KINGSALTON LTD. AND ANOTHER v THAMES WATER DEVELOPMENTS LTD. AND OTHERS [2001] EWCA (Civ) 20

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT
CHANCERY DIVISION
Mr. David Mackie Q.C.
[2001] EWCA Civ 20Case No Case No: CHANF/2000/2713/B2Venue Royal Courts of Justice, Strand, London, WC2A 2LL, Friday 19th January 2001
Between
KINGSALTON LTD. AND ANOTHERRespondentsTHAMES WATER DEVELOPMENTS LTD. AND OTHERSAppellants
Before
Lord Justice Peter GibsonLady Justice ArdenSir Christopher SladeMr. David Elvin Q.C. and Mr. Timothy Morshead (instructed by Messrs Dibb Lupton Alsopof Birmingham for the Respondents)Mr. Kim Lewison Q.C. and Mr. Timothy Fancourt (instructed by Messrs Ashurst Morris Crispof London for the Appellants)Date 19 January 2001

LORD JUSTICE PETER GIBSON:

The

[1]First Defendant, Thames Water Developments Ltd., the Second Defendant, Westbrook Mill Lane Ltd., and the Third Defendant, Westbrook Property Developments Ltd., appeal with the leave of Mummery L.J., the single Lord Justice considering the leave application on paper, from part of the order dated 12 July 2000 of Mr. David Mackie Q.C., sitting as a Deputy High Court Judge in the Chancery Division. By that part of his order the Deputy Judge ordered rectification of the register at the Land Registry under s. 82 (1) Land Registration Act 1925 ("the 1925 Act") so as to reflect his findings as to the location of the boundary between the registered land of the First Defendant and the registered land of the First Claimant, Kingsalton Ltd. ("Kingsalton"). The Defendants were also given leave by Mummery L.J. to appeal against the findings of the Deputy Judge on the location of the boundary. But they do not pursue that appeal. Nor have they sought to appeal against the Deputy Judge's finding on the boundary between the First Defendant's land and the registered land of the Second Claimant, Pollock & Searby Ltd. ("P&S"). The sole issue on this appeal is whether the Deputy Judge erred in the exercise of his discretion in ordering rectification against the Defendants as registered proprietors in possession.[2]The background to this dispute can be summarised shortly. In Alton in Hampshire an unadopted lane ("the Lane") runs roughly east-west. It joins Mill Lane at the western end of the Lane. Mill Lane in turn leads onto the Alton by-pass. The Lane runs eastward from the junction with Mill Lane past land owned by Kingsalton to the north of the Lane and land owned by P&S to the south of the Lane. Prior to 1973 all the land including the Lane was owned by two brothers, Philip and John Mayhew ("the Mayhews"). The Lane then crosses a stream by means of a bridge and beyond that to the southeast is a large piece of land, part of Alton Sewage Works, which the Defendants propose to develop ("the development land").[3]On 9 May 1973 the Mayhews did a land swap with Alton District Council ("Alton"). They conveyed to Alton certain parcels of land which Alton required in connection with the widening of Mill Lane. The land so conveyed contained part of the Lane and some of the grass verge to the north of it.[4]On 15 June 1973 the Mayhews conveyed a parcel of land, identified on a small scale plan which provides no reliable guide to the boundaries, to the north of the Lane to a developer, Arrowcroft Investments Ltd. ("Arrowcroft"). At the time of the conveyance plans existed for the construction of a factory on that land. But a dispute then arose between Alton and Arrowcroft as to whether the factory would trespass on Alton's land. Arrowcroft caused its architects to alter the plans for the proposed factory so that its south east corner was moved about 90cm. to the north. The plans showed the land adjacent to the southern wall of the factory as "land in local authority ownership". The factory was built by Arrowcroft in accordance with the revised plans. On 9 October 1976 Arrowcroft let the factory to another company. The plan for the lease showed the demised land as bounded by the southern wall of the factory.[5]On 26 May 1977 Arrowcroft's solicitors wrote to East Hampshire District Council referring to a plan showing the land of which Arrowcroft held the freehold and adjoining it, land of which, the solicitors said, they understood that that Council held the freehold. The solicitors enclosed a further larger scale plan which showed that they considered that the Arrowcroft land included the land (called "the wedge" by the Deputy Judge) between the factory wall as built and the factory wall as planned, but that the land between the factory wall as planned and the northern edge of the Lane belonged to that Council. They said that it appeared that with the consent of the Council Arrowcroft had built a doorway (close to the south west corner of the factory) "leading onto your Council's property" with a view to it being an emergency exit. The Deputy Judge commented that the implication was that Arrowcroft thought its title ended at the edge of the building (more accurately in my view, at the edge of the building as originally planned) and that the area beyond belonged to the Council. But he found that neither had applied its mind to the boundary between them. On 1 December 1977 Arrowcroft transferred its freehold to Prudential Nominees Ltd. ("Prudential"). On 14 December 1977 Prudential obtained first registration of its title (HP 122511). This unambiguously shows the southern boundary of Prudential's land to be the southern wall of the factory. On 14 August 1989 Prudential sold the land to Kingsalton, which on 29 September 1989 became the registered proprietor.[6]Thames Water Utilities Ltd. ("TWU") became the registered proprietor of certain land including the Lane and the development land on 26 August 1982. On 8 December 1994 TWU transferred part of its land, including the Lane and the development land, for value to the First Defendant, which became the registered proprietor on 9 January 1995 under title number HP 494357.[7]In the meantime on 25 September 1991 the Mayhews granted an associated company of the Second and Third Defendants, Westbrook Lynch Hill Ltd. ("WLH"), an option to purchase land which they claimed to have retained, that is to say a narrow strip to the north of the Lane running from Mill Lane to a point to the west of the stream and bounded by the southern wall of the factory to the north and by the edge of the Lane to the south. At the request of the Third Defendant the Mayhews on 13 October 1994 obtained registration of their title to that and other land under title number HP 489823. On 5 April 1995 the narrow strip was transferred by the Mayhews to WLH for £50,000 pursuant to the option. On the same day WLH sold that land for the same price to the Second Defendant which on the same date sold it on to the First Defendant for £176,250. On 31 May 1995 that land was removed from title number HP489823 and the First Defendant's title to that land was registered under title number HP500177. I shall call the land "the disputed land", even though the ownership of not all of it was the subject of dispute before the Deputy Judge.[8]The significance of the disputed land lies in the fact that if the development land is to be developed there must be an access road to the required standards, and normally that requires a road at least 7.3 metres wide with a footway on either side of at least 2 metres. The Lane itself is not wide enough. The disputed land is also needed. The Second and Third Defendants in February 1991 had enquired of Kingsalton whether it was prepared to sell part of the factory and some land in order to provide a suitable access to the development land. Kingsalton indicated that it was not prepared to sell.[9]Kingsalton had placed a chain-link fence parallel to the wall of the factory in the disputed land. On 30 January 1995 agents for the Mayhews wrote to Kingsalton's tenant of the factory requesting the repositioning of that fence. Kingsalton acceded to that request by moving the fence closer to the factory. On 23 March 1995 the agents wrote again to thank Kingsalton, but they said that the fence still jutted out by a few feet onto the Mayhews' land, and they asked that the fence be replaced along the boundary flush with the factory. Kingsalton in response disputed the need for that. On 28 April 1995 there was a meeting on site between Kingsalton and Mr. Lyndon-Skeggs for the Defendants. No agreement was reached. A gas governor for the gas supply to the factory, which had been placed on the disputed land by British Gas, was also objected to by the agents for the Mayhews and removed to Kingsalton's land.[10]On 27 November 1995 the Defendants moved Kingsalton's fence and erected peg and rope markers on the disputed land to show the intended line of the road to be built. On 24 July 1997 the Defendants commenced work to turn the Lane into a suitable access road. Part of the disputed land together with the Lane was used to construct a road despite Kingsalton's repeated objections.[11]On 29 July 1997 Kingsalton and P & S commenced proceedings against the Defendants. Kingsalton claimed possession of part of the disputed land up to a line, known as "the Blue Line", which the parties' experts had identified and which runs in a straight line from a point about 0.3m. from the south west corner of the factory to a point about 2m. from the south east corner of the factory, and a little further on curves north to a point facing Mill Lane. Kingsalton also claimed a declaration that its southern boundary is the Blue Line and rectification of the register at the Land Registry in accordance with the declaration. It is unnecessary to describe the relief sought by P & S.[12]The Deputy Judge at the end of the trial held that the boundary of Kingsalton's land was the Blue Line and granted a declaration to that effect. He then turned to the issue of rectification of the register. He heard evidence from Mr. Philip Mayhew that in 1973 he had retained land by the Lane because he wanted to be sure that the Lane would be wide enough for, amongst other things, the traffic going to and from the Mayhews' farm. The Judge found that Mr. Mayhew's recollection on this was mistaken. He referred to s. 82 (1)(a) and (3) of the 1925 Act (as amended) and to the decision of Templeman J in Epps v Esso Petroleum [1973] 1 WLR 1071. The Deputy Judge said:
"The facts are very different here but the process identified in Epps remains valid. The ownership of the [disputed land] was an issue the importance of which no-one was aware of until the early 1990s. It was in a sense the fault of Kingsalton's predecessors in title that there was a lack of precision about the identity of this boundary but it was never foreseen to be a matter of much significance. The Defendants are not the first proprietors, the Mayhews were. But they are less free from responsibility than other successors to registered title because they were involved with and initiated the first registration to resolve what they saw would otherwise be a doubt. The registration depended on limited examination of old plans and a mistaken recollection by Mr. Mayhew which was not closely tested at the time. This was a step with which the Defendants were closely associated."
[13]After referring to the arguments for Kingsalton, the Deputy

