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Viscount Bridgeman: We very much appreciate the balance that the Minister seeks to draw between the purchaser and the owner. With the strength of The Oxford English Dictionary behind her, we shall have to consider her reply very carefully. In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 52 to 57 not moved.]

Baroness Buscombe moved Amendment No. 58:

"( ) For the purposes of sub-paragraph (1)(b), an easement or profit shall be taken to be apparent on a reasonably careful inspection if such an inspection would reveal that acts had been done on the land, or advantages had been enjoyed over it, which were in fact done or enjoyed in the exercise of the easement or profit, whether or not such an inspection would have revealed or led to the discovery of the particular right under which those acts were done or advantages enjoyed."

The noble Baroness said: The amendment is designed to ensure that an easement is protected if the facts connected with its enjoyment are discoverable by inspection. Inspection without more will not show whether, for example, an access way or light to a window is enjoyed as of right or merely by prescription. If facts that are consistent with the existence of an easement show up on a buyer's inspection the onus should, we suggest, be on him to go on to ask about the legal position.

That distinction is not discussed in paragraphs 8.65 to 8.72 of the report Land Registration for the Twenty-First Century. The result produced by the amendment would be equivalent to the position adopted for "actual occupation". Paragraph 8.62(1) points out that it,

    "is not the interest that has to be apparent ... but the occupation of the person having the interest".

I beg to move.

Baroness Scotland of Asthal: I am most grateful to the noble Baroness for that explanation. I confess that we had some difficulty understanding precisely what was intended by the amendment. We considered the matter on the basis that the amendment sought to spell

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out that if it was obvious or--to use the word in the amendment--"apparent" from an inspection that there has been activity on the land or advantage enjoyed over the land, the disponee under the registered disposition will take subject to the easement or profit even if the fact that the activity or advantage has been exercised under that interest cannot be discovered by inspection and thus the existence of the easement or profit is not discoverable or known.

We have already discussed the matter in relation to the previous group of amendments. I explained to the Committee the background to and basis of paragraph 3 of Schedule 3. In so doing I mentioned that if the disponee knows of the legal easement or profit because it is patent he would be bound by it. Such easements will be discovered from a reasonably careful inspection of the property and the seller will not be under a duty to disclose them.

It is considered that the test of what is "obvious" on a reasonably careful inspection is to be interpreted in the same light as the case law relating to the question of a patent defect in title; that is, one that does not have to be disclosed to a buyer of land prior to contract under the principles that were set out in Yandle & Sons v. Sutton. As many noble Lords may know, the learned judge in that case said: "I think he"--that is, the purchaser--

    "is only liable to take property subject to those defects which are patent to the eye, including those defects which are a necessary consequence of something which is patent to the eye".

If it was patent to the eye that, for example, a private right of way existed the buyer would be bound even if he did not know the particular right under which the way was used or who all the users were. That being so, paragraph 3(1)(b) already appears to cover the concerns that were outlined by the noble Baroness and I therefore hope that she will withdraw the amendment.

Baroness Buscombe: I thank the Minister for her full response. I shall look again at the Bill to ensure that I am content that this important point is already covered. I shall read with care what she said in Hansard. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 59 not moved.]

On Question, Whether Schedule 3 shall be agreed to?

Viscount Colville of Culross: It may be patent, apparent or obvious that I have not understood the schedule but on page 49 in line 6, should not the third word be "or" rather than "of"? Will the Minister comment on that?

Baroness Scotland of Asthal: I thank the noble Viscount. I had not noticed that; I do not know whether any other noble Lords had done. That demonstrates the invaluable benefit of having Cross-Benchers actively engaged in our debate. I wholeheartedly thank the noble Viscount.

Baroness Buscombe: I support the Minister's comments. We are grateful to the noble Viscount for that intervention.

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Schedule 3 agreed to.

Clauses 31 to 33 agreed to.

Clause 34 [Entry on application]:

Baroness Buscombe moved Amendment No. 60:

    Page 14, line 40, leave out "Subject to rules,"

The noble Baroness said: In moving this amendment I shall speak also to Amendments Nos. 61 and 62.

The amendments taken together would ensure that an agreed notice could be entered only if the registered proprietor or someone entitled to be registered made or consented to the application. Any other application would have to be for a unilateral notice so that the proprietor would be told of it under Clause 35(1) and would have an opportunity to apply under Clause 36(1) for it to be cancelled.

Paragraph 6.22 to 6.31 of the Land Registration for the Twenty-First Century report describes the system in the Bill and indicates that it is intended not only to allow the entry of so-called agreed notices, which are not in fact consensual, to which reference is made in paragraph 6.24, but to go further and prescribe by rules that certain interests can be protected only by agreed notices without any procedure for cancellation on the proprietor's application. That is paragraph 6.25. It gives matrimonial home rights as an example.

It seems wrong in principle to allow entries to be made without the proprietor's consent and, possibly, even without his knowledge and without allowing him to use the procedure in Clauses 35 and 36 to resolve the applicant's claim where it is disputed.

