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You are here: BAILII >> Databases >> The Law Commission >> Land Registration For The Twenty-First Century: A Conveyancing Revolution (Report) [2001] EWLC 271(6) (9 July 2001) URL: http://www.bailii.org/ew/other/EWLC/2001/271(6).html Cite as: [2001] EWLC 271(6) |
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PART VI NOTICES AND RESTRICTIONS
INTRODUCTION
6.1 Part 4 of the Bill contains provisions on notices and restrictions. It is concerned primarily, but not exclusively, with the protection of third party rights over or in relation to a registered estate or charge.[1] This Part of the Bill has its origins in Part VI of the Consultative Document.[2] The aims of the changes that were proposed in that Part, which were amongst the most sweeping in the whole of the Consultative Document, can be summarised as follows-
(1) to simplify the law;
(2) to clarify the concepts that were employed; and
(3) to improve significantly the protection given to third party rights where an appropriate entry had been made on the register.
THE PROPOSALS IN THE CONSULTATIVE DOCUMENT
6.2 The main recommendations in the Consultative Document, which were overwhelmingly supported on consultation,[3] can be summarised as follows.
(1) Cautions against dealings should be prospectively abolished,[4] though existing cautions would be retained on the register.[5] Cautions were an inadequate form of protection for interests in registered land because they conferred no priority and merely gave the cautioner an opportunity to object to a transaction.[6]
(2) The existing system of notices[7] should be extended so that there would be two types of notice, those that were entered consensually,[8] and those that were entered unilaterally by the party claiming the interest. In relation to the latter, the registered proprietor would be informed of the registration and would be able to apply for its cancellation.[9]
(3) Inhibitions are in reality just one form of restriction and there is therefore no need to retain them as a separate category of entry. The only method of reflecting any limitation on the power of the registered proprietor to make a disposition should be by the entry of a restriction.[10]
The Bill implements these recommendations. In this Part we therefore examine the following matters-
(a) the prospective abolition of cautions;
(b) notices under the Bill;
(c) the prospective abolition of inhibitions;
(d) restrictions under the Bill; and
(e) the special treatment of pending land actions, writs, orders and deeds of arrangement.
THE PROVISIONS OF THE BILL
Prospective abolition of cautions against dealings
6.3 The proposal in the Consultative Document to abolish cautions against dealings was almost unanimously supported on consultation. There is therefore no power to lodge further cautions under the Bill. However, in relation to existing cautions against dealings, those parts of the Land Registration Act 1925 that deal with their operation[11] continue to have effect under the transitional provisions of the Bill.[12] Furthermore, the 1925 Act will continue to apply in relation to any applications for a caution that are pending at the time when the Bill is brought into force.[13] The Land Registration Rules 1925 also contain provisions relating to the operation of cautions.[14] The Bill therefore contains a power to make rules in relation to existing cautions,[15] so that the effect of the existing rules can be replicated.
6.4 For the future, notices and restrictions will do the work of cautions. The choice of entry will obviously depend upon the nature of the interest to be protected and the form of protection that is required. As we explain below,[16] the two forms of entry perform very different functions and in most cases only one of the two will be possible.
Notices
Introduction
6.5 The Bill makes provision as to the following matters-
(1) the nature and effect of a notice;
(2) the interests which may and may not be protected by the entry of a notice;
(3) the circumstances in which a notice may be entered on the register; and
(4) unilateral notices and their cancellation. These are explained below.
Nature and effect of a notice
6.6 Clause 32 of the Bill explains the nature and effect of a notice. It is an entry in the register in respect of the burden of an interest affecting a registered estate or charge.[17] The interest in question may of course be another registered estate, as where a registrable lease is granted out of a registered freehold and a notice is entered in respect of it on the title to that freehold estate.[18] The notice is entered in relation to the registered estate or charge affected by the interest concerned.[19] As now, the fact that a notice has been entered does not necessarily mean that the interest protected is in fact valid.[20] If, for example, parties had entered into an agreement that was not in fact a valid contract,[21] the entry of a notice in respect of that agreement would not validate it.[22] However, where an interest is valid, the entry of a notice will protect its priority as against a registered disposition of an estate or charge.[23] As we explain below, notices will either be agreed or unilateral.[24] The entry of the latter can be challenged by the registered proprietor or a person entitled to be registered as proprietor.[25]
6.7 The form and content of notices in the register is to be a matter for rules.[26] Because the Bill does not change the nature of existing notices, there is no need for any transitional provisions. The Bill applies to notices entered under the Land Registration Act 1925 as much as it does to those entered under the provisions of the Bill.[27]
Interests which may not be protected by notice
INTERESTS UNDER TRUSTS OF LAND AND SETTLEMENTS
6.9 The first exception is in respect of interests under either a trust of land or a settlement under the Settled Land Act 1925.[28] It will not, therefore, be possible to enter a notice in respect of any interest under any form of trust.[29]This exception is, in some senses, the most important of the six because it makes it clear what the nature of a notice is intended to be. A notice protects an interest in registered land when it is intended to bind any person who acquires the land. It is therefore apposite in relation (for example) to the burden of a restrictive covenant or an easement. It is not the appropriate means of protecting beneficial interests under trusts.[30]A buyer wishes to take free of such interests which should be overreached and bind the proceeds of sale. Beneficial interests are capable of being overreached[31] on payment of any purchase money by the buyer to the trustees, of whom there should either be at least two or a trust corporation.[32] A restriction is the proper form of entry to ensure that this occurs.[33]
SHORT LEASES
6.10 The second exception is in respect of leases which are granted for a term of three years or less[34] and are not required to be registered.[35]
6.11 As the law stands, a notice cannot be entered in respect of a lease granted for 21 years or less,[36] unless it falls within certain statutory exceptions. The reduction in the length of leases, the burden of which may be noted on the register, is the one significant change that the Bill makes to the present law. We have explained elsewhere that the Bill reduces the length of leases that are required to be registered from those granted for more than 21 years to those granted for more than 7 years.[37] However, as we have explained, it is likely that there will be a further reduction[38] once electronic conveyancing is fully operative, so that leases granted for more than 3 years will be required to be registered.[39] Furthermore, under the Bill, all easements that are expressly granted or reserved out of a registered estate are registrable dispositions, whatever their duration.[40] If, for example, a lease is granted for seven years (and so takes effect without registration),[41] but various easements are granted in relation to the property let, it will in practice be necessary to note all those easements on the register. We strongly suspect that, if the tenant is required to enter a notice in respect of the easements that are ancillary to his or her lease, he or she will also wish to do likewise in respect of the lease itself. The Bill enables him or her to do so, and, at the same time, anticipates the likely reduction in the length of registrable leases.
