England and Wales High Court (Chancery Division) Decisions

IN THE HIGH COURT OF JUSTICE
CHANCERY DIVISION

		Birmingham Civil Justice Centre, The Priory Courts, 33 Bull Street, Birmingham B4 6DS
		15/04/2014

Mr Justice Morgan:

Introduction

1. 258 Broad Street has been used for some years as a club, first a jazz club and now a lap dancing club. When these proceedings began, the First Claimant was the lessee of the club. During the course of the proceedings, the First Claimant ("Balevents") assigned its lease to the Second Claimant. This dispute is about an area of the pavement in front of the club. The disputed area is not subject to a public right of way. The Defendant, Mr Sartori, successfully applied in 2009 for the registration of a possessory title in relation to the disputed area. The Claimants now say that Mr Sartori holds his registered title on a constructive trust for one of them and that the register should be rectified accordingly. That is the primary relief which they seek. However, in the course of submissions, the Claimants have put forward an alternative case to the effect that even if the Claimants cannot show that one of them should be the registered proprietor, the register should still be rectified so that the Defendant ceases to be the registered proprietor. Accordingly, the ultimate question for the court is: as between the parties, who is entitled to ownership of the disputed area? The possible answers are: (1) one of the Claimants; (2) the Defendant; or (3) none of these parties.
2. This is the second trial of this claim. I did not conduct the first trial. The orders which were made after the first trial were set aside by the Court of Appeal on the ground that Balevents wished to adduce evidence that had not been available at the first trial. The Court of Appeal ordered a new trial, without any limitation as to the evidence which could be adduced. At the second trial, the evidence has gone much wider and deeper than the evidence at the first trial. I will, of course, base my findings on all of the evidence at the second trial. I will also form my own assessment of the witnesses based on that evidence.
3. There are major disputes of fact between the parties. There is a dispute as to the use of the disputed area from 1974 up to 2009. There is a dispute as to the events of 2009 which led to Mr Sartori successfully applying for a possessory title. Mr Sartori is an important witness. However, I have reached the conclusion that I am not able to accept his evidence on a large number of matters. Mr Laurence Reddy ("Mr Reddy"), who I find to be the person who controlled Balevents at all material times, is also an important witness, in particular, in relation to the events of 2009. I have reached the conclusion that I am not able to accept his evidence as to those events. The findings of fact which I will make will be fundamental to the outcome of the case.
4. Although the facts are of central importance, there was also lengthy argument as to a number of legal matters. These included the law as to adverse possession of land, fiduciary duties and rectification of the register of title under the Land Registration Act 2002. I will need to refer to a number of legal matters and the outcome critically depends upon the application of the rectification provisions of the 2002 Act to my findings of fact.
5. Mr Randall QC and Mr Verduyn appeared on behalf of the Claimants and Mr Hansen appeared on behalf of the Defendant. The case was very thoroughly prepared and was well presented and well argued. I am grateful to all counsel for their assistance.

The pavement in front of Quayside Tower

6. Broad Street, Birmingham is a busy thoroughfare near the centre of the city. The part of Broad Street relevant to this case runs from the south-west to the north-east. On the south side of Broad Street is a building known as Quayside Tower, which was erected in the 1960s. The building sits on a site between Gas Street and Berkley Street. The building has a large podium which runs between those two streets and on top of the podium there is a tower block which has a footprint much smaller than the area of the podium. The podium was originally designed as a number of shops fronting Broad Street. The shops were numbered 252 to 260 Broad Street, although the premises which have been referred to as 258 Broad Street are at the end of the run of shops. The shops were on ground and first floor level and I think that there were some basement areas. The tower block was, and is, used as offices.
7. The freeholders of Quayside Tower have been, and still are, the Governors of the Schools of King Edward the Sixth in Birmingham ("the Governors"). Quayside Tower was let to the Prudential Assurance Company Limited ("the Prudential") for a term of 99 years from 29 September 1963 by a head lease dated 11 May 1964.
8. Quayside Tower was constructed some distance back from the roadway in Broad Street. The area between the building and the roadway has the appearance of being a conventional, although somewhat broad, pavement. In fact, only about one half in width of this paved area is the subject of a public right of way. That part has always been owned by Birmingham City Council. The area of land, or the strip, between the part of the pavement which is subject to a public right of way and the front of the building was and is private land, not subject to such rights. When Quayside Tower was built, this strip was owned by the Governors and it was included in the head lease. In 1966, that position changed. On 26 May 1966, the head lessee surrendered its interest in relation to the strip to the freeholder and on the next day, the freeholder conveyed it with vacant possession to Birmingham City Council ("the City Council"). Thereafter, the Governors became registered at the Land Registry in relation to Quayside Tower with title number WM609435 and the Prudential became registered in relation to the head lease with title number WM664035. These registrations did not include the strip of land between the public right of way and the front of the building. The City Council became registered in relation to the strip under title number WK34407.
9. It seems that when the strip of land along the frontage of the building was conveyed to the City Council, it intended to incorporate the strip into the area over which there was a public right of way. However, the City Council did not do anything to bring that about. In practice, and subject to the later findings of fact I will make as to the use of the part of the strip which was outside 258 Broad Street, the use of the strip simply continued as before. It was used as a pavement and as if the public had a right of way over it. However, no one has contended in these proceedings that the strip ever became subject to a public right of way.

The disputed land

10. The land which is in dispute in these proceedings is a part of the strip in front of Quayside Tower. The relevant part lies in front of 258 Broad Street. However, the land in dispute does not comprise the full extent of the frontage to 258 Broad Street. As will be explained later in this judgment, the land in dispute has been given its own registered title, WM951202 and the dispute is confined to that land. However, the evidence which I was given as to relevant use of the disputed land was not always confined to that area. The evidence extended to the use of land which might have been part of the strip but was not confined to the disputed land and the land which was used may also have included some of the land in front of 258 Broad Street which was subject to a public right of way (and therefore not part of the relevant strip as I have described it).
11. Until around 1991, 258 Broad Street was used as a furniture shop with typical large plate glass shop windows. Then in 1991, as I will describe in more detail later, those premises were converted to be used as the Ronnie Scott's Jazz Club. That use continued until around 2003, when the premises were used as a lap dancing club and that remains the use of the premises.
12. There has always been an entrance to the premises at 258 Broad Street in approximately the middle of its frontage. There are also two other entrances to 258 Broad Street, one to the left and one to the right of the middle entrance. Access to these entrances requires one to cross the strip in front of 258 Broad Street. The disputed land is in front of the left hand and the middle entrance.

Mr Allan Sartori

13. Mr Sartori was the son of Bernard Sartori who was employed as a primings maker by Ansell's Brewery until around 1982 or 1983. When I refer to "Mr Sartori" without using a first name, I am referring to the Defendant, Allan Sartori. When I refer to Bernard Sartori I will either refer to him by name or as "Mr Sartori's father".
14. Over the years, Mr Sartori was involved in various businesses connected with leisure and catering. Mr Sartori says that his father ran a sandwich bar on the disputed land (and perhaps adjoining land) from around 1974 and that Mr Sartori took it over in around 1986 and continued to run it until 1991. When Ronnie Scott's Jazz Club opened in Birmingham in 1991, it was operated by Jazz Enterprises Ltd ("JEL"). Mr Sartori was a director of JEL from a date before February 1992. The business of the jazz club was taken over by Broomco 2540 Ltd ("Broomco") in around 2001. Mr Sartori was a director of Broomco from 17 July 2001 to 13 August 2001, the latter date being when Mr Sartori entered into an Individual Voluntary Arrangement ("an IVA"). The lease of the premises was transferred from JEL to Broomco on 7 February 2002 and then to Balevents (the First Claimant) on 28 May 2003. Mr Sartori was not a director or shareholder in relation to Balevents. Mr Sartori described himself, and was happy to be described by others, particularly in the course of the relevant events in 2009, as "the general manager" of Balevents. Mr Sartori was also a director from 3 April 2008 to 8 January 2010 of Broad Street Entertainments Ltd ("BSEL") which was connected with the operation of the business in 258 Broad Street. The evidence was not always clear as to which of the companies associated with the Claimants operated the business at the premises and when it is not central to my findings I will simply refer to the company which operated the business without being more precise as to the identity of that company.

Some relevant companies

15. I have already mentioned JEL, Broomco, Balevents and BSEL.
16. JEL was incorporated on 5 February 1991, had administrative receivers appointed in relation to it on 10 August 2001 and was dissolved on 23 September 2003. Mr Sartori was appointed a director of JEL before February 1992 and remained a director thereafter. The original shareholders in JEL were Mr Sartori and Mr Sherwin (save for others who had nominal shareholdings) but others became substantial shareholders on 22 April 1998.
17. Broomco was incorporated on 10 April 2001, went into creditors voluntary liquidation on 23 September 2003 and was dissolved on 26 November 2009. Mr Sartori was a director from 17 July 2001 to 13 August 2001, the day he entered into an IVA. His wife was a director from 30 June 2003 onwards.
18. Balevents was incorporated on 3 May 2001. Initially, there were two issued shares. These were owned by Mr Reddy from 7 June 2001 until 23 May 2003 when he transferred them, for no consideration, to his brother Mr William Reddy, who retained them thereafter. Mr Reddy was a director of Balevents from 7 June 2001 to 24 November 2002. William Reddy has been a director of Balevents throughout. Mr Reddy's son, Matthew, was a director from 22 March 2010 until 5 August 2011. Mr Sartori was never a director of or shareholder in Balevents.
19. BSEL was incorporated on 3 April 2008 and dissolved on 14 February 2012. Mr Sartori was a director from 3 April 2008 to 8 January 2010 and was a shareholder in that company. Mr Sartori had an oral contract of employment with BSEL from 2 November 2008.
20. Rocket Club Restaurant Ltd was incorporated on 9 January 2002. It took an assignment of the lease of 258 Broad Street from Balevents on 30 August 2012. William Reddy has throughout been the principal or the only shareholder in this company. He was appointed a director on 6 January 2003. Mr Sartori was never a director or shareholder in relation to Rocket Club Restaurant Ltd.

Mr Reddy and William Reddy

21. Mr Reddy is a successful businessman. He was not connected with JEL or Broomco. In 2002, he lent substantial sums of money to Broomco (at the request of Mr Sartori). As the above details of the relevant companies show, he was a director of Balevents until 24 November 2002 and had shares in that company until 23 May 2003. It was accepted at the trial that he was a shadow director of Balevents at all material times when he was not an actual director. By using the term "shadow director", I understand therefore that it is accepted that he was a person in accordance with whose directions or instructions the directors of a company were accustomed to act.
22. William Reddy is the brother of Mr Reddy. William Reddy had been in the army from 1961 until he retired in 1991. He had no business background prior to 2003 when he apparently became involved in Balevents. In around 2002, he and his wife decided to leave the United Kingdom to live in Spain. They moved to Spain in around October 2003. He was then aged 59. There is an issue as to whether he held his shares in Balevents on trust for Mr Reddy and there are questions as to the extent to which he was involved with the making of decisions in relation to Balevents.
23. Mr Reddy and William Reddy gave evidence that William Reddy's shares in Balevents were held by him beneficially and not as a nominee for Mr Reddy. It was submitted on behalf of Mr Sartori that I should not accept this evidence. It is clear that Mr Reddy was the original owner of two shares in Balevents and that he transferred them to William Reddy for no consideration. The evidence suggests that the shares had no value at that time. Later, Balevents issued further shares to William Reddy.
24. There was a considerable amount of evidence as to the role played by Mr Reddy and by William Reddy, in relation to the affairs of Balevents. Mr Reddy acted at all times as if Balevents was wholly owned and controlled by him. Mr Reddy invested substantial amounts of money and time in Balevents, although on the face of it he had no economic interest in Balevents. I comment at this point that Mr Sartori was also of great importance to the day to day running of the business. Although at times Mr Sartori described himself and Mr Reddy as being partners, it is clear that Mr Sartori was not a director or a shareholder of Balevents and it is not alleged that anyone held any shares as a nominee for him.
25. William Reddy lived in Spain from October 2003 but he came to the United Kingdom a few times a year. Whilst in this country, he would go the club but his visits were essentially for social and not for business purposes. Because he was the sole director of Balevents, it was necessary for William Reddy to sign formal papers and he did so and, for that purpose, he would attend at the offices of Balevents' accountants. It is possible, indeed likely, that the accountants would provide some limited information to William Reddy before he signed formal papers in this way. There was evidence of William Reddy involving himself in one or two decisions on behalf of Balevents but this was wholly exceptional; in all other instances, he left the running of the company to his brother, Mr Reddy. As between Mr Reddy and William Reddy, Mr Reddy made the decisions and controlled Balevents and the business at the premises and William Reddy did not. Mr Reddy was also involved with William Reddy's shareholding in Balevents. It was Mr Reddy who decided that William Reddy should receive dividends from Balevents. William Reddy's involvement with dividends was confined to providing information as to where the money should be sent. Significantly, from June 2009 to mid-February 2010, there were lengthy negotiations as to a sale of the shares in Balevents to Mr Sartori. I am prepared to accept that Mr Reddy told William Reddy what was going on but it was Mr Reddy, and not William Reddy, who indicated to Mr Sartori a willingness to sell the shares and it was Mr Reddy who handled and controlled the negotiations to sell the shares to Mr Sartori. It has been Mr Reddy who has throughout been responsible for this litigation.
26. William Reddy told me that that his brother had nothing to do with the club and that his brother had never made a decision in relation to the club. William Reddy told me that he made all of the decisions about the club. William Reddy's evidence is quite absurd. It is flatly contrary to all of the evidence contained in the contemporaneous documents and the evidence of the other witnesses.
27. I find it difficult to know whether William Reddy is the beneficial owner of the shares in Balevents. It is entirely possible that he is on the basis that Mr Reddy is the wealthier of the two brothers and he has always been well disposed to William Reddy. It may be that as between the two brothers Mr Reddy was being generous with his time and his money in running and supporting Balevents on the basis that it was a way of helping his brother. Conversely, it may be the case that Mr Reddy regarded himself as beneficially owning the shares in Balevents but if the shares in Balevents were ever worth any substantial sum of money he would think of sharing that with his brother. I think it is likely that the position was deliberately left obscure as between the two brothers. In the event, it is not necessary for the purposes of this case to make a finding as to whether William Reddy is the beneficial owner of the shares or a nominee for his brother. I find that William Reddy, whether as nominee or as beneficial owner of the shares, authorised Mr Reddy to be wholly in control of Balevents, and of William Reddy's shareholding in Balevents and of the business of the club.

