I am pleased to introduce in the Seanad the Land and Conveyancing Law Reform Bill 2006. The Bill contains proposals for a comprehensive, radical and far-reaching reform of our land and conveyancing laws, many of which date back to feudal times. Before outlining its main provisions, I wish to briefly explain the background to the Bill's preparation and publication.
The Bill is the outcome of an innovative joint law reform project — launched in late 2003 — between the Department of Justice, Equality and Law Reform and the Law Reform Commission. Its primary purpose is to comprehensively reform and modernise all our land and conveyancing laws. It does so by repealing, in whole or in part, numerous pre-1922 statutes that still apply in this area, the earliest of which date from the 13th century. It replaces these statutes with provisions more suited to modern conditions. The joint project is part of a larger reform programme, which includes the modernisation of land registration structures and procedures under the recently-enacted Registration of Deeds and Title Act 2006, and which has as its ultimate goal the implementation of a comprehensive system of e-conveyancing of land.
During the Second Stage debate on the Registration of Deeds and Title Bill in this House last year, the Minister outlined his intention to reform and modernise both our land registration systems and structures and our substantive land and conveyancing laws. The Minister has already delivered on the first of these objectives, as that Bill has recently been enacted and it establishes the Property Registration Authority to manage and control the Registry of Deeds and the Land Registry as well as updating the law relating to the registration both of deeds and titles. This Bill delivers on the Minister's second objective, reforming and modernising the substantive law.
Given the scale and ambition of the joint project, a strategic and research-intensive approach has been adopted by my Department and the Law Reform Commission from the outset of the project. Its first phase involved the screening of pre-1922 statutes with a view to identifying those which could be repealed without replacement, and those which needed to be updated or replaced with provisions more suited to modern conditions. The results of this exercise, and the reform recommendations emanating from it, were published in the Law Reform Commission consultation paper Reform and Modernisation of Land Law and Conveyancing Law, which the Minister launched in October 2004.
Publication of the consultation paper was followed by an extensive consultative phase, which included a conference in November 2004 at which distinguished experts in land and conveyancing law, both from this country and abroad, discussed future reform options in the light of experiences gained from reform initiatives in comparable common law jurisdictions. Arising from publication of the consultation paper and the conference proceedings, valuable submissions were received from representative bodies involved in the conveyancing system and from other relevant stakeholders.
The third phase of the project involved preparation of a draft Bill to give effect to the reform proposals which had been adapted, where appropriate, to take account of submissions and comments received during the consultation process. The Law Reform Commission report, Reform and Modernisation of Land Law and Conveyancing Law, which the Minister launched in July 2005, contained the text of a draft Land and Conveyancing Bill.
With the agreement of the Attorney General, the Minister wrote to the president of the Law Reform Commission late last year suggesting that given the unique collaboration and expertise involved in preparing the draft Bill, finalisation of the Bill for publication and presentation could best be achieved through the good offices of the commission and the continued involvement of those most closely associated with its preparation. The commission readily agreed to this and the Bill before us today has been prepared by a drafting group which has met under the aegis of the Law Reform Commission.
The Minister wishes to place on the record of the House his sincere thanks, and that of the Government, to the president of the Law Reform Commission, the Honourable Justice Catherine McGuinness, and her predecessor in office, the Honourable Justice Declan Budd, as well as the other commissioners, for their enthusiastic commitment to and support for the joint project. Thanks are also due to Professor John Wylie, the foremost expert in the land and conveyancing laws of these islands, for his work and sustained interest in the project and Mr. Marcus Bourke, former Parliamentary Counsel, who assisted in the drafting process. The Minister also acknowledges the input of the commission's substantive law working group, which brings together many of the stakeholders and experts in the land and conveyancing law area.
I wish to speak on the general subject matter of the Bill and explain its scope and structure. Land is a finite and scarce resource and prior to the development of a money-based economy it was by far the most important source of wealth. Not only that, land ownership was a key determinant of social standing and political influence and power. Not surprisingly perhaps, the owners of land sought over the centuries to ensure that the land remained within the family from one generation to the next. However, a new class of wealth emerged in the aftermath of the industrial revolution and barriers to the operation of a free market in land were gradually removed. Eventually, by the end of the 19th century, land was seen as another, but no longer the pre-eminent, source of wealth and prestige.