6.12 We have already explained that certain leases, however short their duration, are either subject to the requirement of compulsory registration[42] or are registrable dispositions.[43] It necessarily follows that, in relation to such leases, it must be possible to enter a notice-(1) where the lease is granted out of an unregistered estate when that estate is itself eventually registered;[44] and (2) where the lease is granted out of a registered estate, when first granted.[45]
A RESTRICTIVE COVENANT BETWEEN LANDLORD AND TENANT
6.13 The third exception is in relation to a restrictive covenant made between a lessor and lessee, so far as relating to the property leased.[46] It is unnecessary to note such covenants, because they are normally apparent from the lease. The Bill accordingly provides that a person to whom a disposition of a registered leasehold estate or of a registered charge over such an estate is made, takes it subject to the burden of an interest[47] that is incident to the estate.[48] A rather wider version of this third exception exists under the present law. A restrictive covenant "made between a lessor and lessee" cannot be protected by the entry of a notice.[49] However, that exception has given rise to some difficulty. It means that no notice can be entered in respect of a restrictive covenant made between lessor and lessee that relates to land that is not comprised in the lease, such as other adjacent property owned by the landlord.[50] Such covenants appear, therefore, to be unprotectable. The Bill avoids this difficulty by confining the exception to restrictive covenants "so far as relating to the demised premises".[51]
AN INTEREST WHICH IS REGISTRABLE UNDER THE COMMONS REGISTRATION ACT 1965
6.14 As we have explained,[52] rights of common, which are registrable under the Commons Registration Act 1965, cannot be registered under the Land Registration Act 1925,[53] and this limitation is replicated in the Bill.[54] The fourth exception, by which a notice cannot be entered in respect of an interest capable of being registered under the Commons Registration Act 1965,[55] is the necessary concomitant of this.
AN INTEREST IN ANY COAL OR COAL MINE OR ANCILLARY RIGHTS
6.15 The fifth exception also replicates one that exists under the present law.[56] It is, in practice, impossible to locate and map all rights to coal. It would, therefore, be impossible to register such rights. For this reason, it has been the policy since the Coal Act 1938 to make rights to coal and the necessary ancillary rights overriding interests,[57] and to provide that such rights cannot be noted on the register. Under the Bill, it is not possible to enter a notice in respect of an interest in any coal or coal mine, the rights attached to any such interest, and the rights of any person under sections 38,[58] 49[59] or 51[60] of the Coal Industry Act 1994.[61] A PPP
LEASE
6.16 The sixth exception concerns PPP leases, granted under the provisions of the Greater London Authority Act 1999.[62] As we explain elsewhere, it is intended that future arrangements for the operation and development of the London underground railway network will be made by means of public-private partnership agreements.[63] PPP leases will be employed as part of that strategy. They will be leases of the underground railways and other ancillary properties. The Bill, once again replicating the present law,[64] provides that no notice may be entered in respect of an interest under a PPP lease.[65]
The circumstances in which a notice may be entered on the register
INTRODUCTION
6.17 Under the Bill, a notice may be entered on the register in at least five circumstances,[66] namely-
(1) on the first registration of an estate, in respect of an interest that burdens it;
(2) where it appears to the registrar that a registered estate is subject to an overriding interest;
(3) where it is necessary to complete the registration of a registrable disposition;
(4) where such an entry is necessary to update the register; and
(5) on application to the registrar. We comment on each of these in turn.
BURDENS ENTERED ON THE REGISTER ON FIRST REGISTRATION
6.18 As we have already explained,[67] on the first registration of an estate, whether freehold or leasehold, the registrar will note against the title the burden of any interest which affects the land of which he is aware, unless the interest is one that cannot be protected by notice.[68] The circumstances in which the registrar will enter a notice on first registration are likely to be clarified by rules made under Clause 14(b)(ii) (entries to be made in the register where an application for first registration is approved).[69]
ENTRY IN RESPECT OF AN OVERRIDING INTEREST
6.19 Where it appears to the registrar that a registered estate is subject to an overriding interest[70] that-
(1) falls within any of the paragraphs of Schedule 1;[71] and
(2) is not excluded by Clause 33;[72]
he may enter a notice in the register in respect of that interest.[73] As we explain in Part VIII of this Report, this power to note overriding interests is part of the strategy to eliminate such interests so far as possible.[74]
ENTRY IN RESPECT OF A REGISTRABLE DISPOSITION
6.20 We have explained in Part IV of this Report that, in order to register certain registrable dispositions, it is necessary to enter a notice in respect of that interest on the title of a registered estate that is burdened by it.[75] The Bill therefore provides that, where a person is registered as proprietor of an interest under a disposition of any of the following kinds, the registrar must enter a notice in the register in respect of that interest.[76] The relevant dispositions to which it applies are as follows-
(1) the grant of any lease that is required to be registered;[77]
(2) where the registered estate is a franchise or manor, the grant of any lease of that franchise or manor;[78]
(3) the express grant or reservation of an easement, right or privilege for an interest equivalent to an estate in fee simple absolute in possession or a term of years absolute,[79] other than a right of common which is capable of being registered under the Commons Registration Act 1965;[80]
(4) the express grant or reservation of a rentcharge in possession which is either perpetual or for a term of years absolute;[81] and
(5) the express grant or reservation of a right of entry exercisable over or in respect of a legal lease, or annexed, for any purpose, to a legal rentcharge.[82] As we have explained above,[83] the notice will be entered against the title of the estate out of which the interest was granted or reserved.[84]
WHERE THE ENTRY IS NECESSARY TO UPDATE THE REGISTER
(1) If a court or the Adjudicator[85] determines that a person is entitled to a right over the registered estate of another, the burden of which should be protected by the entry of a notice, an agreed notice will be entered by the registrar.[86]
(2) The registrar might discover that, due to some mistake, the burden of a registered disposition was not protected on the register as it should have been by the entry of a notice.[87] He may then enter a notice.[88]
APPLICATIONS FOR THE ENTRY OF A NOTICE
6.22 A notice may be entered on application to the registrar by a person who claims to be entitled to the benefit of an interest in relation to a registered estate or charge that can be registered as a notice.[89] Subject to rules, that application may be for either an agreed notice or for a unilateral notice.[90] For reasons that we explain below, rules may provide that, in certain circumstances, a notice should always be an agreed notice.[91]
6.23 The registrar may only approve an application for an agreed notice in three situations. The first is where the applicant is either the registered proprietor or the person entitled to be registered as proprietor of the estate or charge that is burdened by the interest to be noted.[92] The second is where either the registered proprietor or the person entitled to be registered as proprietor of the estate or charge consents to the entry of the notice.[93] These first two cases are therefore consensual. There is, however, to be no requirement that the land certificate has to be produced in order that a notice should be entered, as is the case now where the land certificate is not deposited with the registry.[94] As we explain in Part IX of this Report, the role of land certificates is to be considerably reduced under the Bill, and they are likely to be little more than an indication that a person is the registered proprietor.[95] They will never be required to be produced in order to secure the registration of an entry on the register. There is no power to issue charge certificates under the Bill and they will therefore become obsolete.
6.24 The third situation will usually arise where the application for a notice is not in fact consensual. The registrar is to be able to enter an agreed notice where he is satisfied as to the validity of the applicant's claim.[96] If, for example, the applicant could establish to the registrar's satisfaction that a registered proprietor had granted him or her an option to purchase the land, the registrar could enter a notice in respect of that option, even if the registered proprietor had not agreed to the entry.
