Mr Christopher Nugee QC:
Introduction
- I have before me an appeal by Derbyshire County Council ("the Council") from a Decision dated 23 November 2006 ("the Decision") made by Mr Michael Mark sitting as a Deputy Adjudicator to HM Land Registry under the Land Registration Act 2002 ("the 2002 Act").
- The office of adjudicator to HM Land Registry was created by the 2002 Act and is governed by Part 11 of the Act. The functions of the adjudicator are set out in s. 108 and include (by s. 108(1)(a)) "determining matters referred to him under section 73(7)". The effect of s. 73(7) is that where an application is made to the registrar under the 2002 Act and an objection is made, then unless the registrar is satisfied that the objection is groundless or it is possible to dispose of it by agreement, the registrar must refer the matter to the adjudicator.
- In the present case the Council applied to the registrar to alter the register of Title No. DY 185906. This is a freehold title of which Mr and Mrs Fallon are the registered proprietors and they objected to the application. It was therefore referred under s. 73(7) to the adjudicator, and in due course came before Mr Mark. Although sitting as a deputy adjudicator, I will refer to him as "the Adjudicator". He refused the Council's application and directed the Council to pay one half of the Fallons' costs. An appeal lies from such a decision to the High Court under s. 111(2) of the 2002 Act; permission is required for such an appeal (see Practice Direction Appeals, supplementing Part 52 of the CPR, paragraph 23.8B(1)) and was given to the Council by Warren J on 22 January 2007.
- The Council owns the land adjoining the Fallons' land. Its title is unregistered. Its case before the Adjudicator was that the filed plan of Title No. DY 185906 showed the boundary between the Fallons' land and the Council's land in the wrong place so that part of the land shown on the filed plan as included in the registered title was in fact owned by the Council.
- This gave rise to the following issues before the Adjudicator, which were set out in an Agreed Schedule of Issues: (1) where (ignoring the effect of registration) was the boundary between the Council's land and the Fallons' land ("the Paper Title Issue"); (2) if the Council won on that issue, whether its title was barred by limitation ("the Adverse Possession Issue"); and (3) if the Council won on both those issues, whether the dispute was a boundary or a property dispute, that is, whether the "General Boundaries rule" was to be applied in order to determine the exact line of the boundary ("the General Boundaries Rule Issue"). There were then set out a further three issues which arose if the Council lost on the General Boundaries Rule Issue, which I will refer to later.
- In the event the Adjudicator held in favour of the Council on each of the first three issues, save for a comparatively minor point on the Paper Title Issue. But for reasons that I will come to in due course, he declined to grant the Council the relief it sought of amending the register. The Council appeals both the minor point on the Paper Title Issue and the refusal to amend the register and seeks an order altering the filed plan so as to exclude from the title the land in dispute. It also appeals the order for costs. There is no cross-appeal. In essence therefore there are only three points for me to decide: did the Adjudicator correctly identify where the pre-registration boundary lay ? Should he in the light of his findings have directed the registrar to alter the register ? Should he have made a different order for costs ?
The Paper Title Issue
- In order to explain this point I must set out some of the conveyancing history:
i) Title No DY 185906 is the registered freehold title to land at 18 Ambaston Lane, Shardlow, Derbyshire. The filed plan shows a roughly triangular plot with a detached house built on it; it lies on the inside of a corner where Ambaston Lane turns from running north-west to roughly north, but it does not extend all the way to the road as the Council owns a substantial parcel of land between the plot and the road. The filed plan shows the Fallons' land as having a straight boundary to the north (adjoining a field), an almost straight but slightly kinked boundary on the east (adjoining No 16 Ambaston Lane), and a curved boundary on the remaining side (south-west), which is the boundary with the Council's land.
ii) The Council's case is that the true boundary between the two parcels is that shown on two conveyances to it each dated 16 August 1966. This boundary line has been plotted on a plan prepared by GreenHatch Ltd for the purposes of this dispute which shows that it lies some distance further to the north-east than the boundary shown on the filed plan. The Adjudicator referred to the strip between the two ("the disputed strip") as about 36 metres long and varying between about 2 to 4 metres wide. I would not myself have thought the disputed strip was quite as long as that but nothing turns on the precise length the disputed strip is identifiable from the GreenHatch plan.
iii) The Fallons' land and the Council's land (which together make up a roughly square plot on the inside of the corner of Ambaston Lane) were formerly owned by the Trustees of the Will of Sir Henry Sutton ("the Sutton Trustees"). There were then 4 cottages on them (part of a row of 5 cottages, the fifth of which appears to survive as what is now 16 Ambaston Lane). One of the cottages (the second nearest the road, then apparently called 4 Ambaston Lane) was sold off by the Sutton Trustees in 1950 to Esther Poulton, and Mrs Poulton in turn conveyed it on 5 July 1954 to Alice Wheeler.
iv) In 1964 the four cottages were the subject of a clearance order. The one that had been sold off was by then owned by Mrs Wheeler's executor and the Sutton Trustees retained the other three. The Council, which was the Highway Authority, became interested in acquiring the front part of the site for highway purposes; and a recommendation to purchase either the front part of the site for road widening purposes (said to be 410 square yards) or if necessary the whole site (said to be 785 square yards) was approved in September 1964.
v) Meanwhile the land had been surveyed by, or under the direction of, the County Surveyor, Mr S Mehew; the survey plan indicates that the land was surveyed in August 1964 and the plan drawn in September. This plan ("the 1964 plan") is drawn to a 1/500 scale and shows a curved boundary dividing the front part of the site from the remainder. The front part is itself divided into two pink areas and one green area, representing the land owned by the Suttton Trustees and Mrs Wheeler's executor respectively, and the plan is marked to show that these areas were 315 square yards (pink) and 95 square yards (green), thus together adding up to the 410 square yards mentioned in the report recommending purchase. The plan also shows the dimensions of the triangular plot that would be left; these are marked as 69' (the northern boundary), 77' (the kinked eastern boundary) and 95' (the curved southwestern boundary).
vi) A letter from the District Valuer to Mr Mehew of 16 February 1965 shows that purchase of the site had been agreed in principle with the Sutton Trustees' agents, and asked Mr Mehew to arrange for the boundary line to be pegged out. A reply of 26 March 1965 indicates that the pegging out had by then been completed.
