England and Wales High Court (Administrative Court) Decisions

IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT

		Royal Courts of Justice Strand London WC2A 2LL
		3 December 2010

1. MR JUSTICE MITTING: The claimant is the registered proprietor of a building and land known as 493 High Road, London, N17 under registered title number 489671. He acquired the premises on 13 May 2003. He runs in them a Chinese restaurant, as did his predecessor.
2. It is unnecessary for me to set out the conveyancing history of 493 High Road because the issue that arises in this claim does not require an examination of it.
3. On 12 May 1980, planning permission was granted for the construction of a singly storey rear extension on land at the rear of 493 High Road. There is no reason to doubt that the extension was built soon after. On 18 June 1986, planning permission was granted for the erection of a roof over land at the back of 493 High Road in the space formed by the back of the existing building and the side of the recently built extension. Again, there is no reason to doubt that the roof was built soon after permission was granted.
4. No one has yet established who, if anybody, has paper title to the land on which the extension and roof were built. Behind that bit of land is a further small parcel of land, which may originally have formed part of an embankment next to a railway line which leads northwards to Bruce Grove Station a little further up the High Road. It is possible that Railtrack, the owner of the railway line, claimed paper title to that part of the land. It seems unlikely, on the information that I have, that Railtrack claimed ownership of the land on which the extension and all or most of the roof were built.
5. The claimant and his predecessors have used part of the land to the rear of the extension and roof for storage purposes. No one else during their occupation has had or enjoyed access to it. For my purposes, the history of the land and its surroundings has not been satisfactorily established. To the south of the extension is an area marked (on the plan which I have) "Works". I do not know what, if any, attempts have been made to find out the identity of the occupier of the works; whether any activity is still carried on there; whether any attempt has been made to find out the ownership of the land on which the works exist; nor whether title to that land has been registered. All that I can deduce from the map and from the evidential silence about the matter is that it is at least possible that the works have been occupied and used actively, access being gained from the highway just next to the railway bridge, and that it is possible that the original owner and possibly paper title owner of the land on which the extension and roof now stand was the owner and occupier of the works.
6. The claimant applied to the Land Registry to register the land on which the extension and roof stand and the land to the rear of that as a result of more than 12 years possession of the land to the exclusion of the owner, if any, of it. The registrar was willing to register possessory title to the land, but not absolute title. I will deal with the reasons for that in a moment.
7. The decision was reviewed and upheld, albeit for slightly different reasons. That led to this challenge. It is common ground that the only means by which a challenge to a decision of this nature by the registrar can be brought is by judicial review proceedings. Permission was refused on the papers, but granted for this aspect of a somewhat wider challenge by Dobbs J.
8. Section 3 of the Land Registration Act 2002 provides for circumstances in which title may be registered:

"(1) This section applies to any unregistered legal estate which is an interest of any of the following kinds—

(a) an estate in land...

(2) Subject to the following provisions, a person may apply to the registrar to be registered as the proprietor of an unregistered legal estate to which this section applies if—

...

(b)he is entitled to require the estate to be vested in him."

9. Section 9 identifies three categories of title which may be registered:

"(1) In the case of an application for registration under this Chapter of a freehold estate, the classes of title with which the applicant may be registered as proprietor are—

(a) absolute title,

(b) qualified title, and

(c) possessory title;

and the following provisions deal with when each of the classes of title is available.

(2) A person may be registered with absolute title if the registrar is of the opinion that the person's title to the estate is such as a willing buyer could properly be advised by a competent professional adviser to accept.

(3) In applying subsection (2), the registrar may disregard the fact that a person's title appears to him to be open to objection if he is of the opinion that the defect will not cause the holding under the title to be disturbed.

...

(5) A person may be registered with possessory title if the registrar is of the opinion—

(a) that the person is in actual possession of the land ... and

(b) that there is no other class of title with which he may be registered."

10. The effect of registration is set out in section 11:

"(2) Registration with absolute title has the effect described in subsections (3) to (5).

