Property Law - Peu23 PDF

LA2003 Property law
Pre-exam update 2023
The current edition of the module guide was published in 2022.
The following developments should be noted.
CHAPTER 1: INTRODUCTION
1.5 Some basic definitions
Substantive examination advice
It is well-settled that drawing a distinction between fixtures and chattels essentially turns
on the interrelation between the disputed item’s degree and purpose of annexation. This
approach is commonly traced back to Blackburn J’s 19th century judgment in Holland v
Hodgson, an approach that was left undisturbed (although tweaked) by the leading House
of Lords ruling in Elitestone Ltd v Morris [1997] UKHL 15. Applying the two-pronged test
remains fact sensitive. So, even though Royal Parks Ltd v Bluebird Boats Ltd [2021]
EWHC 2278 (TCC) definitely does not signal any shift in the legal test, it provides an
interesting illustration of how these well-established principles operate and it does so in a
distinctive factual context. The dispute concerned a boathouse that Bluebird Boats, the
operator of a boating concession, had constructed on the edge of London’s Serpentine
Lake in Hyde Park. The High Court held that at the end of the concession agreement
Bluebird had no right to remove the boathouse. First, the expert evidence established that,
although the structure of the boathouse could have been removed over a three to four-
week period, the foundations could not be moved without destroying them. Second,
looking objectively at the purpose the boathouse served at the time it was annexed (rather
than Bluebird’s subjective intention for putting it there), the court decided it was meant to
be a permanent and substantial improvement to the land.
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LA2003 Property law Pre-exam update 2023
CHAPTER 4: CO-OWNERSHIP AND TRUSTS OF LAND

4.3.4Understanding the old case law on ‘common intention’
In O’Neill v Holland the Court of Appeal emphasised the importance (established in Lloyds
Bank v Rosset) detrimental reliance plays in establishing a common intention constructive
trust where the claim rests upon an express but informal agreement between the parties.
More recently, O’Neill’s insistence on detriment was initially put in question by Kerr J’s
first-instance ruling in Hudson v Hathway [2022] EWHC 631. However, the Court of Appeal
in Hudson reiterated (obiter) the traditional stance that a claimant must show they have
acted to their detriment in reliance on the informal agreement.
CHAPTER 6: PROPRIETARY ESTOPPEL

6.1.2 The remedy
The Supreme Court’s much anticipated ruling in Guest v Guest [2022] UKSC 27 is
undoubtedly a standout decision on proprietary estoppel. Its 108 pages will repay, and
doubtless receive, extensive treatment both in future cases and academic commentaries.
There is much to digest in both the majority and the dissenting judgments about claims to
proprietary estoppel. It is a particularly important ruling, especially in what it has to say
about the purpose of remedies and the approach to be taken when determining relief to
satisfy a successful estoppel claim. Guest is considered more fully in David Thomas’s two-
part blog on the Property aw pages on the VLE (‘The remedy in proprietary estoppel’).
CHAPTER 8: FREEHOLD COVENANTS

8.1.2 Passing the benefit in equity
Bath Rugby Club wanted to construct a new 18,000 seat stadium on land they occupied.
But could owners of a nearby recreation ground invoke the benefit of a 1922 restrictive
covenant to frustrate their plans? The restrictive covenant in question prevented any
building on the land that could be or become a nuisance to ‘the adjoining premises or the
neighbourhood’. In Bath Rugby Ltd v Greenwood [2021] EWCA Civ 1927 the Court of
Appeal, overturning the High Court decision, held that the covenant was unenforceable. In
reaching its conclusion, the Court had to analyse the wording of the 1922 covenant to
establish if the benefit had been expressly annexed – the covenant having been created
before the possibility of automatic annexation of the benefit via s.78 of the Law of Property
Act 1925 (as recognised in Federated Homes Ltd v Mill Lodge Properties Ltd (1980). The
lack of precision in the way the covenant described the benefited land proved to be a
stumbling block to finding it had been expressly annexed to the land when the covenant
was created. It was not possible to identify which land (and therefore which property
owners) enjoyed the benefit of the covenant. In particular, Nugee LJ regarded the
covenant’s use of the term ‘the neighbourhood’ as ‘inherently imprecise’, referring to a
local area rather than identifying particular properties intended to be benefited by the
covenant. A more precise description of the property or the relationship between the
properties was required. The other two members of the Court of Appeal (Newey LJ and
King LJ) agreed. However, they, unlike Nugee LJ, took the view that the identity of the land
benefiting from the covenant had to be ‘easily ascertainable’ from the conveyance itself
rather than from extrinsic evidence.
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LA2003 Property law Pre-exam update 2023
CHAPTER 9: MORTGAGES
9.3.1 Debt action
Power of sale
Without breaking new ground on the mortgagee’s power of sale, Serene Construction Ltd
v Salata and Associates Ltd [2021] EWHC 2433 (Ch) is a neat illustration of the application
of the well-settled principle found in Cuckmere Brick Co v Mutual Finance. It demonstrates
how the court sets about evaluating evidence to determine whether a mortgagee (or in this
case a receiver) has taken reasonable care to obtain the ‘true market value’ or a ‘proper
price’ for the land used as security at the time of the sale. In Serene Construction the
receiver sold the land for £175,000, after initially receiving two offers, one of which was
subsequently withdrawn. The mortgagors claimed the sale price fell £400,000 below the
true market value of the development site. However, their action to recover the shortfall as
damages failed. The court accepted that simply because the sale price was less than the
valuation did not necessarily mean the receiver had breached its duty of care. Instead, it
focused on assessing the steps taken in arranging the sale to see if they fell below the
standard of care required. The High Court found they did not. In particular, it ruled that, in
the circumstances, there was no need for the receiver to: obtain an independent expert
valuation; mention planning permission (which in any event might have lapsed) and that
was readily discoverable online; or market the site more widely (in what were difficult
market conditions) with a guide price.
CHAPTER 10: ADVERSE POSSESSION AND FREEHOLD TITLE

10.3.1 The nature of adverse possession under LRA 2002
Boundary disputes
In Crook v Zurich Assurance REF/2019/1066 the First tier Tribunal (Land Registration)
addressed an uncertain point of law in relation to the application of Sch 6, para. 5(4) of the
Land Registration Act 2002. For an adverse possessor to acquire title to registered land
where the boundaries are uncertain, one of para. 5(4)(c) conditions requires them to hold a
reasonable belief of ownership of the land for 10 years of adverse possession. But will any
10 years of such belief suffice? Or, must the 10 years last until immediately (or at least for
a short period) before the squatter’s application is made under the LRA 2002? The latter
view is favoured (obiter) by Arden LJ in Zarb v Parry (2011) and accepted in IAM Group
plc v Chowdrey (2012). In Crook, Judge McAllister took the contrary view, finding that any
10 years will do. It will be interesting to see if this view gains the endorsement of higher
courts. By preferring a broad construction of para. 5(4)(c), it potentially opens the door to
more adverse possession applications. This, in turn, may promote the accuracy of the
Land Registry.
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LA2003 Property law

Pre-exam update 2023

The current edition of the module guide was published in 2022.

The following developments should be noted.

CHAPTER 4: CO-OWNERSHIP AND TRUSTS OF LAND

CHAPTER 6: PROPRIETARY ESTOPPEL

CHAPTER 8: FREEHOLD COVENANTS

CHAPTER 10: ADVERSE POSSESSION AND FREEHOLD TITLE

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