vii) On 24 December 1965 Mrs Wheeler's executor conveyed to Donald Sharman the part of her land not wanted by the Council. The conveyance itself does not appear to be available, but it is referred to in a memorandum endorsed on the conveyance of 5 July 1954 under which the land was conveyed by Mrs Poulton to Mrs Wheeler. This memorandum refers to a plan, a copy of which was attached ("the 1965 plan"); it is a small plan which shows the general position of the curved boundary but is neither said to be to scale nor contains any dimensions.
viii) On 25 February 1966 the Sutton Trustees and Mrs Wheeler's executor entered into a contract of sale with the Council, under which they agreed to sell the front strip of land, described as an area amounting to 410 square yards or thereabouts. The plan annexed is similar (but not identical) to the 1965 plan; unlike that plan it does give dimensions of the triangular plot. These are difficult to read on the copy plan I have seen but appear to accord with those shown on the 1964 plan, namely 69' (north), 77' (east) and 95' (southwest).
ix) In June 1966 Mr Sharman applied for planning permission for erection of a house on the triangular plot, describing himself as owner of the land. The Adjudicator inferred that he had by then acquired the remainder of the plot from the Sutton Trustees, and this is not disputed on appeal; indeed before me Mr Din, who appeared on behalf of the Council, accepted that he probably acquired it at the same time as he acquired the Wheeler part of the plot, in December 1965. The plan accompanying the planning application ("the 1966 plan") is said to be 1/500 scale and gives the dimensions of the triangular plot as 67' (north), 77' (east) and 98' (curved boundary to southwest).
x) On 16 August 1966 the sale of the front strip to the Council was completed by two conveyances, one by the Sutton Trustees and the other by Mrs Wheeler's executor. Each conveyance annexed a copy of the 1964 plan and described the land conveyed by reference to the areas given on that survey, namely "95 square yards or thereabouts" in the case of the land conveyed by Mrs Wheeler's executor, and two parcels together comprising "315 square yards or thereabouts" in the case of the land conveyed by the Sutton Trustees.
xi) Mr Sharman built a detached house on his land called Sharman House. In 1972 he conveyed the land to a Mr and Mrs Ledger. The Adjudicator recorded that the plans to this conveyance (which appear to have been similar to the 1965 plan) showed that it purported to convey almost all the disputed strip. After a series of further conveyances and transfers (one of which led to the first registration of the land in 1989) the land was ultimately transferred to the Fallons in 1994 and they were registered as proprietors.
xii) The filed plan to the registered title shows the relevant boundary with a dotted line and there is a note on the filed plan to the effect
"The boundaries shown by the dotted lines have been plotted from the plans on the deeds. The title plan may be updated from later survey information."
The Adjudicator noted that the boundary as shown on the filed plan was in approximately the same position as in the plan to the 1972 conveyance; and inferred that in each case what was sold on after 1972 was that described as being sold in the 1972 conveyance. As a result the filed plan shows the disputed strip as included in the registered title.
- It follows from the history I have recited, as pointed out by the Adjudicator, that the first conveyance by the Sutton Trustees and Mrs Wheeler's executor was in each case that to Mr Sharman, so that what was conveyed to the Council was whatever land was left. The critical issue therefore for the question of where the boundary lies on the paper title is, is what land was conveyed to Mr Sharman. The Adjudicator rejected an argument for the Fallons that this was to be determined by reference to the 1965 plan; and held that it was to be determined by reference to the boundary as pegged out on the ground which had already taken place in February or March 1965 (paragraph 13 of the Decision). This is not disputed on appeal and seems to me plainly right.
- There remains the question where the pegged out boundary actually lay. There is no direct evidence available. The Council's case is that the Adjudicator should have held that the boundary was pegged out in early 1965 along the line indicated by the measurements shown on the Council's 1964 plan (that is along a boundary 95' long which met the then northern boundary 69' from the north-east corner of the plot the current northern boundary of the Fallons' land is slightly further north). The Adjudicator however held that it was marginally more likely that the boundary was pegged along the line shown on Mr Sharman's 1966 plan (that is along a boundary 98' long which met the then northern boundary 67' from the north-east corner).
- Mr Din suggested that when Mr Sharman submitted the planning application in 1966, the dimensions on the accompanying plan may have been taken from the Council's 1964 plan and mis-read. This seems to me unlikely: two of the three measurements are different, and although the 95' marked on the 1964 plan might just have been mistaken for 98' (it is however clear enough to me) I do not see how the 69' could readily have been misread as 67' and it is too far-fetched to think that both figures were misread. It seems to me more likely that the 1966 plan was drawn up afresh: it has a name (which appears to be Neil Moore) at the bottom with an address in Spondon, Derby and the inference I draw is that Mr Moore drew up the plan from measurements taken on the ground rather than from a mis-reading of the Council's 1964 plan.
- That does not however answer the question. As Mr Din submitted, the pegging out was carried out (in February or March 1965) by, or under the supervision of, the County Surveyor, Mr Mehew, who had also been responsible for the 1964 plan. I agree that it is likely that he would have wanted the pegging out to follow the line shown on the 1964 plan: there is no apparent reason why, having gone to the trouble of drawing up a measured survey, he would have had the boundary pegged anywhere else. When one adds to that the fact that the Sutton Trustees and Mrs Wheeler's executor entered into a contract with the Council in February 1966 which so far as one can tell has the same measurements as shown on the 1964 plan (and under which the land contracted to be sold was the same area, 410 square yards, as shown on the 1964 plan), and the fact that when the conveyances were executed in August 1966 the conveyance plan used in each case was the 1964 plan, it seems to me a safe inference that there had been no conscious decision to draw the boundary anywhere else. The Sutton Trustees, Mrs Wheeler's executor and the Council were all apparently proceeding in 1966 on the assumption that the boundary was where it had been shown on the 1964 plan.