Clause 32(3) provides that a notice does not validate an interest but does protect its priorities if it is valid. A so-called agreed notice in respect of a claim which is, in fact, disputed will be a serious interference with the registered proprietor's ability to deal with his land. Indeed, any prospective purchaser will insist on having the entry cleared off, which may be a protracted process if it arises out of a dispute between the proprietor and the applicant.

We believe that no justification is shown for depriving the proprietor of the protections described in paragraphs 6.29 and 6.30 of the report. Moreover, the cases in which that can happen are to be prescribed by rules which will not receive further parliamentary scrutiny. We feel strongly that that is a disproportionate interference with the proprietor's rights. On that basis, I beg to move the amendment.

7 p.m.

Baroness Scotland of Asthal: I am grateful to the noble Baroness for explaining the amendment so fully. Amendments Nos. 60 and 61 are grouped together because they are linked. The link is that Amendment No. 61 is unnecessary without Amendment No. 60. The effect of Amendment No. 60 on Clause 34(2) is to remove the Lord Chancellor's power to make applications for unilateral or agreed notice subject to rules. I can understand the concern behind this amendment; namely, that the right to apply may be curtailed by the detailed rules that are made.

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However, I hope that I shall be able to reassure the noble Baroness that the purpose of the provision is to give the Lord Chancellor power, for example, to prescribe that certain types of application will always be registrable as agreed notices. That is very similar to certain situations which arise under the present law, and the noble Baroness touched on that; for example, whereby notice can be entered of a wife's matrimonial home rights notwithstanding that the proprietor objects. If that power is to be exercised, the right to apply to the registry must be made expressly subject to rules as originally drafted. That need for such a wide rule-making power does not exist under the current law because the methods of protecting third party interests are rather different. As the law stands now, there is only a consensual form of notice, and unilateral action is taken by lodging a caution against dealings.

Even with those different methods, the position is not straightforward. For example, rights under the Family Law Act 1996 are registered as notices even though they are not in fact consensual in the normal sense. Under the new arrangements, the registry can set out in rules a comprehensive statement of the interests which can be protected by a consensual notice and which can be protected by a unilateral notice. The difference between the two is significant. The registered proprietor may challenge the unilateral notice and seek its removal.

The advantage of setting out the detail in rules is that it will remain flexible and can be more readily updated in the future. I have already mentioned the Family Law Act 1996. It is apparent from that that the treatment of these different applications by the registry can depend on legislation outside of the sphere of land registration. There must be an ability to respond to those. That makes it more important that these details are left to rules because we cannot prescribe what future legislation may need to provide in relation to its operation and how that may impact upon the Land Registry's discharge of its duties.

Having heard the reasons that I have given for the width of the rule-making power under this clause, I invite the noble Baroness to withdraw the amendment. I remind her of the role that will be played by the rule committee in that regard, which should give greater assurance.

Amendment No. 61 also amends the rule-making power in subsection (2). It makes it clear that rules can cover the form of the application that has to be made and also the information to be contained in it. However, this amendment is not necessary if the rule-making power under subsection (2) is left as originally drafted. The subsection already begins with a much more general statement that the right to make an application to register an agreed or unilateral notice is subject to rules. I therefore invite the noble Baroness not to press that amendment.

I now turn to Amendment No. 62. Subsection 34(3) sets out the three different circumstances in which the registrar may approve an application for an agreed notice. The first two cases are ones where the registered

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proprietor consents to the entry of the notice. The ability of the registrar to approve such applications has not been questioned. Therefore, we expect that that will be relatively straightforward.

However, the third situation in which the registrar may approve an application for an agreed notice will arise where the registered proprietor does not consent to the entry of a notice. It is that option which the amendment removes.

I should like to clarify the circumstances in which it is envisaged that the registrar would approve such an application. The subsection states that the registrar is able to enter an agreed notice where he is satisfied as to the validity of the applicant's claim. An example would be where the applicant could establish to the registrar's satisfaction that the registered proprietor had granted him an easement.

A more detailed example of how the amendment would work in practice might assist. When dealing with these issues, it is always difficult to think how they may apply in concrete terms. Perhaps I may pose one example. What if the registered proprietor granted an option in writing to X? X applied to have it protected by an agreed notice. The registered proprietor refuses to agree to that. X would be forced to enter a unilateral notice even though the registrar had seen the grant of the option and was quite satisfied that it was valid. At present the registrar is entitled and does enter a notice if an interest has been validly created even if the proprietor objects. It is a power which he exercises regularly and it should not be taken away from him because of its practical use. From what I have said, I hope that I have demonstrated why that third basis of approval of an application for registration of an agreed notice is necessary. It enables the practical way in which that matter has operated in the past to be carried forward and provides an appropriate level of flexibility and transparency. Therefore, I invite the noble Baroness to withdraw the amendment.

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