English and Welsh Courts - Miscellaneous

IN THE BIRMINGHAM COUNTY COURT

		Birmingham Civil Justice Centre
		4th April 2008

GERALDINE ANDREWS Q.C.:

INTRODUCTION

1. These related actions concern two adjacent properties, Nos 123 and 125 Alcester Road, Moseley, Birmingham. They are part of a row of semi-detached and terraced 2 and 3 storey Victorian properties which form a small parade of shops and restaurants on one side of Alcester Road, leading up to the junction with Salisbury Road.
2. At all material times, on the first floor of No.125, a room used as an office at the rear of the building led directly into another room, which I shall call "the store room". The store room was what is known as a "flying freehold". It was physically constructed within No.123 Alcester Road, but could only be accessed from No.125, and was treated as an integral part of that property. Access to the store room from the office was via a doorway in the party wall dividing No 125 from No.123. There was no connecting door in that doorway. There was also a fire exit on the first floor of No.125, comprising a door in the exterior wall of the store room which led out directly onto the top of an old-fashioned cast iron fire escape. The fire door was secured by an internal lock. The stairs of the fire escape led down from the door directly into the rear yard of No.125. No. 123 had its own separate fire escape.
3. At the opposite end of the store room from the entrance through the office was a solid lath and plaster wall, which divided the store room completely from the rest of No.123 ("the dividing wall"). This internal configuration is shown in plans accompanying an application made in 1962 for planning permission to convert the first floor of No.125 into a flat, though the nature of the materials used to construct the dividing wall make it likely that it had been there much longer than that. One of the witnesses, Mr Natanson, who has considerable experience as a manager of construction projects, told the Court that the dividing wall looked to him "as though it had been put up as an original", an opinion shared by the workman who demolished it, Mr Floyd. However it is unnecessary for the purposes of this judgment to determine whether that view was correct. Suffice it to say that at the time of the matters complained of, the dividing wall and the internal layout which I have described had been in place for at least 37 years.
4. In practical terms, nobody could get in to the store room from No.123, and vice versa, whether internally or externally. Thus, on the first floor, the physical boundary between Nos 125 and 123 Alcester Road was in a different place from the boundary on the ground floor.
5. Most of the matters in dispute in these actions relate to an incident which took place on 29^th April 1999, when workmen engaged in a project to convert the first and second floors of No.123 Alcester Road into self-contained flats demolished the dividing wall, entered the store room, and thereafter bricked up and made good both the doorway leading into the office, and the fire exit door. By this means, the store room was subsumed into No.123 Alcester Road and cut off from No.125. It is now part of a flat on the first floor of No.123. The workmen subsequently severed the stairs on the fire escape and removed the lower part of the staircase, rendering it impossible to use. Any items of property which were found in the store room were disposed of.
6. The Claimants allege that the appropriation of the store room and fire exit was unlawful, because the store room had been transferred to Mr Mohammed Ramzan, who was then the tenant, when he purchased the freehold of No.125 from Agra Ltd ("Agra") for £145,000 in 1992. The Defendants assert that the store room was not transferred to Mr Ramzan as part of the sale and conveyance of No.125. In any event, they say that at the time of the incident in April 1999, Brookwide Ltd ("Brookwide") was the registered proprietor of the freehold property registered under Title Number WM278950, which included the store room. They claim that they were entitled to do what they did to the store room and fire escape. They also raise a number of other defences, including one of limitation.
7. The question whether the appropriation of the store room (which expression will be used hereafter as shorthand for the store room and fire escape unless the context otherwise requires) was lawful or unlawful, is the main issue for me to determine; however, I also have to deal with a number of ancillary matters.
8. In the first action, Mohammed Ramzan obtained judgment on 11^th July 2005 for the return of a rent deposit of £5,850 paid by him to Agra at a time when he was the lessee of No.125 Alcester Road, together with interest. On 4^th August 2005 Mohammed Ramzan obtained judgment against Agra for conversion of certain items kept in the store room, which are listed in a schedule served with the Re-Amended Particulars of Claim ("the Claimant's Schedule").
9. As recorded in the order of District Judge Cooke made on 6^th March 2007, the issues that remain for determination in that action are (1) whether the sum of money currently in court representing the principal amount of the rent deposit should be paid out to Mr Ramzan (2) what rate of interest is to be applied on the deposit for the period from 16^th February 2004 to 24^th January 2006 and (3) the quantum of damages for conversion of the goods in the store room. It is for Mr Ramzan to establish his title to the goods and their value on 29^th April 1999, as the judgment on liability precludes the Defendant in that action from contesting the presence of those goods in the store room on that date.
10. During the course of the trial, Counsel very helpfully reached an agreement that the rate of interest on the deposit during the relevant period should be 7% per annum, and as that is an appropriate commercial rate I will make an order in those terms.