- The only piece of evidence that casts any doubt on this is the 1966 plan annexed to Mr Sharman's planning application. I agree with the Adjudicator that since it appears this was drawn up after the pegging out it was presumably made by reference to the boundary as staked out. The choice is therefore between the pegging out having been carried out in the wrong place, and Mr Moore (or whoever measured the boundaries in drawing up the 1966 plan) getting the measurements right; and the pegging out having been carried out as intended, and Mr Moore getting the measurements slightly wrong.
- The Adjudicator concluded that the former was marginally more likely, and that in any event the Council had not established a paper title to the small area of land which would be included on the basis of its 1964 plan measurements but excluded using Mr Sharman's 1966 plan measurements. I acknowledge that there is very little evidence one way or the other, but this is a point which turns entirely on the inferences to be drawn from the surviving documents and on which I am in as good a position to draw inferences as the Adjudicator. After careful consideration I have come to the conclusion that it is more likely that the pegged out boundary was as shown on the 1964 plan.
- The 1964 plan was a carefully drawn survey. Its very purpose was to identify that part of the then undivided land which the Council should seek to acquire for highway purposes. In other words it was always intended to form the basis for first the negotiation of, and then the completion of, the purchase of the front part of the site. Having gone to such care to draw up a detailed and measured survey plan, I think it would be surprising if Mr Mehew had not also taken some care to ensure that what was marked on the ground coincided with what the Council had actually resolved to acquire. And, as I have said, I think it is evident that the Sutton Trustees, Mrs Wheeler's executor and the Council all continued to believe in both February and August 1966 that what was being sold and conveyed to the Council was what was shown on the 1964 plan.
- By contrast the 1966 plan was not drawn up for the purposes of dividing the site or for being used as the basis for a conveyance. It was a plan annexed to a planning application, and is considerably less detailed than the 1964 plan. Although it gives the measurements of the boundaries, it is unlikely that the precise measurements would affect the outcome of the application. What was important was that the house conformed with the building line of 15 feet apparently required by the planning authority.
- In these circumstances I consider that it is more probable that the measurements shown on the 1966 plan are not quite accurate than that the pegging out was in the wrong place. Nor do I think this an appropriate case to decide on the burden of proof; where the Court is asked to determine where a boundary lies, I think it should be very reluctant in effect to say that it cannot be determined. I think it is preferable for the Court to do its best, even with limited material available, to assess where the probabilities lie. In my judgment therefore the Council has established that its paper title extends to the boundary line as shown on the 1964 plan and hence includes all of the disputed strip.
The General Boundaries Issue
- The Adjudicator next considered whether the fact that the disputed strip was included in the filed plan meant that the Fallons had acquired a registered title to it. This is the General Boundaries Issue. Following the decision of the Court of Appeal in Lee v Barrey [1957] Ch 251, which turned on a similar question, he decided this issue in favour of the Council. Since there is no appeal against this, it is unnecessary for me to refer to it in any detail. In short, the effect of the general boundaries rule in rule 278 of the Land Registration Rules 1925 was that when the Fallons' land was registered, the boundary indicated on the filed plan did not represent the actual boundary of their title and could not be relied on to indicate the precise extent of their land. That could therefore only be determined by looking at where the boundary lay by reference to the pre-registration documents. The Adjudicator therefore concluded that the extent of their registered title is no greater than that of their unregistered predecessors in title and that the boundary of the land is the same as it was following the conveyances to Mr Sharman.
The Adverse Possession Issue
- The Adjudicator also dismissed a claim by the Fallons to have acquired title by adverse possession to the disputed strip. Again his conclusion is not challenged on this appeal so I do not need to set out the details of this issue: in essence he held that there had been no attempt to exclude the world at large before 1995 or 1996 (when the Fallons built an angled breeze block wall which incorporated the northern part of the disputed strip into their garden).
The Adjudicator's powers to amend the register
- The result of his decision on these three issues was, as he said, that
"the boundary is incorrectly shown on the Land Registry plan, and it is necessary to consider whether I should direct that it should be corrected."
The second issue on appeal is whether his decision not to do so was wrong.
- I must start by briefly referring to the relevant statutory provisions. These are now found in the 2002 Act, and specifically in schedule 4 which is given effect to by s. 65 and which deals generally with what is now called "alteration" of the register. This is a deliberate change in terminology from the Land Registration Act 1925 which had conferred power on the Court and the Registrar to "rectify" the register in a number of disparate situations. Under the 2002 Act however the general term used is "alteration", and "rectification" is a narrower concept which is used to refer to a specific type of alteration. This is the effect of paragraph 1 of schedule 4, which is in these terms:
"Introductory
1 In this Schedule, references to rectification, in relation to alteration of the register, are to alteration which
(a) involves the correction of a mistake, and
(b) prejudicially affects the title of a registered proprietor."
- Schedule 4 contains separate provisions in relation to alteration pursuant to a Court order (paragraphs 2 to 4) and alteration otherwise than pursuant to a Court order (paragraphs 5 to 7). The Adjudicator was concerned with the latter. They provide as follows:
"Alteration otherwise than pursuant to a court order
5 The registrar may alter the register for the purpose of
(a) correcting a mistake,
(b) bringing the register up to date,
(c) giving effect to any estate, right or interest excepted from the effect of registration, or
(d) removing a superfluous entry.
6(1) This paragraph applies to the power under paragraph 5, so far as relating to rectification.
(2) No alteration affecting the title of a registered proprietor of a registered estate in land may be made under paragraph 5 without the proprietor's consent in relation to the land in his possession unless
(a) he has by fraud or lack of proper care caused or substantially contributed to the mistake, or
(b) it would for any other reason be unjust for the alteration not to be made.
(3) If on an application for alteration under paragraph 5 the registrar has power to make the alteration, the application must be approved, unless there are exceptional circumstances which justify not making the alteration.
7 Rules may
(a) make provision about the circumstances in which there is a duty to exercise the power under paragraph 5, so far as not relating to rectification;
"
In the case of rectification therefore the powers of the registrar are restricted by paragraph 6(2), but if these restrictions are overcome, the registrar is under a duty to alter unless there are exceptional circumstances. In the case of an alteration which is not a rectification, schedule 4 does not itself make any provision but confers a rule-making power, which, I was told, has not been exercised.