The leases

28. As explained, the disputed land was included in the head lease dated 11 May 1964 of Quayside Tower but the lease of the disputed land was surrendered to the freeholder on 26 May 1966. After that date, there was no lease of the disputed land but there were leases of 258 Broad Street to which it is relevant to refer. The head lease of Quayside Tower (therefore including 258 Broad Street) was assigned to Kenmore Quayside Ltd and then, on 25 October 2005, to Mourant & Co Trustees Ltd and Mourant Property Trustees Ltd. It seems that the head lessee granted an underlease to P & O Property Holdings Ltd and it was that company which underlet the property to JEL on 27 February 1992. By that underlease, the premises were let to JEL for a term of 25 years from 24 September 1991. It was common ground before me that the underlease to JEL did not include the disputed land. That underlease contained an option for the underlessee to renew the term of the lease for a further term of 15 years. Mr Sartori and Mr Sherwin joined in the underlease to JEL to guarantee the obligations of JEL. The terms of the guarantee provided that the liability of the guarantors was to last for at most 5 years. On 20 November 1998, it was recorded that Mr Sartori and Mr Sherwin were discharged as guarantors. On 7 February 2002, JEL assigned to Broomco the term of the underlease dated 27 February 1992 in accordance with a licence to assign under which Mr Sartori and Mr Sherwin again entered into a guarantee in relation to the obligations of Broomco under the underlease. The underlease was later assigned to Balevents on 28 May 2003 in accordance with a licence to assign dated 23 May 2003. Finally, the underlease was assigned to Rocket Club Restaurants Ltd on 30 August 2012 and that company is the registered proprietor in relation to the lease under title number WM558119.

Mr Sartori's case

29. I will now summarise the essential case which is put forward by Mr Sartori. He says that from 1974, his father, Bernard Sartori, ran a sandwich bar from the pavement in front of 258 Broad Street. The relevant part of the pavement has not been precisely located but it was in the area of the disputed land. It is said that Bernard Sartori's use of the pavement amounted in law to possession of that part of the pavement (leaving out of account any part of the pavement over which there was a public right of way). In due course, Mr Sartori took over his father's sandwich bar and continued in possession of the relevant area of the pavement. Before Ronnie Scott's opened in 258 Broad Street, Mr Sartori (and his father as his predecessor) had been in possession of a relevant area of land for a period in excess of 12 years and had acquired a possessory title to that land. Because the land was registered under the Land Registration Act 1925, the registered proprietor held the title on trust for Mr Sartori. When Ronnie Scott's opened in 1991, JEL, the lessee of 258 Broad Street, acknowledged that the relevant area of land in front of the club belonged to Mr Sartori. Mr Sartori received payments, or was entitled to receive payments, from others for their use of that land. He lent that money to JEL and Broomco as director's loans. When the land in front of the club was used by JEL, Broomco and Balevents, this use was with his permission. Eventually, in 2009, Mr Sartori applied to the Land Registry to be registered with a possessory title to land in front of 258 Broad Street. That application was made with the knowledge and indeed the encouragement of Mr Reddy, who was effectively in control of Balevents. The application succeeded in relation to the disputed land and Mr Sartori was registered as proprietor of that land on 23 October 2009. Mr Sartori contends that there is no possible ground on which his registered title should be transferred to Balevents and also no possible ground on which his registration should now be cancelled on the application of Balevents.

The Claimants' case

30. The Claimants' case is that Mr Sartori and his father were not in possession of any part of the pavement as a result of the running of a sandwich bar, or otherwise. JEL, Broomco and Balevents made use of the disputed land from 1991 onwards but were not in possession of the disputed land until about 1996. The possession of that land was by the limited companies and not by Mr Sartori. The limited companies received the income from the land and did not use the land with any permission from Mr Sartori. When Mr Sartori applied to be registered in relation to the land in front of 258 Broad Street, Mr Reddy did not know the detail of what Mr Sartori was doing. It was a breach of Mr Sartori's fiduciary duties to Balevents for him to apply for a registered title in his name, instead of in the name of Balevents. The result is that Mr Sartori holds his registered title on a constructive trust for Balevents, or possibly Rocket Club Restaurant Ltd, the assignee from Balevents of the lease of 258 Broad Street. In the alternative, Mr Sartori should not have been registered in relation to the disputed land and Balevents asks the court to rectify the register under schedule 4 to the Land Registration Act 2002. It is said that Mr Sartori has no defence to an application to rectify the register and nothing that Balevents has done prevents it succeeding with such an application.

The procedural history

31. These proceedings were brought by Balevents on 29 June 2010. They were tried before Kitchin J, as he then was, in July 2011. Kitchin J gave a reserved judgment on 29 September 2001. He dimissed Balevents' claim with the result that Mr Sartori remained the registered proprietor of the disputed land. Balevents appealed to the Court of Appeal. On 14 October 2012, the Court of Appeal allowed the appeal and gave their reasons in a judgment handed down on 28 November 2012. The appeal was allowed on the basis of fresh evidence having become available to Balevents in relation to some of the matters in dispute. The Court of Appeal directed a new trial of the claim and specifically directed that there should be no restriction at the new trial on the issues before the court. The costs of the trial before Kitchin J and of the appeal were reserved to the judge who conducted the retrial.
32. I conducted the retrial in accordance with the directions of the Court of Appeal. The parties, and in particular Balevents, have carried out further investigations and have called evidence which was not before Kitchin J and, as permitted by the Court of Appeal, which went beyond the new evidence which the Court of Appeal had held justified an order for a new trial. The parties have called more witnesses and have adduced more documentary evidence than was before Kitchin J and the re-trial has taken longer than the original trial. I have also been provided with a transcript of the evidence at the original trial and parts of that evidence were put in cross-examination of witnesses who gave evidence at both trials.

The witnesses

33. I heard a large number of witnesses on a wide range of disputed issues of fact. I do not think that it is necessary for me to assess each witness individually at this point in my judgment. Many of the witnesses who were not directly interested in the outcome of these proceedings were plainly doing their best to assist the court although, even so, there were some stark conflicts of fact between such witnesses. When I make my findings of fact I will indicate which evidence I accept and why.
34. When I come to make my detailed findings of fact, I will consider the evidence given by Mr Reddy and by Mr Sartori at that stage. However, I will now make some general comments about the reliability of their evidence.
35. I did not find Mr Reddy or Mr Sartori to be reliable witnesses. On the central issue as to Mr Reddy's involvement in the events of 2009, which led to Mr Sartori applying for and obtaining a possessory title to the disputed land, I am not able to accept Mr Reddy's evidence. I reach this conclusion principally because his evidence is contradicted by the contemporaneous documents and by other credible witnesses. Whilst it is not strictly necessary to come to a view as to how Mr Reddy came to give untrue evidence on this central matter, it is difficult to avoid the conclusion that Mr Reddy gave evidence which he knew to be untrue.
36. Mr Sartori was also an unreliable witness. Mr Sartori had a real difficulty in distinguishing what actually happened from what he would have liked to have happened. This was the case at the time of the events which have been examined at this trial and also during his evidence at the trial. In the course of those events, he repeatedly exaggerated matters or even made up the facts to suit the case he wished that he had. He ended up not being able to say what had really happened and what he had made up. At the trial, he attempted to stick to the versions of the facts that he had created over the years.

