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England and Wales Court of Appeal (Civil Division) Decisions

You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> Parshall v Hackney [2013] EWCA Civ 240 (26 March 2013)
URL: http://www.bailii.org/ew/cases/EWCA/Civ/2013/240.html
Cite as: [2013] 1 CH 568, [2013] WLR(D) 124, [2013] 3 WLR 605, [2013] Ch 568, [2013] 2 EGLR 37, [2013] 3 All ER 224, [2013] EWCA Civ 240, [2013] 1 Ch 568, [2013] 15 EG 104
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Neutral Citation Number: [2013] EWCA Civ 240
Case No: A3/2012/0559

IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
CHANCERY DIVISION
MR DAVID DONALDSON QC sitting as a Deputy High Court Judge
Claim No CH/2011/0431

Royal Courts of Justice
Strand, London, WC2A 2LL
26/03/2013

B e f o r e :

LORD JUSTICE MUMMERY
LORD JUSTICE PATTEN
and
LORD JUSTICE TREACY
____________________

Between:
HORACE PARSHALL
 Appellant
- and -
CLARA HACKNEY
 Respondent

____________________

(Transcript of the Handed Down Judgment of
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____________________

MR CHRISTOPHER PYMONT QC and MR NIGEL THOMAS (instructed by Wansbroughs) for the Appellant
MR MARTIN RODGER QC and MS STEPHANIE TOZER (instructed by Piper Smith Watton) for the Respondents
Hearing date: 24th October 2012
____________________

HTML VERSION OF JUDGMENT
____________________

Crown Copyright ©

    Lord Justice Mummery :

    Introductory summary

  1. This troublesome case is about title to a small piece of land. It is not big enough (under 2 metres across at its widest point and 4 metres long) to park a car on unless used in conjunction with adjoining land. Being in Chelsea, London SW3 and part of Smith's Charity Kensington Estate, it is worth enough for the parties to survive three rounds of civil litigation: the first before a Deputy Adjudicator to the Land Registry (Professor Robert Abbey) in 2011; the second in the High Court (Mr David Donaldson QC sitting as a Deputy Judge) in 2012; and the third (by way of a second appeal) to this court.

    2. Appellant's property

  2. The appellant's property is at 29 Milner Street (No 29). Title to it was first registered on 6 April 1904 (Title No BGL35489). It was a pub called "The Australian" before Mr Horace Parshall and his wife, Mrs Helen Parshall, bought it in 2006 and converted it into a shop with flats above. Sadly, Mrs Parshall died not long before the hearing of this appeal. Mr Parshall pursues the appeal as the person entitled to be registered as the sole legal owner of No 29.

  3. No 29 is at the western corner of the junction of Milner Street with a private road, Lennox Gardens Mews, which runs along the back of Lennox Gardens to Walton Street. The registered title plan included a triangle of paved land at the front of the building. The triangular area is the land in dispute.

    4. Respondent's property

  4. The respondent's property is at 31 Milner Street (No 31). Title to it was first registered in 1980 (Title No NGL380405). It was transferred to the respondent's father and mother in 1986, and subsequently to other members of her family. Ms Clara Hackney is now the sole registered proprietor, and was substituted as sole respondent by order dated 9 August 2012.

  5. No 31 is at the eastern corner of the Lennox Garden Mews, just across the road from No 29. The Land Registry included the disputed land in the title of No 31. That was a mistake on the part of the Land Registry, because the disputed land was already included in the registered title of No 29.

    6. The problem

  6. On 29 May 1986 No 31 was transferred to members of the respondent's family. The registered transfer included the disputed land. The respondent is currently the sole registered proprietor of No 31 and the disputed land.

  7. The Parshalls were registered as proprietors of No 29 on 12 June 2006, having acquired it by a registered transfer.

  8. Even someone who knows nothing about land registration would realise that concurrent registration of title to the same piece of land in the names of different people is bad news. If spotted early on, the mistake can be easily remedied by rectification of the land register and indemnification by the Land Registry for loss suffered by reason of rectification of the register. The situation is likely to become more difficult to unravel with the passing of time and the accumulation of more reasons for not rectifying the land register.

  9. The problem is that, as a matter of law, the disputed land is owned either by the appellant or by the respondent. They cannot both be owners of a fee simple in the same piece of land. They are not co-owners with beneficial shares in the disputed land. The court has to perform the delicate task of sorting out a muddle which has potentially serious, long term consequences. It has to decide who has the better title to the disputed land and whether the land register should be rectified to reflect that.

  10. That difficult exercise in registered land law and statutory discretion was not made any easier when, in October 2000, the Land Registry made another mistake. That mistake happened in the course of computerising the title plan to No 29. The Land Registry excluded the disputed land from No 29. Although that accidental slip eliminated, to the extent of the disputed land, the overlap between the two registered titles, it did not resolve the questions of either title or rectification.