(3) The estate is vested in the proprietor together with all interests subsisting for the benefit of the estate.

...

(7) Registration with possessory title has the same effect as registration with absolute title, except that it does not affect the enforcement of any estate, right or interest adverse to, or in derogation of, the proprietor's title subsisting at the time of registration or then capable of arising."

11. Pursuant to a recommendation of the Law Commission, the 2002 Act contains a provision which was not present in the Land Registration Act 1975 in section 62:

"62 Power to upgrade title

(1) Where the title to a freehold estate is entered in the register as possessory ... the registrar may enter it as absolute if he is satisfied as to the title to the estate.

...

(4) Where the title to a freehold estate in land has been entered in the register as possessory for at least twelve years, the registrar may enter it as absolute if he is satisfied that the proprietor is in possession of the land."

12. The statutory provisions have been supplemented by practice guidance given by the registrar. In Practice Guide 5 of November 2008 at paragraph 6.4, the registrar has stated the general policy of the registry:

"6.4 Class of title

Generally, where the application is in respect of unregistered land, we will only register the squatter with an absolute title if we are satisfied that their adverse possession has barred the owner's title. Usually this will only be so where:

— we know what that title is, and

— we are satisfied that the owner has consented to, or could have no valid grounds for objecting to, the squatter being registered as proprietor of the land.

In any other case we will only register with a possessory title..."

13. That policy was applied here. In the original decision letter of 2 April 2009, Noel Bateman, for the Registry, explained the registrar's decision to register only a possessory title:

"It is not the Registry's practice to grant absolute title in a case such as this. A title founded on possession is, by its nature, more susceptible to challenge than one found on documentation. Although Railtrack's objection was deemed groundless, they have not consented to your client being registered as proprietor. Accordingly, no better class of title than possessory title can be granted."

14. When that decision was challenged, it was reviewed. Sally Carter, upholding the decision but for different reasons, stated in the decision letter which is the subject of this challenge dated 23 April 2009:

"It is very rare indeed for any better class of title than possessory to be granted where the applicant's title is founded on adverse possession since such a title is by its very nature more susceptible to impeachment than those cases where a good documentary title has been deduced. Without evidence of the dispossessed owner's title, the tenure of the land cannot be ascertained with complete certainty. If, for example, a head leasehold term is vested in the dispossessed owner, time would not run against the freehold reversioner until the determination of that lease. In addition, the documentary owner may be under a disability and, quite apart from the question of subsisting leasehold estates, there may be circumstances where interests in remainder have not yet fallen into possession. In such circumstances, those inchoate rights to ultimate possession would not have been defeated by a squatter. Also, the very nature of acts of possession relied upon may be challenged, for example by allegations that the possession was permissive and not adverse."

