Ariel and Bianca operate a business designing and manufacturing beauty pageant gowns. In 2016 they wish to purchase the Workroom, a two storey building, title to which is registered. The first storey is suitable for the installation of manufacturing equipment and the second storey consists of three apartments. The purchase price of the Workroom is £500,000. Ariel and Bianca can only afford to contribute £150,000 each to the purchase price. Ariel approaches her grandmother, Courtney, who suffers from arthritis, and Courtney offers to contribute £200,000 to the purchase of the Workroom. Ariel, Bianca and Courtney agree that Courtney will move into one of the apartments so that Ariel and Bianca, who will share a second apartment, can help to look after her. The Workroom is conveyed into Ariel’s sole name. The manufacturing equipment is installed in the first storey and Ariel, Bianca and Courtney move into the agreed apartments.
In 2017 Ariel’s friend Darienne moves into the Workroom’s third apartment and pays a monthly rent. In 2018 Darienne is offered a lucrative job, on a two-year fixed-term contract, in Las Vegas. She tells Ariel that the job will allow her to save money to buy her own property. Ariel asks Darienne whether she would be interested in purchasing the rented apartment on her return from Las Vegas at the end of the contract and Darienne agrees that she would. Ariel grants Darienne an option to purchase the apartment. Darienne immediately clears all her property out of the apartment and flies to Las Vegas. In early 2019 Ariel and Bianca agree that Bianca should embark on a comprehensive marketing trip to America. They plan an itinerary which will take six months to complete, and Bianca leaves in March 2019. Ariel becomes increasingly dissatisfied at having to run the business and take care of Courtney on her own.
In July 2019 Eureka expresses an interest in purchasing the Workroom and Ariel immediately removes all Bianca’s belongings from the apartment they share. Ariel arranges to show Eureka around the property at a time when Courtney is attending a hospital appointment. Eureka inspects the second storey and Ariel explains that her grandmother occasionally stays in one of the apartments. As Eureka is inspecting the first storey, Courtney returns early from her appointment. Puzzled by her presence, Eureka asks Courtney, “Have you any interest in any of this?” Believing that Eureka is referring to the business, Courtney responds “With my arthritis? Of course I don’t have any interest.”
Eureka offers Ariel £900,000 for the Workroom. Ariel is about to accept the offer, but she experiences an attack of conscience and informs Eureka of Darienne’s option to purchase one of the apartments. Eureka replies, “Well, that’s a shame, I was planning to rent all three apartments out. That changes things, I shall have to reconsider.” Anxious to complete the sale of the Workroom, Ariel informs Eureka that she will accept £750,000 for the property, and Eureka agrees to this. The Workroom is conveyed to Eureka in August 2019. Ariel tells Courtney that she has booked a month-long retreat for her at a health farm, and once Courtney has left for the retreat Ariel leaves for Puerto Rica. She sends letters to Bianca, Courtney and Darienne, explaining that she needed to make a completely fresh start.
(1) Advise –
(a) Bianca, whether she has any interest in the Workroom enforceable against Eureka;
(b) Courtney, whether she has any interest in the Workroom enforceable against Eureka;
(c) Darienne, whether she has any interest in the Workroom enforceable against Eureka.
(2) How, if at all, would your answers to (1)(a), (b) and (c) differ if the relevant principles were those applicable to unregistered land?
(3) Comment critically on the specific principles of law that you have applied in answering (1) and (2).
