England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM MR JUSTICE HART
Neutral Citation Number [2004] EWHC 1504 (Ch)

		Royal Courts of Justice Strand, London, WC2A 2LL
		10 March 2005

The Vice-Chancellor :

Introduction
1. The first appellant, Ms Sommer, is the owner and occupier of The Old Forge ("the Old Forge") Osbaston, Monmouth. Her title is registered in HM Land Registry under title no:WA480928. The respondents, the Sweets, are neighbours of Ms Sommer. They own and occupy a property adjoining the Old Forge to the north called Forge Meadow ("Forge Meadow"), Osbaston. Their title is registered in HM Land Registry under title no:WA508839. The Sweets also own another property adjoining to the north of Forge Meadow called Northern Field, the title to which is registered under Title no:CYM48571. The fourth property which features in this appeal is Meadowgate which lies to the east of Forge Meadow, the south-east of the Northern Field and the north-east of the Old Forge.
2. Vehicular access to all four properties is gained from the public highway to the south called Forge Road. In the case of Meadowgate access is over a strip of land ("the Meadowgate Access Strip") the title to which is registered in HM Land Registry in the names of the owners of Meadowgate under title no:WA434915. In the case of the other three properties vehicular access is obtained from Forge Road over a part of the Old Forge, known as the Old Forge Yard lying immediately to the west of the Meadowgate Access Strip. In the case of Forge Meadow and the Northern Field the vehicular access runs from Forge Road to the north-west so as to link up with those two properties. What I have described is shown on the plan marked Plan A appended to this judgment.
3. In the case of Forge Meadow the right to such access had apparently been granted to a Mr and Mrs Martin, the predecessors in title of the Sweets, by a transfer dated 31st October 1988 and made by Mr T.E.C.Lovering. In the case of the Northern Field vehicular rights of access had been reserved out of an assent made on 23rd December 1983 and were noted on the title to the Old Forge. But all was not as it seemed. For reasons which will become apparent later Ms Sommer challenged the vehicular rights of way on which the Sweets relied.
4. On 7th February 2003 the Sweets instituted proceedings against Ms Sommer and Mr Neanor ("the Appellants") in the Newport County Court seeking declarations as to their entitlement, the insertion of the appropriate entries on the respective titles, injunctions and damages. In due course, the Appellants served a defence and, in the case of Ms Sommer alone, a counterclaim seeking declarations that the Sweets were not entitled to the rights they claimed. The proceedings were transferred to the High Court and came before Hart J sitting in Cardiff. After a four day hearing he gave judgment on 25th June 2004. He upheld the claims of the Sweets to be entitled to vehicular rights of way over Old Forge Yard as appurtenant to both Forge Meadow and the Northern Field, granted appropriate declarations, ordered the rectification of the relevant titles to reflect the conclusions to which he had come, enjoined the Appellants from obstructing any such rights and awarded the Sweets £300 in damages. In addition he awarded costs of the proceedings to the Sweets to be assessed on the standard basis up to 6th June 2003 and an indemnity basis thereafter and dismissed the counterclaim. The Appellants now appeal with the permission of the judge.
5. Their appeal raises the following points:

(1) Whether the judge was right to conclude that the Sweets were entitled to the vehicular access from Forge Road over Old Forge Yard to Forge Meadow they claimed as either

(a) a way of necessity the reservation of which is to be implied into two transfers dated 15th April 1988 and made by Mr T.E.C.Lovering in favour of himself and his wife, and/or

(b) a right arising by way of proprietary estoppel from the dealings between Mr and Mrs Lovering and the Martins after the transfer in their favour made on 31st October 1988.

(2) Whether the judge was right to conclude that the Sweets were entitled to vehicular access from Forge Road over Old Forge Yard as appertaining or reputed to appertain to the Northern Field within Land Registration Rules 1925 r.258.

(3) Whether the judge was entitled to make the orders for rectification of title which he did in consequence of his conclusions, even if right.

(4) Whether, in the circumstances the judge was right to order that that the Appellants should pay the costs of the Sweets and whether the assessment of the costs of the Sweets incurred after 6th June 2003 should be on an indemnity basis.