It is hardly surprising that the development of land law and conveyancing practices over the centuries reflected these societal tensions as well as economic and social changes. Moreover, much of our land law can really only be understood in the context of our historical experience of dispossession followed by repossession. Conquest by the Normans in the 12th century led to the gradual introduction of the feudal system of land ownership and, eventually, by the beginning of the 17th century, displacement of the old Brehon laws. From the 16th century onwards confiscation of land from the native owners was accompanied by successive plantations of English and Scottish settlers. The late 19th century witnessed improvements in the rights of tenants and, eventually, restoration of much of the country's agricultural land to tenant farmers under various land purchase schemes.
While this Bill does not deal with the various land purchase Acts, one positive feature of that legislation is worth noting in the present context. The land purchase Acts provided loans for tenant farmers to purchase their holdings from landlords subject to annual repayments in the form of land purchase annuities. As these schemes involved the advancing of large amounts of public funds, it was considered that title to the lands in question — which formed the security for the loans and which might have to be sold in the event of default — should be secured by means of registration.
Arising from this, the Local Registration of Title (Ireland) Act 1891 established the Land Registry and provided that the registration of title was compulsory in all cases where land was purchased under the land purchase schemes. All of this land has remained within the registration of title system. The ongoing significance of the 1891 Act is that approximately 85% of land in the State — including almost all farmland — is now registered in the Land Registry. I will return to this registration issue in due course.
It is difficult in practice to draw a clear and rigid distinction between land law on the one hand and conveyancing law on the other. In general terms, land law deals with different types of ownership of land, and the rights relating to each type, while conveyancing law is more concerned with the transfer and disposal of land and rights relating to it, for example, by sale, lease or mortgage. In effect, they are two sides of the same coin and it makes good sense to deal with them in a single Bill rather than in separate sets of proposals.
Our land law and conveyancing law is a complex mixture of statutory provisions, common law and equity. Successive layers of statute law, the earliest of which dates back to the 13th century; common law, that is, the judge-made rules enforcing legal rights that emerged from the common law courts; and equitable rights and remedies developed by courts of chancery in response to shortcomings in the common law, have resulted in an unnecessarily complex code, much of which is difficult to apply to modern conditions. There is general agreement that the law needs to be reformed in order to meet the needs of a vibrant market economy in the 21st century.
This Bill does not set out to "codify" all our land and conveyancing laws into statutory form. This would have involved attempting to distil and convert all relevant common law and equity into legislation. Apart from the effort involved, such a project would have taken a considerable number of years and such a codification would increase the rigidity of the law and remove the flexibility and adaptability which is such a positive feature of our legal system. In particular, the ability of the courts to exercise their equitable jurisdiction in response to changing needs and circumstances must be preserved.
Moreover, while every effort has been made both to simplify the law and update its language, it has been necessary to bear in mind that many technical terms in this area of the law have acquired a specific meaning and are commonly used and understood as having that meaning. Changes in language could lead to confusion or, more seriously, have an impact on substantive rights in land law. It could also result in the abandonment of relevant case law and have other unintended consequences. As the Law Reform Commission emphasised in its report, Statutory Drafting and Interpretation: Plain Language and the Law, while the use of plain language is desirable, this end should not be achieved at the expense of legal certainty, especially where certain words and grammatical constructions, though not in common use, have acquired a fixed and clear legal meaning.
The radical and far-reaching reforms set out in the Bill have the following objectives: updating the law to accommodate modern conditions; simplification of the law to make it more easily understood and accessible; simplification of the conveyancing process, particularly the procedures involved, in order to reduce delays and associated costs; promoting extension of the registration of title system in the Land Registry; and, facilitating the introduction of e-conveyancing of land as soon as possible. Moreover, the draft Bill represents a substantial contribution to the process of regulatory reform — including the repeal of obsolete and outdated statute law — to which the Government committed itself in the White Paper, Regulating Better.
I do not propose to enter into great detail on the Bill today, not least because it is accompanied by a comprehensive and highly informative explanatory memorandum, at the request of the Minister. Those Members who may be familiar with Professor Wylie's texts on Irish land and conveyancing law will undoubtedly detect his hand in the memorandum.
Part 1, relating to preliminary and general matters, contains definitions of various terms used in the Bill and general provisions which are common in legislation of this nature. As I mentioned earlier, section 8 repeals — in whole or in part — approximately 150 pre-1922 statutes which are listed in Schedule 2 and which stretch back over the centuries to feudal times. It is a remarkable feat of drafting and legal expertise that the Bill, while repealing so many old statutes, manages to restate the new law in a Bill of 124 sections and a few Schedules.
