Parliamentary
Archives,
HL/PO/JU/18/240
Die
Jovis 19° Junii 1980
Upon Report from the Appellate
Committee to
whom was referred the Cause Williams and Glyn's
Bank
Limited against Boland and another, That the
Committee had heard
Counsel as well on Monday the
21st as on Tuesday the 22nd,
Wednesday the 23rd,
Thursday the 24th and Monday the 28th days of
April
last upon the Petition and Appeal of Williams &
Glyn's
Bank Limited of 20 Birchin Lane, London E.C.3.
praying
that the matter of the Order set forth in the
Schedule thereto,
namely an Order of Her Majesty's
Court of Appeal of the 7th day of
March 1979 might
be reviewed before Her Majesty the Queen in
Her
Court of Parliament and that the said Order might be
reversed,
varied or altered and that the Petitioners might
have the relief
prayed for in the Appeal or such other
relief in the premises as
to Her Majesty the Queen in
Her Court of Parliament might seem
meet; as also
upon the Case of Michael Boland and Julia
Boland
lodged in answer to the said Appeal; and due
consideration
had this day of what was offered on either
side in this Cause:
It is Ordered and
Adjudged, by the Lords Spiritual
and Temporal in the Court
of Parliament of Her
Majesty the Queen assembled, That the said
Order of
Her Majesty's Court of Appeal (Civil Division) of the
7th
day of March 1979 complained of in the said
Appeal be, and the
same is hereby, Affirmed and that
the said Petition and
Appeal be, and the same is hereby,
dismissed this House: And it is
further Ordered,
That the Appellants do pay or cause to be
paid to the
said Respondents the Costs incurred by them in
respect
of the said Appeal, the amount thereof to be certified
by
the Clerk of the Parliaments if not agreed between
the parties.
HOUSE
OF LORDS
Lord Wilberforce
Viscount
Dilhorne
Lord Salmon
Lord Scarman
Lord Roskill
WILLIAMS & GLYN'S BANK
LIMITED
(APPELLANTS)
v.
BOLAND AND ANOTHER
(RESPONDENTS)
WILLIAMS & GLYN'S BANK
LIMITED
(APPELLANTS)
v.
BROWN AND ANOTHER
(RESPONDENTS)
[CONJOINED APPEALS]
Lord
Wilberforce
MY LORDS,
These appeals, apart from one
special point affecting only Mr. Boland, raise
for decision the
same question: whether a husband or a wife, (in each actual
case a
wife) who has a beneficial interest in the matrimonial home, by
virtue of
having contributed to its purchase price, but whose
spouse is the legal and
registered owner, has an "overriding
interest" binding on a mortgagee who
claims possession of the
matrimonial home under a mortgage granted by that
spouse alone.
Although this statement of the issue uses the words
"spouse",
"husband and wife", "matrimonial
"home", the appeals do not, in my under-
standing,
involve any question of matrimonial law, or of the rights of
married
women or of women as such. Exactly the same issue could
arise if the roles of
husband and wife were reversed, or if the
persons interested in the house were
not married to each other.
The solution must be derived from a consideration
in the light of
current social conditions of the Land Registration Act 1925 and
other
property statutes.
The essential facts behind this
legal formulation are as follows. Each wife
contributed a
substantial sum of her own money toward the purchase of
the
matrimonial home or to paying off a mortgage on it. This,
indisputably, made
her an equitable tenant in common to the extent
of her contribution. Each
house being registered land was
transferred into the sole name of the husband
who became its
registered proprietor. Later, each husband mortgaged the house
by
legal mortgage to the appellant Bank, which made no enquiries of
either wife.
Default being made, the Bank started proceedings in
the Boland case in the High
Court, in the Brown case in the
Dartford County Court, for possession, with a
view to sale. In
each case the judge made an order for possession but his decision
was
reversed by the Court of Appeal. So the question is whether the legal
and
registered mortgage takes effect against the matrimonial home,
or whether the
wives' beneficial interest has priority over it.
