KNOW YOUR LIMITS! Title Claims and Boundary Claims

This short article is a work in progress, considering a potentially significant distinction that appears to be at play in three separate strands of cases: (1) the law on boundary agreements (and section 2 of the Law of Property (Miscellaneous Provisions) Act 1989); (2) the effect of the "general boundaries" rule derived from rule 278 of the Land Registration Rules: and (3)(potentially) adverse possession under the Land Registration Act 2002.

In the first two contexts, the Courts have been distinguishing between claims to ownership of a parcel of land (a "title" claim) on the one hand, and claims merely clarifying the boundaries of ownership (a "boundary" claim) on the other. Whilst it can be important to distinguish between these two categories of claim, the distinction is not uniformly made or observed in the cases.

As I will point out briefly at the end, the distinction has potentially important, but not as yet explored, implications for the operation of the Third Condition in Schedule 6 paragraph 5(4) of the Land Registration Act 2002 ("reasonable mistake as to boundaries").

General Boundaries

In Parshall v Hackney [2013] Ch. 568 an unusual situation arose. P had acquired land which had, for many years, included within its paper title, and registered title (registered since 1904), a triangle of land suitable for parking a car. H was the owner of neighbouring land, first registered in 1980. The Land Registry mistakenly included the triangle in that latter title too. Then, in 2000, the Land Registry computerised its plans. In the course of so doing, the triangle was removed from P’s title, where it in fact belonged, and included in H’s registered title. On spotting the error, P applied to have H’s title rectified, and H resisted on the grounds of limitation. H argued that there had been adverse possession for 12 years from 1988, when H claimed to have taken possession. During that period, therefore, both P and H had separate and concurrent registered titles to the disputed land. One argument that was considered was whether recourse could simply be had to the general boundaries rule to resolve the title discrepancy between the parties, so that rectification was unnecessary. Rule 278(1) of the Land Registration Rules provides that "[e]xcept in cases in which it is noted in the Property Register that the boundaries have been fixed, the filed plan or General Map shall be deemed to indicate the general boundaries only." A general boundary leaves a degree of wriggle room for where the true boundary is. It was hoped that recourse could be had to that rule so that P could claim paper title to the land without needing to change the title plan at all.

This potential solution to the problem was rejected by the Court of Appeal, Mummery LJ explaining at [96]:

“In my judgment, the general boundaries rule does not help the respondent for the simple reason that the dispute in this case is not a dispute about the position or delineation of the boundaries of No 29 or No 31. The dispute is about title to registered land (the disputed land.) The question is who has the better title to the disputed land. It is not about where the boundary should be drawn as between No 29 and No 31.”

The Court of Appeal referred to an earlier case, Drake & Anor v Fripp [2011] EWCA Civ 1279. In that case, the dispute related to an acre and a half of land. The registered title plan suggested that the land belonged to the Appellant. The true construction of the instrument effecting the conveyance, of 153 acres of land (the disputed land was therefore about 1% of the total), suggested that it remained with the Respondent. The Respondent said the registered title plan showed general boundaries only, and contained a mistake which could be corrected by mere alteration. The Appellant said that this prejudicially affected his title and that this was rectification, and not mere correction of a mistake, and additional restrictions applied which had not been taken into account by the Court below. For the Appellant to be prejudiced, he of course had to show that he had some title capable of being prejudiced in the first place. Lewison LJ held he did not have any title on a proper interpretation of the relevant conveyance. In doing that, consideration had to be given to whether 1.5 acres was within the tolerance of the general boundaries rule. The Appellant was taking the point that this was just too much land to fall within the notion of a "boundary dispute". Lewison LJ disagreed (at paragraph [20]):

"Nor do I accept that there is some limit to the quantity of land that might be encompassed in a boundary dispute. It must depend on all the circumstances and in particular the quantity of land abutting the boundary. A dispute over a strip of land a few centimetres wide but running the whole length of, say, a railway or a canal would plainly be a boundary dispute even if the area involved was many hectares. In Lee v Barrey [1957] Ch 251 an alteration in the filed plan to move the boundary by 10 feet fell within the scope of the general boundaries rule, even though the whole frontage of the plot in question was only 42 feet. On the other hand an alteration in the proprietorship of a small strip of land registered under a separate title may well fall outside the scope of the general boundaries rule. In truth whether a change is "appreciable" must depend on all the circumstances; and I can see no objection to the ratio between the quantity of land at issue and the quantity of land remaining being a relevant consideration. [Counsel for the Appellant] suggested that the approach might be different if the contest is between two physical features, as opposed to a contest between a physical feature on the one hand and an imaginary line on the other. I do not accept that there is any difference in principle. If parties were to dispute whether the boundary was a hedge as opposed to a ditch; or whether the boundary did or did not include a road, the dispute would still be a boundary dispute."

There is therefore a title/boundary distinction to be drawn. Which side of the line a given case falls into does not turn on the size of the land in question, but on the nature and lay-out of the land in question. The principles for determining this question will require further consideration in the cases.  

Boundary Agreements

The same distinction arises in the context of boundary agreements, which are often informal "handshakes over the fence" agreed to before anything becomes contentious. Of course the counsel of perfection is that they are documented, but that is not the nature of boundary disputes. At what point does an informal agreement as to boundaries - to be warmly encouraged before a neighbour disagreement explodes into one of the most wasteful forms of litigation ever devised, the boundary dispute - become an impermissible disposal of an interest in land, non-compliant with section 2 of the 1989 Act and therefore void unless saved by, for example, a proprietary estoppel? That depends on whether the agreement settles a boundary or conveys title. The distinction can be extremely fine.

