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Published: Fri, 02 Feb 2018

Free Property and Trust Essay

QUESTION: 1) “The vendor and

purchaser of land should make express provisions for any easements that they

want. The law should rarely imply easements in their favour”. Discuss.

QUESTION: 2) “There is not

equity in this court to perfect an imperfect gift” – Turner LJ in Milroy v

Lord (1861) – How accurate is this statement in current English Law?

Question 1

It is suggested

that ‘the vendor and purchaser of land should make express provisions for any

easements that they want’ and that ‘the law should rarely imply easements in

their favour’. In order to evaluate this assertion it is first necessary to

establish the characteristics of an easement, thus facilitating a discussion as

to the various means by which easements may be acquired with particular

reference to their acquisition by implied grant or reservation.

An easement is a

right which makes the use of a person’s land more convenient or which

accommodates or benefits it in some way. As it is a right that is imposed over

someone else’s land, it follows that it imposes a burden upon that land.

Easements are also proprietary interests in land,

meaning that the benefit and burden may pass to subsequent owners of the two

pieces of land involved. The four characteristics of an easement were defined

by the Court of Appeal in Re Ellenborough Park.

Firstly, there must be a dominant and a servient tenement

(the dominant tenement carries the benefit of the easement and the servient

tenement carries the burden); secondly, the easement must accommodate, or

benefit, the dominant tenement; thirdly, the dominant and servient tenement

must not be both owned and occupied by the same person; finally, the right must

be capable of forming the subject matter of a grant – that is, the person who

grants the right must have the power to do so, the grantee must be capable of

receiving it and the nature of the right claimed must be sufficiently clear

and the owner of the servient tenement must not be deprived of too many of

their rights.

Having described

the essential characteristics of an easement as involving the imposition of

rights over someone else’s land, it follows that the most obvious way in which

such an easement can be created is where the owners of two neighbouring pieces

of land agree that one of them is to have an easement over the land of the

other. This is the manner in which easements are acquired in the vast majority

of cases. Indeed, most express grants of easements occur when a person sells

part of the land that they own; the vendor of the parcel of land and its

purchaser making express provisions for the easements that they want and

specifically agreeing the rights that are to subsist over the servient

tenement.

In terms of

formalities, section 1(2) of the Law of Property Act 1925 states that an

easement is a right ‘that is capable of subsisting or of being conveyed or

created at law’, that is, capable of being a legal interest, and can only be

legal if ‘for an interest equivalent to an estate in fee simple absolute in possession

or a term of years absolute’. Moreover, section 52 of the Law of Property Act

1925 provides that a conveyance of land or of an interest in land is void for

the purpose of conveying or creating a legal estate unless it is made by deed.

Therefore, legal easements must be granted by deed. Easements may also be

expressly reserved; where a vendor is selling part of their land, they may wish

to reserve or keep back certain rights in their favour. Again, this involves a

clear and express agreement between the vendor and the purchaser as to the

rights that are to be enjoyed over the servient tenement. It is also necessary

to consider the protection of easements. When land is conveyed under the

unregistered system, the legal estate passes immediately on completion of the

transaction; if conveyance is by deed and contains the grant of an easement,

the easement takes effect immediately as a legal easement and binds the whole

world irrespective of notice. The owner of the dominant tenement may enforce

the right against the owner of the servient tenement. However, where title to

the land is registered, section 27(1) of the Land Registration Act 2002

provides that the disposition of a registered estate that is required to be

completed by registration does not operate at law until the registration

requirements are met; this includes the express grant or reservation of an

easement since it falls within section 1(2)(a) of the Law of Property Act 1925.

Therefore, express grants of easements must be registered, and once registered

will bind successive owners of the servient land. Until registration, the

easement is merely an equitable easement. Registration will take place

in the Property Register of the title to the dominant tenement and the Charges

Register of the title to the servient tenement.

In the majority

of cases, therefore, ‘the vendor and purchaser of land should make express

provisions for any easements that they want’: this enables a clear agreement to

be reached between the parties as to the precise nature of the easements

granted or reserved, and enables both parties to be certain as to their

position. In an ideal world, all easements would be expressly granted or

reserved; by examination of the deed of conveyance or entries on the register

of title (depending on whether title to the land in question is registered or

unregistered) any prospective purchaser should be able to establish what

easements benefit and burden a property. However, there are certain circumstances

in which the law will imply an easement.