The legal framework within which
the appeals are to be decided can be
summarised as follows.
Under the Land Registration Act
1925, legal estates in land are the only
interests in respect of
which a proprietor can be registered. Other interests take
effect
in equity as "minor interests", which are overriden by a
registered transfer.
But the Act recognises also an intermediate,
or hybrid, class of what are called
"overriding interests":
though these are not registered, legal dispositions take
effect
subject to them. The list of overriding interests is contained in
section 70
and it includes such matters as easements, liabilities
having their origin in tenure,
land tax and title rentcharge,
seignorial and manorial rights, leases for terms not
exceeding 21
years; and finally, the relevant paragraph being section 70(1)
(g):-
2
"The rights of every person
in actual occupation of the land or in receipt
"of the rents
and profits thereof, save where enquiry is made of such person
"and
the rights are not disclosed".
The first question is whether
the wife is a "person in actual occupation" and
if so,
whether her right as a tenant in common in equity is a right
protected
by this provision.
The other main legal element
arises out of the Law of Property Act 1925.
Since that Act,
undivided shares in land can only take effect in equity, behind
a
trust for sale upon which the legal owner is to hold the land.
Dispositions of
the land, including mortgages, may be made under
this trust, and provided that
there are at least two trustees, or
a trust corporation, "overreach" the trusts.
This means
that the "purchaser" takes free from them, whether or not
he has
notice of them, and that the trusts enforceable against the
proceeds of sale.
See Land Property Act 1925, section 2(2) and
section 2(3) which lists certain
exceptions.
The second question is whether
the wife's equitable interest under the trust
for sale, if she is
in occupation of the land, is capable of being an
overriding
interest, or whether, as is generally the rule as
regards equitable interests, it can
only take effect as a "minor
interest". In the latter event a registered
transferee,
including a legal mortgagee, would take free from it.
The system of land registration,
as it exists in England, which long antedates
the Land
Registration Act 1925, is designed to simplify and to
cheapen
conveyancing. It is intended to replace the often
complicated and voluminous
title deeds of property by a single
land certificate, on the strength of which land
can be dealt with.
In place of the lengthy and often technical investigation of
title
to which a purchaser was committed, all he has to do is to consult
the regis-
ter; from any burden not entered on the register, with
one exception, he takes
free. Above all, the system is designed to
free the purchaser from the hazards
of notice—real or
constructive—which, in the case of unregistered land,
in-
volved him in enquiries, often quite elaborate, failing which
he might be bound
by equities. The Law of Property Act 1925
contains provisions limiting the
effect of the doctrine of notice,
but it still remains a potential source of danger
to purchasers.
By contrast, the only provisions in the Land Registration Act
1925
with regard to notice are provisions which enable a purchaser to take
the
estate free from equitable interests or equities whether he
has notice or not. (See,
for example, section 3(xv) s.v. "minor
interests"). The only kind of notice
recognised is by entry
on the register.
The exception just mentioned
consists of "overriding interests" listed in
section 70.
As to these, all registered land is stated to be deemed to be
subject
to such of them as may be subsisting in reference to the
land, unless the contrary
is expressed on the register. The land
is so subject regardless of notice actual or
constructive. In my
opinion therefore, the law as to notice as it may affect
purchasers
of unregistered land, whether contained in decided cases, or in
a
statute (the Conveyancing Act 1882, section 3, Law of Property
Act, section
199) has no application even by analogy to registered
land. Whether a particular
right is an overriding interest, and
whether it affects a purchaser, is to be decided
upon the terms of
section 70, and other relevant provisions of the Land Regis-
tration
Act 1925, and upon nothing else.
In relation to rights connected
with occupation, it has been said that the
purpose and effect of
section 70(l)(g) of the Land Registration Act 1925 was to
make
applicable to registered land the same rule as previously had been
held
to apply to unregistered land (see per Lord Denning M.R. in
National Provincial
Bank Ltd. v. Hastings Car Mart Ltd.