Part 2, comprising sections 9 to 14, contains important provisions which reform and modernise the ownership of land. In particular, it removes the remaining vestiges of the feudal system of landholding introduced by the Normans to Ireland in the 12th century. For example, in so far as it survives, the concept of ‘tenure', whereby all land was held from the Crown, is abolished. This concept is not compatible with the relationship between the State and its citizens as set out in the Constitution. Also abolished are methods of landholding developed over the centuries to meet the needs of earlier times but which are no longer of relevance to modern conditions or will cease to have significance as a result of other provisions of the Bill. This applies to "fee tails", "fee farm grants" and "leases for lives".
On the other hand, the Bill retains the concept of an "estate" in land which was also part of the feudal system but which remains a central and useful feature of the modern system of land ownership. The idea of dividing ownership according to different periods of time is what makes land ownership under a common law system so flexible. It is based on the fundamental principle that what is owned is not the physical entity, that is, the land itself, but rather an estate giving substantial rights in respect of the land, such as the right to occupy and use it, or an interest giving less substantial rights in it, for example, a right of way over a road on the land, or a right to cut and take away turf. The full ownership of any particular area of land comprises these various estates and interests, including equitable interests such as those existing under a trust of the land. It is worth noting that Article 10.1 of the Constitution refers expressly to "estates and interests" in the context of natural resources.
The number of these various estates and interests that will exist in respect of a particular area of land will vary from case to case. As I mentioned earlier, as part of its objective of simplifying the law, the Bill substantially reduces the number of estates that can be created in future. For example, it provides that the only legal estates which may be created or disposed of are the freehold estate, meaning a fee simple in possession, and the leasehold estate, meaning a tenancy in the modern sense of a relationship between landlord and tenant.
Part 3 introduces a substantial simplification of the various rules concerning "future interests" in land and, in some cases, such interests in other property. Future interests are interests which do not "vest" in, that is, come into the possession of the persons entitled to them until sometime in the future, usually because the land or other property is vested in someone else in the meantime. The early common law had difficulty with what are referred to as "contingent" future interests where, in addition to prior interests having to run their course, some other condition had to be satisfied or event had to occur before any vesting took place. The disposition could not vest until that contingency had been met.
In early times, the common law was concerned that this might result in a period of time when the land would be vested in no one and so feudal dues payable in respect of the land could not be collected. This resulted in the development of complicated rules designed to avoid such a gap in what was referred to in feudal times as the "seisin" of the land. These rules were known as the common law contingent remainder rules. Later, as settlements and trusts of land and of other property became more sophisticated, the courts developed a range of other rules designed to restrict the ability of owners to determine the ownership of property far into the future.
The Law Reform Commission concluded in an earlier report that all these rules had served their purpose and that they now give rise to unnecessary complications in the law. It recommended that the various rules should be abolished, but subject to an important qualification. Given that the abolition of the various rules would enable owners to create settlements and trusts determining the ownership of property far into the future, there could be a risk that future owners might find themselves saddled with an unsuitable scheme of ownership. In order to provide a means whereby future generations might secure a modification to a scheme set up many years previously, the commission has recommended that abolition of the rules relating to future interests should be accompanied by the enactment of provisions to permit the variation of trusts. I intend to provide for the variation of trusts by means of an amendment to the Civil Law (Miscellaneous Provisions) Bill 2006 which is currently awaiting Second Stage in the Dáil.
Part 4 provides for a radical overhaul and simplification of the law relating to settlements and trusts of land. Currently, many settlements do not involve use of a trust. Instead, the land is given by a deed or will to different persons in succession. Sometimes a trust is used and the land is instead given to trustees to be held by them on trust for the beneficiaries. The type of trust used may vary from one case to another. In some cases, the trustees may be required to retain the land, in others, the trust may require the trustees to sell the land at the earliest opportunity, invest the proceeds and hold those investments instead for the beneficiaries.
The law governing settlements and trusts has become complicated. One reason is that while the Settled Land Acts 1882 to 1890 apply to settlements without any trust — usually referred to as a "strict settlement" — and trusts to retain land, they do not apply in the same way to trusts for sale. Part 4 clears up this confusion by replacing the Settled Land Acts with a single and much more straightforward trust of land scheme. An important feature of the scheme is that the legal title to the land will always be vested in trustees and they will have full powers of dealing with it and using it for the benefit of the beneficiaries.
