15.3.2. All other interests

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nature of a prior-interest holder’s interest, or the circumstances in which it arose, or the conduct of the prior-interest holder. In other words, whatever justifies treating an interest as overriding, it ought to be something relating to the interest holder, not something relating to the conduct of the purchaser.

The second argument is that there are some transient interests, too trivial or fleeting or too numerous, that should not be put on the register, either because it would be a waste of resources or because it would impose too heavy an administrative burden on the Land Registry. This made some sense when we had a paperbased registration system, where each registration involved physical processes of entry, filing, storage and eventual deletion. However, it is a strange argument to hear in the context of a wholly computerised system for registering interests in land. Few interests in land are either trivial or transient – the most short-lived are probably short-term residential tenancies, and even these are unlikely to last for less than three or six months, and anyway make up in importance to the interest holder what they lack in length. Recording events of this duration should not be beyond the demands of a modern computerised system, nor should sheer weight of numbers be the obstacle it was in a paper-based system.

The third argument is, however, compelling. Peter Birks, in Extract 12.1, describes the provision of an overriding interest category in the Land Registration Act as ‘the attempt of the legislator to anticipate the most obvious instance of the problem endemic in formality’. In other words, there is an inevitable tension between the need to protect prior-interest holders who for one reason or another could not have been expected to use the machinery provided for this purpose, and the need to guarantee to prospective purchasers that the register tells them all they need to know about the property.

15.4.2. Principles to be applied

In its Third Report on Land Registration (Law Commission Report No. 158, 1987, an earlier attempt at reform of land registration), the Law Commission put it in this way:

We have mentioned the theoretical ideal of the mirror principle. However, it should be appreciated that this is a conveyancer’s ideal which can only prevail at the price of restricting someone else’s rights. The conflict was plainly put by our predecessors fifteen years ago [in Law Commission Working Paper No. 37 (1971), paragraph 7]:

From the point of view of purchasers of registered land, it is clearly desirable that as many as possible of the matters which may burden the land should be recorded on the register of the title to the land. We aim at simplifying conveyancing, and a reduction in the number of overriding interests would contribute to that end. A balance must, however, be maintained between, on the one hand, the interests of purchasers of land and, on the other, the legitimate interests of those who have rights in the land which might be prejudiced by a requirement that such rights must be recorded on the register to be binding on a purchaser. Those who advocate eliminating or drastically reducing

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on first registration set out in Schedule 1). They do not marry particularly well with the description just given. The 2002 Act cut down the 1925 Act’s list of overriding interests, implementing the recommendations of the joint Law Commission and Land Registry report (Land Registration for the Twenty-First Century: A Conveyancing Revolution (Law Commission Report No. 271, 2001)). This report adopted much the same principles as those advocated by the Law Commission in its Third Report on Land Registration (Law Commission Report No. 158, 1987), although with considerably less sympathy for the interest holder who neglects to use the machinery provided (see Part VIII of the 2001 report) and without supporting the recommended linkage of overriding interests with the payment of indemnity.

One of the ways is which the 2002 Act has attempted to reduce the category of overriding interests marks a radical change from the 1925 Act. The 1925 Act kept scrupulously away from the idea of notice as a factor governing the enforceability of interests, for the reasons given by the House of Lords in Williams & Glyn’s Bank Ltd v. Boland [1981] AC 487. The 2002 Act has broken away from this, and in two categories has made discoverability of the interest a criterion for overriding status, as we see below.

The most important of the Schedule 3 interests are leases for a term not exceeding seven years (Schedule 3, paragraph 1: see paragraph 1(a) and (b) for the relatively insignificant exceptions), the interests of persons in actual occupation (paragraph 2), legal (but not equitable) easements and profits (paragraph 3, with highly significant exceptions in paragraph 3(1) and (2)), and customary and public rights. The second and the third require further examination.

15.4.4. Easements and profits

As we saw in Chapter 13, easements frequently arise by implication and/or long use. Sometimes they take effect as legal interests, but not always. Following the principles stated by the Law Commission in its Third Report on Land Registration (Law Commission Report No. 158, 1987), one would expect them all to qualify for overriding status – there seems no logical reason why equitable easements which are informally created should be treated differently from legal easements. Nevertheless, this is what the Act achieves. More importantly, the Act has tried to cut down the class by limiting it, in effect, to those easements and profits that the purchaser in question either knew about or should have known about. It does this by introducing a kind of ‘discoverability’ test. Paragraph 3 of Schedule 3 provides that even a legal easement or profit will not be overriding if it ‘would not have been obvious on a reasonably careful inspection of the land over which the easement or profit is exercisable’ (paragraph 3(1)(a)). There are two exceptions provided to this. The first is that an easement or profit which does not pass the discoverability test will nevertheless be overriding if it is ‘within the actual knowledge of the person to whom the disposition is made’ (paragraph 3(1)(a)). Secondly, it will not