[1964] Ch. 665, 689, and in this House
[1965] AC 1175,
1259).
I adhere to this, but I do not
accept the argument which learned counsel for
the appellant sought
to draw from it. His submission was that, in applying
3
section 70(l)(g), we should have
regard to and limit the application of the
paragraph in the light
of the doctrine of notice. But this would run counter to
the whole
purpose of the Act. The purpose, in each system, is the same,
namely,
to safeguard the rights of persons in occupation, but the
method used differs.
In the case of unregistered land, the
purchaser's obligation depends upon what
he has notice of—notice
actual or constructive. In the case of registered land,
it is the
fact of occupation that matters. If there is actual occupation, and
the
occupier has rights, the purchaser takes subject to them. If
not, he does not.
No further element is material.
I now deal with the first
question. Were the wives here in "actual occu-
pation"?
These words are ordinary words of plain English, and should, in
my
opinion, be interpreted as such. Historically they appear to
have emerged in the
judgment of Lord Loughborough in Taylor v.
Stibbert (1974) 2 Yes. 437, in a
passage which repays
quotation:—
". . . whoever purchases an
estate from the owner, knowing it to be in
"possession of
tenants, is bound to inquire into the estates those tenants
"have.
It has been determined that a purchaser being told particular
parts
"of the estate were in possession of a tenant, without
any information as to
"his interest and taking it for granted
it was only from year to year, was
"bound by a lease that
tenant had, which was a surprise upon him. That
"was rightly
determined; for it was sufficient to put the purchaser upon
"inquiry,
that he was informed the estate was not in the actual
possession
"of the person with whom he contracted; that
he could not transfer the
"ownership and possession at the
same time; that there were interests, as
"to the extent and
terms of which it was his duty to inquire."
They were taken up in the
judgment of the Privy Council in Barnhart v.
Greenshields
(1853) 9 Moo.P.C. 18. The purpose for which they were used,
in
that case, was evidently to distinguish the case of a person
who was in some
kind of legal possession, as by receipt of the
rents and profits, from that of a
person actually in occupation as
tenant. Given occupation, i.e. presence on the
land, I do not
think that the word "actual" was intended to introduce
any
additional qualification, certainly not to suggest that
possession must be
"adverse": it merely emphasises that
what is required is physical presence, not
some entitlement in
law. So even if it were necessary to look behind these plain
words
into history, I would find no reason for denying them their plain
meaning.
Then, were the wives in actual
occupation? I ask: why not? There was
physical presence, with all
the rights that occupiers have, including the right to
exclude all
others except those having similar rights. The house was a
matri-
monial home, intended to be occupied, and in fact occupied
by both spouses,
both of which have an interest in it: it would
require some special doctrine of
law to avoid the result that each
is in occupation. Three arguments were used
for a contrary
conclusion. First, it was said that if the vendor (I use this word
to
include a mortgagee) is in occupation, that is enough to
prevent the application
of the paragraph. This seems to be a
proposition of general application, not
limited to the case of
husbands, and no doubt, if correct, would be very con-
venient for
purchasers and intending mortgagees. But the presence of the
vendor,
with occupation, does not exclude the possibility of
occupation of others. These
are observations which suggest the
contrary in the unregistered land case of
Caunce v. Caunce
[1969] 1 W.L.R. 286, but I agree with the disapproval of
these,
and with the assertion of the proposition I have just stated by
Russell L.J.
in Hodgson v. Marks [1971] Ch 892,
934. Then it was suggested that the wife's
"occupation"
was nothing but the shadow of the husband's—a version I
suppose
of the doctrine of unity of husband and wife. This
expression and the argument
flowing from it was used by Templeman
J. in Bird v. Syme-Thomson [1979]
1 W.L.R. 440-444,
a decision preceding and which he followed in the present
case.
The argument was also inherent in the judgment in Caunce v.
Caunce
(supra) which influenced the decisions of Templeman
J. It somewhat faded
from the arguments in the present case and
appears to me to be heavily obsolete.