15. The first letter of 2 April 2009 may have been potentially misleading in that the reader might have understood that the only possible candidate for paper title owner was Railtrack. For the reasons I have explained, it seems to me that that is unlikely to be correct. The embankment or strip of land running along the railway line would either have had to have had a gouge out of it if the land was owned by somebody else, or to have had a square-shaped extension at the back only of 493 High Road if Railtrack owned it for no reason that I can discern.
16. If indeed it had been conclusively established that Railtrack was the only person with a possible claim to paper title, then, applying the Registry's guidance at 6.4, it may well have been that the decision not to register absolute title would have been impeachable because the owner would have been identified and, its claims having been dismissed as groundless, it "could have no valid grounds for objecting to" the registration of the claimant as absolute proprietor. But as Miss Carter's letter makes clear, there was no evidence as to who was the paper title owner of the land. In those circumstances, what Miss Carter did was no more and no less than to apply the declared policy of the Registry. This claim must therefore be a challenge to that policy. Mr Paget, who appears for the claimant, does not shirk from such a challenge.
17. This brings into play wider policy considerations which underlie the Act of Parliament. Schedules 4 and 8 to the 2002 Act contain provision for compensating either the registered proprietor, or someone whose interest has been displaced by registration if a mistake has been made. It is unnecessary for me to examine the circumstances in which that obligation might arise beyond observing that if, as a result of the registration of a possessory title as an absolute title, someone with a claim which would have defeated the possessory title who cannot now challenge the absolute title might be entitled to compensation for his loss. What the Act does is to strike a balance between the economic and social interest of having title to land firmly established to ensure that it can be freely marketed, and protection of the public purse against justified claims for indemnity as a result of mistakes in the register.
18. The registrar, it seems to me, is plainly entitled to take a cautious -- even an ultra cautious -- view of the position so as to avoid putting public funds at risk.
19. As Mr Morshead for the registrar has submitted, conveyancing throws up many surprises. Even on this small piece of land, the possibility of a surprise which might give rise to a claim on the public purse cannot wholly be excluded. I accept that it is very unlikely that anyone with a disability would appear as an undisplaced claimant to this land. It is also unlikely that a reversioner to a lease created before 1925 exists who might have a claim to the land once the lease falls in which would not be affected by the adverse claim of the claimant, unless the claimant's title was registered as an absolute title.
20. It is also unlikely, I accept, that the Crown might have an interest in this land as bona vacantia land. But these are not wholly fanciful propositions. Furthermore, the claimant has, in my view, in any event not done enough to establish who might have a paper claim to this land sufficient to permit the registrar under his declared policy in paragraph 6.4 to treat it as giving rise to no valid grounds for objection.
21. For all of those reasons, it seems to me that the decision of the registrar to agree to register possessory title only cannot be categorised as unlawful or irrational, and this challenge must fail.
22. MR MORSHEAD: My Lord, I am grateful. May I invite your Lordship to say that the claim is dismissed and to consider the matter of costs? I understand that schedules have been exchanged.
23. MR JUSTICE MITTING: I have not seen them.
24. MR MORSHEAD: I do not know if they have made their way to your Lordship. Can I hand your Lordship my schedule of costs? I do not myself have a spare copy of my learned friend's schedule, but in case your Lordship finds it helpful perhaps, just looking at the bottom line figure, it is £13,216.40. So we are not all that far apart, I suppose. My Lord, just scanning through the hours, I do not know if your Lordship would like to deal first with the principle and then assessment?
25. MR JUSTICE MITTING: Certainly. Let us deal with the principle first. Can you object to the application for costs in principle?
26. MR PAGET: My Lord, I cannot, save that there was negotiations between the parties at an early stage for the matter to be settled, and I do not know if my Lord wants me to deal with that. It cuts both across amount and principle first.
27. MR JUSTICE MITTING: Well, at the moment, I am in the dark. What you are saying, if I understand you rightly, is that I should look at both principle and detail at the same time.
28. MR PAGET: My Lord, yes.
29. MR JUSTICE MITTING: I will do that then.
