land law problem question

1

Examination No: 1000366 Words: 3,486

Land Law Assignment

The concerns of Cliff Caves broach many issues central to the nature and extent of freehold estates. With

respect to these concerns it is appropriate, firstly, to address the concept of ‘estate’ and the question of the

possibility, and constitutionality, of absolute ownership of land. It will then be permissible to turn to the

creation and the nature of the fee simple, its various modifications, in addition to some of the rights and

restrictions burdening the owner of such an estate. We will then address the extent of Cliff’s estate by

examining the various possibilities surrounding fee farm grants in terms of both annual rentcharges and

covenants. Having done this the issue of ground rents and the constitutionality of the legislation affecting

them will be addressed. Finally, as there is no information regarding the date of acquisition all of these issues

must be examined in light of both the reform of the law which was enacted by the Land and Conveyancing

Law Reform Act 2009,1 and the law as it stood prior to that enactment.

1. The Concept of ‘Estate’ and the Absolute Ownership of Land

The concept of an ‘estate’ denotes “the nature and extent ” of an interest in land. An estate is recognised in

law as four dimensional entity comprising both the physical boundaries of the land and the temporal duration

of the interest. What this means is that the various categories of freehold estate, for example, the fee simple

or fee farm grant, are not merely distinguished on the grounds of the nature of the particular interest but also

on its duration or extent. In Walsingham’s Case2 the courts have given expression to this characteristic:

[T]he land itself is one thing, and the estate in the land is another thing, for an estate in the land is a

time in the land, or land for a time, and there are diversities of estates, which are no more than

diversities of time.

In addition to linking the nature of an estate to is temporal duration, this extract from Walsingham’s Case also

distinguishes the land itself, that is, the actual physical entity from the abstract notion of an estate in land. The

LCLRA 2009 retains the concept of ‘estate’ at s10(1) and Explanatory Memorandum of the LCLRA 2009 states

(at p.3) that

The notion of dividing ownership according to different periods of time is what makes land ownership

under a common law system flexible. It enshrines the fundamental principle that what is owned is not

the physical entity, the land, but rather some estate … or interest.3

Thus, the impossibility of absolute ownership of land is derived, in a sense, from this temporal dimension of

the concept of an estate.

1 From here on ‘LCLRA 2009’ or ‘2009 Act’.2 Lyall first page of Ch. 4 for citation3 Wylie takes the same view, see: chapter 4, paragraph 4.22

2


Ultimately Article 43 of the Constitution “provides that … the State may … delimit by law the exercise of

these [property] rights with a view to reconciling their exercise with the exigencies of the common good”.4 A

recent article on the subject has found that redistribution of private property “in the interests of social justice

was clearly regarded by the drafters as a permissible basis for limiting private ownership”.5 Albeit, the fee

simple remains “the largest [estate] recognised by the common law, and the nearest it ever came to

recognising absolute ownership [of land]”.6

2. The Fee Simple

The fee simple estate is the largest freehold estate known in Irish land law not merely because it is the one

that has the potential to last the longest but also because it bestows “the widest powers of enjoyment in

respect of all the advantages to be derived from the land itself and from anything found on it”.7 The owner of a

fee simple benefits from two core rights that are responsible for his or her extensive powers of enjoyment,

firstly, the right of alienation and secondly the right to everything in, on or over the land. However, before

examining these rights it would propitious to examine how a fee simple is created.

(a) The Creation of a Fee Simple

Since the Real Property Act 1845 a fee simple has usually been created by deed. In fact, s62(1) of the LCLRA

2009 provides that “a legal estate or interest in land may only be created or conveyed by a deed” and at

subsection 2 that such a deed, once it has been executed after the commencement of the 2009 Act is “fully

effective for such purposes”.8

Section 123 of the Registration of Title Act 19649 in addition to s67 of the LCLRA 2009 provide for the

passing of estates without the use of “words of limitation”. What this phrase refers to is the fact that in order

to convey an “ordinary” fee simple at common law the correct words of limitation had to be included. As Lyall

points out: “To pass the fee simple a grant had to be made to a grantee “and his/ her heirs”. Nothing else

would do”.10 Thus, at common law and prior to the commencement of the 1964 Act, in order to convey an fee

simple one had to use specifically those words of limitation, after the 1964 Act it was only necessary to do so

for unregistered land and finally with the commencement of the s67 of the LCLRA 2009 the requirement for

words of limitation has effectively been abolished, although they may still be used.