Part 5 deals with powers relating to both land and personal property, especially powers of appointment. These powers are commonly used in family settlements and trusts where, instead of allocating property directly to named beneficiaries, the owner gives another person — called the "donee" of the power — a power to "appoint", that is, select from a group of potential beneficiaries — called the "objects" of the power — which of them should become beneficiaries and in what shares. In general, this part does not deal with the other common power to deal with property, the power of attorney. The law on such powers was modernised by the Powers of Attorney Act 1996. Nor does it deal specifically with various powers to deal with property held by persons such as trustees, which is currently governed by the Trustee Act 1893; personal representatives, which is governed by the Succession Act 1965; and mortgagees, which is covered in Part 9 of this Bill.
Part 6 deals with the law relating to co-ownership of land, that is, cases where the legal title to the land is vested in two or more persons concurrently. Two types of co-ownership remain common nowadays — joint tenancy and tenancy in common. The key feature of a joint tenancy is the so-called "right of survivorship" whereby on the death of a joint tenant, that owner's interest ceases and the land becomes vested in the surviving joint tenants. This process continues until the land becomes vested in the last surviving joint tenant as sole owner and the co-ownership ends. In the case of a tenancy in common, on the other hand, each tenant has a distinct but undivided share which can be inherited on that tenant's death by persons named in his or her will.
One of the important aspects of the law of co-ownership is the right of severance of a joint tenancy, that is, when a joint tenancy is converted into a tenancy in common. Unilateral severance is permitted under current law. This has significant consequences because it means the tenants lose the expectation that one of them will, as the last surviving joint tenant, end up as the sole owner of the land. In order to remedy this, the Bill prohibits unilateral severance of a joint tenancy without the written consent of the other joint tenants. This part also updates the law relating to partition of land by co-owners.
Part 7 provides for a substantial overhaul of the law relating to appurtenant rights. These rights are extremely common with respect to land and usually exist as between neighbouring landowners. They permit one landowner to do something on a neighbour's land or entitle that landowner to prevent the neighbour from doing something on the land. The most common categories of such rights are easements and profits à prendre and these are dealt with in Chapter 1. An easement is a right such as a right of way or right of light over neighbouring land. Although the categories of easement are generally settled, courts have made it clear that the listing is not necessarily closed and new rights with similar characteristics may be recognised as changes in society require, for example, the right to park a vehicle.
A profit à prendre is the right to go onto someone else’s land and to take from it something which exists on it naturally, such as the right to mine or quarry, cut timber or turf, graze animals on grass, fish and hunt wild game. Such profits are frequently enjoyed by a neighbouring landowner and are therefore appurtenant, but they can also be owned “in gross”, that is, by a person who is not a neighbour and who may own no land other than the profit exercisable over someone else’s land.
Chapter 2 prohibits the creation of rentcharges, which is another type of right that may be owned in respect of someone else's land. A rentcharge, which is to be distinguished from a rent payable by a tenant under a tenancy, is a rent charged on land to provide an income or regular payments to the owner of the rent charge. In the past, rentcharges were created in family settlements in order to provide an income for members who were given no other substantial interest in the land, for example, the siblings of the family member, usually the eldest son, who was given a life interest in the land, but they are no longer common.
Chapter 3 provides for a new statutory system to deal with problems which frequently arise with regard to party structures such as party walls and fences separating neighbouring buildings or lands. It is designed to regulate the rights of the neighbouring owners, especially where a dispute occurs over repairs or works which one owner wishes to carry out. The provisions will also extend to situations where, strictly speaking, there may not be a party structure but the buildings are so close to the boundary line that work such as repairs cannot be carried out effectively without access from the neighbouring property. The provisions will enable one landowner to obtain a District Court works order permitting such access under certain conditions.
Chapter 4 remedies a long-standing defect in existing law, namely, the limited enforceability of freehold covenants affecting land. Such covenants are frequently entered into when a landowner sells part of the land to someone else. The purchaser will often covenant to restrict the use of the land purchased and to undertake various positive obligations relating to building and repairs. Unlike leasehold covenants which generally bind successors in title, freehold covenants are enforceable against successors in title to a limited extent only. In effect, only the burden of negative or restrictive freehold covenants pass to successors. Chapter 4 changes the law substantially to bring the enforceability of freehold covenants, whether positive or negative, into line with that of leasehold covenants.
Part 8 deals with contracts and conveyances relating to land and replaces the provisions of the Conveyancing Acts 1881 to 1911 and various other pre-1922 statutes with reformed provisions more suited to modern conditions. While it is designed to prepare the ground for eventual electronic conveyancing, this part of the Bill also contains provisions for the interim period before a fully electronic and paperless system of conveyancing becomes operative. Until then, written documents and deeds in the traditional form will continue to be used.