  11. The disputed land had been part of No 29 for almost a century. Not surprisingly, the Parshalls pointed to the prior registration of title to the disputed land as part of their property and to the fact that the inclusion of the disputed land in the title to No 31 was a mistake not on their part, but on the part of the Land Registry. They made an application on 8 August 2008 to rectify the register by excluding the disputed land from the title plan to No 31. They said that, although the owners of No 31 were registered proprietors of the disputed land and were in possession of it for many years, it would be unjust not to allow rectification.

  12. The application to rectify was resisted on limitation grounds. The Parshalls' application was not an action for the recovery of land, which could be subject to the 12 year limitation period set in the Limitation Act 1980 (the 1980 Act): their case was that they could not have any right of action for the recovery of the disputed land that was capable of being statute-barred before the register was first rectified to exclude the disputed land from the title to No 31 and to include it in the title to No 29. Rectification would be official confirmation and proof that the disputed land was within their title to No 29 (and not within the respondent's title to No 31). It was necessary in order to give them title to sue for recovery of the disputed land.

  13. The opposition to rectification of the land register was not by way of a contest between contradictory registered titles to the disputed land. On this appeal the validity of the initial registration of the disputed land as part of No 29 is not disputed. No reliance is placed by the respondent on the inclusion (by mistake) of the disputed land in the registered title to No 31 (save as regards discretion). Opposition to rectification is advanced on the different basis of a possessory title to the disputed land under the 1980 Act by virtue of 12 years adverse possession from the accrual, in July 1988, of a right of action to recover the disputed land.

  14. What matters under English land law, says the respondent, is the "bedrock" doctrine of relativity of title. The question is: who has the better title to the disputed land? Is it the appellant, by virtue of prior registration? Or is it the respondent, by virtue of adverse possession of it by the owners of No 31 for 12 years and more from taking possession of it in July 1988? At that time the owners of No 31 fixed a chain and metal eye (or hook) into a concrete bollard to demarcate the disputed land as a parking space, which had been used, and was used thereafter, exclusively by the owners of No 31.

  15. In brief, the respondent contends that, by reason of more than 12 years adverse possession of the disputed land by her predecessors in title to No 31, the appellant's right of action to recover it is statute-barred; that she has acquired a possessory title to it; and that rectification of the register by cancelling the mistaken inclusion of the disputed land in the title to No 31 is not available to the appellant.

  16. Alternatively, the respondent contends that she has an easement over the disputed land. As a result of long and open use as of right for car parking, No 31 enjoys, as the dominant tenement, a prescriptive right to park a car on the disputed land, as the servient tenement.

  17. This case, which I hope is extremely rare in practice, raises basic questions about the gain and loss of title to registered land under the 1980 Act and the Land Registration Act 1925 (the 1925 Act), but now replaced by the Land Registration Act 2002 (the 2002 Act.) Can a person with a registered title have "a right of action" to recover his land from a person who also has a registered title to it and is in possession of it? Can a person in possession of land, which is registered in his name, be in "adverse possession" of it within the meaning of the 1980 Act? Can a person acquire a prescriptive easement over land to which he has a registered title by relying on long user as of right? Is this in substance a boundary dispute between No 29 and No 31 to be resolved by application of the general boundaries rule? What principles govern the exercise of the discretion to rectify the land register in a case of concurrent registrations of title?

  18. Expecting to find answers to those questions somewhere in the legislation, I turn to the 1980 Act and to the 1925 Act.

    19. The legislation

  19. The two legislative regimes, which applied to registered land before the 2002 Act came into force on 13 October 2003, implement different legal policies about gain and loss of title.

  20. I would regard as paramount the specific legal policy in establishing a system for the registration of title to land. Although the 1925 Act has been replaced by the 2002 Act, it is common ground that its provisions continue to apply to this case. The objective of the 1925 Act was to confer security of title by means of entries in the land register, subject to a discretionary power to rectify mistakes in the register in specified circumstances.

  21. I would regard as secondary the general legal policy of the statutes of limitation which, in the public interest, prevent people with good claims from pursuing them in the courts after the expiration of a specified statutory period. In the case of land the effect of that policy is to protect long undisturbed exclusive possession of land from recovery by the person with a good paper title to it. At the relevant date the 1980 Act applied to the case of both registered and unregistered land. Its effect was that a person might acquire the right to be registered as proprietor of registered land by reason of exclusive adverse possession of it for 12 years or more, as distinct from the normal mechanism of a registration of a transfer of it to that person by a registered proprietor.

  22. The key elements in the acquisition of possessory title to land were (a) discontinuance of possession or dispossession of land and (b) adverse possession of that land by another person for 12 years or more after the accrual of the right of action for its recovery. The gain of possessory title and the loss of the paper title to the land were considered by Parliament to be in the public interest: the 1980 Act (and its predecessors) prevented the sterilisation of land use, which might arise from stale claims creating uncertainty of title, by resolving title in favour of the person who establishes long term enjoyment of exclusive possession of the land in question.