Judge continued:

"The Defendants are in a sense in possession of the disputed area but in a way different from that which the statute must have contemplated when considering it just to give additional protection to those in possession. It seems to me I can look at the matter equally well in one of two ways. If there is no possession then I consider the matter within Section 82(1) but bear in mind the nature of the occupation secured by the Defendants. If there is possession within Section 82(3) I have to apply that sub-section but have regard to the limited and questionable nature of the possession and the fact that it was secured by works carried out wrongly but in good faith to force an issue. However I look at it the need for rectification is clear. It seems to me unjust not to order rectification, in the circumstances which I have described in the judgment, when registration was obtained quite recently, at the behest of the Defendants to resolve a doubt and only secured because the evidence which I have had the benefit of considering was not available to the Land Registry. In my judgment notwithstanding the fact that the Defendants may arguably be in possession of the property I believe that it would be unjust not to rectify the register against them to give effect to what I have found the true boundary between the parties' land to be."
The Deputy Judge therefore ordered rectification of title numbers HP 122511, HP 500177 and HP 494357 to give effect to his declaration and the amendment of those titles, where they abut each other, in accordance with his declaration.[14]This appeal turns on the true construction and application of s. 82 (1) and (3). S. 82(1) provides (so far as material):
"The register may be rectified pursuant to an order of the court or by the registrar, subject to an appeal to the court, in any of the following cases, but subject to the provisions of this section:- (a) Subject to any express provisions of this Act to the contrary, where a court of competent jurisdiction has decided that any person is entitled to any estate right or interest in or to any registered land or charge, and as a consequence of such decision such court is of opinion that a rectification of the register is required, and makes an order to that effect; .... (g) Where a legal estate has been registered in the name of a person who if the land had not been registered would not have been the estate owner ...."
[15]S. 82 (3), as amended by s. 24 Administration of Justice Act 1977, provides: "The Register shall not be rectified, except for the purpose of giving effect to an overriding interest [or an order of the court], so as to affect the title of the proprietor who is in possession -(a) [unless the proprietor has caused or substantially contributed to the error or omission by fraud or lack of proper care; or](b) [...](c) unless for any other reason, in any particular case, it is considered that it would be unjust not to rectify the register against him." (What is contained between the square brackets reflects the amendments made by s. 24.)[16]S. 83(1) provides that where the register is so rectified, any person suffering loss by reason of the rectification is entitled to be indemnified. S. 83(2) provides that where an error or omission has occurred in the register but the register is not rectified, any person suffering loss by reason of the error or omission is entitled to be indemnified. By subs. (8):
"Where an indemnity is paid in respect of the loss of an estate or interest in or charge on land, the amount so paid shall not exceed - (a) where the register is not rectified, the value of the estate, interest or charge at the time when the error or omission which caused the loss was made; (b) where the register is rectified, the value (if there had been no rectification) of the estate, interest or charge, immediately before the time of rectification."
[17]The first issue which arises is a point taken by Mr. Elvin Q.C. for Kingsalton for the first time in this court. By its Respondent's Notice Kingsalton says that the Deputy Judge need not have considered s. 82 (3) because the questions raised by the subsection do not arise where rectification of the register is made pursuant to an order of the court. It further says that the right question for the Deputy Judge was whether in his discretion he ought to rectify the register without having regard to the question whether the First Defendant was in possession except to the extent that that consideration would weigh in the exercise of his discretion apart from s. 82 (3).[18]It is unfortunate that the point was not taken before the Deputy Judge. Mr. Lewison Q.C. for the Defendants sought to argue, first, that s. 82 (1)(g), not s. 82 (1)(a), was the applicable provision in this case, and, second, that the words in s. 82 (3) "except for the purpose of giving effect to .... an order of the court" had no application to the circumstances of the present case in consequence. I can accept neither limb of that argument. It may well be that the Deputy Judge could have found that the case fell within s. 82 (1)(g). But it is plain that he regarded s. 82 (1)(a) as the applicable provision, as para. (a) was the only paragraph in s. 82 (1) to which he refers in his judgment. The applicability of that paragraph was not debated before the Deputy Judge. Mr. Lewison suggested that the effect of the First Defendant's registration was that the only person "entitled to an estate, right or interest in or to any registered land" was the First Defendant. I of course accept that that was the effect of the registration of the First Defendant. But when a court finds, as did the Deputy Judge, that the true boundary between the registered land and other land belonging to another bisects the registered land and grants a declaration to give effect to that decision, the court has in reality decided that that person is entitled to an estate, right or interest in or to that part of the registered land which lies his side of that boundary. The Deputy Judge expressly stated that it would be unjust not to rectify the register "to give effect to what I have found the true boundary between the parties' land to be". He must therefore be taken to have thought that the case was within s. 82 (1)(a), as indeed it was. But even if that is wrong, it seems plain to me that the case falls within the words of exception in s. 82 (3). It cannot sensibly make a difference that the order to which effect is given is made in the same proceedings as those in which rectification is sought rather than earlier proceedings. The expression "the court" in s. 82 (3) is limited to the High Court (se s. 3 (ii) of the 1925 Act, no rules having been made to confer jurisdiction on the county court) and Parliament can be seen to have intended to entrust the High Court with an unfettered discretion when ordering rectification. Mr. Lewison was not able to suggest any meaning for the words of the exception which would exclude their application to the present case. I have no hesitation in accepting the submission of Mr. Elvin that s. 82 (3) does not apply.[19]Mr. Lewison applied, in response to the new point on the construction of s. 82 (3), to amend the Appellant's Notice to take the point that if the question of rectification was for the exercise of the Deputy Judge's discretion under s. 82 (1) the Deputy Judge exercised his discretion wrongly in law because he failed to take into account relevant matters that weighed against rectification being ordered and relied upon matters that were either of no weight or were, upon a proper application, matters that weighed against rectification being ordered, and because all relevant matters and considerations were in favour of rectification being refused. We allowed that amendment but indicated that the relevant matters and considerations had to be limited to matters which were in evidence before the Deputy Judge. There are no challenges to findings of fact in either the Appellant's Notice or the Respondent's Notice.[20]It is trite law that this court will only interfere with the exercise of a discretion entrusted to a lower court if that court has made an error of law or taken into account irrelevant matters or left out of account relevant matters or was otherwise plainly wrong.[21]The basis of the Deputy Judge's decision on rectification was that if the Defendants did not have possession, then he considered the matter within s. 82 (1), that is to say as an exercise of discretion without the constraints of s. 82 (3), whereas if they did have possession, then he applied s. 82 (3). For the reasons which I have given s. 82 (3) is inapplicable. The Deputy Judge only considered the exercise of discretion under s. 82 (1) on the footing that the Defendants did not have possession. The term "possession" is defined in the 1925 Act as including receipt of rents and profits or the right to receive the same, if any (s. 3 (xviii)), but that definition is expressed in the opening words of s. 3 to apply unless the context otherwise requires. For my part I doubt if that expansion of the meaning of "possession" is of assistance in the present case. In s. 5 of the 1925 Act the effect of first registration with absolute title is said to be that an estate in fee simple in possession in the land vests in the first proprietor. So too by s. 20 (1) in the case of a freehold estate registered with absolute title a disposition of the registered land for valuable consideration confers on the transferee an estate in fee simple and the disposition operates in like manner as if the registered transferor were entitled to the registered land in fee simple in possession. On registration therefore of their title to the disputed land, the Mayhews, WLH and the First Defendant in turn must be taken to have had possession unless and until dispossessed.