Chapter 17 Self-test questions

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. Mr & Mrs X own a house in which they and Mr & Mrs Y have an equitable joint tenancy. Mr & Mrs X mortgage the house to a Bank. The loan money is paid to Mr & Mrs X's joint account. Mr & Mrs X emigrate and fail to repay the loan. The Bank seeks to exercise its powers of sale over the house and claim to have overreached Mr & Mrs Y's interests in the house. If the Bank is successful in is claim, Mr & Mrs Y's equitable interest in the house has been defeated.

True correct incorrect

False correct incorrect

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. Which of the following interests in a plot of land, X, can be overreached on the basis of the terms of LPA 1925, s.2?

An equitable interest of a neighbour who enjoys the benefit (i.e. is the dominant tenement) of a restrictive covenant. correct incorrect

An equitable interest under a trust of land. correct incorrect

An equitable lease created by the execution of a contract for a lease in accordance with LP(MP)A 1989, s.2. correct incorrect

An equitable interest in land sold by order of the court. correct incorrect

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. On the reasoning of Robert Walker LJ in Birmingham Midshires Mortgage Services Ltd v Sabherwal, certainly in the family context, an interest under an equitable ________ is capable of being overreached.

Your response

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. T holds land on trust for B. T mortgages the land to Bank in support of an overdraft facility of £1million. Provided that the overdraft has not been drawn down at all at the time the mortgage is created, if it is subsequently drawn down to the full extent of £1million, B's equitable interest will be overreached.

True correct incorrect

False correct incorrect

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. Although it is argued that City of London Building Society v Flegg remains the leading case on overreaching, it was decided before the enactment of TOLATA 1996, which made (most) trusts holding land, trusts of land.

The judge at first instance in Birmingham Midshires Mortgage Services Ltd v Sabherwal gave ten reasons why the decision in Flegg was not affected by TOLATA. Which three are the most cogent?

Please select all that apply.

The overreaching effect of the legal charges took place when they were executed in July 1990, and cannot be ousted by the coming into force of TOLATA over six years later. correct incorrect

TOLATA contains nothing to exclude the essential overreaching provision contained in section 2(1)(ii) of LPA 1925. correct incorrect

The abolition of the doctrine of conversion explains the amendment of s.27(1) of the Law of Property Act 1925. correct incorrect

The abolition of the doctrine of conversion by section 3 of TOLATA is irrelevant. correct incorrect

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. Breaches of trustees' authority and trustees' powers may have differing effects on overreaching. Match the type of breach to its effect.

An ultra vires breach in which capital moneys are paid to two trustees

Cannot overreach under LPA 1925 s.27 Overreaching is unaffected Is technically possible to overreach Cannot overreach under LPA 1925 s.2

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An intra vires breach in which capital moneys are paid to two trustees

Is technically possible to overreach Cannot overreach under LPA 1925 s.2 Cannot overreach under LPA 1925 s.27 Overreaching is unaffected

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A breach of trust by a single trustee who receives capital money

Cannot overreach under LPA 1925 s.2 Overreaching is unaffected Cannot overreach under LPA 1925 s.27 Is technically possible to overreach

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A breach of trust by a single trustee in which no capital moneys are paid

Cannot overreach under LPA 1925 s.27 Overreaching is unaffected Is technically possible to overreach Cannot overreach under LPA 1925 s.2

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. A purchaser of land is only concerned with an ultra vires breach by the trustees, because Harpum demonstrated that it has long been the law that a disposition beyond the trustees' authority (ultra vires) cannot overreach the beneficial interests and nor can the purchaser claim the protection of s 2 of the LPA 1925.

True correct incorrect

False correct incorrect