The use of the disputed land 1974 to 1991

37. Mr Sartori's case is that his father had a sandwich bar on the pavement in front of 258 Broad Street from 1974 onwards and that in 1986 Mr Sartori took over that sandwich bar and ran it until around 1991. Balevents do not accept that there was ever a sandwich bar on the pavement in front of 258 Broad Street. With the exception of the evidence provided by certain photographs, the evidence for and against the existence of a sandwich bar in this area is oral evidence. Before considering the oral evidence further, I will comment on the photographic evidence.
38. There is no photograph which shows the presence of a sandwich bar on the pavement in front of Quayside Tower between 1974 and 1991. Indeed there is no photograph of a sandwich bar anywhere at any time. If there had been, such a photograph would have helped me to understand the size and mobility of the sandwich bar. Balevents has produced photographs at various dates during the period 1974 to 1991 and these photographs clearly show the pavement in front of Quayside Tower, and in particular the pavement in front of 258 Broad Street. In the photographs, the pavement is completely clear. There is no sandwich bar on the pavement and there is no sign that a sandwich bar had previously been there, although it is possible that a sandwich bar had been there before the photographs were taken and had then been removed.
39. The photographs to which I refer are reliably dated as March 1980, 13 March 1991 and May 1991. There is also a photograph from 1986 which suggests that there was no sandwich bar in front of 258 Broad Street but the photograph does not show enough of the pavement in front of Quayside Tower to enable me to be certain about that suggestion.
40. The relevance of the dates of these photographs is that the period from 1974 (when the use of a sandwich bar allegedly began) to March 1980 is less than 12 years. Further, the period from March 1980 to March 1991 is again less than 12 years. As I will later explain, in order for Mr Sartori to establish that his father and later Mr Sartori himself had acquired a possessory title to any land, it must be shown that they retained possession of that land for an unbroken period of 12 years.
41. The photographs of March 1980, March 1991 and May 1991 are also revealing as they show how the pavement appeared and how it could be used at a time when there was no sandwich bar on the pavement. At such a time, the pavement in front of Quayside Tower was a wide and unimpeded pavement. There was no visible distinction between the part of the pavement over which there was a public right of way and the remainder of the pavement. A member of the public was free to walk on any part of the pavement. The disputed land is towards the left hand side of the frontage of 258 Broad Street and in the period covered by these photographs a member of the public would have had an unimpeded opportunity to gaze in the shop windows of 258 Broad Street.
42. I record at this point that there was no evidence on behalf of Mr Sartori relating to the period just before or just after the photographs of March 1980 to explain why it was that there was no sandwich bar on the pavement at that point, if there had been a sandwich bar on the pavement before that date. In particular, I was not given any evidence which might have formed the basis for a submission that Mr Sartori's father had been clearly in possession of a part of the pavement just before March 1980 and that he was clearly in possession again immediately after March 1980 so that the fact that the sandwich bar was not on the pavement at the instant that the photographs were taken in March 1980 would not prevent a court holding that Mr Sartori's father had retained possession throughout the interval of time captured in those photographs. The same comment applies to the photographs taken on 13 March 1991. As to the photographs of May 1991, Mr Sartori suggested that the sandwich bar might have been removed around that time to allow works of refurbishment to be carried out to 258 Broad Street.
43. I heard evidence from a number of witnesses, including Mr Sartori himself, as to the presence of a sandwich bar on the pavement in front of 258 Broad Street. I will summarise the principal parts of all of this evidence. I will start with Mr Sartori's own evidence on this topic.
44. In his witness statement, Mr Sartori gave what appeared to be clear information about the sandwich bar in front of 258 Broad Street. He said that his father started his sandwich bar business in this location in 1974. He ran the business from a catering trailer or kiosk. The trailer could be towed away by a large vehicle. The trailer was not removed on a daily basis; Mr Sartori described it as "permanent". He said that the trailer never moved except for the purposes of repair and maintenance or for a refit. The trailer was replaced twice over the period 1974 to 1991. Mr Sartori said that his father traded from the trailer from early morning until mid-afternoon. A few years after his father began this operation, he put up a low wooden picket fence, painted white, to enclose an area of the pavement within which area he placed tables and chairs. At night, the chairs and tables were stacked and secured by a chain to the trailer. In the mid-eighties, Mr Sartori's father handed over the sandwich bar business to Mr Sartori. Mr Sartori opened the trailer for the morning and lunchtime business.
45. When Mr Sartori was cross-examined, he was rather vague about the matters he had described so clearly in his witness statement. He gave me the strong impression that he did not actually know the details that he had set out in his witness statement. He told me that he did not go to the sandwich bar very often. He told me that he only "presumed" that his father kept the trailer on the pavement all of the time. In fact, he said that he thought that his father probably took the trailer off the pavement at night. He was asked why he told his solicitor on 2 March 2009 that there had been a mobile burger bar run as a mobile pie and ice cream parlour; this is a matter I will refer to again later in this judgment. He accepted that the references to a mobile pie and ice cream parlour were intended to refer to the time his father had a trailer on the pavement. His answer was that he did not know what his father had done and he presumed that he had a pie and ice cream parlour. Save to the extent that Mr Sartori's evidence on this topic is corroborated by a reliable witness, I am not prepared to give his evidence on this topic any real weight. However, as will be seen, Mr Sartori was not the only witness who referred to Mr Sartori's father's trailer on the pavement in front of Quayside Tower.
46. Mr Hart worked from premises further along Broad Street from the early 1970s to 1980. He remembered buying sandwiches from a small unit outside 258 Broad Street. He said that the unit was only open at lunch time and was run by an Italian man called Enrico. It is not suggested that Enrico and Bernard Sartori were different persons.
47. Mr Hart's sister is Ms Byrne. She worked for her brother's estate agency in Broad Street in the 1970s and she bought sandwiches from the kiosk in front of 258 Broad Street which was run by a man she knew as Enrico Sartori. Indeed, she worked as a waitress at the kiosk for a time in 1973 and 1974.
48. Mr Dixon gave very clear and detailed evidence that he and his fellow window cleaners worked in Broad Street from around 1975 to 1977/1978 and met at, and used, the sandwich bar in front of 258 Broad Street. He remembered the tables and chairs on the pavement and white fence. He thought that the man who ran the sandwich bar was Italian and the sandwich bar felt as if it was "Spanish" or mediterranean.
49. Mr Rose told me that he ordered sandwiches from the kiosk in front of 258 Broad Street in the late 1970s and the 1980s. He remembered tables and chairs on the pavement.
50. Mr Page gave evidence that he purchased sandwiches from Mr Sartori's father's sandwich bar in the 1970s. He described the trailer and he also described Bernard Sartori.
51. Mr Sherwin was an original shareholder in JEL, together with Mr Sartori. Mr Sherwin had been a business partner of Mr Sartori since 1982. Mr Sherwin told me that he had seen, and been to, Mr Sartori's father's trailer in 1983 or 1984. He described the trailer and the fence and tables and chairs. He said that the trailer and the fence were in front of 258 Broad Street. His witness statement said that the trailer and the fence were not on the area subject to a public right of way. He told me that he would not have been able, in the 1980s, to tell whether the trailer and fence were on the public right of way but he found out later where the public right to way was and in that way was able to make this statement. He described how the trailer became Mr Sartori's venture in around 1985 and he recalled delivering food to the trailer. He told me that in 1991, when work had begun on the renovation and conversion of 258 Broad Street, the trailer was moved into storage in nearby premises and it never returned to the pavement in front of 258 Broad Street. At that point, the building contractors erected a builder's hoarding in front of the property. The hoarding was erected in line with the upper level of the podium which up until that stage had overhung the premises at ground floor level.
52. Mr Sartori's wife, Lynn Sartori, told me that she had passed the kiosk on a pitch in Broad Street on several occasions. She referred to a period which, from other evidence, began in the mid-1980s.
53. Mr Lambert was an electrician who worked on the conversion of 258 Broad Street from a shop to a club in 1991. He remembered that there was a need to remove a kiosk, which he described as a "tatty shed" from the pavement in front of the property and that it was then removed.
54. The Claimants called a large number of witnesses who said that there had not been a sandwich bar on the pavement in front of Quayside Tower as alleged by Mr Sartori. These witnesses (and the periods referred to by them) were Mr Goldstein (1968 - 2007), Mr Bird (1968 – 1988), Ms Cartwright (1970s and 1980s), Mr Laver (whose witness statement was admitted as hearsay evidence) (1970s and 1980s), Ms Harris (early 1980s to 1992), Mr Hassall (1988 to 1991, in particular), Mr Watkins (from 1988 onwards). I also had hearsay statements from Mr Simpson and Mr Kane. These witnesses all gave evidence that they had never seen a kiosk on the pavement in front of Quayside Tower and they also explained why they would have seen a sandwich bar kiosk, if one had been there. Some of the witnesses added reasons why it was unlikely that a kiosk would have been allowed to be placed on the pavement at this point. Mr Black, a private investigator hired by the Claimants, also introduced some hearsay evidence from people who said that there had not been a sandwich bar in front of Quayside Tower during any part of the period claimed by Mr Sartori.
55. I also heard evidence from two brewers at Ansells' brewery, Mr Freakley and Mr Cox. These two witnesses knew Bernard Sartori at Ansells' brewery. Bernard Sartori was employed by Ansells until 1981, when the brewery closed down. Mr Freakley was employed at Ansells from 1966 to 1981. He explained to me in detail the nature of the work done by Bernard Sartori and the hours which he was expected to work. Mr Freakley said that Bernard Sartori did indeed work his appointed hours, that he was a good worker and arrived and left punctually. Mr Freakely's evidence was to the effect that Bernard Sartori simply could not have been absent during his working hours at Ansells for the purpose of running a sandwich bar in Broad Street. Mr Cox only worked at Ansells from 1963 to 1971 and he knew Bernard Sartori. He also knew the nature of the job that Bernard Sartori was employed to do and his intended working hours.
56. I will now make my findings of fact as to the alleged presence of a trailer used as a sandwich bar between 1974 and 1991. I have already commented that Mr Sartori's own evidence on this subject is not dependable. I find that the witnesses called on his behalf and the witnesses called on behalf of the Claimant were genuinely trying to recall what the position had been, although the period in question (1974 to 1991) was a considerable time ago. Some of the witnesses called on behalf of Mr Sartori were impressive: I would mention Mr Dixon in particular. Further, it is very difficult not to accept the specific evidence of Ms Byrne. Conversely, some of the witnesses called on behalf of the Claimants were also impressive; I specifically mention Mr Bird and Mr Goldstein. The evidence given by the two groups of witnesses differed in this respect; the witnesses who gave evidence of the existence of the sandwich bar were giving positive evidence that the sandwich bar did exist whereas the other witnesses were giving negative evidence that they had no recollection of ever having seen a sandwich bar. The evidence of Mr Freakley and Mr Cox was also impressive. Their evidence makes it very difficult to understand how Bernard Sartori could have been running a sandwich bar from Broad Street, on a daily basis, for the period from 1974 to 1981, as alleged by Mr Sartori. Finally, I have the evidence of the photographs. Mr Sartori could not give any evidence to explain why the photographs of March 1980 and March 1991, in particular, showed that there was no trailer on the pavement at those dates.
57. I consider that I can make some findings of fact on this issue with reasonable confidence and others with less confidence. Based on the photographs together with the absence of any explanation from Mr Sartori, I can hold that there were times in the period 1974 to 1991, when the trailer was not on the pavement. I also hold that it is extremely improbable that the time during which the trailer was absent was confined to the very day when these photographs were taken; the photographs were taken on dates which were random dates so far as this dispute is concerned. Accordingly, there was a period of time around March 1990 and another period of time around March 1991 when there was no trailer on the pavement. Conversely, I hold that Bernard Sartori did place a trailer on the pavement some of the time in the period 1974 onwards. It is not possible to be precise about the dates when he did so. I find that the trailer was there often enough for some of the witnesses genuinely to remember it. Conversely, I do not consider that it was there most of the time; the fact that so many witnesses genuinely thought that it had never been there supports that conclusion. It is possible, if one gives weight to the dates of the photographs of March 1980 and March 1991, that Bernard Sartori only placed the trailer on the pavement in the warmer weather. I hold that there were substantial periods of time between 1974 and 1986 when the trailer was not there. I was told that there were frequent strikes at Ansells' brewery and, in particular, one long strike which led to the closure of the brewery in 1981. There would have been no difficulty in Bernard Sartori taking his trailer to Broad Street during those periods. I cannot hold with any confidence that the trailer was only there during the strikes and, indeed, I was not given any evidence as to the dates of those strikes. I also hold that Mr Sartori himself was connected with the running of a sandwich bar from a trailer in the period 1986 to 1991 but I am not able to make any more precise findings as to the periods during which he kept a trailer on the pavement.

The use of the disputed land 1991 to 1995

58. It is more straightforward to make findings as to the use of the pavement in the period from 1991 to 1995 than for the earlier period. The material I have in relation to the period from 1991 to 1995 consists of photographs, documentary evidence which refers to the use made of the pavement in that period and oral evidence. The witness who gave the most detailed evidence as to the use of the pavement in this period was Mr Sherwin. It was submitted that I should treat Mr Sherwin's evidence with caution and I was shown his short witness statement which he prepared before the first trial of this claim and the transcript of the evidence he gave at that first trial. I was asked to consider the differences in his evidence on the two occasions. I do approach Mr Sherwin's evidence with a degree of caution. He accepted that some of the evidence he gave me was not based on his independent recollection of matters but had been assisted by discussing the position with others. Notwithstanding my caution, I have concluded that Mr Sherwin's evidence is generally reliable on this point. His evidence fits with the contemporaneous documents and is otherwise credible and indeed probable. Accordingly, I make the following findings of fact as to the use of the pavement from 1991 to 1995.
59. The premises at 258 Broad Street were used as a furniture shop prior to 1991. By March 1991, that use had ceased. By May 1991, Mr Sartori and Mr Sherwin had persuaded the landlord of 258 Broad Street to let the premises to them, or more probably, a company controlled by them for use as a jazz club, intended to trade as Ronnie Scott's. In or around May 1991, posters were placed in the windows of 258 Broad Street advertising the forthcoming arrival of Ronnie Scott's. At some time between May 1991 and October 1991, the landlord gave possession of the premises to Mr Sartori and Mr Sherwin, or their company, to allow them to fit out the premises. Some time later, on 27 February 1992, the landlord let the premises to JEL and the term of the lease was expressed to commence on 24 June 1991. Between May and October 1991, there was no sandwich bar on, or other use of, the pavement in front of 258 Broad Street. Mr Lambert removed "the tatty shed" from the pavement during this period. The overhang of the first floor of 258 Broad Street over the pavement was enclosed by a hoarding at this time and, as part of the conversion works, the front enclosure of the ground floor of 258 Broad Street was permanently moved forward so that it was in line with the front elevation of the first floor.
60. Ronnie Scott's club at 258 Broad Street opened on 28 October 1991. Around the time of the opening, JEL had bought tables and chairs which could be placed on the pavement in front of the premises. There may have been as many as 18 tables and 72 chairs, although it is possible that there were fewer in 1991 as compared with the number which were there later in the period 1991 to 1995. It is also possible that some of these tables and chairs were intended to be used inside the premises. It may be that the tables and chairs were placed on the pavement so that they could be seen by the licensing justices when they inspected the premises shortly before 28 October 1991. The pavement was not used in the first two weeks after the club opened.
61. After November 1991, the club placed some tables and chairs on the pavement during the club's opening hours. The club opened at 5 pm and traded until the early hours of the morning. When the club was closed, the tables and chairs were moved back into the ground floor bar of the club. Along with the tables and chairs, the club placed planters on the pavement to mark out the area being used. The planters were mobile and could be moved back inside the premises. On 8 April 1992, the club was granted planning permission allowing a part of the pavement to be used as a café area. The permission was subject to a permission that the boundary of the permitted area would be defined.
62. In the period 1991 to 1995, the club placed tables and chairs on the pavement during opening hours and cleared the tables and chairs away when the club closed. It is less clear whether, at any time, the club left its planters on the pavement when the club was closed. Mr Sherwin referred to some of the shrubs in the planters being stolen. It seems likely that for most of the period in question, the planters were moved inside the premises with the tables and chairs. The fact that there were tables and chairs on the pavement during opening hours did not mean that customers sat at the tables on the pavements. For many days in the year sitting out in front of the premises would have been extremely unattractive. Nonetheless the tables and chairs were placed on the pavement when the club was open as there was then no other convenient place to store them.
63. The appearance of the pavement when the club was closed can be seen in photographs taken in 1993 and 1994 by Mr Timms. The pavement was completely bare of tables, chairs and planters. The disputed land looked the same as the part of the pavement over which there was a public right of way.
64. In the period from 1991 to 1995, there may have been promotional activities when the Club made some use of the pavement. This was certainly the case in September 1992, when a Fiat Tipo was placed on the pavement in front of the club.

Mr Timms

65. In October 1995, at the invitation of Mr Sartori, Mr Timms placed a mobile catering unit on the pavement outside the club. He placed it at the left hand side of the disputed land, looking at the building from the front. The mobile unit was moved every night to a safe place for storage. On or about 13 January 1996, the police required Mr Timms to remove his unit and he did so. He returned in around June 1996 following the construction of an enclosed terrace at the front of the club, to which I will next refer.

The use of the disputed land from 1996 to 2000

66. In June 1996, the club carried out works to form a tapas bar on the pavement in front of the premises. The club placed planters on the pavement to define the area of the tapas bar. There was metal fencing which was above the planters which took the enclosure to a greater height than the planters. The enclosure incorporated external lighting. The tables and chairs were placed within the defined area which extended along the entire frontage of the premises. There was a gap in the enclosure which allowed access to an entrance door for the premises. Mr Timms returned and placed his catering unit to the left hand side of the pavement, within the enclosure. Most of the enclosed area was covered by a retractable awning. The club placed heaters within the enclosed area.
67. By a written licence dated 20 November 1998, JEL's landlord, P & O Property Holdings Ltd, described as the Grantor, granted to JEL, described as the Grantee a licence to maintain an awning, described as "the Grantee's Awning" against the premises demised by the lease dated 27 February 1992.
68. In late 1997 or early 1998, Mr Timms began to pay rent for the permission to keep his catering unit on the pavement in front of the club. The rent was paid to "Ronnie Scott's club" and not to Mr Sartori personally.

The use of the disputed land from 2000 onwards

69. In 2000, the club carried out extensive alterations to the enclosed area in front of the club premises. The club applied for planning permission for those alterations on 3 March 2000 and planning permission was granted on 7 June 2000. The extent of the enclosed area was reduced. It no longer ran along the entire frontage of the club premises. The new smaller enclosed area was confined to what is now the disputed land. The form of the enclosure was also altered.
70. Mr Timms' catering unit initially remained in the revised enclosed area. However, in May 2001, the club required Mr Timms to leave the area in front of the club and, eventually, Mr Timms did leave on or about 5 August 2001.
71. In 2001, JEL trading as Ronnie Scott's Jazz Club was in severe financial difficulties and by 2002, the jazz club had closed and the premises became the Rocket Club. In January 2002, it was agreed that Mr Timms could return to the enclosed area on the pavement in front of the club and he did so. As explained earlier, the lease of the premises was assigned to Broomco on 7 February 2002 and then to Balevents on 28 May 2003. Mr Timms paid rent for his catering unit to the Rocket Club.

Use by whom?