6.25 The third situation is likely to be important in at least one other context. As we have indicated above,[97] it is likely that rules will provide that, in relation to certain types of application, an agreed notice should be the only form of entry. Unlike unilateral notices, which we explain below,[98] there will be no procedure for the cancellation of such notices on application by the registered proprietor or some person who is entitled to be registered as proprietor. Under the present law, there are certain situations in which, for policy reasons, a notice can be entered on the register without the production of the proprietor's land certificate, instead of leaving the applicant to lodge a caution.[99] One example (by way of illustration) is a spouse's charge in respect of his or her matrimonial home rights under section 31(10) of the Family Law Act 1996.[100] We anticipate that those cases that can presently be protected by notice without the production of the proprietor's land certificate are likely to be protected by agreed notices under the Bill.
Unilateral notices
THE NATURE OF UNILATERAL NOTICES
6.26 Unilateral notices are intended as part of the replacement for cautions against dealings. As we have explained above, all notices, whether agreed or unilateral, will protect the priority of an interest, if valid, as against a subsequent registered disposition.[101] In this respect, unilateral notices are a very considerable improvement on cautions (which, as we have explained, confer no priority[102]). The essence of a unilateral notice is that it does not require the consent of the registered proprietor of the estate or charge to which it relates. It can be entered even though the applicant has not satisfied the registrar as to the validity of his or her claim. A unilateral notice must indicate that it is such a notice and identify who is the beneficiary of it.[103] It is unlikely that anything else will appear on the register.[104] This is a point of some importance. Under the present law, cautions are often lodged in respect of agreements in preference to a notice in order to protect their confidentiality. This is because the entry of the caution on the register gives no indication as to the matter that lies behind it. A number of those who responded to the Consultative Document were concerned that it should remain possible to preserve commercial confidentiality in the same way after cautions had been abolished.
PROTECTION AGAINST THE IMPROPER ENTRY OF A UNILATERAL NOTICE
6.28 First, a person must not exercise his or her right to apply for a notice without reasonable cause.[105] Any person who does apply for a notice without reasonable cause is in breach of this statutory duty and is liable in tort accordingly to any person who suffers damage in consequence of that breach.[106]
6.29 Secondly, where a unilateral notice is entered by the registrar, he must give notice of the entry to the proprietor of the registered estate or charge to which it relates and to such other persons as rules may provide.[107]
6.30 Thirdly, and following from this, the Bill makes provision for the cancellation of a unilateral notice. Both the registered proprietor of the estate or charge to which the notice relates and any person who is entitled to be registered as the proprietor of that estate or charge may apply to the registrar for the cancellation of a unilateral notice.[108] When such an application is made, the registrar must serve a notice on the person who is identified on the register as the beneficiary of the unilateral notice.[109] That notice must inform the beneficiary-
(1) of the application; and
(2) that if he or she fails to exercise his or her right to object before the end of the period specified in the notice, the registrar will cancel the notice.[110]
The right to object is the general right conferred by the Bill to object to an application to the registrar.[111] If the matter cannot be disposed of by agreement, it must be referred to the Adjudicator for resolution.[112]
(1) First, the notice may indeed be cancelled, either because the person who entered the notice does not contest the application or because it is determined that he or she had no interest that could be protected by a notice.
(2) Secondly, the Adjudicator[113] may determine that the person who had entered a unilateral notice was entitled to do so, and that the unilateral notice should therefore be replaced by an agreed notice (or perhaps some other form of entry, such as a registered charge).
(3) Thirdly, the Adjudicator[114] may determine that although the person who had entered a unilateral notice was not entitled to do so, he or she was entitled to enter a restriction on the register instead. The appropriate entry will then be made.
Abolition of inhibitions as a separate form of entry
6.32 Under the present law, an inhibition is an order made by the court or registrar that inhibits the registration or entry of any dealing in relation to any registered land or charge.[115] There is no separate category of entries corresponding to inhibitions in the Bill. This is because inhibitions are simply one form of restriction on the power of the registered proprietor (or other person) to make a disposition of registered land. As such, they are subsumed within restrictions, which we explain below.[116] This makes it unnecessary to include in the Bill any specific transitional provisions in relation to either inhibitions or restrictions entered under the Land Registration Act 1925. The provisions of the Bill on restrictions apply to such inhibitions and restrictions.[117]
Restrictions
Introduction
6.33 The Bill makes provision as to the following matters-
(1) the nature and effect of a restriction;
(2) the purposes for, and the circumstances in which, a restriction may or must be entered on the register;
(3) notifiable applications for a restriction; and
(4) the withdrawal of restrictions.
These are explained below.
The nature and effect of a restriction
6.34 Under the Bill, a restriction is an entry in the register which regulates the circumstances in which a disposition of a registered estate or charge may be the subject of an entry in the register.[118] A restriction can be entered, therefore, only in respect of dispositions-
(1) of a registered estate or charge; and
(2) in relation to which some entry on the register may be made.
It follows that restrictions cannot be entered in relation to dealings with any unregistered interests.[119] Nor can a restriction prevent any disposition of registered land in relation to which no entry on the register is needed.[120] The way that a restriction operates is to restrict in some way the circumstances in which any entry may be made in the register.[121] The restriction is entered in relation to the registered estate or charge to which it relates.[122]
6.35 The Bill gives particular instances as to the form of restriction.[123] First, it may prohibit the making of any disposition or of a disposition of a kind specified in the restriction.[124] For example, at one extreme it might "freeze" the register and prevent any disposition at all that might be the subject of an entry on the register.[125] Another case might be where a registered proprietor (typically a corporation or statutory body) has limited powers of disposition.[126] A restriction should then be entered to prevent the registration of any disposition that was outside those powers.
6.36 Secondly, a restriction may prohibit the making of an entry-
(1) indefinitely;
(2) for a period specified in the restriction; or
(3) until the occurrence of a specified event.[127]
An indefinite restriction would be appropriate where the registered proprietor had limited powers. A restriction for a specified period might be appropriate where the proprietor had contracted not to make a disposition of the property for that period. As regards (3), the Bill gives examples of the kinds of events that might be specified, namely the giving of notice,[128] the obtaining of consent[129] and the making of an order by the court or registrar.[130] These are no more than examples, and there are many other forms which a restriction may take.
6.37 In general, where a restriction is entered on the register, no entry in respect of a disposition to which the restriction applies may be made in the register, except in accordance with the terms of the restriction.[131] This general principle is, however, subject to an exception. On the application of a person who appears to the registrar to have a sufficient interest in the restriction,[132] the registrar has power by order to disapply a restriction or provide that a restriction has effect with modifications in relation to either-
(1) a disposition; or
(2) dispositions of a kind;
specified in the order.[133]The sort of case in which it would be appropriate for the registrar to exercise his power would be where a disposition of a registered estate could only be made with the consent of a named individual who had disappeared. But for this power, the applicant would be compelled to incur the expense of an application to the court. It should be noted that, in conferring this dispensing power, the Bill does no more than codify present practice. When a restriction is currently entered, it is always prefaced by the words "Except under an order of the registrar...".
