A Critical Analysis of Overriding Interests and the Mirror Principle

This essay provides a critical analysis of the conflict between overriding interests and the mirror principle in land law, questioning the relevance of overriding interests in modern land law. It begins by defining overriding interests as unregistered interests that bind land buyers, contrasting them with the mirror principle, which emphasizes the importance of a complete and accurate land register. The essay examines relevant legislation, including the Land Registration Acts of 1925 and 2002, and case law, such as Celsteel Ltd v Alton House Holdings. It argues that overriding interests undermine the certainty and reliability of the land register, compromising the concept of absolute title. While acknowledging the rationale for certain overriding interests, the essay ultimately advocates for their abolishment, asserting that the mirror principle should prevail to ensure a true reflection of the title's state.

A Critical Analysis of Whether Overriding Interests Undermine the Mirror Principle
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Introduction
The effect, controversial or otherwise, of overriding interests on conventional land law has
caused them to earn an indomitable reputation. Numerous scholars have questioned the very
existence of overriding interests and much debate has ensued as to whether it is possible to have
reform. For bona fide land purchasers to be bound automatically to conditions whether they are
registered or not, not only defeats the purport of the mirror principle but also directly contradicts
the same. This paper critically examines overriding interests in light of the mirror principle. This
paper questions whether overriding principles are still relevant in modern land law. The article
explores the definitions and scope of both the overriding interests and mirror principle before
fostering arguments as to which of the two should prevail. The paper argues and concludes that
the mirror principle should prevail over the overriding interests and that the overriding interests
should, in fact, be abolished.
Overriding Interests
These are interests over or in land that are not register-protected but are the subject of all
registered dispositions on land.1 In other words, they are interests over and in registered land that
pass with title, binding transferees notwithstanding the fact that they do not feature on the
register of land.2 At the orthodox level, there exist several minor liabilities that do not appear in
title deeds and which, therefore, may not be practicable to form a trustworthy record on the
register.3 However, the manner in which overriding interests law has developed over the years
demonstrates that they are by no means minor liabilities. What, therefore, is the rationale for the
1 Law Commission, ‘Land Registration for the Twenty First Century’ (1998) A Consultative Document London:
Law Commission, 15.
2 LRA 1925, s 3(xvi).
3 Brickdale & Stewart Wallace’s Land Registration Act, 1925 (4th edn 1939) 190.
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existence of these interests? Firstly, overriding interests provide a way of accommodation of
rights that can arise informally and which, therefore, may be unrealistic to register at the time of
their creation.4 A classic example of such rights includes that of adverse possessors as well as the
right that arises constructive trust or estoppel in the case of persons who are in actual occupation.
It is also justifiable to construe public and customary rights over land as overriding interests
since the nature of their origin is usually surrounded by obscurity. Secondly, rights which were
previously the equal of overriding interests under the Land Transfer Act 1875 became overriding
interests under the LRA 1925.5 Thirdly, rights which are not corporeal, such as profits and
easements, which existed at the time of registration but not recorded in the land register
effectively, become overriding interests. Therefore, the status of these interests as overriding
become a mechanism for protection of those rights in case of not coming to light during the first
registration.
The Mirror Principle
This principle forms part of the three fundamental principles of land dealings – the mirror,
curtain and insurance principles. This paper does not discuss the curtain and insurance principles
and limits itself to discussing the mirror principle. The mirror principle propounds the idea that
all necessary and relevant information must be availed to a purchaser before the land is bought.
Some of the details include the proprietor’s identity, the scope of the proprietor’s ownership, any
encumbrances on the proprietor’s ownership and any other adverse rights that other persons
enjoy over the land. What then is the rationale for the mirror principle? One of the salient
objectives of land registration is for prospective purchasers of registered land to always be in a
position of verifying, by simply examining the register, the exact kind of interests existing on