In Yeates v Line [2012] EWHC 3085 (Ch), Mr Prosser QC (sitting as a Deputy High Court Judge) said:

[29]    Joyce v Rigolli is binding authority for the proposition that an oral  demarcation agreement, that is an agreement to demarcate an unclear boundary described in title documents or delineated on a plan, is not void by virtue of section 2(1) of the 1989 Act even though the agreement has a disposing effect, because the words “a contract for…” in section 2(1) refer to an agreement which has a sipping purpose.

[35]    Parliament has not impliedly enacted that a demarcation agreement need not comply with section 2(1): section 2(5) expressly excepts certain types of contract from the scope of the section, but demarcation agreements are not mentioned, and I do not think it is possible to imply a further exception. The reason why a demarcation agreement does not have to be in writing is simply because, as the Court of Appeal held in Joyce v Rigolli, the words “a contract for…” in section 2(1) refer to an agreement which has a disposing purpose, whereas a demarcation agreement does not have a disposing purpose. It may have a disposing effect, but this is “not the acid test”, as Arden LJ put it. But if a disposing effect is not the acid test in relation to a boundary agreement, I do not see how it can be the acid test in relation to other agreements. After all, section 2(1) refers generally to “a contract” and “land”, without distinguishing between boundary agreements and other  agreements, or between a boundary and any other land, and I do not see how, even on a purposive interpretation, one can give the word “for” one meaning in relation to boundary agreements and a different meaning in relation to other agreements.                                   

[36]          It may be objected that this interpretation of section 2(1) conflicts with the aims of certainty, prevention of fraud, consumer protection, and so on, which are identified in the Law Commission Report, Formalities for Contracts for Sale Etc. of Land, and on which this legislation is based; and that in order to give effect to those aims I ought not to expand the categories of agreements which in fact dispose of land and which do not have to be in writing, beyond those contracts expressly mentioned in section 2(5) and demarcation agreements. But my task is to interpret section 2(1), and to do so in the light of the reasoning of the Court of Appeal in Joyce v Rigolli, and I consider that I am therefore required to decide that a demarcation agreement is no more than an example of an agreement which does not fall foul of section 2(1), because it does not have a disposing purpose even if it has a disposing effect. The compromise agreement in the present case is another example.

It is suggested that the Deputy Judge was right to be perplexed by the distinction between an agreement that has a disposing effect but not a disposing purpose (permissible as not within section 2) and an agreement with both that effect and purpose (void under section 2 without formality). Perhaps the better analysis might be to apply the reasoning of Lewison LJ in Drake, that a boundary agreement is outside section 2 because it confirms what each party already owns, rather than transferring ownership on way or the other. That makes it all the more important to be able to make the distinction between title claims and boundary claims, however, and it might be objected that, though the analysis is better and more logical, it it still difficult to explain the difference between the two. There is a risk that the "what is an elephant" test applies - impossible to describe, but you'll know one if you see one.

The discussion of this issue resurfaced in Nata Lee Ltd v Abid [2014] EWCA Civ 1652, at   [34], it was explained further that “where the purpose of an agreement was to delineate a boundary rather than to transfer land, it was to be presumed that any consequential transfer of land was trivial, unless the contrary was shown […] Again, the evidence and findings of the judge in the present case do not suggest that the purpose of the agreement was to define an uncertain boundary, but rather to transfer the disputed land.” In that case, a boundary which was not in dispute was shifted by agreement, leading to a non-trivial transfer of land. That was, the Court of Appeal said, impermissible. This does not merely focus on the purpose of the agreement as the acid test for validity, but also adopts a concept of triviality that Drake rejected.

The "dispositive purpose" test for validity of boundary agreements is therefore somewhat entrenched at Court of Appeal level, and is a different test from the line of cases considering the "general boundary" rule. It is suggested that the tests should really be the same as the issue is the same, and that the correct test subject to further clarification is the Drake test.

There does not appear to be cross-referable between this line of authorities and the line dealing with the general boundaries rule. That seems unfortunate, as one might think that the same concepts ought to be in play. Whilst one may not be able to say more at the moment than where the line is depends on the facts, there is surely a case for these two lines of authority to be combined so that the principles are the same or similar. There seems to be no good reason for them to diverge.

A New Frontier for the Title/Boundary Distinction?

As we all know, the frequently used Third Condition in Schedule 6, paragraph 5(4) allows a squatter to succeed if they can show that they have made a reasonable mistake as to.a boundary if it is not a boundary that has been "determined" under section 60. It must, surely, be arguable on the right facts to say that a squatter is not permitted to rely on the Third Condition, no matter how reasonable their belief, if they are claiming title, and not clarifying a boundary. Of course it may be the case that the fact that in such a case the belief will almost always be unreasonable, but that is by no means guaranteed. In IAM Group v Chowdrey [2012] EWCA Civ 505 the squatter succeeded because he reasonably believed that a room above an adjacent shop to his own was within his title and hence subject to the general boundaries rule. In light of the authorities set out above, and the title/boundary distinction, might one, in future, be able to argue that one does not even get into the Third Condition in such a case, because the belief, however reasonable, does not relate to a boundary issue at all?