When a restriction may or must be entered
INTRODUCTION
6.38 Under the present law,[134] a restriction is normally entered by the registrar on application either by the registered proprietor[135] or by certain other persons who, under rules,[136] may apply for such an entry. There are occasions on which the registrar must or may enter a restriction, whether under the Land Registration Act 1925,[137] the Land Registration Rules 1925,[138] or some other statute.[139] Inhibitions are entered either on the order of the court or by the registrar, on the application of any person interested. The Bill provides a more coherent framework as to when a restriction may or must be entered.
WHEN THE REGISTRAR MAY OR MUST ENTER A RESTRICTION
6.39 The Bill sets out the circumstances in which the registrar has-
(1) power; and
(2) a duty;
to enter a restriction in the register. We explain below when the registrar is under a duty to enter a restriction.[140] Under Clause 42(1) of the Bill, he has a power to do so if it appears to him that it is necessary or desirable to do so for any one of three purposes. Where the registrar may enter a restriction
6.40 The first purpose is to prevent invalidity or unlawfulness in relation to dispositions of a registered estate or charge.[141] The following examples illustrate the kinds of circumstance in which such an entry might be made-
(1) Where the registered proprietor of an estate or charge is a corporation or statutory body that has limited powers. If a restriction were not entered to record that limitation, the proprietor's powers of disposition would, as regards any disponee, be taken to be free of any limitation affecting the validity of that disposition.[142]
(2) Where the registered proprietor has contracted with some third party that he or she will not make any disposition either at all or without the consent of that third party. An obvious example of this is a right of pre-emption,[143] but there are many other cases.[144] The unlawfulness which the restriction prevents is a breach of contract. (3) Where trustees of land are required to obtain the consent of some person to a disposition.[145] The unlawfulness which the restriction prevents is a disposition in breach of trust.
6.41 The second purpose is to secure that interests which are capable of being overreached on a disposition of a registered estate or charge are overreached.[146] This is directed primarily at trusts of land and at settlements under the Settled Land Act 1925.[147] Where there is a disposition by trustees of land or by the tenant for life under a settlement,[148] any capital moneys that arise must be paid to the trustees or to the trustees of the settlement, of whom (in either case) there must be at least two unless the trustee is a trust corporation.[149] If this requirement is not met, the beneficial interests under the trust of land or settlement will not be overreached.[150] To ensure that overreaching does take place, the registrar may enter a restriction to ensure that the proceeds of any disposition are paid to at least two trustees or to a trust corporation.
6.42 This power to enter a restriction is in fact supplemented in the Bill by a duty to do so in the specific case of legal co-ownership. When the registrar enters two or more persons in the register as the proprietor of a registered estate,[151] he must also enter in the register such restrictions as rules may provide for the purpose of securing that interests which are capable of being overreached on a disposition are overreached.[152]
6.43 The third purpose is to protect a right or claim in relation to a registered estate or charge.[153] For example, a restriction could be entered in relation to a claim by a person that he or she had a beneficial interest in a property under a resulting or constructive trust because he or she had contributed to the cost of its acquisition. The restriction might be that no disposition of the land should be registered without the consent of the person claiming the interest. The Bill specifically provides that a person who is entitled to the benefit of a charging order relating to an interest under a trust is, for these purposes, to be treated as having a right or claim in relation to the trust property.[154] This means that a restriction can be entered in relation to that order.[155] Charging orders over beneficial interests under a trust of land are fairly common.[156] At present they are protected by the entry of a caution against dealings,[157] but this will cease to be possible under the Bill.[158] Because they relate to an overreachable interest under a trust, they cannot be protected by the entry of a notice either under the present law[159] or under the Bill.[160]
6.44 There is one limitation on the power explained in paragraph 6.43. In exercising it, the registrar may not enter any restriction to protect the priority of an interest that is or could be the subject of a notice.[161] In fact, it is contrary to the nature of a restriction that it should confer priority on an interest. A restriction is simply a means of preventing some entry on the register except to the extent (if any) that is permitted by the terms of the restriction.[162] As we have mentioned above, in the context of a right of pre-emption, both a notice and a restriction could be entered in relation to the same interest.[163] Each would serve a different function. The notice would protect the priority of the interest against a subsequent registered disposition and the restriction would ensure the compliance with certain conditions or requirements in relation to any disposition of the property by the registered proprietor.
6.45 Where the registrar exercises his power to enter a restriction under Clause 42(1),[164] he must give notice to the proprietor of the registered estate or charge concerned, except where the entry is made in pursuance of an application as explained below, at paragraph 6.47.[165] If the proprietor wishes to challenge the exercise of the registrar's power, he or she may do so by seeking a judicial review.[166]
Where the registrar must enter a restriction
6.46 We have mentioned above one case where the registrar is under a duty to enter a restriction to ensure that interests under a trust of land are overreached.[167] However, there are many other situations in which this is so. Thus a number of statutes require the registrar to enter a restriction in particular circumstances without application,[168] and the Bill provides for the form of those restrictions to be such as rules may provide.[169] In addition, there are a number of situations in which the Bill itself imposes a duty on the registrar to enter a restriction. One case has been mentioned above,[170] and the entry of a bankruptcy restriction is another.[171]
APPLICATIONS FOR THE ENTRY OF A RESTRICTION
6.47 The Bill permits a person to apply for the entry of a restriction if he or she-
(1) is either the registered proprietor or a person entitled to be registered as proprietor of the estate or charge to which the application relates;[172]
(2) has the consent of the registered proprietor or a person entitled to be registered as proprietor of the estate or charge to which the application relates;[173]
(3) has otherwise a sufficient interest in the making of an entry.[174]
6.48 There is a power to make rules that will require that an application be made in such circumstances and by such persons as may be prescribed.[175] Under the present law there are a number of situations in which there is a duty to apply for a restriction. For example, where the powers of trustees of land are limited by virtue of section 8 of the Trusts of Land and Appointment of Trustees Act 1996,[176] the trustees must apply for a restriction.[177] It is likely that in these and perhaps other cases, rules made under the Bill will require an application for a restriction.
