Chapter 11 Self-test questions

Of the three case law examples discussed in Chapter 1, which ultimately turned on the defences question?

National Provincial Bank v Ainsworth (1965) and Williams and Glyn's Bank v Boland (1981)

Williams and Glyn's Bank v Boland (1981) and City of London Building Society v Flegg (1988)

All of the three cases.

None of the three cases.

A and B set up home together. Both A and B contribute to the deposit, and the remainder of the purchase price is financed by a mortgage loan made to A by C Bank. The freehold is registered in A's sole name and, to secure the loan, a charge is executed in favour of the bank. B's has an equitable interest in the home under a common intention constructive trust; C has a legal property right in the home due to its charge. In such a case, which right is regarded as arising first: B's right or C's right?

Whilst the two rights essentially arise at the same time (the moment of the purchase of the freehold), C's right should be viewed as arising first.

Logically, there is a very brief moment of time (a scintilla temporis) between A acquiring the freehold and then giving C its charge over the land. As B's right attaches to the land as soon as A acquires the freehold, B's right must arise before C's right and so must arise first.

The rights arise at exactly the same time.

Whilst the two rights essentially arise at the same time (the moment of the purchase of the freehold), B's right should be viewed as arising first, as B is interested in occupying the land, and not just in its financial value.

Which of the following is the most accurate explanation of why, in Scott v Southern Pacific Mortgages Ltd (2014), the Supreme Court decided against Mrs Scott?

It was held that the charge acquired by the lender took effect at the time when the purchaser entered its contract with Mrs Scott to acquire the land, and so could be regarded as arising before any property right of Mrs Scott.

It was held that Mrs Scott had impliedly consented to the lender having priority, as she knew that the purchaser planned to fund its acquisition of the land by borrowing the purchase money.

It was held that Mrs Scott was not in actual occupation of the land and so she had no overriding interest.

It was held that any property right held by Mrs Scott arose only when the purchaser acquired a legal estate - before that point, she could only have a personal right against the purchaser. As a result, following Abbey National v Cann (1991), the lender was regarded as having acquired its charge at a point before Mrs Scott acquired any property right from the purchaser.

In Williams & Glyn's Bank v Boland (1981), why was the bank unable to use the lack of registration defence against Mrs Boland's pre-existing but unregistered right?

Because Mrs Boland had a pre-existing equitable property right, and was in actual occupation of the land when the bank acquired its rights.

Because Mrs Boland was in actual occupation of the land when the bank acquired its rights.

Because Mrs Boland had a pre-existing equitable property right.

Because the bank was aware that Mrs Boland had a pre-existing equitable property right.

If, in Abbey National v Cann (1991), Mrs Cann had obtained her equitable property right before the building society obtained its charge, would the outcome have changed?

Yes. The fact that Mrs Cann was in actual occupation of the property would have protected her right if it had predated that of the building society.

Yes. Mrs Cann's property right would have pre-dated that of the building society, and she would therefore have succeeded.

Perhaps. If Mrs Cann's property right had pre-dated that of the building society, then the basic rule would have given priority to her right. However, the courts may still have allowed the building society a defence to her right, for example the lack of registration defence, or a defence based on Mrs Cann's implied consent to the charge.

Definitely not. Mrs Cann's right was only equitable, and therefore the legal charge which the building society held over the property would have taken priority even if it had not pre-dated it.

Are legal property rights often subject to the lack of registration defence?

No. The Land Registration Act 2002 means that it is almost impossible for the lack of registration defence to be used against a pre-existing legal property right.

Yes. If a legal property right is not registered then the defence will often be successful.

No. Legal property rights must always be registered, and therefore the defence is never applicable.

No. Legal interests are always overriding and therefore the defence is never applicable.

Which of the following interests in registered land may be protected by the entry of a notice on the register under LRA 2002, s.32?
Please select all that apply.

A legal easement.

An equitable easement.

An interest under a resulting trust.

An inchoate equity from a claim to proprietary estoppel.

Match the means of protection under the LRA 2002 to the relevant leasehold estate or interest.

A legal lease commencing on 1^st July 2005, terminating on 30^th June 2010 at a rent of £5,000 per annum

An oral legal lease, valid under LPA 1925 s.54(2), commencing on 30^th June 2005

A legal lease commencing on 4^th October 2003, terminating on 3^rd October 2013 at a rent of £5,000 per annum

An equitable lease commencing on 1^st July 2005, terminating on 30^th June 2010 at a rent of £5,000 per annum

You purchase a plot of registered land. Prior to completion, you made a reasonably careful inspection of the land and there was no obvious occupation of the land. You have checked the register and have no knowledge that anyone had or has any interest over the land other than the vendor. Now you find that your neighbour claims an easement to walk over your garden as a shortcut to get to the local church, which she attends regularly every Christmas and Easter. She says that the easement was given to her 5 years ago by a former owner of your property. Which of the following best describes the legal position?

Your neighbour's right cannot bind you, as you will be able to rely on the lack of registration defence under s 29 of the LRA 2002.

Your neighbour's right will bind you as all easements are overriding interests under Sch 3, para 3 of the LRA 2002.

Your neighbour's right will bind you only if it was expressly granted to her in a deed by a former owner of your land.

Your neighbour's right will bind you only if it arose through an implied grant by a former owner of your land.

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

True

False

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