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Midland Bank Trust Co Ltd v Green (No 1)
Factual and Procedural Background
A dispute arose over a 300-acre property (“The Farm”) situated in The County. In 1961, Person A (the father) granted his tenant-son, Person B, a ten-year option to purchase The Farm for £75 per acre. The option—an “estate contract” under the Land Charges Act 1925—was never registered.
In 1967, following a family disagreement, Person A sold The Farm to his wife, Person C, for £500 after confirming that no land charge was registered. Shortly thereafter Person B registered the option and sought to exercise it, ultimately issuing proceedings for specific performance and damages.
The High Court (Judge Oliver) held that the 1967 conveyance was to a “purchaser” for money or money’s worth and that the unregistered option was void as against her; damages were ordered against Person A’s estate. The Court of Appeal, by majority, reversed that finding and declared the option specifically enforceable. The present appeal to the House of Lords is by Appellants (representing Person C’s estate) against Respondents (representing Person B’s estate).
Legal Issues Presented
- Whether an unregistered option to purchase land (a class C estate contract) is void against a grantee who qualifies as a “purchaser … for money or money’s worth” under section 13(2) of the Land Charges Act 1925.
- Whether the statutory protection for a purchaser is lost if the purchaser lacks “good faith” or acts with an intention to defeat the option.
- Whether a consideration of £500 was merely “nominal,” so that the grantee was not a purchaser for “money or money’s worth.”
Arguments of the Parties
Appellants' Arguments
- The Act’s wording is clear: an estate contract unregistered before completion is void against any purchaser for money or money’s worth; no good-faith requirement exists in section 13(2).
- £500 constitutes “money or money’s worth,” and adequacy of consideration is irrelevant once valuable consideration exists.
- Equitable notions of fraud or constructive notice cannot override the express statutory scheme.
Respondents' Arguments
- Section 13(2) should be read as requiring the purchaser to act “in good faith”; a purchaser acting to defeat an option should not benefit from the statute.
- The phrase “money or money’s worth” should exclude merely nominal consideration; £500 was nominal relative to the land’s £40,000 value.
- Equitable principles, including bona fide purchaser doctrine, survived into the 1925 legislation and should qualify statutory priority rules.
Table of Precedents Cited
| Precedent | Rule or Principle Cited For | Application by the Court |
|---|---|---|
| Pilcher v. Rawlins (1872) LR 7 Ch 259 | Equity’s concept of bona fide purchaser for value without notice | Quoted to show historic link between good faith and notice but distinguished as predating the 1925 code |
| Berwick & Co. v. Price [1905] 1 Ch 632 | Persistence of good-faith enquiry after 1882 | Cited to illustrate, then held not to govern construction of 1925 Act |
| Taylor v. London & County Banking Co. [1901] 2 Ch 231 | Same context as above | Discussed and distinguished |
| Oliver v. Hinton [1899] 2 Ch 264 | Good faith and notice | Discussed and distinguished |
| In re Monolithic Building Co. [1915] 1 Ch 643 | Statutory priority rules override equitable doctrines; taking advantage of statutory rights is not fraud | Relied on as persuasive support for literal reading of section 13(2) |
| Le Neve v. Le Neve (1747) 3 Atk 646 | Registry Acts and equitable fraud | Shown to be outdated and inapplicable to modern registration statutes |
| Greaves v. Tofield (1880) 14 Ch D 563 | Same lineage as Le Neve | Likewise regarded as obsolete for current purposes |
| Grey v. Inland Revenue Commissioners [1960] AC 1 | Importance of giving plain words their plain meaning in the 1925 property legislation | Cited to justify adherence to the statutory text without equitable gloss |
Court's Reasoning and Analysis
Delivering the leading opinion, Judge Wilberforce emphasized the clarity and purpose of the Land Charges Act 1925: to create a “simple and understandable system” that puts purchasers on notice through registration. The option, an estate contract, was admittedly unregistered at completion; therefore, by the express words of section 13(2), it was void against a purchaser for money or money’s worth.
The House rejected insertion of a “good-faith” requirement. Although “good faith” appears in other contemporaneous Acts, its deliberate omission from the Land Charges Act definition of “purchaser” showed legislative intent to exclude subjective inquiries into motive. Practical difficulties in evaluating mixed motives further supported a literal reading.
On consideration, the £500 paid was “money” and thus satisfied the statutory phrase “money or money’s worth.” The Court declined to assess adequacy, noting that “valuable consideration” is a term of art that precludes re-valuation of price.
Equitable authorities predating the 1925 code, notably Le Neve v. Le Neve, were held inapplicable. The Court endorsed In re Monolithic Building Co. as confirming that reliance on statutory priority rules is not fraud.
Lords Edmund-Davies, Fraser of Tullybelton, Russell of Killowen, and Bridge of Harwich each delivered concurring speeches adopting Judge Wilberforce’s analysis in full.
Holding and Implications
APPEAL ALLOWED. The House reversed the Court of Appeal, restored the High Court’s order, awarded costs to the Appellants, and remitted the matter to the Chancery Division for further proceedings consistent with its judgment.
Implications: The decision reinforces the strict registration regime for unregistered land. A purchaser who provides any valuable monetary consideration obtains statutory protection irrespective of motive or adequacy of price, and equitable doctrines of good faith or notice do not qualify section 13(2) of the Land Charges Act 1925. No new precedent was set, but the ruling confirms the primacy of statutory text over equitable gloss in land-charges priority disputes.
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