REF/2008/0442

 

The Adjudicator to Her majesty’s Land Registry

LAND Registration act 2002

 

IN the matter of a reference from hm land registry

 

BETWEEN

 

THE MANCHESTER SHIP CANAL COMPANY

 

APPLICANT

and

 

MORRIS HOMES (NORTH) LIMITED

 

RESPONDENT

 

Property Address: Land adjoining Thelwall Lane, Latchford, Cheshire

 

Title Number: CH568645

 

Before: Mr Rhys sitting as Deputy Adjudicator to HM Land Registry

 

Sitting at: Manchester Civil Justice Centre

 

On: Thursday 12^th March 2009

 

Applicant Representation: Ian Foster of Counsel instructed by Hill Dickinson

Respondent Representation: Mark Halliwell of Counsel instructed by Read, Roper & Read

 

 

D E C I S I O N

 

1. The dispute between the parties relates to a piece of land – roughly crescent-shaped (“the Disputed Land”) – which forms part of a tarmaced single carriageway road known as Thelwall Lane, Latchford, near Warrington, Cheshire. The road runs east to west, parallel with the Manchester Ship Canal which lies just to the south. A substantial new housing development has been built on the north side of the road. The development is served by a new road which runs along the west of the development and joins up with Thelwall Lane at a roundabout. At the eastern entrance to the roundabout there is a pedestrian island or refuge. The south-western tip of the Disputed Land touches the pedestrian refuge, and the remainder occupies the northern part of the carriageway of Thelwall Lane where it abuts the development to the north. The status of Thelwall Lane is not entirely clear. Certainly, the eastern section of Thelwall Lane – east of the Disputed Land – is owned by the Applicant, subject to various rights of way. The extent of public rights of way over the section of Thelwall Lane in dispute is, however, not agreed and no definitive evidence has been produced to resolve this issue. However, the extent of public rights over Thelwall Lane, or the Disputed Land, is not the central issue, although as I shall explain it does have some relevance to the Respondent’s case.

 

2. The dispute arises in this way. By a Conveyance dated 11^th November 1985 (“the 1985 Conveyance”) the Applicant conveyed certain land at Latchford to TI New World Ltd (“TI New World”), the Respondent’s predecessor in title). Pursuant to the 1985 Conveyance Blue Circle Domestic Appliances Ltd (“Blue Circle”,the holding company of TI New World) was registered as proprietor of the land comprised therein under Title No CH252043. This included the Disputed Land. Subsequently, this title was closed, and added to title number CH304107. On 26^th April 2004 the Applicants applied for first registration as proprietors of adjoining unregistered land in their ownership. The application included the Disputed Land. The Land Registry took the view that a mistake had been made on the original registration of the Disputed Land, in that the 1985 Conveyance did not in fact include that land, and in October 2006 notified the registered proprietors of CH504107 (Glen Dimplex Home Appliances Ltd (“Glen Dimplex”)) that it proposed to amend the filed plan to exclude the Disputed Land. Glen Dimplex, through its lawyers Gordons, objected to the proposed alteration and informed the Land Registry that it had contracted to sell CH504107. There was further correspondence between the Land Registry and Gordons which I shall refer to in more detail below. On or about 16^th November 2006 the Applicant agreed with the Land Registry that its application for first registration should proceed, but without the inclusion of the Disputed Land. There is a dispute between the parties as to the precise terms of the agreement with the Land Registry, but it is common ground that the Disputed Land remained within Title No CH504107 and the Applicant was not registered with title to it. On 28^th December 2006 the whole of Title No CH504107 was transferred to the Respondent pursuant to the pre-existing contract.