6. The Appellants also applied for permission to adduce further evidence. This was opposed by Counsel for the Sweets on the grounds that it had been available at the time of the trial, no good reason had been given why it had not been adduced then and that it did not advance matters anyway. We indicated that we would look at the documents de bene esse and give our ruling as part of our judgments on the appeal. I would uphold the objections of Counsel for the Sweets in respect of documents m), n) and o) as specified in Ms Sommer's application notice. But I would admit documents a) to l). Many of them are not additional evidence at all but legible copies of what was in evidence already. The others are helpful in explaining some gaps in the chain of title to the various properties and cannot prejudice the position of the Sweets.
Vehicular Access to Forge Meadow Implied Reservation
7. Both Ms Sommer and the Sweets have a common predecessor in title in Mr T.E.C.Lovering. By 1988 he had acquired the land now comprising the Old Forge, the Old Forge Yard, Forge Meadow and the Meadowgate Access Strip. In addition he owned alone or jointly with his wife other land in the immediate vicinity. The extent of those holdings is indicated on Plan D which is also appended to this judgment. At that time all the relevant titles were unregistered.
8. On 9th February 1988 Mr Lovering conveyed the Meadowgate Access Strip to Mr and Mrs Gunter, the then owners of Meadowgate. On 15th April 1988 Mr Lovering executed two documents in form 19 as prescribed by Land Registration Rules transferring into the joint names of his wife and himself the land now comprising the Old Forge and the Old Forge Yard. Then, as I have already recorded, on 31st October 1988 Mr Lovering executed a document described as a transfer of part in favour of Mr and Mrs Martin together with

"a right of way with or without vehicles (in common with the Transferor and all other persons who may have or who hereafter may have a like right) at all times and for all purposes in connection with the use of [Forge Meadow] over the driveway shown coloured brown on the said plan..."

The driveway coloured brown is reproduced on Plan A by the brown line.

9. The point was taken against the Sweets that the express right of way on which they relied had not been granted by the owner of the servient tenement because on 15th April 1988 Mr Lovering had transferred the Old Forge Yard into the joint names of himself and his wife but only he purported to grant the express right. The response of the Sweets was that the reservation of an equivalent way of necessity was to be implied into the transfer of Old Forge Yard dated 15th April 1988 for without it what became Forge Meadow had no access to Forge Road. The riposte of Ms Sommer was to point out that Forge Meadow was not without any access as there was a public footpath running from north of Forge Meadow over Old Forge Yard to Forge Road. In any event access could be obtained over other land of Mr Lovering to the south of Forge Meadow or by demolishing part of a workshop.
10. Hart J held that for the purpose of an implied reservation of a way of necessity Forge Meadow was to be treated as 'land-locked' as at 15th April 1988 because Mr Lovering could not as of right compel his wife to grant the easement to be impliedly reserved. Further he concluded that the implication was to be made notwithstanding that access might be obtained if part of the workshop were demolished or on foot along the footpath. Hart J summarised his conclusions in paragraph 32 of his judgment in these terms:

"Accordingly, my conclusion is that the effect of the April 1988 transfer was to create, by implied reservation, a vehicular right of way over the Old Forge Yard in favour of Forge Meadow for the purposes of constructing, and thereafter using, a dwelling-house thereon. That is, for practical purposes, the same right as Mr Lovering subsequently sought to confer on the Martins by the Martins' transfer (save that the latter was expressed to be for all purposes). The way so reserved will have been a legal easement, and the first defendant's acquisition of the Old Forge and the Old Forge Yard will therefore have been subject to it."

11. At the hearing of this appeal the Appellants accepted, as counsel for the Sweets had suggested in his written argument, that it would not be enough for them to succeed on the implied reservation of a way of necessity. They had to succeed on proprietary estoppel as well. It did not seem to us that this appeal was the proper vehicle for the consideration by this court of difficult points in connection with whether there was a "necessity" for the purpose of the implication of a reservation of a vehicular access unless compelled to do so. In those circumstances we invited the Appellants to address us first on the alternative ground relied on by the Sweets, namely a right arising by proprietary estoppel, the issues relating to the Northern Field, rectification and costs. We then heard argument from Counsel for the Sweets and from the Appellants in reply. We did not find it necessary to call on the Appellants to address us on the implied reservation of a vehicular way of necessity. In those circumstances I express no view on the conclusions of Hart J on that matter or on the written arguments of either party in relation to them.
Proprietary Estoppel
12. As I have already mentioned, on 31st October 1988 Mr Lovering transferred Forge Meadow to Mr and Mrs Martin together with the right I have quoted in paragraph 8 above. That transfer was registered in HM Land Registry on 18th October 1989 under title no:WA508839 and the right granted by the transfer was duly noted. The Sweets acquired Forge Meadow from the Martins by a transfer dated 17th July 1998 duly registered on 10th August 1998. Ms Sommer acquired the Old Forge (and other property to the west) from Mr and Mrs Lovering by a transfer dated 24th August 1998 and registered under title no:WA480928 on 18th September 1998. The burden of the right of way apparently granted by Mr Lovering to the Martins was not noted in the charges register to that title.
13. Hart J recorded that the Martins had bought the Forge Meadow land for the purpose of building a house on it. In paragraph 10 of his judgment he found:

"The Martins proceeded to build their house on the Forge Meadow land and in the course of doing so, and thereafter, used the rights purportedly granted to them by that transfer. There is, however, a complication to that simple statement. Mr and Mrs Lovering had installed gates and a stile between the Old Forge Yard/Meadowgate drive and Old Forge road. The gates were put there to deter commercial vehicles visiting a factory to the south from using the Old Forge Yard for parking; a phenomenon which decreased once the Old Forge had been re-developed and became more obviously a private space. Following his acquisition of the Meadowgate drive, Mr Gunter had, with the Loverings' encouragement, taken down the stile and welded one of the pre-existing gates to the other, so that the two gates together would, when closed, provide (unless opened) a complete obstacle to direct entry from Old Forge lane onto the Old Forge Yard. Either then, or subsequently, a smaller wooden gate was placed at the entrance to the Meadowgate drive, but this was in practice never closed (and Mrs Lovering told me that the bolt hole in the tarmac did not in fact ever take the bolt). The welded gates were heavy. If they were closed (which would not be always) it was much easier for vehicles to get on to the Old Forge Yard (and thence to Forge Meadow) by entering via the entrance of the Meadowgate drive. More often than not this is how the Martins did in fact enter, and did so without objection from Mr Gunter or his successors in title."

14. In paragraph 12 Hart J noted that the rights apparently granted to the Martins did not appear on the register of the title to the Old Forge and continued:

"Some attempt was made by the first defendant in her evidence to suggest that she was unaware of them prior to exchange of contracts. I am satisfied, however, that that is not the case."

15. In paragraphs 34 to 46 of his judgment Hart J dealt with the submissions of counsel for the Sweets that the Martins had become entitled as against the Loverings to a right of way over the Old Forge Yard arising by proprietary estoppel so as to bind Ms Sommer as the successor in title of the Loverings. In paragraphs 35 and 36 he said:

"35. The factual basis of the estoppel relied on rested on the following propositions:

i) that Mr Lovering had represented to the Martins by the wording of the Martin Transfer that the right of way existed;

ii) that Mr and Mrs Martin believed the right of way to exist to the knowledge of Mr and Mrs Lovering;

iii) that in that belief, or in reliance on the representation, the Martins acted to their detriment in purchasing Forge Meadow and building a house thereon while Mr and Mrs Lovering, knowing of their belief, stood by and permitted them to do so.

36. The factual allegations were easily made out in the evidence. I heard oral evidence from Mrs Lovering, and had the benefit of witness statements from Mr Lovering and Mr Martin. It was perfectly clear that Mr Martin would never have spent money on purchasing Forge Meadow and building a house thereon had be not believed that he and his wife were entitled to the right of way apparently granted to him by the Martin transfer. It is equally clear that both Mr and Mrs Lovering knew of his belief, and stood by without objection while the Martins proceeded to build the house and thereafter make it their home. There is equally no doubt that both Mr and Mrs Lovering themselves believed that a right of way had indeed been granted to the Martins: Mrs Lovering was herself the author of the brown line on the Martin transfer plan, and, as indicated by the reply given by Hambly Smith in their letter dated 22^nd July 1998 to Watkins & Gunn (see paragraph 12 above) believed herself to have been a party to the grant."

16. Hart J then disposed of three objections raised by Counsel then acting for Ms Sommer and concluded in paragraph 43:

"I am left in no doubt that had the matter arisen as an issue between the Martins and the Loverings, the Martins would have had no difficulty in asserting, whether by sword of claim or shield of defence, that as against the Loverings they were entitled to claim a vehicular right of way for the purposes of Forge Meadow over the Old Forge Yard on to Forge Lane. The conferring of such a right of way was plainly the appropriate way in which to satisfy the equity."

