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Baroness Buscombe: My Lords, I thank the Minister for her response. I am somewhat disappointed by it but am much reassured by the fact that she said that only the heads of content are to be contained in the disposition. However, I should have preferred--I believe it to be the simpler route--that she had accepted the amendment and left out altogether the words "and content". However, the Minister has certainly reassured us in some detail, and that will be clear for all to see in Hansard. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 26 [Protection of disponees]:
Baroness Buscombe moved Amendment No. 30:
- Page 12, line 12, after "this" insert "or any other".
The noble Baroness said: My Lords, Amendment No. 30 relates to Clause 26. I shall set out its purpose. Although it may be the intention to reflect limitations of owners' powers on the register, if a qualification is omitted from the register in error, it is against public policy to legitimise dispositions which statute has made void. There are, for example, restrictions on dispositions by local authorities and by charities. Subsection (3) appears to mean that someone would otherwise acquire a good title.
The Bill seeks to protect people who take a transfer of registered land when it is apparently valid on the face of the register. While that is undoubtedly useful, it must surely be against policy that it should overrule statutory restrictions imposed on particular landowners. The important point here is that the register would normally reflect such restrictions, but, in practice, one must deal with the cases in which that safeguard fails.
Restrictions are placed on certain disposals by charities, by local authorities and by registered social landlords. In those cases, we believe that it is extremely important that human error is allowed for. In essence, it is, in our view, simply wrong to write off a
qualification of an owner's powers on the registrar in the event that the registrar makes a mistake. I beg to move.
Baroness Scotland of Asthal: My Lords, although I have listened very carefully to what the noble Baroness has said, we have considerable concerns about this amendment. We believe that there are two substantial objections to the amendment. First, it would undermine the fundamental objective of the Bill. Secondly, it would make a substantial change in the existing law. Perhaps I may deal with each aspect in turn.
Clause 26 is one of the clauses which embody the fundamental objective of the Bill. In their joint report, the Law Commission and the Land Registry recommended that that objective should be:
- "that, under the system of electronic dealing with land that [the Bill] seeks to create, the register should be a complete and accurate reflection of the state of the title of the land at any given time, so that it is possible to investigate title to land on line, with the absolute minimum of additional enquiries and inspections".
The amendment runs directly against that. It seeks to widen the limitation so that the powers of an owner can also be limited by other statutory provisions. If the amendment were agreed, it would undermine the fundamental objective and would do so in a way which would have a direct and practical effect on potential buyers. People dealing with the title would need to consider what, if any, statutes might impose a limitation on those powers. They would then need to investigate to see whether that was the case. That would detract from the completeness and clarity of the register of title. We believe that that can be described as the argument of principle against the amendment.
The other argument--that it makes a significant and undesirable change in the existing law--is very largely a question of practicality. The clause as drafted codifies the existing law and practice. I invite your Lordships in particular to remember the comments of Lord Justice Peter Gibson in the well known case of State Bank of India v. Sood. He said:
- "It is fundamental that any registered proprietor can exercise all or any powers of disposition unless some entry on the register exists to curtail or remove those powers".
Therefore, the register is already conclusive as to the existence of any such limitations, and a sale made beyond the powers of the current owner already cannot be undone. So far as land registration is concerned, it simply is not contrary to policy, as the noble Baroness argued, for dealings with land which are contrary to the general law or contrary to statute to be rendered irreversible by a change in registration.
We respectfully suggest that the solution proposed by the amendment is far worse than the problem. Creating a novel situation in which a buyer would have to check that a proposed disposition was within the powers of someone who purported to be the owner would add significantly to the delays and to the costs of conveyancing. It will be difficult to prepare a detailed checklist of the circumstances where there might be room to doubt the actual powers of the owner, and the legal position could very often be obscure. All buyers would have to consider whether there was any possibility of those circumstances applying to their transaction. Where that appeared to be possible, they would be put to the trouble and expense of attempting to ascertain the actual extent of the seller's powers. In the worst circumstances, they would get that wrong. They would then be confronted with the prospect both of losing their land and of protracted and expensive litigation against the person who purported to have sold it to them. That would not be a change for the better.
That is why the Government prefer the simplification of the existing law that will be effected by the Bill. That will reduce the ways in which questions can be raised about owners' powers to dispose of land. Limitations on powers can now be recorded by procedures involving both restrictions and inhibitions. Under the Bill it will be possible to record limitations on powers only by restriction, which will give a clear and certain picture. In the absence of a restriction reflecting the limitation on the owner's powers, a sale or other transaction could not be challenged. That gives buyers the protection that they need.
It worth noting that someone who had bought land in such a transaction might also be accountable in equity for having received something that was transferred by an illegal transaction if they were aware of the impropriety. That is the right way to deal with any problems that might arise--it is preferable to creating a substantial and universal new burden on buyers, which would undoubtedly give rise to many hard cases.
It is intended that current Land Registry practice will continue after the Bill comes into force, and it is right that it should do so. Third parties should be able to look to the register--and to the register alone--to determine what limitations exist on the owners' powers to dispose of their interest. I therefore invite the noble Baroness to withdraw her amendment.
Baroness Buscombe: My Lords, I thank the Minister for her very full response. I am sorry that she raised such a wholehearted objection to the amendment. We on these Benches felt confident that this was a good point to make. However, I am much persuaded by what she said and shall read it with care in Hansard. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 27 [Dispositions required to be registered]:
[Amendments Nos. 31 to 33 not moved.]
6.15 p.m.
Viscount Bridgeman moved Amendment No. 34:
- Page 12, line 38, at end insert "or one granted or reserved by an instrument creating a term of years absolute which is not registered or required to be registered".
The noble Viscount said: My Lords, in moving this amendment, I shall speak also to Amendments Nos. 35 and 39. The amendments are intended to ensure that easements and rights of entry for short terms of years do not have to be registered or noted on the title to the servient land where they are created by short leases that are not themselves registrable.
We have taken note of the point that the Government made in Committee; namely, that it is undesirable for there to be easements and so on that cannot readily be discovered. We accept that a tenant who acquires an express easement by a transaction that is separate from his lease can fairly be asked to register it. However, if an unregistrable lease itself grants or reserves an easement, a buyer of the reversion will anyway have to look at the lease and will see the easement, so it is entirely right for the easement to be binding on him.
However, as the Bill stands, such easements will be registrable under Clause 27(2)(d). By Clause 27(1), they will not operate as law unless registered against a landlord's title. I refer to paragraph 7(2)(a) of Schedule 2. Therefore, on a subsequent dealing with the landlord's title, there will not be overriding interests under paragraph 3(1) of Schedule 3 because that applies only to legal easements. By contrast, implied easements, including continuous and apparent easements, and rights of way of necessity, will operate as legal easements without being registered, because paragraphs (d) and (e) of Clause 27(2) refer to "express" grants. Implied easements will be overriding interests when the land over which they are exercised is sold.
Let me give an example. Consider two flats on opposite sides of the landing on the upper floor in a block. Both are let for a term that is not long enough to make the leases registrable. One of them expressly grants the tenant the right to use the lift and staircase, but the other is silent on that point. Neither tenant registers anything. As the Bill stands, if the landlord sells the block, the first tenant's right of access, although clear in his lease, will not bind the buyer, whereas the second tenant's rights will be perfectly good over both the lift and the stairs, although they are not mentioned elsewhere. That is absurd.
I suggest to the Minister that to justify such an absurdity along the lines that are suggested in paragraph 6.11 of the report by the Law Commission and the Land Registry adds something that will encourage tenants to register short leases voluntarily and is machiavellian. I beg to move.
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