The purpose of s67, according to Wylie, is to “save conveyances which would otherwise fail to achieve

their primary purpose of conveying a fee simple through a failure to use words of limitation,”11 furthermore,

s67(4) allows this curative affect to act retrospectively.

4 Wylie; paragraph 1.85.5 Walsh; p.1.6 LCLRA 2009 Explanatory Memorandum; p.5.7 Wik Peoples v. Queensland [1996] 187 CLR 1 (HC of Australia) per Gummow J; see also: Lyall p.64.8 Section 63 provides for certain exceptions which do not need to be explored here.9 From here on ‘the 1964 Act’10 Lyall, p.184. The term “heirs” is used merely to signify a spes successionis or the hope of inheriting as nemo est heres viventis – no one can inherit from the living.11 Wylie; at paragraph 4.31.

3


(b) The Rule against Inalienability

Alienation refers to the right to dispose of one’s interest in land. Since Quia Emptores 1290 it has been the

position of the law that the holder of a fee simple cannot be restricted in this respect. For example in Byrne v.

Byrne12 a testator left a fee simple to his nephew but specified that “In the event of my nephew … attempting

to sell the said farms … or in any way parting with the possession of them, I revoke the bequest of the said

farms to him and in that event I leave them to the next heir on the same condition”. This restriction on

alienation was held by Budd J as being repugnant to the nature of the fee simple and was therefore void. The

LCLRA 2009 has retained the rule against inalienability at s9(4) where it states that “A fee simple remains freely

alienable” in its Memorandum it explains that this means “the owner of the largest ‘‘freehold’’ estate, the fee

simple, is free to dispose of it” (at p.4). However, if the restriction on alienation is not absolute

it is a question for the court as a matter of public policy whether it is so restrictive as to be void. In

deciding this the court has to balance the competing interests of free disposition of property by

grantors and the general policy of ensuring marketability of freehold land.13

An example of the Courts holding a restrictive covenant in a fee simple not to be repugnant to the right of

alienability can be found in Fitzsimons v. Fitzsimons14 where a testator, before his death, transferred a

substantial portion of his 182 acre farm in fee simple to his son. In his last will, he devised a devise in

remainder to the plaintiff conditional upon "him being the beneficial owner for a like estate … transferred by

me to him during my lifetime." Subsequent to the testator's death, the plaintiff was made an offer for the sale

of half an acre of the land transferred to him. It was held by Keane J, in construing the will that the condition

was not repugnant to the estate granted since it did not prevent him from selling all or any part of the lands.

(c) The Right to Everything on, in or over the Land

This right has its roots in the Latin brocard cuius est solum, eius est summitas usque ad coelum.15 Of late the

soundness of this principle has been subject to question.16 However, both its soundness and the restrictions to

which it qualifies a fee simple were addressed in the Supreme Court of the UK17 by the Deputy President Lord

Hope, who was of the opinion that “the brocard still has value in English law … It is an imperfect guide, as it has

ceased to apply to the use of airspace above a height which may interfere with the ordinary user of land … As a

general rule anything that can be touched or worked must be taken to belong to someone”.18

12 [1953] 87 ILTR 183.13 Wylie; at paragraph 4.55.14 [1993] ILRM 478.15 The principle was firmly established in common law by Lord Edward Coke in Bury v. Pope Cro. Eliz. 118 [1588] and 78 ER 375 [1586] per the reporters note, and was adopted in a number of judgements in the 19th century. See the judgement of Lord Wilberforce in Commissioner for Railways v Valuer-General [1974] AC 325 at p.351.16 Commissioner for Railways v Valuer-General [1974] AC 325 at p.35117Star Energy Weald Basin Limited and Anor v. Bocardo SA [2010] UKSC 35.18 Star Energy Weald Basin Limited and Anor v. Bocardo SA; p.12 The ruling on airspace which is referred to by Lord Hope can be found in Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479.