72. Based on the above findings, it would seem to follow that the company which operated the club was the person which used the terrace in the various ways I have described for the periods from 1991 to 1995, from 1995 to 1996, from 1996 to 2000 and from 2000 onwards.
73. In his witness statement, Mr Sherwin said that he considered the terrace to be Mr Sartori's land "given his history with it". He said that if there were a special event which involved the use of the terrace, such as the Fiat Tipo promotion, the payments made for the use of the land would go to Mr Sartori rather than to JEL. On the other hand, JEL did not pay Mr Sartori for the use of the terrace. The use of the terrace was simply part of the business of the club. Mr Sherwin stated that when Mr Timms began to run his business from the terrace, the payments made by Mr Timms were so small as to be of no real significance. Mr Sherwin thought that he told JEL's accountant to treat the payments made by Mr Timms to JEL as payments to reduce the amount due from Mr Sartori on his loan account with JEL. When cross-examined, Mr Sherwin was much less sure about these matters and was much more vague about the detail than his witness statement appeared to suggest. He did not know if the accountant had acted on what he thought he had told her. He did not tell later accountants who replaced her. He did not know if anyone had ever acted on what he thought he had told the accountant. He described the procedure within JEL as to drawings and the payment of expenses. The arrangements were rather informal and decidedly imprecise. Mr Sartori gave some general evidence about the way in which JEL was expected by him to deal with the rental payments made by Mr Timms to JEL.
74. On the basis of evidence of Mr Sherwin and Mr Sartori, I am not able to find that JEL ever treated monies it received from Mr Timms as being owing from JEL to Mr Sartori. Further, even if in the early period after Mr Timms started to use the terrace in around October 1995, the payments by Mr Timms were ever considered by anybody to be payments for the benefit of Mr Sartori, I do not think that that belief could have lasted very long in view of the attempt, shortly after that time, to tighten up financial controls within JEL.
75. I heard considerable evidence about the way in which the rent payable by Mr Timms was treated by Broomco and by Balevents and its associated companies. At the end of the evidence, there was really no room for dispute about the matter. The rent received by the operating company from Mr Timms was properly treated as income of that company. Mr Sartori did not at any time prepare any accounts or returns which showed it as his income. There was no credit in Mr Sartori's favour in any loan account he had with any company. There was no material to support Mr Sartori's suggestion that the rent paid by Mr Timms was treated as money due from the recipient company to Mr Sartori.
76. On 13 August 2001, Mr Sartori entered into an IVA. On 5 September 2001, Mr Sartori certified a statement of affairs for the purpose of the IVA. Although Mr Sartori gave evidence that he had always regarded the terrace as being owned by him, the statement of affairs did not include any reference to an asset in the form of ownership of the terrace. Further, the statement of affairs does not refer to any entitlement on his part to receive any income from the terrace; I recognise however that Mr Timms had been required to leave the terrace shortly before this time.
77. In June 2007, Mr Sartori received from the company operating the club a bonus of £100,000 and in around March 2008 he received a further bonus of £10,000. He suggested that these were payments to him of the money owed to him pursuant to the arrangement whereby he had loaned the rent from Mr Timms to that company. I consider that this suggestion has no foundation. Mr Sartori paid substantial sums by way of income tax and national insurance on these bonuses. That would have been wholly inappropriate if the payments were repayments to Mr Sartori of monies he had earlier lent to the operating company.
78. I make the following findings in relation to the identity of the person who was making use of the terrace from 1991 onwards:

(1) the company operating the club was the person who used the terrace from 1991 onwards;

(2) Mr Sartori did not make any personal use of the terrace at any time;

(3) the company which used the terrace did not do so under any licence or permission from Mr Sartori; there was no credible evidence of any express arrangement granting any such licence or permission and there is no basis on which such a licence or permission could be inferred;

(4) the income in the form of rent from Mr Timms belonged to the company operating the club; it was never due from Mr Timms to Mr Sartori and it was not treated by the company operating the club as if it had been.

Possession of land: the general principles

79. There was no dispute as to the general legal principles which apply in a case where the court is asked to determine whether a person has been in possession of land. These principles were authoritatively considered by the House of Lords, in the context of an adverse possession claim, in J A Pye (Oxford) Ltd v Graham [2003] 1 AC 419 and are summarised in Megarry & Wade, 8^th ed., paras. 35-015 to 35-019. So far as material in the present case, they can be stated as follows:

(1) There is a presumption that the owner of land with a paper title is in possession of the land.

(2) If a person who does not have the benefit of this presumption wishes to show that he is in possession of the land, the burden is on him to show that he is in factual possession of the land and that he has the requisite intention to possess the land.

(3) For a person to show that he is in factual possession of the land, he must show that he has an appropriate degree of physical control of the land, that his possession is exclusive and that he has dealt with the land in question as an occupying owner might have been expected to deal with it and no-one else has done so.

(4) Whether a person has taken a sufficient degree of control of the land is a matter of fact, depending on all the circumstances, in particular the nature of the land and the manner in which such land is commonly enjoyed.

(5) The person claiming to be in possession may be in possession through his tenant or licensee, if that tenant or licensee has, on the facts, sufficient control of the land to amount to factual possession.

(6) The person seeking to show that he has had possession of land must show that he had an intention for the time being to possess the land to the exclusion of all other persons, including the owner with the paper title.

(7) The relevant intention is an intention to possess and need not be an intention to own.

(8) The intention to possess must be manifested clearly so that it is apparent that the person now claiming to have been in possession was not merely a persistent trespasser.

(9) If the acts relied on are equivocal then they will not demonstrate the necessary intention.

(10) It is possible in some cases for a person in possession to add to his own period of possession, the period of time during which his predecessor was in possession; this applies in particular where the predecessor relinquishes possession to a person who then takes possession.

Adverse possession: before the Land Registration Act 2002

80. Before the coming into force of relevant provisions of the Land Registration Act 2002 (on 13 October 2003), the law as to the acquisition of title by adverse possession in the case of registered land was governed by the Limitation Act 1980, sections 12 and 17 and schedule 1, and the Land Registration Act 1925, section 75. In summary, no action could be brought by a person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him: section 12(1) of the 1980 Act. By paragraph 1 of schedule 1 to the 1980 Act, where a person bringing an action to recover land had been dispossessed or had discontinued his possession, then his right of action was treated as having accrued on the date of the dispossession or discontinuance. By paragraph 8(1) of schedule 1 to the 1980 Act, no right of action to recover land was treated as accruing until the land was in the possession of some person in whose favour the period of limitation could run; such possession was referred to in paragraph 8 as "adverse possession". By paragraph 8(2) of schedule 1 to the 1980 Act, where a right of action to recover land had accrued and after its accrual, before the right was barred, the land ceased to be in adverse possession, then the right of action should no longer be treated as having accrued and no fresh right of action should be treated as accruing unless and until the land was again taken into adverse possession. By section 17 of the 1980 Act, in the case of unregistered land, at the end of the period prescribed by the 1980 Act for any person to bring an action to recover land, the title of that person to the land was extinguished. This latter provision was modified in the case of registered land so that, instead of the registered proprietor's title being extinguished under the 1980 Act, his title was held on trust for the person who had, by virtue of the 1980 Act, acquired title as against the registered proprietor and that person could apply to be registered in place of the registered proprietor.
81. Thus, in relation to the period before 13 October 2003, applying the above law to this case, if it were shown that a person had been in possession of the disputed land for 12 years, then the registered proprietor of the disputed land, Birmingham City Council, would be unable to bring an action to recover possession of the land and the person who had been in possession for the relevant 12 years could apply to be registered as proprietor in place of Birmingham City Council.
82. As explained, the required period of adverse possession is 12 years. The provision in paragraph 8(2) makes it clear that the period of adverse possession must not be broken. In that sense, the possession must continue for 12 years. However, the concept of possession of land does not require a person to be physically present on the land for every moment of the 12 year period. With some types of land, a person can be in possession even if he is absent from it for long periods. The concept of possession is satisfied if the person claiming to be in possession for 12 years, without interruption, has had the requisite degree of control of the land throughout the relevant period of 12 years.
83. It is also necessary to consider a possible question which arises where the person in adverse possession of land is a tenant of adjoining land. This question would not arise in this case if it were held that Mr Sartori's father, and later Mr Sartori himself, were the persons in adverse possession of the disputed land. Neither Mr Sartori's father nor Mr Sartori himself had been tenants of land adjoining the disputed land. However, if it were to be held that the person in adverse possession of the disputed land had been JEL, followed by Broomco, followed by Balevents, then it would be necessary to consider whether such possession had resulted in Balevents, as the successor to the earlier persons in possession, acquiring title for itself or whether Balevents had acquired title for the freeholder of 258 Broad Street and so that the disputed land would be owned by the freeholder subject to Balevents being regarded as the tenant of the disputed land as an addition to the premises demised by the lease of 27 February 1992. The relevant principle which falls to be applied is summarised in Megarry & Wade at para. 35-027. The principle is that encroachments by a tenant on land belonging to third parties will anomalously enure for the landlord's benefit provided that :

(1) the land is "very close to the demised land and occupied by the tenant together with the demised land"; and

(2) no different intention is shown by the conduct of the landlord or the tenant within the 12 years of adverse possession; the parties' acts subsequent to the expiry of the 12 year period are relevant only in so far as they cast light on what the parties believed or intended at the end of that period.

Adverse possession: after the Land Registration Act 2002

84. The relevant provisions of the Land Registration Act 2002 came into force on 13 October 2003. The 2002 Act introduced a different regime as to adverse possession in relation to registered land. However, schedule 12 to the 2002 Act contained transitional provisions. If a person had already been in adverse possession for 12 years prior to the coming into force of the 2002 Act, so that the registered title was held on trust for that person (under section 75 of the Land Registration Act 1925), then he remained entitled to be registered as the proprietor of the estate: 2002 Act, schedule 12 para. 18(1).
85. Subject to the transitional provisions of the 2002 Act, section 96 disapplied the earlier regime as to adverse possession in relation to registered land. Section 97 gave effect to the new regime contained in schedule 6. Paragraph 1(1) of schedule 6 allowed a person to apply to the registrar to be registered as the proprietor of a registered estate if he had been in adverse possession of land for the period of 10 years ending on the date of the application. For this purpose, the requirement of "adverse possession" was satisfied if a period of limitation under section 15 of the Limitation Act 1980 would have run in his favour in relation to the estate: 2002 Act, schedule 6 para. 11(1). An application under paragraph 1 of schedule 6 had to be accompanied by a statutory declaration setting out the evidence relied upon in support of the claim: Land Registration Rules 2003, rule 188. The fact that the period of adverse possession referred to in paragraph 1(1) of schedule 6 was 10 years, and not 12 years, was not intended to make it easier to acquire a possessory title. To understand its impact, the reduction in the period has to be read with the other provisions of schedule 6.
86. Where a person applied to be registered under paragraph 1(1) of schedule 6, the registrar was obliged to notify the registered proprietor: schedule 6 para. 2(1). The registered proprietor was then entitled to require that the application be dealt with under schedule 6 para. 5. Under para. 5, the applicant was only entitled to be registered if any one of three conditions was met. The three conditions were restrictive. It was not enough for the applicant simply to show that he had been in adverse possession for 10 years. However, the second condition (in paragraph 5(3)) would apply to a case where the applicant had been in adverse possession for 12 years before 13 October 2003 and so, under the transitional provision in schedule 12 para 18(1), had retained an entitlement to be registered as proprietor. It is the practice of the Land Registry to require an application for registration on this ground to be made by the normal application form, AP1: the current Land Registry Practice Guide 5 (July 2013 edition) says so at para. 5.2. This was also the position under the March 2003 edition of the Practice Guide: see at para. 10.2.
87. Thus, under the new regime, a person is not entitled to be registered as proprietor just by being in adverse possession for a period of time. After 10 years of adverse possession, he may apply to be registered, but notice of his application is given to the registered proprietor who can block the application, save in the three special cases. However, the regime involves the registered proprietor taking action to block the application (by giving notice requiring that it be dealt with under para. 5). The corollary is that if the registered proprietor does not require the application to be dealt with under paragraph 5, then the applicant is entitled to be registered as the new proprietor of the estate: schedule 6 para. 4.
88. Although the registered proprietor can normally block an application made under paragraph 1(1) of schedule 6 by requiring it to be dealt with under paragraph 5, this does not mean that the matter is permanently dealt with by the application not succeeding at that point. This is because the person in adverse possession is entitled to make a further application for registration, this time under para. 6 of schedule 6. This requires him to show that he has been in adverse possession of the estate from the date of his application under para. 1(1) of schedule 6 until the last day of the period of 2 years beginning with the date of rejection of that application. If the applicant satisfies this requirement then he is entitled to be registered as the new proprietor of the estate: schedule 6 para. 7. The result is that following the rejection of the application under para. 1 of schedule 6, the registered proprietor must take action to recover possession of the land (or legitimise the possession of it) otherwise, after a further 2 years, the person in adverse possession will have an unanswerable claim to be registered on a second application.

Was anyone entitled to be registered?