[22]Mr. Elvin pointed to certain acts carried out by Kingsalton on the disputed land. One was the fence erected by it. But when asked to move it Kingsalton obliged by moving it closer to the factory wall and it was then taken down by the Defendants. Another was the building of the gas regulator on the disputed land. But again this was removed when the Mayhews' agents objected. Another was the building of foundations for the factory extending 670mm. beyond the wall. But the protrusion does not appear to have been apparent till one dug down and found it under the earth. A further act was said to be building an emergency door in the southern wall of the factory. But that work to Kingsalton's own wall does not show that Kingsalton was dispossessing the registered owners of the disputed strip, or taking possession itself, save perhaps for a small concrete step built outside that door. Lastly, it is said that Kingsalton cut the grass on the disputed strip. Mr. Elvin did not assert that these acts amounted to Kingsalton dispossessing the Defendants, and in my judgment he was right so not to claim. The Deputy Judge should have considered the exercise of discretion under s. 82 (1) on the footing that the Defendants were in possession, but he never did so.[23]Further, in so far as the Deputy Judge considered the exercise of discretion on the basis that the Defendants were in possession, he did so only under s. 82 (3). As I have held, that was wrong. However it is not disputed that the Deputy Judge would have been able to take into account the policy of the 1925 Act as manifested in s. 82 (3), that is to say to leave the registered owner in possession with his title indefeasible, save in exceptional circumstances justifying rectification. Mr. Elvin submits that the Deputy Judge having considered the position under s. 82 (3) and having found that it was not unjust to order rectification, this court should not interfere. But it is clear that the Deputy Judge did not consider the Defendants to be in true possession. He described them as "in a sense in possession" and "in a way different from that which the statute must have contemplated when considering it just to give additional protection to those in possession." He referred to "the limited and questionable nature of the possession and the fact that it was secured by works carried out wrongly but in good faith to force an issue". I am not able to accept these qualifications to the possession of the Defendants. Unlike the Deputy Judge I start from the fact that on registration the Defendants were to be treated as in possession until dispossessed, and that did not occur. The nature of the disputed land, viz. the grass verge to the Lane, has to be borne in mind. Such land cannot normally be occupied like a house or factory. Possession was not secured by the road works. The Mayhews made clear to Kingsalton that they regarded the disputed land as theirs, thereby causing the fence and the gas regulator to be moved and the Defendants also made plain their intention to use the land of which they were the registered owners.[24]It appears that the Deputy Judge thought that he could apply the decision in Epps by analogy to discount the Defendants' possession. But in Epps the proprietor of the registered land who had been in possession before having been unlawfully excluded by a fence was treated as still in possession for the purposes of s. 82 (3) (in its unamended form) even though no longer in physical occupation. In the present case the First Defendant was lawfully in possession pursuant to its registered title. Its acts on the disputed land were therefore lawful and consistent with its title even though that was being challenged by Kingsalton.[25]The Deputy Judge further appeared to consider that the Defendants were responsible for the Land Registry incorrectly registering the Mayhews' title to the disputed land. True it is that the Defendants suggested to the Mayhews that they apply for first registration. But I do not see why they should be criticised for that or for the consequent registration which the Mayhews obtained. The carelessness of Kingsalton's predecessors, Arrowcroft and Prudential, in obtaining registration to land shown bounded by the southern wall of the factory was instrumental in the registration of the disputed land with the boundaries which it has as shown on the filed plan. When the Mayhews applied for registration of the disputed land, they were aware of doubts as to the boundary, but it was not improper to seek to resolve those doubts by applying for registration, when it would be for the Registrar to examine title. He was empowered to make such searches and enquiries and to give such notices to occupiers and other persons as he might deem expedient (r. 25 Land Registration Rules 1925). He was required, before registration was completed, to advertise in the Gazette, but only in such newspapers as he decided (r. 31 ibid.) That Kingsalton was not aware of the impending registration and did not object is unfortunate, but that is not the fault of the Defendants.[26]In my judgment therefore the Deputy Judge, through no fault of his own, did not approach the exercise of discretion on the right basis that the Defendants were in possession, in a true sense, of the registered land and that he had discretion under s. 82 (1) which was unfettered by s. 82 (3), though he could and should properly have regard to the policy of the Act favouring the proprietor in possession of registered land being allowed to keep his title, the party seeking rectification being left to take the indemnity provided by the Act. It follows that the Deputy Judge erred in law in his approach and that this court can exercise the discretion under s. 82 (1) afresh.[27]The factors in favour of rectification are in my view as follows:(1) The Deputy Judge has found where the true boundary lies and rectification would give effect to that finding.(2) The First Defendant's predecessors, the Mayhews, were aware that there were doubts as to the boundary; the First Defendant took a commercial risk, knowing Kingsalton's claim to part of the disputed land, when acquiring the disputed land and proceeding with the roadworks.(3) Kingsalton, through the evidence of its director, Mr. Froud, is genuinely concerned about the integrity of the factory and the possible damage to the factory from vehicles passing by very close to the wall of the factory at its south west corner particularly with its foundations protruding from the line of the wall; the potential damage could affect the factory's letting value, and there could be interruption to the business carried on in the factory.(4) The refusal of rectification would leave Kingsalton to claim indemnity only on the basis of the value of the estate or interest at the time when the error or omission which caused the loss was made, not the current value.[28]The factors against rectification are as follows:(1) The policy of the 1925 Act favours registered proprietors in possession being left with their title undisturbed.(2) Kingsalton had acquired its land at a time when it was registered land with its southern boundary shown on the filed plan as ending with the southern wall of the factory.(3) The Mayhews had without objection duly obtained registration of the disputed land to resolve doubts and the First Defendant paid a substantial sum to acquire it.(4) The works carried out by the Defendants were, as the Deputy Judge found, done in good faith.(5) If rectification is ordered, the development land will lack a proper access road and may not be developed; that is likely to cause substantial loss to the First Defendant, which could not recover that loss under s. 83.[29]Towards the conclusion of the hearing in response to questions from the Court there was some discussion of the possibility of imposing terms as a condition of the exercise of discretion under s. 82, and as to the effect of the European Convention on Human Rights. The parties were given the opportunity to make further submissions in writing, if they liked, and both availed themselves of that opportunity.[30]In the course of his written submissions Mr. Elvin referred to Article 1 of the First Protocol to the Convention, protecting the right of every person to the peaceful enjoyment of his possessions. Mr. Elvin submitted that to refuse to order rectification would amount to the deprivation of Kingsalton of its possessions which could not be justified. He stressed that there was no dispute as to the underlying title. He pointed out that the extent of the possible harm and losses to Kingsalton has not been quantified and is not known to the court, which, he said, cannot be satisfied that a fair balance can be struck. But I do not see why this court need go beyond noting the fact that whichever way the discretion is exercised, the compensation under the indemnity is reasonably related to the value of the property. That is not a breach of Article 1. I do not consider this to be a factor in favour of rectification.