  23. As explained in English Private Law (2nd edn by Professor Andrew Burrows) at para 4.476 the possibilities (a) of extinguishing title to registered land by placing a time bar on an action for its recovery and (b) of acquiring title to it by virtue of adverse possession at the end of the limitation period, present a problem for a system of title registration aimed at providing security of title for entries in the land register.

  24. One solution to the problem would have been complete abolition of the law of adverse possession for registered land. The major changes made in the 2002 Act came into force after the material dates in this case. However, it is of interest to note their effect, as summarised in Megarry & Wade- The Law of Real Property (8th Ed) at 35-070:-

    25. "Under the new system, adverse possession of a registered estate has no effect as such upon the title of the registered proprietor however long that period of adverse possession may have been. However, after 10 years, the squatter may apply to be registered as proprietor. If the registered proprietor objects to the application, it will be rejected except in very limited circumstances. If, before any application to register is made, the registered proprietor takes proceedings to establish his right to possession, those proceedings will be successful except where the squatter would have been entitled to be registered had he applied. Where a squatter's application to be registered is rejected, the registered proprietor must take steps either to evict the squatter or to legitimise the possession within two years of that rejection, or the squatter may re-apply and, provided that he has remained in adverse possession for that two year period, his application will be successful."
  25. In relation to an estate in land the title to which is registered, the time limits applicable under the 1980 Act to actions for the recovery of land are disapplied: s. 96(1), (2) of the 2002 Act. As explained at 35-071 of Megarry & Wade the reason for the disapplication is that :-

    26. "…the register is conclusive as to the ownership of that registered estate…The conclusive nature of such registration protects that registered proprietor…Where time does not run, it is further provided that the title of the person against whom there has been adverse possession will not be extinguished either. In consequence of these provisions, a registered proprietor's title can never be barred by adverse possession." [see s. 96(3) of the 2002 Act]
  26. I now turn from the summary of the key facts and issues to the course of these proceedings, the relevant law and the judgments of the Deputy Adjudicator and the Deputy Judge.

    27. The appeal

  27. This appeal is from an order made by Mr David Donaldson QC, sitting as a Deputy High Court Judge, dated 16 February 2012. He dismissed an appeal from the decision dated 21 April 2011 of a Deputy Adjudicator to the Land Registry. The essence of those decisions was that possessory title to the disputed land had been acquired by the owners of No 31, even though, throughout the relevant period, the persons claiming to be in adverse possession of it had been registered as the proprietors of it.

  28. An appeal lies to this court on a question of law. Permission for a second appeal was granted by Lewison LJ on 26 March 2012 on the ground that it raised an important point of principle involving the separation of legal and beneficial ownership in relation to adverse possession.

    29. Law

    The 1980 Act

  29. Section 15 of the 1980 Act provides:-

    30. "(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person."
    (6) Part I of Schedule I to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned."
  30. Schedule I provides:-

    31. "1. Where the person bringing an action to recover land, or some person through whom he claims, has been in possession of the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action shall be treated as having accrued on the date of dispossession or the discontinuance."
    "8. (1) No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as 'adverse possession'); and where under the preceding provisions of this Schedule any such right of action is treated as accruing on a certain date and no person is in adverse possession on that date the right of action shall not be treated as accruing unless and until adverse possession is taken of the land."

    The 1925 Act

  31. Section 5 of the 1925 Act governs the effect of first registration with absolute title. It enacts that, in the case of a freehold estate, as was the situation with No 29 and the disputed land, the registration of any person as first proprietor with absolute title vests in that person (the appellant's predecessor in title in 1904) an estate in fee simple in possession in the land.

  32. Section 69 governs the effect of registration on the legal estate. It is enacted in subsection (1) that the registered proprietor of land shall be deemed to have vested in him, without any conveyance, where the registered land is freehold, the legal estate in fee simple in possession. That was the case when the respondent's predecessors in title were registered in 1986 as proprietors of No 31 and also of the disputed land.

  33. Under s.20, when dispositions of the registered land in the case of a freehold estate registered with absolute title are registered, they confer on the transferees the estate in fee simple in possession for their own benefit. In this case there were dispositions of both No 29 and the disputed land and of No 31 and the disputed land. Both sides assert that, by reason of that section, as applied to the transfers to them, the legal and beneficial interest in the disputed land vested in them for their own benefit and free from all other estates and interests whatsoever. Throughout the relevant period there were two registered estates in the disputed land, each comprising a legal and beneficial interest. There is no question of any trust having arisen under which the respondent's predecessors would hold the legal estate upon trust for the appellant's predecessors. There were two parallel legal estates in the same land; not a separation of a legal interest and a beneficial interest in separate persons, thereby giving rise to a trust of the land.

  34. Under s.75 of the 1925 Act it is provided that the 1980 Act applies to registered land in the same manner and to the same extent as it applies to land not registered, except that, rather than being extinguished, as in the case of unregistered land, the estate is deemed to be held by the proprietor for the time being in trust for the person who acquired title against the proprietor by virtue of the 1980 Act. The person claiming to have acquired title may apply to be registered as proprietor.