The two general

rules relating to the acquisition of easements by implied grant or reservation

were identified by Thesiger LJ in Wheeldon v. Burrows.

The first rule relates to the rights which, in the absence of any express

provision, will be acquired by the purchaser over the vendor’s retained land.

It states that the purchaser of land acquires all those continuous and apparent

easements, or easements that are necessary to the reasonable enjoyment of the

property sold, and which the vendor was using immediately prior to the sale.

The second rule applies where a landowner sells part of his land and fails

expressly to reserve any rights over the land that he has sold; in this case

the vendor is not normally able to claim an implied easement. Thesiger LJ

stated that these rules were based on the maxim that ‘a grantor shall not derogate

from his grant’; in other words ‘a grantor having given a thing with one hand

is not to take away the means of enjoying it with the other’.

The requirement for a ‘continuous and apparent’ easement has been held to be

some feature to be present on the servient tenement which would be apparent on

an inspection and which has some degree of permanence, such as drains (in the

case of a implied drainage easement) or a path. There are some exceptions to

the second rule in Wheeldon v. Burrows. The first of these are

easements of necessity; for example, where a purchaser buys land to which there

is no access except by crossing the land of the vendor, and there is no express

grant of a right of access, then an easement of necessity will be implied to

prevent the purchaser from becoming landlocked. However, the purchaser will

only be entitled to what is necessary and not that which is merely convenient;

the right will be limited to that which was necessary at the time of the grant

and will not give the purchaser a right for all purposes.

There may also be other exceptions to the rule that a person may not derogate

from his grant: for instance in Pwllbach Colliery Co. Ltd v. Woodman,

Lord Parker considered that an easement will also be implied if it is necessary

to give effect to the common intention of the parties. However, it is necessary

to show that the land was meant to be used in a particular way and that the

parties must have intended there be a right granted in order that it may be so

used.

Having

considered the circumstances in which easements may be expressly granted or

reserved and may be acquired by implication, it is clear that, as suggested,

the vendor and purchaser of land should make express provisions for any

easements that they want. This would provide certainty to all persons

interested in a particular piece of land as to the nature of the easements with

which it is burdened or benefited. However, it is also clear that, since not

all easements are the subject matter of an express grant, the law must

intervene to imply easements under certain circumstances. This is done to

prevent unfairness to purchasers who could otherwise, for example, find

themselves landlocked or without drainage facilities. It is also true however,

that the law will ‘rarely imply easements’; seeking to limit this to those in

current usage that are necessary for reasonable enjoyment,

limiting easements of necessity to exclude rights which would be merely

convenient

and only exceptionally implying other easements to give effect to the common

intention of the parties.

Therefore, the statement provided represents a very good encapsulation of the

current law.

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Question 2

This essay will

explain the maxim ‘equity will not perfect an imperfect gift’ and consider

situations that suggest that this maxim is not a wholly accurate statement in

current English law. In order to do so, the essay will explain the operation

and rationale of the maxim before considering situations in which it is held

not to be applicable.

The rule that

equity will not perfect an imperfect gift is a particular application of the

more general principle that equity will not assist a volunteer. A volunteer is

someone who has not provided consideration for something of value. This maxim

is applicable to gifts as these are gratuitous transfers of property from the

original owner (offeror) to another (offeree) who provides nothing in return.

As this is an unequal bargain, equity will not enforce the gift if the offeror

has a change of heart or is otherwise prevented from completing the transfer of

property. An agreement to give a gift is not a binding arrangement because of

its one-sided nature so the offeree cannot invoke equity to complete the gift

as there is no obligation upon the offeror to honour the promise therefore no

inequity that needs to be remedied if the offeror reneges upon the agreement.

In Milroy v. Lord,

the court recognised three situations whereby equity would recognise a gift:

firstly, an outright transfer of legal title to the offeree; secondly, an

outright transfer to trustees to hold on trust for a beneficiary and, finally,

a self-declared trust (which must satisfy the requirements of formality and

certainty).