6.49 Rules may also prescribe classes of person who are to be regarded as having a sufficient interest in the making of an entry of a restriction mentioned in paragraph 6.47(3) above.[178] These rules will not in any way detract from the generality of those who may apply under that category. They will simply specify the most important classes of such persons and might include-
(1) a person having an interest in land that is capable of being protected by the entry of a restriction, such as a beneficiary under a trust of land;[179]
(2) the donee of a special power of appointment in relation to registered land;[180]
(3) the Charity Commission in relation to registered land held upon charitable trusts;
(4) the Church Commissioners in respect of any registered land relating to or administered by them under any statute;[181] and
(5) a receiver (whether or not appointed by the court), administrative receiver, or an administrator or a sequestrator appointed in respect of registered land or a registered charge.[182]
Where an applicant falls within one of the categories prescribed by rules, he or she will obviously not have to satisfy the registrar that he or she has a sufficient interest in the making of the entry. He or she will be regarded as doing so.[183]
6.50 Standard forms of restriction may be prescribed by rules.[184] If there is an application for the entry of a restriction that is not in one of the forms so prescribed, the registrar may only approve the application if it appears to him that the terms of the restriction are reasonable, and that applying the restriction would be straightforward and would not place an unreasonable burden on him.[185] This power replicates the effect of one that is found in the Land Registration Act 1925.[186] There are from time to time applications for restrictions that the registrar has to refuse for one or more of the reasons set out above. For example, a restriction might provide for something to happen on the occurrence of some event, where it might be difficult for the registrar to determine whether or not that event had occurred.[187]
WHERE THE COURT MAY ORDER THE ENTRY OF A RESTRICTION
6.51 Under the Bill, if it appears to the court that it is necessary or desirable to do so for the purpose of protecting a right or claim in relation to a registered estate or charge, it may make an order requiring the registrar to enter a restriction in the register.[188] The cases in which the court is most likely to make such an order are in circumstances when, under the present law, it orders the entry of an inhibition.[189] However, whereas inhibitions prevent the entry of any dealing on the register, the jurisdiction of the court under the Bill is not so constrained. It could therefore order the entry of a restriction of a much more limited kind where that was necessary or desirable to protect the relevant right or claim.[190] What the court cannot do is to make an order for the purpose of protecting the priority of an interest which is, or could be, the subject of a notice,[191] any more than can the registrar when he exercises his power to enter a restriction.[192] However, as we explain in the next paragraph, an issue of priority can arise in a case where the court orders that a restriction be entered which prevents the registration of any disposition pending its further order.
6.52 As we explain more fully in Part IX of this Report, there are two situations under the Bill in which an entry on the register is protected if it is made within a priority period,[193] namely, where there is an official search and where an estate contract is protected by the entry of a notice.[194] Where an intending buyer has priority protection, and the court then orders that a restriction be entered that prevents the registration of any dealing with the registered estate, it needs to be clear whether the restriction overrides the priority protection enjoyed by the intending buyer so as to prevent the registration of the subsequent transfer in his or her favour. Under the present law, the issue could arise where the court orders that an inhibition be entered on the register.[195] However, there is no reported instance in which the point has arisen. In the Consultative Document, we sought views as to whether, in ordering that a restriction be entered, the court should have power to direct that its order should have overriding priority.[196] The responses were almost evenly divided on the point, but with a slight preponderance in favour of such a power, provided that it was coupled with strict safeguards. The Bill reflects the view of the majority.
6.53 The effect of the Bill may be summarised as follows-
(1) in the absence of any order of the court, the priority protection given to an official search or the entry of a notice in respect of an estate contract would prevail over any order of the court that a restriction should be entered on the register;[197]
(2) the court would, however, have a power to include in its order a direction that the restriction should have overriding priority;[198]
(3) in exercising its power under (2), the court could impose such terms and conditions as it thought fit,[199] and would probably require an undertaking from the applicant that he or she should indemnify any person acting in good faith who had suffered loss as a result of the court's direction; and
(4) when a court made a direction under (2), the registrar would be required to make such entry in the register as rules might provide,[200] so as to ensure that it was apparent from the register that the restriction did indeed have overriding priority.
Notifiable applications for a restriction
6.54 Under the present law, unless the registered proprietor's land certificate is deposited with the registry, it normally has to be produced before a restriction can be entered.[201] As we have explained above, the role of land certificates under the Bill is greatly reduced from that which they presently have.[202] They will not have to be produced when an applicant seeks the entry of a restriction any more than when he or she applies for the entry of a notice.[203] As with unilateral notices, there have to be safeguards therefore to protect a registered proprietor from the improper entry of restrictions.
6.55 First, as with applications for a notice,[204] a person must not exercise his or her right to apply for a restriction without reasonable cause.[205] As we have explained in the context of notices,[206] any person who does so without reasonable cause commits a breach of statutory duty and is liable accordingly to any person who suffers damage in consequence.[207]
6.56 Secondly, the Bill creates a procedure by which, where there is an application for the entry of a restriction, the registrar must give notice of it to both the proprietor of the registered estate or charge to which the application relates and such other persons as rules may provide (such as registered chargees and any other persons who may have a direct interest in any disposition of the property).[208] The registrar's obligation to serve notice of an application applies in all cases except where-
(1) the application is made by or with the consent of-
(a) the proprietor of the registered estate or charge to which the application relates; or(b) a person who is entitled to be registered as the proprietor;[209]
(2) there is a duty under rules to apply for a restriction as explained above in paragraph 6.48;[210] and
(3) there is an application for the entry of a restriction that reflects a limitation under either-
(a) an order of the court or registrar; or(b) an undertaking given in place of such an order.[211]
In essence, therefore, the registrar will serve notice of an application of a restriction which is both voluntary (in the sense that it is not one that the applicant or registrar is or can be required to make) and unilateral (because it is not made with the concurrence of the registered proprietor).
6.57 Once notice of the application is given, the registered proprietor may object to it and the usual provisions of the Bill that relate to objections, explained in Part XVI of this Report, will apply.[212] If the objection cannot be resolved by agreement of the parties, it will be referred to the Adjudicator for his decision.[213]
Withdrawal of restrictions
6.58 The Bill makes provision by which an application may be made for the withdrawal of a restriction.[214] Both the persons who may apply for withdrawal and the circumstances in which such an application may be made will be prescribed by rules.[215] In general, this power is likely to be applicable primarily in respect of restrictions that were entered on application rather than those which were entered because there was a duty to do so, or because they were entered on the order of the court or by the registrar. However, even in respect of restrictions that were entered otherwise than on application, it may be appropriate for an interested person to apply for the withdrawal of a restriction, as where it is spent.
Pending land actions, writs, orders and deeds of arrangement
6.59 The Bill makes special provision as to how to protect the following matters-
(1) a pending land action;[216]
(2) a writ or order affecting land issued or made by any court for the purpose of enforcing a judgment or recognisance;[217]
(3) an order appointing a receiver or a sequestrator of land;[218] and
(4) a deed of arrangement within the meaning of the Deeds of Arrangement Act 1914.[219]
At present such matters are protected by the entry of a caution. It is therefore necessary to make alternative provision for them in the Bill, given the prospective abolition of cautions.[220]
6.60 Under the Bill, all of these matters are treated as interests affecting an estate or charge.[221] Some entry is, therefore, required to protect them on the register.[222] The effect of the Bill is that the only entry that can be made in relation to an order appointing a receiver or a sequestrator of land and a deed of arrangement is a restriction.[223] The reasons for this are as follows-
(1) An order appointing a receiver or sequestrator will sometimes be regarded as a proprietary right and sometimes it will not.[224] We were concerned that there should be one method for protecting all such orders without an inquiry as to which side of the line the order fell.
(2) A deed of arrangement is registered to protect creditors during the interim between a debtor assigning his or her property to a trustee for his or her creditors' benefit and the trustee being registered as proprietor. They are, therefore, analogous to bankruptcy orders which, under the Bill, are protected by the entry of a restriction.[225]
Although, as we have explained, a restriction cannot be used to protect the priority of an interest that could be protected by a notice,[226] they can provide very effective protection for a right by preventing the registration of any dealing with the registered estate or charge affected.