30. MR MORSHEAD: My Lord, I was just going to draw your Lordship's attention to the times that have been spent. Your Lordship will see that some care has been taken by my instructing solicitor to attend both on the client and on me. We had quite a long conference last year. I cannot identify the others with whom attendance has been made at the foot of the page. Attendance on opponents is self-explanatory. Your Lordship sees that some work has also been done on documents.
31. MR JUSTICE MITTING: Attendance on opponents ought to be the same number of hours. It is almost, so that is reassuring.
32. MR MORSHEAD: I was just going to check that.
33. MR JUSTICE MITTING: One is 4, and one is 4.2, so that is acceptable.
34. MR MORSHEAD: Broad parity on that, which perhaps gives some confidence about the other numbers, I do not know. Three hours were allowed for attendance this morning. That is roughly right, I suppose. Travel, then there are my fees. Your Lordship, just by way of background, you will have appreciated that, although your Lordship has been able to form a clear view of the law, this is a point of concern to the Registry, largely for the reason that your Lordship mentioned. There are public funds at risk here. The proposition put forward really at the heart of Mr Diep's claim was quite a profound one, with wide-ranging implications, and it was a claim which, I am afraid, having brought this claim, my client had to respond to it quite seriously, and that is what we have done, and I am afraid that is now expressed and reflected in the bill of costs. Of course, it is seldom of much comfort, but of course if this litigation had been conducted at commercial rates rather than Treasury rates, one would have been looking at a higher bill even than this.
35. MR JUSTICE MITTING: Your rates are senior Treasury Solicitor rates which, for a case of this kind, is clearly appropriate.
36. MR MORSHEAD: My Lord, I am grateful. It is not one of those cases where the nature of the issues is such as to justify describing this level of fees as disproportionate. One can see how it may be disproportionate to the parcel of land. I have not idea what the valuation is, but this claim raises a point which needed to be grappled with quite seriously. I better leave my learned friend to develop what he wants to say regarding some correspondence which I think he wants to show your Lordship.
37. MR JUSTICE MITTING: Mr Paget?
38. MR PAGET: My Lord, we do not criticise the hourly rates that the Treasury Solicitors seek, albeit they are slightly more than you mentioned in Mr O'Brien's costs application earlier this morning.
39. MR JUSTICE MITTING: There are two grades. There is the £160 which is the standard immigration case grade, and £200 which is when a more senior lawyer has to deal with the case, and this is not a standard issue case, and so one would expect it to be dealt with by a more senior lawyer.
40. MR PAGET: My Lord, yes, and we do not take issue with that. What we do say, there are two aspects of the schedule of costs that we query; that is, work done on documents. It is sought to have 25 hours recovered for that. That equates to £5,000. Of the documents, there is no witness statement or anything of that nature that needed to be drafted by the solicitor, and there are in fact no other documents, save the acknowledgment of service and the attendant guidance that supported that, and the two letters that, my Lord, you have referenced in your judgment, 2 April 2009 and 23 April 2009.
41. MR JUSTICE MITTING: It is reading those documents; it is not drafting them.
42. MR PAGET: My Lord, yes, but if you look at the bundle as a whole, it is insubstantial. We would submit that that figure of 25 hours -- well, what are the documents?
43. MR JUSTICE MITTING: You have got up to 17.7, have you not?
44. MR PAGET: My Lord, yes, in relation to bringing this as a claimant.
45. MR JUSTICE MITTING: A number of hours that I would have raised an eyebrow at had you won.
46. MR PAGET: My Lord, of course there is a difference between the costs that are incurred by a claimant and the costs that are incurred by a defendant in responding to a claim, where we would submit that that is on the high side.
47. The other aspect that we criticise, or at least draw to the court's attention, is the counsel's fees for the hearing. Counsel's fees are broken down into two aspects: preparatory work and attendance at the hearing. Those costs of the hearing are governed by CPR 48.5, and we are in the realm of the table that is set out at 48.51, which is at page 1497 of the White Book, Volume 1. The guidance relevant here is in the last table, "Administrative Court, counsel over ten years call". This matter was set down for a one-hour hearing. We have gone slightly over that, but we are not into the realm of a half-day hearing, so we would submit that the figure that is appropriate there is the one that the claimant's seek in their schedule of costs, £1,250.
48. MR JUSTICE MITTING: These are figures derived from costs cases that have gone through the Supreme Court costs office -- senior court costs office we must now call it.
49. MR PAGET: My Lord, yes.