17. In paragraphs 44 to 46 Hart J considered whether and if so how such an equity could bind a successor in title to the Loverings and concluded (para 44) that it would only do so if either it satisfied the characteristics of an overriding interest or the purchaser's conscience was independently affected by the equity. After setting out the terms of Rule 258 of the Land Registration Rules 1925 and considering the judgment of Scott J in Celsteel Ltd v Alton House Ltd [1985] 1 WLR 204, 220-221 to the effect that rule 258 applied to any right, privilege or appurtenance which is "openly exercised and enjoyed" with the land Hart J concluded (paras 45 and 46)

"45.....There is in my judgment no doubt that the way over the Old Forge Yard was being openly exercised by the Martins. The fact that they usually did so by entering and exiting through the Meadowgate drive access (a purely permissive user) does not detract from the fact that when they used the Old Forge Yard entrance they were doing so openly and on the basis of an entitlement to do so. Since that right to do so was (as I have held) capable of legal vindication there seems to me to be no difficulty in fitting it within the wording of Rule 258.

46. If that is right then I need not decide whether there are independent reasons for holding the first defendant's conscience to be affected. However, the fact that she purchased with knowledge of the Loverings belief that they had successfully granted the right of way and of the Martins' exercise of the rights (see the letter dated 22^nd July 1998 quoted in paragraph 12 above), would obviously be highly relevant to that question."

18. On this appeal the Appellants submit that the judge was wrong for four reasons, namely:

i) the judge concluded that the satisfaction of the equity required the declaration of a right of way other than that which the evidence showed to have been used by the Martins and their successors in title;

ii) the route of the way as declared to be required to satisfy the equity in part passes partly over a public footpath so that its use would be contrary to s.34 Road Traffic Act 1988 and unlawful;

iii) as neither the Martins nor the Sweets have been in occupation of the Old Forge their use for vehicular access could not constitute an overriding interest;

iv) the equity to which the judge found the Martins and Sweets to be entitled was by definition a minor interest which had not been protected by notice and was in any event overreached on the transfer by the Loverings to Ms Sommer.

The Appellants also challenged the judge's conclusion that in registered land the conscience of the purchaser may be so affected by notice as to create as an overriding interest that which in law is not. I do not need to deal with this point as it was not a ground on which the judge found against the Appellants.

19. Rule 258 Land Registration Rules 1925 provides that:

"Rights, privileges, and appurtenances appertaining or reputed to appertain to land or demised, occupied, or enjoyed therewith or reputed or known as part and parcel of or appurtenant thereto, which adversely affect registered land, are overriding interests within section 70 of the Act, and shall not be deemed incumbrances for the purposes of the Act."

