Brian Lenihan Jnr (Dublin West, Fianna Fail)

I am very pleased to have the opportunity to introduce the Land and Conveyancing Law Reform Bill 2006 in this House. At the outset, I want to put on record, and pay tribute to, the significant contribution made to the process of statute law reform in this country by my predecessor in office, Michael McDowell. This Bill is but one of many initiatives he took during his period as Minister for Justice, Equality and Law Reform to update and modernise our laws in order to bring them more into line with modern conditions and meet the needs of the 21st century.

I am pleased to say the Bill received broad support from all sides on its way through Seanad Éireann and I look forward to a continuation of that broad support in this House. Also, the very detailed explanatory memorandum accompanying the Bill has been updated to take account of the various amendments agreed in the Seanad.

This Bill is major reforming legislation and it is the outcome of an innovative joint law reform project, launched in 2003, between my Department and the Law Reform Commission. Indeed, I had the pleasure in November 2004 of addressing a conference in the O'Reilly Hall at UCD on modernising Irish land and conveyancing law. The conference had been organised as part of the extensive consultation process which followed completion of the first phase of the joint project.

The Bill is undoubtedly a technical and complex piece of draft legislation but the comprehensive reforms contained in it will bring many benefits for private individuals and businesses alike in the years ahead. It is important to appreciate that, in all modern economies, an efficient system of title registration and transfer is essential for economic growth and is one of the key factors identified as essential in the development of prosperous economies in the modern world.

Much of our current land and conveyancing law dates from the 19th century, while certain parts of it have their roots in far distant feudal times. This Bill is poised to bring it into the 21st century. I want briefly to explain the context of the preparation and publication of this Bill. The main purpose of the Bill is to engage in a comprehensive reform and modernisation of all our land and conveyancing laws. It does so by repealing, in whole or in part, the numerous pre-1922 statutes which make up our land and conveyancing code and replacing them, where necessary, with updated provisions more suited to modern conditions.

This Bill is part of a larger reform programme which includes the reforms already enacted in the Registration of Deeds and Title Act 2006. That Act established the Property Registration Authority with a mandate to promote and extend registration of title to land and it has also updated land registration procedures and processes. The ultimate goal of the reforms contained in last year's Act and this Bill is to pave the way for the introduction of a comprehensive system of electronic conveyancing of land, i.e. eConveyancing. Given the scale and ambition of this Bill, a strategic and research-intensive approach has been adopted by my Department and the Law Reform Commission from the outset of the project. The first phase involved the screening of the numerous pre-1922 statutes with a view to identifying those which could be repealed without replacement and, secondly, those which needed to be updated or replaced with provisions more suited to modern conditions. The results of this exercise were published in the Law Reform Commission's consultation paper, Reform and Modernisation of Land Law and Conveyancing Law, in 2004.

Publication of the consultation paper was followed by an extensive consultative process, including the conference to which I referred earlier at which distinguished experts in land and conveyancing law from this country and abroad discussed future reform options in light of experiences gained from reform initiatives in comparable common law jurisdictions. Valuable submissions were also received from representative bodies involved in the conveyancing system and from other relevant stakeholders.

The third phase of the project involved preparation of draft legislation to give effect to the Commission's definitive reform proposals following completion of the consultation process. The report entitled Reform and Modernisation of Land Law and Conveyancing Law, published in July 2005, contained the text of a draft land and conveyancing Bill. With the agreement of the then Attorney General, the former Minister for Justice, Equality and Law Reform, Deputy McDowell, subsequently wrote to the President of the Law Reform Commission suggesting that, given the unique collaboration and expertise involved in the project, finalisation of the text of a Bill for publication could best be achieved through the good offices of the commission and the continued involvement of those already closely associated with the project. The commission readily agreed and the Bill before us has been prepared by a drafting group which has continued to meet under the aegis of the Law Reform Commission.

