Discussing the Case Concerning Property Law in England - Coursework Example

Property coursework This work relates to property law of UK only and therefore should not include other areas of the law. This work should only be attempted by some one with legal qualifications and experience with property law. 1. “Property rights are rights in rem; equity acts in personam; therefore, equitable interests are not property rights.” 2. Anna is the registered proprietor of a large country estate from which she runs a racing stable. Anna allows Dave, a neighbour, on to her land to fish in her lake, saying, “Anything you catch is yours”. One day, Dave brings his daughter, Claire, to the lake for a day’s fishing. They each catch a fish. When they get the fish home, Dave discovers that in the stomach of one of the fish is a diamond ring. Eddie, another of Anna’s neighbours, is keen to improve his estate. Two years ago, he reconstructed the drains and water supply, running pipes into the ground water under Anna’s land and constructing a drainage channel at the very edge of his land. The drainage channel he has built is likely to flood in heavy weather, spilling onto Anna’s garden. Eddie has also built a large and unattractive extension to his house, which puts Anna’s garden in the shade, so that her flowers have not grown as well as they did before. Anna knew about Eddie’s plans but did not object to them because she and Eddie were friends. Recently, however, they have fallen out because she suspects that Eddie is enticing her pheasants on to his land to spoil her annual pheasant shoots. Anna has told Eddie that she wants him to put things back as they were before his improvements. Whilst laying the new drainage channel, Fred, an employee of Eddie, found a rusty old box with a Latin inscription on it. He took it home and had it examined by an archaeologist friend, Gareth. Gareth told Fred that it was of no value but he would like it for a museum. In fact, as Gareth knew, the box contained religious relics: the bones of St. Harold. Gareth kept it to sell to a collector. Anna’s friend, Isabelle, is an amateur jockey and Anna allows her to borrow Anna’s horses to ride at race meetings, on the condition that Isabelle brings the horses back to Anna’s stables immediately after the race. Last week, Isabelle borrowed Jack the Lad and Killer. On the way back from the race, Isabelle crashed her car whilst driving five miles per hour over the speed limit. At the time of the accident, the two horses were in a horse box being towed by Isabelle’s car: Jack the Lad cut a leg in the accident; Killer ran off, trampling the crops in a field belonging to Leon. Leon caught Killer and put him in his stable. The next day, Leon introduced Killer to one of his own horses, Lady Luck. The horses mated and Lady Luck became pregnant. Upset by the crash, Isabelle drove straight to her own home. She put Jack the Lad in her barn. The next morning, Isabelle discovered that Jack the Lad had escaped and was no longer in the barn; he has not been seen since. Discuss 1. In order to determine whether equitable interests can be property rights it is necessary to discuss the difference between rights in rem and rights in personam. In general in rem rights relate to the ownership of property. Purchasers of property gain legal rights of ownership through an entry being made onto the property register, which then gives the purchaser a right in rem over that property1. A person having rights in rem is entitled to dispose of that property in any manner he chooses2. By contrast in personam rights are based on personal relationship with the property. It is the generally held opinion that rights in personam cannot exist independent of the law3. The law in relation to equity is based on justice and fairness but it is not always possible to apply equity in order to correct a wrong4. Equity is dependent on the conscience of the legal owner of the property by instructing that person on how they should conduct themselves in relation to the handling of property subject to an equitable interest. Equity is generally applied to prevent any unfairness or injustice that might result from the actions of the legal owner5. Although equity acts in personam there are occasions where the decision of the courts seems to accept that equitable interests can have property rights. In general, mere equities do not possess any of the characteristics of rights in rem as was decided in National Provincial Bank Ltd v Ainsworth [1965]6, which was concerned with the equitable rights of the wife of the legal owner over the property. Resulting trusts Under the principle of a resulting trust equity can make the presumption that a person who has contributed to the purchase price of the property must have done so with the intention of acquiring an interest in that land proportionate to the amount invested in the property7. In Gissing v Gissing8 Lord Diplock stated that A resulting, implied or constructive trust…is created by a transaction between the trustee and the cestui que trust in connection with the acquisition by the trustee of a legal estate in land, whenever the trustee has so conducted himself that it would be inequitable to allow him to deny the cestui que trust a beneficial interest in the land acquired. A resulting trust therefore has the effect of making an express declaration9 that the person contributing towards the purchase price will have an interest in the property. In this way an equitable interest can become a right in property10. The court agreed with this principle in Tinsley v Milligan11, in which the respondent was attempting to rely on the fact that the property was registered in her name only, to claim full ownership of the property. In the final determination of this case the court held that the plaintiff was entitled to a share of the property in proportion to the amount she had contributed to the purchase price. By doing this, an interest that was essentially only an equitable interest was given proprietary rights over the property. Overriding interests An overriding interest is an interest that does not need to be on the register in order to bind the interests of a new owner12. Generally speaking, interests can only be protected if they are entered on the register, however, there are some occasions where such interests cannot be entered but can still be binding on a subsequent