For a gift to exist, Turner LJ stated that:

To render a voluntary settlement effectual, the settlor must have done

everything which, according to the nature of the property comprised in the

settlement, was necessary in order to transfer the property and render the

settlement binding upon him.

In other words,

the law will only recognise a gift if the offeror has complied with all the

legal requirements needed to transfer property. If the property that is the

subject matter of the gift is straightforward, it can be transferred simply by

rendering it into the possession of the offeree. However, more complex gifts

of land and property that lacks a physical presence cannot be transferred

without the completion of formalities. This means, for example, that gifts of

land must be transferred by conveyance,

equitable interests may only be transferred in writing

and shares require the completion of an instrument of transfer.

If the offeror

has set in motion measures to transfer the property in question but has failed

to complete the necessary formalities, either because he has died or because

events have intervened in some way to prevent their completion, the property

becomes the subject of an improperly constituted trust. The question then

arises as to whether it is equitable for the courts to complete the transfer of

the property that is the subject matter of the gift which is where the maxim

that equity will not perfect an imperfect gift comes into operation.

In Re Rose,

the requirement that the offeror must have done all that is required was

questioned and an exception arose to the rule that equity will not perfect an

imperfect gift. Here, it was held that if the offeror had done all that could

be expected of him then the transfer of property would be complete. This was

an acknowledgement by the courts that the transfer of property such as shares

that required the completion of certain formalities could be left incomplete by

dint of the action (or inaction) of a third party. As such, it could not be

said that the offeror had not done all that he could to complete the transfer

thus it would not be inequitable for equity to intervene. The notion that

equity would complete an incomplete transfer if the failure to conclude was not

due to the default of the offeror and occurred once the matter was out of his

hands was confirmed in Hunter v. Moss where Dillon LJ stated that

such a situation was better viewed as a completed gift without waiting for

registration of the transfer.

As these cases

illustrate, an incomplete transfer where the offeror has done all that it is

reasonable and possible for him to do personally will be completed by the

intervention of equity if the failure to complete the transfer is attributable

to some other person or factor. Therefore, the principle in Re Rose would facilitate the transfer of property as gifts even if statutory

formalities were not complied with provided that this failure was not due to

the default of the offeror. Although it has been described as legal

sleight-of-hand, the principle in Re Rose is an exception to the rule

that equity will not perfect an imperfect gift.

whereby an intention to transfer property that is maintained until the death of

the offeror but which is never completed in their lifetime is deemed to be

completed if the property is inadvertently transferred to the offeree after the

death of the offeror, i.e. because the offeree is appointed as

executor. In many ways, this is not a true example of equitable perfection

because the property has passed to the offeree, albeit accidentally, thus the

gift is complete. Strictly speaking, this is an example of equity standing

aside (rather than intervening) and permitting the rule of fortuitous vesting

apply but, despite this, it has been applied in subsequent case law

as an example of equity perfecting an imperfect gift thus must be so regarded.

A further situation that could

be seen as an exception to the rule that equity will not perfect an imperfect

gift concerns gifts made in contemplation of death (donationes mortis causa).

These have been described by Buckley J as being of an amphibious nature as

they are midway between inter vivos gifts and testamentary provisions.

A donatio mortis causa is a gift made in contemplation of death on the

understanding that it will be complete only once the offeror has died and there

must be some evidence of the offeror parting with dominion of the property in

question.

This is an imperfect give as it cannot be completed by the offeror as it will

only take effect after his death, when it is impossible for him to take the

steps necessary to transfer the property to the offeree. Nonetheless, it is a

recognised exception to the rule that equity will not perfect an imperfect gift

and it can be seen as being somewhat analogous to the principle in Re Rose in that it is a situation in which the offeror has done all that he can do to

complete the death thus it would be inequitable to allow his death to defeat

his intentions regarding the transfer of his property.

The final example of the

operation of equity to perfect an imperfect gift is proprietary estoppel which

arises if the offeree has acted to his detriment, by the expenditure of money

or otherwise, in reliance with a misrepresentation by the offeror. The rules

concerning the operation of proprietary estoppel in relation to imperfect gifts

are set out in Willmott v. Barber where it was held that the offeree must have made a mistake about his legal

rights or entitlements and he must have acted in response to this mistaken

belief in a way that amounts to a detriment. The offeror must be aware of the

mistaken belief of the offeree and have nonetheless failed to prevent the

offeree acting to his detriment by bringing the true facts to his attention.