Before proceeding, I want to place on the record of the House my sincere thanks, and that of Government, to the President of the Law Reform Commission, Mrs. Justice Catherine McGuinness, her predecessor in office, Mr. Justice Declan Budd, and the other commissioners for their enthusiastic commitment to, and support for, the joint project. I want also to thank Professor John Wylie, the foremost expert in land and conveyancing laws of these islands, for his input and sustained interest in the project and Mr. Marcus Bourke, former Parliamentary Counsel, who assisted in the drafting process. Finally, I acknowledge the input of the Law Reform Commission's substantive law working group which brings together many of the stakeholders and experts in the land and conveyancing law area.

I want to say a little now about the general subject matter of the Bill and to 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. It is not surprising, therefore, that those fortunate enough to own land often sought to ensure that it remained within the family from one generation to the next. Nevertheless, a new class of wealth emerged with the onset of the Industrial Revolution and barriers to the operation of a free market in land, which had already been weakened by the common law courts from the late feudal period onwards, were gradually dismantled. By the end of the 19th century, land was no longer regarded as a pre-eminent source of wealth and prestige.

The development of land law and conveyancing practices over the centuries reflects the tensions arising from this gradual transition from feudalism to a market-oriented economy based on industry and trade and the related processes of social change. In Ireland's case, there has been an added dimension. Much of our land law can only be understood in the context of our historical experience of confiscations and repossessions. Arrival of the Normans in the 12th century led to gradual introduction of the feudal system of land ownership and, at the beginning of the 17th century, to 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 second half of the 19th century witnessed improvements in the rights of tenants and restoration of much of the country's agricultural land to tenant farmers under various land purchase schemes. While the Bill does not deal with the various land purchase Acts, a positive feature of that legislation is worth noting. Land purchase schemes 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 security for the loans and which might have to be sold in the event of default, should be secured by means of registration of the title. That was the context in which the imperial parliament enacted the Local Registration of Title (Ireland) Act 1891, establishing the Land Registry and making the registration of title 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. This is a sound foundation on which to complete the process of registering titles. I will return to registration issues later.

As the Title indicates, the Bill deals with land and conveyancing law. However, it is difficult in practice to draw a clear and rigid distinction between them. In general terms, land law deals with different types of ownership of land and the rights relating to each type of land while conveyancing law is more concerned with the transfer and disposal of land and rights relating to it whether by way of sale, lease, mortgage or other dealing. They are essentially 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 current system of land and conveyancing law is a complex mixture of statutory provisions drawn from the historical influences of common law and equity. Successive layers of Statute law, the earliest of which dates back to the 13th century, include common law, namely, judicial rules developed over centuries in what were known before 1877 as common law courts, and equitable rights and remedies developed by what were known before 1877 as 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 a pressing need to update and streamline this law in order to meet the needs of a vibrant market economy in the 21st century.

I want to stress that the Bill does not set out to codify into statutory form all our land and conveyancing laws. This would have involved attempting to distil and convert all relevant principles, judicial or legislative, into a common legislative code. Apart from the effort involved — such a project would have taken a considerable number of years — such a codification would inevitably increase the rigidity of the law and remove the flexibility and adaptability which is such a positive feature of our system. The ability of our courts to exercise their equitable jurisdiction in response to changing needs and circumstances is a valuable aspect of our system and needs to be preserved. Moreover, while every effort must be made to simplify the law and update its language, many words and terms of the law in this area have acquired a specific technical meaning and are used accordingly.

Consequently, the drafters of this Bill have had to bear in mind that changes in language could easily lead to confusion or, more seriously, have an unforeseen and unintended impact on substantive rights in land. It could also result in the abandonment of relevant case law and have other unintended consequences. Whereas we are making a fresh statutory departure, some old friends known to those of us who had to study them in law school will remain with us. This is essential for the accurate drafting of a measure of this type.

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 Bill has five clear objectives: to update the law to accommodate modern conditions, to simplify the law to make it more easily understood and accessible to citizens, to simplify the conveyancing process particularly the procedures involved in order to reduce delays and associated costs, to promote extension of the registration of title system in the Land Registry and to facilitate the introduction of e-conveyancing of land as soon as possible. The Bill represents a substantial contribution to the process of regulatory reform including the repeal of obsolete and outdated statute law as set out in the White Paper, Regulating Better.