- Similar provisions apply in the case of alteration pursuant to a Court order. Paragraph 2 confers on the Court a power to order alteration in similar terms to paragraph 5 (with the omission of sub-paragraph (d)); paragraph 3 imposes restrictions in the case of rectification in similar terms to paragraph 6; and paragraph 4(a) confers a rule-making power similar to that in paragraph 7(a). But in this case the power has been exercised, namely by rule 126 of the Land Registration Rules 2003 which provides in effect that in a non-registration case, the Court must make an order for alteration once it has concluded that paragraph 2 applies unless there are exceptional circumstances that justify not doing so.
- The Fallons' case before the Adjudicator included a contention that the Council's application was an application for rectification and should be refused because they were proprietors in possession and entitled to the protection of paragraph 6(2) of schedule 4. This led to issues 4 to 6 of the Agreed Schedule of Issues in these terms:
"4 If the rule does not apply and the Register may be Rectified: are the Respondents registered proprietors "in possession" of the disputed land within the meaning of the LRA 2002 ("the Possession Issue") ?
5 If the Respondents are not in material possession of the disputed land, should the Register be rectified ?
6 If the Respondents are in material possession of the disputed land, "would it for any other reason be unjust for" the register not to be rectified ?"
(The reference in Issue 4 to "the rule" is a reference to the General Boundaries rule referred to in Issue 3.) It can be seen that the drafting of these issues assumed that Issues 4 to 6 would not arise unless the Council lost on the General Boundaries Issue. This seems to me to be right. Issues 4 to 6 are all concerned with the exercise of the power to alter in a case of rectification, but an alteration is only a rectification if it prejudicially affects the title of a registered proprietor. But if the Council succeeded on the first three issues, the alteration of the register would not prejudicially affect the Fallons' title: the effect of the Adjudicator's decision on the first three issues would be (and in the event was) that they did not have a registered title to the disputed strip and re-drawing the boundary on the filed plan would not therefore take anything away from them. In these circumstances I agree with Mr Din that Issues 4 to 6 did not in fact arise for decision.
- What actually happened is that after the hearing (which took place on 26 and 27 July 2006) the Adjudicator issued a draft of his decision on 1 September 2006, in which he proposed to refuse the Council's application on the grounds that there were exceptional circumstances justifying not making the alteration. The parties then made written submissions on permission to appeal and costs; the Council among other things submitted that in finding there to be exceptional circumstances the Adjudicator had wrongly applied paragraph 6(3) of schedule 4 to the 2002 Act when he should not have done so as it was not a case of rectification; and that in any event he should have given the Council an opportunity to be heard on the point. In these circumstances the Adjudicator invited a further hearing which took place on 7 November 2006 and then issued his final Decision on 23 November 2006.
- The final Decision was to the same effect as the draft decision, but expanded in the light of the further hearing which had taken place. Mr Din took me through the draft decision and compared it with the final Decision to indicate what changes were made. The thrust of his submission was that in the draft decision the Adjudicator had found exceptional circumstances under paragraph 6 of schedule 4, whereas in the final version of the Decision, the Adjudicator had reached the same result by a different route. This may well be right, but I do not think it is necessary to detail the precise evolution of the final version: where a draft decision has been superseded by a final version, any appeal has to be determined by the terms of that final decision and in general and certainly in this case it is not necessary for the appellate court to investigate the terms of a draft which ex hypothesi does not represent the final authoritative expression of the reasons for the decision.
The Adjudicator's reasons for refusing the application
- I come then to the reasons given by the Adjudicator in the final Decision for refusing the application. He proceeded as follows:
i) Having found that the boundary line as shown on the filed plan was a general boundary and shown in the wrong place, he held that this was clearly a mistake which might be corrected under paragraph 5 of schedule 4 to the 2002 Act (paragraph 45 of the Decision). This seems plainly right and is not challenged on appeal.
ii) He then identified three questions which arose under paragraph 6 of schedule 4, namely (1) whether the alteration, if made, would affect the Fallons' title; (2) whether the alteration would be in relation to land in the Fallons' possession; and (3) whether it would be unjust for the alteration not to be made. He then added a further question (4) whether there were exceptional circumstances which justified not making the alteration (paragraph 46).
iii) He then considered in some detail the history of events since the Fallons acquired Sharman House (paragraphs 48 to 67). He explained that the Fallons first built a garage, driveway and the angled breeze block wall in 1995/96; then in 2000 applied (to the planning authority, the South Derbyshire District Council) for planning permission to build a further double garage and a new brick wall, which was granted subject to the highway boundary (ie the boundary with the Council's land) being resolved; and that despite a site meeting in 2001 with Council officers, and about a year's correspondence between the Fallons' solicitors and the Council, the boundary was not resolved. The correspondence culminated in a letter from the Fallons' solicitors in May 2002 to the effect that unless the Council applied to HM Land Registry to rectify the title, the Fallons would continue to treat all the land shown on the filed plan as their own, and in particular that they proposed to build a garage on part of it. In September 2002 the Fallons submitted a revised application for planning permission; the Council's response this time was that "the Highway Authority would not want to restrict the grant of planning permission", and permission was granted in November 2002. The Adjudicator said he accepted Mr Fallon's evidence that he concluded from the lack of continued objection that the Council was not disputing his ownership to the boundary shown on the Land Registry plan. Work started in spring 2003 and the bulk of it had been carried out when the Council first wrote at the end of April 2003 saying that the garage wall and driveway appeared to conflict with the Council's ownership. Mr Fallon finished the work, and in July 2003 the Council noticed that it had been carried out; this led to the Council's application to the Land Registry in August 2003.
iv) The Adjudicator then turned to the first of the four questions he had identified, namely whether the alteration would affect the Fallons' title. He correctly said it would not affect their paper title; what it would do would produce "another general boundary in a more accurate position than the current general boundary" (paragraph 68).
v) He continued:
"69. However at this stage more than the paper title is in issue. In Lee v Barrey, there was no claim for an injunction to compel the defendant to pull down his house. No doubt there would have been an award of damages to compensate the plaintiff for the loss of the land, with the practical result that the area of land on which the house was built would have been incorporated into the defendant's registered title. In the present case there appears to me to be at least a serious issue as to whether, in the circumstances which I have described, a court would grant an injunction ordering the Fallons to demolish all or any of the work they have carried out and hand over the land to the Council rather than either simply awarding damages for trespass either in respect of the new garage or, possibly, in respect of the whole of the land built over and enclosed.