[31]I am not satisfied that there is any power under the 1925 Act to impose terms on a grant or refusal of rectification. However, the Defendants on 1 December wrote an open letter to Kingsalton, seeking to address Kingsalton's concerns about the integrity of the factory. In it they said that if this court allowed their appeal, they would be willing to undertake to design and construct the access road to a technical specification which will avoid any risk of damage to the factory foundations arising from the proper use of the road by vehicles approaching or leaving the completed development. They said that they would appoint a firm of surveyors at their own cost to prepare a full structural survey of the foundations to Kingsalton's property.[32]The response of Kingsalton in a letter dated 6 December to the court was to challenge the adequacy of the undertaking offered. It was pointed out that Mr. Froud's concerns were not limited to the physical damage to Kingsalton's property but included financial damage. It questioned the substance of the undertaking itself. It suggested that it was not appropriate for the proposed undertaking to form part of any order of this court.[33]In their additional submissions dated 6 December Mr. Lewison and Mr. Fancourt word the offered undertaking slightly differently, and I would assume that this represents the Defendants' considered offer:
"If the appeal is allowed and the order below for rectification of the Register set aside, the Appellant will undertake to the Court that if the proposed access road is to be constructed on the disputed land (namely the strip between the blue line and the wall of the Respondent's building) then, subject to the Respondent reasonably co-operating with the Appellant in that regard, the Appellant - 1. will not carry out works of construction to the proposed access road except in accordance with the planning consent and any requirements of the highway authority; 2. subject to 1 above, will design and construct the access road and associated highway works to a technical specification which will avoid any risk of damage to the Respondent's building caused by the construction and by subsequent use of the road in the manner for which it was designed."
[34]Even without the undertaking the balance of the rival considerations seems to me to favour exercising the discretion under s. 82 (1) so as to refuse rectification. In particular, in my judgment, the policy of the Act points strongly in that direction, given that the First Defendant is the registered proprietor in possession.[35]However, as the Defendants have offered their undertaking I do not see why this court should decline to accept what has been offered, unless Kingsalton does not want the benefit of it. The offer would appear to give Kingsalton the chance of avoiding much of the prejudice which it fears.[36]For these reasons I would allow the appeal, set aside that part of the Deputy Judge's order which ordered rectification of the register in favour of Kingsalton, and dismiss the application for that rectification. Arden L.J.:[37]I have had the advantage of reading in draft the judgments of both Peter Gibson LJ and Sir Christopher Slade. I agree that, for the reasons which they have given and which I gratefully adopt, the appeal in this case should be allowed.[38]Like Sir Christopher Slade, I agree with the factors enumerated by Peter Gibson LJ as relevant to the exercise of discretion in this case. The Court must next determine the weight to be given to these various considerations. A particular feature of the present case is that, although rectification is sought to give effect to the substantive right of Kingsalton in the disputed land, the fact that the register does not reflect that right did not, as will often be the position, arise from a transaction to which the parties to the proceedings for rectification were parties. One can readily see that if A and B enter into a transaction whereby A becomes the registered proprietor in possession of what was B's land, and that transaction is avoided for example because of undue influence by A over B, and the court declares that B should be the owner of the land, the register should be rectified. (In this example, the register does not contain an error or omission meeting the requirements of section 82(3)(a)). This example is of the kind referred to by Scott LJ (with whose judgment Butler-Sloss and Purchas LJJ agreed) in Norwich Building Society v Steed [1993] Ch.116 at 139 when he said:
"In cases within paragraphs (a) and (b) but not within paragraphs (d) to (h) [of section 82(1)], e.g. cases in which voidable transactions are set aside and, as a consequence, rectification of the register is required, it is difficult to construct any scenario in which rectification could be withheld."
[39]Rectification would seem to be the natural and just consequence of the court's findings against A in the situation I have postulated. In such a case the factor which weighs heavily is the wrongful act of A. The question, however, which arises in the present case is what factor should carry most weight where that element does not exist. Although in Norwich Building Society v Steed Scott LJ found it difficult to envisage such a case, he did not exclude the possibility that rectification might be withheld in such a situation.[40]As I see it the answer to the question which I have posed is to found first by considering the general aim of the Act, namely to achieve a system whereby title to land primarily depends on registration, and second by seeking guidance in section 82 itself. Section 82(3) imposes restrictions on rectification in favour of the registered proprietor. It may properly be inferred that the objective in doing so is to strengthen the position of registered proprietors in possession and to put them in general in a better position than that of persons with unregistered interests in registered land, and thereby to enhance the system of land registration and encourage its use. This is confirmed by section 82(3)(c), which requires a person seeking rectification against a registered proprietor in possession to show not simply that it is just to rectify (the normal hurdle in section 82(1)) but the higher hurdle that it would be unjust not to rectify. In these circumstances I consider that, other factors being equal, when the court is considering whether to exercise its discretion under s.82(1), the fact that the registered proprietor is in possession for the purposes of section 82 is a factor to be given special weight.[41]I note that, if the discretion were not to be exercised in this way, in this case there would have been a different result in this case according to whether the respondent had chosen to agree that the boundary was the blue line or required that matter to be proved against it, so as to become the subject of a court order. A beneficial by-product of exercising the discretion in the manner proposed is that it avoids that capricious distinction in this case.[42]In my judgment, it was clear from section 82 as originally enacted that the discretion under s.82(1) was subject to section 82(3). It is the 1977 amendment which has created doubt. However, in my judgment, the words "or an order of the court" inserted in s.82(3) by section 24 of the Administration of Justice Act 1977 mean any order of the court which forms the grounds on which the court can exercise its discretion under s.82(1). The effect of the amendment is to give the court power to order rectification even where section 82(3) applies, but as I see it this discretion is to be sparingly exercised having regard to the policy of the Act.[43]It is arguably unfortunate that section 82(1)(a) does not contain explicit guidance on the weight to be given in this sort of case to the fact that the registered proprietor is in possession. But, as the circumstances in which the need for rectification may arise are so various, it may have been difficult for the drafter to achieve this.[44]It may be that these observations are of transient value if, as I hope, the system of land registration in England and Wales is modernised and reformed consequent on the valuable work of the Law Commission and HM Land Registry: see Land Registration for the Twentieth Century - A consultative document (1998) (Law Com. No.254).