The appellants main and
final position became in the end this: that, to come
within the
paragraph, the occupation in question must be apparently
incon-
sistent with the title of the vendor. This, it was
suggested, would exclude the
4
wife of a husband-vendor because
her apparent occupation would be satisfac-
torily accounted for by
his. But, apart from the rewriting of the paragraph which
this
would involve, the suggestion is unacceptable. Consistency, or
incon-
sistency, involves the absence, or presence, of an
independent right to occupy,
though I must observe that
"inconsistency" in this context is an inappropriate
word.
But how can either quality be predicated of a wife, simply qua wife?
A
wife may, and everyone knows this, have rights of her own;
particularly, many
wives have a share in a matrimonial home. How
can it be said that the presence
of a wife in the house, as
occupier, is consistent or inconsistent with the husband's
rights
until one knows what rights she has? And if she has rights, why,
just
because she is a wife (or in the converse case, just because
an occupier is the
husband), should these rights be denied
protection under the paragraph? If
one looks beyond the case of
husband and wife, the difficulty of all these
arguments stands out
if one considers the case of a man living with a mistress,
or of a
man and a woman—or for that matter two persons of the same
sex—
living in a house in separate or partially shared
rooms. Are these cases of
apparently consistent occupation, so
that the rights of the other person (other
than the vendor) can be
disregarded? The only solution which is consistent with
the Act
(section 70(l)(g)) and with common sense is to read the paragraph
for
what it says. Occupation, existing as a fact, may protect
rights if the person in
occupation has rights. On this part of the
case I have no difficulty in concluding
that a spouse, living in a
house, has an actual occupation capable of con-
ferring
protection, as an overriding interest, upon rights of that spouse.
This brings me to the second
question, which is whether such rights as a
spouse has under a
trust for sale are capable of recognition as overriding
interests—a
question to my mind of some difficulty. The argument against this
is
based upon the structure of the Land Registration Act 1925 and upon
specific
provisions in it.
As to structure, it is said that
the Act recognises three things: (a) legal estates,
(b) minor
interests, which take effect in equity, (c) overriding interests.
These are
mutually exclusive: an equitable interest, which is a
minor interest, is incapable
of being at the same time an
overriding interest. The wife's interest, existing
under, or
behind, a trust for sale is an equitable interest and nothing more.
To
give it the protection of an overriding interest would,
moreover, contradict the
principle according to which such an
equitable interest can be overreached by
an exercise of the trust
for sale. As to the provisions of the Act, particular
emphasis is
placed on section 3(xv) which, in defining "minor
interests"
specifically includes in the case of land held on
trust for sale "all interests and
"powers which are
under the Law of Property Act, 1925, capable of being
"overriden
by the trustees for sale" and excludes, expressly, overriding
interests.
Reliance is also placed on section 86, which, dealing
analogously, so it is said,
with settled law, prescribes that
successive or other interests created by or
arising under a
settlement take effect as minor interests and not otherwise, and
on
section 101 which, it is argued, recognises the exclusive character
of minor
interests, which in all cases can be overridden.
My Lords, I find this argument
formidable. To reach a conclusion upon it
involves some further
consideration of the nature of trusts for sale, in relation
to
undivided shares. The trusts upon which, in this case, the land is to
be held
are defined—as "statutory trusts"—in
section 35 of the Law of Property
Act, 1925, i.e.
' . . . upon trust to sell the
same and to stand possessed of the net
"proceeds of sale,
after payment of costs, and of the net rents and profits
"until
sale after payment of rates, taxes, costs of insurance, repairs,
and
"other outgoings, upon such trusts, and subject to such
powers and
"provisions, as may be requisite for giving effect
to the rights of the
"persons . . . interested in the land".
