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Lord Goodhart: My Lords, I rise to make two brief points. First, I entirely agree with the noble Baroness, Lady Buscombe, on the substance of this matter. It seems to me that it is anomalous to treat beneficiaries under strict settlements governed by the Settled Land Act in a different way from beneficiaries under the trust for sale or, since 1997, the trust for land. I can see no justification for that. It would have been better if these passages had been omitted from the Bill.

Secondly, I hope that the noble Baroness will not on this occasion divide the House. This is a Law Commission Bill and will undoubtedly improve land ownership and conveyancing. The problem that has arisen here is a fairly minor one. Although I hope that the Government will reconsider the point in the light of the arguments justifiably advanced—the Government will have an opportunity to do so before the Bill goes to another place—it does not seem appropriate for the Bill to be made the subject, on this particular issue, of a ping-pong between the two Houses. That is a view that I shall consistently take when we come to debate my own amendment.

Baroness Scotland of Asthal: My Lords, first, I thank the noble Lord, Lord Goodhart, and the noble Baroness for their comments. I understand the basis on which the amendment has been proposed. However, as the noble Lord rightly said, we had a good and full debate on the same amendment both in Committee and on Report.

Our reasons for opposing the amendment may be summarised as follows. The Bill proceeds on the basis that there should be as few overriding interests as possible. The Law Commission and the Land Registry were prepared to consider an exception for such settlements. They put the proposal to consultation, and they received a large response. Many expert lawyers expressed their views. I believe I am correct in saying that, without exception, those who responded told us, quite sharply, that there was no purpose in making such an exception. The Bill as drafted reflects the outcome of that consultation. We took the consultative process very seriously. There is little point in having proper consultation if you do not listen to those with whom you consult. That is the first reason. One of the other aims of the Bill was to keep matters simple. The responses were acted upon.

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Thirdly, there appears to be no evidence that the present provision has ever caused any hardship in practice. We believe that this is a theoretical and not a practical or real problem. Our reasons are recorded in more detail at cols. 1328 and 1329 of Hansard of 30th October. I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness Buscombe: My Lords, I thank the Minister for her response. In essence, while we accept that this would affect only a few people and a diminishing group of people, we believe that nothing is to be lost by agreeing to the amendment. It is an anomaly which should be dealt with and we prefer it to be dealt with here and now. Far from anything being lost, there is something to be gained. There is no justification for discriminating against any person who may be affected by the proposal. Taking our first example, if it came to litigation the widow would have to demonstrate her title to the interest. The fact that she was in occupation under a strict settlement would then emerge. In other words, the fact that it is a strict settlement is bound to emerge in litigation.

I understand that the Government have been in consultation on this and all other points. However, we on these Benches have also consulted extensively and have been given a very different point of view. There is a purpose in making an exception in this case. I hear what the noble Lord, Lord Goodhart, says in supporting the amendment in spirit. I cannot understand why the Bill being drafted by the Law Commission makes it different from any other Bill which needs amendment. I should like to test the opinion of the House.

4.12 p.m.

On Question, Whether the said amendment (No. 9) shall be agreed to?

Their Lordships divided: Contents, 77; Not-Contents, 112.

