Schedule 3 - Unregistered interests which override registered dispositions

Part of Land Registration Bill [Lords] – in a Public Bill Committee at 2:45 pm on 13 December 2001.

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Photo of Michael Wills Michael Wills Parliamentary Secretary, Lord Chancellor's Department, Parliamentary Secretary (Lord Chancellor's Department) 2:45, 13 December 2001

I agree with the hon. Member for Stone (Mr. Cash). At one level, amendments Nos. 36 and 38 cover drafting matters, but they could have important consequences, which is why I shall resist them. In speaking to those amendments, I shall also speak to amendment No. 39.

The Government share a common objective with the hon. Gentleman: that the Bill should provide that if a buyer knows of a person's occupation or a legal easement or profit because it is patent, he should be bound by it. The issue is: how can that common objective be best achieved? The hon. Gentleman believes that the words ''disclosed by'' will achieve that objective better than the words ''obvious on''. We disagree, and to explain why I must say a little about the way in which the Bill was drafted.

Many areas of the statutes that the Bill replaces have been subject to considerable litigation over many years. When there has been doubt about important provisions and that doubt has been resolved, the answers now form part of the common law. When the answers are clear and satisfactory, the Bill has deliberately been drafted neither to incorporate nor to change the substantive law. That is in the interests of a shorter Bill and avoiding the risk of having been taken to have changed the law.

In the Bill as originally drafted, paragraph 2 represented a partial exception to that rule. There are many practical difficulties in establishing the steps that a prospective buyer needs to take to discover whether land is occupied and whether the person occupying it has acquired rights that will override the sale. The first version of the Bill tried to give some additional explanation. During debate in another place, the Government were convinced that that was a mistake and that the words that had been inserted were not self-evidently clear. Although they were not intended to change what had been established by the leading cases on the matter, there was an unacceptable risk that they might have been thought to do so and thereby give rise to avoidable litigation.

After careful consideration and hard thinking to see whether the wording could be made more helpfully explanatory, the Government decided that the safest way was to use the shortest wording that was closest to the current statutes, because there would then be less risk of attempts to revisit common law decisions that had been found to be clear and workable.

I hope that Conservative Members will accept that approach. Their amendments would, arguably, change the existing law and they are no clearer than what they would replace. Little may turn on the two phrases, but I am not aware of any judicial gloss on the word ''discovered'' in this context, while the word ''obvious'' has been the subject of judicial use.

In the leading cases of Ashburner v. Sewell and Yandle and Sons v. Sutton, the test applied by the judges was whether a defect in title was obvious to an intending purchaser. We consider that the safest course is to use the word ''obvious'' in the Bill because it is a word that has been considered by the courts in a similar context. As far as I am aware, the phrase ''discovered by'' has not had such judicial consideration.