Foundations in Law and Property - Case Study Example

Coastguard Cottages Since the right of way exercised by the tenants of cottage two via their chickens in respect of cottages 1and 3 is not provided for in the conveyance of those properties, the right can only be exercised in the event a prescription arises. Section 62 of the Law property Act 1925 implies that an easement will arise when there is: "some diversity of ownership or occupation of the quasi-dominant and servient tenements prior to the conveyance". 1 However the purchase is required to be by deed and easements will run with the land unless the conveyance to a purchaser specifically provides otherwise. 2 A prescription can arise by virtue of presumption in the case of a continued and uninterrupted use of a right of way. The presumption arises when a right of way is exercised and the person who has authority to put a stop to the exercises of a right of way does nothing to interfere with the use of the right of way. Silence is therefore deemed to be acquiescence and the person with authority to intervene cannot at some later stage put a stop to the easement.3 The common law doctrine of prescription was delineated by Lindsey J in Gardner v Hodgsons Kingston Brewery Co Ltd [1903] AC 229, and he maintained that the doctrine of prescription presumes that all prescriptions presuppose a grant.4 When claiming a prescription the claimant is required to demonstrate that he freely exercised the easement in a manner suggestive of the fact that he was entitled to do so. The exercise of the easement entitling the user to prescription is defined in terms of the Latin Maxim, ne vi, nec clam, nec precario.5 In other words the easement was exercised in the absence of force, secrecy and permission.6 Therefore in Gardner v Hodgsons Kingston Brewery Co Ltd the fact that the user paid an annual fee for upward of sixty years was a bar to his obtaining a prescription.7 In Hollins v Verney (1884) 13 QBD 304 an easement used only three times over a period of twelve years will not be sufficient to support a claim for acquisition of an easement by virtue of the doctrine of prescription.8 In this case the occupiers of Cottage 2 have been raising chickens that wandered onto the property of cottages 1 and 3 for the prescribed period without having to use force. The protestations by the occupiers in cottages 1 and three do nothing more than prove that the right of way was not exercised in secret. Complaining about the nuisance is entirely different from taking positive steps to prevent it. The time prescribed is twenty years.9 In each case the tenants have occupied the cottages and exercised the right of way for at least twenty-five years. A claim founded on the lost modern grant doctrine can be lost if there is proof that there was no grantor capable of granting the easement at the time when the grant is presumed to have occurred.10 In Tehidy Minerals v Norman [1971] 2 QB 528 Buckley LJ held in respect of the doctrine of lost modern grant that: “…where there has been upwards of 20 years uninterrupted enjoyment of an easement, such enjoyment having the necessary qualities to fulfill the requirements of prescription, then unless, for some reason .... the existence of such a grant is impossible, the law will adopt a legal fiction that such a grant was made, in spite of any direct evidence that no such grant was in fact made.”11 The Prescription Act 1832 modifies the common law doctrines of prescription and lost modern grants by making provision for all easements, a special rule applicable to light and exceptions to the acquisition of easements.12 The claimant remains at liberty to invoke the common law however when the Prescription Act 1832 is capable of application, the user may not succeed in his claim if the presumption of acquisition by virtue of twenty years’ use can be rebutted.13Moreover, a tenant cannot claim a prescriptive right over his landlord’s adjourning property. 14Now that the tenants occupying the Coastguard Cottages are purchasing the cottages the prescribed time will start to run at the time of the conveyances. In order to prevent a prescription arising in the manner described above it is important for the new owners of cottages 1 and 3 to take steps to prevent the exercise of any access to their property by the owners of cottage 2 via their chickens or otherwise. Section 3 of the 1832 Act makes provision for the acquisition of an absolute right to enjoyment of light to an edifice if such enjoyment continues for an uninterrupted period of twenty consecutive years and provided it is not granted by virtue of a written agreement.15 Likewise a tenant is entitled to the acquisition of a right to light against the interest of his landlord provided that unless prior to the expiration of the proscribed period the right was interrupted.16 Likewise the owners of cottage 2 have a continuing right to the enjoyment of light as against their landlord and can enforce that right against the new owners of Cottage 3. Paddock The Law of Findings dictates that the owner of real property has the best title to lost property uncovered on land. However there are circumstances which can arise to complicate matters such as leased premises, property to which the public has access and claims from predecessors in title.17 Determining the owner of the diamond ring is not entirely clear. The question becomes blurred by the legal and illegal