In addition to this specific
disposition, the general provisions as to trusts for
sale in
sections 23-31, where not inconsistent, appear to apply. The right
of
occupation of the land pending sale is not explicity dealt with
in these sections
5
and the position as to it is
obscure. Before the Act the position was that owners
of undivided
shares (which could exist at law) had concurrent rights of
occup-
ation. In Bull v. Bull [1955] 1 Q.B. 234, it
was held by the Court of Appeal,
applying In re Warren [1932]
1 Ch. 42, that the conversion of these legal estates
into
equitable interests by the Law of Property Act 1925 should not affect
the
mutual rights of the owners. Denning L.J., in a judgment which
I find most
illuminating, there held, in a factual situation
similar to that of the instant
cases, that "when there are
two equitable tenants in common, then, until the
"place is
sold, each of them is entitled concurrently with the other to
the
"possession of the land and to the use and enjoyment of
it in a proper manner"
(I.c. p.238). And he referred to
section 14 of the Law of Property Act 1925
which provides that the
Act "shall not prejudicially affect the interest of any
"person
in possession or in actual occupation of land to which he may
be
"entitled in right of such possession or occupation".
How then are these various
rights to be fitted into the scheme of the Land
Registration Act
1925? It is clear, at least, that the interests of the
co-owners
under the "statutory trusts" are minor
interests—this fits with the definition
in section 3(xv).
But I can see no reason why, if these interests, or that of any
one
of them, are or is protected by "actual occupation" they
should remain
merely as "minor interests". On the
contrary, I see every reason why, in that
event, they should
acquire the status of overriding interests. And, moreover,
I find
it easy to accept that they satisfy the opening, and governing, words
of
section 70, namely, interests subsisting in reference to the
land. As Lord
Denning M.R. points out, to describe the interests
of spouses in a house jointly
bought to be lived in as a
matrimonial home as merely an interest in proceeds
of sale, or
rents and profits until sale, is just a little unreal see also Elias
v.
Mitchell [1972] Ch. 652 per Pennycuick V.-C. with
whose analysis I agree,
and contrast, Cedar Holdings v.
Green [1979] 3W.L.R.31 (which I consider to
have been
wrongly decided).
There are decisions, in relation
to other equitable interests than those of
tenants in common,
which confirm this line of argument. In Bridges v. Mees
[1957]
Ch. 475, Harman J. decided that a purchaser of land under a
contract
for sale, who had paid the price and so was entitled to
the land in equity, could
acquire an overriding interest by virtue
of actual occupation, and a similar
position was held by the Court
of Appeal to arise in relation to a resulting trust
(Hodgson v.
Marks [1971] Ch 892). These decisions (following the law as
it
undoubtedly existed before 1925—see Barnhart v.
Greenshields I.c. p.32,
Daniels v. Davison (1809)
16 Yes. 249, Allen v. Anthony (1816) 1 Mer. 282,
284
per Lord Eldon) provide an answer to the argument that there
is a firm dividing
line, or an unbridgeable gulf, between minor
interests and overriding interests,
and, on the contrary, confirm
that the fact of occupation enables protection of
the latter to
extend to what without it would be the former. In my opinion,
the
wives' equitable interests, subsisting in reference to the land, were
by the
fact of occupation, made into overriding interests, and so
protected by section
70(l)(g). I should add that it makes no
difference to this that these same interests
might also have been
capable of protection by the registration of a caution
(see
Bridges v. Mees p.c. p.487, Land Registration Act 1925,
section 59(6)).
There was finally an argument
based upon section 74 of the Land Registration
Act 1925.
"74. Subject to the
provisions of this Act as to settled land, neither
"the
registrar nor any person dealing with a registered estate or
charge
"shall be affected with notice of a trust express
implied or constructive,
"and references to trusts shall, so
far as possible, be excluded from the
"register".
The argument was that if the
overriding interest sought to be protected is,
under the general
law, only binding on a purchaser by virtue of notice, the
section
has the effect of denying the protection. It is obvious—and
indeed
conceded—that if this is right, Hodgson v.
Marks and Bridges v. Mees (supra)
must have
been wrongly decided.
