Overreaching and the Rationale of the Law of Property Act 1925
![handle is hein.journals/notnghmlj15 and id is 65 raw text is: NOTTINGHAM LAW JOURNAL
VOL 15(2) 2006
ARTICLES
OVERREACHING AND THE RATIONALE OF THE LAW OF
PROPERTY ACT 1925
NICOLA JACKSON*
INTRODUCTION
Overreaching is a rule that allows a purchaser of a legal estate to take free from
equitable interests under a trust of land or settlement.1 Megarry and Wade states that
[t]he term is nowadays understood in two distinct senses: first,
[i]n its traditional meaning, overreaching is the process whereby existing proprietary
interests, whether legal or equitable, are subordinated to or overridden by some later
interest or estate created pursuant to a trust or power.
Secondly, [o]verreaching has tended to be used in a narrower sense to mean the
process by which an interest in land is transferred from the land to the purchase money
or other property acquired in exchange for it, leaving the land free from that interest.2
In Williams & Glyn's Bank v Boland,3 although trust interests were held capable of
being overriding, this was only the case if any capital money had not been paid to two
trustees in accordance with the overreaching provisions in the Law of Property Act
1925, sections 2 and 27. This was confirmed in City of London Building Society v
Flegg.4 In 1990, Harpum argued that the nature of the overreaching is a necessary
concomitant of a power of disposition.5 Thus, only an authorised disposition will free
* University of Manchester. I am indebted to John Stevens, Mark Thompson, Martin Davey, Gerard McCormack and Jean
Howell for comments on earlier drafts. I wish to acknowledge my debt to Anderson's Lawyers and the Making of English
Land Law 1832-1940 (1992), though he does not necessarily support the views offered in this article. I have derived some
ideas and arguments from an earlier article of mine: Overreaching in Registered Land Law (2006) 69 MLR 214. Parts of
this article are reprinted here with kind permission of the Modern Law Review.
I Law of Property Act 1925, ss 2 and 27; Harpum, Overreaching, Trustees' Powers and the Reform of the
1925 Legislation [1990] CLJ 277, hereafter Overreaching [1990]; Sparkes, A New Land Law (Oxford: Hart Publishing,
1999).
2 Megarry and Wade The Law of Real Property (London: Sweet & Maxwell, 6th ed, Harpum, 2000), hereafter Harpum,
Megarry and Wade, paras 4-078-4-080, footnotes omitted. The work concludes that [o]verreaching in [the] broad sense
was well-known by the early years of the nineteenth century: para 4-079.
3 [1979] Ch 312; [19811 AC 487.
4 [1988] 1 AC 54.
5 Overreaching [1990], 277; by the same author The Stranger as Constructive Trustee (1986) 102 LQR 67; An illustration
given by Harpum is Law of Property Act 1925, s 99, by which a borrower, in granting a lease under his power to do
so under this section, has the concomitant ability to subordinate the interest of the lender to that of the tenant. Harpum,
Megarry and Wade at para 8-165 observes: [O]verreaching is, and has always been, the necessary corollary of the](ViewImageLocal?handle=hein.journals/notnghmlj15&div=20&collection=&method=preview&ext=.png&size=3)
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Overreaching and the Rationale of the Law of Property Act 1925
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