6.61 As regards a pending land action or a writ or order affecting land issued or made by any court for the purpose of enforcing a judgment or recognisance, it will be possible to protect such an interest by the entry of a notice, a restriction or both. There is a power to modify the application of the Bill by rules in relation to any of the matters listed above in paragraph 6.59.[227] This is because there may be cases where such matters may not naturally fall within the wording of the provisions of the Bill, but where those provisions should, nonetheless, apply.[228]
Note 1 In other words, what in the Land Registration Act 1925 are called “minor interests”: see s 3(xv). The Bill does not use the term. [Back] Note 2 “The Protection of Minor Interests and Restrictions on Dealings with Registered Land”. [Back] Note 3 As regards (1) and (2), below, 93% of those who responded to our proposals supported the scheme which the Bill now adopts. As regards (3), all of those who responded agreed with our recommendations. [Back] Note 4 Cautions against first registration are preserved by the Bill: see above, para 3.56. [Back] Note 5 Law Com No 254, paras 6.50-6.54, 6.69. [Back] Note 6 See Law Com No 254, paras 6.10-6.23, 6.45. [Back] Note 7 For the present law, see Law Com No 254, paras 6.3-6.9. [Back] Note 8 Under the present law, notices can only be entered with the agreement of the registered proprietor (Land Registration Act 1925, s 48(1)) or pursuant to an order of the court (ibid, s 48(2)). [Back] Note 9 See Law Com No 254, para 6.52. [Back] Note 10 See Law Com No 254, paras 6.55-6.57. [Back] Note 11 That is, ss 55 (the effect of cautions) and 56 (general provisions as to cautions). [Back] Note 12 Schedule 12, para 2(3). [Back] Note 13 Schedule 12, para 5. [Back] Note 14 See, in particular, rr 217-219, 221, 222. [Back] Note 15 Schedule 12, para 2(4). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 16 See paras 6.9, 6.44. [Back] Note 18 See Schedule 2, para 3(2); above, para 4.21. [Back] Note 20 Cl 32(3). For the equivalent provision in the present legislation, see Land Registration Act 1925, s 52(1). [Back] Note 21 As where it did not comply with the formal requirements of s 2 of the Law of Property (Miscellaneous Provisions) Act 1989. [Back] Note 22 Another example might be where A, a registered proprietor of land that was subject to a registered charge in favour of B, contracted to sell that estate to C, but without the prior consent of B. C applied for the entry of a notice on A’s title. B then exercised its power of sale and conveyed the land to D, who was registered as proprietor. D would not be bound by C’s estate contract because it would have been overreached by B’s sale to D. All that A could sell to C without B’s consent was her equity of redemption. The entry of the notice could not enhance its status. Cf Duke v Robson [1973] 1 WLR 267. [Back] Note 23 Cl 32(3). Cf Land Registration Act 1925, s 52(1). See too Cls 29(2)(a)(i); 30(2)(a)(i); above, paras 4.5, 4.11. [Back] Note 25 See below, para 6.30. [Back] Note 26 Cl 39. The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 27 Schedule 12, para 2(1). Such notices take effect as agreed notices under Cl 34(2)(a). For agreed notices, see below, para 6.23. [Back] Note 29 This will include a charging order over an interest under a trust. This may be protected by the entry of a restriction under the Bill: see below, para 6.43. [Back] Note 30 One of the fundamental principles of the 1925 property legislation was that trusts should be kept off the title. The Bill adheres to that principle. [Back] Note 31 For the nature of overreaching, see State Bank of India v Sood [1997] Ch 276. [Back] Note 32 See Settled Land Act 1925, s 94(1); Law of Property Act 1925, s 27(2). [Back] Note 33 See Cl 42(1)(b); below, para 6.41. See too Cl 44; below, para 6.42. [Back] Note 34 In other words, those leases that can be created orally: see Law of Property Act 1925, s 54(2). [Back] Note 36 In other words, where the lease is an overriding interest under Land Registration Act 1925, s 70(1)(k): seeibid, s 48(1). [Back] Note 37 See Cl 27(2)(b)(i); above, para 4.20. [Back] Note 38 Under Cl 116(1); above, paras 3.17, 4.20. [Back] Note 39 See above, para 3.30. [Back] Note 40 Cl 27(2)(d); above, para 4.24. [Back] Note 41 See Schedule 3, para 1; below, para 8.50. [Back] Note 42 See Cl 4(1)(c)-(f); above, paras 3.30 and following. [Back] Note 43 See Cl 27(2)(b); above, para 4.20. [Back] Note 44 Cf Cls 11(4)(a); 12(4)(b); above, para 3.45. [Back] Note 45 See Schedule 2, para 3. [Back] Note 47 Such as a restrictive covenant. [Back] Note 48 Cls 29(2)(b) (disposition of registered estate); 30(2)(b) (disposition of registered charge). See above, para 5.13. [Back] Note 49 Land Registration Act 1925, s 50(1). [Back] Note 50 See Oceanic Village Ltd v United Attractions Ltd [2000] Ch 234, 252-254. [Back] Note 51 Cl 33(c). The point had in fact been foreseen by the Law Commission and HM Land Registry and Parliamentary Counsel had been instructed on it some months before the Oceanic Village case was heard. [Back] Note 52 See above, para 4.25. [Back] Note 53 Commons Registration Act 1965, s 1. [Back] Note 54 See Cl 27(2)(d). [Back] Note 56 See Land Registration Act 1925, s 70(4). [Back] Note 57 See Law Com No 254, paras 5.97, 5.98. For the overriding status of rights to coal, see below, para 8.32; and Schedule 1, para 7; and Schedule 3, para 7. [Back] Note 58 Right to withdraw support. [Back] Note 59 Rights to work coal in former copyhold land. [Back] Note 60 Additional rights in relation to underground land. [Back] Note 62 For the definition of PPP leases, see Greater London Authority Act 1999, s 218. [Back] Note 63 See Greater London Authority Act 1999, s 210; below, para 8.11. [Back] Note 64 See Land Registration Act 1925, s 70(3A), inserted by Greater London Authority Act 1999, s 219(7)(b). [Back] Note 66 This may not be a comprehensive list. [Back] Note 67 See above, para 3.45. [Back] Note 68 Cf Cls 11(4)(a); 12(4)(b). For interests that cannot be protected by notice, see above, paras 6.8 and following. [Back] Note 69 See above, para 3.53. [Back] Note 70 Or, as the Bill describes it, “an unregistered interest”: see Cl 37. For overriding interests, see below, Part VIII. [Back] Note 71 See below, paras 8.8 and following, where the categories of interest that override first registration are explained. It is the overriding interests within Schedule 1, rather than those which override a registered disposition under Schedule 3, that are relevant for these purposes. This is because in exercising this power, the registrar is not concerned with the effect of a disposition, but merely with whether there is an overriding interest at the relevant time. The interest might have arisen after the last disposition of the land in question. Cf below, para 8.3. [Back] Note 72 See above, paras 6.8 and following. [Back] Note 74 See below, para 8.95. [Back] Note 75 See above, para 4.14. [Back] Note 77 Schedule 2, para 3(2); see Cl 27(2)(b); above, para 4.20. [Back] Note 78 Schedule 2, paras 4(2), 5(2); see Cl 27(2)(c); above, para 4.23. [Back] Note 79 See Law of Property Act 1925, s 1(2)(a). [Back] Note 80 Schedule 2, para 6(2); see Cl 27(2)(d); above, para 4.24. Cf above, para 6.14. [Back] Note 81 Schedule 2, para 7(2); see Cl 27(2)(e); above, para 4.27. The circumstances in which a rentcharge can now be created are very limited: see Rentcharges Act 1977, s 2. [Back] Note 82 Schedule 2, para 7(2); see Cl 27(2)(e); above, para 4.27. See Law of Property Act 1925, s 1(2)(e). [Back] Note 85 For the role of the Adjudicator, see below, paras 16.6 and following. [Back] Note 86 Cf Schedule 4, paras 2 and 5; below, paras 10.10; 10.19. [Back] Note 87 Cf Schedule 2, where the registration requirements are set out; see above, para 4.28. [Back] Note 88 See Schedule 4, para 5(a). [Back] Note 89 Cl 34(1). For interests that cannot be protected by notice, see above, paras 6.8 and following. [Back] Note 90 Cl 34(2). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 91 See para 6.25. The power could in theory be used to provide that on particular facts a notice was always to be unilateral, but this is less likely. [Back] Note 94 See Land Registration Act 1925, s 64(1). [Back] Note 95 See Schedule 10, para 4; below, para 9.90. [Back] Note 97 See above, para 6.22. [Back] Note 98 See paras 6.26 and following. [Back] Note 99 See Land Registration Act 1925, s 64(1)(c), (5)-(7). [Back] Note 100 Land Registration Act 1925, s 64(5). [Back] Note 102 See above, para 6.2. [Back] Note 103 Cl 35(2). The beneficiary of such a notice may apply to the registrar at any time for the removal of the notice: Cl 35(3). [Back] Note 104 Cf Cl 39 (rules may make provision about the form and content of notices in the register); above, para 6.6. [Back] Note 105 Cl 77(1)(b). This applies to all notices. As we have indicated above, some agreed notices may in fact be entered without the agreement of the registered proprietor: see paras 6.24, 6.25. [Back] Note 106 Cl 77(2). Cf above, para 3.59; below, paras 6.55, 16.6. [Back] Note 107 Cl 35(1). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). It is anticipated that rules may provide that notice be served (for example) on a liquidator of a company which was the registered proprietor. [Back] Note 109 Cl 36(2), (4). [Back] Note 110 Cl 36(2), (3). [Back] Note 111 Under Cl 73: see below, para 16.6. [Back] Note 112 See Cls 73(7); 106(1). For the Adjudicator and his jurisdiction, see below, paras 16.3 and following. [Back] Note 113 Or, if there is an appeal from his decision under Cl 109, the High Court (see below, para 16.24). [Back] Note 114 Or High Court. [Back] Note 115 See Land Registration Act 1925, s 57. [Back] Note 116 See paras 6.32 and following. [Back] Note 117 Schedule 12, para 2(2). [Back] Note 119 For example, leases granted for 7 years or less normally take effect without registration as overriding interests: see below, paras 8.9, 8.50. They are not registered estates and have no title on the register. It would not be possible to enter any restriction against, say, the assignment of such a lease because there would be no title against which to enter it, nor would it be possible to make any form of entry in respect of any such assignment on the register. [Back] Note 120 As, for example, where a registered proprietor grants a lease for 3 years or less that takes effect without registration as an overriding interest. The restriction may reflect a prohibition on the creation of any interest, including an unregistrable interest, out of a registered estate. [Back] Note 121 See below, para 6.37. [Back] Note 123 These are no more than instances. They do not qualify the generality of what may be done by restriction set out in Cl 40(1). [Back] Note 125 Typically this might be to give effect to a “freezing injunction”, restraining any disposition or dealing with a registered property. Under the present law, this would be achieved by the entry of an inhibition on the register. [Back] Note 126 For the powers of disposition of a registered proprietor, see above, paras 4.2—4.8. [Back] Note 128 In this way, a restriction can perform a function akin to a caution under the present law. It can be employed to warn an interested person of any impending disposition of the property. [Back] Note 129 An example would be in relation to a trust of land, where a beneficiary of full age who was entitled to an interest in possession could enter a restriction to ensure that the trustees consulted him or her before exercising any of their functions in relation to land subject to the trust: see Trusts of Land and Appointment of Trustees Act 1996, s 11(1). [Back] Note 134 See Law Com No 254, paras 6.28-6.36. [Back] Note 135 See Land Registration Act 1925, s 58(1). [Back] Note 136 Made pursuant to Land Registration Act 1925, s 58(5). See Land Registration Rules 1925, r 236. [Back] Note 139 See below, para 6.46. [Back] Note 140 See paras 6.42, 6.46. [Back] Note 142 See Cl 26(1); above, para 4.4; and Cl 52(1); below, para 7.7. This provision operates only to prevent the title of the disponee from being questioned. It does not affect the lawfulness of the disposition: see Cls 26(3); 52(2). [Back] Note 143 The priority of a right of pre-emption can be protected by a notice. As we explain at para 6.43 below, a restriction cannot be directly employed to protect priority. However, a restriction can be entered as well as a notice, to ensure that the registered proprietor first offers to sell the land to the grantee of the right of pre-emption before he or she contracts to sell it to anybody else. In this way it can indirectly protect the priority of the right of pre-emption by prohibiting any disposition that would affect its priority. [Back] Note 144 Three further examples may be given. The first is where, under a registered charge, the chargor agrees with the chargee to the exclusion of his or her statutory power of leasing under Law of Property Act 1925, s 99. The second is where a chargor contracts with a chargee that he or she will not further charge the registered estate, without the chargee’s consent. On such agreements, see below, paras 7.26, 7.27. The third arises where there is a housing or industrial estate and each freeholder covenants with a management company (which owns the verges, roads, parks, etc) to pay service charges in respect of the amenities which it provides. As the burden of such positive covenants may not run (except perhaps through the rather uncertain doctrine of mutual benefit and burden), each freeholder also covenants with the management company that when he or she sells the land, he or she will take a covenant from the buyer by which that buyer undertakes to enter into a covenant with the management company to pay the service charges. [Back] Note 145 That consent might be that of a third party who, under the terms of the trust, must consent to the disposition. However, in the case of a trust of land, it might also be the beneficiaries of full age who are beneficially entitled to an interest in possession in the land, whom the trustees should consult before exercising their functions under Trusts of Land and Appointment of Trustees Act 1996, s 11(1) (unless the trust instrument provides otherwise). [Back] Note 147 There are other situations in which overreaching can take place, such as a sale by a mortgagee pursuant to its paramount powers, which do not require the entry of any restriction on the register. Where the disposition is a registered disposition for valuable consideration, the disponee will take free of any interests under any settlement because there will be no restriction on the register to protect them and interests under a settlement cannot be overriding interests: see Schedule 3, para 2(1), see below, para 8.59. As regards a trust of