89. I will now apply the above legal principles as to the possession of land and as to registration of title to my earlier findings of fact.
90. I begin by considering the period from 1974 to 1991. I have found that Mr Sartori's father, and later Mr Sartori, made some use of some part of the pavement in front of 258 Broad Street for some of that period. I have also found that there were substantial periods of time when the trailer was not on the pavement. I find that it has certainly not been established that the trailer was ever present on the pavement for a continuous period of 12 years prior to 1991. When the trailer was not present on the pavement it cannot be said that Mr Sartori's father or Mr Sartori were in possession of any part of the pavement. When the trailer was not on the pavement, then the pavement was wholly unobstructed and was used by the public generally just like a pavement over which there was a public right of way. I do not therefore need to decide whether it would be right to hold that Mr Sartori's father or Mr Sartori were in possession of any part of the pavement during the periods of time when a trailer was present on the pavement. I also do not need to decide whether the trailer was on the part of the pavement which in 2009 happened to be registered with a possessory title. It is quite possible that the trailer was on a different part of the pavement. The position of the trailer might have overlapped with the area later registered. It is conceivable that the position of the trailer was wholly within the area later registered but there was no reliable evidence on which I could make a firm finding in this respect.
91. In relation to the period from 1991 to 1995, it cannot be said that the use made of the pavement amounted to continuous possession of the pavement. For a large part of each 24 hour period, the pavement was completely clear and was used as an unobstructed pavement by the public. Mr Timms placed a mobile catering unit on the pavement for a period from October 1995 until early 1996. He removed the unit each night. That use did not amount to continuous possession between October 1995 and early 1996.
92. In relation to the period from June 1996 to 2000, there was an enclosed terrace café or bar (subject to an opening to allow access to the club behind). It is strongly arguable that the use made of the terrace during this time amounted to possession and, in particular, that there was the necessary degree of control and it can be inferred that there was the necessary intention to be in possession. If there was possession of the terrace at that time, then it was possession on the part of the operator of the club, JEL. It was not possession by Mr Sartori personally.
93. In relation to the period from 2000 to the coming into force of the Land Registration Act 2002 on 13 October 2003, the area of the terrace was smaller than it was before 2000 but it was an enclosed area and it is again strongly arguable that the use made of the terrace during this time amounted to possession and, in particular, that there was the necessary degree of control and it can be inferred that there was the necessary intention to be in possession. If there was possession of the terrace at that time, then it was possession on the part of the operator of the club or, if different, the lessee of the club. It was not possession by Mr Sartori personally. That position continued after 2003 until Mr Sartori applied for a possessory title in 2009.
94. Based on the above findings, it is clear that Mr Sartori cannot show that any part of the disputed land was held on trust for him when the 2002 Act came into force. Further, he was not able to show that he had been in possession of any part of the disputed land for 10 years ending on the date of the application when he made his application in 2009.
95. Based on the above findings, it is clear that Balevents cannot show that any part of the disputed land was held on trust for it when the 2002 Act came into force. If the company operating the club, or the lessee of the club, had been in possession since 1996 as suggested above, and if it was Balevents rather than the operator of the club which went into possession, and if Balevents were able to add previous periods of possession to its own possession, then after 2006 Balevents would have been able to apply under schedule 6 para 1 of the 2002 Act for a possessory title in relation to the disputed land. If Balevents had applied for a possessory title after 2006, it would have been obliged to disclose to the Land Registry that the registered proprietor was the City Council. In any event, the Land Registry would have become aware of that fact as they did when Mr Sartori applied for a possessory title, even though he wrongly stated that he did not know who the registered proprietor was; I discuss this later in this judgment. The Land Registry would then have notified the City Council and the City Council would have been able to block the application under schedule 6 para. 5 of the 2002 Act. The City Council did object to Mr Sartori's application when it was notified of it. As I explain below, the Land Registry overrode that objection but that was because Mr Sartori wrongly stated that he and his predecessor had been in possession from 1974 until the coming into force of the 2002 Act. Balevents would not have been able to make that statement.
96. If, for some reason, the City Council had failed to object to an application after 2006 by Balevents there may then have been a question as to whether Balevents (and its predecessors in possession) would be held to have been a tenant encroaching on land adjoining the demised premises so that the benefit of any adverse possession accrued to the freeholder (and possibly intermediate landlords) of 258 Broad Street, although the disputed land would then be regarded as demised to Balevents as an extension to the premises demised by its lease. In view of my earlier findings, it is not necessary to consider that matter further as it is not a live issue between the parties to these proceedings or even as regards the registered proprietor, the City Council. If that point were to arise it would then be an issue between Balevents and those holding in reversion on Balevents' lease.

What actually happened

97. The first sign in the documents of anyone thinking of registering a possessory title, in relation to a part of the pavement in front of the club, was a note dated 12 October 2005, made by Mr Willetts, a surveyor who acted on behalf of the Rocket Club. I was not given any evidence about this note. The note refers to Mr Reddy. It is not clear whether the note records a discussion with Mr Reddy or something else. There is no reference in the note to Mr Sartori. In any event, the note identifies the possibility of the registration of a possessory title based on previous use of the land in question. The periods referred to in the note begin with 1992.
98. In 2006, Mr Reddy and Mr Sartori took legal advice as to the possibility of registering title to the land in front of the club. Advice was given by solicitors, Martineau Johnson. The initial approach to those solicitors appears to have been on 31 May 2006 in a telephone call from Mr Sartori. Mr Sartori referred to the use of the land by the club. He said he and Mr Reddy, the latter as "a sleeping partner", owned the club. Mr Sartori thought there was going to be some kind of a dispute with the club's landlord over the area of land in front of the club. Mr Sartori stated that an approach had been made to the City Council with a view to buying the land; that would seem to indicate that Mr Sartori knew that the City Council was the paper owner of the land.
99. Martineau Johnson immediately carried out some searches, including a search at the Land Registry. On (or possibly just after) 5 June 2006, they obtained a copy of the City Council's registered title, WK34407, in relation to the land in front of Quayside Tower.
100. On 5 June 2006, Lawrence Reddy and Mr Sartori met two solicitors from Martineau Johnson. There is a detailed solicitor's attendance note of the meeting. Mr Sartori began by describing the history of the matter. He referred to the use of the land in front of the club. It is not completely clear whether, at that point, he was referring to use by himself or use by the club but I consider that is because he did not distinguish between himself and the limited company which was the lessee of the club and which owned the business of the club. The note refers to "AS's lease" although it is clear that the lease was not vested in Mr Sartori personally. When the solicitors asked who the lessee was, Mr Sartori said that it was "Balevent". Then he referred to the companies which ran the business of the club. Mr Reddy also gave instructions and information to the solicitors at that meeting. When discussing whether there was a conflict of interest with other clients of the solicitors, they said they would treat Mr Reddy as an existing client. There are several statements in the note which indicate that Mr Reddy and Mr Sartori understood that the City Council was the paper owner of the land.
101. At the meeting with the solicitors, there was discussion as to who should be the applicant for a possessory title. The solicitors advised that it would have to be shown that the possession relied on had "nothing to do with the landlord". This was plainly a reference to the possibility that a claim by the tenant of the club would result in the possessory freehold title being registered in the name of the landlord rather than the tenant. The solicitors advised that this was "a trap" to be aware of. The solicitors are not recorded as having advised that if the tenant fell into this trap, the tenant would nonetheless have the benefit of the land being added to the premises demised to it by its lease. Later in the discussion, Mr Reddy referred to a mechanism whereby "AS" owned the land. After further discussion, the solicitors advised that the risk of the landlord taking the benefit of an application for a possessory title would have to be considered further. The note then discusses who the solicitors' client was to be and it was agreed it would be Mr Reddy and Mr Sartori jointly, rather than Balevents. The matter was left on the basis that the solicitors would do further research and correspondence for Mr Reddy and Mr Sartori would be sent to the latter's home address. In due course, the solicitors did write to their joint clients at Mr Sartori's home address.
102. On 11 August 2006, Martineau Johnson wrote to Mr Sartori and Mr Reddy. It seems that before 11 August 2006, the solicitors had become aware that their clients were not minded to take matters further. However, the solicitors offered advice possibly because they believed, wrongly, that there was a cut off date of 13 October 2006 to bring a claim based on 12 years adverse possession pursuant to the transitional provisions of the 2002 Act. The solicitors' letter of advice referred to the paper owner of the land being the City Council and gave some brief advice about the law on adverse possession before the 2002 Act and under the 2002 Act. On 31 August 2006, Mr Sartori telephoned the solicitors to say that having discussed the matter with "his partner" Mr Reddy, they had decided to "tread water". On 5 September 2006, the solicitors sent their fee account to Mr Sartori and Mr Reddy. The solicitors had already received an initial payment on account. In December 2006, there was a request for a revised invoice to be raised in the name of Balevents but on 8 December 2006, the solicitors declined to do this on the basis that it had been agreed that the clients were Mr Reddy and Mr Sartori. In due course, the balance of the invoice was paid. The payments were made by Rocket Club Restaurants Ltd.
103. Mr Reddy gave evidence that the instructions to Martineau Johnson were on behalf of the club. He said that the correspondence from the solicitors was to be to him and Mr Sartori personally, as he wanted the matter to be discrete. He says that he did not act on the advice because it was not particularly positive. When cross-examined, he was asked about "the trap" referred to in the attendance note of 5 June 2006 and he stated that he did not understand what that was. When Mr Sartori described the meeting of 5 June 2006, he stated that Mr Reddy was keen to say that Mr Sartori owned the land. When cross-examined, he said that he did not understand about "the trap" referred to by Martineau Johnson.
104. I did not find the evidence of either Mr Reddy or Mr Sartori particularly reliable as to what was said, and why it was said, at the meeting on 5 June 2006. It seemed to me that both witnesses were seeking to stress the parts of the attendance note which might be thought to help them and to downplay or ignore other parts of that note. It also occurred to me that the discussion of "the trap" at this meeting might have been very significant and might have explained why, later, an application for a possessory title was made by Mr Sartori, allegedly with the agreement of Mr Reddy. The explanation could have been that this was an attempt to avoid the trap which the tenant would walk into if it applied for a possessory title, the trap being that the possessory freehold title would be taken by the landlord rather than by the tenant. However, there was nothing in the evidence of either witness to support this possibility.
105. There was no further step taken in relation to a possible application for a possessory title until February 2009. What led to the matter being taken up again was a letter received by the Rococo Lounge which was a bar in Quayside Tower. The letter stated that a third party was proposing to buy the strip of land in front of Quayside Tower and then let the part of the strip in front of each of the ground floor premises to the operator of those premises. The operator of the Rococo Lounge showed the letter to Mr Sartori. He told me that when he saw the letter, he noted that the third party was proposing to buy the land from the City Council. Mr Sartori showed the letter to Mr Reddy and Mr Olley. Mr Olley was described as the manager of the Broad Street Business Improvement District. Mr Sartori, Mr Reddy and Mr Olley were all concerned about the implications of what was proposed. A copy of the letter to the Rococo Lounge has not survived.
106. Mr Olley took up his concerns with the City Council. He wrote to the City Council on 12 February 2009; a copy of his letter is not now available. On 23 February 2009, the City Council replied to Mr Olley. In its reply, the City Council told Mr Olley that its records showed that it owned the land in front of Quayside Tower and that the current users of that land did not have any rights over the land. The City Council had agreed heads of terms with the freeholder of Quayside Tower; it is to be inferred that the heads of terms provided for the freeholder to acquire the land in question. The heads of terms were subject to formal approval by the Council. The letter also stated that the Council would not consider disposing of parts of the strip to adjoining occupiers as this would fragment ownership and complicate future management of the land.
107. Mr Sartori and Mr Reddy discussed what to do in the light of these events. A meeting was arranged with a solicitor, Mr Cottam of Cottams Solicitors Limited, who had been introduced by Mr Olley. Mr Cottam's file was available at the trial. The file appears to be fairly complete. The file suggests that the first meeting which Mr Cottam had with anyone in connection with this matter was on 2 March 2009. Mr Cottam and Mr Sartori gave evidence that this was the first such meeting. Mr Reddy suggested that there must have been an earlier meeting, in February 2009. He suggested that he was at a meeting in February but he was not at the meeting on 2 March 2009. He suggested that he could not have attended a meeting on 2 March 2009 because he was involved in another meeting on that day. He also suggested that the events which happened immediately after 2 March 2009 (the preparation of a detailed statutory declaration by Mr Sartori accompanied by many photographs and documents) could not have happened if the meeting on 2 March 2009 was the first such meeting. Mr Cottam and Mr Sartori gave evidence that Mr Reddy was at the meeting on 2 March 2009. I find that Mr Reddy was at the meeting on 2 March 2009 and that there had not been an earlier meeting with Mr Cottam in February 2009. Mr Reddy's other appointment on 2 March 2009 would not necessarily have prevented him attending the meeting with Mr Cottam on that day and I find that it did not prevent him doing so. As to the compilation of the documents for the statutory declaration, I think it is likely that Mr Sartori had assembled, or had begun to assemble, those documents before 2 March 2009. Mr Sartori had already had advice in 2006 about an application for a possessory title and the Rococo Lounge letter and the City Council letter of 23 February 2009 had brought home to Mr Sartori the need to collect the information he wished to rely on in support of an application for a possessory title.
108. Mr Cottam was a solicitor with a general practice. He did not claim particular expertise in relation to property matters and he did not display any such expertise in his dealing with this matter, as will later appear. He told me that he had previously made applications for the registration of a possessory title.
109. The meeting on 2 March 2009 lasted about 30 minutes. Mr Cottam made a manuscript attendance note during the meeting. The note is fairly brief. It was typed up much later (on 6 December 2010) and there are one or two minor differences based on Mr Cottam deciphering his earlier note and sometimes getting it wrong e.g. he referred to "company" instead of "canopy". Nonetheless the typewritten note is helpful to assist in deciphering Mr Cottam's handwriting.
110. According to the attendance note, Mr Sartori (rather than Mr Reddy) appears to have taken the lead at this meeting. Indeed, the note does not refer to Mr Reddy being present and that allowed Mr Reddy to contend (see above) that he was not at this meeting. The note does not refer to Olley being present although I find that he was. Mr Olley had introduced the others to Mr Cottam and did not take an active part in the meeting. The note does not refer to Mr Willetts being present although it is likely that he was. Mr Sartori described himself as the "general manager" of Balevents. He referred to the lease of the club. He said that the lease had been granted to JEL and Mr Sherwin and himself but that the lease was now vested in Balevents. Mr Sartori referred to the strip of land in front of the Rocket Club having an area of 397 square yards. He told Mr Cottam: "since 24^th June 1991 Mr Sartori has occupied the premises as tenant and latterly since February 2001 as general manager of Balevents Ltd". He then told Mr Cottam that he did not have any consent or occupational right and was not aware of any claim to ownership by any third party. He referred to the use of the land in question and referred to events in the period beginning in 1991. The note then records: "Applicant would be Mr Sartori". Finally, the note stated that: "a mobile burger bar (predecessor) was run as a mobile pie and ice-cream parlour". Based on this note and on what happened afterwards, what must have been agreed at this meeting was that Mr Cottam would make an application for a possessory title and that the applicant would be Mr Sartori. I find that Mr Reddy was aware of this as a result of his attendance at that meeting and this finding is corroborated by what happened later where, I find, Mr Reddy was indeed aware that the application for a possessory title was made in the name of Mr Sartori. I accept Mr Cottam's evidence that Mr Reddy did intervene throughout the meeting but principally for the purpose of stressing that the matter had to be dealt with quickly before any third party could claim ownership of the strip. There does not appear to have been any detailed discussion at this fairly short meeting of any alternative to an application by Mr Sartori. In particular, there was no discussion of "the trap" which had been mentioned by Martineau Johnson in 2006. Mr Cottam accepted that on 2 March 2009 he was not aware of any possible significance that might be attached to an application being made by someone who claimed to have been a tenant of the adjoining land as Mr Sartori was, wrongly, claiming that he had been a joint tenant under the 1992 lease.
111. On 2 March 2009, Mr Cottam opened a new file in relation to this instruction. He named his client as Mr Sartori and gave his correspondence address as Balevents, at its registered office address. After this time, Mr Cottam did address a number of letters to Mr Sartori at Balevents. Mr Reddy said that he did not see these letters. It may be that he did not see them. Some of the letters are likely to have been handed over to Mr Sartori when he later attended at Cottams' offices. Some indeed might have been sent by email. If a letter was addressed to Mr Sartori at Balevents' offices, it might well not have been read by Mr Reddy. However, I do not think that there was any attempt made by Mr Sartori to keep Mr Reddy in the dark as to what was happening in relation to the application for a possessory title.
112. 2 March 2009 was a Monday. By Thursday 5 March 2009, Mr Cottam had prepared a draft statutory declaration to be made by Mr Sartori. Mr Sartori went to Cottams' offices, picked up the draft statutory declaration and made the declaration before a solicitor in another firm. I will refer to this as "the first statutory declaration". In this declaration, Mr Sartori stated that:

(1) he was the general manager of Balevents;

(2) Balevents was the lessee of the Rocket Club, 258 Broad Street;

(3) that lease was originally granted to JEL, Mr Sartori and Mr Sherwin jointly;

(4) since 24 June 1991, Mr Sartori had always regarded an area of land of 397 square yards adjacent to the Rocket Club "as being my property"; the land was shown marked on an attached plan which showed a strip of land extending along the whole frontage of Quayside Tower and not just 258 Broad Street;

(5) he had never known of any claim of ownership or proprietary rights or occupational rights by any third party since 24 June 1991;

(6) he had not, nor had any colleague at JEL or Balevents, sought consent for any occupational rights over the land;

(7) the land had been used in various ways since 1991 as evidenced by 16 photographs, which were exhibited, and a number of documents, which were also exhibited;

(8) he believed that the exhibited documents evidenced his continued ownership of the land; and

(9) he requested that possessory title be granted to him.