4 Ben McFarlane, Nicholas Hopkins and Sarah Nield, Land Law (1st edn OUP 2017) 375.
5 Law Commission, ‘Land Registration for the Twenty First Century’ (n 1) 53.
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and over the land they purpose to buy.6 Therefore, under this principle, if an interest is not
captured in the register, a purchaser is entitled to ignoring it.7
Overriding Interests and Mirror Principle under Legislation
Overriding interests first found their expression under section 70 of the Land Registration Act
(hereinafter referred to as LRA 1925).8 The import of that section rendered these interests as
unregistered interests that are binding upon land buyers whether or not they were recorded on the
register of land and without notice to the buyer. Among the most important of these rights
include appurtenant rights9; public and customary rights10; easements; rights in coal11; leases12;
actual occupation rights13; and squatter rights14. Also referred to as burdens, these interests have
become the subject of tremendous debate amongst legal scholars and academics alike. The
mirror principle, as discussed above, lays emphasis on the fact that there must be certainty in the
process of land registration. Therefore, the great controversy lies in the fact that overriding
interests hampers attainment of this certainty. As a consequence of this quagmire, reform was
made to the LRA 1925 through the introduction of the Land Registration Act 2002 in an attempt
to answer to calls for reform to overriding interests. The Land Registrar and the Law
Commission struck an agreement in a bid to reduce the scope of overriding interests.15
6 Kevin Gray and Susan Francis, Elements of Land Law (5th Edn OUP London 2008) 190.
7 Keenan Sarah, ‘Smoke, curtains and mirrors: The production of race through time and title registration’ (2017)
Law and Critique 28(1) 87-108, 100.
8 Land Registration Act 1925.
9 Land Registration Rules 1925, r 258.
10 Land Registration Act 1925, s 70(1)(a).
11 Ibid, s 70(1)(m).
12 Ibid, s 70(1)(k).
13 s 70(1)(g).
14 s 70(1)(f).
15 Law Commission, ‘Land Registration For The Twenty-First Century A Conveyancing Revolution: Land
Registration Bill And Commentary’ (2001) 271 Laid before Parliament by the Lord High Chancellor, 57.
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Significant changes were therefore made to the provisions of section 70 of the LRA 1925 that
laid down the overriding interests.
It is noteworthy that even the LRA 2002 contains provisions that undermine the mirror principle.
The effect of these provisions is allowing for the existence of certain unrecorded proprietary
rights and which can only be discerned by physically inspecting land. Schedule 3, 1, and sections
29(1)-(2(a) (i-ii), 12(4) (c) and 11 (4) (b) of the LRA 2002 contain these provisions.
Additionally, there is another category of interests termed as minor interests that do not require
registration and that, therefore, override registration. The LRA 2002, under section 11 (4) (b),
provides that an estate vests in the proprietor subject to a number of interests outlined under
schedule 1 of the Act. There are seven kinds of interests listed under schedules 1 and 3 of the
LRA 2002 that override registration: miscellaneous interests; mines and minerals; local land
charges; public and customary rights; profits a prendre and easements; persons in occupation
rights; and leasehold estates. Schedule 3 is concerned with unregistered land while schedule 1 is
concerned with registered land.
Case Law on the Overriding Interests vis a vis the Mirror Principle
One of the most significant cases worthy of discussion with respect to overriding interests as
against the mirror principle is the case of Celsteel Ltd v Alton House Holdings.16 This case
involved a lessor who had leased part of their land to an oil company. The lease agreement
provided for the right to build a car wash. The lessor had also leased part of the land to other
tenants who brought an application in court seeking injunctive remedy against the building of the
car wash since they had a right of way to their garages. The case went up to the Court of Appeal,
which held that the lessor could not go narrow the right of way that the claimants used to go to
16 (1986) 1 WLR 512.
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their garage as this would constitute substantial interference with the easement. This is,
necessarily, the landmark case that recognised equitable easements as overriding interests.
Arguments
There is arguably no other provision of the LRA 1925 that has evoked fierce commentary that
the infamous section 70 that laid out overriding interests. Because land transferees are bound by
overriding interests notwithstanding the fact that they are not register-protected by definition,
they are acknowledged widely as enigmatic in registered conveyancing. The very existence of
property rights that are binding upon a purchaser of registered land without the requirement that
such interests be recorded in the land register or without them being discoverable, is considered
to be the very antithesis of land registration.17 After all, what purpose does a title registration
system serve if the title as registered does not offer a conclusive position as to the place of other
significant adverse interests in the land? According to some scholars, it is not inherently wrong
to have a group of binding and non-registerable interests in a land registration system.