[45]I also agree with the conclusion of Peter Gibson LJ concerning article 1 of the First Protocol to European Convention on Human Rights. The point was not fully argued and so I will deal with it briefly. In my judgment that provision is (as a matter of English domestic law) capable of applying to an order of court declining rectification made after 2 October 2000 if the order fails to give effect to the substantive property rights of a party (see Human Rights Act 1998, s.6). That party is deprived of his right to his property because the registered proprietor will be able to deal with land without impediment: see Land Registration Act 1925, s.18. However the power to decline rectification is given for the legitimate aim in the public interest of enhancing the land registration system (see above). The court's order implements Parliament's policy on land registration. Moreover, because an error or omission has occurred in the register, that party is entitled to compensation on the basis set out in s.83(8) (see para. 16 of Peter Gibson LJ's judgment). Since the unregistered owner could have discovered the error or omission at any time after it was made, it is in my judgment reasonable and proportionate that the compensation should be related to the value of his interest at the time the error was made. Consequential losses, such as damage suffered to buildings through use of the disputed land as a road, are not included (save in so far as the prospect of such losses may have any bearing on the value of the disputed land). Such losses are caused by the subsequent use of the land, not the error or omission in the register, and in any event there may be other remedies under the general law if such losses occur. Accordingly it is not, in my judgment, a valid objection in Convention terms that the compensation will not include these losses. In conclusion, the court's order declining rectification will not infringe Kingsalton's Convention right under article 1 of the First Protocol.[46]I agree with Peter Gibson LJ that the Court has no power in this case to impose conditions. However, as I see it, the undertaking which has been offered and which is described by him, is appropriate and the Court should accept it. Of course, it is for Kingsalton to decide whether to enforce it. It cannot prejudice any further right which it may have under the general law.[47]For the reasons given and adopted above, on that undertaking I would allow this appeal. Sir Christopher Slade:[48]I gratefully adopt Lord Justice Peter Gibson's statement of the facts of this case. I am in entire agreement with his judgment and will do no more than add a few points by way of supplementing his reasons for allowing this appeal.[49]Despite the forceful submissions of Mr Lewison QC to the contrary, I agree that section 82(3) of the Land Registration Act 1925 ("the Act") has no direct application to the facts of the present case, for the reasons given in that judgment.[50]In my judgment, the Deputy Judge misdirected himself in law for at least two reasons. First, through no fault of his own, because the relevance of the first amendment to the sub-section effected by section 24 of the Administration of Justice Act 1977 was not drawn to his attention, he thought that section 82(3) of the Act applied. Secondly, and more importantly, he appears to have considered that the Defendants did not acquire "possession" (within the meaning of section 82) of the disputed land until they carried out works on the land and that their carrying out of works on it was wrongful. On this point also the Deputy Judge in my opinion was wrong in law .[51]Beyond the limited guidance given by section 3(xviii), the Act contains no special definition of "possession" for the purpose of section 82. It is therefore not surprising that there has been been much debate as to its true meaning. Some commentators have suggested that it means little, if anything , more than occupation: (see for example Law Commmission Working Paper on Transfer of Land: Land Registration (No 45), 1972, para 78). It is, however, worth noting that, following the registration of the First Defendants' title to the disputed land on 31st May 1995, Kingsalton has never claimed to be a person "in actual occupation" of it, having an "overriding interest" within the meaning of section 70(1)(g) of the Act, and correspondingly entitled to protection under that section. I see no escape from the conclusion that the First Defendants acquired "possession", within the meaning of section 82 and whatever may be the precise meaning of that word in that context, as soon as their title to the disputed land was registered; and that they were entitled to be treated as continuing in possession of it until dispossesssed, which they never were. Likewise, as registered owners in possession, they were entitled to carry out works on the disputed land.[52]The Deputy Judge having misdirected himself in law, in my judgment it falls to this court itself to exercise the discretion conferred by section 82(1) of the Act. Lord Justice Peter Gibson has listed what he regards as the principal factors in favour of and against rectification, in the exercise of such discretion. I agree with his analysis. In my judgment, however, the factor which should carry most weight in the circumstances of the present case is what he has described as the policy of the Act.[53]In my judgment the clear policy of the Act in its original form, as embodied by section 82(3) in its original form, was to give protection to a registered proprietor in possession, by imposing an absolute prohibition on any rectification of the register which would affect the title of any such proprietor, save in four stated, exceptional sets of circumstances. The reasoning behind the placing of the proprietor in possession in this privileged position was presumably the recognition that in his case compensation under section 83 would not normally afford adequate recompense for the loss of his interest: (see para 78 of the Working Paper referred to above). Those four stated sets of circumstances were the case where rectification was required to give effect to an overriding interest and the three cases respectively described in paragraphs (a), (b) and (c) of the sub-section. Accordingly, even in a case where a court of competent jurisdiction had decided that a person other than the registered owner was entitled to an estate, right or interest in the land, the court or the Registrar was absolutely precluded from proceeding to order rectification of the register if the effect would be to prejudice the title of a registered proprietor in possession, unless one or other of the four exceptions applied.[54]Now as a result of the addition of the words "or an order of the court" to section 82(3), effected by section 24 of the Administration of Justice Act 1977, the court is subject to no such absolute fetter in exercising its jurisdiction under section 82 in a case such as the present. Nevertheless, I am confident that it was not the intention of the legislature, in amending section 82 (3), to introduce any fundamental change in the policy of the Act. Indeed, though the addition of the words "or an order of the court" in their actual application had a wider effect, I suspect that the purpose of their introduction may well have been simply to ensure that the powers of the court in relation to conveyances made with a view to defeating the rights of a trustee in bankruptcy would not be affected by the deletion of the original paragraph (b) from section 82(3): (See Report, Law Commission no 158, para 3.13). [The exceptional circumstance covered by the deleted paragraph (b) was that where "the immediate disposition to [the proprietor in possession] was void, or the disposition to any person through whom he claims otherwise than for valuable consideration was void"][55]It follows in my judgment that, while the conditions specified in paragraphs (a) and (c) of section 82(3) in its present form do not bind this court in the exercise of its discretion under section 82 in the case before us, the factors which they embody are still highly relevant considerations, since they still reflect the general policy of the Act.[56]Looking at those factors in turn, I do not think it can be said that the Defendants have caused or substantially contributed to the error in the register either by fraud or lack of proper care.[57]Nor do I consider that it would be unjust not to rectify the Register against the Defendants. If one looks at the matter broadly, in the light of the factors favouring and against rectification listed by Lord Justice Peter Gibson, I think that the scales of justice are fairly evenly balanced. In the end, however, the crucial factors seem to me to be these. I do not regard the defendants as having been at fault in any relevant respect. In acquiring the disputed land from the Mayhews by way of a registered transfer, they were in my judgment entitled to assume that their title would be afforded the protection normally afforded to the title of registered proprietors in possession - and no less so because they knew that before the title of their predecessors, the Mayhews, was registered, there had been doubts as to the true boundaries of the disputed land. The very purpose of registration was to resolve such doubts. Furthermore, this is by no means a case where, if rectification were ordered, the defendants could be adequately compensated under section 83 of the Act.[58]I hope that in the event it may be possible for Kingsalton to receive substantial recompense, beyond that to which they may be entitled under section 83, by means of the undertaking referred to by Lord Justice Peter Gibson. But I too am not satisfied that there is any power under the Act to impose terms on a grant or refusal of rectification.[59]I too would allow this appeal and concur in the order which Lord Justice Peter Gibson has proposed.