  35. Section 82 provides for rectification of the register by order of the court or by the registrar in inter alia the case where "(e) …two or more persons are, by mistake, registered as proprietors of the same registered estate..", or where "(g) …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.." and "(h) In any other case where, by reason of any error or omission in the register, or by reason of any entry made under a mistake, it may be deemed just to rectify the register."

  36. The effect of s. 82 (3)(b) and (c) is that the register shall not be rectified so as to affect the title of the proprietor who is in possession unless for any other reason, in any particular case, it is considered that it would be unjust not to rectify the register against him.

  37. Reference has also been made to the position on "General Boundaries" provided for in the Land Registration Rules. Rule 278 provided that:-

    38. "(1) Except in cases in which it is noted in the Property Register that the boundaries have been fixed, the filed plan or General Map shall be deemed to indicate the general boundaries only."

    The authorities

  38. On the construction of the provisions of the 1980 Act governing actions for the recovery of land and adverse possession of it JA Pye (Oxford) Limited v. Graham [2003] 1AC 419 and the earlier authorities approved in it were cited.

  39. One of those cases was Buckinghamshire CC v. Moran [1990] 1 Ch 623 at 636 G-H in which Slade LJ said:-

    40. "Possession is never 'adverse' within the meaning of the Act of 1980 if it is enjoyed under a lawful title. If, therefore, a person occupies or uses land by licence of the owner with the paper title and his licence has not been duly determined, he cannot be treated as having been in 'adverse possession' as against the owner with the paper title."[See also Ramnarace v. Lutchman [2001] 1 WLR 1651 at [10] ]
  40. It has also been said that possession of land by a person is only adverse as against the owner, if the owner of that land is entitled to recover possession from that person: see Adverse Possession (2nd edn) by Stephen Jourdan & Radley-Gardner at 6-14: Moses v. Lovegrove [1952] 2 QB 583 at 540 and 544.

  41. If the occupation or use of the disputed land is not adverse, time does not begin to run in favour of the person in occupation. On that basis it is argued by the appellant in the present case that the possession of the disputed land by the respondent's predecessors in title to No 31 was not "adverse", as those predecessors were registered with title. Their possession of the disputed land was referable to their registered title to it, which would afford them with a defence to an action for its recovery by another person with a registered title to the disputed land.

  42. The important points to note are that, for the 1980 Act to apply, (a) a right of action to recover possession of the land must have accrued to the paper title owner and (b) the person claiming possessory title must have been in adverse possession of the disputed land for more than 12 years.

  43. The question is: what effect does concurrent registration of title under the 1925 Act have on those points? Malory Enterprises Ltd v. Cheshire Homes (UK) Ltd [2002] Ch 216 was relied on below as authority for the general proposition that rectification of the land register was not a pre-condition of an equitable right to possession of land in dispute. It was argued that the owners of No 29 therefore had a right of action to recover the disputed land without obtaining a prior order for rectification.

  44. In Malory the land was owned and registered in the name of the claimant. A new land certificate was dishonestly obtained from the Land Registry by another similarly named company, which executed a transfer of the land to the first defendant, which was then registered as proprietor and carried out works on the land. The claimant sought rectification of the register with retrospective effect and damages for trespass against the first defendant.

  45. The Court of Appeal held that the company which executed the transfer to the first defendant had no title to convey to the first defendant; that, by virtue of s. 69 of the 1925 Act, the first defendant, once registered as proprietor, was deemed to have vested in it the legal estate; but that was subject to the claimant's rights as beneficial owner; and that, as equitable owner, the claimant was the true owner and had a better right to possession and had sufficient standing to sue for trespass without seeking rectification of the register.

  46. Particular reliance was placed on a passage cited from the judgment of Arden LJ, in which she said that:-

    47. "65. ..[the first defendant's] status as registered proprietor is subject to the rights of [the claimant] as beneficial owner…It follows that I accept that [the claimant] has sufficient standing to sue for trespass even without seeking rectification of the register because it is the true owner and has a better right to possession: see Chowood Ltd v. Lyall (No 2) [1930] 2 Ch 156,163-164."
  47. The appellant disputes the relevance of that ruling to the circumstances of the present case, which do not involve the registration of any relevant transfer tainted by fraud or any separation of the legal and equitable interest in the disputed land. Against that, the respondent says that the absence of fraud in this case does not affect the application of the principle, which is that there was no legal basis for the registration of the respondent's predecessors in title as proprietors of the disputed land and that the owners of No 29 could have brought an action for the recovery of the disputed land without obtaining rectification of the land register before action. Those submissions are dealt with in more detail below.

    48. Judgment of Deputy Adjudicator

  48. On the application to the Land Registry for rectification of the title plan to No 31 to remove the disputed land from that title, the Deputy Adjudicator made an order on 21 April 2011 refusing rectification. He did so in the light of his finding that the respondent and her predecessors had acquired a possessory title to the disputed land. In the alternative, he concluded that the respondent had an easement of parking on it.