4


(d) Freehold Covenants and Successors in Title

Prior to the LCLRA 2009 there were different rules in common law and in equity with regard to covenants as

well as distinct conditions and possibilities of enforcement. Originally the basic principle at common law was

that the benefit could pass to a successor in title in certain circumstances, while the burden could not.

However, the rule in Tulk v. Moxhay19 offered a partial equitable solution to this problem although this solution

is held to be “subject to major limitations”.20 One such limitation for example was that “the

rule permits the burden of only “restrictive” (or “negative”) covenants to pass to successors in title to the

original covenantor”.21 Furthermore, with the exception of leasehold provisions applying to certain fee farm

grants, prior to the 2009 Act, freehold covenants could not be enforced via statute.22

The law was significantly changed by the ss48-50 of the LCLRA 2009 with the purpose, according to

Murphy J, of correcting “what had been long recognised as a major defect in our land law and conveyancing

system”23 which will, according to Mee and Murphy, “completely recast the rules in relation to freehold

covenants, ensuring that the benefit and the burden of both positive and negative covenants would pass to

successors in title”.24 The Explanatory Memorandum makes it clear “that the new provisions replace the old

law, including the limited rule in Tulk v. Moxhay”25 while going on to state that s49(2)

contains the new law which makes freehold covenants bind successors fully, in the sense that the

benefit will run with the land intended to be benefited and the burden will run with the land subject to

the covenant.26

3. Modified Fees

(a) The distinction between determinable and conditional fees

As Wylie explains:

A determinable fee is a fee simple which will determine automatically on the occurrence of an event

which may or may not happen.27

19 [1884] 2 Ph 774.20 Law Reform Commission Report on Land Law and Conveyancing: Positive Covenants over Freehold Land and Other Proposals; p.6, paragraph 1.07.21 Ibid; p.7, paragraph 1.0822 Ibid; p.6, paragraph 1.07. See, for example, Gaw v. CIE [1953] IR 232.23 Cardiff Meats Ltd v. McGrath & Ors [2007] IEHC 219; p. 16.24 Mee & Murphy; p.2.25 At p.26.26 The Memorandum goes on to note that “Generally the benefit and burden will attach to the owner for the time being of the lands in question so long as they are such owners. However, a person who has ceased to be the owner of the benefited land may enforce breaches of covenant which occurred before he or she ceased to be the owner. Similarly, a person may be liable for breaches which occurred while the owner of the land was subject to the covenant, but which are pursued after that person ceased to be owner of that land” (at p.26).27 Wylie; paragraph 4.47.

5


A fee simple upon a condition, often called a conditional fee, is a fee simple to which is attached a

condition subsequent, which may cause the estate to be brought to an end … [it] is a condition which

may result in forfeiture of an estate already vested in the grantee.28

(b) The LCLRA 2009

These modified fees, in addition to the rights of re-entry which follow a conditional fee and the possibility of a

reverter, that is, fees simple with qualifications, have been retained as legal estates by s11 of the LCLRA 2009.

It ought to be noted, however, that as early as 1892 judges – such as Porter MR in Re King’s Trusts29 – were

labelling this distinction as “‘little short of disgraceful to our jurisprudence” while holding that it points to “the

unsatisfactory state of the law”.30 Wylie holds that comments such as these were uttered with the vista toward

the making of wills. Nevertheless, the conditions or limitations contained in such modified fees are voidable

and the Courts have voided such restrictions on numerous occasions on grounds of constitutionality or, as in

Re Dunne’s Estate, for public policy reasons.

4. Fee Farm Grants

According to Wylie a “fee farm grant is a conveyance of a fee simple subject to payment by the grantee and his

successors in title to the grantor and his successors in title of a perpetual rent”.31 Section 12 of the LCLRA 2009

prohibits the future creation of a fee farm grant in law or equity and states that any such attempt will vest in

the grantee the legal or equitable fee simple while simultaneously discharging any covenants or rents which

are repugnant to the nature of a fee simple. This section does not affect existing fee farm grants however “a

fee farm grantee may use the legislation to buy out the rent and become relieved of the covenants in the

grant”.32

(a) Rentcharge Fee Farm Grant

A rentcharge is created in the conveyance of a fee simple and obliges the grantee and his or her successors in

title to pay a particular sum of money to the grantor. This burden on the land of the grantee does not create

either the relationship of landlord and tenant or any form of feudal or leasehold tenure.33