70. At the further hearing on 7 November 2006, counsel for the Council conceded that there was a triable issue as to whether the Council was estopped from pursuing any claim to the disputed land and as to whether, apart from any question of estoppel, the Council was entitled to a mandatory injunction to get the structures on the disputed land removed."
vi) He did not however answer the question whether the alteration could be said to affect the Fallons' title; but held that if it could, it would not be unjust for the alteration not to be made, relying on the fact that the land was of little value to the Council, that it had neglected to define its boundaries adequately for 35 years, that this had contributed to the confusion over the boundary and that it failed either to respond to the 2001 invitation by the Fallons' solicitors to apply for the plan to be altered or to object to the 2002 application for permission, leading Mr Fallon to believe that it had abandoned its claim (paragraphs 71 to 72).
vii) He then continued
"73. In the end I do not find it necessary to come to a conclusion on this issue because I have come to the clear conclusion that even if the alteration would not affect the Fallons' title, the facts to which I have referred constitute exceptional circumstances which justify not making the alteration unless and until a court has decided whether to order the Fallons to remove all or any of the wall, buildings and paving which trespass on the Council's property, taking into account, for example, the principles set out by the Court of Appeal in Jaggard v Sawyer [1995] 1 WLR 269, or agreement has been reached between the Fallons and the Council on this matter. To alter it while this issue remained unclear would not lead to greater clarity but only to confusion as the Fallons' development would be over the new boundary line and there would remain a real possibility, it not a likelihood, that all or some of it would remain and be effectively owned by the Fallons."
viii) He then pointed out that in a non-rectification case paragraph 5 of schedule 4 to the 2002 Act conferred a discretion on the Chief Land Registrar; that rule 126 of the Land Registration Rules 2003 required the Court, in a non-rectification case, to order alteration unless there were exceptional circumstances and concluded that he should apply a similar test on the assumption the present case were a non-rectification case (paragraph 74).
ix) He then identified the reasons for concluding that this was an exceptional case (paragraphs 75 to 81). I will deal with these below, but in essence he concluded that the alteration would achieve nothing of any value and it was inappropriate for the Council to proceed with an application for an alteration of the boundary when the real issues between the parties could only be resolved by the Court.
- One of the Council's grounds of appeal (Ground 8) is that, insofar as he did so, the Adjudicator was wrong to apply paragraph 6 of schedule 4. I do not think there is anything in this ground. I agree that this is not a paragraph 6 case, because the alteration does not prejudicially affect the Fallons' title and hence it is not a case of rectification and not within paragraph 6. And it is true that in paragraphs 68 to 72 of the Decision the Adjudicator addresses questions which only arise under paragraph 6. But it seems to me clear that he did not rest his decision on this. This is the effect of paragraph 73 which I have quoted above and where the reference to "this issue" is, as I read it, to the issue whether the alteration could be said to affect the Fallons' title. What the Adjudicator was saying was that he did not need to decide if it were a rectification case or not, because there were exceptional circumstances which justified not making the alteration. If it were a rectification case, this would satisfy paragraph 6(3). But assuming it were not a rectification case, the Adjudicator regarded this as a reason for refusing the application.
- Another ground of appeal (Ground 7) is that the Adjudicator was wrong to apply rule 126 of the Land Registration Rules 2003. I reject this ground too. Paragraph 5 of schedule 4 to the 2002 Act provides that the registrar "may" alter the register and Mr Din accepted that this conferred on the registrar a discretion in a non-rectification case: he referred me by way of analogy to Claridge v Tingey [1967] 1 WLR 134, 141 where Pennycuick J held that the wording of s. 82(1) of the Land Registration Act 1925 ("The register may be rectified
") was discretionary. I agree; and I further agree that rule 126 has no direct application to the exercise of the registrar's discretion under paragraph 5 in a non-rectification case because rule 126 is limited to the case where the Court is dealing with a case. But I do not think the Adjudicator made the mistake of thinking that rule 126 applied to an application to the registrar; what he was doing was looking to rule 126 for guidance as to how the discretion should be exercised. Given that (i) it is accepted that paragraph 5 does confer a discretion on the registrar; (ii) paragraph 7 confers a power to make rules as to how that discretion should be exercised in a non-rectification case but no such rules have been made; (iii) paragraph 4 confers a similar rule-making power in the case of the Court exercising its discretion under paragraph 2 in a non-rectification case; and (iv) that power has been exercised in the form of rule 126, I can see nothing wrong in the Adjudicator in effect adopting the same principles as are laid down in rule 126 for the Court. It would certainly be surprising if the discretion under paragraph 5, which has not been constrained by rule, were less flexible than the discretion under paragraph 2, which has; it would also be surprising if the discretion under paragraph 5 were so inflexible as not to permit the alteration to be refused even if the circumstances were exceptional. If anything, the Adjudicator's decision to follow rule 126 might be said to err in favour of the applicant by limiting the cases in which the alteration might be refused to exceptional ones; but if so, the Council cannot complain of this.
- I therefore reject any suggestion that the Adjudicator applied the wrong test: he was in my judgment perfectly entitled to take the view that if the circumstances were exceptional, he could properly refuse the application, whether it was a rectification case (under paragraph 6(3)) or a non-rectification case (in the exercise of the general discretion conferred by paragraph 5, and by analogy with rule 126).
- This means that the appeal on this issue can only succeed if the Council can show that he exercised his discretion wrongly. The test for an appellate court to disturb the exercise of a discretion is a familiar one. Although the CPR provides that the appeal court will allow an appeal where the decision of the lower court was "wrong" (r. 52.11(30(a)), the appeal court will only be able to conclude that the exercise of a discretion is wrong if the decision maker has "exceeded the generous ambit within which reasonable disagreement is possible" (G v G [1985] 1 WLR 647, 652).