6
I am of opinion that this
section has no such effect. Its purpose is to make
clear, as I
have already explained, that the doctrine of notice has no
application
to registered conveyancing, and accordingly to
establish, as an administrative
measure, that entries may not be
made in the register which would only be
appropriate if that
doctrine were applicable. It cannot have the effect of cutting
down
the general application of section 70(1)(9).
I would only add, in conclusion,
on the appeal as it concerns the wives a
brief observation on the
conveyancing consequences of dismissing the appeal.
These were
alarming to Templeman J., and I can agree with him to the extent
that
whereas the object of a land registration system is to reduce the
risks to
purchasers from anything not on the register, to extend
(if it be an extension)
the area of risk so as to include possible
interests of spouses, and indeed, in
theory, of other members of
the family or even outside it, may add to the
burdens of
purchasers, and involve them in enquiries which in some cases may
be
troublesome.
But conceded, as it must be,
that the Act, following established practice,
gives protection to
occupation, the extension of the risk area follows necessarily
from
the extension, beyond the paterfamilias, of rights of ownership,
itself
following from the diffusion of property and earning
capacity. What is involved
is a departure from an easy-going
practice of dispensing with enquiries as to
occupation beyond that
of the vendor and accepting the risks of doing so.
To substitute
for this a practice of more careful enquiry as to the fact
of
occupation, and if necessary, as to the rights of occupiers can
not, in my view
of the matter, be considered as unacceptable
except at the price of overlooking
the widespread development of
shared interests of ownership. In the light of
section 70 of the
Act, I cannot believe that Parliament intended this, though it
may
be true that in 1925 it did not foresee the full extent of this
development.
Mr. Boland's appeal
The special point taken by Mr.
Boland arises out of the facts of his case and
the nature of the
Bank's proceeding against him. This was brought under
R.S.C. Order
88 for summary judgment. Mr. Boland contended that there was
a
dispute as to the amount actually owed by him to the Bank, and that
until
this dispute was resolved by trial, judgment for possession
ought not to be
granted against him before he had had an
opportunity of invoking the discretion
of the Court under the
Administration of Justice Act 1970 section 36. The
judgment of
Templeman J., who fully considered this point, provides a
complete
answer to this contention. It is clear that, on the view
of the matter most
favourable to Mr. Boland, he owes a substantial
sum, of the order of £40,000,
to the Bank. He has, on the
other hand, put forward no material evidence as
to the likelihood,
or possibility, of discharging or refinancing this indebtedness,
upon
which to invoke the court's discretion under the section, and the
judge
was undoubtedly right in refusing to exercise it in the
absence of such material
evidence. In any case, there was no basis
upon which the Court of Appeal could
legitimately interfere with
the decision of the judge, and indeed no substantial
reason was
given for doing so. In my opinion this part of the decision of
the
Court of Appeal cannot be supported.
However, on the main issue on
both appeals, as they affect the wives, the
decision of the Court
of Appeal was, in my opinion, right, and an order for
possession
cannot be made in either case. I would dismiss the appeals.
Viscount Dilhorne
My lords,
I had intended to deliver a
speech in this important case but since I have had
the advantage
of reading in draft the speech of my noble and learned friend,
Lord
Wilberforce, I have come to the conclusion that no useful purpose
would
be served by my doing so as I agree with him so completely,
both in his reasoning
and in his conclusions.
I too would dismiss the appeals.
7
Lord
Salmon
my
lords,
I have had the advantage of
reading in draft the speech prepared by my noble
and learned
friend, Lord Wilberforce. For the reasons he gives, I too,
would
dismiss the appeal.
Lord
Scarman
MY LORDS,
The result of the appeals in the
two wives' cases will depend upon the
construction to be put upon
section 70(l)(g) of the Land Registration Act 1925.
