Critically assess the rules which a claimant might rely on to establish an

overriding interest as an actual occupier and which a disponee might

rely on to defeat the claimants case.

Under Schedule 3 Paragraph 2 of the Land Registration Act 20o2, all rights in
rem will bind the disponee if not registered, but are listed under the schedule
or are accompanied by actual and apparent occupation of the land - known as
overriding interests. [Gardner] I will progress to analyse the ways in which
these can be established and destroyed; to then conclude on whether the
current registration system would be better off without this seemingly complex
system of undisclosed yet binding rights.

In this case we are talking about the main overriding interest of actual
occupation, which providefollows that you must prove that not only do you
actually occupy the land, but that you have a legal right/proprietary interest in
that land for your right to bind the disponee as an overriding interest; mere
factual occupation is not sufficient. [Ainsworth [1965]] However, the difficulty
then comes with proving actual occupation, as there is no direct test. The best
way to prove actual occupation is to find the occupier on the land; yet this is
not always possible as people are not always on their land. I will now proceed to
assess the ways in which case law has dictated that actual occupation can be
established.

Firstly, one way of establishing actual occupation would be to show some

degree of permanence and continuity about your occupation, mere fleeting
presence is not enough. [per Lord Oliver in Cann [1991]] So you may be in
actual occupation if you are temporarily absent, (e.g. On holiday, in hospital)
but you are intending to return as your permanent residence. This can become
difficult in cases where somebody has various homes that they move between;
giving a confident answer becomes very subjective, it seems to be a matter of
interpretation, which acts contrary to the idea expressed in Cann that
occupation is a question of fact. However, arguably this could be resolved by
finding an intention to return. In Bustard [2010] actual occupation was upheld
because although the occupier was hospitalised, she always intended on
returning and the presence of her physical possessions inferred her occupation.
The fact that you can be in actual occupation, when in fact you are not, causes
problems as legislation focuses more on obtaining information from the
occupier rather than discoverability of the right.[Gardner] In Garden Holdings
[1995] the supposed occupant did have a proprietary right via conditional gift;
yet it was not actual occupation as there was no permanence or continuity, her
presence served as a means to an end and there was no real intention to return
stay. The court seem to use their discretion to find or not find actual
occupation where it seems appropriate; as in both the two cases above it seems
to penalise those who try to subvert the law and abuse the law on overriding
interests to their advantage. This may be a positive thing, although its lack of
objectivity may sometimes create unfair or harsh rulings and so it is not
completely reliable.[Good point.]
The courts can also infer actual occupation by proxy elements. The proxy
elements must ring alarm bells that there is another occupier to this land other
than the legal titleholder. As in Cann, when the building societies property
inspector was round, extra furniture was being moved in the court said they
should have asked the simple question of whom it belonged to. However, in
this case the court did not find actual occupation, as the arrival of the
belongings prior to completion did not show continuance or permanence, just
preparation. Thus, it appears that the court uphold the burden on the disponee
to ask questions to discover actual occupation, yet when the proxy element that
should have been questioned is trivial they find other ways of coming to the
correct decision. This is supported by Rossett [1989], where the court of appeal
said that the presence of builders on the property should have made the
disponee question for actual occupiers; yet when taken to the House of Lords it
was held that there was never an agreement that she would have a beneficial
interest in the property, so she had no proprietary right. Thus, I continue with
my assertion that the tests laid down in case law to assert actual occupation
allow for large court discretion, which creates uncertainty in the law here.