In terms of covenants, in Re Lunham’s Estate34, it was held that a covenant which restricts the grantee

from dividing the premises into four or more lots is “repugnant to the free power of alienation necessarily

implied in the fee farm grant”.35 Flanagan J noted that ”In legal effect [the fee farm grant] is simply a grant of

certain premises … in fee simple, and a re-grant of a rent-charge ”36 which implies that the law in relation to

28 Wylie; paragraph 4.49.29 [1892] 29 LR Ir 401.30 Re King’s Trusts; at p.410.31 Wylie; at paragraph 4.58.32 LCLRA 2009 Explanatory Memorandum; p. 9.33 See: Lyall; p.242-3 and Wylie; paragraph 4.107.34 [1871] IR 5 Eq 170.35 Re Lunham’s Estate; at p. 170.36 Ibid; at p.171.

6


fee farm grant covenants is the same as that which is applicable to “ordinary” fees simple.37 The LCLRA 2009

s41 prohibits the future creation of rentcharges subject to the exceptions listed in subsection (2).

(b) Deasy’s Act Fee Farm Grants

The passing of the Landlord and Tenant Law (Amendment) Act (Ireland) 1860, ubiquitously known as Deasy’s

Act was a significant factor in the rise in popularity of fee farm grants in Ireland such that they remain the

“largest surviving fee farm grants existing in Ireland today”.38 The reason for this popularity, according to both

Wylie and Lyall, stems from the wording of s3 of the Act39 which provides that “a reversion shall not be

necessary” 40 in order to establish the relation of landlord and tenant. This section facilitated the creation of a

new category of fee farm grant, one where the grantee obtained the fee simple, but was subject to perpetual

rents and specific covenants such that “the estate is freehold but the tenure … is leasehold”.41 As the Law

Reform Commission point out, such grants “are still made in modern times”42 and according to ss12 and 13 of

Deasy’s Act the successors in title are bound by the covenants.43

Section 52 of Deasy’s Act, which provided for proceedings for ejectment for non-payment of a year's

rent, was modified by the Landlord and Tenant (Ground Rents) Act 1978 (No.2)44, firstly, by qualifying the rent

reserved thereon as a “ground rent,”45 and secondly, by providing that where “a person is entitled to acquire

the fee simple in a dwellinghouse” s52 of Deasy’s Act no longer applies.46 Furthermore, since s3 of the 1978

Act specifically “includes a fee farm grant” under the concept of a lease the overall effect of this legislation

thus enables a Deasy’s Act grant to be enlarged into a fee simple free from ground rents and certain

covenants.47

Section 9(4) of the 2009 Act retains the rule against inalienability with respect to the fee simple and

s50, which acts retrospectively, entitles a person subject to a freehold covenant to “apply for a court order

discharging it in whole or in part or modifying it on the ground that it now constitutes an unreasonable

interference with the use and enjoyment of the land subject to it”.48

5. Ground Rents and the Constitutional Challenge

37 Lyall; p.243.38 Lyall; p.238.39 See: Wylie; paragraph 4.94 and Lyall; p. p238.40 Wylie; paragraph 4.94.41 Lyall; p.238.42 Law Reform Commission Consultation Paper on the Reform and Modernisation of Land Law and Conveyancing Law 2004; p. 19, paragraph 1.15.43 See: Wylie; paragraph 4.103.44 From here on ‘the 1978 Act’.45 Thus modifying s52 of Deasy’s Act.46 See: s27(1) of the 1978 Act.47 The covenants which it will not be freed from are specified in s28 of the 1978 Act. As Lyall notes: ”A person with a Deasy’s Act grant already has a fee simple vested in them, but the policy of the 1978 Act is that the tenant under the Act is the substantial owner of the property and so should not only be entitled to the fee simple free of rent, but also that a mere holder of ground rent should not be able to disturb the possession of such an owner” (at p.240).48 LCLRA 2009 Explanatory Memorandum; p.27.