But the
importance of the House's decision is not to be judged solely by
its
impact on conveyancing, or banking, practice. The Court of
Appeal recognised
the relevance, and stressed the importance, of
the social implications of the
case. While the technical task
faced by the courts, and now facing the House,
is the construction
to be put upon a sub-clause in a subsection of a
conveyancing
statute, it is our duty, when tackling it, to give
the provision, if we properly
can, a meaning which will work for,
rather than against, rights conferred by
Parliament, or recognised
by judicial decision, as being necessary for the
achievement of
social justice. The courts may not, therefore, put aside,
as
irrevelant, the undoubted fact that, if the two wives succeed,
the protection of
the beneficial interest which English law now
recognises that a married woman
has in the matrimonial home will
be strengthened, whereas, if they lose, this
interest can be
weakened, and even destroyed, by an unscrupulous husband. Nor
must
the courts flinch when assailed by arguments to the effect that the
pro-
tection of her interest will create difficulties in banking
or conveyancing practice.
The difficulties are, I believe,
exaggerated: but bankers, and solicitors, exist to
provide the
service which the public needs. They can—as they have
successfully
done in the past—adjust their practice, if it
be socially required. Nevertheless,
the judicial responsibility
remains—to interpret the statute truly according to
its
tenor. The social background is, therefore, to be kept in mind but
can be
decisive only if the particular statutory provision under
review is reasonably
capable of the meaning conducive to the
social purpose to which I have referred.
If it is not, the remedy
is to be found not by judicial distortion of the language
used by
Parliament but in amending legislation.
Fortunately, these appeals call
for no judicial ingenuity—let alone distortion.
The ordinary
meaning of the words used by Parliament meets the needs of
social
justice.
Each appeal is concerned with
registered land; and each raises the same
point—the true
construction of section 70(l)(g) of the Land Registration Act
1925.
The relevant terms of the subsection are:—
"70—(1) All
registered land shall, unless under the provisions of this
"Act
the contrary is expressed on the register, be deemed to be
subject
"to such of the following overriding interests as may
be for the time being
"subsisting in reference thereto, and
such interests shall not be treated as
"incumbrances within
the meaning of this Act, (that is to say):—
"
. . .
"(g) The rights of every
person in actual occupation of the land or
"in receipt of the
rents and profits thereof, save where enquiry is
"made of
such person and the rights are not disclosed;"
It is conceded that each wife
has a beneficial interest in the land, which is
her matrimonial
home. Each is an equitable tenant in common behind a trust
for
sale, there being only one trustee, her husband, in whom the legal
estate
(a freehold) is vested. Each, therefore, enjoys by reasons
of her interest, a
8
present right of occupation as
well as a right to a share in the proceeds of sale,
if and when
the house is sold: Bull v. Bull [1955] 1 Q.B. 234. It
is also conceded'
that each was at all material times living in
her house with her husband: and,
for the reasons given by my noble
and learned friend, Lord Wilberforce,
I have no doubt that the
wife was, as also was her husband, in actual occupation
of the
home.
Upon these facts, a construction
of the subsection based upon the ordinary
meaning of the words of
the subsection can lead to only one conclusion:
the wife has an
overriding interest. For each wife meets the three requirements
of
the section. She was in "actual occupation", in the
ordinary meaning of the
words, and she enjoyed "rights",
one of which, her right to occupation, was
certainly an interest
"subsisting in reference" to registered land. Since the
Bank
made no enquiry of the wife in either case before granting
the husband a
mortgage, its claim as mortgagee to possession is,
on this view of the subsection,
defeated by the wife's overriding
interest.
But the Bank submits that this
simple approach to the interpretation of the
subsection must be
rejected as inconsistent with other key provisions in the
Land
Registration Act 1925 and with its legislative purpose. It is
submitted that
the true meaning of the subsection is to be
gathered from an examination of
the statute against its historical
background and in the context of the property
law, which includes
the provisions of the 1925 legislation dealing with the
trust for
sale.
An English lawyer ignores
history at his peril. But the lessons of our legal
history are not
always easy to discern. Legal history, even English legal history,
is
not one of unbroken continuity in the law's development: it includes
some-
times the rejection of existing principles and the
introduction of new ones.