 

3. On 22^nd February 2007 the Respondent was registered as proprietor of Title No CH558564 which was previously CH504107. The Disputed Land was allocated a separate title number – CH568645. On 6^th April 2007 the Applicant applied to the Land Registry for the alteration of the register to remove the Disputed Land from Title No CH504107, on the grounds that the Applicant retains title to the land which was excluded from the 1985 Conveyance. Since the Disputed Land was in fact registered under a different title number – CH568645 – a further application, based on the same facts, was made on 30^th November 2007. The Respondent has objected to both applications, and the dispute was referred to the Adjudicator on 1^st April 2008. I heard the case on 12^th March 2009. Evidence was called by each party. Ms Tonina Mycock, the solicitor who had dealt with the Land Registry in 2006, gave evidence for the Applicant. Mr Peter Kendall, the Respondent’s solicitor, gave evidence on its behalf.

 

The Issues

4. Four issues were identified by the parties, although the second of these stands or falls with the first. The Issues are:

4.1 On the true construction of the 1985 Conveyance, did the Applicant convey the Disputed Land to TI New World? I should say that the Land Registry has accepted that it made a mistake, on the grounds that it agrees with the Applicant’s construction of the 1985 Conveyance – i.e that this excludes the Disputed Land. However, the Respondent does not accept that the Land Registry is right.

4.2 Did the Land Registry make a mistake in registering Blue Circle/Glen Dimplex as owners of the Disputed Land under Title Number CH352043 (later 504107)? Obviously, this depends on the outcome of the previous issue: if the Applicant’s construction of the 1985 Conveyance is correct, it follows that a mistake has been made.

4.3 Is the Respondent to be regarded as a proprietor in possession of the Disputed Land within the meaning of Schedule 4 of the 2002 Act? The significance of this issue is clear: proprietors in possession of the registered title have a higher degree of protection from alteration – see Paragraph 6 of Schedule 4.

4.4 On the assumption that the registrar has power to alter the register, are there exceptional circumstances which would justify not making the alteration in the Applicant’s favour? This issue invokes the long-stop protection to registered proprietors contained in Paragraph 6(3) of Schedule 4, which allows the registrar to refuse alteration even of a mistake in the register can be proved.

 

Issue 1 – construction of the 1985 Conveyance.

5. The parcels clause is in the following terms:

“ALL THAT plot of land fronting to Thelwall Lane Warrington Cheshire and shown for identification purposes and edged red in the plan annexed hereto being part of the property conveyed to the Vendor by a Conveyance (the Conveyance) made the 27^th April 1888 between Henry Silk of the one part and the Vendor of the other part……”

The attached plan (“the Conveyance Plan”) is drawn to a scale of 1:500 and is a detailed site survey, showing individual items such as a manhole and iron railings. The land is shown as having a frontage to Thelwall Lane along most of its length. Where it adjoins the land, the plan shows Thelwall Lane as describing a bend: running east to west, the roadway turns from a roughly west-south-west alignment to a more or less due west alignment. The bend in the road is very gentle and therefore the southern boundary of the land comprised in the 1985 Conveyance is a gentle curve along the bend in the road. At face value, therefore, the southern boundary of the Disputed Land as delineated on the Conveyance Plan is clear, in that it follows the northern edge of Thelwall Lane. Indeed, the verbal description is “fronting on Thelwall Lane”.

 

6. However, if the Conveyance Plan is compared with the filed plan of Title CH252043 (to all intents and purposes identical to the filed plan on Title CH504107) it can be seen that there is a discrepancy. The filed plan is drawn to a smaller scale – 1:1250 – and is not as detailed as the Conveyance Plan. However, it is apparent that the bend in Thelwall Lane is not the gentle curve shown on the Conveyance Plan, but a sharp 45 degree angle. The historical reason for the sharp bend is that at the time of the construction of the Ship Canal, Thelwall Lane ran more or less north-south. When the canal was built, it severed the old road, and the Ship Canal Company constructed a new road which ran alongside the canal in a more or less east-west alignment, which continues to this day. There is thus a conflict between the Conveyance Plan and the filed plan. An explanation was given to Glen Dimplex by the Land Registry, in a letter dated 6^th November 2006, as follows:

“The land in question is part of an unadopted road (the road). By a Conveyance dated 11 November 1985 (the Conveyance) your client’s predecessors in title acquired land adjoining the road from the Ship Canal Company. I am enclosing a copy of the Conveyance. It did not include any part of the road. When the conveyance was registered Land Registry made an error. We utilised old ordnance survey detail to create the title plan. This showed the road in the position, which it was previously in, before realignment. We mapped up to the road. A survey has confirmed that the road is not in the position shown on your clients title plan but in the position shown on the conveyance plan……”

The filed plan is stamped 11^th November 1986, but the Ordnance Survey edition on which it is based is dated 1965. The Applicant has applied to alter the filed plan – in effect to remove the Disputed Land in its entirety from CH510407 – on the grounds of mistake, in that the land should never have been registered pursuant to the 1985 Conveyance. In making this application, it is necessary for me to decide whether the Disputed Land was included in the 1985 Conveyance. That requires me to construe that document.

 

7. As Mr Halliwell, for the Respondent, submits, the object of construction of a written agreement is to elicit from it the intention of the parties. He has referred me to the well-known case of Investors Compensation Scheme v West Bromwich Building Society [1998] 1 WLR 896, and in particular the passage at page 912 as follows:

“The task of ascertaining the intention of the parties must be approached objectively; the question is not what one or other of the parties meant or understood by the words used, but “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract””.

This is probably just another formulation of the “factual matrix” test enunciated in the earlier case of Prenn v Simmonds [1973] 1 WLR 1381. However, as Mr Halliwell points out, direct evidence or indirect evidence of the intentions of the contracting parties is not admissible. In construing a conveyance, evidence of the surrounding physical circumstances are also admissible, as a matter of course.

 

8. When the parties entered into the 1985 Conveyance, what was the “factual matrix”, and what were the physical circumstances? The Applicant has produced a bundle of correspondence and other documents commencing in 1978. No objection has been taken to the admission of these documents, save for one passage in a letter dated 8^th May 1985 to which I shall refer. The documents establish that there were discussions in 1978, involving the Applicant and four commercial users of Thelwall Lane, one of which was TI New World, with a view to facilitating a scheme for the improvement of the bend in Thelwall Lane in the vicinity of the Disputed Land. The Applicant, through its agent, applied for planning permission to carry out those road improvements. I have seen a contemporaneous plan prepared by Warrington Highways Authority, which shows the accepted “easing” of the bend. The re-alignment of Thelwall Lane shown on this plan more or else matches the alignment shown on the Conveyance Plan. The existing sharp 45 degree turn – much as it is shown on the 1965 Ordnance Survey used as the basis of the filed plan – is “eased” to form a more gentle curve, thus moving the northern edge of the roadway farther north. By letter dated 27^th January 1978 the Applicant’s Estate officer sent a plan to TI New World indicating the extent of the Applicant’s ownership of the affected land. The plan is obviously that which became the Conveyance Plan. Two lines are shown on the southern boundary of the land to be sold. To the north, the gentle curve of the new road. To the south, a sharper bend, consistent with the existing line of the old road. In the letter the Applicant refers to the possibility of excluding “the small piece of land required for the road improvements” from the sale – i.e the Disputed Land – but on terms that TI New World would be allowed “to enter on to that portion to complete the necessary works..”.

 

9. The final letter in the sequence is dated 8^th May 1985, and appears to be written by the Applicant’s solicitors to the solicitors acting for TI New World. It precedes the November 1985 Conveyance by six months. This letter states, in terms, that “The area coloured yellow will be excluded as it is to form part of the new road improvement line for Thelwall Lane”. This is identified on a plan – which is in essence the same as the Conveyance Plan – as the Disputed Land. In the third paragraph of the same letter the Applicant confirms that “Although the land coloured yellow is to be excluded from the Conveyance, we understand that your clients are to be allowed to carry out improvement works on or adjacent to this land, but eventually of course the yellow land will be incorporated into Thelwall Lane. We therefore suggest that this particular point should rest in correspondence between us, rather than be incorporated in any Deed of Conveyance.” Mr Halliwell submits that, although I may look at this letter as part of the factual matrix, I may not have regard to the express indications of the Applicant’s intention to exclude the Disputed Land from the sale, for the reason explained above.