LORD JUSTICE PETER GIBSON:

For

[1]the reasons given in the judgments of the court which have been handed down, this appeal will be allowed, that part of the Deputy Judge's order which ordered rectification of the register in favour of Kingsalton will be set aside and the application for rectification will be dismissed.[2]We accept the undertaking that is proffered. Mr Fancourt, I am sure you will confirm that it is an undertaking of the appellants, not a single appellant.[3]MR FANCOURT: My Lord, I do confirm that.[4]So far as the exact order that this court should make is concerned, I have handed up a draft which I think your Lordships have been given. There is a measure of agreement.

LORD JUSTICE PETER GIBSON: We are just looking at it now. Thank you.

[6]MR FANCOURT: I have set out first the undertaking that is in exactly the same terms as the submissions that were sent to the court.

LORD JUSTICE PETER GIBSON: Well, that could be pluralised so far as it says "appellant companies".

[8]MR FANCOURT: There an "s" missing.

LORD JUSTICE PETER GIBSON: It starts perfectly well in the capitals, if I might say so, but then it has become singular a little later on. Can I ask if Mr Morshead agrees with this, because if so

[10]MR MORSHEAD: My Lord, yes, subject to the plurality.[11]MR FANCOURT: I think we are agreed on the form that the order should take, subject to your Lordship's approval. That covers paragraphs numbers 1 and 2 of the draft order.[12]Paragraph 3: your Lordships may recall that various undertakings were given to the trial judge. Lord Justice Mummery released those undertakings pending the hearing of the appeal. It is now appropriate, in view of your Lordships judgment, in my submission, that they be released permanently and that is what paragraph 3 is intended to do.

LADY JUSTICE ARDEN: There is no claim under them because they were released.

[14]MR FANCOURT: My Lady, no. They were released very quickly after they were given and before any work was done.

LORD JUSTICE PETER GIBSON: Yes.

[16]MR FANCOURT: My Lords, that leaves the question of costs. Again, your Lordships may recall there was at one stage a second basis of appeal to this court on what was called the Blue Line issue, which was abandoned by the appellants by notice on 7th November. The appellants agreed at that stage to pay the respondent's costs relating to that issue. Of course, we stick by that. So far as the other issue, the one which your Lordships heard and adjudicated upon, in my submission the appellants should have their costs in this court of that issue.[17]My Lord, I also ask that the appellants have their costs against the first claimant in the court below. Would your Lordships look at the amended particulars of claim in the trial bundle. It is behind tab 7: tab 7, my Lords, page 61. If one looks at the relief that is claimed by the first claimant, the relief claimed was possession for land in dispute, over the page injunctive relief in relation to the work that has been done on it and then the declarations as to the true position of the boundary and entitlement to be registered, further rectification, damages, interest, and so on.[18]My Lords,[18]the first claimant has failed in relation to its claim with the one exception of the declaration as to the paper title boundary. My Lords, that issue was always going to get the first claimant nowhere unless it succeeded on the rectification claim also, for the reasons which your Lordships have given in your judgments. So, success to the extent that the first claimant had it in the court below, and that success still stands. The paper entitlement position gets the first claimant nowhere in his submission. This litigation was not about the ownership of a small piece of land as such, it was about whether or not the appellants would be able to build a road on the land, and, to that extent, ultimately, the first claimant has failed so far as private law is concerned and any matters relating to the Highways Authority which have not yet come into play. For those reasons, my Lord, the first claimant has in substance failed in his claim against the appellants, and, therefore, the appellants ought to have their costs of the action below as well as in this court.

LORD JUSTICE PETER GIBSON: How much time was taken on the issue on which it succeeded?

[20]MR FANCOURT: Well, my Lord, there was certainly some time spent on that issue. There was expert evidence which related not just to that issue but also to the second claimant's claim. So, to be fair, yes, there was substantial time spent at trial in relation to the issue of the Blue Line. But, despite that, in my submission, from the outset that was never going to be enough on its own. It was always going to depend on the rectification.

LORD JUSTICE PETER GIBSON: Yes. If it were to be done by way of a percentage of costs relating to the Blue Line, I mean, leaving aside your point that it was not going to be enough, what percentage would you say was the time, indeed, the costs in relation to that?

[22]MR FANCOURT: There was a proliferation of issues before the learned judge which are now distilled into just one in this court. There are a number of issues. But probably half the time before the trial judge was spent in relation to the paper title issue so far as the first claimant was concerned.

LORD JUSTICE PETER GIBSON: Yes, I see. Thank you. Mr Morshead?

[24]MR MORSHEAD: I am grateful to my learned friend for drawing attention to the pleadings. Your Lordships may remember that in the course of the substantive appeal you were also taken to the appellants' amended defence; and you will remember that the way they approached the question of rectification was to allow their defence to rectification to stand or fall on the question whether the boundary lay where they said it lay or where the respondent said it lay. Just to remind your Lordship, if one goes to page 73 in the bundle behind tab 8 at paragraph 10, a draftsman has introduced a denial to all the forms of relief that were claimed by my clients in the premises, in other words, by relation to the preceding parts of this pleading. And your Lordship will remember that those parts of the pleading addressed only two issues: first, the question of construction and, secondly, the question of adverse possession. The adverse possession question, of course, my clients withdrew, and the order below makes appropriate provision for that. But the question of construction, which alone was the pleaded issue, is the point on which my clients won below on which we have succeeded before your Lordships by admission of the appellants.[25]Additionally to that obvious point on the pleadings, it was reflected in the reality of the hearing before Judge Mackie that the overwhelming body of the examination at trial, the expert evidence, for example, was addressed exclusively to this question of construction identifying where the boundary should lie having looked at the plans to try to correlate them to what one would find on the ground. I was not at the trial, Mr Elvin was at trial, but it is apparent from the way the evidence was collected, and I have instructions from those behind that this is the case, that the overwhelming majority of time spent at the trial and in the preparation of the case was to address the pleaded issues, the construction question and the adverse possession question.

LADY JUSTICE ARDEN: Can you put a percentage on it?