I do not propose to enter into great detail today in respect of the contents of the Bill, not least because it is accompanied by a comprehensive Explanatory Memorandum. Part 1 contains definitions of various terms used in the Bill and general provisions which are common in legislation of this nature. Section 8 repeals, in whole or in part, approximately 150 pre-1922 statutes listed in Schedule 2 and which stretch back over the centuries to feudal times. Part 2, comprising sections 9 to 14, deals with the fundamental provisions relating to the ownership of land. It 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 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. 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. Examples include fee tails, where an estate was entailed to particular members of a family; fee farm grants, which were popular in this jurisdiction but not in others where one had, in effect, a perpetual leasehold; and leases for lives, an analogous Irish device where land was leased for a number of 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 land 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 or gather seaweed on a foreshore. The full ownership of any particular piece of land comprises these various estates and interests, including equitable interests such as those existing under a trust which has among its assets land. It is worth noting that Article 10.1 of the Constitution refers expressly to estates and interests in the context of natural resources.

How many of these various estates and interests 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 which may 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. It may surprise Members to learn that there is a great number of estates still recognised in Irish law, encountered infrequently but encountered all the same, which will be terminated on the enactment of this legislation.

Part 3 introduces a substantial simplification of the law concerning future interests in land and, in some cases, such interests in other property. Future interests are interests that do not vest in, that is do not come into the possession of, the persons entitled to them until a fixed or determinable future date, usually because the land or other property is vested in someone else in the meantime. The law in this area must strike a balance between the wishes of those who want to fetter the ownership of land for a period of time and the requirement of the law that land should be marketable and that interest should be realisable.

Part 4 provides for a radical simplification of the law relating to settlements and trusts of land. Currently, many settlements do not involve the use of a trust. Instead, the land is given by a deed or will to different persons in succession. Sometimes a trust is used instead and the land is 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 very 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 property, 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 are to be beneficiaries and in what shares.

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: the joint tenancy and the tenancy in common.

The distinguishing 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. That type of joint tenancy is convenient in the case of a married couple who have bought a house and who wish the house to be left to the surviving spouse in the event of the death of one spouse. It ensures that the surviving spouse owns the property. 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. Where a joint tenancy is converted into a tenancy in common one has severance. Unilateral severance by a single joint tenant is permitted under current law and it has significant consequences because it means the other joint tenants lose the expectation that one of them will, as the last surviving joint tenant, end up as the sole owner of all 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 the partition of land by co-owners. When the co-owners of land disagree about the management of the property it is necessary to have a procedure for the resolution of their differences.

Part 7 provides for a substantial overhaul of the law relating to appurtenant rights. These are rights which are extremely common with respect to land and usually involve neighbouring landowners. They either permit one landowner to do something on a neighbour's land or entitle that landowner to prevent the neighbour from doing something on it. 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 over neighbouring land or a right to light.

Although the categories of easement are generally regarded as settled, courts have made it clear that the existing list is not necessarily closed and new rights with similar characteristics may be recognised as changes in society require, for example a 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 or 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. These rights have been the happy hunting ground of lawyers for centuries.

Chapter 2 prohibits the creation of rentcharges which is another type of right which may be owned in respect of someone else's land. It is a rent charged on land to provide an income or regular payments to the owner of the rentcharge. These used to be created in family settlements in bygone days in order to provide an income for members who were given no other substantial interest in the land, for example siblings of the family member, usually the eldest son, who was given a life interest in the land. Rentcharges are no longer common.

