. This is the case even iif she is equity’s darling.
Overreaching has no effect on an easement or a restrictive covenant since these are excluded from overreaching under the Lae of Property Act 1925. So this does not change the earlier answers.