- So it is necessary to consider what the Adjudicator relied on in concluding that the circumstances were exceptional. His reasons were as follows:
i) The boundary shown on the filed plan was a general boundary. If it were altered it would still be a general boundary, albeit drawn in a different place. So altering it would not change the ownership of the land.
ii) Altering a general boundary therefore changes nothing, except, in the usual case, providing greater accuracy. That would have been the case if the Council had applied before the garage and wall were built. There would then have been no reason why the Council should not have the disputed land.
iii) But the position changed once the Fallons had built over the land. At that stage the question whether the Council could have the land restored to it depended on whether it could obtain an order excluding the Fallons from part of their garage and compelling them to pull it and the wall down. This was not a question which either the registrar or the Adjudicator could answer, but one which could only be answered by the Court.
iv) The Council conceded it to be arguable that the Fallons might be able to resist an injunction by reason of an estoppel or otherwise. There was therefore at least a seriously arguable case (and the Adjudicator himself thought a very strong one) for leaving the Fallons in possession of the land they had built on and enclosed "with or without an award of damages equal to the value of that land."
v) In these circumstances although the present boundary line did not reflect where the paper title lay, changing it would be "wholly unhelpful to anyone". An application to alter it was not an appropriate way of resolving the issues between the parties:
"The Chief Land Registrar ought not to be troubled by questions of altering the general boundary before the real issues between the parties have been fully resolved and the future of the disputed land has been determined." (paragraph 81)
- Mr Din submits that this analysis is flawed. He said that the whole purpose of the Land Registration Acts was to deal with the registration of title; and that the purpose of the register is to be an accurate reflection of the ownership of land. Having decided where the ownership of the land actually lay, there was no good reason why the register should not be amended to reflect that ownership more accurately. He accepted that if the Council applied to the Court for an order for possession, it was arguable that the Fallons might be able to defeat such a claim by relying on a proprietary estoppel or the like; but he said that this did not affect the title and was no reason not to amend the register to reflect more accurately where the title was. He accepted that the registrar and Adjudicator could not decide on the issues of injunctive relief or possession; but said that this just reinforced the point that all they were dealing with was title, which was a quite separate point from the question of possession on the ground. He said that to leave the register unaltered would be to perpetuate the potentially misleading nature of the filed plan which had in fact misled the Fallons and might mislead future purchasers as to where the title lay. He also said that there was nothing exceptional about an encroachment leading to a boundary dispute: boundary disputes typically arose because the boundary was put in issue by some encroachment.
- I fully accept that the purpose of the Land Registration Acts is to provide for registration of title and that in the normal course of things it is preferable for the register to be altered so as to be more accurate even if the alteration simply consists of moving a general boundary from one position to another. In general anyone looking at a filed plan to a registered title is likely to assume, even if the boundary is a general boundary and the plan bears the note about dotted boundaries, that the boundary is where the plan shows it to be. In the normal case therefore if the registrar or Adjudicator has determined that the boundary is in the wrong place, it can be expected that the filed plan will be altered to show the boundary more accurately.
- It seems to me however that the critical question is whether the Adjudicator was right in regarding as relevant to the exercise of his discretion the facts that he referred to, namely that there was an unresolved issue as to whether the Council would be able to recover its land from the Fallons. It is trite law that the exercise of a discretion is flawed if the decision-maker takes account of an irrelevant factor; but if the factor is a relevant one, the weight to be given to it is a matter for him.
- I have not been referred to any authority on what factors might be relevant to the exercise of the discretion to alter the register under paragraphs 2 and 5 of schedule 4. Mr Din very properly drew my attention to the obiter comments of Pennycuick J in Claridge v Tingey [1967] 1 WLR 134, 141 when considering the jurisdiction to order rectification under s. 82(1) of the Land Registration Act 1925, where he said:
"
it seems to me that there must certainly be circumstances in which it would not be just to make an order for rectification. I am not referring now to a mere matter of hardship. What I have in mind is the type of case in which the true owner, having learnt that the registered proprietor is doing work upon the land, stands by and allows him to do the work before he intervenes with an application for rectification. In an extreme case of that kind, it is I think abundantly clear, that it would not be just to make an order for rectification."
At first blush this seems very pertinent, but Mr Din submitted, and I agree, that the position Pennycuick J was considering is rather different from the present. In the case he was considering, rectification would deprive the registered proprietor of his registered title to the land in dispute, and refusing it would leave him with such a title. The outcome of the application for rectification would therefore directly affect his title. In the present case, as the Adjudicator correctly identified, the alteration would not affect title at all, as the Fallons do not have either a paper or a registered title to the disputed strip.
- However it seems to me that the Adjudicator's point was really this. Although he had decided that the Council had a paper title to the disputed strip, the Fallons had built over it in circumstances where it was at least arguable (and in his view rather more than arguable) that the Council would not in practice be able to recover the land if it sought to do so. As I understand it what he contemplated was that if the Council sought an injunction preventing the Fallons from continuing to trespass and requiring them to remove their garage, wall and paving so far as built over the boundary, it might be met by either of two defences: (i) that there was a proprietary estoppel which prevented the Council from complaining of the trespass at all; or (ii) that an injunction should be refused as a matter of discretion, leaving the Council to a remedy in damages. (I need not consider quite what the limits of the Court's powers might be to refuse an injunction to restrain a trespass; it was not suggested before me that the Adjudicator was wrong to regard these points as arguable). One way or another therefore, the Council might fail in any attempt to recover the land, and the Fallons might be left in undisturbed occupation of it. The Council would then have a paper title but one which could not be enforced against the Fallons.
- What then would be the purpose of altering the register ? Given that it would not actually change the title to any of the land; and that the only purpose of altering a general boundary to show it in a different place is to make the register more accurate, in what sense would it be more accurate to alter this boundary ? It would then accord with the Council's paper title but not with the practical position on the ground. In effect if the Fallons can resist any claim to recover the land by the Council, the Council's paper title becomes a purely nominal or theoretical one, and the Fallons will have a de facto right to stay on the land. What is more, since an estoppel ensures for the benefit of successors, no doubt a purchaser from them would succeed to their rights. This would give the Fallons a sort of de facto title (and so long as they remained in possession a possessory title which, as the Adjudicator said, might in due course ripen into one which barred the Council's paper title under the Limitation Acts). This is what I consider the Adjudicator was referring to when he referred (in paragraph 73 of the Decision) to the "possibility, if not likelihood, that all or some of [the Fallons' development] would remain and be effectively owned by the Fallons." In these circumstances moving the boundary to show the Fallons as not having any rights to the disputed land would not achieve anything useful at all: it would not be "more accurate" except in the limited sense of according with the paper title; it would not accord with the practical reality on the ground and would, as the Adjudicator said, be "wholly unhelpful" and "would not lead to greater clarity but only to confusion."