The case of Boland[1981] highlights the uncertainty in this area, which led to
the law being changed in 2002, giving disponees a chance to defeat the
claimants case by way of the reasonable inspection requirement. The problem
in Boland could have been resolved by getting the actual occupier to waive her
rights from the start of the agreement Nevertheless, as an element of fairness,
the schedule 3 paragraph 2 of LRA 2002 states that a disponee wont be bound
by actual occupation if the actual occupiers existence wasnt obvious on
reasonably careful inspection of the land and the disponee doesnt know the
claimants right to occupy. Cases such as Chhokar v Chhokar [1984] may have
been protected under the new amendments, by saying that her furniture did
not make her presence reasonably discoverable. There have been concerns that
the reasonable requirement would transfer costs on to customers of banks;
however, the occupation must be actual and apparent, so it must be readily and
easily discoverable so that the costs are contained and cheap. However, the
requirement is still largely indeterminate and the courts can bend it to their
preferred position [Gardner]. So it can be unfair in this way, and also in the way
that it puts large burdens on inspectors of the property trying to carry out the
inspections.

Additionally, a disponee will not be bound by actual occupation if the occupier

fails to disclose his interest when he reasonably would be expected to do so
(LRA 2002 Schedule 3, paragraph 2 (b)). However, the question to ask here is,
when would it be reasonable to not disclose? The law appears unsure in this
area, so although it works as a general principle, its boundaries are not defined,
further contributing to the uncertainty of the law in this area.

Overreaching, which requires payment of the purchase price to at least two

trustees thus transferring all rights in the land into the proceeds of sale, is also
another way of defeating actual occupation. However, this can have very unfair
results as seen in the case of Flegg [1988]. The two actual occupiers beneficial
interests were overreached when the other two co-owners mortgaged the
property for their own purposes. This was an extremely harsh result, yet on the
other hand it is not a usual set of circumstances, so this element of
overreaching would not cause many issues in reality.

Having critically assessed the ways in which actual occupation can be

demonstrated and defeated, I have come to the conclusion on many instances
that the current system, which is meant to be based around factual assertions,
is largely left to the courts discretion. This can be good as it can allow for the
most justiciable outcome (as in Chhokar the husband seems to be being
punished for a rogue dealing.) However, it also causes uncertainty, which is
particularly problematic in for commercial parties who need to be sure of the
consequences of their actions under law. Thus, perhaps a mirror image
approach to overriding interests in general would be a better option, which
would promote both transparency and certainty; but to the detriment of
protection of vulnerable interests. I would argue that e-conveyancing could
provide a compromise; technology could phase out the existence of overriding
interests altogether by almost playing the role of the lawyer, advising people
when they may have an interest that should be registered.[Bogusz] Thus, there
would be mirrored land register, but there would also be some protection
afforded to those with interests that arise in a disorganised way. Alternatively,
the current system needs some formal tests and criteria regarding actual
occupations establishment and defeat to provide a more secure system of land
rights.

Name: Paris Daly Word count: 1338

Paris, this is really good. Sometimes I think youre straying a little bit away from
the question into general commentary, but on the whole youve addressed the
question well certainly well enough to warrant a mark of 67. Heres a few
suggestions on things you could do to get the mark into the 70+ bracket (some of
these things youve done already: my advice is really about trying to show how
you might present some of the material a bit more schematically and with more
attention to the Critically assess part of the question (though I want to
emphasize that you in no way do badly on this part of the question. If you think
about it, the question is requiring you to do four things: (1) explain the rules
relating to actual occupation; (2) explain the principles that can stop the rules
relating to actual occupation taking effect; (3) explain whats wrong with the rules
relating to actual occupation; and (4) explain whats wrong with the principles
that can stop the rules relating to actual occupation taking effect. The order in
which Id do them is (1) followed by (3), and then (2) followed by (4), though
other ways could be equally effective. On (1), you need to explain as you do
that occupation doesnt have to be factual that it can be apparent (i.e., obvious
from a reasonably careful inspection of the land) owing to proxy elements and
evidence of a continuing intention to occupy. You also have to explain that
occupation itself isnt enough: that the person claiming the overriding interest in
the land must have a property right in it as well (again, you appreciate this).