The Land Registration legislation is an
example. The wearisome and intricate
task of examining title, and
with it the doctrine of notice have been replaced
by a statutory
system of registration (where the Act applies), subject to
the
overriding interests set out in section 70(1). These interests
take effect under the
section without registration and whether or
not a purchaser has notice of them.
I do not, therefore, read the
Act of 1925 as requiring the courts to give the
words "actual
occupation" in section 70(l)(g) the special meaning for
which
the appellants contend, namely an occupation, which by its
nature necessarily
puts a would-be purchaser (or mortgagee) upon
notice of a claim adverse to
the registered owner. On the
contrary, 1 expect to find—as I do find—that the
statute
has substituted a plain factual situation for the uncertainties of
notice,
actual or constructive, as the determinant of an
overriding interest. Nor—and
for the same reason—do I
accept the submission that assistance in interpreting
these words
is to be gained from considering such cases as Caunce v.
Caunce
[1969] 1 W.L.R. 286, which dealt with unregistered
land. The issue in those
cases was as to the circumstances in
which occupation constitutes constructive
notice to a purchaser of
the rights of the occupier. Like Russell L.J. in Hodgson
v.
Marks [1971] Ch 892 (pp.934-935), I am by no means certain
that Caunce
v. Caunce was correctly decided.
However, since the present case is concerned
only with registered
land, it is unnecessary to express a final opinion upon the
point.
My noble and learned friend,
Lord Wilberforce, has dealt with the appellants'
arguments based
on the Act's definitions of minor interests and overriding
interests.
I agree with him in rejecting them, and will, therefore, add only a
few
words of my own. The critically important right of the wife,
so far as these
appeals are concerned, is the right of occupation
of the land. This right, if
unaccompanied by actual occupation, is
clearly within the definition of a minor
interest: section 3(xv).
It is not, therefore, itself an overriding interest. But, once
it
is associated with actual occupation, the association is an
overriding interest.
I agree with the appellants that overriding
interests and minor interests are, as
categories, exclusive of
each other. But there is no logical difficulty in the
association
of a minor interest with another factor (i.e. actual occupation)
being,
qua association, an overriding interest. And this is, in my
judgment, the effect
of section 70(1)(g).
9
For these reasons I would
dismiss the appeals of the Bank in the wives' cases.
I agree with
my noble and learned friend that Mr. Boland's appeal must, how-
ever,
be dismissed. But his lack of success makes no difference to the
outcome
of the litigation. The Bank fails in each case to obtain
what it seeks, an order
for possession of the matrimonial home,
because the wife is in actual occupation
and has herself a right
of occupation.
Lord
Roskill
my
lords,
I have had the advantage of
reading in draft the speech of my noble and
learned friend Lord
Wilberforce. I agree with it, and would dismiss this appeal
for
the reasons therein set out.
Since your Lordships have
reached the same result as the Court of Appeal, it is
in my
judgment desirable to correct one statement in the judgment of
Lord
Justice Ormrod in that court which learned counsel for the
respondents found
himself unable to support, lest otherwise that
statement by the learned Lord
Justice may be thought to have the
approval of your Lordships' House. That
statement appears in the
report of Lord Justice Ormrod's judgment in [1979]
Ch. 309 at
p.337. He was dealing with the appellants' submissions based
on
section 3(xv) (a) of the Land Registration Act 1925 and on
section 2 of the Law
Property Act 1925. He said:—
"I think, with respect,
that the answer to both points is that the wives'
"interests
have not been overreached and are not capable of being over-
"reached
because in each case the land was held by a sole trustee who has
no
"overreaching powers . . . ".
Your Lordships were told by
learned counsel that this point had not been
discussed in argument
before the Court of Appeal, but was raised for the first
time in
this judgment. Accordingly counsel did not have the opportunity
of
drawing the attention of the learned Lord Justice to section
49(2) of the Land
Registration Act 1925 and to the protection that
that section accords. No doubt
had they done so, the learned Lord
Justice would not have expressed himself
as he did.
B721776/MP
Dd 8013619 216 6/80