land, the disponee will take free of any interests under the trust in the absence of any restriction unless a beneficiary under the trust is in actual occupation of the land. If so, he or she will have an overriding interest under Schedule 3, para 2(1); see below, para 8.54. [Back] Note 148 Or person having the powers of the tenant for life under Settled Land Act 1925, s 20. [Back] Note 149 Law of Property Act 1925, s 27(2); Settled Land Act 1925, s 94(1). [Back] Note 150 If overreaching does not take place, the normal rules of priority apply to determine whether the disponee is or is not bound by the interests under the trust or settlement: see Cls 28-30; above, paras 5.5-5.6. [Back] Note 151 So that there is, necessarily, a trust of land. [Back] Note 152 Cl 44. The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 153 Cl 42(1)(c). This is an example of the use of a restriction in circumstances where, under the present law, a caution would commonly be entered. [Back] Note 155 The form of restriction is likely to provide that no disposition should be made of the registered estate held in trust without the prior notification of the person having the benefit of the charging order. [Back] Note 156 For charging orders over interests under a trust of land, see Charging Orders Act 1979, s 2(1)(a)(ii). [Back] Note 157 See Ruoff & Roper, Registered Conveyancing, 35-32; 36-08. [Back] Note 158 For the prospective abolition of cautions against dealings, see above, para 6.3. [Back] Note 160 See Cl 33(a); above, para 6.9. [Back] Note 162 Of course a restriction may indirectly have the effect of protecting the priority of an interest. This is because it can prevent the registration of a disposition that would affect the priority of that interest. [Back] Note 163 See para 6.40(2). [Back] Note 164 See above paras 6.39 and following. [Back] Note 166 The Adjudicator does not have jurisdiction in this case, because the entry of a restriction does not arise out of an application to which the registered proprietor may object: see Cls 73, 109; below, paras 16.6 and following. See too para 16.14. [Back] Note 167 Where the registrar enters two or more persons in the register as registered proprietors: see Cl 44; above, para 6.42. [Back] Note 168 See, eg, Housing Act 1985, s 157(7); Schedule 9A, paras 4, 5(2); Housing Act 1988, ss 81(10), 133(9); Local Government and Housing Act 1989, s 37(8); Charities Act 1993, ss 37(8), 39(1B) (each as amended by Schedule 11 of the Bill). For the entry of a restriction on application, see below, para 6.47. [Back] Note 169 Cl 44(2). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 171 Cl 86(2); below, para 11.40. [Back] Note 172 Cl 43(1)(a), (4). [Back] Note 173 Cl 43(1)(b), (4). The form of consent may be prescribed by rules: see Cl 43(2)(b). [Back] Note 175 Cl 43(2)(a). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 176 The general powers of trustees and their powers to partition, conferred respectively by Trusts of Land and Appointment of Trustees Act 1996, ss 6 and 7, do not apply to a trust of land created by a disposition where the disposition makes provision to that effect:ibid, s 8(1). The disposition may also provide that powers conferred by ss 6 and 7 can only be exercised with consent:ibid, s 8(2). [Back] Note 177 Land Registration Rules 1925, rr 59A (duty on first registration), 106A(1) (duty on registration of a disposition of registered land in favour of the trustees). For other examples of a duty to apply for a restriction, seeibid, rr 124, 169A. [Back] Note 178 Cl 43(2)(c). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1) [Back] Note 179 Cf Land Registration Rules 1925, r 236. [Back] Note 180 A donee of a general power of appointment can always appoint to him or herself, and therefore falls within the category mentioned above, in para 6.47 (1). [Back] Note 181 Cf Land Registration Rules 1925, r 238. See Ruoff & Roper, Registered Conveyancing, 10- 21, where there is a discussion of the relevant statutes. [Back] Note 182 Such persons have no interest in any land or charge as such, but they may have a right or claim that can appropriately be protected by means of a restriction. [Back] Note 183 Under Cl 43(1)(c). [Back] Note 184 Cl 43(2)(d). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 186 See s 58(2). See too Land Registration Rules 1925, r 78. [Back] Note 187 Such as a restriction that precluded any disposition until certain building works had been completed. It would be unreasonable to expect the registrar to have to ascertain whether those works had in fact been completed. [Back] Note 189 In other words, where it is necessary to “freeze” the register and to prevent the registration of any dealing with or disposition of the estate or charge. [Back] Note 190 For example, if it determined that a person was entitled to a beneficial interest under a resulting or constructive trust, it might also order the entry of a restriction to ensure that there was no disposition of the registered estate without the prior consent of the beneficiary. [Back] Note 192 See above, para 6.44. [Back] Note 193 Cl 72; below, para 9.67. [Back] Note 194 Cl 72(6); below, para 9.68. [Back] Note 195 See Law Com No 254, para 6.38. [Back] Note 196 Law Com No 254, paras 6.60, 6.61. We made no recommendation on the point. [Back] Note 197 This follows from Cl 72(2). [Back] Note 200 Cl 46(4). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 201 Land Registration Act 1925, s 64(1)(c). [Back] Note 202 See para 6.23. See further below, paras 9.88, 9.90. [Back] Note 204 See above, para 6.28. [Back] Note 206 Above, para 6.28. See too above, para 3.59 (lodging a caution unreasonably); and below, para 16.6 (objecting to an application unreasonably). [Back] Note 208 Cl 45(1). The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 212 See Cls 73; 106; below, paras 16.6 and following. [Back] Note 213 Cl 73(7); below, para 16.6. [Back] Note 215 Ibid. The rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 216 See Land Charges Act 1972, s 5(1)(a). [Back] Note 217 Seeibid, s 6(1)(a). [Back] Note 218 Seeibid, s 6(1)(b). [Back] Note 219 Seeibid, s 7(1). For the relevant deeds of arrangement, see Deeds of Arrangement Act 1914, s 1. [Back] Note 220 See above, para 6.3. [Back] Note 221 Cl 87(1). In other words, they are “an adverse right affecting the title to the estate or charge”: see Cl 129(3)(b). [Back] Note 222 Such rights cannot be protected as overriding interests under either Schedule 1, para 2, or Schedule 3, para 2, where the person having the benefit of the interest is in actual occupation. [Back] Note 223 The Bill achieves this in a negative way by providing that no notice may be entered in respect of such rights: see Cl 87(2). [Back] Note 224 See Clayhope Properties Ltd v Evans [1986] 1 WLR 1223, 1228. [Back] Note 225 Cl 86(4); below, para 11.40. [Back] Note 226 Cl 42(2); above, para 6.44. [Back] Note 227 Cl 87(4). Any rules will be land registration rules and will be required to be laid before Parliament only. See Cls 125, 129(1). [Back] Note 228 For example, a restraint order under Criminal Justice Act 1988, s 77, takes effect as a pending land action. However, there might be a doubt as to whether a prosecutor who seeks a restraint order against a criminal’s registered estate can be said to “be entitled to the benefit of an interest affecting a registered estate” within Cl 34(1) (above, para 6.22). [Back]