owner. The courts have adopted the principle of overriding interests to assist those persons who could not reasonably expect to have their interests protected by registration. This includes things such as short term leases, legal easements13, as well as squatter’s rights and the rights of persons in actual occupation14. The case of Walsh v Lonsdale (1882)15 demonstrates how equitable rights can be regarded as proprietary rights, even in cases where a lease has not been formally executed. Overriding interests are covered under s70 of the Land Registration Act 1925, which has now been replaced by the Land Registration Act 2002. Overriding interests are now dealt with under sch 1 and 2 of the 2002 Act. One of the first case to adopt the principle of overriding interests was Williams & Glyn Bank v Boland, in which the wife of the respondent claimed an overriding interest in the property based on the fact that she had made a substantial contribution to the purchase and was in actual occupation. This case demonstrates how actual occupation might be regarded as an overriding interest16. In general, the courts are unlikely to interfere with the right of a person in actual occupation to remain in the property if they can show that they have an interest in that property. Any person who can prove such an interest might be able to rely on proprietary estoppel to prevent the sale of the property17. Proprietary estoppel In Willmott v Barber (1880)18 and Ramsden v Dyson (1866)19, five essential elements were identified, that must be satisfied before a legal owner would be prevented from asserting his legal rights. These elements included proof that the plaintiff had expended some money or had acted in some way, believing that they would gain an interest in the land20; they must have made some mistake as to their legal rights; the defendant must know of the existence of his own right which is inconsistent with the plaintiffs rights; the defendant must be aware of the plaintiffs mistaken belief of his rights; and lastly the defendant must have encouraged the plaintiff to spend money in the way they have or have encouraged them to act in the way they did21. In such cases, the courts have allowed the plaintiff to prevent the sale of the property under the principle of proprietary estoppel. This is further evidence that an equitable interest is capable of creating property rights for the person in whom that interest has been vested. Personal rights only A distinction between mere equity and an equitable interest in land was made in National Provincial Bank Ltd v Ainsworth, mentioned above, in which the House of Lords made the observation that equitable interests in land were capable of binding third parties under s70(1) (g) of the Land Registration Act 1925, and that such equitable interests would give the party full property rights. Although equity creates in personam rights it is obvious from the above that equitable interests can, in some cases, give the person full proprietary rights over land. Conclusion From the above it can be noted that even though equity acts in personam, there are several exceptions in which an equitable interest can create a property right. The statement that equitable interests are not property rights is therefore not strictly correct as case law has demonstrated how the courts have given proprietary rights to persons whose interest has existed purely in equity. 2. In order to be able to advise the parties in the above scenario it is necessary to consider the law in relation to ownership of property found on the land of another. It will be necessary to consider when the person finding property has a greater claim to ownership over the person on whose land the item was found. It will also be necessary to consider whether a person finding an item belonging to another, on their own land, would be entitled to keep that item. A further part that will require discussion is whether Anna can insist on Eddie having to remove the extension and the drainage system. This might be problematic given that she made no objection to the changes prior to the work being carried out. It will be necessary to consider case law in this area in order to determine her rights in this matter. There will also need to be consideration give to the Treasure Act 1996 in relation to the bones found. In examining this it will be necessary to consider case law in order to determine to whom any reward might be paid to for the find. Rights of finders When dealing with matters relating to property that has been found there is a general presumption that ownership is defined by the possession of the item. However, where the property has been found the finder has a duty to try to identify the true owner of the property before they would be entitled to claim ownership of the item. The rightful owner has greater rights over the property then the finder. This was demonstrated in Armory v Delamirie [1722]22, in which a chimney sweep found a jewel and took it to the jeweler for valuation. The jeweler kept the stones and the chimney sweep brought an action against the jeweler, claiming ownership on the basis that he found the jewel. Although neither party was the true owner of the ring, the court determined that the chimney sweep had a greater claim to the jewel than the jeweler. The court ordered the jeweler to pay the sweep the true value of the stones, stating that if the true owner of the jewel was ever found they would have to sue the sweep for the loss. Similarly in Hannah v Peel [1945]23, a soldier who was staying in a requisitioned house, was entitled to retain ownership of a brooch ha had found on the basis that the owner of the estate had no knowledge of the brooch until it had been found, and therefore could not prove that he was the rightful owner. By contrast, in South Staffordshire Water Co v Sharman [1896]24 the court stated that the water company was entitled to claim the rings found at the bottom of the pool. In this case the defendant had been hired by the company to clean out the pool, and found the rings whilst doing so. Despite the fact that the water company had no knowledge of the rings being there the court awarded in their favour on the basis that possession of land includes everything attached to the land or under the land. The court stated that unless the true owner of the rings could be found the possessor of the land