Chapter 3 provides for a new statutory system to deal with problems which frequently arise in relation to party structures, such as party walls and fences, separating neighbours. This is designed to regulate the rights of such owners, especially where a dispute occurs over repairs or works which one owner wishes to carry out. These 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. These 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. This is 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 passes to successors. In the 19th century many of the great estates in Dublin had their planning organised through the device of the restrictive covenant. It is not so common in our modern planning system. Those covenants are enforceable, but traditionally, positive covenants were not enforceable against freehold owners and will become so under this legislation. Chapter 4 changes the law substantially so as 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 conveyancing Acts 1881 to 1911, and various other pre-1922 statutes, with updated provisions more suited to modern conditions. It is designed to prepare the ground for eventual eConveyancing. This part also contains provisions for the interim period before a fully electronic and paperless system 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 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 statutory provisions that can be read into them, while chapter 5 contains some general provisions concerning conveyancing.

Part 9 deals with mortgages. It contains a 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. It 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 amendments to the Registration of Title Act 1964, while Part 12 contains miscellaneous provisions. The First Schedule contains consequential amendments to various statutes, while the Second Schedule contains repeals of numerous pre-1922 statutes. The Third Schedule sets out the different classes of covenants for title implied in conveyances under sections 77 and 78.

At this stage, I want to return to the issue of registration of title and say a few words about eConveyancing. 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 eConveyancing. However, the Law Reform Commission has concluded, and I agree wholeheartedly with it, that an efficient and comprehensive eConveyancing system can operate only in respect of registered land. For this reason, one of the key tasks given to the Property Registration Authority under the 2006 Act is to promote and extend the compulsory registration of title.

Compulsory registration of title applies at present in only six counties: Carlow, Laois and Meath since 1970, and Longford, Roscommon and Westmeath since 1 April 2006. Clearly, someone with a sense of humour made that order on 1 April 2006. Much remains to be done therefore and I expect the Property Registration Authority to address this key challenge with urgency and vigour.

Increased registration of title will in turn mean less need for, and eventual closure of the Registry of Deeds. It has served a useful purpose for 300 years but eConveyancing requires conclusive registration of ownership and that need cannot be met through the registration of deeds and the associated searches which must take place there every time a land transaction takes place. The Registry of Deeds is a valuable source of historical material and existing documentation must be preserved, and access to it ensured, for future generations. The archive of material that is available in the Registry of Deeds is very valuable.

Issues concerning multi-unit developments were raised in the discussions in the Seanad and are a major issue of property law in the public mind. It is important to recognise the important distinction between property management agents and property management companies. Agents provide property-related services under contract. Because they provide property services, management agents will, together with auctioneers and estate agents, be covered by the licensing system to be operated by the National Property Services Regulatory Authority. That legislation is currently being drafted in the Office of the Parliamentary Counsel. Property management companies, on the other hand, are established under company law and comprise the owners of units within multi-unit developments.

Issues relating to such developments and, in particular, the operation of property management companies were discussed at a conference organised by my Department and the Law Reform Commission earlier this year. The conference provided an opportunity for a discussion of the wide range of issues identified in the commission's consultation paper on multi-unit developments. The consultation paper makes it clear that solutions to the difficulties arising in relation to property management companies will require action across a broad range of areas, including company law and consumer protection law. These companies are subject to the provisions of company law and its enforcement mechanisms, including the Companies Registration Office, CRO, and the Office of the Director of Corporate Enforcement, ODCE, and the National Consumer Agency, NCA. I look forward to the final report of the Law Reform Commission because it will provide a foundation on which we can develop the necessary amendments to the legislation that regulates these corporate entities.

In recognition of the complex nature of the difficulties, and the cross-cutting nature of many of them, the Government has established a high-level interdepartmental committee to assist in the development of a coherent and comprehensive legislative response. The legislation relating to the auctioneers and the providers of services to those in multi-unit developments is already being drafted. I await the report of the Law Reform Commission. The key task of the committee is to identify the legislative and administrative actions to be taken on receipt of the Law Reform Commission's definitive recommendations for legislative reforms in its forthcoming report on multi-unit developments. The commission will publish this report later this year following completion of a consultation process.

I intend to bring forward certain amendments on Committee Stage to respond to issues raised and suggestions made during earlier Seanad discussions. In the meantime, I commend the Bill to the House.

See this speech in context