 

10. Having regard to its terms, and the factual matrix, but excluding any evidence of the parties’ actual intentions, how should I construe the property description in the 1985 Conveyance? As to the physical circumstances existing at the date of the conveyance, there is no definitive evidence whether the improvement works had already been carried out at that time. Since the purpose of the transaction was to enable the work to be carried out – by TI New World – the likelihood is that the new road had not yet been completed, and I so find. Certainly, the Respondent invited me to make that assumption (see the Skeleton Argument at 3.4.3). Ignoring for the moment any extrinsic evidence, or evidence of the surrounding circumstances, the 1985 Conveyance is fairly clear in its meaning. What is being conveyed is land forming part of the land comprised within an earlier conveyance dated 27^th April 1888, which fronts on to Thelwall Lane, and is identified on the attached plan. Although the plan is described as being “for identification purposes” it is a detailed scale plan. It shows the southern boundary of the land as following the line of Thelwall Lane, which according to the Conveyance Plan does not include a sharp bend, but a gentle curve. However, on the assumption that Thelwall Lane, at this time, followed its old alignment, it is apparent that there must have been a conflict between the physical circumstances then existing, and the Conveyance Plan. Mr Halliwell submits that I must ignore the plan in this case, since it is introduced for identification purposes, and according to him it is settled law – see Wigginton v Winster Engineering [1978] 1 WLR 1462 – that such a plan must be ignored where it conflicts with the verbal description. I do not think that any such rigorous rule applies. The court or tribunal is entitled to consider the totality of the material before it, and give such material whatever weight that may be justified in the circumstances. Obviously, there will be cases where a conveyance plan can be disregarded if in conflict with a clear and detailed verbal description, particularly where the plan is of small scale and without detail. In this case, however, the verbal description is itself less than full, and the plan is very detailed and drawn to a reasonably large scale. At the very least, it seems to me, there is a genuine ambiguity in the 1985 Conveyance which must be resolved, and I am not bound to ignore the plan altogether.

 

11. Given the ambiguity, I am entitled to look at relevant extrinsic evidence, which certainly encompasses the correspondence and planning permission which I have referred to. No doubt I am entitled to have regard to these in any event as part of the factual matrix. Once these documents are looked at the ambiguity is easily resolved. The parties were contemplating that Thelwall Lane would be re-aligned: indeed, that was the very purpose of the transaction. The re-aligned road is shown on the Conveyance Plan. Accordingly, when the parties referred to the “plot of land fronting Thelwall Lane” it is obvious that they meant the “new” Thelwall Lane, and not the original line. Alternatively, and even if there were no ambiguity, I would have construed the words “Thelwall Lane” in the parcels clause as meaning the intended new road. This is the only construction that is remotely consistent with “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract”. Since the parties knew that Thelwall Lane, in its original form, would cease to exist as a result of the 1985 Conveyance, and since the Applicant was permitting TI New World to enter on to retained land to carry out the works, it is obvious that the parties cannot have intended that the Disputed Land should have been included in the conveyance. In reaching this conclusion, I am not taking into account evidence of the actual intentions of the parties, as stated in the letter of 8^th May 1985. I therefore conclude that the Disputed Land was not included in the 1985 Conveyance. It follows that it was included in Title Number CH 510407 by mistake. These are the first two issues identified by the parties.

 

Is the Respondent in possession of the Disputed Land?