[27]MR MORSHEAD: My Lady, my instructions are that the amount spent on the rectification issue was negligent. I can't venture to put a percentage on it.[28]My Lady, what I will accept is that the basis on which costs were awarded against the appellants on an indemnity basis after 16th March may fall to be revisited by your Lordships because my the clients' offer, and I don't think we need take your Lordships to this in detail, was one that would not have given them the rectification relief that they have obtained in front of your Lordships. So on the question of whether the basis of assessment should be standard or indemnity, I accept that it would be appropriate to adjust the order made below to take away the indemnity element. Other than that, my Lords, I respectfully submit that there is no basis for adjusting the order on costs below.[29]My Lords,[29]I will return to this point, if I may, briefly in a moment, but before I leave this question of costs, clearly one of the matters of importance in your Lordship's consideration of this appeal has been the meaning of possession in section 82(3) and the concept of the underlying policy of the Act. I will just flag up for your Lordships the basis on which the appellants themselves approached this question when obtaining permission to appeal by inviting your attention to page 25 in the bundle underneath paragraph 19 -- this is the appellants' skeleton argument -- just to the third line from the last paragraph on this page. Your Lordship sees, at least at this stage, there was no dispute between the parties that possession here must have been intended to mean something beyond having a registered title, otherwise every claim for rectification would be against the proprietor in possession. I will come to that a moment. But your Lordships see that the precise basis, the matter of greatest inference in your Lordship's judgments is one that has emerged very late in the day in the management of this appeal. It clearly was not a factor before Judge Mackie.[30]My Lords,[30]for those reasons, I invite you not to disturb the order for costs below except to the extent that I have indicated. Apart from that, I don't dissent from the principle expressed in sub-paragraph (4) of my learned friend's draft order.

LORD JUSTICE PETER GIBSON: So it is only (5) in relation to the costs in the lower court?

[32]MR MORSHEAD: In relation to the costs in the lower court, my Lord, yes.[33]In relation to the costs in this court, if I can take that separately having introduced it by reference to page 25 in the bundle, my respectful submission is that the right order is that there should be no order as to costs in the appeal.

LORD JUSTICE PETER GIBSON: Why?

[35]MR MORSHEAD: And that that broadly reflects the balance of fairness in the case, it not having been advanced until a very late date on a rather different basis from that on which your Lordships have decided.

LORD JUSTICE PETER GIBSON: Is there anything further you want to say?

[37]MR MORSHEAD: No.[38]MR FANCOURT: Briefly on those points so far as the pleadings are concerned, the question of rectification is not dealt with at any great length in the defence because it was not dealt with at any great length in the particulars of claim. It does not appear at all in the body of the particulars of claim. The basis on which rectification is sought does not appear. It simply appears as a paragraph in the prayer; and indeed it was not even in the prayer originally, it only came in by amendment to the particulars of claim. So that, in my submission, is the answer to why there is no detailed assertion and reassertion on the merits of rectification in the pleadings.[39]My learned friend says that the time spent at trial on the rectification issue was negligible. My Lords, I stress again, it was not just the case that there were two issues: the question of the Blue Line and the question of rectification. There were a great number of other issues, as your Lordships can see from the pleadings, and the skeleton arguments and from the documents put in the bundle.[40]So far as rectification specifically is concerned, can I show your Lordships one example of some considerable time being spent on the rectification issue. Do your Lordships have the respondent's bundle? It is the second large bundle that is before the court.

LORD JUSTICE PETER GIBSON: Yes.

[42]MR FANCOURT: If you go to tab 9, you will see a transcript of the evidence of one of the appellants' witness's, Mr Linden-Skeggs. The examination-in-chief was, of course, very short, in the modern way. There is then quite lengthy cross-examination by Mr Elvin going on to page 74 of the bundle, all to do with the conduct of Thames and Mr Linden-Skeggs in particular. My Lord, on page 74, at the end of that lengthy cross-examination, I make this observation at line 17:
"My learned friend in opening this case to your Lordship told your Lordship that he was not going to ask for anything other than nominal damages. In those circumstances I cannot possibly find any relevant material for re-examination. I have no questions in re-examination."
[43]Mr Elvin's response is that the whole of that cross-examination went to section 82 of the Land Registration Act. That is indicative. It is one example. So clearly time was spent on it. Time was spent on other issues, and I have accepted that a good deal of time was spent on the entitlement issue.[44]I don't quite understand the argument my learned friend puts forward about the way the appeal was argued on paper in this case. The point he makes would only hold any water if he is really saying that, had the argument been put in the way it was finally put in this court and accepted by your Lordships, the respondents would have given up at that point because they would have spotted that a good argument was being put forward. I invite your Lordships to say that that is not realistic at all. This was grown up litigation being fought to the end by both parties. Both had end objectives in mind. It certainly would not have made any difference to the way it was being if it had been put on paper at an early stage.[45]My Lords,[45]for those reasons I invite your Lordships to award the appellants the costs of their appeal apart from the costs of the Blue Line issue and to overturn the judge's order as to costs, either the whole of it or, more realistically, to give the defendants a proportion of their costs in the court below to reflect the fact that they did succeed ultimately, although some time was spent on issues upon which they didn't succeed.

LORD JUSTICE PETER GIBSON: Thank you. We will rise. (Short adjournment)

LORD JUSTICE PETER GIBSON: We shall order that the respondents pay the successful appellants the costs of the appeal. We vary the order as to costs below -- paragraph 5, that is, of the Deputy Judge's order -- only in respect of paragraph 5(1) of that order, page 32 of the bundle. We think that the order should reflect the fact that a great deal of time below was taken up with the issues as to the true position of the paper title on which the appellants lost and on which they have valued any appeal to this court. We shall vary paragraph 5(1) of the deputy judge's order by requiring the appellants to pay one-third of the costs of the action relating to those issues, that is the costs in the lower court. I should make it clear that so far as the costs in this court are concerned, we do not, of course, alter what is agreed in paragraph 4 of the draft minutes of order which on that paragraph are agreed. We make the other orders with the variation in paragraph 5 of the draft minutes that I have indicated. Is all that clear?

[48]MR FANCOURT: I think so.[49]MR MORSHEAD: My Lords, while your Lordships had risen a point was drawn to my attention. I don't know whether your Lordships have the list of core agenda that my learned friend sent to the Court of Appeal?

LORD JUSTICE PETER GIBSON: Yes.

[51]MR MORSHEAD: One of which drew attention to the question of the width at paragraph 8 of your Lordships judgment. I flag it up now just for this reason. What your Lordships may not know is that there has been some protracted discussion with the Highways Authority about the width. There is some concern the authority might be anxious, as it were, to look to the body of this judgment to determine whether or not the width, even with the added land, is sufficient for highway purposes. That is a concern. What would be of concern to my clients were if it were open to the local authority to read this paragraph as indicating that with the disputed land the width of the access way is sufficient for highway purposes.

LORD JUSTICE PETER GIBSON: I had not intended to say anything of the sort. I have not corrected the judgment because this was really not a point that was, as it were, the subject of controversy or argument before us. But I hope I have made it clear that the figures I gave were of the normal requirements. You can make what you will of it, but I certainly had it in mind that there was a road which may not have fulfilled the normal requirement.

[53]MR MORSHEAD: My Lord, the only point being that even with the additional land, it may still not even fulfil the normal requirement.

LORD JUSTICE PETER GIBSON: Yes. I appreciate that.