A good analogy is the instance where a person seeks to buy a car. Such a person would normally
not buy the car on inspection of the title document only, but, necessarily, upon inspection of the
car itself. The rationale is to get to know as much about the car before buying it irrespective of
the contents of the register. Likewise, there may exist policies that require recognition of certain
rights binding upon a title notwithstanding the fact that they are not registered. An obvious
example is general public usage obligations such as rights of way. It may be argued that it is
important to regard the property rights of persons who are not accorded protection through a
17 Martin Dixon, ‘The reform of property law and the Land Registration Act 2002: A risk assessment’
(2003) Conveyancer and Property Lawyer 136-156, 139.
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system that formally acknowledges their rights but who necessarily are in occupation of the land
as home without requiring registration.18
Even though this paper provides a rationale for the existence of certain types of overriding
interests, they have nonetheless been the subject of much criticism. The comprehensiveness and
reliability of the register is thereby necessarily compromised. This is exacerbated by the fact that
these overriding interests are in their extent both discoverable while others may not be readily
discernible. It is noteworthy that although not all of these interests are registerable, most of them
can be protected through registration.19 Indeed, it is no longer 1925 and the law as drafted then
may most assuredly not be well-suited for the present day and age. Moreover, is may be argued
that the reform in land law as well as the manner in which land is used in present times have
completely turned overriding objectives under section 70 of the LRA 1925 into a different
creature other than what the original drafters envisaged. Recent developments of land law that
permit persons to informally acquire interests in land have drastically increased the probability of
the existence of adverse rights as well as their undiscoverability. Such developments include
proprietary estoppel as well as constructive and resulting trusts. These interests may not
necessarily be obvious to the prudent buyer nor are they recorded materially. Therefore, although
the case for abolishment of overriding interests is not as watertight as it should be, there are
formidable pro-reform arguments.
The mere existence of overriding interests has the meaning that absolute title cannot really be
deemed as such. The reason is that the register does not bear the true mirror reflection of the
title’s state. In order for the register to be a completely true reflection of the title, there is a price
18 Megarry Robert, Charles Harpum, William Wade, Stuart Bridge and Martin Dixon, The law of real property (6th
edn, Sweet & Maxwell 2000) 5-121.
19 Hughson Mary-Anne, Marcia Neave, and Pamela O'Connor, ‘Reflections on the mirror of title: Resolving the
conflict between purchasers and prior interest holders’ (1996) Melb. UL Rev 21 460, 470.
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to pay, namely, suppressing many other rights of third parties. The reason is that, practically, if
overriding interests were to be registered, at least some of them would not be registerable.20
There are only two other ways of truly accommodating overriding interests into the system of
land registration. One, these interests could be totally extinguished by statute. This option would
require a scheme of compensation, which admittedly, can mean commitment to paying
unquantifiable amounts of money. The second option is statutory admission that these rights can
only exist separate from the register. This is what the Land Registration Acts of 1925 and 2002
have done.
In addition to the above, the discoverability of overriding interests is not necessarily simple even
in the case of reasonable inspection. An example of a case of rights of land occupiers, courts
have admitted that even where a purchaser makes a comprehensive inquiry as to whether land is
occupied, discovery may not be made as to whether there is a third party in occupation.21 In
essence, even situations that are factually similar may yield different results.22 Accordingly, a
land purchaser may be found in a position where they are bound by interests that do not reflect
on the register.
Based on the foregoing arguments, the question now is whether the mirror principle should
prevail over overriding objectives. When and if the objective is wholly reshaping the manner in
which dispositions of land are done, and making the register the origin and evidence of a
person’s title’s legal validity, attained with the very least of additional enquiries, the mirror
principle must necessarily prevail. This means that diminution of the land register’s integrity
must be reduced to the absolute minimum. Emphasis must be laid on the act of registration as the
20 Dworkin Gerald, ‘Registered Land Reform’ (1961) The Modern Law Review 24(1) 135-143.
21 Kling v Keston Properties Ltd (1983) CR 212, 222.
22 Epps v Esso Petroleum Co Ltd [1973] 1 WLR 1071.
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means by which interests in land are both created and transferred. If this dream is to be achieved,
then overriding objectives must be seen as an obstacle to this reform agenda. It is worthy to note
that the Land Registration Act 2002 aims at ensuring that the register gives a picture of the state
of the land as accurately as possible.23 The LRA 2002 also provides an interval between the time
when the land is first registered and when the first registered disposition occurs. The purpose of
this interval is to provide an avenue of introducing more interests onto the register (even in the
case where they are overriding) as well as denying overriding status thereafter to intentions that
are repugnant to the Act’s paramount policies.24 Accordingly, section 71 (b) of the LRA 2002
imputes a duty of disclosure of information regarding rights that fall under the ambit of Schedule
3 upon persons registering dispositions. With respect to registered dispositions, the LRA 2002
denies certain land rights overriding status notwithstanding that they were effective during first
registration and regardless of the surrounding circumstances during the disposition.25 It is
therefore worthy to note at this point, that the LRA 2002 should be fine-tuned in order for its
provisions not to infringe upon property rights and thus be aligned with human rights law.