  49. The Deputy Adjudicator found that:-

    50. (1) The disputed land fell within the area shown on the 1904 plan and formed part of the title to No 29. It was properly registered as such from 1904. In 1980 the Land Registry made the mistake of registering the disputed land in the titles of both No 29 and No 31. That mistake was exacerbated when in 2000 the Land Registry wrongly excluded the disputed land from the title to No 29.

    (2) The Parshalls would have been entitled, apart from the possessory title issue, to rectification of the register, there being no injustice in rectifying the error of the Land Registry. It would be unjust not to allow rectification to correct the errors of the Land Registry.

    (3) The respondent's predecessors in title intended to possess the disputed land, exercised exclusive possession and control of it for at least 12 years and had established their claim to exclusive possession for at least 12 years prior to 2003 when the 2002 Act came into force. They had a claim to adverse possession, subject to the point that the disputed land was registered in error in the name of the owners of No 31.

    (4) However, the owners of No 29 would have been entitled to rectification of the land register. That was a "procedural step", which would have enabled them to seek an order for possession. They therefore had a right to bring an action to recover the disputed land. Time was not prevented from running by the fact of their having to take a prior procedural step of rectification. The result was that the respondent's claim to adverse possession of the disputed land should succeed.

    (5) Alternatively, he would have found that owners of No 31 had acquired an easement of parking on the disputed land. He accepted the respondent's contention that that it was possible to prescribe against the land registered in the names of the owners of No 31, because their registered title to the disputed land was held subject to the right of the owners of No 29 to rectify, whereas the parking was in the right of the owners of No 31.

    Judgment on first appeal

  50. In dismissing the appeal by his order dated 16 February 2012 the Deputy Judge agreed that the respondent had, via her predecessors in title, acquired possessory title to the disputed land, though not for the same reasons as the Deputy Adjudicator had given in his judgment.

  51. The Deputy Judge disagreed with the characterisation of rectification of the land register as a "procedural step" that would have enabled the owners of No 29 to seek an order for possession. He rejected the submission that the owners of No 29 could overcome the problem of the respondent's registration of title to the disputed land by including claims for rectification and possession in a single set of proceedings, because the court itself could not rectify the register. It could do no more than order rectification: only the Registrar could actually effect rectification.

  52. The Deputy Judge went on to hold that a right of action to recover possession of the disputed land arose in 1988 and that rectification of the register was not a pre-condition of that right of action. Citing Malory (above) he said that it was sufficient that there was no legal basis for the registration of title to the disputed land as part of No 31: "…in deciding whether there was a right of action to recover the land the registered but rectifiable title of the Respondents must be ignored and cannot be invoked (paradoxically by the Appellants) to legitimate the Respondents' acts of possession."[20]

  53. He concluded that the 12 years began to run when the chains were fitted, which was not later than 5 July 1988, and that the requirements of s.15(1) were satisfied in July 2000 and thus before 2003. The result was that the respondent had, via her predecessors, acquired title to the disputed land by adverse possession. That justified the title that had been erroneously registered in the names of her predecessors in 1986 and the removal of the disputed land from the title to No 29 in October 2000.

  54. The Deputy Judge said that it was not necessary or appropriate to rule on the respondent's easement claim, which was opposed on the ground that, as a result of the errors in registration of title, the owners of No 29 were not able to bring an action to prevent the parking. The Deputy Judge also had reservations about recognising as an easement a use that would, in practical effect, amount to a right of user of the disputed land to the exclusion of the owners of No 29.

    55. Appellant's submissions

  55. The appellant's first point is that the Deputy Judge erred in law in holding that the respondent had acquired a possessory title to the disputed land, notwithstanding that, throughout the relevant period of exclusive possession of that land relied on, the respondent's predecessors were the registered owners of it.

  56. The appellant's second point is that the Deputy Judge erred in holding that he was bound by the decision in Malory, in particular the passage cited from the judgment of Arden LJ, which was obiter, not binding and distinguishable. It was not authority for the proposition that a registered title, coupled with a right to seek rectification, was sufficient title to commence an action for the recovery of the disputed land.

  57. Thirdly, the Deputy Judge failed to consider adequately the effect of first registration under s. 5 of the 1925 Act.

  58. It is contended that rectification of the register and indemnification are the only remedies for mistakes resulting in double registration of land in two different titles. During the relevant period in which the respondent claims that possessory title was acquired the legal and beneficial title to the disputed land were vested in the appellant's predecessors in title under s. 5 of the 1925 Act and they were taken to be in possession of the disputed land, unless and until dispossessed.