[55]MR MORSHEAD: I am grateful. My Lords, I wish to ask Lordships for permission to appeal on two grounds. My Lords, the first is in relation to the Convention. Your Lordships may remember Mr Elvin's note on this subject, which included reference to the case of James . If I can introduce this part of my submissions perhaps by reference to paragraph 30 of your Lordships judgment:
"Mr Elvin referred to Article 1 of the First Protocol to the Convention...."
[56]and so on. Your Lordship, Peter Gibson LJ, has dealt with the matter towards the end of this paragraph in this way:
"But I do not see why this court need go beyond noting the fact that whichever way the discretion is exercised, the compensation under the indemnity is reasonably related to the value of the property. That is not a breach of Article 1."
[57]Just to tie in with that, my Lord, your Lordships may remember the observation made in Mr Elvin's note, and I think Lord Justice Peter Gibson has considered and accepted this, that the question of compensation is not one that has been addressed on the evidence and has not been dealt with specifically.[58]My Lords,[58]my submission is to suggest that to note the matter in the way done in paragraph 30 may not be the correct approach under the Convention having regard to the guidance given in James . I don't know whether your Lordships have copies of James handy, but I have brought photocopies along. I am only going to go to one paragraph. (Same handed) My Lords, the paragraph to which I would invite your attention is paragraph 36, which is to be found at page 139, where, your Lordships will remember, the first sentence is:
"The Court" [that is the court is Strasbourg] "has frequently stated the principle that without losing sight of the general context of the case it must in proceedings originating in an individual application invite its attention as far as possible to the concrete case."
[59]My Lords,[59]what is of note is that in the Duke of Westminster's case it was the essence of the applicant's complaint that it was directed against the terms and conditions of the contested legislation. It does not relate to the manner of execution of the law by a state authority (inaudible). Indeed, one of the instances of the legislation does not allow scope for discretionary and (inaudible), etcetera, etcetera. "The court must therefore ... direct its attention primarily to the contested legislation itself in order to determine whether that legislation is compatible with Article 1 of the First Protocol."[60]My Lords,[60]even that did not mean that the court would examine the legislation in abstract.[61]My Lords,[61]the point I seek to suggest may be of interest, particularly as this is an emerging jurisdiction, is this. As one gets through the first part of paragraph 36, the right approach where the criticism, as in this case, is of the particular way in which you operate the statutory machinery, has to be conducted by reference to the particular facts of the case, including such questions as the adequacy on the facts of the individual case of compensation for the party being deprived of his property right. The Duke of Westminster's case is a full frontal attack on the legislation. We are not in that category of case.[62]Your Lordship has the distinction.[63]My Lords,[63]I respectfully submit that is a point of public importance. It is a question suitable for the House.

LADY JUSTICE ARDEN: So how are you saying the Convention question should be resolved?

[65]MR MORSHEAD: My Lady, in my submission the position ought to be resolved in this way. By starting with the position that, having brought themselves within section 8(2)(1) of the 1925 Act, my clients were prima facie entitled to rectification. They were within one of the exceptions to the question of the integrity of title. They had a property right. Their paper title omitted by the respondents is one which is now in question and, absent proof of adequate compensation, they ought not to be deprived of that right.

LORD JUSTICE PETER GIBSON: Yes.

[67]MR MORSHEAD: What we do know on the facts of the present case, my Lords, is that compensation, since it is to be addressed by reference to historical backgrounds, we do at least know that it is unlikely to be a fair reflection of the true loss to the respondents such as it will be felt in practical terms. My Lords, such material as this is in favour of my clients on this question.[68]The second of the grounds on which I seek your Lordship's permission to appeal is the question of approach to section 82. In my submission the starting point here is that your Lordships have concluded that section 82(3) does not apply -- we are not within that case -- but that we are within subsection (1) of section 82 where, I think, in Lady Justice Arden's words, the normal hurdle applies. At paragraph 40 in the judgment her Ladyship says:
"This is confirmed by section 82(3), which requires a person seeking rectification against a registered proprietor in possession to show not simply that it is to rectify (the normal hurdle in section 82(1)) but the higher hurdle that it would be unjust not to rectify."
[69]In my respectful submission, that distinction between, as it were, where the burden lies, what is the normal, indeed, special hurdle in section 8(2)(3), is a most pertinent distinction having regard to the fact that your Lordships, I hope I can put it in this way, have found the factors to be taken into account in the exercise of discretion evenly balanced and weighing in favour of the appellants because of their possession.[70]My Lords,[70]that leads into the question of what are the incidents of possession that the court should have regard to when considering how to approach its discretion. Your Lordships have discerned, particularly from subsection (3), a policy of the Act. I took you to page 25 in the appellants' bundle. The appellants' own approach was, as with the respondents, that possession must mean something more than being the mere registration. In my submission, that does raise a question of general importance largely for the reason that Mr Fancourt flagged up in that skeleton argument. It perhaps can be expressed as a slightly circular -- it can perhaps be criticised as a slightly circular argument; and Parliament, as your Lordships have found, has only seen fit to apply this presumption in subsection (3) as a matter of legislation. That is where one finds the special provision for people in possession.[71]Of course, the approach that in practice your Lordships have taken by applying the policy that your Lordships have discerned from that subsection is to read back subsection (3) to the entirety of the subsection and thus to diminish the value of the exception to a point where it becomes almost nugatory in the way that Mr Fancourt himself expressed it: every registered proprietor, at least of a freehold or leasehold estate, is a proprietor in possession.[72]My Lords,[72]I respectfully submit those two are important issues and would justify your Lordships granting permission to appeal.[73]Unless I can assist your Lordship further.

LORD JUSTICE PETER GIBSON: Mr Fancourt.

[75]MR FANCOURT: I am not proposing to say anything about the second, unless your Lordships want me to, being the very point your Lordships have decided in this case.[76]So far as the first is concerned, it must be for the party seeking to rely on a Convention right to bring evidence before the court as to the inadequacy for compensation, if that is the point sought to be relied upon. There is no evidence that the respondent has brought before this court as to the inadequacy of the compensation which invites your Lordships to speculate that, because of the date of assessment of compensation there might be a difference. There is no evidence as to that, and the court must, as paragraph 36 of the judgment in the European Court of Human Rights says, confine itself so far as possible to the concrete case, that is to say the individual application. There is no material on the basis of which the House of Lords will possibly decide the adequacy of compensation in this particular case. For that reason the application ought to be refused.

LORD JUSTICE PETER GIBSON: We shall refuse permission to appeal to the House of Lords. We recognise that there are points of general importance, but we think that it is appropriate to let the House of Lords themselves decide whether to grant permission to appeal. (The Court Adjourned)

ORDER

Appeal allowed, that part of the Deputy Judge's order which ordered rectification of the register in favour of Kingsalton set aside and the application for rectification dismissed. The Respondents shall pay the successful appellants the costs of the appeal. We vary the order as to costs below – paragraph 5, that is, of the Deputy Judge's order – only in respect of paragraph 5 (1) of that order at page 32 of the bundle. We think that the order should reflect the fact that a great deal of time below was taken up with the issues as to the true position of the paper title on which the appellants lost, and on which they have valued any appeal to this court. We shall vary paragraph 5 (1) of the Deputy Judge's order by requirement; the appellants shall pay one-third of the costs of the action relating to those issues, that is the costs in the lower court. So far as the costs in this court are concerned, we do not alter what is agreed in paragraph 4 of the draft minutes of the order. We make the other orders with the variation in paragraph 5 of the draft minutes that I have indicated. Permission to appeal to the House of Lords refused. (Order does not form part of approved Judgment) POST JUDGMENT DISCUSSION

Cited in 2 later judgments