Land law 10 Mortgages Exam With Accurate Solutions (A+)
mortgage, 2 types legal, EQ - ANSWER conveyance of an interest in property as security
for the payment of a debt or the discharge of some other obligation.
equity of redemption - ANSWER mortgagor's interest in L, i.e. value of L after debt
attached to it has been paid. important for mortgagor since it gives him R to redeem M,
unencumbering L. It also allows him some protection from oppressive terms. can be
disposed of in all ways available for an interest in L: sold, leased, or itself subjected to
further M called second M.
debtor insolvency - ANSWER secured creditor has priority over an unsecured creditor
and the most important kind of security is the mortgage, particularly the mortgage of
land.
Cesser - ANSWER early termination of some right or interest; for example, one which
stands until some condition is fulfilled, such as getting married or having children.
Legal mortgages under the Land Registration Act 2002: - ANSWER M of RL is created by
way of legal charge and is then followed by registration in charges register of L
concerned, from which it becomes registered charge. Legal Rs under M only pass once
registration is effected; s24 only registered proprietor or person entitled to be
registered under X or owner before first registration may create legal M.
Equitable mortgages: - ANSWER all Ms of RT L which are not on register
Equitable mortgages ex - ANSWER M of an EQ interest (e.g. life interest arising under
settlement or TIC) is necessarily EQ and is effected by conveyance of EQ interest with
proviso for reconveyance. If not made by will, assignment must be in writing signed by
Mor or his agent authorised in writing (LPA s.53(1)): interests created or disposed in L in
writing
,Informal mortgage of a legal interest An informal mortgage of a legal interest is treated
as a contract for a mortgage provided the requirements of the Law of Property
(Miscellaneous Provisions) Act 1989 s.2 are satisfied - ANSWER made in signed writing;
if the contract is specifically enforceable, it is regarded in equity as a mortgage.
s2 Ks for sale etc. of L to be made by signed writing.(1)A K for sale or other disposition
of an interest in L can only be made in writing and only by incorporating all terms which
parties have expressly agreed in one document or, where Ks are exchanged, in each.
mere deposit of title deeds is ineffective to create M in absence of written K
equitable mortgage by deposit of title deeds, - ANSWER deposit must be intended to be
by way of security and in practice is usually accompanied by a memorandum under seal.
United Bank of Kuwait v Sahib [1995] - ANSWER Since 1783 deposit of title deeds
relating to PY by way of security has been taken to create an EQ M of that PY not
withstanding section 40 of LPA 1925. Q in this case was whether this criticised but well
established rule had survived coming into force of section 2 of Law of LPA89. Gibson
held that depositing of deeds with bank is not enough to create charge over them.
equitable charge - ANSWER arises where property is appropriated to the discharge of a
debt or some other obligation.
LRA 2002 (ss.25-27) equitable M - ANSWER any M which is off the register is equitable In
order to be enforced it must be registered substantively; at which point, whatever form
it previously took, it becomes a legal charge (s.51) registration=>legal M
Registration of Ms
UL: following types of M are registrable as land charges under the LCA 1972:
vimp LCA s2 classes of charges - ANSWER 1. puisne a Class C(i) land charge (not
protected by deposit of deeds)
2. a contract for a legal M (an estate contract) as a Class C(iv) land charge, and
3. a general equitable charge as a Class C(iii) land charge (LCA 1972 s.2(4)).
Dearle v Hall :equitable M - ANSWER Where an equitable M is protected by deposit of
, deeds, it is not registrable as a general equitable charge nor, though this is less certain,
as an estate contract. These provisions are particularly important when the priority of
Ms falls to be considered. The Mee of an equitable interest should give notice to the
trustees in order to secure priority under the rule in Dearle v Hall
Dearle v Hall - ANSWER rule to determine priority between competing equitable claims
to the same asset. where the equitable owner of an asset purports to dispose of his
equitable interest on two or more occasions, and the equities are equal between
claimants, the claimant who first notifies the trustee or legal owner of the asset shall
have a first priority claim.
Although the classic decisions concerned interests under a trust, the rule nowadays is
invoked primarily in factoring of receivables[1] and in multiple grants of equitable
security interests.
Dearle v Hall 2 reasons for decision
beneficial owner of a trust fund assigned it first by way of security to A, and then
outright to B, in each case for valuable consideration. A had not given notice of his
assignment to the trustees of the fund and, accordingly, when B made enquiries of
them, he did not discover the existence of the assignment to A because the trustees
were not aware of it. B did give notice of the assignment to the trustees, and then A
subsequently also gave notice to them. - ANSWER beneficial owner of a trust fund
assigned it first by way of security to A, and then outright to B, in each case for valuable
consideration. A had not given notice of his assignment to the trustees of the fund and,
accordingly, when B made enquiries of them, he did not discover the existence of the
assignment to A because the trustees were not aware of it. B did give notice of the
assignment to the trustees, and then A subsequently also gave notice to them. 2. A's
failure to give notice had left the beneficiary of the trust in apparent possession of the
trust fund, and A could not, therefore, rely on this assignment in a dispute with B.