12. Where alteration of the register is sought against a proprietor “in relation to land in his possession” certain additional restrictions are imposed on the power to alter – see Paragraph 6(2) of Schedule 4. Section 131(1) of the 2002 Act defines a “Proprietor in possession” as being in physical possession of land. This may be contrasted with the position under the Land Registration Act 1925 - see Kingsalton v Thames Water Developments Ltd [2001] EWCA Civ 20, where registration as proprietor was in itself held to amount to "possession". The Respondent (see paragraph 7 of the Skeleton Argument) argues that “If TI New World took possession of the [Disputed Land] in order to carry out road widening works, there is no evidence that it was subsequently dispossessed by any third party.” As I have said, the Disputed Land has been incorporated into the roadway. It may or not be a public highway, but it is manifestly a vehicular carriageway. In the circumstances, I cannot see that any party is in physical possession of the land in any true sense of the word, and certainly not within the meaning of Section 131(1). I therefore reject the Respondent’s argument that the more stringent requirements apply.

 

Are there exceptional circumstances?

13. By Schedule 4 Paragraph 6(3), it is provided that if the registrar has power to make the alteration to the register, the application must be approved “unless there are exceptional circumstances which justify not making the alteration”. In this case, the Respondent relies on three separate reasons, namely (a) delay, (b) estoppel (in substance if not in name) and (c) the Applicant’s alleged failure to disclose its “commercial reasons” for obtaining title to the Disputed Land. I shall deal with these issues in turn. Before doing so, however, I observe that there is no guidance in the 2002 Act as to the meaning of the phrase “exceptional circumstances”, and neither Counsel was able to assist me in this regard. However, the intention of the provision is manifestly to provide a long-stop power to refuse alteration in the appropriate circumstances. This power must be exercised judicially.

 

Delay

14. I do not think there is anything in this point. The Disputed Land has formed part of Thelwall Lane since 1985 or thereabouts. There has been no dispute regarding possession or ownership until very recently. There would be no reason for the Applicant to know that there had been a mistake. It was as a result of the Applicant’s application to register its land holdings (on a voluntary basis, I assume) that the mistake came to light. In view of the objection by Glen Dimplex in 2006 the Applicant decided to withdraw the application as regards the Disputed Land in November 2006, but the application to alter the register was made within a matter of months thereafter, in April 2007. I cannot see that this constitutes an “exceptional” circumstance.

 

Estoppel.

15. I have heard evidence on this issue from both sides: Ms Mycock for the Applicant, and Mr Kendall for the Respondent. The argument arises in this way. I have previously explained that the Respondent had contracted to purchase CH 510407 in 2005. Its vendor, Glen Dimplex, objected to the Applicant’s application to be registered with title to the Disputed Land. As it happens, the Land Registry rejected the validity of the objection – see the letter dated 6^th November 2006. Nevertheless, it allowed further time for Glen Dimplex to object. On 15^th November 2006 Glen Dimplex’s solicitors re-iterated the objection to the registration, and asked for further time (until 5^th December) to respond. On 16^th November 2006 the Land Registrar wrote this letter:

“I thank you for your faxed transmission dated yesterday’s date. In the course of processing the application lodged by the Ship Canal Company the error with your client’s title plan came to light. As it appears that your client has considerable concerns about the proposed alteration of his title plan the matter has been discussed with the applicant. In the circumstances they have advised that they are content for us to complete their application to exclude the land that was included in your clients registered extent in error. In those circumstances no alteration will be made to your clients title plan.”

Glen Dimplex’s solicitors replied on 17^th November 2006 in the following terms:

“Thank you for your letter of the 16^th 2006 and your express confirmation that no alteration will be made to the official plan to Title number CH504107.

As we set out in previous correspondence, our client has entered into a Contract for the sale of the land within title CH504107 and they will now therefore proceed with the sale in reliance upon the current and existing title plan to this title.”

 