113. On 5 March 2009, Mr Cottam applied to the Land Registry on Mr Sartori's behalf. Mr Sartori's address was given as Balevents Ltd, at its registered office. Mr Cottam applied for a possessory title using Form ADV1. If the information contained in Mr Sartori's first statutory declaration had been correct, Mr Sartori's case that he had been in possession since 24 June 1991 would have entitled Mr Sartori to apply under the transitional provisions in para 18 of schedule 12 to the 2002 Act, as 12 years possession would have accrued before 13 October 2003. The Land Registry Practice Guide 5 to which I have referred stated that such an application should have been made in Form AP1. The actual application relied upon para 1 of schedule 6 to the 2002 Act. For good measure, the application also stated that the applicant relied upon para 5(2) of schedule 6 (dealing with equity by estoppel). The application related to a strip of land along the entire frontage of Quayside Tower. The application did not identify any title number of the land. The application also confirmed that it conformed to rule 188 of the Land Registration Rules 2003, although it did not so conform in a number of respects. Mr Cottam also applied, in Form SIM, for an index map search; this was at the insistence of the Land Registry.
114. Also on 5 March 2009, Mr Cottam gave Mr Sartori an invoice for his fees. The invoice was addressed to Balevents. He explained in a covering letter that this was on the assumption that Balevents could recover the VAT on the fee but, nonetheless, Mr Cottam's retainer was with Mr Sartori personally and no one else.
115. On 6 March 2009, the Land Registry rejected the application for a possessory title and, for different reasons, the index map search. It rejected the application for a possessory title on various grounds including the fact that the first statutory declaration did not conform to rule 188. It also required a copy of the lease referred to in that statutory declaration.
116. Before 10 March 2009, Mr Cottam arranged for Mr Sartori to make a further statutory declaration ("the second statutory declaration"). In this declaration, Mr Sartori referred again to a plan of the land in question. Although there is room for doubt about this, I consider that the plan he then referred to still identified a strip running along the entire frontage of Quayside Tower. He also stated that:

(1) the period of adverse possession was "from 1991"

(2) he did not know the name or details of any known freehold owner of the land in question;

(3) he had had no contact with any freehold owner of the land in question;

(4) he had been a joint tenant under the lease referred to in the first statutory declaration;

(5) the lease was now vested in Balevents; and

(6) he was the general manager of Balevents.

117. On 10 March 2009, Mr Cottam re-submitted the application for a possessory title together with the second statutory declaration. Also on 10 March 2009, Mr Cottam's fees were paid by a cheque from BSEL.
118. On 11 March 2009, the Land Registry replied to the index map search. They referred to the land being registered with a freehold title under title number WK34407. This was the title of the City Council. Also on 11 March 2009, the Land Registry wrote to Cottams asking for a copy of the lease which had been referred to. The heading to this letter stated that the proprietor was the City Council, referring again to title no. WK34407.
119. On 12 March 2009, Mr Willetts sent to Mr Cottam a copy of the lease dated 27 February 1992 and stated that it was registered under title no. WM558119. The cover sheet of the lease named the parties as P&O Property Holdings Limited and Jazz Enterprises Ltd and Messrs A J Sartori and B D Sherwin. The cover sheet did not specify their capacities as parties to the lease. Mr Cottam did not look at the lease (except possibly the cover sheet). If he had turned past the cover sheet, he would have seen clearly from the first part of the first page of the lease that the tenant was JEL and that Mr Sartori and Mr Sherwin were sureties, and not joint tenants.
120. On 20 March 2009, Mr Cottam wrote to to the Land Registry informing them that the lease was dated 27 February 1992 and gave the title number under which it was registered. The heading to his letter referred to the City Council and title no. WK34407. He did not enclose a copy of the lease. Around the same time, Mr Olley received a letter from the City Council which referred to the negotiations to sell the land in front of Quayside Tower to the freeholder. Mr Olley was in contact with Mr Cottam on that day and it is likely that the information from the City Council was discussed.
121. On 30 March 2009, the Land Registry wrote to Cottams, raising requisitions. It pointed out that the registered proprietor of the lease was Broomco, not Balevents. It also said that the application related to all of the land in title no. WK34407 i.e. the whole frontage of Quayside Tower. The requisition also discussed in detail the point about a presumption that a tenant of adjoining land is in possession on behalf of the landlord of the adjoining land and that, if the application were to proceed, the Land Registry would serve notice on that landlord. Mr Cottam told me that this was a new point to him and that he did not understand that if the landlord acquired a possessory title in this way, it would result in the land being treated as an extension to the premises demised to the lessee. (In fact, the Land Registry did not serve notice on the landlord although they did notify the registered proprietor. I infer that the Land Registry did not notify the landlord because of a later statutory declaration made by Mr Sartori which stated, wrongly, that he and his predecessor had been in possession of the land since the 1970s.) The Land Registry stated that the application for a possessory title would be cancelled in the absence of a response by 30 April 2009. Mr Cottam took no action in response to these requisitions until he received a reminder on 22 April 2009, whereupon he applied for an extension of time. On that day, his time for responding was extended to 15 May 2009.
122. On 29 April 2009, Mr Cottam had two telephone conversations with Mr Sartori. He must have explained to Mr Sartori some of the detail of the requisitions raised by the Land Registry. On the same day, he wrote to Mr Sartori, setting out some of the points which had been raised. In this letter, Mr Cottam recorded certain things which Mr Sartori had told him. These included:

(1) that Mr Sartori had been a joint tenant of the club since 24 June 1991;

(2) that Mr Sartori's father ran an ice-cream stall from the land concerned and it might be the case that Mr Sartori's involvement with the land went back before 24 June 1991.

Mr Cottam stressed that it might be necessary to establish that Mr Sartori occupied the land other than in his capacity as a tenant of the club.

123. A meeting was arranged for 29 April 2009 and it actually took place on 1 May 2009. The meeting was at the club and lasted about 30 minutes. Both Mr Reddy and Mr Sartori met Mr Cottam. Mr Cottam made a manuscript note of that meeting and this note was typed up much later. At this meeting, Mr Sartori told Mr Cottam that:

(1) his father had a kiosk on the land;

(2) his father had retired in the 1970s;

(3) Mr Sartori took over from his father in the 1970s;

(4) the kiosk sold sweets and sandwiches and then chicken wraps (the latter may have been a reference to Mr Timms' kiosk);

(5) the kiosk was run by employees.

124. I find that Mr Reddy was present at the meeting on 1 May 2009. I accept Mr Cottam's evidence that Mr Reddy had "quite a bit to say". He told Mr Cottam off for not including, in the original application to the Land Registry, the information about Mr Sartori's previous occupation of the land.
125. Around this time, Mr Cottam took a number of steps to obtain a copy of the lease dated 27 February 1992. He contacted another solicitor, Ms Lawrence, of Keelys LLP. There is a note which indicates that Ms Lawrence spoke to Mr Reddy about the lease. Eventually, Mr Cottam did obtain a copy of the lease.
126. On 11 May 2009, Mr Sartori made another statutory declaration ("the third statutory declaration"). In this declaration, Mr Sartori stated that:

(1) he was seeking a possessory title only in relation to the strip of land in front of 258 Broad Street; he provided a revised plan to show the land in question;

(2) he had been a joint tenant of the club on 24 June 1991;

(3) since February 2001, he had been the general manager of Balevents;

(4) it was not right that he only considered the land to be his property since June 1991;

(5) his father had occupied the land before a date in the 1970s by using the land for a kiosk selling sweets and sandwiches;

(6) he had acquired the land from his father in the 1970s;

(7) he "now" continues to occupy the land with a kiosk and he continued to sell similar items in addition to chicken wraps;

(8) the period of adverse possession was from the 1970s;

(9) he had enclosed the land with boundary features;

(10) his possession since the 1970s had been without the licence or consent of anyone;

(11) he did not know the name or details of any known freehold owner of the land in question.