  59. Time did not begin to run against the owners of No 29 under the 1980 Act until they were in a position to sue for possession. They could only do that, if they first obtained rectification of the register. It was a necessary step before they were entitled to commence an action for possession. That was a substantive matter rather than a procedural one. Without rectification of the register the owners of No 29 had no right of action for recovery of the disputed land. Further, an application to the Land Registry, such as an application to vacate a caution or to rectify the register, would not be an action for the recovery of land within the meaning of s. 15 of the 1980 Act and so would not be subject to the 12 year limitation period.: see Pye v Graham (above) at first instance [2000] Ch 676 per Neuberger J at p.702B-C. An application for rectification is a step taken to establish title to the land in question, not an action for its recovery.

  60. Time could not begin to run in favour of the respondent's predecessors, as they were doing nothing unlawful on the disputed land to which they had a registered title. Their acts were not inconsistent with the title of the true owner, whose identity would not be known until the rectification issue had been resolved.

  61. As for the general boundaries point, which is relied upon by the respondent in support of the contention that the owners of No 29 could have commenced an action for possession without prior rectification of the register, Mr Pymont QC for the appellants said that the litigation is not about the boundaries between two parcels of registered land; it is about registered title to a specific piece of land, which was concurrently registered in different titles without one registered title being, while they were registered, superior to the other.

  62. As for discretion to rectify, Mr Pymont QC submitted that the Deputy Adjudicator was best placed to make the decision on the exercise of discretion and, but for the possessory title claim which succeeded before him, he would have made an order for rectification. Refusal of rectification would mean a compulsory transfer of title from one who had it to one who had none at all, but for the mistake of the Land Registry. It was irrelevant that, as was argued against the appellant, the respondent might have obtained possessory title to the disputed land, if it was unregistered land. The fact was that this is registered land.

  63. As for the easement, the Deputy Judge ought to have rejected the respondent's claim that she could in law have an easement of parking over a servient tenement of which she, like her predecessors had been, was the registered owner.

    64. Respondent's submissions

  64. The respondent's position is that the appeal should be dismissed. The following reasons were advanced by Mr Martin Rodger QC.

    65. General submissions

  65. First, the owners of No 29 could have brought a possession claim against the owners of No 31 during the period 1988 to 2000 on the basis of their registered title to the disputed land, coupled with a claim for rectification of the land register, or a declaration as to the correct position of the boundary, in order to rebut a defence based on registration of title.

  66. Secondly, the general boundaries rule would have precluded the owners of No 31 from relying on their registration as a defence to the possession claim and make it unnecessary for the owners of No 29 to seek rectification before seeking to recover possession of the disputed land. There was no reason why, despite the apparent concurrent registration of the disputed land, time should not have run against the owners of No 29.

  67. Thirdly, it would be unjust to rectify the register in circumstances where, but for a mistake by the Land Registry to which the owners of No 31 did not contribute, the owners of No 31 would have acquired title by adverse possession.

    68. Detailed points

  68. Mr Martin Rodger QC then skilfully developed those points in more detail.

  69. He submitted that the question whether a cause of action for the recovery of possession of the disputed land arose and, if so, when, turned on s.15(1) of the 1980 Act and paragraph 1 of Schedule 1. In this case the cause of action arose on 5 July 1988. That was the date of installation of the chain around the disputed land. That was the date when the owners of No 29 were dispossessed of the disputed land.

  70. Where, as here, two parties are registered with separate freehold titles to the disputed land, the right of action accrued when one excluded the other from the disputed land. That is what the owners of No 31 had done to the owners of No 29. A right of action thus accrued to the owners of No 29 in July 1988, regardless of whether rectification of the land register had occurred.

  71. He emphasised that the title relied on by the respondent is not the registered title to the disputed land; it was title acquired by exclusive possession of the disputed land.

  72. As for the general boundaries point, Mr Rodger contended that the 1986 conveyance of No 31 did not, according to the plan, purport to convey any part of No 29 and the inclusion of the disputed land in the title plan to No 31 did not confer title on the respondent's predecessors: see Drake v. Fripp [2011] EWCA Civ 1279 at [20].

  73. The respondent had taken the general boundaries point before the Deputy Adjudicator contending that its operation would have made it unnecessary for the owners of No 29 to seek rectification in order to recover possession of the disputed land from the owners of No 31. The Deputy Adjudicator made no reference to the point, which was not taken before the Deputy Judge.

  74. As for the rectification point, which arises if the adverse possession claim fails, Mr Rodger took issue with the Deputy Adjudicator's conclusion that it would be unjust not to rectify the register and seeks an order from this court exercising the discretion in order to avoid the expense and inconvenience of remission to the Adjudicator. He submitted that the discretion should be exercised in favour of the respondent, because, but for the mistaken registration, the respondent would have succeeded in the adverse possession claim; it would be consistent with the policy of the 1980 Act not to disturb the respondent, whose predecessors had been in possession of the disputed land for 20 years before the application for rectification; there was no suggestion that the respondent and her predecessors were at fault or even knew about the mistaken registration; the disputed land was of value to the respondent, but of no value for the Parshalls; and there was no suggestion that the Parshalls even appreciated that they had paper title when they bought No 29 in 2006.