20. In Celsteel Ltd v Alton House Ltd [1985] 1 WLR 204, 221 Scott J concluded that Rule 258 was authorised by s.144(1)(xxxi) Land Registration Act 1925 and, by force of s.144(2) of that Act, has the same force as if enacted in the Land Registration Act 1925. Accordingly the rule adds to the categories of overriding interest contained in s.70(1) Land Registration Act 1925. He also considered that a right "openly exercised and enjoyed" at the relevant time was a "right...enjoyed therewith [sc.the land]". None of these conclusions was challenged by the Appellants and I see no reason to doubt them.
21. It follows that the point taken by the Appellants which I have recorded in paragraph 18(iii) above is irrelevant. Actual occupation is only in point if the issue is whether the right in question was an overriding interest within the terms of s.70(1)(g) Land Registration Act 1925. No such contention was raised by the Sweets or found by Hart J.
22. The first objection made by the Appellants, summarised in paragraph 18(i) above, is based on the judge's findings in paragraphs 10 and 45 of his judgment, quoted in paragraphs 13 and 17 above. They contend that the access actually enjoyed did not lie only over Ms Sommer's land, as Hart J has now declared, but at the point it met Old Forge Road lay over the Meadowgate Access Strip. For that reason, they argue, it was not open to the judge to find that the "right enjoyed with" Forge Meadow passed over Old Forge Yard at the point where it joined Old Forge Road.
23. I do not accept this submission. It is quite clear from paragraph 10 of his judgment that the judge was aware that if the welded gates over the junction of Old Forge Yard and Old Forge Road were closed then access to Old Forge Road was at the southern end gained over the Meadowgate Access Strip. Equally if the gates were open or opened then the vehicular access enjoyed by the Martins lay over Old Forge Yard for its whole length. It is such latter access that he held to be sufficient to constitute enjoyment with Forge Meadow. I agree. I can see no reason to interfere with the judge's findings and conclusion that the vehicular access in fact enjoyed by the Martins over Old Forge Yard came within Rule 258 so as, subject to the other objections raised by the Appellants, to constitute an overriding interest binding on Ms Sommer.
24. The second point relied on by the Appellants and summarised in paragraph 18(2) was not raised by them before Hart J. Nor have they sought or obtained permission to take it. The fact is that it is not established that there is a public footpath over any part of Old Forge Yard. The old maps indicate a path running over the Northern Field but coming to an end at the boundary between the Northern Field and Forge Meadow and Old Forge. Further s.34 Road Traffic Act 1988, so far as relevant, only prohibits the driving of a mechanically propelled vehicle "on any road being a footpath". By s.192(1) a footpath is defined as a way over which the public have a right of way on foot. There is no evidence or finding that the footpath, if it existed at all as a physical feature over Old Forge Yard, was subject to any public rights. In any event the authority on which the Appellants relied in their written argument, Hanning v Top Deck Travel Group Ltd (1993) 68 P&CR 14 was overruled by the House of Lords in Bakewell Management Ltd v Brandwood [2004] 2 AC 519.
25. I turn then to the fourth point relied on by the Appellants summarised in paragraph 18(iv) above. I have already dealt with the contention that the equity arising by way of proprietary estoppel is a minor interest. The fact is that it is not because Rule 258 constitutes it an overriding interest.
26. But this contention raises another point, namely that the provisions of s.2 Law of Property Act 1925 operate to overreach the equity on to the proceeds of sale. I do not accept that submission either for two reasons. First, s.2(1) Law of Property Act 1925 can only overreach "any equitable interest or power" affecting the estate transferred. The decision of this court in E.R.Ives Investment Ltd v High [1967] 2 QB 379 established that an equity arising from a proprietary estoppel could not be registrable under the Land Charges Act as an equitable easement within class D(iii). Similarly in Shiloh Spinners v Harding [1973] AC 691, 721 Lord Wilberforce, with whom all the other members of the Appellate Committee agreed, recognised the existence of rights of an equitable character outside both the provisions for registration of charges and overreaching of interests. Specifically he was impressed by the decision of the Court of Appeal in E.R.Ives Investment Ltd v High and thereby contemplated that the equity arising from a proprietary estoppel was not an "equitable interest" capable of being overreached pursuant to s.2 Law of Property Act 1925. To the like effect is the judgment of Robert Walker LJ in Birmingham Midshires Mortgage Services Ltd v Sabherwal (17th December 1999 CA unreported).
27. Second, s.20 Land Registration Act 1925 specifically provides that a registered disposition is effective to transfer the freehold estate in the land transferred subject to the overriding interests affecting it except so far as the contrary is expressed on the register. If as the judge held, and I agree with him, the right was an overriding interest in accordance with the provisions of Rule 258 then Ms Sommer took subject to it. There could be no reason to regard it as an equitable interest for the purposes of s.2(1) Law of Property Act 1925 in order to set up a conflict between the two provisions rather than to avoid such conflict by recognising that the right is not an equitable interest for the purpose of s.2(1).
28. For all these reasons I conclude that Hart J was right to find that Ms Sommer was bound by the equity arising from the proprietary estoppel existing between the Martins/Sweets on the one hand and the Loverings on the other. Accordingly I would uphold declaration (1) contained in his order made on 2nd July 2004.
Vehicular Access to the Northern Field
29. The position with regard to the Northern Field was described by Hart J in paragraph 14 of his judgment as follows:

"Worse, from the claimants' point of view, was to follow. Although the registered title of the Old Forge did not note the easement of way purportedly granted to the Martins, it did describe the Old Forge as subject to a right of way in favour of the owners of the northern field. While the dispute over the Forge Meadow right of way was beginning to reach crisis point, the claimants had the opportunity to purchase a part of the northern field immediately adjacent to Forge Meadow with the benefit of that right of way over the Old Forge Yard. No doubt believing that this might strengthen their hand in the emerging dispute, they took advantage of the opportunity and purchased the relevant part of the northern field with the benefit of the right of way. They were registered as proprietors of that land, together with the right of way, on 15^th November 2001. Unfortunately for them, there was discovered to be a fatal flaw in the earlier conveyancing in relation to this. The relevant right of way had purportedly been created by persons who undoubtedly had the power to create it, namely the executors of Arnold Miles, but all the acts necessary to its creation had taken place under assents which were under hand only and not under seal (namely an assent dated 23^rd December 1983 by which the Old Forge and Forge Meadow land was vested in Warwick Miles, expressly excepting and reserving to the executors a right of way over the Old Forge Yard/Meadowgate Drive in favour of the northern field, and an assent dated 17^th January 1984 by the executors of the northern field in favour of Warwick Miles and others together with a right of way over the same property)."

30. The judge recorded the concession of counsel for the Sweets, repeated, though with regret, before us, that the assents being under hand and not under seal operated to create or grant a right of way in equity only. Hart J recorded the objections of the Appellants and his conclusions in paragraphs 48 and 49 of his judgment in the following terms:

"48. Accordingly, the only real question in relation to this right of way is whether it was an overriding interest within Rule 258. [Counsel for the Appellants] submitted that there were two reasons why it could not be. First, he submitted that there was little if any evidence of actual use by the owners of the northern field of the way at the time of the first defendant's purchase. That is indeed the case. However, there had been use in the past, albeit only rarely. More importantly, however, all relevant dispositions of the Old Forge Yard had been made expressly subject to the right of way purportedly reserved by the 1983 assent. As between the parties to that assent, Mr Warwick Miles could not have asserted that he took free from the right. It seems to me that on any view, the right was, regardless of the extent to which it was in practice ever used, known or reputed as appertaining to the northern field and, therefore, potentially an overriding interest within Rule 258.

49. Alternatively, [Counsel for the Appellants] submitted that the right could not be an overriding interest because it had, at the date of the first defendant's purchase, been entered on the register. Section 3(xvi) of the 1925 Act defines "overriding interest" as meaning:

"all the incumbrances, interests, rights and powers not entered on the register but subject to which registered dispositions are by this Act to take effect…"

That definition applies "unless the context otherwise requires". The context here is the enumeration of overriding interests set out in section 70(1)(a) as extended by the provisions of Rule 258, and the provisions of section 20(1) of the Act which makes dispositions of the legal estate in registered land subject to the entries on the register and to any overriding interests. In the latter context, it seems to me absurd to say that an interest which has wrongly been entered on the register but which in all other respects answers the description of an overriding interest is disqualified as an overriding interest by reason of its (mistaken) appearance on the register."