Division No. 2

CONTENTS

Allenby of Megiddo, V.
Alton of Liverpool, L.
Anelay of St Johns, B.
Astor of Hever, L.
Biffen, L.
Blaker, L.
Blatch, B.
Boardman, L.
Bowness, L.
Bridgeman, V.
Brooke of Sutton Mandeville, L.
Brougham and Vaux, L.
Burnham, L.
Buscombe, B.
Byford, B.
Caithness, E.
Campbell of Alloway, L.
Campbell of Croy, L.
Carnegy of Lour, B.
Chadlington, L.
Colwyn, L.
Cope of Berkeley, L. [Teller]
Crathorne, L.
Cumberlege, B.
Dean of Harptree, L.
Denham, L.
Dixon-Smith, L.
Eccles of Moulton, B.
Eden of Winton, L.
Elton, L.
Flather, B.
Fookes, B.
Freeman, L.
Gardner of Parkes, B.
Glentoran, L.
Hanham, B.
Hayhoe, L.
Henley, L.
Higgins, L.
Howe, E.
Howe of Aberavon, L.
Hunt of Wirral, L.
Jenkin of Roding, L.
Jopling, L.
King of Bridgwater, L.
Knight of Collingtree, B.
Liverpool, E.
Luke, L.
Mancroft, L.
Miller of Hendon, B.
Monro of Langholm, L.
Montagu of Beaulieu, L.
Montrose, D.
Mowbray and Stourton, L.
Naseby, L.
Noakes, B.
Northesk, E.
Norton of Louth, L.
O'Cathain, B.
Oxfuird, V.
Pilkington of Oxenford, L.
Rawlings, B.
Reay, L.
Renton, L.
Roberts of Conwy, L.
Saltoun of Abernethy, Ly.
Sanderson of Bowden, L.
Seccombe, B. [Teller]
Skelmersdale, L.
Stewartby, L.
Strathclyde, L.
Tenby, V.
Thomas of Gwydir, L.
Trumpington, B.
Tugendhat, L.
Vivian, L.
Waddington, L.

NOT-CONTENTS

Acton, L.
Ahmed, L.
Amos, B.
Archer of Sandwell, L.
Ashley of Stoke, L.
Ashton of Upholland, B.
Bach, L.
Bassam of Brighton, L.
Berkeley, L.
Billingham, B.
Blackstone, B.
Borrie, L.
Brookman, L.
Bruce of Donington, L.
Burlison, L.
Campbell-Savours, L.
Carter, L. [Teller]
Chan, L.
Chandos, V.
Christopher, L.
Clark of Windermere, L.
Clinton-Davis, L.
Craig of Radley, L.
Crawley, B.
Davies of Coity, L.
Davies of Oldham, L.
Desai, L.
Dormand of Easington, L.
Dubs, L.
Eatwell, L.
Evans of Temple Guiting, L.
Evans of Watford, L.
Falkender, B.
Farrington of Ribbleton, B.
Faulkner of Worcester, L.
Filkin, L.
Fyfe of Fairfield, L.
Gale, B.
Gibson of Market Rasen, B.
Gladwin of Clee, L.
Goudie, B.
Gould of Potternewton, B.
Grabiner, L.
Graham of Edmonton, L.
Grenfell, L.
Grocott, L.
Harris of Haringey, L.
Harrison, L.
Haskel, L.
Hayman, B.
Healey, L.
Hilton of Eggardon, B.
Hollis of Heigham, B.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Chesterton, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L. (Lord Chancellor)
Janner of Braunstone, L.
Jay of Paddington, B.
King of West Bromwich, L.
Laird, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
McIntosh of Haringey, L. [Teller]
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.
Mallalieu, B.
Milner of Leeds, L.
Mishcon, L.
Mitchell, L.
Morgan of Huyton, B.
Morris of Aberavon, L.
Murray of Epping Forest, L.
Nicol, B.
Parekh, L.
Pendry, L.
Pitkeathley, B.
Plant of Highfield, L.
Prys-Davies, L.
Ramsay of Cartvale, B.
Rendell of Babergh, B.
Richard, L.
Rogers of Riverside, L.
Rooker, L.
Sainsbury of Turville, L.
Sawyer, L.
Scotland of Asthal, B.
Serota, B.
Sheldon, L.
Simon, V.
Slim, V.
Stallard, L.
Stone of Blackheath, L.
Strabolgi, L.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Turner of Camden, B.
Uddin, B.
Weatherill, L.
Whitaker, B.
Whitty, L.
Wilkins, B.
Williams of Elvel, L.
Williams of Mostyn, L. (Lord Privy Seal)
Young of Dartington, L.

Resolved in the negative, and amendment disagreed to accordingly.

8 Nov 2001 : Column 319

4.22 p.m.

Schedule 2 [Registrable dispositions: registration requirements]:

[Amendments Nos. 10 to 12 not moved.]

Schedule 3 [Unregistered interests which override registered dispositions]:

[Amendments Nos. 13 and 14 not moved.]