The latter ground has been criticised as it seems to be derived from the principle of
reputed ownership in bankruptcy law, which had never before been used in determining
priority between competing equitable interests. Nevertheless, on the facts most
commentators feel that justice was done; A had allowed the beneficiary to perpetuate a
fraud on B, and therefore A should rank behind B. LRA 1997 s(1)(2): compulsory 1st reg
- ANSWER 1997, first legal Ms attract compulsory first registration.
mortgage, 2 types legal, EQ - ANSWER conveyance of an interest in property as security
for the payment of a debt or the discharge of some other obligation.
equity of redemption - ANSWER mortgagor's interest in L, i.e. value of L after debt
attached to it has been paid. important for mortgagor since it gives him R to redeem M,
unencumbering L. It also allows him some protection from oppressive terms. can be
disposed of in all ways available for an interest in L: sold, leased, or itself subjected to
further M called second M.
debtor insolvency - ANSWER secured creditor has priority over an unsecured creditor
and the most important kind of security is the mortgage, particularly the mortgage of
land.
Cesser - ANSWER early termination of some right or interest; for example, one which
stands until some condition is fulfilled, such as getting married or having children.
Legal mortgages under the Land Registration Act 2002: - ANSWER M of RL is created by
way of legal charge and is then followed by registration in charges register of L
concerned, from which it becomes registered charge. Legal Rs under M only pass once
registration is effected; s24 only registered proprietor or person entitled to be
registered under X or owner before first registration may create legal M.
Equitable mortgages: - ANSWER all Ms of RT L which are not on register
Equitable mortgages ex - ANSWER M of an EQ interest (e.g. life interest arising under
settlement or TIC) is necessarily EQ and is effected by conveyance of EQ interest with
proviso for reconveyance. If not made by will, assignment must be in writing signed by
Mor or his agent authorised in writing (LPA s.53(1)): interests created or disposed in L in
writing
,Informal mortgage of a legal interest An informal mortgage of a legal interest is treated
as a contract for a mortgage provided the requirements of the Law of Property
(Miscellaneous Provisions) Act 1989 s.2 are satisfied - ANSWER made in signed writing;
if the contract is specifically enforceable, it is regarded in equity as a mortgage.
s2 Ks for sale etc. of L to be made by signed writing.(1)A K for sale or other disposition
of an interest in L can only be made in writing and only by incorporating all terms which
parties have expressly agreed in one document or, where Ks are exchanged, in each.
mere deposit of title deeds is ineffective to create M in absence of written K
equitable mortgage by deposit of title deeds, - ANSWER deposit must be intended to be
by way of security and in practice is usually accompanied by a memorandum under seal.
United Bank of Kuwait v Sahib [1995] - ANSWER Since 1783 deposit of title deeds
relating to PY by way of security has been taken to create an EQ M of that PY not
withstanding section 40 of LPA 1925. Q in this case was whether this criticised but well
established rule had survived coming into force of section 2 of Law of LPA89. Gibson
held that depositing of deeds with bank is not enough to create charge over them.
equitable charge - ANSWER arises where property is appropriated to the discharge of a
debt or some other obligation.
LRA 2002 (ss.25-27) equitable M - ANSWER any M which is off the register is equitable In
order to be enforced it must be registered substantively; at which point, whatever form
it previously took, it becomes a legal charge (s.51) registration=>legal M
Registration of Ms
UL: following types of M are registrable as land charges under the LCA 1972:
vimp LCA s2 classes of charges - ANSWER 1. puisne a Class C(i) land charge (not
protected by deposit of deeds)
2. a contract for a legal M (an estate contract) as a Class C(iv) land charge, and
3. a general equitable charge as a Class C(iii) land charge (LCA 1972 s.2(4)).
Dearle v Hall :equitable M - ANSWER Where an equitable M is protected by deposit of
, deeds, it is not registrable as a general equitable charge nor, though this is less certain,
as an estate contract. These provisions are particularly important when the priority of
Ms falls to be considered. The Mee of an equitable interest should give notice to the
trustees in order to secure priority under the rule in Dearle v Hall
Dearle v Hall - ANSWER rule to determine priority between competing equitable claims
to the same asset. where the equitable owner of an asset purports to dispose of his
equitable interest on two or more occasions, and the equities are equal between
claimants, the claimant who first notifies the trustee or legal owner of the asset shall
have a first priority claim.
Although the classic decisions concerned interests under a trust, the rule nowadays is
invoked primarily in factoring of receivables[1] and in multiple grants of equitable
security interests.
Dearle v Hall 2 reasons for decision
beneficial owner of a trust fund assigned it first by way of security to A, and then
outright to B, in each case for valuable consideration. A had not given notice of his
assignment to the trustees of the fund and, accordingly, when B made enquiries of
them, he did not discover the existence of the assignment to A because the trustees
were not aware of it. B did give notice of the assignment to the trustees, and then A
subsequently also gave notice to them. - ANSWER beneficial owner of a trust fund
assigned it first by way of security to A, and then outright to B, in each case for valuable
consideration. A had not given notice of his assignment to the trustees of the fund and,
accordingly, when B made enquiries of them, he did not discover the existence of the
assignment to A because the trustees were not aware of it. B did give notice of the
assignment to the trustees, and then A subsequently also gave notice to them. 2. A's
failure to give notice had left the beneficiary of the trust in apparent possession of the
trust fund, and A could not, therefore, rely on this assignment in a dispute with B.
The latter ground has been criticised as it seems to be derived from the principle of
reputed ownership in bankruptcy law, which had never before been used in determining
priority between competing equitable interests. Nevertheless, on the facts most
commentators feel that justice was done; A had allowed the beneficiary to perpetuate a
fraud on B, and therefore A should rank behind B. LRA 1997 s(1)(2): compulsory 1st reg
- ANSWER 1997, first legal Ms attract compulsory first registration.