50. MR JUSTICE MITTING: So these are not figures which guide; they are the result of an exercise that has been conducted on figures presented in the past?
51. MR PAGET: My Lord, yes, but they are used as guidance.
52. MR JUSTICE MITTING: I am not suggesting that they should not be there. It is a very helpful piece of information. They are not, as with the guidance for solicitors' rates which we accept as X pounds an hour.
53. MR PAGET: No, they do not have that sense of (inaudible) to them, but they are in the White Book because they are useful guidance for the court. We say, reflected in those figures, is the figure of claimant's counsel's fee for attendance. We say that would be appropriate for a recoverable cost on summary assessment.
54. My Lord, I also make a submission as to principle. For that I hand up some correspondence between the parties in July and September. The final figure that is sought by the Treasury Solicitor for their costs today is £12,400, and you will have seen from the costs schedule that just counsel's fees would reflect £2,400 plus of that. Then you have attendance on counsel today, et cetera, and preparation of the documents for trial. We would submit that at least £5,000 worth of those costs would have been incurred post this stream of correspondence, which I will now turn to, my Lord.
55. The claimant's solicitor sought to settle the matter, and that is encapsulate in the first letter, 23 July, which was responded to by the Treasury Solicitor on 28 July, saying "fine, as long as you pay a contribution of £10,000 towards our costs".
56. MR JUSTICE MITTING: You could have applied to discontinue and taken your chance on costs, could you not?
57. MR PAGET: Yes, we could have done. Instead of doing that, in an effort to compromise matters, we were liaising with the Treasury Solicitor to see if there was anything better than merely discontinuing and going to taxation that way, and the response was, well, we have incurred £10,000 costs already, and it is clear now that that was not the case, that at that stage the figure would have been lower than that. It is right to say that --
58. MR JUSTICE MITTING: Only by a few pounds. It is the right ballpark.
59. MR PAGET: We would say it is at least 20 per cent less than that.
60. MR JUSTICE MITTING: What comes off is counsel's fee for the hearing, £2,250, and the attendance at the hearing which is four hours, £800. So it is £3,000, so it comes out at about £9,400, rather £10,000.
61. MR PAGET: Plus, of that 25 hours and attendance on other sides et cetera, there is going to be a percentage of that that will have been done between September and now. We would say that is about quarter of that. So we are looking at a figure of about £7,000 or £8,000 at that stage, rather than what was suggested in the course of the correspondence, which was £10,000.
62. MR JUSTICE MITTING: The answer to that is to take your chance on an assessment.
63. MR PAGET: I accept that that could have been a route.
64. MR JUSTICE MITTING: And it is done very inexpensively too because what you do is you say we will agree to discontinue, consent order, signed costs to be determined on the papers by a judge, and that costs next to nothing.
65. MR PAGET: My Lord, yes, I appreciate we could have pursued that as a route, instead we sought, in the spirit of compromise, to see if there was any other more attractive route available to the Treasury Solicitors, and that response effectively cut off all other routes, save discontinuance, and for those reasons we say that should be taken into account in a holistic way when reaching the figure that you summary assess the costs at.
66. MR JUSTICE MITTING: Leaving that to one side, would you have any observation about an assessment of 30 hours in the round and in total spent on preparation of this case and attendance at the hearing and so forth. They add up to 41 and a half hours and you add up to 36.8 hours.
67. MR PAGET: My Lord, no.
68. MR JUSTICE MITTING: I do think the 25 hours on the documents is too much.
69. MR PAGET: My Lord, yes.
70. MR JUSTICE MITTING: As indeed I think your 17.7 hours is too much.
71. MR PAGET: Those are our submissions.
72. MR JUSTICE MITTING: Mr Morshead?
73. MR MORSHEAD: My Lord, unfortunately it is to a degree in the nature of the summary assessments that I am not in a position to tell you root and branch what accounts for 25 hours. I am in an additional bind because my instructing solicitor who would otherwise be here has sent a stand-in. He has a sore throat apparently and cannot be here, so I might otherwise have been able to shed more light on it. My Lord, I suppose what I have to do is leave it to your Lordship's judgment the question of what is an appropriate allowance to make for the work that has been done on documents.
