One might think that an inspection of the Land Register would be a conclusive and straightforward means of identifying the owner of any particular property. However, an unusual case concerning a former industrial site showed why property lawyers do not always have life so easy.
The case concerned a riverside plot, formerly occupied by an oil company, which included a pier and listed slipway. Title to it had passed through the hands of two offshore companies before it was transferred to an English company. For reasons connected to the potentially contaminated state of the plot, however, the English company was deliberately not formally registered as its owner.
Legal title to the plot therefore remained with the last of the offshore companies to have owned it. After that company was dissolved, the plot reverted to the Crown by a process known as escheat. A charity associated with a local yacht club later bought the plot from the Crown for £5,000 and was registered as its legal owner. Part of the plot was subsequently transferred to another charity, also connected to the club.
The charities pursued possession proceedings against the English company on the basis that it was in possession of the plot as a trespasser. The company, however, asserted that it was entitled to be registered as the plot’s sole proprietor and that the Land Register should be updated accordingly.
Ruling on the case, the High Court found that the company had an equitable interest in the plot which it had not disclaimed and which it was entitled to assert. The terms of the transfer from the Crown gave no guarantee of title and, when it acquired the plot, the charity had constructive knowledge of the existence of the company’s interest.
However, the Court noted that, by operation of Section 11 of the Land Registration Act 2002, the charity obtained legal title to the plot on first registration. That title was not subject to the company’s equitable interest because it was not in actual occupation of the plot at the time of the Crown transfer. The charities were granted the possession order sought and the company’s counterclaim for rectification of the Land Register was dismissed.