- In my judgment the Adjudicator was right, or at any rate entitled, to regard these considerations as relevant to the exercise of his discretion. I therefore reject the central challenge to his decision, namely that the register is a register of title and matters that are relevant only to possession should be ignored. For the reasons I have given, the question whether the Council is able in practice to recover the disputed strip (in whole or in part) from the Fallons, although indeed irrelevant to the paper title, can quite properly be regarded as very relevant to the question of the de facto right to enjoy the land, and hence to the question whether any useful purpose is served by amending the register by substituting one general boundary for another. As Mr Strutt, who appeared for the Fallons, suggested, one way of testing the point is to consider what the Court would have done if the Council had applied in one set of proceedings for a declaration as to who had title to the disputed strip, an order for alteration of the register and an injunction effectively requiring the Fallons to restore the land to the Council. If the Court had refused an injunction either because of an estoppel or on the Jaggard v Sawyer basis, thereby leaving the Fallons in occupation of the land, would the Court nevertheless have been bound to order alteration of the register ? I agree with him that it would in such circumstances be at least open to the Court to refuse to do so, and indeed probable that it would so refuse.
- That covers Grounds 1 and 2 of the Council's Grounds of Appeal. I can deal comparatively briefly with the other grounds:
i) In Ground 3 the Council says that the Adjudicator was wrong to say that the issues of title are "bound up with" the question of injunctive relief. I do not think he was wrong. What the Adjudicator said is that this was so "in practical terms" (paragraph 76); as I read this, he did not mean that the injunction had any effect on the paper title but that it had a practical effect on who was de facto entitled to the land. For the reasons I have given this seems to me to be right.
ii) In Ground 4 the Council says that the Adjudicator was wrong to take account of the prospects of the Fallons acquiring title to the land by adverse possession. I have already referred to this. I do not think the Adjudicator relied on this prospect as a reason for not altering the register: the reason for not altering the register was the possibility (or in his view likelihood) of the Fallons already having acquired what I have called a de facto title.
iii) In Ground 5 the Council says that the Adjudicator was wrong to say that the application for alteration should await a decision on injunctive relief in the courts. This seems to me to be another way of putting the main point which I have already rejected.
iv) In Ground 6 the Council says that the Adjudicator was wrong to conclude that the matters referred to constitute exceptional circumstances. I accept, as Mr Din submitted, that many boundary disputes are only triggered where there is an encroachment across the disputed boundary line. But this does not seem to me to prevent the Adjudicator from regarding the facts of this case as "exceptional circumstances". Paragraph 5 covers all instances of mistake in the register of whatever sort, as well as the other grounds for alteration referred to (bringing the register up to date, giving effect to entries excepted from the effect of registration and removing superfluous entries); and what is exceptional must be judged against the whole range of circumstances in which an alteration might be asked for. And even judged against the ordinary case of encroachment over a boundary line the circumstances in which the Council might have lost its right to recover the land can be seen as an exception to the normal case. I therefore consider that the Adjudicator was fully entitled to regard a case where altering the register would only redraw the general boundary in a place which more accurately reflected the paper title but might not more accurately reflect the de facto right to the land as exceptional.
- That covers all the Grounds of Appeal. As to the point made by Mr Din in his oral submissions that leaving the filed plan uncorrected had already misled the Fallons and might mislead future purchasers, I agree with Mr Strutt that a purchaser would be likely to assume that the boundary followed the physical features on the ground (the wall and garage) and altering the filed plan (which is on the usual scale of 1/1250) would not by itself be very likely to alert a purchaser that these features were built over the boundary. (This is quite apart from the point that in general one would expect purchasers to make inquiries as to any disputes so one would expect that unless the position had been resolved by then, the true position would come to light on any sale.) But in any event it seems to me that the problem of a purchaser being potentially misled only arises because the garage and wall encroach over the boundary. The solution to the problem lies in the hands of the Council, which can either seek to regularise the position by agreement with the Fallons or, if no agreement can be reached, take proceedings for recovery of the disputed strip (which of course may or may not succeed). If however it does nothing, it seems to me that it will effectively be accepting that although it has title to the disputed strip it will not seek to enforce its title; and in such a case it is rather doubtful to what extent it could be said that leaving the boundary on the filed plan where it is would be misleading to purchasers.
- I have now dealt with the arguments advanced by the Council in support of the appeal. In my judgment for the reasons I have given the Adjudicator's decision cannot be impugned. I will therefore dismiss the appeal against the Adjudicator's decision not to direct the registrar to alter the register.
Appeal on costs
- That leaves the Council's appeal against the Adjudicator's decision on costs.
- The Adjudicator had power to make an order in respect of costs under rule 42 of the Adjudicator to Her Majesty's Land Registry (Practice and Procedure) Rules 2003. This provides:
"42. (1) In this rule
(a) "all the circumstances" are all the circumstances of the proceedings and include
(i) the conduct of the parties during (but not prior to) the proceedings;
(ii) whether a party has succeeded on part of his case, even if he has not been wholly successful; and
(iii) any representations made to the Adjudicator by the parties; and
(b) the conduct of the proceedings includes
(i) whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue;
(ii) the manner in which a party has pursued or defended his case or a particular allegation or issue; and
(iii) whether a party who has succeeded in his case in whole or in part exaggerated his case.
(2) The Adjudicator may, on the application of a party or of his own motion, make an order as to costs.
(3) In deciding what order as to costs (if any) to make, the Adjudicator must have regard to all the circumstances.
(4) An order as to costs may
(a) require a party to pay the whole or such part of the costs of another party and
(i) specify a fixed sum or proportion to be paid; or
(ii) specify that the costs are to be assessed by the Adjudicator if not agreed; and
(b) specify the time within which the costs are to be paid."
