3.2.3 Third Party Rights Lecture - Hands on Examples
The following questions are designed to test your knowledge about the core elements regarding third party rights. The answers to the questions can be found at the bottom of the page, however you are encouraged to attempt to answer the questions first, based on your own recall or notes of the topic, before looking at the answers.
Always reiterate and apply the relevant legal tests and principles, derived from both statute and case law. When you have discerned what the outcome will be based on how those principles and cases apply to the question, make sure you state what that outcome is e.g. will the third party licensee be able to remove the trespasser? Will the third party who takes ownership of servient land be subject to the prior interest?
This guide will be most useful to you when you can quickly recognise that there is a third party at issue, meaning there are two initial parties to a contract (whether it is a covenant, a licence, etc.), and then another party who is in some way relying on or subject to that agreement.
Q1. Adrian has discovered that a nearby woodland, owned and run by a government agency, is going to have some of its trees felled and areas cleared to make space for a new car park. Big Business plc is the one clearing the trees and constructing the car park. It has come to an agreement with the government agency that it be allowed to do so. Adrian chains himself to one of the trees in the area, refusing to leave. Big Business plc demand that the government agency takes action, but the agency declines to intervene. Big Business plc are now contemplating taking action to remove Adrian from the woodland.
Q2. Charlotte bought a plot of land from Douglas in the early 1950s. Douglas at the time owned some nearby land and wanted to keep the area quiet and free of traffic. Charlotte and Douglas agreed that the land owned by Charlotte would not be permitted to have any businesses on it. Nothing was said about persons who may take ownership of Charlotte’s land in future. Today, Erica, as head of a start-up company, wants to buy the land in order to establish the main outlet for her business. Erica has seen the agreement between Charlotte and Douglas (who is now deceased) and has been told the Lands Tribunal may be able to do something about it. She believes she has a good case because the surrounding areas have since been developed.
Q3. Florence wants to buy Blackacre, a plot of unregistered land, from Gareth for the purpose of occupation. Gareth informs her that no-one lives at Blackacre. Florence sends her solicitors, Sue, Grabbit & Runne to visit the property with the estate agent as part of the customary inspection. The solicitors notice there are signs of someone, named Ira, actually living at the property, and upon being asked by the solicitors, Ira informs them she has no intention of leaving.
Q4. John lived next to Karen. John owned Greenacre, and Karen owned Whiteacre. At the front of Whiteacre is a large parking area, which Karen allowed John to use to park his vehicle. This right is registered with the Land Register. John disposes the title of Greenacre to Leia, and they do not discuss the use of the parking area on Whiteacre. Karen subsequently sells the title of Whiteacre to Mike. Leia and Mike then learn of the parking right formerly granted to John. Mike would rather keep the large parking area for himself without letting Leia use it.
A1. The facts of this case indicate a licence granted by the agency to Big Business to enter the government-owned land and remove materials. Adrian is viewed by Big Business as a trespasser and they are seeking a possession order to remove him. The facts here are reminiscent of the facts in Manchester Airport v Dutton. So when deciding the outcome, talk about the orthodox position, namely following Allan, Street etc. which indicate that Big Business should have no possession claim, but then raise Manchester Airport. Point out that it is still good law, but that the dissenting opinion of Chadwick LJ is more consistent with case authority.
A2. These facts indicate a restrictive covenant. The agreement is post-1926, and no explicit discussion is made of other parties, so the agreement between Charlotte and Douglas binds the whole world. Therefore, Erica is bound by the terms of the covenant. The reference to the Lands Tribunal is a clue that this restrictive covenant could be modified or discharged. Businesses are being constructed on nearby land, so one could argue that the restrictive covenant ought to be discharged according to one of the provisions of s.84(1) of the Law of Property Act 1925. Aside from attaining the agreement of Douglas (because he has died), all the other grounds could potentially apply.
A3. Because this is unregistered land, there would not be any reference to Ira’s occupation on the register, and so Florence in this instance is hoping to qualify as a bona fide purchaser without notice. The problem is that her solicitors have learned of the existence of someone living at the property. In this case, you can reiterate all of the conditions for bona fide purchasers without notice, and discuss imputed notice, because this the solicitor acts as her agent, and therefore would fix Florence with notice.
A4. This is a case of easements. As you will recall, with legal easements, easements become affixed to the land, whether dominant or servient. Answering this question, explain that Greenacre is the dominant land, and Whiteacre is the servient land. You will note that these easements bind successors in title, so Leia would benefit from the easement, whilst Mike would be bound to comply with the easement. Note that no discussion was made of the easement, however you should point out that transfer of rights of easements are automatic, therefore upon disposition of title, both between John and Leia, and Karen and Mike, the right/burden of the easement was transferred.
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