Chapter 1 contains detailed provisions concerning contracts relating to land, such as contracts for sale. Chapter 2 deals with title matters, in particular, the deduction of title by a vendor and investigation of title by a purchaser. Chapter 3 deals with deeds and their operation, including the formalities for proper execution of deeds and the effect of particular provisions in deeds. Chapter 4 deals with the contents of deeds, in particular, the statutory provisions to be implied in them, while Chapter 5 contains some general provisions concerning conveyancing.
Part 9 introduces substantial simplification and modernisation of the law of mortgages. In particular, it assimilates the law relating to unregistered land with registered land by making a charge the sole method of creating a legal mortgage. Mortgages by conveyance or assignment of the borrower's estate or interest in the land, or by demise in the case of leasehold land, are abolished. This does not affect the security interests of lenders. The Bill also introduces provisions to ensure that lenders' remedies to enforce security are exercised only when appropriate. Part 10 deals with judgment mortgages and replaces, with substantial modification, the provisions of the Judgment Mortgage (Ireland) Acts 1850 and 1858.
Part 11 contains substantial consequential amendments to the Registration of Title Act 1964. Schedule 1 contains various consequential amendments to other statutes, including the Registration of Title Act 1964. Schedule 2 contains repeals of numerous pre-1922 statutes falling into different categories in Parts 1 to 4 and some Acts of the Oireachtas in Part 5. Schedule 3 sets out the different classes of covenants for title implied in conveyances under sections 77 and 78.
I wish to explain why certain matters which featured in the draft Bill contained in last July's report are not contained in this Bill. Provisions relating to adverse possession of land, which we discussed here on a previous occasion, have been omitted in light of the United Kingdom's appeal of a European Court of Human Rights ruling in a case relating to adverse possession to that court's Grand Chamber. This case, in which the ECHR has reversed a House of Lords decision, raises important issues relating to operation of adverse possession law and may, depending on the Grand Chamber's ruling on the appeal, have implications for the operation of adverse possession law here. It would, therefore, be prudent to await the outcome of the United Kingdom's appeal against the original ECHR decision before proceeding with any reforms in this area.
Proposals relating to the sale of land by auction have been overtaken by the report of the auctioneering, estate agency review group which contains, inter alia, recommendations relating to the conduct of auctions and other sales of land. Proposals on these matters will be included in future legislation which will establish the property services regulatory authority to supervise and control the provision of property services by auctioneers, estate agents and property management agents. The Government’s legislative programme foresees publication of this Bill in 2007.
The proposed amendment to the Succession Act 1965, which was intended to clarify aspects of succession law relating to the simultaneous death of joint tenants, has already been included in the Civil Law (Miscellaneous Provisions) Bill 2006. Various changes of a less substantial and technical nature have been made in response to various submissions received following publication of the draft Bill in the July 2005 report.
The reforms to the substantive law set out in this Bill will, together with those already enacted in the Registration of Deeds and Title Act 2006, provide a sound foundation for future e-conveyancing. However, the Law Reform Commission has concluded that an efficient and comprehensive e-conveyancing system can operate only in respect of registered land and the Minister agrees with that conclusion. One of the key tasks, therefore, of the property registration authority established under the Act will be to promote and extend the registration of title.
The Minister has extended compulsory registration of land to counties Longford, Roscommon and Westmeath with effect from 1 April last. Those counties have now joined counties Carlow, Laois and Meath as compulsory registration areas. Much more needs to be done, however, and the Minister will be asking the property registration authority to adopt a strategic and urgent approach to extending compulsory registration in its first strategic plan under the new legislation. Increased registration of title will, in turn, mean less need for, and the eventual closure of, the Registry of Deeds, the tercentenary of which falls next year. The registry has served a useful purpose for 300 years but e-conveyancing requires conclusive registration of ownership and that need cannot be met through the registration of deeds.
Concerns relating to access to documents in the Registry of Deeds and their preservation were raised with the Minister in this House on a previous occasion. Arising from this, he commissioned consultants to carry out an assessment of the building at Henrietta Street to evaluate its suitability for housing this valuable and irreplaceable archive and to identify options and make recommendations for improved access to, and better protection and preservation of, its documents. This exercise has been completed and the Minister intends to make the consultants' report available in the near future.
I thank the Law Reform Commission for its commitment and support for the joint project and all those who contributed to the preparation and publication of this Bill which will, when enacted, bring benefits for home purchasers and the business community alike by improving conditions for the purchase and sale of land and by reducing the delays and costs that so often accompany the conveyancing of land. I commend the Bill to the House.