occupation of the Paddock by Ken Leighton and his daughter who may have acquired adverse possession by virtue of at least 12 years quiet possession of the property without Tom Parker’s (the true owner) consent. The County Council’s claim to the diamond ring however, is not likely to succeed since they can only be viewed as trespassers given that their occupation was without permission and cannot be said to continue from the Leighton’s possession since they ceased occupation some two years prior. The modern rules of ‘finders-keepers’ is largely developed around the court’s findings in the case of Elwes v Brigg Gas Co. (1886) 33 Ch.D. 562. Chitty J made it abundantly clear that in finding disputes the critical question of property entitlement was dependant upon ownership and/or lawful possession of the property where the lost object was discovered. In this case a prehistoric boat which had been buried 6 feet deep in the earth on demised premises was discovered by the lessee. Chitty J maintained that the owner of the demised property was entitled to possession of the object uncovered. Chitty J held: “…he was in possession of the ground, not merely of the surface, but of everything that lay beneath the surface down to the centre of the earth, and consequently in possession of the boat. . . . The plaintiff then, being thus in possession of the chattel, it follows that the property in the chattel was vested in him. Obviously the right of the original owner could not be established; it had for centuries been lost or barred . . . The plaintiff, then, had a lawful possession, good against all the world, and therefore the property in the boat. In my opinion it makes no difference, in the circumstances, that the plaintiff was not aware of the existence of the boat.”18 Based on the common law application of the Law of Findings, Tom Parker is the owner of the diamond ring. The case of Moffat and Another v. Kazana [1968] 3 All ER is consistent with the rule of thumb that the true owner of lost chattels have superior claims over owner’s of the property where the lost chattel is found and over the rights of a finder who is not a trespasser.19 When the true owner cannot be identified and is not identified as in the Paddock case the rule in Hannah v Peel (1945) 1 K.B. 509 will apply. In Hannah v Peel (1945) the issue for the court was whether or not unattached chattels discovered on property rightfully vested in the absent owner or the property. It was held that the general rule of law maintained that when an unattached article was discovered the finder had a right to retention of the article until the real owner laid claim to the article. The court decided that a man might retain possession of chattels that are attached to his property or under them, but it does not automatically follow that he retains possession of unattached chattels that are properly only on the land’s surface.20 Since the ring was found buried in the soil, it is properly speaking a chattel which is attached to Tom Parker’s property. As Chitty J explained in Elwes v Brigg Gas Co. (1886) 33 Ch.D. 562 the owner of property is in possession of all that lays beneath the surface of the land and not merely that which lays on the surface. Had the Leighton’s had claimed title under the doctrine of adverse possession they would have acquired the diamond ring with the property. Since no such claim was made Tom Parker remains entitled to claim all that is on his property and beneath its surface. The Cornerstone Estate A covenant is no more than a contract binding the parties to it. What distinguishes a covenant from an ordinary contract is that a covenant has the capacity to bind successive owners to the property which is the subject of the contract. By virtue of this rule of thumb both Henry Torrington and Peter Chapman are bound to observe the covenants in respect of maintaining the carport roof and observing the provision for driving on the private road at a reduced speed. In general a benefit or covenant can be positive or negative and runs with the land if it can be said to touch and concern the land in question. In Mayor of Congleton v Pattison (1808) 10 East 130 it was held that in order for a covenant to touch and concern the land: “…the covenant must either affect the land as regards mode of occupation, or it must be such as per se, and not merely from collateral circumstances, affects the value of the land.”21 In order for the covenant to bind successor parties the originating conveyance establishing the covenant must refer to the third party.22 In the case of Halsall v Brizell [1957] Ch 169 a scenario similar to the one in the Cornerstone Estate arose. In Halsall’s case purchasers of plots of land covenanted by deed of purchase that they together with any successors in title make contributions toward the maintenance of sewers promenade, sea wall and roads. The House of Lords ruled that: “The defendants cannot rely on any way of necessity or on any right by prescription, for the simple reason that when the house was originally sold in 1931 to their predecessor in title he took the house on the terms of the deed of 1851 which contractually bound him to contribute a proper proportion of the expenses of maintaining the roads and sewers, and so forth, as a condition of being entitled to make use of those roads and sewers. Therefore, it seems to me that the defendants here cannot, if they desire to use this