Indeed the notion of a mirror may theoretically refer to perfectly executing land registration.
However, practice reveals that the integrity of the mirror principle may be compromised. This
fact has come to light as a result of the practical difficulty in the failure of land dispositions to
reflect interests that are unregistered over the land. Scholars have intimated that calls for reform
of land law to overthrow the place of overriding interests may be an anathema to the
development of land law since the value they bring greatly outweigh their inconvenience.26
23 Bogusz Barbara, ‘Bringing Land Registration into the Twenty-First Century. The Land Registration Act
2002’ (2002) The Modern Law Review 65(4) 556-567, 561.
24 Megarry Robert, Charles Harpum, William Wade, Stuart Bridge and Martin Dixon, The law of real property (n
15) 5-125.
25 See LRA 2002, s 37.
26 Martin Dixon, Modern Land Law (9th edn Routledge 2014) 43.
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Admittedly, the fact that there exists a huge number of unregistered rights in and over land that
impact on purchasers’ rights, means that e-conveyancing is dealt a huge blow. However, the
purport of title registration is not and should not be calculated at supplanting the place of actual
ocular land inspections. Moreover, the LRA 2002 provides for disclosure of any known
overriding interests in land and the reason for this is to see to it that such interests are protected.27
Conclusion
In conclusion, although tremendous advances have been made in law reform towards attaining
the perfect implementation of the mirror principle, complete abolition of overriding interests may
not be the way forward. Overriding interests have remained relevant to date and have to a certain
extent rendered the mirror principle repugnant to the dictates of property rights. Therefore, in
order for law reformers to achieve a complete implementation of the mirror principle, it may
make more sense to introduce a separate register of overriding interests. Then and only then can
overriding interests be truly abolished from the Land Registration Act 2002.
27 Ibid, 52.
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Bibliography
Books
Ben McFarlane, Nicholas Hopkins and Sarah Nield, Land Law (1st edn OUP 2017) 391.
Brickdale & Stewart Wallace’s Land Registration Act, 1925 (4th ed 1939) 190.
Kevin Gray and Susan Francis, Elements of Land Law (5th Edn OUP 2008) 190.
Martin Dixon, Modern Land Law (9th edn Routledge 2014) 43.
Megarry Robert, Charles Harpum, William Wade, Stuart Bridge and Martin Dixon, The law of
real property (6th edn Sweet & Maxwell 2000) 5-121.
Journal Articles
Bogusz Barbara, ‘Bringing Land Registration into the Twenty-First Century. The Land
Registration Act 2002’ (2002) The Modern Law Review 65(4) 556-567, 561.
Dworkin Gerald, ‘Registered Land Reform’ (1961) The Modern Law Review 24(1) 135-143.
Hughson Mary-Anne, Marcia Neave, and Pamela O'Connor, ‘Reflections on the mirror of title:
Resolving the conflict between purchasers and prior interest holders’ (1996) Melb. UL Rev 21
460.
Keenan Sarah, ‘Smoke, curtains and mirrors: The production of race through time and title
registration’ (2017) Law and Critique 28(1) 87-108.
11

Law Commission, ‘Land Registration for the Twenty First Century’ (1998) A Consultative
Document London: Law Commission.
Law Commission, ‘Land Registration For The Twenty-First Century A Conveyancing
Revolution: Land Registration Bill And Commentary’ (2001) 271 Laid before Parliament by the
Lord High Chancellor, 57.
Martin Dixon, ‘The reform of property law and the Land Registration Act 2002: A risk
assessment’ (2003) Conveyancer and Property Lawyer 136-156, 139.
Statutes
Land Registration Act 1925.
Land Registration Rules 1925.
Cases
Celsteel Ltd v Alton House Holdings (1986) 1 WLR 512.
Epps v Esso Petroleum Co Ltd [1973] 1 WLR 1071.
Kling v Keston Properties Ltd (1983) CR 212, 222.
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