31. The Appellants contend that Hart J was wrong. They point out, which is not contested, that even if the Sweets are entitled to the right they claim as appurtenant to the Northern Field they may not exercise it for obtaining access to Forge Meadow. Further they submit, as is conceded, that the right appurtenant to the Northern Field is equitable only because the relevant assent was not under seal.
32. Before dealing with their other submissions it is convenient to summarise the bare facts on which they rely. The right of way from the Northern Field over Old Forge Yard to Forge Road was created by the reservation from the assent of the Old Forge and other land made under hand by the personal representatives of W.A.Miles on 23rd December 1983. On 17th January 1984 those personal representatives assented under hand to the vesting of the dominant tenement, namely the Northern Field, together with the right reserved by the earlier assent in W.A.G.Miles. On 30th March 1984 the Old Forge, Old Forge Yard and other land was conveyed on sale by W.A.G.Miles to Mr Lovering but as the right of way had not been registered as a D(iii) Land Charge it was void as against Mr Lovering. Title to the Old Forge and Old Forge Yard was first registered on 15th May 1989 and the right of way reserved by the assent made on 23rd December 1983 was duly entered in the Charges Register. The Northern Field was bought by the Sweets on 31st October 2001 and the title was first registered in their names on 15th November 2001. On first registration it was noted in the property register that the property comprised in the title included the right of way granted or conveyed in the assent dated 17th January 1984; this right had originally been reserved by the assent made on 23rd December 1983. On 23rd October 2002 the Land Registry rectified the title to the Old Forge and Old Forge Yard, WA480928, by removing the reference to the right of way in the Charges Register.
33. The first point the Appellants make is that the failure to register the right of way as a land charge class D(iii) rendered it void as against Mr Lovering when he bought the Old Forge and Old Forge Yard from W.A.G.Miles on 30th March 1984. This may be true but is irrelevant to the question whether at the time of the first registration of the title to the Old Forge and Old Forge Yard on 15th May 1989 the right of way was an overriding interest for the purposes of Rule 258.
34. The Appellants contend that the right of way to the Northern Field did not fall within Rule 258 at the time of first registration. They rely on the fact, as the judge held, that the right of way had only been used rarely and then only in the past. They submit that in those circumstances it was not "enjoyed with" the Northern Field at that time. I would agree with that contention but it does not avail the Appellants if the judge's primary ground of decision is sound. Such primary ground was that as "all relevant dispositions of Old Forge Yard had been made expressly subject to the right of way" Mr Miles could not have asserted that he took the Old Forge Yard free from the right. Accordingly the judge concluded that quite apart from user "the right was...known or reputed as appertaining to the Northern Field". It is also the fact that at the respective times of first registration of Ms Sommer's title to Old Forge and Old Forge Yard, the servient tenement, and of the Sweets title to the Northern Field, the dominant tenement, the right of way was referred to in the title. In these circumstances I can see no reason to disagree with the judge's conclusion that the right of way was reputed to appertain to the Northern Field for the purposes of Rule 258 at the time of registration of the transfer in favour of Ms Sommer on 18th September 1998. The fact that Ms Sommer subsequently persuaded the Land Registry to delete one or both references on the ground that the original reservation had served to create an equitable interest only appears to me to have no impact on the reputation previously existing.
35. Similarly, like the judge, I am unable to understand how the entry on the register of title to Old Forge and Old Forge Yard can preclude the right of way from being an overriding interest. In my view the judge's reasoning and conclusion in paragraph 49 of his judgment are plainly correct. For all these reasons I consider that Hart J was right to make the declaration concerning the right of way appurtenant to the Northern Field which appears in Paragraph 2 of his order made on 2nd July 2004.
Rectification of the Register
36. In paragraph 51 of his judgment Hart J said:

"For the reasons I have given, the claimants are entitled to declarations in appropriate terms as to their rights to use the Old Forge Yard for the purposes of Forge Meadow and the northern field respectively and to the injunctive relief sought by paragraph (4) of the prayer for relief. Subject to any submissions which may be made when this judgment is formally handed down, it seems to me proper to order that the titles numbered WA508839, WA480928 and CYM48705 should be amended to reflect the effect of the declarations I propose to make. They are also entitled in principle to an inquiry as to damages."