Schedule 6 [Registration of adverse possessor]:

Baroness Scotland of Asthal moved Amendment No. 15:


    Page 57, line 20, leave out "pursuance" and insert "pursuant"

On Question, amendment agreed to.

Lord Goodhart moved Amendment No. 16:


    Page 59, line 10, leave out paragraph 12.

The noble Lord said: My Lords, the point I am making was, like some of the earlier ones, raised in Committee and again on Report. It was discussed again at a meeting with the noble Baroness, Lady Scotland, yesterday which I attended. I am afraid that that meeting convinced me more than ever that the Government had got this issue wrong. Mr Charles Harpum, the former Law Commissioner who was responsible for the Bill, is almost infallible on these issues. However, I believe that on this particular point even he, like Homer, has for once nodded.

Let us assume that the owner of a house—let us call him Mr X—has a garden at the bottom of which there is a patch of derelict land. It lies derelict for some time and Mr X thinks that it would make a nice addition to his garden. Therefore, he takes it over. He knows that it is not his but no one else claims it. He plants up the land and after a few years he thinks that it would be nice to own it.

Under the existing law, Mr X has the right to be registered as the owner of that formerly derelict land which he has incorporated into his garden if he has been in unchallenged adverse possession of it for 12 years. Under the existing law there is one exception to that situation; that is, where there is a trust of land. Under the present law that is quite appropriate as the person who owns the house to which the derelict land is properly attached may be a life beneficiary who perhaps does not even know that the land is his and does not want to do anything with it anyway and cannot be bothered to challenge the matter. Therefore, he takes no steps to end the adverse possession.

Equally, the trustees, who are the legal owners of the formerly derelict land, may well not know of adverse possession of the derelict land by Mr X as they have no reason to look at the land and find out whether anyone has trespassed on it. In those circumstances I can see

8 Nov 2001 : Column 320

that it is unfair that a future beneficiary under the trust should lose the derelict land because of the failure of an earlier beneficiary to take action.

However, under the Bill, the situation has now changed. Under the Bill, if X wants to get on the register as owner of the derelict land, he must give notice to the trustees. But he gets on to the register only if they fail to take action within two years, so that there can be no adverse possession against land which is owned by trustees without the knowledge of the trustees and without giving them an opportunity to challenge the claim by the person in possession. However, if paragraph 12 of Schedule 6 stands, the adverse possession may be excluded for a period of 80 years or more as trusts can and do last a long time. Indeed, in the case of a few statutory entails, they may last for ever. There is no reason that I can see why adverse possession should be deferred for a very long time when the trustee must be given notice of any claim by the adverse possessor. If the trustees are given notice and do not respond, and if paragraph 12 is allowed to stand, a difficult situation will arise. Does the Land Registry have to investigate the evidence of the beneficial interests before admitting the trespasser, Mr X, to the register, or does Mr X get registered only to find that the registration is a mistake and it is rectified against him simply because the property is held on trust?

It was suggested in the discussion yesterday that the trustees might fail to oppose the application but might do so without being negligent or, alternatively, might be unable to pay damages to their beneficiary for failing to do their duty to oppose the application for registration. I do not believe that is an adequate excuse. There are extremely few cases where that will apply.

In Committee the noble Baroness, Lady Scotland, recounted what might be described as a "sob story" based on a child beneficiary who lost out because his or her mother, who was also the trustee of the estate that owns the asset, suffered from a severe mental breakdown. However, I think we are agreed that that particular story will not help the situation as such circumstances would be covered perfectly adequately by paragraph 8 of Schedule 6 which prevents adverse possession being claimed against a legal owner who is under a disability.

Of course, adverse possession is not something to be encouraged, but I believe that paragraph 12 creates an unjustifiable anomaly. In the light of the change in the law of adverse possession in the Bill, which will perfectly properly make adverse possession more difficult to achieve, I can see no possible logical reason why the right to acquire title against the legal owner should depend on the nature of the beneficial interests on which a legal owner holds a property.

8 Nov 2001 : Column 321

I should say in conclusion that those who are most likely to benefit from paragraph 12 are the owners of large landed estates, because it is they who most often find that the property is held in trusts. I beg to move.


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