had a greater title to the property than the finder. This was also the case in Elwes v Brigg Gas Co (1886)25 in which the owners of the land were awarded owner ship of the buried boat found by the defendants. The court awarded this on the same principle applied in the South Staffordshire Water Co case. In McAvoy v Medina (1866)26 the court determined that the shopkeeper would possess a greater right of ownership over the pocketbook than the finder. The court stated that neither party possessed rightful ownership, and that the shopkeeper had a duty to keep the item safe, and take reasonable steps to find the true owner. If the true owner could not be traced then the shopkeeper would be entitled to keep the pocketbook. If the person finding the item can prove that the true owner has abandoned the item, then the courts are likely to award them ownership of the property. Treasure Act 1996 Under this Act all persons finding something they believe to be treasure must notify the coroner for the district in which the object was found before the end of the notice period27. The notice period is defined under s8(2) of the above Act. In general terms, treasure is usually defined as any item that has metallic content, and does not cover natural objects. This would seem to suggest that the bones would not be covered by this Act, however, under s2(1) of the Act the Secretary of State may by order…designate any class of object which he considers to be of outstanding historical, archaeological or cultural importance, to be regarded as a treasure. If the bones are classified as treasure under the Act, then the British Museum or the National Museums & Galleries of Wales will be notified to determine whether they wish to acquire these for their collection. If they do decide to do this, a reward will be paid to the finder, if the finder had permission to be on the land when he found the item. If the finder was a trespasser on the land the reward will go to the owner of the land. If the museum does not want the bones, they will be returned to the finder or the landowner, if the finder was not entitled to be on the land when he found them28. Objection to the extension and drainage channel In general terms, if no objection was made to the extension prior to its construction then the courts will not entertain an action brought after the work has been completed. This was deemed to be the case in Nester v Stuart [2007]29. In this case the defendant had not made any objections to the planning application, however, when the extensions had been completed she sought to claim damages stating that the extension was in breach of covenants held by her on the development of the building. The plaintiff brought an action to recover costs incurred in defending the action in the court and won. The court stated that the defendant should have made her objections known when the plans were first discussed, and that she could not insist on compensation for the breach of the covenant as she had given her consent to the breach by not lodging any objections. If, however, the extension is not in accordance with the original plans submitted by Eddie, then Anna might be able to bring a successful case against him for having breached the agreed design. In R (on the application of) Horner v Castle Cement Ltd [2005]30 the court awarded the plaintiff compensation on the grounds that the defendant changed the usage of the site in breach of the original planning application. The court stated that in order to change the use in this manner a new planning application would have to be submitted. In the above, if the end design is not in accordance with the original design, Anna could insist on the extension being altered or removed. She also might be able to sustain an action against him for the drainage channel, as her garden is likely to be flooded if there is heavy rain, although as there is only a possibility that this might happen, she would have to wait until this occurred before she could bring an action against him31. This would involve bringing an action in nuisance for the escape of the water onto her land. Ownership of the ring Applying the above case law to the problem, it could be argued that the ring belongs to Anna as it was found on her property. However, the court may decide that as she did not know of its existence, the finder has a duty to take reasonable steps to find the true owner. If the true owner cannot be found the court may decide that the finder is entitled to keep it. Ownership of the bones As with the ring, the court may determine the true owner to be the person on whose land the bones were found, however, the court may decide that the person finding the bones should be the rightful owner. If the bones are deemed to be treasure under the Treasure Act 1996, then the museum could claim the bones and a reward would be paid to either the finder or the owner of the land according to whom the court determine is the rightful owner. Ownership of the horse Although the horse has strayed onto the land of Leon, he cannot legally claim it as his own unless he can show that the true owner has abandoned ownership of the horse. Leon would have to take reasonable steps to find the true owner before he could claim it as his own. Anna might also be able to bring an action against Isabelle for the loss of the horses, as she had guaranteed to return these after the race. Anna could bring an action in negligence against Isabelle as the horses were lost as a result of the negligent driving of Isabelle. If Anna is able to locate the horses she would be entitled to claim them back, as she could prove that she had not abandoned the animals. Bibliography Ashburner, W, (1933), Principles of Equity, 2nd Ed, Butterworths Birks, P, (1985), An introduction to the Law of Restitution, Oxford University Press Bridge, M, (2002), Personal Property law, Clarendon Press Bryn P, (2000), Understanding Land Law, 3rd Ed, Cavendish Publishing Ltd Civil Procedure, (2002), The White Book, Volumes 1 & 2, Sweet & Maxwell Cockburn, T & Shirley, M (2005), Equity in a Nutshell, Lawbook Co Cockburn, T, Harris, W, & Shirley, M, (2005), Equity & Trusts, Butterworths Dixon, M. (2005). Modern Land Law, 5th Ed, Cavendish  Glover, N & Todd, P, (1995), ‘Inferring share of interest in home: Midland Bank v Cooke’, 4 Web JCLI 28 September 1995. 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