127. On 11 March 2009, Mr Cottam sent the third statutory declaration to the Land Registry and in a covering letter sought to deal with the other requisitions which had been raised. The Land Registry appeared to have cancelled the application for a possessory title on 15 May 2009. On 21 May 2009, the Land Registry gave its reasons for not accepting a re-submitted application. It referred to Practice Guides 4 and 5 and to Forms AP1 and ADV1. It stated that the registered freeholder was the City Council and it asked whether the land was part of the highway.
128. On 26 May 2009, Mr Cottam spoke to Mr Sartori who stated that he had not been aware that the City Council was the registered proprietor of the land. Mr Cottam passed this information on to the Land Registry by telephone and by letter on the same day. Also, Mr Cottam re-submitted his original application for a possessory title.
129. On 28 May 2009, the Land Registry wrote to Cottams stating that it would send a surveyor to visit the property. On 19 June 2009, following a survey, the Land Registry wrote again to Cottams. It referred to the presumption in the case of a tenant encroaching on land adjoining the demised premises. It asked for evidence to rebut that presumption.
130. In June 2009, while the application for a possessory title was progressing, Mr Sartori and Mr Reddy began negotiations for a sale of the shares in Balevents and the business of the club to Mr Sartori. Those negotiations continued until mid-February 2010, when they broke down.
131. On 2 July 2009, Mr Cottam applied to the Land Registry to register Balevents as the registered proprietor in relation to the leasehold title, WM558119. Mr Cottam stated that he was acting for Balevents. Also on 2 July 2009, Mr Cottam wrote to the Land Registry to make the case that Mr Sartori had not been encroaching on land adjoining the demised premises in the capacity of a tenant. Mr Cottam stressed that as stated in the third statutory declaration, Mr Sartori had acquired the land long before he became a tenant of the club.
132. On 3 July 2009, the Land Registry wrote to Cottams stating that it was willing to grant a possessory title to part of the land within the application. The part was the area to one side of the front door on which there was a raised flower bed, a smoking shelter and Mr Timms' van. The Land Registry then told Cottams that a right of way had been claimed over the land in question and enclosed a statutory declaration which had been made on behalf of the freeholder of Quayside Tower. Mr Cottam passed all of this information on to Mr Sartori on 10 July 2009.
133. On 14 July 2009, Mr Sartori prepared a further statutory declaration ("the fourth statutory declaration") disagreeing with the freeholder's statutory declaration. Mr Sartori stated that he had intimate knowledge of the land since the 1970s and he did not recall any right of way being exercised by the freeholder and that all rights of occupation and access had been enjoyed by him and his agents or servants. Mr Cottam sent the fourth statutory declaration to the Land Registry on 28 July 2009.
134. On 6 August 2009, the Land Registry wrote to Cottams stating that it had given notice to the City Council of the application for a possessory title. The City Council were given until 6 November 2009 to respond. Mr Cottam told Mr Sartori of this development on 25 August 2009.
135. On 27 August 2009, the City Council objected to the application for a possessory title. I have not seen the terms of its objection. On 2 September 2009, the Land Registry wrote to the City Council stating that it had not provided grounds to support is objection and that the objection was "groundless" within section 73(6) of the 2002 Act. The Land Registry gave the City Council until 30 September 2009 to put forward more information.
136. On 17 September 2009, the City Council replied to the Land Registry. It said that the terrace shown in Mr Sartori's photographs was of recent construction and that it had not abandoned the land and would "strenuously challenge" the application.
137. On 24 September 2009, the Land Registry responded to the City Council and gave it until 15 October 2009 to provide further information and to comment on Mr Sartori's statutory declarations. I was not shown any further communication with the City Council. On 23 October 2009, the Land Registry wrote to Cottams stating that the application for a possessory title had been completed. Mr Sartori was registered as the proprietor of part of the land in front of 258 Broad Street under title no.WM 951202. The registration was subject to the right of way claimed by the freeholder. As it happened, Mr Cottam did not tell Mr Sartori of this registration until 21 January 2010. Mr Sartori told me that Mr Cottam telephoned him on 25 October 2009 to tell him that the application had been successful and that Mr Sartori had then told Mr Reddy who said "job done" or words to that effect. I do not accept that evidence from Mr Sartori; Mr Sartori did not know the outcome on 25 October 2009 and he found out for the first time on 21 January 2010. On 12 February 2010, Cottams sent copies of the registered title to Higgs and Sons, the solicitors acting for Mr Sartori in connection with his negotiations to purchase the shares in Balevents and the club.
138. By mid-February 2010, Mr Sartori's negotiations to buy Balevents and the club had broken down. Further, at this time, the relationship between Mr Sartori and Mr Reddy also broke down and has not been restored. I need not go into all that led up to that state of affairs.
139. On 12 March 2010, Mr Sartori granted a lease to Mr Timms of the land (now within Mr Sartori's registered title) on which Mr Timms' kiosk stood. The lease was for a term of 1 year at an annual rent of £52,000.
140. On 22 March 2010, solicitors for Balevents wrote to the Land Registry seeking information as to how Mr Sartori had become registered under title no. WM951202. The solicitors stated that Balevents had only recently discovered that fact and that the application for a possessory title should have proceeded in the name of Balevents. On 7 April 2010, Balevents' solicitors wrote to Cottams asking for information about the registration. Mr Cottam telephoned Balevents' solicitor in response on 21 April 2010.
141. On 4 June 2010, Mr Cottam wrote to Balevents' solicitors stating that Mr Sartori would like to be paid rent for the items of Balevents (planters, smoking shelter and hoardings) placed on Mr Sartori's land. A 6 months tenancy at £500 per week was suggested. On 22 June 2010, Mr Cottam wrote again stating that the items mentioned in the earlier letter would be removed by Mr Sartori if the rent was not paid. On 28 June 2010, Balevents' solicitors replied stating that Balevents intended to bring proceedings against Mr Sartori. It was stated that Balevents and its predecessors had occupied the land for a period since 1991 and that Mr Sartori's application for a possessory title in his own name was a breach of his fiduciary duties to Balevents. The present action was brought by a claim form issued on 29 June 2010.
142. Mr Reddy gave evidence as to the meetings with Mr Cottam which he attended. I do not accept his evidence that he was not present at the meeting on 2 March 2009 when Mr Cottam prepared the attendance note to which I have referred. I find that Mr Reddy was present at two meetings; those were the meetings on 2 March and 1 May 2009, and no other meetings with Mr Cottam. Mr Reddy gave evidence that at a meeting with Mr Cottam which he attended it was made clear that the application for a possessory title was to be made on behalf of the club. This part of Mr Reddy's evidence was simply self serving evidence and it is contrary to Mr Cottam's contemporaneous attendance note of the meeting of 2 March 2009, which I find that Mr Reddy attended.
143. Mr Olley gave evidence about a meeting which he attended with Mr Cottam, Mr Reddy and Mr Sartori. I find that this meeting took place on 2 March 2009. I also find that Mr Olley has no real recollection of the detail of what was discussed at that meeting and I do not accept his evidence in so far as he asserts that he remembers that the claim for a possessory title was to be on behalf of the club.
144. Mr Cottam gave evidence and was cross-examined in detail by reference to the contents of his file. He appeared to have a good recall of the relevant events. I suspect that when he gave his evidence Mr Cottam was relying almost entirely on the contents of his file and I am wary about accepting his evidence as to matters which were not recorded on his file. However, I accept Mr Cottam's evidence when he said that his client was Mr Sartori personally, that Mr Sartori personally was to be the applicant for the possessory title and that Mr Reddy was aware of that from his attendance at the meetings on 2 March and 1 May 2009.
145. It is Mr Sartori's case that Mr Reddy said to him that when Mr Sartori succeeded in obtaining a possessory title to the land in front of the club, the land would be "his pension". Mr Sartori said that this statement was made by Mr Reddy on three occasions, namely, immediately following the meeting on 1 May 2009, at a dinner party at the Sartori's house in July 2009 and on a sailing holiday in late September or early October 2009.
146. As to the statement allegedly made on 1 May 2009, the only witnesses on the subject were Mr Sartori and Mr Reddy. Neither is a reliable witness. I would not be able to find, based on their evidence alone, that such a statement was made on this occasion. I accept however that if I am able to find that such a statement was made by Mr Reddy on a later occasion, then this makes it more likely that a similar statement was made on 1 May 2009 also.
147. There was a dinner party at the Sartori's house in July 2009. It is agreed that Mr and Mrs Reddy, Mr and Mrs Sartori and their daughter, Joanne Sartori, were present at the relevant time. I heard evidence from all five of these persons. There was a wide ranging dispute about what happened and why it happened that evening. I do not have to resolve all of the conflicts of fact but I do need to address the evidence to the effect that on this occasion Mr Reddy said to the three Sartoris that as and when Mr Sartori succeeded in obtaining a possessory title to the land in front of the club, it would be "his pension". Mr Reddy says that he said no such thing. Mrs Reddy said that she did not hear such a statement being made. Mrs Sartori and Joanne Sartori gave evidence that the statement was made. Mr Sartori gave the same evidence. Because of the very wide ranging dispute as to the many other things that happened that evening, it is difficult to make a confident finding as to whether the alleged statement was made. If this had been the only occasion on which the statement was alleged to have been made, I would but only with considerable hesitation have been prepared to accept the evidence of Mrs Sartori and Joanne Sartori. However, in view of the later finding I will make as to what was said on the sailing holiday, I am able to find with more confidence that the statement was indeed made by Mr Reddy at the dinner in July 2009.
148. In late September or early October 2009, Mr Reddy and Mr Sartori went on a sailing holiday with Mr Sartori's partner, Mr George Brown, and a Mr Fendick. I heard evidence from each of these four as to a certain conversation which was said to have taken place one evening during that sailing holiday. I will start by referring to the evidence of Mr Fendick. He told me that there was a conversation during which all four were present. Mr Sartori referred to the fact that he had applied for a possessory title in relation to the land in front of the club. He explained the matter to Mr Fendick who was interested in what he was being told as the idea of being able to obtain a possessory title was new to him. During the exchanges, Mr Reddy told Mr Fendick that he thought that Mr Sartori had a good chance of obtaining a possessory title and that "it would be Allan's pension". Mr Brown gave evidence to the same effect, as did Mr Sartori. Mr Reddy told me that he had not said those things to Mr Sartori on the sailing holiday, or at any time. On this topic, I am inclined to give little weight to the evidence of Mr Sartori or Mr Reddy. If Mr Brown had been the only other witness, I might have been inclined to discount his evidence because of his close personal relationship with Mr Sartori. However, I have no reason not to accept the clear and inherently credible evidence on the point from Mr Fendick. Accordingly, I find that Mr Reddy did say what Mr Fendick told me.
149. My findings as to what Mr Reddy said in July 2009, and again in October 2009, indicate that Mr Reddy knew that the application for a possessory title was being made by Mr Sartori personally and that if it succeeded the land would be beneficially owned by Mr Sartori as distinct from, for example, being held by Mr Sartori as a nominee.

The result of the registration

150. The present position is that Mr Sartori is the registered proprietor of the disputed land. I have already held that he was not entitled to be registered but the fact remains that he is registered. In these circumstances, Balevents claims that it should be registered in his place. It claims that Mr Sartori holds his registered title on a constructive trust for it.

A constructive trust?

151. Balevents submits that in 2009 there was an opportunity for it to be registered, that Mr Sartori owed Balevents a fiduciary duty in relation to that opportunity and that Mr Sartori took that opportunity for himself without the knowledge or consent of Balevents. It is open to Mr Sartori to argue, based on my findings of fact, that Balevents did not have an opportunity for itself to be registered in 2009, that Mr Sartori was not a fiduciary in relation to that opportunity and, in any case, Balevents through Mr Reddy knew and consented to Mr Sartori's application, indeed positively encouraged that application. If necessary, Mr Sartori would also contend that Balevents and its sole shareholder, William Reddy, acting through his agent Mr Reddy, gave fully informed consent to Mr Sartori's application.
152. As explained earlier, in 2009 Balevents had a worthwhile argument that it and its predecessors in possession had been in possession of the disputed land since 1996. Based on that argument, Balevents could in 2009 have applied for a possessory title pursuant to schedule 6 para. 1 to the 2002 Act. However, the City Council had an unqualified right to block that application. Given that the application was thought to be desirable as a means of preventing the City Council relying on its ownership of the land to sell it to a third party, the prospect that the City Council would not exercise its right to block an application by Balevents was remote. I suppose it might be said that nonetheless Balevents could have applied and it might have benefited from outstanding good luck if the City Council missed the time limit for serving notice of objection under schedule 6 para. 5.
153. There was elaborate argument at the trial as to Mr Sartori's position as a possible fiduciary. It was said that he owed fiduciary duties to JEL, to Broomco, to Balevents and to BSEL. It does not seem to me to be relevant to explore the extent of any possible duties to JEL, Broomco and BSEL. If he owed fiduciary duties to JEL and Broomco, on my findings of fact, he did not break those duties in the period of their involvement. It is correct that he gave evidence at the trial about his use of the disputed land during the time that they were lessees of the club but I have rejected that evidence without considering whether he was or was not a fiduciary during those periods. It cannot be said that Mr Sartori's behaviour in 2009 when applying for a possessory title amounted to a breach of any fiduciary duty to JEL or Broomco. Further, I do not see that Mr Sartori's application in 2009 could amount to a breach of any fiduciary duty owed to his employer, BSEL and, as I understand it, by the end of the trial that suggestion was not pursued.
154. As to Balevents, it is said that Mr Sartori was the "General Manager" of Balevents and that as the holder of a senior position he owed a fiduciary duty to Balevents. As to that, it seems to be accepted that he was not in fact employed by Balevents. The description of Mr Sartori as "General Manager" appears to have been thought up by Mr Sartori, apparently with the active encouragement of Mr Reddy, when they both thought that it would help Mr Sartori's application to claim a close association with Balevents. There were references in the evidence to Mr Sartori being a shadow director of Balevents and some shadow directors do owe fiduciary duties to the company in question. There is room for argument as to whether Mr Sartori did owe a fiduciary duty to Balevents in relation to some of his activities on behalf of Balevents. However, I am very doubtful whether he was a fiduciary in connection with the application he made for a possessory title. That application, as I will later explain, was largely based on false allegations of fact which emphasised his alleged possession of the land in his personal capacity. In truth, he was simply not entitled to apply for a possessory title. Further, Balevents had only a remote prospect of being lucky enough to get away with an application by it for a possessory title.
155. However, even assuming that Mr Sartori owed some fiduciary duty to Balevents in relation to the way in which he went about his application for a possessory title, the application he made was with the knowledge and consent, and indeed active encouragement, of Mr Reddy. As I have already found, Mr Reddy was Balevents. He had total control of the company. Further, he had complete authority to act on behalf of its only shareholder, William Reddy, whether or not William Reddy was the beneficial owner of the shares. In those circumstances, Balevents cannot say that Mr Sartori broke any duty owed to it and cannot assert that Mr Sartori's registered title now belongs in equity to it. I will therefore dismiss Balevents' claim that it is entitled to be registered as proprietor of the disputed land in place of Mr Sartori.
156. In view of these findings, I do not consider whether it would be open to the landlord of 258 Broad Street to claim as against Balevents that the freehold possessory title to the disputed land should be vested in it. Nor do I need to consider whether, if Balevents were now to be registered in place of Mr Sartori, its title would be liable to be rectified on the application of the City Council.

Rectification of the register: the law

157. In the alternative to its claim that it should be registered in place of Mr Sartori, Balevents claims rectification of the register to remove Mr Sartori. The result of such rectification would seem to be that the City Council would again be the registered proprietor of the disputed land. In order to address this claim I first need to summarise the legal principles which should be applied.
158. The Land Registration Act 2002 contains provisions which allow the register to be altered. Section 65 of the 2002 Act gives effect to schedule 4 to that Act. By para. 1 of schedule 4, references to "rectification" of the register are to alterations to the register which involve the correction of a mistake and prejudicially affect the title of a registered proprietor. By para. 2 of schedule 4, the court may make an order for alteration of the register for the purpose of correcting a mistake. An order under para. 2 has effect, when served on the registrar, as imposing a duty on him to give effect to it. The power under para. 2 is qualified by para. 3(2) where the alteration in question is "rectification" i.e. where it prejudicially affects the title of the registered proprietor. In such a case, no order may be made under para. 2, without the proprietor's consent, in relation to land in the possession of the proprietor, unless:

(1) he has by fraud of lack of proper care caused or substantially contributed to the mistake, or

(2) it would for any other reason be unjust for the alteration not to be made.

If the court has power to make an order under paragraph 2, it must do so, unless there are exceptional circumstances which justify it not doing so: see para. 3(3).

