Adverse Possession and Applications to the Land Registry. Jonathan Klein and Duncan Heath

Transcription

1 Adverse Possession and Applications to the Land Registry Jonathan Klein and Duncan Heath A is the registered proprietor of Blackacre. Blackacre has an area of 100 square hectares. B is the registered proprietor of Whiteacre. Whiteacre has an area of 200 square hectares. Separating the property within their respective registered titles is a long thin strip of land ( the Disputed Land ), with an area of 2 square hectares, which the Land Registry Adjudicator has already determined (i) is unregistered land and (ii) although intended by B s predecessor in title to have been conveyed as part of Whiteacre, was not conveyed by the predecessor in title. The Adjudicator has also already determined that (i) A s predecessor in title to Blackacre, C, by adverse possession, had extinguished the paper title to the Disputed Land by 1980 so that, by that date, C had a possessory title to the Disputed Land, (ii) C was declared bankrupt in 1990, (iii) the bankruptcy was annulled in 1991, (iv) C died in 2000, (v) Blackacre was conveyed to A in 2001, when A became its first registered proprietor, but C s personal representative did not thereby convey any interest in the Disputed Land to A and (vi) A has been in possession of the Disputed Land since Ought A to be registered as the first proprietor of the Disputed Land? If so, what is the quality of title with which he ought to be registered? Would it make any difference if, in fact, (i) the Disputed Land had been conveyed, by D, B s predecessor in title to Whiteacre, to B, but (ii) the Land Registry had, in error, not included the Disputed Land on the title plan? 1. The first part of this scenario concerns an application for first registration of unregistered land by A, who has been in possession of the Disputed Land for three years, from 2010 to 2013.

2 2. By 1980, C had enjoyed more than 12 years adverse possession of the Disputed Land and had extinguished any paper title that B or his predecessor in title might otherwise have been entitled to claim. At the end of the 12 year limitation period, B lost both the right to recover the Disputed Land and his title to the Disputed Land was extinguished for good B has no valid claim to the Disputed Land because he is neither the paper owner nor is he in possession of the Disputed Land. 4. A has a title based on his own possession and such title is good against everyone except the true owner of the Disputed Land C had a possessory title. A has not enjoyed possession for 12 years so as to enable him to defeat C s possessory title. 6. Therefore, A has a right to possession against the whole world apart from C s estate or whoever is entitled to C s possessory title. 7. The question then arises as to who is entitled to any possessory title that C retained at his death. Has his possessory title passed to his estate or has the bankruptcy order and subsequent annulment had any effect on his estate s entitlement to his possessory title? 8. Upon the bankruptcy order being made in 1990, C s property rights vested in his trustee in bankruptcy pursuant to s306 Insolvency Act What is the effect of the annulment in 1991 on C s property rights? 9. Bailey v Johnson (1872) L.R. 7 Ex. Ch 262 is authority that the effect of an annulment is, in general terms, to restore a bankrupt to his former status. There are exceptions to the general rule. For example, a forfeiture that takes effect pursuant to a clause in a will, settlement or lease which provides for forfeiture on bankruptcy will not be reversed upon an annulment 3. However, it is submitted that there is nothing irreversible in the process of land vesting 1 s17 Limitation Act Megarry & Wade Eighth Edition at paragraph See White v Chitty (1866) 1 L.R. Eq 372 and Re Forder [1927] 2 Ch 291

3 in the trustee in bankruptcy, so that the exceptions to the general rule do not apply in the present scenario. There seems to be no reason why possessory title to land should not re-vest in a bankrupt upon an annulment. 10. Upon a bankruptcy order being annulled, the court may make an order under S282(4) Insolvency Act 1986, which provides: (4) Where the court annuls a bankruptcy order (whether under this section or under section 261 [or 263D] in Part VIII) (a) any sale or other disposition of property, payment made or other thing duly done, under any provision in this Group of Parts, by or under the authority of the official receiver or a trustee of the bankrupt's estate or by the court is valid, but (b) if any of the bankrupt's estate is then vested, under any such provision, in such a trustee, it shall vest in such person as the court may appoint or, in default of any such appointment, revert to the bankrupt on such terms (if any) as the court may direct; and the court may include in its order such supplemental provisions as may be authorised by the rules. 11. It is, therefore, also important to check the terms of the annulment order to ensure that the Disputed Land has not been vested in any person other than the bankrupt, C. 12. Assuming that no order has been made vesting the Disputed Land in any person other than C, C s possessory title will pass to his estate. 13. In the present case, it is extremely unlikely that the executors of C s estate, twelve years after conveying Blackacre to A, would seek to assert their right to possession of the Disputed Land against A. The practice of the Adjudicator in such circumstances is to register A with possessory title on the basis that the rights of C s executors are protected by section 11(7) Land Registration Act 2002, which provides that registration with possessory title does not affect the enforcement of any estate, right or interest that is adverse to, or in