house, as they do, take advantage of the trusts concerning the user of the roads contained in the deed and the other benefits created by it without undertaking the obligations thereunder. Upon that principle it seems to me that they are bound by this deed, if they desire to take its benefits."23 In other words, the successor in title is at liberty to renounce the burden of the covenant, but once he or she takes that route they cannot assume the benefit of the covenant. Therefore Henry Torrington can be forced to make contributions toward the maintenance of the road by merely denying him access to it unless and until he provides contributions toward its maintenance. At the sane time, there appears to be no method for which to force him to maintain his garage. Peter Chapman can be forced to observe the restrictive covenant with regards to observing the speed limit in the same manner as Henry Torrington. If Peter refuses to observe the speed limit, he can be denied access to the road. The Rowans The entire property known as the Rowans is encumbered by both a first mortgage to West Midlands Building Society and a further charge in respect of overdraft facilities. The total sum of the mortgage and further charge is 60,000 pounds sterling. The first Mortgage and further charge are attached to the whole of the Rowans and therefore any sale of part of the property cannot be sold free from all encumbrances without first discharging the mortgage and the further charge. Therefore the promise to sell a part of the garden for 80,000 pounds sterling is subject to the proviso that both the mortgage and the further charge will be discharged from the proceeds of the sale. As a result the Bentleys will raise 20, 000 pounds sterling in capital from the sale of the property and following the discharge of the mortgage and further charge. There are two competing interests as against the Rowans. They are the mortgage for 50,000 pounds sterling and the further charge for 10,000. Both are required to be discharged from the proceeds of the sale. The nature of the legal rights conferred by both charges compels the discharge in order for the Bentleys to lay claim to any capital. A mortgage was defined by Santley v Wilde (1899) 2 Ch 474 as a conveyance in the following terms: “…as a security for the payment of a debt or the discharge of some other obligation for which it is given”.24 A charge was defined in English, Scotish, and Australian Bank Ltd v Phillips (1937) 57 CLR 302 as conferring no legal estate in the chargee. However it was noted that the charge carries with it a bundle of rights in respect of the property and can include the right to possession and sale of the same.25 It is imperative that both the further charge and the mortgage are discharged from the proceeds of sale to the developers. Otherwise, the developers would not receive good title for money’s worth. As a result the proceeds of sale in respect of the garden for 80,000 pounds will be calculated after deductions made in discharge of the mortgage and the further charge. It is presumed that both the mortgage and the further charge are registered as required under the Land Registration Act 2002 as land charges and will serve as notice to the purchasing developers. The developers are entitled to good title free from all encumbrances as provided for in the estate contract or pre-purchase negotiations. As such, the developers are at liberty to make the payments of 50,000 pounds sterling to the West Midlands Building Society and 10,000 pounds sterling in favour of the bank before making payment to the Bentleys. In any event, they must provide the Bentleys with proof of payment to the both the bank and the building society. Presuming that the Rowan property is registered land, upon discharge of the mortgage and further charge both the bank and the building society are required to provide the Bentleys with charge certificate as well as the statutory discharge form.26 Following this procedure the Bentleys may then make an application to the Land Registry to have the mortgage and the further charge stricken from the land registry. At this stage the Bentleys will be entitled to possession of the land certificate in respect of the Rowans. While the Bentleys will have liquid funds in the sum of 20,000 pounds sterling they will have a sizeable equity in the unsold property. The estimated value of the Rowans prior to sale was 400,000 pounds sterling. Haven sold a part of the garden which comprises part and parcel of the Rowans for 80,000 pounds sterling the remaining property is likely valued at 360,000 pounds. Works Cited Allen v Greenwood (1980) Ch 119 Amsprop Trading Ltd v Harris Distribution Ltd and another [1997] 2 ALL ER 78 Elwes v Brigg Gas Co. (1886) 33 Ch.D. 562 English, Scotish, and Australian Bank Ltd v Phillips (1937) 57 CLR 302 Gardner v Hodgsons Kingston Brewery Co Ltd [1903] AC 229 Hannah v Peel (1945) 1 K.B. 509 Halsall v Brizell [1957] Ch 169 Hollins v Verney (1884) 13 QBD 304 Hurdman -v- NE Ry Co (1878) 3 CPD 168 Jones v Price and Morgan (1992) P & CR 404 Land Registration Rules 1999 Law property Act 1925 Mayor of Congleton v Pattison (1808) 10 East 130 Moffat and Another v. Kazana [1968] 3 All ER Palmer v Bowman (2000) 1 All ER 22 Parker v British Airways Board (1982) 1 QB 1004 Prescription Act 1832 Simmons v Dobson [1991] 1 WLR 720 Tehidy Minerals v Norman [1971] 2 QB 528 Wright v Macadam [1949] 2 KB 173 Read More