38.—(1) The registration of a person as first registered F51[…] owner of freehold land with a possessory title shall not affect or prejudice the enforcement of any right adverse to or in derogation of the title of that person and subsisting or capable of arising at the time of registration, but, save as aforesaid, shall have the same effect as registration with an absolute title.

(2) “Right” in subsection (1) includes any rights or equities existing by reason of the interest of such owner being deemed to be a graft upon his previous interest in the land, and a reference in any other enactment to land registered subject to equities shall include land the registration of which is subject to any such rights or equities by virtue of that subsection.