    75. Discussion and conclusions

  75. I am grateful for the valuable assistance given by both Leading Counsel. The point for decision is a novel one that is not, in my view, as straightforward as might at first appear. It is one on which the Deputy Adjudicator and the Deputy Judge differed in the reasons given by them for arriving at the same conclusion.

    76. General discussion

  76. The decisions below come as no surprise in light of the legal policy of protecting exclusive possession of land enjoyed long term. Pye v. Graham (above) demonstrated how, under the 1980 Act, a person could acquire, as against the owner with the paper title, a good possessory title to extensive areas of agricultural land for which the owner entertained hopes of future development. Modest agricultural acts were held sufficient to constitute both dispossession of the paper title owner and adverse possession by a person, who had originally been allowed into lawful possession of that land and knew throughout who was the true owner of the land.

  77. In this case the owners of No 31 were in actual exclusive possession of the disputed land for more than 12 years from July 1988. The then owners of No 29 took no proceedings for recovery of possession. So, on the basis of Pye v. Graham, there would appear to be facts supporting a case, in relation to the disputed land, of dispossession of the owners of No 29 by the owners of No 31, who remained in adverse possession of the disputed land for more than 12 years.

  78. Mr Pymont QC distinguished Pye v. Graham as a case on unregistered land. It had none of the complications of concurrent titles registered under the 1925 Act. The paper title there was in Pye Holdings. The person in possession was held to have remained in exclusive possession after the expiration of a lawful title to be in possession, so that Pye's failure to bring proceedings for possession against him within the 12 year limitation period led to Pye's action for recovery of possession being statute-barred and to its paper title being extinguished.

  79. This case, Mr Pymont QC emphasised, is quite different. In view of the concurrent registrations of title to the disputed land, the right of action to recover it from the respondent is not statute-barred, as no such right of action to recover it has even arisen. There was no right of action to recover the disputed land from the previous owners of No 31 because, throughout the relevant period of their possession of it, they were also registered proprietors of it. That necessarily meant that there was nothing unlawful in their acts of possession on the disputed land that could give the then owners of No 29 a right to recover possession from them. Those acts of possession were referable to their right to do them as registered proprietors of the disputed land. Unless and until the land register was rectified the owners of No 29 had no right of action which could become statute-barred.

  80. However, there is, in my view, some force in the contrary submission that the owners of No 29 had a right of action from July 1988 onwards in the sense that it might be possible to plead the basic ingredients of a cause of action for the recovery of possession, by relying on registered title to the disputed land and to possession of it and by alleging that there had been dispossession of it by the erection of the chain fence.

  81. It would then be open to the owners of No 31 to plead, by way of defence, their registered title from 1980 (plus, if applicable, the lack of registered title in the owners of No 29 from 2000) and the exclusive possession of the disputed land by the owners of No 31 since July 1988. The owners of No 29 could then counterclaim alleging that there was a mistake in the Land Register and seeking an order for rectification, which, if granted, might then have cured the complications arising from concurrent titles. Within one set of proceedings it might therefore be possible for the court to resolve the deadlock of concurrent titles by deciding which of the two was the better title. If the owners of No 29 had the better title, the court could, subject to any countervailing factors, order rectification of the register and, subject to any other defences, make an order for possession.

  82. Rectification of the register was, Mr Rodger QC submitted, the consequence of deciding who had the better title, rather than a pre-condition for deciding whether the owners of No 29 had right of action. Rectification would remove any problem arising from concurrent registration. On that approach the owners of No 29 had a right of action when they were dispossessed in 1988. They did not lose that right of action when the disputed land was removed from their title. Prima facie time was running against them all the time that the owners of No 31 were in adverse possession of the disputed land. The claim for recovery of possession was now statute-barred.

    83. The correct questions

  83. In my view, the key to assessing the respondent's claim to a possessory title is to be found in asking the correct questions under the 1980 Act and then answering them against the background of the concurrent registrations of the disputed land and the object, scheme and language of the relevant legislation and the overall justice of the case.

  84. The correct questions under the 1980 Act are:

    85. (1) Did the owners of No 29 have a right of action in the period 1988 to 2003 against owners of No 31 for recovery of the disputed land? If so,

    (2) Did time run in favour of the owners of No 31 as persons in adverse possession of the disputed land?

  85. The appeal thus turns on whether the owners of No 29 were dispossessed of the disputed land in July 1988 and whether the owners of No 31 were in adverse possession of it throughout the period down to 2003.

  86. In my judgment, Mr Pymont QC is right in his contentions that the previous owners of No 29 were not dispossessed of the disputed land by the owners of No 31, and that their possession of the disputed land during the relevant period was not "adverse possession" within the meaning of the 1980 Act.

