REF/2010/0803

THE ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY

LAND REGISTRATION ACT 2002

 

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

 

BETWEEN

SATIN ESTATES LIMITED

APPLICANT

and

(1) JOHN HOWARD FOULDS

(2) PATRICIA SYLVIA FOULDS

RESPONDENTS

Property Address: Land lying to the west of Birmingham Road, Lydiate Ash

Title Number: WR126437

Before: Mr Owen Rhys sitting as Deputy Adjudicator to HM Land Registry

Sitting at: Victory House, Kingsway, London WC2B 6EX

On: 10 ^th July 2012

Applicant representation: Mr William Hanson of Counsel (Direct Access)

Respondent representation: Mr Kenneth Rogers of Counsel instructed by Gordon Jones & Co

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D E C I S I O N

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Preliminary issue – whether the dispute before the Adjudicator had been compromised

 

1.       This is a preliminary issue directed by Order dated 18 ^th April 2012. The issue is as follows: “Whether, in the events that have happened, the parties have reached a binding compromise of this dispute”. It arises in this way. On 30 ^th October 2009 the Applicant made an application to the Land Registry in form ADV1, seeking to be registered as proprietor of certain land within the Respondents’ title WR521134 on the basis of adverse possession. Notice of the application was given to the Respondents and they objected, primarily, it seems, on the grounds that any possession had been with the consent of the registered proprietor. The land in dispute (“the Disputed Land”) consists of a small strip at the rear of three separate back gardens, serving three newly-constructed houses, the Applicant being the developer. It appears that the strip of land is enclosed within these gardens by a fence. The Applicant contends that the fence has delineated the physical boundary of the Respondents’ title for many years, hence the application based on adverse possession. The dispute was referred to the Adjudicator on 21 ^st July 2010. In the course of the adjudication proceedings, a Case Management Conference took place in January 2012 in order to consider certain contested directions. On that occasion, it is common ground that the Applicant, through his Counsel Mr Hansen, made an offer to the Respondents to settle the dispute. The offer was not accepted on that occasion. Subsequently however, in a telephone conversation between Mr Abbas, a director of the Applicant, and Mr Williams, of the Respondents’ solicitors, on 13 ^th February 2012, the offer was repeated, and on this occasion it was accepted. The Respondents contend that a binding compromise came into effect on that day, and that this reference is concluded. The Applicant, however, argues that (a) no concluded agreement came into being and (b) even if it did, it is void for want of writing pursuant to section 2 of the Law of Property (Miscellaneous Provisions) Act 1989 (“the 1989 Act”).

2.       In order to resolve the preliminary issue, I must initially make a finding as to the terms of the offer that (as the Applicant concedes) was accepted by the Respondents on 13 ^th February 2012. I heard evidence from Mr Abbas himself, as well as from Ms Philippa Swingler, a solicitor who has at all material times assisted the Respondents’ solicitor Mr Williams. Mr Williams himself was not present, although he had made a witness statement which was relied upon. Although the original offer made at the door of the court had been made by Mr Hansen, on behalf of his client, to Mr Rogers, neither of them had made a witness statement and, since they both appeared as advocates before me, they could not give evidence. Accordingly, I had no direct evidence of the oral discussion between them. Fortunately, however, Ms Swingler was a witness to the discussions between Counsel and was able to confirm the nature of the offer.

 

3.       I am satisfied that the offer made at the hearing on 31 ^st January 2012 was as follows: the Applicant would pay the sum of £15,000 to the Respondents in return for a transfer of the Disputed Land. Ms Swingler was clear on this point, which was entirely consistent with the evidence of Mr Abbas. The offer need not have taken that form. There were other ways in which the dispute could have been settled. For example, the Applicant might have offered to pay £15,000 in exchange for a withdrawal of the Respondents’ objection to the original application. In that event, an order of the Adjudicator could have been obtained directing the Chief Land Registrar to give effect to the Applicant’s application. In that event, the register would have been altered and the Applicant registered with a possessory title to the Disputed Land. However, that was not the offer which was made. The offer was to receive a transfer of the Disputed Land – with an absolute title – in consideration of a money sum. This would of course be an improvement on the best outcome available to the Applicant even if he “won” the adjudication. Although Mr Abbas told me in evidence that he had not taken legal advice as to the precise manner in which the compromise would be implemented, he was clear that the matter would be turned over to his conveyancers to carry the matter forward.