If the claimant is saying they themselves have a right to occupy the land, its not
clear if just about any property right will satisfy this requirement (as one
textbook writer suggests is the case). In the relevant case law, the property right
which the claimant/occupier has is nearly always one which gives them a right
to be in occupation of the land rather than to use the land in some way. (In Kling
v Keston, the relevant property right was a right to use (to park a car in a garage),
but then in that case the claimant was seeking to establish that they had the
parking right as an overriding interest rather than that they had a right to occupy
the land themselves.)

If youre critically assessing the rules on actual occupation (Land Registration

Act 2002, schedule 3, paragraph 2) then youll want to point out that occupation
by proxy only really makes sense if you have a reliable proxy element: e.g.,
simply saying that the presence of furniture = evidence of actual occupation
surely cant be right, and saying that the presence of the occupiers furniture is
only a good test where theres something about the claimants furniture that
makes it distinct from the title-holders. (Some proxy elements will be more
useful than others, usually because theyre gender-specific: e.g., clothing.) You
might also want to point out that the continuing intention to occupy test, while
sensible, may be difficult to apply in practice (look at the assignment question
concerning Astrid, Bernice and Craig the one you didnt do and ask yourself:
did B have a continuing intention to occupy? Its difficult to say). You touch on all
this at the top of page 2, though I think the point could be made a bit more
carefully.

Then you can move to (3). The main point you need to make (as you do) is that a
disponee will defeat a claimants case (as the question puts it) if a court is
satisfied that the disponee carried out a reasonably careful inspection of the land
but the overriding interest still didnt come to light. You also need to bring in (as
you do) the principle of unreasonable non-disclosure, not least because this gives
you an opportunity to provide some of that critical assessment that the question
asks for: the implication behind the principle is that sometimes it will be
reasonable not to disclose actual occupation. But, as you know, its not clear what
sorts of circumstances would make it reasonable not to disclose the overriding
interest.

In any event, whos the disponee supposed to ask? LRA 2002 sch 3, para 2(b)
refers to the person of whom the inquiry was made. Does that mean about
whom Im inquiring or to whom Im putting the inquiry? Im not sure, and yet
the difference could be crucial. If the disponee were to ask the title-holder if
theres anyone in actual occupation and the title-holder said there isnt (when in
fact there was), this would obviously be a case of non-disclosure on the part of
the person to whom Ive put the question. Yet its not clear if the title-holder
opting not to disclose in this way satisfies the statutory definition of
unreasonable non-disclosure the matter hasnt been tested in the courts. If the
title holder is (on the statutory definition) culpable of unreasonable non-
disclosure, it seems tough on actual occupiers because their overriding interests
could then be defeated because of a lie told to the disponee by the title-holder.

By dealing with this last point, you will have already started to address (2):
inspection and non-disclosure provisions of sch 3 para 2 LRA 2002 are part of
the explanation as to how actual occupation might not prevail against a disponee
(i.e., because of a failure to carry out a reasonably careful inspection, or because
of unreasonable non-disclosure). These and other examples of how an actual
occupation claim might be defeated are provided on the last two slides from the
week 3 lectures (more often than not, what defeats an actual occupation right is
the fact that the holder of that right has consented to waive it: for relevant
critical assessment, see the chapter on Consenting out of a Right in Gardners
textbook).

In critically assessing these examples (i.e., doing (4)), youll want to point out
that the reasonably careful inspection requirement keeps the doctrine of
constructive notice something parliament wanted to eradicate in 2002 just
about alive: if your inspection of the land doesnt reveal the fact of actual
occupation and a court rules that your inspection of that land wasnt reasonably
careful, you will be bound i.e., deemed to have constructive notice of the
overriding interest. You dont need to go to town on this point. Likewise, you
dont need to spend too long on overreaching. You should certainly make the
point as you do that actual occupation can be defeated where purchase
money is paid to two trustees, as in Flegg, but its worth keeping in minds that
this sort of case is rare.

None of this is intended as criticism. Its just advice on how to move up by five or
six percentage points which youre clearly capable of doing. Well done.