16. In December 2006, the Respondent took a Transfer of CH504107 pursuant to the contract. Mr Kendall, a Solicitor and the Legal Director of the Respondent, gave evidence before me. He said that he was aware of the correspondence between the Land Registry and Glen Dimplex before the Respondent completed the transaction. He stopped short of saying that his company only completed because of the letter from the Land Registry. Indeed, he very fairly accepted that his company was probably bound to complete in any event, and he was aware that an application to alter the register could be made even after completion. However, he thought it unlikely that the Applicant would make such an application, in view of the Land Registry’s letter dated 16^th November. Ms Mycock, who was acting as the Applicant’s solicitor for the purposes of the application for first registration, also gave evidence. She told me, and I find as a fact, that she did not represent to the Land Registry that her client would never apply to alter the register in relation to the Disputed Land. On behalf of her client, she simply agreed for convenience that the application, which included a considerable amount of other land, should proceed without the Disputed Land. The alternative was for the entire process to be stalled while the Respondent’s objection was determined. She did not tell the Land Registry that the claim would be permanently abandoned. Nor did she see the letter dated 16^th November. She produced a lengthy memorandum which she prepared on 21^st November 2006 for her client. This summarised the history of the dispute, and set out the options with regard to the Disputed Land including an application to rectify the register. This makes it clear that no decision had been taken by the Applicant at the date of the Land Registry’s letter dated 16^th November 2006 to abandon, once and for all, the claim to the Disputed Land.

 

17. However, the letter of 16^th November could be read as indicating an irrevocable intention by the Applicant to abandon the claim. That is a possible reading of the letter. However, even if the letter was understood in that way, it clearly did not accurately represent the Applicant’s position as explained to the Land Registry. I do not think the Applicant should be bound by any statement in the letter which misrepresented its position. It is not suggested that the Land Registry had actual or ostensible authority to make binding representations on behalf of the Applicant. Furthermore, I do not think that a prudent purchaser would rely on the letter as an abandonment of the claim. It could be read more narrowly. Indeed, Mr Kendal accepted that he always knew that a further claim could be made. It seems to me that the Land Registry also considered this a possibility – even a probability – since it allocated a separate title number to the Disputed Land. At all events, I can find nothing in the correspondence in 2006, or anywhere else, which could properly be regarded as "exceptional circumstances". If an estoppel or some similar claim is to be established, the Respondent would be bound to produce more evidence than that which was presented to me.

 

Possible ransom strip

18. The Respondent has constructed a substantial residential development to the north of Thelwall Lane. The principal road access is not from Thelwall Lane itself, but from a new road which runs into it from the north. Mr Halliwell, on behalf of the Respondents, suggests that the Disputed Land – which forms part of the carriageway of Thelwall Lane close to the entry point of this new road – might constitute an impediment to full and free public access into the new housing estate. This might be used as a ransom strip. His client cannot discern any other possible commercial motive for the Applicant’s claim. He has drawn my attention to correspondence passing between the parties in which the Respondent has offered to grant full rights of way over the Disputed Land, if it retains its title, but this has been refused. On his part, Mr Foster for the Applicant relies on the fact of paper ownership, and that the Applicant is a statutory body which has certain obligations to provide public access over Thelwall Lane. His client’s position is that it is the owner of the land, and chooses to accept nothing less than registration as proprietor. He declined, on behalf of his client, to give any reassurance as to its motives.

 

19. No evidence was placed before me as to the significance of the Disputed Land, or whether it was of any importance or relevance as regards access to the Respondent’s estate. It seems to me that if this type of submission is going to be made good – namely, that a piece of land will be used to extract a ransom from a registered proprietor – there has to be some evidence to back it up. Mere speculation and innuendo is not enough. It is at least possible that intended use of a piece of land as a ransom strip – coupled with a clear representation by the Applicant in the terms of the Land Registry’s letter dated 16^th November 2006 – might amount to an exceptional circumstance. That combination of facts would probably amount to an estoppel in any event. However, these facts are not present, or at least proved, in this case. I therefore reject the Respondent’s submissions on this issue.

 

Conclusion

20. In my judgment, there is no reason why the Applicant should not succeed in its application, and I shall direct the Chief Land Registrar to give effect to the Applicant’s application dated 7^th April 2007. Subject to any written submissions received from the Respondent, I propose to order it to pay the Applicant’s costs on the standard basis, to be subject to a detailed assessment. Any such submissions by the Respondent should be filed and served within 14 days.

 

 

 

Dated this 24th day of April 2009

 

 

 

 

 

By Order of The Adjudicator to HM Land Registry