159. These provisions refer to the correction of a "mistake". The meaning of "mistake" was considered in Baxter v Mannion [2010] 1 WLR 1965 (Henderson J) and [2011] 1 WLR 1594 (Court of Appeal). That case concerned an application which had been made under para. 1 of schedule 6 to the 2002 Act. The application was made in the correct way and a notice was served on the registered proprietor, who failed to serve a notice requiring the application to be dealt with under para. 5 of schedule 6. If he had done so, the application would have been rejected. As the registered proprietor did not serve such a notice, the application succeeded and the applicant was registered as the new proprietor. The former registered proprietor then sought rectification of the register to restore himself as the registered proprietor. The adjudicator held that the applicant had not been in adverse possession of the land for 10 years before the date of the application so that he was not entitled to apply under para. 1 of schedule 6 and she ordered rectification of the register to correct a "mistake". The judge agreed that there had been a mistake. His decision was upheld by the Court of Appeal. It was held that having been in possession for 10 years was a precondition to the right to apply for registration under para. 1(1); that a registration obtained by a person not entitled to apply for it was a mistake and restoring the register to its earlier condition was the "correction of a mistake".
160. I referred earlier to para. 3(2) of schedule 4 to the 2002 Act. Para. 3(2) of schedule 4 refers to land being in the "possession" of the registered proprietor. Section 131(1) states that land is in the possession of the proprietor of a registered estate in the land if it is physically in his possession. Further, by section 131(2), land in the possession of a tenant is treated as being in the possession of the tenant's landlord and land in the possession of a licensee is treated as being in the possession of the licensee's licensor.
161. In Walker v Burton [2012] EWHC 978 (Ch) (Mr Cousins QC) at [86] and [123] and [2013] EWCA Civ 1228 (Court of Appeal) at [97], it was held that the burden was on the applicant for rectification to establish that the registered proprietor in possession had, by fraud or lack of proper care, caused or substantially contributed to the mistake and/or that it would for any other reason be unjust for the alteration not to be made. On the very unusual facts of that case, it was held that the applicant for rectification had failed to prove either of those matters.
162. In Baxter v Mannion (referred to above), the new registered proprietor had gone into possession, but the judge held that it would be unjust not to correct the mistake so as to restore the former registered proprietor. His decision was upheld by the Court of Appeal. That case considered para. 6(2), rather than para. 3(2) of schedule 4, but the provisions are to the same effect.
163. I have also referred to para. 3(3) of schedule 4. Para. 3(3) of schedule 4 is in substantially the same terms as para. 6(3) of schedule 4. Para. 6(3) was considered in Paton v Todd [2012] 2 EGLR 19 at [63] – [71] and [79], where the earlier cases were reviewed. The court must ask itself two questions: (1) are there exceptional circumstances in this case? and (2) do those exceptional circumstances justify not ordering rectification? The word "exceptional" describes a circumstance which is such as to form an exception, which is out of the ordinary course, or unusual or special, or uncommon; to be exceptional, a circumstance need not be unique or unprecedented, or very rare but it cannot be one that is regularly, or routinely, or normally encountered. The search is for exceptional circumstances which have a bearing on the ultimate conclusion as to whether such circumstances justify not rectifying the register. On that issue, the court will wish to consider the effect on the relevant parties of an order for rectification or of a refusal to order rectification.
164. An order for rectification is not retrospective; para. 8 of schedule 4 states that the power to order rectification extends to changing priority of any interest affecting the registered estate "for the future".
165. It has been held in a number of cases that it is not necessary for a party applying for an order rectifying the register to show that he has an interest in the relevant land. Those cases were referred to in Paton v Todd [2012] 2 EGLR 19 at [51]. One of the cases there referred to has since been considered by the Court of Appeal: Walker v Burton [2013] EWCA Civ 1228; the question of locus standi was referred to at [31] but the point was not before the Court of Appeal for decision. Both sides in the present case accepted that the legal position is as stated above. Thus, even if the Claimants cannot show that one of them has an interest in the disputed land, they are nonetheless entitled to apply to the court for an order rectifying the register in relation to that land.
166. In a particular case, it may be material to take account of the provisions of schedule 8 dealing with the possibility of an indemnity. The provisions of schedule 8 which are of principal relevance are paras. 1(1)(a), 5 and 11. Under para. 1(1)(a), a person is entitled to be indemnified by the registrar if he suffers loss by reason of "rectification of the register" Under para. 11, this phrase refers to an alteration of the register which involves the correction of a mistake and which prejudicially affects the title of a registered proprietor. Under para. 5(1), no indemnity is payable on account of any loss suffered by a claimant: (a) wholly or partly as a result of his own fraud; or (b) wholly as a result of his own lack of proper care. By para. 5(2), where any loss is suffered by a claimant partly as a result of his own lack of proper care, any indemnity payable to him is to be reduced to such extent as is fair having regard to his share in the responsibility for the loss.

Rectification: discussion and conclusions

167. The first matter to be considered is whether Balevents has standing to apply for rectification of Mr Sartori's registered title. The parties agreed that Balevents had standing even though it could not show that it was itself entitled to any interest in the disputed land.
168. The next question is whether Mr Sartori's registration was the result of a "mistake" within schedule 4 para 2. Based on the decision in Baxter v Mannion and my findings of fact, it is clear that Mr Sartori's registration was the result of a mistake. Accordingly, the court can consider making an order for the alteration of the register by removing Mr Sartori as the registered proprietor. Such an order would plainly affect the title of a registered proprietor and so schedule 4 para 3(2) is potentially engaged and Mr Sartori plainly does not consent to the alteration.
169. The next question therefore is whether the disputed land is in the possession of Mr Sartori. None of the land is physically in his possession. Part of it is in the physical possession of the company operating the club; Kitchin J made an order for possession of that part on 29 September 2011 but that order was stayed by Lloyd LJ on 7 December 2011 and set aside by the Court of Appeal on 4 October 2012. The other part of the disputed land is in the physical possession of Mr Timms. As regards the part of the disputed land in the physical possession of Mr Timms, the question then is whether there is a relationship of landlord and tenant between Mr Sartori and Mr Timms: see section 131(2) of the 2002 Act. There was a lease between Mr Sartori and Mr Timms and Mr Timms appears to be holding over after the end of that lease. Mr Sartori remains the registered proprietor until the court orders otherwise and, if the court were to order an alteration to the register, the alteration would not be retrospective. For good measure, the various orders which have been made about Mr Sartori's right to receive rent from Mr Timms (orders of 4 April 2011, 29 September 2011, 7 December 2011 and 4 October 2012) have left the position that Mr Sartori is able to receive rent from Mr Timms. Accordingly, for the purposes of section 131 of the 2002 Act, there is at present a relationship of landlord and tenant between Mr Sartori and Mr Timms. Mr Sartori is therefore able to say for the purposes of schedule 4 para. 3(2) that he is in possession of a part of the disputed land, but not of all of it.
170. As regards the part of the disputed land where Mr Sartori is not in physical possession, the matter is not governed by schedule 4 para 3(2) but is instead governed by schedule 4 para 3(3), so that the court must make an order for rectification of the register unless there are exceptional circumstances which justify the court in not doing so. I will defer considering the operation of schedule 4 para 3(3) until I have considered the position in relation to the part of the disputed land where Mr Sartori is treated as being in physical possession.
171. Under schedule 4 para 3(2)(a), the court may order alteration of the register against a proprietor in possession where he has, by fraud or lack of proper care, caused or substantially contributed to the mistake. I have earlier set out in detail the steps taken by Mr Sartori and the information provided by him which led to his registration. Based on those findings, it can be seen that Mr Sartori gave the following incorrect information to the Land Registry:

(1) that he had been in possession of the land from a date in the 1970s to 1991;

(2) that he had been one of three joint tenants of 258 Broad Street from 1991 to the early 2000s;

(3) that he had been in possession of the land from 1991 to 2009;

(4) that he did not know the identity of the registered proprietor of the land.

172. I will deal with each of these four matters but in a slightly different order. The statement that Mr Sartori did not know the identity of the registered proprietor of the land did not cause or substantially contribute to the mistake. The Land Registry ascertained for itself that the registered proprietor was the City Council and notified it of the application. However, in case it is relevant to my other findings about fraud or lack of care, I will briefly comment on how it was that Mr Sartori repeatedly made this incorrect statement. It is quite clear that Mr Sartori did know that the land was owned by the City Council. The whole point of the application for a possessory title was to stop the City Council selling the land to a third party. There was a total lack of care in Mr Sartori's giving instructions to Mr Cottam in connection with this point. As to whether Mr Sartori was guilty of fraud in this respect, there is some force in the observation that Mr Sartori just did not think about what he was doing so that he did not set out to deceive by making this incorrect statement. However, even if that observation is correct, he was certainly reckless as to the accuracy of the information he provided to Mr Cottam to pass on to the Land Registry.
173. The statement that Mr Sartori had been one of three joint tenants was careless on his part and also on the part of Mr Cottam. Mr Cottam did not even turn over the cover sheet of the lease to see who the parties were, and in what capacity. Even the cover sheet itself would have suggested the strong possibility that Mr Sartori and Mr Sherwin were not joint tenants but were guarantors. However, this inaccurate information did not cause or substantially contribute to the mistake. If anything, it was not in Mr Sartori's interests to make that statement because it introduced the complication that Mr Sartori's alleged possession might have been in the capacity of a tenant encroaching on premises adjoining the demised premises.
174. The incorrect statements made by Mr Sartori which undoubtedly caused the mistake to be made were the statements that he had been in possession from the 1970s to 1991 and then from 1991 onwards. Of these two statements, the one with the greatest causative effect was the first. It was the first which persuaded the Land Registry not to serve notice on the landlord to allow the landlord to make any case as to encroachment. If the landlord had been notified, then the landlord would have known some of the history of the matter and it is likely it would have been able to oppose effectively the application. Further, the Land Registry was dismissive of the City Council's objection to the registration because the case was being put on the basis of many years (in excess of 12) of possession before the coming into force of the 2002 Act. Were these statements made without proper care or fraudulently? They were certainly made without proper care by Mr Sartori. On my findings of fact, Mr Sartori did not give Mr Cottam an accurate description of the position. If he had described the matter accurately, then the statutory declarations could not possibly have been made in the terms which Mr Sartori signed. If the matter had been accurately described, it would have been clear that Mr Sartori and/or his father had not been in possession for an unbroken period of 12 years at any time and that Mr Sartori had not been in possession from 1991 to 2009. If Mr Sartori had not been sure as to the extent of his father's use of the pavement (as he was unsure at the trial) then he could have investigated the facts rather than making up the assertions which he did make. I consider that he was at least careless in that he put forward a version of the facts which was seriously untrue. Further, the reason why Mr Sartori said what he did to Mr Cottam was that he did not really care what the real facts were; he was more concerned to say what he considered would help him to succeed with his application. That amounts to being reckless as to the false statements which he made. It might also be said that Mr Cottam was careless. The story being told to Mr Cottam was an unusual one and Mr Sartori's statements were very general. I do not suggest that Mr Cottam was under an obligation to cross-examine his client before accepting what he was told but given the nature of the story, he ought to have explored it in more detail. Instead, Mr Cottam dealt with the matter in a wholly superficial way. What certainly cannot be said was that what happened involved proper care on the part of both Mr Sartori and Mr Cottam.
175. Accordingly, I find for the purposes of schedule 4 para 3(2)(a) of the 2002 Act, that Mr Sartori, by fraud and/or by lack of proper care, caused and/or substantially contributed to the mistake. This finding means that I do not need to consider the application of para. 3(2)(b) of schedule 4. However, I will shortly turn to consider para. 3(3) of schedule 4 which provides that the court is obliged to order rectification unless there are exceptional circumstances which justify its not doing so. The burden of persuasion in relation to para. 3(2)(b) is different from the burden of persuasion in relation to para. 3(3). However, the reasons which I set out below in relation to para. 3(3) would also have persuaded me that it would be unjust in this case for the court not to order rectification of the register in order to remove Mr Sartori as the registered proprietor.
176. I now turn to consider the position under schedule 4 para 3(3). In view of my decision in relation to para 3(2), this paragraph applies both to the land which is treated as being in the possession of Mr Sartori and to the land not in his possession. The effect of para 3(3) is that I must order rectification unless there are exceptional circumstances which justify me in not doing so.
177. I have earlier described what is involved in "exceptional circumstances". Mr Sartori is entitled to point to two matters in this case which could qualify as exceptional circumstances. The first is that person seeking rectification is Balevents which cannot claim an interest in the land. The second exceptional circumstance is that Balevents, through Mr Reddy, encouraged Mr Sartori to make the application for a possessory title, which Balevents now wishes to have cancelled. Indeed, Balevents' primary case at this trial (which I have now rejected) is that it should benefit from Mr Sartori's successful application for a possessory title. Although Balevents' stance is a most unattractive one, Mr Sartori does not go so far as to submit that Balevents is in any way estopped from seeking rectification to remove Mr Sartori as the registered proprietor.
178. I next have to consider whether these exceptional circumstances justify a refusal to order rectification. As to the first circumstance, as well as considering the point that Balevents cannot claim an interest in the land, I ought to take into account the fact that the result of ordering rectification would be that the City Council would again become the registered proprietor of the land. In 2009, the City Council did object to the registration but the Land Registry, perhaps too readily, overrode that objection. Further, if I do not order rectification on Balevents' application, Mr Sartori would be vulnerable to a possible application for rectification by the City Council. So far as I am aware, the City Council has not shown much interest in the land since 2009 but this judgment will be available to it and, to put it no higher, may have considerable influence on what the City Council now chooses to do. If I do not order rectification on Balevents' application and the City Council were to apply for rectification, then on the basis of my findings, the City Council would be able to show what was needed for rectification subject only to the possibility that Mr Sartori might be able to contend that rectification should be withheld under schedule 4 para. 3(3). I cannot prejudge what would happen in such an event but I can say that the City Council would have a strong case for rectification.
179. As to the second exceptional circumstance i.e that Balevents supported Mr Sartori's application in 2009 and now wishes to have it cancelled, I consider that as between Balevents and Mr Sartori, it is Mr Sartori who was primarily responsible for making the false statements to support the application and his fault is certainly greater than that of Balevents. The criticism of Balevents' inconsistent behaviour is mitigated by the consideration that when Balevents supported Mr Sartori's application in 2009, it considered that Mr Sartori was friendly to Balevents; it preferred to have Mr Sartori as the owner of the disputed land rather than a third party purchaser from the City Council. It now appears that Mr Sartori is hostile to Balevents and it would be better off with the land being restored to the City Council.
180. I do not consider that the exceptional circumstances in this case justify a refusal to order rectification. The significance of those factors is outweighed by the fact that Mr Sartori should never have been the registered proprietor of the land. He only became the registered proprietor by reason of his fraud and/or a lack of proper care. It is not just that he should be allowed to continue as the registered proprietor of this land. The matter should now be corrected even on an application for rectification which is made by Balevents.
181. I find that all of the requirements of schedule 4 to the 2002 Act, in relation to the court making an order for rectification, are satisfied with the result that I will make an appropriate order removing Mr Sartori as the registered proprietor of the land.

The overall result

182. The overall result is:

(1) I will dismiss the claim by Balevents for any relief based on the contention that it is entitled to be registered in place of Mr Sartori.

(2) I will make an order for rectification of Mr Sartori's registered title under schedule 4 to the 2002 Act.

(3) I will hand down this judgment at a hearing which need not be attended by the parties. Following judgment, I will adjourn any consideration of the form of the court's order and any consequential matters. If they cannot be agreed, then they will be considered at a hearing on a date to be fixed.