  87. There was no dispossession in July 1988, because the taking of possession of the disputed land was not unlawful. It was lawful for the owners of No 31 to take and remain in possession of the disputed land, because they had a registered title to it. As long as they remained registered proprietors of the disputed land, that possession would be lawful and could not be adverse to the owners of No 29.

  88. It is now in the respondent's interest to ignore the concurrent registration of title to the disputed land during the relevant period and instead to rely on a possessory title to the disputed land. But, unless and until the land register is rectified by order, the legal position is that the owners of No 29 did not have a completed cause of action for recovery of the disputed land. They could neither have nor plead a better title to the disputed land than the owners of No 31. They both had registered title to it with all that that entails under the 1925 Act.

  89. This is a case of equality of registered titles, rather than the normal case of relativity of titles. The two registered titles co-exist on the register unless and until corrected by rectification. The determination of the question of rectification is logically prior to the determination of the question of possessory title. It has to be decided who was entitled to be registered as proprietor of the disputed land before it can be decided whether the right of the proprietor to recover the disputed land is statute barred. If, for example, the rectification issue regarding registration is resolved in favour of the respondent, the question of the respondent's claim to a possessory title would never arise for determination.

  90. The owners of No 31 could not have or plead a better title against the owners of No 29, on the basis of registration. Nor was it possible for the owners of No 31 to have or plead a better title on the basis of exclusive possession, because the possession of the disputed land by a person with registered title to it was not unlawful and therefore not adverse possession.

  91. It is not open to the respondent to choose to ignore the legal fact of concurrent registration of title to the disputed land or its consequences. The mistakes of concurrent registration are liable to be rectified by order in accordance with the procedures in the 1925 Act. Subject to that corrective action, they are legal facts with legal consequences.

  92. It is true that the owners of No 29 could get that mistake rectified and would normally seek to do so once it has been discovered, but there is no time limit set for making such an application, as distinct from bringing an action for the recovery of land.

  93. In my judgment, the case of Malory is not, when properly understood, against the appellant on this point. It was not a case on the effect of first registration nor was it a case of concurrent registrations. It was a case of a purported disposition of registered land that was held not to affect the beneficial ownership of the land, because of the fraud of the transferor. It was held that only the bare legal title passed to the transferee, who was registered as proprietor. The claimant, who had been defrauded, was left with the beneficial ownership of the land and that was held to be sufficient to entitle the claimant in that case to sue for trespass.

  94. In this case there are no circumstances from which a separation of legal title and beneficial ownership of the disputed land could be inferred or implied. Subject to rectification of the register by order, both parties have a good legal and beneficial title to the disputed land conferred by registration.

  95. In my judgment, the above analysis of the way in which the 1980 Act operates in the case of concurrent registrations is consistent with the language of the relevant provisions in that Act and with the legal effects of the relevant provisions in the 1925 Act. It is also consistent with the overall scheme of the legislation affecting the gain and loss of title to registered land. The land register is a system of state-guaranteed registered title. Mistakes may be made. If they are, the legislation caters for that by providing machinery for their correction and for indemnification with safeguards to protect the interests of the proprietor in possession and to prevent injustice. That is the machinery which has to be used to establish the true title to registered land before any question arises of establishing possessory title to registered land.

    96. General boundaries point

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

    97. Discretion to rectify

  97. There are no grounds for interfering with the decision of the Deputy Adjudicator as to how he would have exercised his discretion to rectify, but for the possessory title point. The points forcefully advanced by Mr Rodger QC against rectification could not disguise the plain unvarnished fact that his client is seeking to take the benefit of a mistake by the Land Registry, which had occurred through no fault on the appellants' side and which it would be unjust not to correct.

    98. Easement to park point

  98. No easement to park could be acquired by a person who was, during the relevant period of user, the registered owner of both the dominant tenement (No 31) and the servient tenement (the disputed land).

    99. Result

  99. I would allow this appeal.

  100. In brief, the legal position is that the owners of No 29 did not have a right of action against the owners of No 31 for the recovery of possession of the disputed land for putting up the chain link fence round the disputed land in July 1988 or for parking on it. No right of action arose then or subsequently, because there was no unlawful act of taking possession by the owners of No 31; they were entitled in law, even as against other persons with a registered title to the disputed land, to go into it and to remain in possession of it. Time did not begin to run against the owners of No 29.

  101. Just as time did not begin to run against the owners of No 29, so it did not begin to run in favour of the owners of No 31, as their possession of the disputed land was referable to their registered title and was not unlawful or adverse within the meaning of the 1980 Act.

  102. The fact that the owners of No 29 had a right to apply for rectification of the register is beside the point for the purposes of the 1980 Act. That is a right of a different kind than a right of action for the recovery of possession to which the 1980 Act applies a limitation period. The 1980 Act does not apply to the statutory right to apply to rectify the land register. The right to apply for it did not of itself give the owners of No 29 a right of action to recover possession of the disputed land from others who had a concurrent registered title to it.

    103. Lord Justice Treacy:

  103. I agree.

    104. Lord Justice Patten:

  104. I also agree.

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