37. We were told by Counsel for the Sweets that further argument on the question of rectification and on other issues took place on 2nd July 2004. We were given to understand that he acknowledged the burden of establishing that it would be unjust within s.82(3)(c) Land Registration Act 1925 not to rectify the register in relation to Old Forge Yard against Ms Sommer as the proprietor in possession. We do not have any note of any further judgment of Hart J on this point. By his order made on 2nd July 2004 Hart J directed that the register of the title to Old Forge and Old Forge Yard, WA480928, be amended by placing a note thereon of the overriding interests previously declared in respect of the rights of way in relation to Forge Meadow and the Northern Field.
38. Ms Sommer contends that the judge was wrong to have done so. For the most part her submissions on this issue proceed from the proposition that the judge was wrong to have concluded that the rights claimed by the Sweets were overriding interests. As I have concluded that the judge was right such submissions do not arise.
39. In any event the restriction on rectifying the register contained in s.82(3) Land Registration Act 1925 does not apply to rectification "for the purpose of giving effect to an overriding interest or an order of the court". Moreover as that subsection and s.70(3) Land Registration Act 1925 both show there is no prohibition on noting an overriding interest on the register. Not only did the title to the Old Forge Yard on first registration contain such a notice the history of this unfortunate dispute clearly demonstrates the wisdom of restoring it. I see no reason to interfere with paragraph 5 of the judge's order.
Indemnity Costs
40. On 13th May 2003 the solicitor for the Sweets, who also happened to be the owner of Meadowgate, wrote to the solicitors for the Appellants a letter containing a Part 36 Offer headed "Without Prejudice Save as to Costs". By that letter the Sweets offered to settle on the basis of the grant by Ms Sommer to the Sweets of legal easements over Old Forge Yard as appurtenant to both Forge Meadow and the Northern Field, with no declarations or injunctions and an award of damages to be paid by Mr Neanor of £1 inclusive of any interest.
41. In the event Hart J made the declarations as to the rights of the Sweets to which I have already referred. He ordered that the title to Old Forge Yard should be rectified by the inclusion of the note in relation to the overriding interests to which I have also referred. In addition he enjoined both the Appellants from obstructing those rights and required them to remove all existing obstructions. He awarded £300 damages against them and dismissed the counterclaim of Ms Sommer.
42. In those circumstances Hart J ordered that the costs of the Sweets of and incidental to the claim and counterclaim be paid by the Appellants, such costs to be assessed on the standard basis until 6th June 2003 and on the indemnity basis thereafter. In addition the judge ordered the Appellants to pay interest on the damages and costs at a rate of 4% above base rate for the time being.
43. The Appellants contend that the judge was wrong to have directed that the costs were to be assessed on the indemnity basis from 6th June 2003 or, indeed awarded to the Sweets at all. They submitted that the Sweets had obtained from the judge, at best, two equitable easements. In those circumstances, so they submitted, the Sweets had failed to beat their own offer and should not have recovered any costs or any more costs than those assessed on a standard basis.
44. I do not accept any of those submissions. First, it is not incumbent on a claimant making a Part 36 offer to 'beat' it. If he does not then he cannot obtain the advantages specified in CPR Rule 36.21. But the judge's discretion to award costs in favour of the claimant is unaffected by the claimant's offer. Accordingly the suggestion that the judge should not have awarded the Sweets any costs indicates a misapprehension as to the effect of CPR Part 36. Second, it is clear that the Sweets did beat their Part 36 offer. Not only are the Appellants mistaken in suggesting that all they got were declarations as to equitable rather than legal easements they have overlooked the injunctions and award of damages. Third, the order the judge made was sanctioned by the express provisions of CPR Rule 36.21. There is no ground for interfering with the way in which he exercised his discretion in favour of the Sweets.
45. Finally I should note the complaint of Mr Neanor alone. He points out that he owns no land in the vicinity. He suggests that the action against him was quite unnecessary. He submits that it is iniquitous and disproportionate to order him to pay any of the Sweets' costs, let alone on an indemnity basis.
46. Plainly Mr Neanor might have obtained his release from the proceedings at an early stage on the basis of undertakings given by him. In that event his liability for costs might have been minimal. But he did not. The allegations of obstruction were made against him as well as against Ms Sommer. He joined with her in defending the proceedings and jointly instructed solicitors and counsel. He was found to be liable for the various obstructions of which the Sweets complained and is jointly liable with Ms Sommer for the award of damages in the Sweets favour. It is true that he was not a party to the counterclaim made by Ms Sommer but that is precisely because he has no interest in land which could be affected by it. Apart from that the issues on the claim and the counterclaim were the same. I see no ground on which the judge can be criticised for treating Mr Neanor in the same manner as Ms Sommer.
Summary
47. For all these reasons I would dismiss the appeal.
48. Even at this late stage I would urge the parties to consider some agreed modus vivendi. It was suggested by the Appellants that the reason for the appeal was that they had been advised that the injunctions made against them necessitated the removal of all their plants in pots or tubs and precluded them from parking their cars on any part of Old Forge Yard. This is not so if, but only if, the maintenance of the pots and tubs and the parking of their cars does not substantially obstruct or interfere with the right of way to which the judge declared the Sweets to be entitled. It appears to me from the plans to which we were referred that it would be possible to park a car in Old Forge Yard without causing any such obstruction or interference. As there is now an injunction in force it would be prudent for the Appellants to obtain the agreement of the Sweets as to where they may park or place their tubs or pots. It would be prudent for the Sweets to consider any such request constructively. In the absence of such an agreement it seems likely that this most regrettable dispute between neighbours will be continued through the medium of contempt proceedings to the advantage of neither.

Lord Justice Clarke:

49. I agree.

Lord Justice Jonathan Parker:

50. I also agree.


ORDER:

Appeal dismissed. The order of Mr Justice Hart dated 2^nd July to stand. The Appellants do pay the costs of the Respondents of the appeal, to be assessed in detailed on the standard basis in the Cardiff District Registry together with the costs ordered to be paid by paragraph (10) of the said order of Mr Justice Hart if not agreed.

(Order does not form part of approved Judgment)