4 derogation of the proprietor s title, if that estate, right or interest subsisted at the time of first registration A ought to be registered with possessory title to the Disputed Land. 15. If the plan filed at Land Registry ( the LR plan ) does not appear to include the Disputed Land, despite D having conveyed the Disputed Land to B, A s application will be less straightforward. What is the effect of the Disputed Land being accidentally omitted from B s title on the LR plan? Does this render the Disputed Land unregistered? If so, A will obtain possessory title as outlined above. If, however, the Disputed Land should be treated as registered land, notwithstanding its accidental omission from the LR plan, A will have to make his application pursuant to Schedule 6 of the Land Registration Act 2002 ( LRA 2002 ). Pursuant to Schedule 6 paragraph 1(1) LRA 2002, A would have to show 10 years adverse possession immediately prior to the date of his application. A cannot do so, as he has only been in adverse possession for three years. It is, therefore, crucial to consider whether the Disputed Land is registered land. 16. Following the Court of Appeal s decision in Drake v Fripp [2011] EWCA Civ 1279; [2012] 1 P. & C.R. 4, and on the facts of the present case, B should apply for alteration of the register pursuant to Schedule 4 LRA 2002 on the basis that the LR plan is mistaken and it is necessary to correct the mistake. 17. In Drake v Fripp, D claimed that a Cornish hedge was the boundary between the parties titles. F argued that a fence marked the boundary. The hedge and the fence were approximately 4 to 5 metres apart. Both parties claimed ownership of the long, thin strip between the hedge and the fence, which consisted of about 1 ½ acres. The plan filed at Land Registry showed the hedge as the boundary. F argued that the LR plan was wrong. D argued that the plan was correct or, if it was not, that F s application amounted to an application for rectification and that D was, therefore, entitled to an indemnity. 4 See Bezkorowajny v Dawson (2011) REF/201/1203 and REF 2011/0521.

5 18. The Court of Appeal 5 held that, as a matter of construction of the original conveyance, the fence was the boundary and the disputed strip had been conveyed to F. F was, therefore, entitled to an order for alteration of the register. 19. F s application did not amount to an application for rectification. The title plans held at Land Registry only show the general boundaries. The correction of the title plan did not cause D to lose land and F to gain land; it merely recorded more accurately the position of the general boundary. Correcting the plan to show the fence as the boundary did not amount to rectification because no registered title was prejudicially affected by the correction because no registered proprietor had lost land. 20. The Court of Appeal held that not every correction to a title plan would fall within the scope of the general boundaries rule. Whether a correction to the position of a general boundary on a title plan was sufficient to amount to an alteration outwith the scope of the general boundaries rule was a question of fact and degree in each case. In Drake v Fripp, the disputed strip was a long, thin strip running alongside the boundaries to the two titles. Accordingly, the dispute was clearly in the nature of a boundary dispute and the general boundaries rule applied. 21. It is not entirely clear from the judgment of Lewsion LJ why any alteration application needed to be made at all or how the court had jurisdiction to hear an alteration application in circumstances where the only criticism of the LR plan was that the precise boundary was 4 to 5 metres removed from the general boundary shown on the LR plan. 22. The court may make an order for alteration of the register to correct a mistake 6. Lewison LJ stated alteration of the boundary shown on the title plan would undoubtedly correct a mistake 7. This statement seems open to question. 5 Lord Neuberger MR and Aikens and Lewison L.JJ. 6 Sched 4 para 2(a) LRA Paragraph 16 of the judgment.

6 23. The Court of Appeal also held that registration of S.L.A. as proprietor by reference to a filed plan on which the boundary line followed the Cornish hedge left the position of the precise boundary undetermined 8. That point was central to the Court of Appeal s decision. However, there seems to be a tension between the statement that the boundary as shown on the LR plan left the position of the boundary undetermined and the finding that the location of the general boundary on a filed plan can amount to a mistake. 24. If the title plan filed at Land Registry: (1) shows only a general boundary (2) is always subject to a proper construction of the original conveyance and (3) does not determine the line of the boundary; then it is difficult to see how the boundary shown on the title plan can ever be said to be mistaken. If something does not purport to be accurate, how can it be said to be mistaken? And if something does not determine rights, why does it need altering? 25. The answer to those questions may lie in paragraph 21 of the judgment, which describes the order being made as alteration of the register to reflect the true boundary more accurately. However, this seems to amount to improvement of the register rather than the correction of a mistake. It is submitted that it would have been possible for the court to simply make a declaration that the disputed strip was within F s title and to hold that there was no need or jurisdiction to make an order for alteration because it was not necessary to correct a mistake, no mistake having been made. 26. Notwithstanding such arguments, Drake v Fripp clearly establishes binding precedent that a proprietor in F s situation may apply to the Adjudicator for an order altering the register. 27. Plainly, the present scenario falls within the general boundaries rule: the Disputed Land is described as a long thin strip of land with an area of 2 square hectares. B can apply for alteration. Given that the effect of the alteration is only to show the position as it has always been, the Disputed 8 Paragraph 20 of the judgment.

7 Land is registered land. A s application to be registered with title to the registered Disputed Land must fail. Enterprise Chambers 43 Park Square, Leeds jonathanklein@enterprisechambers.com duncanheath@enterprisechambers.com