- The Adjudicator said that he did not find the question of costs an easy one, but in the end concluded that the Council should pay one half of the Fallons' costs (to be assessed on the standard basis if not agreed).
- The Council appeals this order. Undoubtedly Mr Din's strongest point is that the Council won on each of the issues which were agreed between the parties on the Schedule of Issues and fought out. Specifically the Fallons resisted the application (i) on the ground that the Council did not have paper title; (ii) on the ground that they had a title by adverse possession; and (iii) on the ground that it was a case of rectification and therefore they were entitled to the protection of paragraph 6 of schedule 4 to the 2002 Act. On each of these they lost; and they only ultimately succeeded on a ground first appearing in the draft decision of the Adjudicator and only then espoused by them.
- This is a telling point well made and I have carefully considered whether the Adjudicator was not unfair on the Council in not only depriving it of any of its costs but making it pay half the costs of the Fallons when it succeeded on so many of the agreed issues in the case. But there are two considerations which go the other way.
- The first is that the Council was overall unsuccessful in obtaining the relief that it sought, and the Adjudicator's substantive decision meant that the Fallons were the ultimate winners. Unlike the provisions of the CPR, rule 42 does not lay down any general rule that the unsuccessful party will ordinarily be ordered to pay the successful party's costs, and for all I know this may be deliberate. But I regard it as implicit in any discretion to make one party pay the other party's costs that if any order for costs is made at all, the starting point will be that the loser pays the winner; and this is reinforced by the specific provisions of rule 42 (rule 42(1)(a)(ii) and (1)(b)(iii)) which refer to a party succeeding in his case. And I think one can go further. Although rule 42 refers to the case of a party succeeding on part of his case, I take this to refer to a case where a party has succeeded in obtaining part of the relief that he sought, not a case where a party has established part of his case but failed to obtain any relief. Ordinarily, a party who brings a claim which wholly fails would not expect to recover any part of his costs from the successful defendant (or in this case objector).
- This simple way of looking at it is complicated in the present case because the Council did succeed in establishing its paper title, and although this did not lead to any formal relief it was common ground before me that this would give rise to an issue estoppel in the Council's favour preventing the question of paper title from being re-opened in any subsequent proceedings. To this extent the Council can be said to have achieved something of potential value from the proceedings; nevertheless, as the Adjudicator said, although the decision as to paper title would assist the Council, by itself it does not help it regain the land without a court order (paragraph 84).
- That brings me to the second point, which the Adjudicator dealt with at some length. This was that he took the view that the real issue between the parties was who would get to keep the disputed land. As already explained, this issue could only be resolved by court proceedings in which the questions of estoppel and injunction could be resolved; and he took the view that the Council should have brought court proceedings to resolve all the issues at the same time (paragraph 83). If it had done so, some of the costs would have been incurred in any event; but the overall costs would have been substantially less, because the evidence that he heard on the parties' conduct and motives (relevant to the issue of exceptional circumstances) would also be relevant to any court proceedings for an injunction or estoppel. In addition if there had been one set of proceedings, the Fallons could have protected themselves against costs by offering to purchase the disputed land (paragraphs 85 to 86).
- In the light of these considerations, the Adjudicator said he was satisfied that there should be no order for costs in favour of the Council, but that it would not be right to make the Council pay all the Fallons' costs (paragraph 88) and hence that they should pay one half of the Fallons' costs.
- The question for me is whether the Adjudicator erred in principle. As with the substantive appeal this is an appeal against the exercise of a discretion and his decision can only be interfered with if it is wrong in the sense of being outside the generous ambit within which reasonable disagreement is possible. In my judgment his decision cannot be so characterised.
- First, I consider that he was entitled to take the view that there should be no order in favour of the Council. As I have already said, the Council failed in obtaining the relief it sought. There seems to me nothing wrong in principle in such a case in the successful party, the Fallons, not being ordered to pay any part of the costs of the unsuccessful party, the Council. This is so even though the Fallons lost on some of the issues on which they fought, and even though the issue on which they did ultimately succeed was one which first appeared in the draft decision and was only then espoused by them. It is also so even though Mr Strutt accepts that the paper title issue has been decided in favour of the Council and is potentially helpful to the Council: the Adjudicator was alive to this as I have mentioned but in my judgment he was entitled to take the view that by itself this did not give the Council anything of substantive value. The point can again be tested in this way. Suppose that the Council had brought court proceedings seeking a declaration as to its paper title and an injunction and the Court had duly found for it in relation to the paper title but refused an injunction. Would the Court be bound to grant it its costs of the paper title issue ? It might do so, but I cannot see that it would be bound to do so, and in circumstances where the decision on paper title was of no practical benefit to the Council I think it might very well decline to do so. In these circumstances I do not think the Adjudicator can be said to have gone wrong in principle in taking the view that despite the Council's success on the paper title issue, the Fallons should not be required to pay any part of the Council's costs.
- Second, I consider that he was entitled to take the view that the Council should pay some but not all of the costs of the Fallons. This reflected the fact that the Fallons had won, but not succeeded on all the issues. It also reflected the fact that the Council had chosen to bring proceedings which did not resolve all the matters in dispute between the parties and would overall lead to an increase in costs. In my judgment it was well within his discretion to take the view that in those circumstances the Council should pay part but not all of the Fallons' costs. Having made that decision, it is impossible to criticise the proportion of 50% which he chose: he had a far better idea of the time spent on the paper title and adverse possession issues (on which the Council won) and on the exceptional circumstances issue (on which the Council lost) than I have.
- I may add that in the Council's written submissions on costs after the Adjudicator's draft decision, the Council itself suggested that any costs awarded to the Fallons should be reduced by 50% as a means in effect of both denying them their costs of the paper title and adverse possession issues (estimated at 10% of their overall costs) and giving the Council its costs of these issues (estimated at 40%). The Council may have later changed its position on costs, but the fact that the Adjudicator's order reflected the Council's initial submission on costs does tend to support the conclusion I have reached that it was a course that was open to him in his discretion.
- For the reasons I have given the Adjudicator's order as to costs is not shown to have involved any error of principle, and I will dismiss the appeal against it.