 

4.       Both parties agree that, on 13 ^th February 2012, Mr Williams spoke directly to Mr Abbas, and asked him if the offer was still on the table. Mr Abbas confirmed that it was. Mr Williams accepted it, on behalf of his clients. There is a difference in recollection between Mr Abbas on the one hand, and Ms Swingler (and Mr Williams’s witness statement) on the other, as to what else was said on that occasion. Mr Abbas’s evidence is that he made it clear that he wanted the deal to be completed no later than 28 ^th February, which was the date on which witness statements were due to be exchanged. Ms Swingler’s recollection was that Mr Abbas initially insisted that the parties should proceed to exchange of witness statements in any event, but Mr Williams made it clear that his clients were accepting the offer on the basis that no further costs would be incurred. on was made on 19 ^th January 2011.

 

5.       On the same day Mr Williams wrote to Mr Abbas in these terms. “ We have had the opportunity to speak on the telephone this afternoon when you confirmed that the offer of settlement in the sum of £15,000 made at the recent Tribunal hearing remained “on the table” and open and capable of acceptance. Having confirmed such with you our Mr Williams did confirm acceptance on behalf of our clients and thus the matter is now resolved with the mechanics of the settlement to be put in hand. We would anticipate the settlement mechanics as being the transfer of the land in dispute from our clients to yours, the simultaneous payment of the settlement monies and (thereafter) the notification of the matter being resolved being given to the Tribunal. We presume you will be in touch with your conveyancer and please ask them to contact us as soon as possible.” On 15 ^th February 2012 Mr Abbas replied as follows: “ Thank you for your letter dated 13 ^th Feb 2012. I have instructed a HBJ Gately Wareing to contact you as detailed in your letter. I feel that the agreement may not be executed before the 28 ^th Feb 2012, as such I would still like to work towards the Directions in The Order dated 1 ^st Feb 2012. Namely that we exchange witness statements by the 28 ^th Feb 2012.”

 

6.       On 22 ^nd February 2012 Gordon Jones & Co (ref PS) responded to the letter of 15 ^th February, enclosing a signed plan identifying the land to be transferred, and continuing in these terms: “The settlement was agreed by you and when you did raise the suggestion that witness statements should still be exchanged, we pointed out that acceptance of your offer had been made and you agreed with this. Accordingly, we have an agreement as set out in our letter of 13 february 2012 which was made on the basis that no further work is to be done on this matter save for implementing the agreement……….” On 23 ^rd February Gordon Jones & Co sent the signed plan to HBJ Gateley Wareing, together with a copy of their clients’ title to the Disputed Land taken from the Land register. On 28 ^th February a further letter was sent to Mr Abbas, asking him if it was his intention to submit a Consent Order to be lodged with the Tribunal. Eventually, after several chasing letters to HBJ Gateley Wareing, and a request by the Adjudicator for clarification of the position, on 2 ^nd April 2012 Mr Abbas explained in a letter that “ There was an agreement in principle to resolve the matter on the basis that the Respondents would transfer the disputed land to the Applicant in return for £15,000. However, this agreement was never reduced to signed writing and I am advised that it was and is therefore void for want of compliance with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. I also made it clear that time was of the essence in relation to completing the proposed transfer and this was to be by 28 ^th February but this is a secondary point.”

 

7.       Mr Hansen, appearing for the Applicant, makes two broad submissions. First, that the agreement made on 13 ^th February 2012 was insufficiently complete or certain, even apart from any formalities issue. He points to the absence of certainty as to the land to be transferred – evidenced, he says, by the Respondents’ need to provide a plan for that purpose. He also points to the absence of any express agreement as to the costs of the reference, the terms on which the transfer was to be made, the nature of the title and the machinery for bringing the reference to an end. In this connection, reliance is placed on an attendance note dated 15 ^th February 2012 by the Applicant’s conveyancing solicitor, recording a telephone conversation with Mr Williams. This suggests a number of “loose ends” to be resolved. In short, he argues that the agreement on 13 ^th February 2012 was in principle only, to become binding only when a further agreement or other documentation was completed.