Here, equity intervenes to complete an incomplete transfer on the basis that

the conduct of the offeror, in allowing the offeree to continue to operate

under a misapprehension and to expend money (or other detrimental reliance) is

unconscionable. For example, in Dillwyn v. Llewelyn, a father

purported to transfer some land to his son although he knew that the transfer

was ineffective as the transfer was not contained in a deed. Believing himself

to be the owner of the land, the son spent some 14,000 on erecting a dwelling

on the land with the full knowledge and encouragement of his father.

The requirements of proprietary estoppel were satisfied thus the court

intervened to complete the transfer of property to the son. Here, although the

effect is to perfect an imperfect gift, the intervention of equity is founded

on the unconscionable behaviour of the offeror.

Although these four exceptions

illustrate that the rule that equity will not perfect an imperfect gift is not

absolute, they are exceptions based upon deeper and more fundamental equitable

principles such as the prevention of unconscionable behaviour and maxims such

as ‘equity regards as done that which ought to be done’. Overall, equity

intervenes to achieve equitable outcomes thus deviation from a principle in the

interests of fairness is only to be expected.

References

  • Birmingham, Dudley

    & District Banking Co. v. Ross (1888) 38 Ch D 295

  • Corporation of

    London v. Riggs (1880) 13 ChD

    798

  • Ford v. Metropolitan and Metropolitan District Rly Co. (1886)

    17 QBD 12

  • Pwllbach Colliery

    Co. Ltd v. Woodman [1915] AC

    634

  • Rangeley v. Midland Railway Co (1868) 3 Ch App 306
  • Re Ellenborough Park [1956] Ch 131
  • Re Webb’s Lease [1951] 1 Ch 808
  • Wheeldon v. Burrows (1879) 12 ChD 31
  • Choithram v. Pagarani (2000) The Times, 30

    November

  • Dillwyn v. Llewelyn (1862) 4 De GF & J 517
  • Milroy v. Lord (1862) 4 De GF & J 264
  • Re Beaumont [1902] 1 Ch 889 per Buckley J
  • Re Stewart [1908] 2 Ch 251
  • Strong v. Bird (1874) LR 18 Eq 318
  • Willmott v. Barber (1880) 15 Ch D 96
  • Gray, K &

    Gray SF (2003) Land Law (3rd edition), LexisNexis UK: London

  • Sparkes, P

    (2003) A New Land Law (2nd edition), Hart: Oxford

  • Smith, RJ

    (2003) Property Law Cases and Materials (2nd edition),

    Longman: Harlow

  • Thomas, M

    (2004) Blackstone’s Statutes on Property Law (12th edition),

    OUP: Oxford

  • Baker, P.V., ‘Land as a Donatio

    Mortis Causa’ (1993) Law Quarterly Review 109

  • Burn, EH and Virgo, GJ (2002) Maudley

    & Burn’s Trusts & Trustees Cases & Materials (6th edition), Oxford: OUP

  • Davis, C., ‘Proprietary Estoppel:

    Future Interests and Future Property’ (1996) Conveyancer 193

  • Edwards, R and Stockwell, N (2002) Trusts

    and Equity (5th edition), Harlow: Pearson Education

  • Hayton, DJ (2001) Hayton and

    Marshall Commentary and Cases on the Law of Trusts and Equitable Remedies (11th edition), London: Sweet & Maxwell

  • Kodilinye, G., ‘A Fresh Look at the

    Rule in Strong v. Bird’ (1982) Conveyancer 14

  • Lowrie, S. & Todd, P., ‘Re Rose

    Revisited’ (1998) Cambridge Law Journal 46

  • Martin, J.M., ‘Fusion, Fallacy and

    Confusion’ (1994) Conveyancer 13

  • Moffat, G (2004) Trusts Law Text

    and Materials (3rd edition), Cambridge: CUP

  • Oakley, AJ (2003) Parker &

    Mellows – The Modern Law of Trusts (8th edition), London: Sweet

    & Maxwell

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