74. So far as counsel's fees are concerned, this very interesting table says in terms and emphasises that these figures are not recommended rates, but it is a helpful starting point for judges when assessing counsel's fees. The appropriate fee in any particular case may be more or less than the figures appearing in the table depending on the circumstances. Your Lordship will be aware that the practice of the Treasury Solicitor is not to pay brief fees at all. Treasury counsel is paid an hourly rate, and the estimate of counsel's fees based on a pre-estimate of the amount of time it is going to take to do the work necessary. So what your Lordship sees -- and the A Panel rate is, I think, £120, not a very large amount. So the figure of £2,250, I cannot now recall exactly how it has been broken down, but some time was spent drafting two skeleton arguments, one before receipt of my learned friend's skeleton argument, late, and the other one after we received it in order to respond to the points that he made. There is then the further time in preparation. As your Lordship will appreciate, one has to read the papers before the hearing and there is the hearing itself.
75. Now, I do not have a piece of paper which breaks down how that time has been arrived at, but it is an arithmetical exercise, not an arbitrary one. So, getting on my high horse, one thinks it slightly amiss, particularly when one is acting on Treasury rates, for the fee to be attacked in that way because it was a case of substantial importance for the Treasury Solicitor and for the Land Registry. They wanted the case to be conducted with care. Your Lordship has found it was conducted carefully. I do not know, but the feeling was that this was a case which deserved careful attention. Then there is the matter of the correspondence, which your Lordship has been shown. I am not sure your Lordship will get very much help from it, but I do not want my Lord to leave with the impression that his client and his instructing solicitors have been terribly reasonable about everything, and my instructing solicitors have been not so. You have been shown the first two or three letters.
76. MR JUSTICE MITTING: I have skim read through them. Both sides took a stance which I think was not wholly justified. I rather doubt that this exchange of correspondence adds materially to the factors I have to take into account.
77. MR MORSHEAD: If I may say so, I respectfully agree; I merely point out that (inaudible) my instructing solicitor was saying: look, if you do not like the figure we have come up with, let there be an assessment. That was the suggestion, and that received a rather robust and surprising rejection, but I do not think I need detain your Lordship further.
78. MR JUSTICE MITTING: Thank you. Anything in reply?
79. MR PAGET: My Lord, yes, if the indemnity principle should apply to the actual costs, if it is on an hourly rate for Treasury Solicitors instructing Treasury counsel, then that should really be incorporated within the statement of costs, rather than a global figure. But if you add the two global figures together you get about 20 hours of Treasury counsel's time on an hourly rate of, let us say, £200 an hour. The defendant has said, well, this would have been a far larger figure if it was commercial rates. Well, the guidance in the White Book is from the Supreme Court --
80. MR JUSTICE MITTING: The indemnity principle does not permit anything beyond that which has actually been incurred to be ordered to be paid. That is the end of any argument about, well, if we had been to Linklaters they would have charged £600 an hour.
81. MR PAGET: If it is difficult from this statement of costs, where there is a global figure put, what actually has been incurred in the costs by the Treasury Solicitor. Treasury counsel says, well, this is far lower than it would have been at a commercial rate. The White Book guidance is costs assessments of all matters that have gone to the Supreme Court office, including private litigants, not just the Treasury Solicitor, and those are the figures that have been discerned to be the averages. So we would say that it is inappropriate where the Treasury counsel is higher than that.
82. MR JUSTICE MITTING: The claimant must pay the defendant's costs of the case. I assess them in the sum of £9,900, made up as follows: 30 hours, including all preparation and attendances at £200 a hour; and counsel's fees as claimed at £3,900. If my arithmetic is correct in every respect, that is £9,900. I have arrived at a figure lower than that claimed by the defendant because, in my view, the number of hours claimed for work done on documents, 25, is significantly excessive and more than is reasonably required to prepare the case, and more than is reasonable to expect the unsuccessful opponent to pay.
83. I note that the claimant's bill includes 36.8 hours of preparation and attendance. I would have held that also to be moderately excessive. On that basis, I arrive at that figure.
84. I disregard, I should add, the correspondence exchanged in July, August and October of this year in which the claimant's solicitors offered to withdraw the claim, and the Treasury Solicitor insisted upon the price of doing so as the acceptance of costs of £10,000. I ignore it because the sum claimed by the Treasury Solicitor at that time exceeded the sum likely to be recovered on an assessment, and because the claimant had always available to him the option of withdrawing and inviting a judge to assess the amount of the defendant's costs.