The end of 2018 saw a flurry of property law cases handed down, the publishing of the Law Commission Commonhold Consultation Paper, and the passing of the Homes (Fitness for Human Habitation) Act 2018. This blog post summarises those developments, and looks forward to what can be expected from the first big case of 2019, Canary Wharf Group v European Medicines.
Sunset 2018
London Borough of Southwark v Transport for London [2018] UKSC 63
The Supreme Court was asked to determine the meaning of “highway” in the GLA Roads and Side Roads (Transfer of Property etc) Order 2000, article 2(1)(a). In particular, the question to be determined was whether “highway” carried only the ‘narrow’ meaning of the ordinary zone of use (the road surface and airspace and subsoil necessary for the operation, maintenance and repair of the road) or the ‘wider’ meaning of the entire vertical plane (all the airspace and subsoil below the surface of the road).
At arbitration and in the High Court the narrow approach was preferred. The Court of Appeal adopted the wider definition.
The Supreme Court decided that, in the absence of ‘highway’ having a single meaning in law, the appeal should be allowed and the wider interpretation adopted. Adopting the wide approach avoids the potentially awkward multi-layering of titleholders on the vertical plane, and aligns the law concerning the vesting of ownership in highways with law of freehold conveyancing and its definition of ‘land’.
Antoine v Barclays Bank [2018] EWCA Civ 2846
The Court of Appeal was asked to determine whether the registration of a person as the proprietor of a property that gave effect a court order obtained through the use of documents that later transpired to be forgeries is a ‘mistake’ for the purposes of the Land Registration Act 2002, schedule 4. Similarly, the court was also asked to determine whether a legal charge entered into by the registered proprietor before the court order was set aside could also qualify as a ‘mistake’.
Lady Justice Aplin, with whom Peter Jackson and Longmore LJJ agreed, held that registrations that occur as a result of a court order are akin to registrations that take place following a voidable transaction. Applying NRAM Ltd v Evans [2017] EWCA Civ 1013, if registration takes place before the court order is set aside, there is no mistake for the purposes of schedule 4, and no rectification of the land register can be made.
Rashid v Nasrullah [2018] EWCA Civ 2685
A fraudster forged a document transferring title to a parcel of land into his name. When the true owner sought to rectify the register the fraudster argued that rectification should not take place as he had acquired the land by adverse possession, notwithstanding that he had been the registered proprietor of the land throughout the relevant limitation period. The First Tier Tribunal and the Upper Tribunal rejected the fraudster’s argument. It is of note that the case was decided according to the provisions of the Land Registration Act 1925, as the Land Registration Act 2002 was not yet in force at the time of the fraud.
The Court of Appeal allowed the fraudsters appeal. Lewison LJ held that, following the landmark case of JAPye (Oxford) Ltd v Graham [2002] UKHL 30, for the purposes of a claim in adverse possession, dispossession of the true owner will occur if possession of the land has been taken from them without their consent. Lewison LJ rejected the decision in Parshall v Bryans [2013] EWCA Civ 240, in which it was held that there is no dispossession where a party has registered title. Accordingly, the only question that matters is whether the true owner has been dispossessed, and the registration of the dispossessor as the proprietor of the land is immaterial to an adverse possession claim.
Lewison LJ’s decision initially appears awkward. For a claim in ‘adverse’ possession one would expect the possession to be just that: it should be ‘adverse’. We would ordinarily look for possession that is nec precario (without permission). It is hard to describe possession of the land by the registered proprietor as being without permission. However, as Lewison LJ clarifies, possession of the land will be adverse if the true owner does not consent to it, irrespective if there is a form of ‘permission’ flowing from another source (such as the registration of the dispossessor as the proprietor of the land).
Furthermore, Lewison LJ’s decision prevents arbitrary distinctions being made between a dispossessor who does no more than take physical possession of the land, and those who go so far as to register the property in their own name. King and Peter Jackson LJJ gave an additional judgment agreeing with Lewsion LJ and also noted that, under the Limitation Act 1980, there are a variety of parties in whose favour limitation periods do not run; that class did not include registered owners, and should not be extended to include them. Time will run in favour of someone who takes possession of land without the permission of the true owner, and it was difficult to see why time should not run in favour of someone who takes the extra step of registering the property in his or her own name. By definition, adverse possession rewards ‘wrongful’ actions, and therefore the act of registration should not preclude the running of the limitation period.
Finally, when determining whether the dispossessor has ‘intention to possess’, as required by the test for adverse possession, the registration of the land in the name of the dispossessor may be a good indication of such intention.
Moore v Moore [2018] EWCA Civ 2669
“This is a case about proprietary estoppel. As so often, it involves a family farm, and a sad breakdown in relations between members of the family. Indeed the dispute has already been ruinous in both human and financial terms. We were told that the total costs so far incurred on both sides are estimated to be in the region of £2.5 million.” (Henderson LJ, paragraph 1)
Competing for the best opening paragraph of 2018 is Henderson LJ in Moore v Moore. His Lordship’s judgment, with which Leggatt and Floyd LJJ agreed, set down further guidance concerning the satisfaction of estoppel equities (paragraphs 91-106).
Law Commission
On 10 December 2018 the Law Commission published its Commonhold Consultation Paper, a sub-project to the main Residential Leasehold and Commonhold project. The consultation is open until 10 March 2019.
Commonhold is a form of tenure introduced by the Commonhold and Leasehold Reform Act 2002. An alternative to leasehold, commonhold provides a structure by which the relationship between separate, individually owned properties (referred to as ‘units’) within a larger building or development can be managed. In a commonhold arrangement each unit (such as a flat) is held on a freehold basis, with each unit owner also becoming a member of a company (the ‘commonhold association’) that owns and manages the freehold of the building or development.
Despite its many virtues, the commonhold tenure has proven unpopular, with fewer than 20 being created since the introduction of the form of tenure in 2002. The commonhold project seeks to establish which aspects of commonhold law have impeded its use and popularity as a form of tenure.
Homes (Fitness for Human Habitation) Act 2018
Having received Royal Assent on 20 December 2018, the Homes (Fitness for Human Habitation) Act 2018 came into being, and will come into force on 20 March 2019. The Act comprises only two sections, which are intended to ensure that rented residential accommodation is provided and maintained in a state of fitness for habitation. Going forward, leases that are within the scope of the Act will contain an implied covenant that a landlord should ensure that the property is fit for human habitation both at the beginning and throughout the duration of the tenancy.
The dawn of 2019
With the news dominated by Brexit it seems only fitting that the property law case to watch in January should itself have a Brexit theme. Beginning in the High Court on 16 January, Canary Wharf Group v European Medicines concerns a dispute about a 25-year lease entered into in 2014 by the European Medicines Agency. The Agency intends to relocate to Amsterdam following Brexit, and is arguing that its lease will be frustrated and come to an end when the United Kingdom does in fact leave the European Union.
The City will be watching the case with great concern. If the Agency’s lease is held to be frustrated by Brexit, the floodgates could be opened for other relocating business and institutions to follow suit and escape their leasehold obligations before the end of the term of the lease.
Land and Property Law Blog 