7


Professor Wylie has recently held that “the term "ground rent" is not a term of art and is not defined in the

legislation”. 49 He stated that "it is used generally speaking to mean a rent that is reserved on a long term lease

which is relatively low because all that is being leased is the ground."50 Forfeiture of rent can result in ejection

proceeding being taken against the tenant in accordance with s52 of Deasy’s Act.51 Section 8 of the 1978 Act,

conditional upon s9, confers the right to purchase the fee simple on persons listed in ss9-16 of the Act and s7

of the Landlord and Tenant (Amendment) Act 1984, in particular s7(3),determines the purchase price

thereof.52 In Digital Hub Development Agency v. Keane53 O’Neill J held that if the fee simple owners right to

possess is remote then “only a very small portion of the value [of the property] should be reflected in the

purchase price.”54

In the recent case of Shirley v O'Gorman & Ors ground rents legislation was subjected to

constitutional challenge on a number of bases.55 Peart J significantly analysed the landlords interest by way of

“income stream” rather than an entitlement to future possession, stating that

what is being valued in reality is the residual interest of the landlord in the premises, and that for all

reasonable purposes this can be seen as the income stream to which the landlord is entitled.56

This characterisation of the landlord's actual interest as an “income stream” rather than a realisable future

right of possession redirects the constitutional debate from one about interference to one regarding monetary

compensation where the grantee wishes to buy out ground rents. Ultimately Peart J was not satisfied that “the

presumption of constitutionality which attaches to the legislative scheme … has been rebutted,” and held that

“a social justice principle lies behind the legislation, even one that endures still”.57 On appeal, the Supreme

Court have upheld Peart J’s decision on the basis that the appellants had no standing. Mr Justice Fennelly for

the five judge Supreme Court held that the section being challenged was reasonably open to an interpretation

consistent with the appellant’s constitutionally protected property rights.58

It is now possible to examine the facts of the case in light of the law as discussed above. Firstly, with respect to

Ms Lake’s insistence that the residents stop paying ground rents on the basis that they are unconscionable and

unconstitutional, it has been held by the Supreme Court in Shirley v O'Gorman & Ors that the legislation with

respect to ground rents is indeed constitutional, furthermore, on the foot of the decisions in Digital Hub 49 Shirley v O'Gorman & Ors [2006] IEHC 27; at p.65..50 Shirley v O'Gorman & Ors; at p.65.51 See: Bank of Ireland v. Lady Lisa Ireland Ltd [1992] 1 IR 404; at p.404.52 Subject to the qualifications listed in s7 “the purchase price shall be the sum which, in the opinion of the arbitrator, a willing purchaser would give and a willing vendor would accept for the fee simple”.53 [2008] IEHC 122 at p.31.54 O’Neill J set the buyout price at 5 per cent the value of the property.55 The central contention was the manner in which s10(2) of the 1978 Act “links the rent to the rateable valuation is unconstitutional in as much as the section for the first time made this link one of the criteria for eligibility to acquire the fee simple” (at p.63).56 Shirley v O'Gorman & Ors; at p.65-6.57 Ibid; p. 62.58 Irish Times, February 3rd , “Supreme Court rejects ground rent law challenge”: http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html (accessed on 6/2/1012). For a more extensive analysis of the High Court decision see: Buckley, N. F. ‘Ground Rents Revisited’.

http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html

8


Development Agency v. Keane and Bank of Ireland v. Lady Lisa Ireland Ltd it would be more advisable to

buyout the fee simple at a potentially minimal percentage of the value of the property than risk being ejected

from the property for forfeiture of payment. Finally, the question of whether ground rents are unconscionable

is a matter for the legislature.59

Secondly, with respect to Professor Poole’s estate, the question relates to (i) whether she holds a fully

marketable title and (ii) whether she can “do what she likes with her property”. In terms of (i) there is are

various possibilities that could severely affect the marketability of Professor Poole’s estate, for example, she

could have been transferred, or inherited, a modified fee until such time as she becomes a Professor or upon

the condition that some of the land be used for the extraction of turf, these modifications on the Professors

estate would lessen its marketable value in the sense that the covenants could pass to the successors in title.