 

8.       In my judgment, Mr Hansen’s submission on this point is not correct. I have no doubt that the identity of the land to be transferred was ascertained and ascertainable, simply by reference to the Land Registry Notice plan. The Disputed Land was part of a registered title and would be transferred by way of a TP1, using the general boundaries shown on the filed plan. As to title, in the absence of any particular stipulation, a full title guarantee would be expected. As to costs, since nothing was said to the contrary, the assumption must be that each side would bear its own costs. The essence of the deal – a transfer in consideration of payment of £15,000 – was simple and entirely workable without any further agreements being required.

 

9.       His second submission, predicated on the assumption (correct, as I find) that there is an otherwise binding agreement for the transfer of the Disputed Land to the Applicant, is that the formal requirements of section 2 of the 1989 Act have not been complied with. Clearly, there is no document in existence which complies with section 2, and I do not think Mr Rogers, for the Respondents, argues to the contrary. Mr Hansen, however, anticipated that the Respondents might seek to rely on section 2(5) of the 1989, the well-known and well-used saving for resulting, implied or constructive trusts. In the event, Mr Rogers did seek to rely on this subsection, albeit that his Skeleton Argument does not raise the issue. He expressly disclaimed any argument based on estoppel, conceding – quite correctly in my view – that there was no element of detrimental reliance in this case. However, he was not able to formulate any coherent trust argument or otherwise to bring the Respondents within the exception established by cases such as Cobbe v Yeoman’s Row [2008] 1 WLR 1752 and Herbert v Doyle [2010] EWCA Civ 1095 and other cases discussed in Megarry’s Law of Real Property (8 ^th ed.) at 15-042 to 15-044. As Mr Hansen submitted – relying on some very clear and helpful statements by Briggs J in Anderson Antiques (UK) Ltd v Anderson Wharf (Hull) Ltd [2007] EWHC 2086 (Ch) – this is an entirely standard oral contract case, with no peculiar or extenuating features, and there is no reason why the full rigour of section 2 should not be applied.

 

10.   Mr Rogers’s principal argument, as set out in his Skeleton Argument, was that section 2 did not apply to the agreement since it qualified as a “Boundary Agreement” as the phrase is explained in cases such as Nielson v Poole (1969) 20 P & CR 909 and Joyce v Rigoli [2004] EWCA Civ 79. Undoubtedly, certain types of boundary agreement are exempt from the formal requirements of section 2 However, that is only the case where the boundary agreement simply involves the mutual acknowledgment of a disputed or uncertain boundary line derived from the title documents. The exception does not apply where the agreement, on its true construction, is an agreement to convey land, albeit that it may be made against the background of a disputed boundary. The distinction is made very clear in the following passage from Megarry J’s judgment on Nielson v Poole at page 918. “ Now a boundary agreement may constitute a contract to convey land. The parties may agree that in return for a concession by A in one place, straightening the line of division, B will make a concession in another place; and the agreement may thus be one for the conveyance of land. But there is another type of boundary agreement. This does no more than identify on the ground what the documents describe in words or delineate on plans. Nothing is transferred, at any rate consciously; the agreement is to identify and not to convey. In such a case, I do not see how the agreement can be said to constitute a contract to convey land.”

 

11.   In the present case, the agreement is quite clearly one whereby the Respondents will transfer an identified parcel of land to the Applicant in consideration of a money payment. Even if there is some dispute as to the true boundary line, this sale agreement cannot in my view be regarded as a boundary agreement of the second type identified by Megarry J. This is a contract for the sale of land pure and simple, and subject to the formalities of section 2.

 

12.   In the circumstances, therefore, I find that the agreement reached between the parties on 13 ^th February 2012 is void and is therefore not binding on the parties. Accordingly, this dispute has not been compromised and the reference to the Adjudicator will continue. I have therefore ordered that this case shall be re-listed for hearing, and that the parties shall give their dates to avoid in accordance with the accompanying directions. As to the costs of the preliminary issue, I do not see why the Respondents should not pay them on the standard basis. I have directed the Applicant to lodge a statement of costs and for a timetable allowing the Respondents to make submissions and for the Applicant to respond.

 

Dated this 16 ^th day of July 2012

 

 

 

 

BY ORDER OF THE ADJUDICATOR TO HM LAND REGISTRY