In terms of (ii) there are several possibilities restrict or burden the Professor Poole’s estate, firstly, it is possible

that pre-2009 equitable burdens run with the land; secondly, if she acquired the land after the

commencement of the 2009 Act she would be bound to any burdens as a successor in title; thirdly, in terms of

the alienability of the estate, it is possible given then ruling in Fitzsimmons that there are partial restrictions on

the alienability of the estate; finally; there are other implied burdens on the use of the land, for example, with

respect to the use of airspace.60

Thirdly, with respect to Cliff’s concerns regarding the rent charges and covenants on his fee farm

grant, he has to pay the rent and comply with the covenants because the law holds them to be inherited by

successors in title. However, it is possible under the 2009 Act to buy out the rentcharges and to discharge

those covenants that are unduly onerous or repugnant to the nature of a fee simple, furthermore, if Cliff’s

estate is a Deasy’s Act fee farm grant it can be enlarged and freed of ground rents and certain covenants.

Finally, as already noted, even if Cliff acquires an “ordinary” fee simple there may still be covenants both

implied or explicit restricting and burdening the land.

Finally, Cliff’s belief that the Constitution protects that right to absolute ownership of property is

somewhat misplaced. The Constitution, while it protects the right to ownership of private property, does not

protect the right to absolute ownership and, in fact, expressly limits such ownership.

59 There has indeed been much debate on the issue, for example, see: http://historical-debates.oireachtas.ie/S/0062/S.0062.196612140005.html (accessed 08/02/12).60 This still does not exhaust the possible burdens and restrictions on the owner of a fee simple For the sake of brevity easements and profits à prendre were not discussed.

http://historical-debates.oireachtas.ie/S/0062/S.0062.196612140005.html

9


Bibliography

Cases:Bank of Ireland v. Lady Lisa Ireland Ltd [1992] 1 IR 404.

Bernstein of Leigh (Baron) v Skyviews & General Ltd [1978] QB 479.

Bury v. Pope Cro. Eliz. 118 [1588] and 78 ER 375 [1586].

Byrne v. Byrne [1953] 87 ILTR 183.

Cardiff Meats Ltd v. McGrath & Ors [2007] IEHC 219.

Commissioner for Railways v Valuer-General [1974] AC 325.

Digital Hub Development Agency v. Keane [2008] IEHC 122.

Fitzsimons v. Fitzsimons [1993] ILRM 478.

Gaw v. CIE [1953] IR 232.

Re King’s Trust [1892] 29 LR Ir 401.

Re Lunham’s Estate [1871] IR 5 Eq 170.

Shirley v O'Gorman & Ors [2006] IEHC 27.

Star Energy Weald Basin Limited and Anor v. Bocardo SA [2010] UKSC 35.

Tulk v. Moxhay [1884] 2 Ph 774.

Walsingham’s Case [1573] 2 Plowden 547.

Wik Peoples v. Queensland [1996] 187 CLR 1

Books, Articles & Reports:

Buckley, N. F.(2009) ‘Ground Rents Revisited’ Conveyancing and Property Law Journal, 14(1) 6.

http://historical-debates.oireachtas.ie/S/0062/S.0062.196612140005.html (accessed on 08/02/12).

Irish Times, February 3rd , “Supreme Court rejects ground rent law challenge”:

http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html (accessed on 6/2/1012).

Law Reform Commission (LRC CP 34 - 2004) Consultation Paper on the Reform and Modernisation of Land Law

and Conveyancing Law.

Law Reform Commission (LRC 70 - 2003) Report on Land Law and Conveyancing: Positive Covenants over

Freehold Land and Other Proposals.

Lyall, A. (2010) Land Law in Ireland. 3rd Ed, Round Hall (Dublin).

Mee, J & Murphy, A. (2007) ‘Reform of the Law of Covenants’. Conveyancing and Property Law Journal, 12(4)

100.

Wylie, J. C. W. (2010) Irish Land Law. 4th Ed, Bloomsbury Professional (Dublin).

Walsh, R. (2010) ‘Private Property Rights in the Drafting of the Irish Constitution: A Communitarian

Compromise’. Dublin University Law Journal, 18(1) 86.

http://www.irishtimes.com/newspaper/ireland/2012/0203/1224311176959.html

http://historical-debates.oireachtas.ie/S/0062/S.0062.196612140005.html

land law problem question

Documents