MR MOHAMMED RAMZAN'S BANKRUPTCY

11. The history of this litigation has been dogged by procedural complications, which has meant that it has come to trial somewhat later in the day than might have been anticipated. These complications were partly brought about by the fact that Mohammed Ramzan was adjudicated bankrupt on 10^th September 1997. This meant that title to any property belonging to or vested in Mohammed Ramzan at that time vested automatically in his trustee in bankruptcy, the official receiver, unless that property fell within the exceptions in Section 283(2) of the Insolvency Act 1986.
12. Mr Ramzan's interest in the freehold of No.125 Alcester Road, and any interest which he had in the store room, devolved upon his trustee in bankruptcy in 1997, as did any accrued cause of action relating to that property. Any cause of action arising from the initial appropriation of the store room in April 1999 and its continuing appropriation was also vested in the trustee, save for the claim for conversion of goods in the store room. One of the statutory exceptions is "tools…and other items of equipment as are necessary to the bankrupt for use personally by him in his employment, business or vocation". The items which were removed by the builders from the store room were all of that nature: they included two microwave ovens, a dough kneading machine, steel tables, table linens, business stationery and various other items connected with the restaurant business being carried on by Mohammed Ramzan at No. 125 Alcester Road. The fact that these trade related items happened to be in storage (even long-term storage) did not stop them falling within the relevant statutory exception; this did not change their nature. There was no suggestion that the restaurant had ceased trading.
13. Any property (including any cause of action) which did vest in the trustee in bankruptcy did not automatically re-vest in Mohammed Ramzan upon his discharge from bankruptcy. On 23^rd May 2001, the trustee in bankruptcy transferred the interest of Mohammed Ramzan in the property at 125 Alcester Road to Mr Ausman Ramzan, Mohammed Ramzan's son, who is the Claimant in the second action, in consideration of the payment of £1.
14. On 6^th March 2007, District Judge Cooke made an order in the first action permitting Mohammed Ramzan to file and serve on Agra a re-amended claim form and re-amended particulars of claim "with the omission of any claim against Brookwide and any claim dependent on title to land". This order was made on Ausman Ramzan undertaking by 9^th March 2007 to issue proceedings against Brookwide, which he did: those proceedings comprise the second action.
15. Re-amended Particulars of Claim were served in the first action on 26^th March 2007 as a complete substitute for the existing Particulars, effectively confining Mohammed Ramzan's claims to the matters referred to in paragraph 9 above. Thus the only claims relating to the appropriation of the store room itself, and its continued occupation, are brought by Ausman Ramzan in the second action.
16. On 13 November 2007, the solicitors for both Claimants, Silks, wrote to the official receiver under the rubric "Re: Mr Mohammed Ramzan v Agra" referring to their client Mohammed Ramzan. After referring to earlier correspondence, (which was not in evidence), they stated "we should be grateful if you would please confirm that you the Trustees would make no claim to the £5,800 [a slightly inaccurate reference to the deposit, which was £5,850] or any interest on that sum or any claim to the items on the schedule attached [i.e. the schedule of goods which are the subject of the judgment for damages for conversion], and no claim to the land in dispute or any award of damages to Mr Ramzan. We enclose Particulars of Claim again for your attention and look forward to receiving your response." Although the enclosure was not in evidence, it is fair to assume that the Particulars of Claim which accompanied that letter were the Re-Amended Particulars of Claim in the first action. By then, as the Re-Amended Particulars made clear, Mohammed Ramzan was not bringing any claim in respect of the land in dispute or for damages relating to it.
17. The official receiver responded on 4 January 2008 confirming that having reviewed the papers, he had no interest in "the claim". The natural reading of this response, in the context of the correspondence, is that it is a reference to the claim or claims made by Mohammed Ramzan in the first action and set out in the Re-Amended Particulars of Claim. I agree with the submission of Mr Clarke, counsel for the Defendants, that is not clear from his response that the official receiver was disclaiming an interest in any claim relating to the appropriation of the store room itself, or that he had even turned his mind to that question. After all, he had sold No.125 Alcester Road to Ausman Ramzan several years earlier, and the only claim in respect of the freehold property was now being brought by Ausman Ramzan. The official receiver was only being asked to disclaim an interest in matters affecting Mohammed Ramzan. He was not asked to, and did not, assign any cause of action vested in him on Mohammed Ramzan's bankruptcy to either of the Claimants at that point.
18. On the last day of the trial, 7^th February 2008, it became apparent that the Defendants wished to take issue with the status of the Claimants to make these claims against them, although no point on title to sue (whether or not specifically referable to the bankruptcy of Mr Mohammed Ramzan) had been expressly raised by way of defence in either action and no application had been made by the Defendants for summary judgment or to strike out the claims in either action. The point only clearly emerged in the course of Mr Clarke's final speech, although, in fairness to Mr Clarke, so far as the second action is concerned, it does appear to have been foreshadowed in paragraph 32(ii) of his skeleton argument.
19. As Counsel for the Claimants, Mr Stenhouse, pointed out, no point on title to sue could be taken against Mohammed Ramzan in the first action after judgment had been entered in his favour on liability. The Defendants are estopped from alleging that the claims for conversion of goods, or for the return of the rent deposit, belonged to the trustee in bankruptcy. However, the £5,850 representing the principal amount of the rent deposit had been paid into court after the judgment on liability, and HH Judge Norris Q.C. (as he then was) had made an order on 9 January 2006 that those monies "shall be held for the account of the Claimant or the Official Receiver as the case may require". This left open the possibility that the Court might conclude that the money should be paid to the trustee in bankruptcy instead of to Mr Ramzan. Mr Stenhouse explained that it was for that reason that the Claimants' solicitors had decided, out of an abundance of caution, to obtain the letter of disclaimer. Mr Stenhouse submitted (correctly, in my judgment) that as the converted goods were trade goods and the claim relating to them never passed to the trustee in bankruptcy, there was nothing for him to disclaim in that regard.
20. Since the letter from the solicitors had asked the trustee to state that he had "no claim to the land in dispute", in order to clarify the Claimants' position I asked Mr Stenhouse whether any part of Mr Ausman Ramzan's claim against Brookwide relating to the store room itself derived from any prior claim which had initially vested in his father. I pointed out that even an explicit disclaimer by the official receiver of any interest in causes of action vested in Mohammed Ramzan at the time of his bankruptcy would not suffice to re-vest in Mohammed Ramzan, or to vest in Ausman Ramzan, any cause of action that had vested in the official receiver by operation of law. That could only be achieved by an assignment – though of course certain rights could pass with the land.
21. Mr Stenhouse responded that Ausman Ramzan's claim is a claim brought in his own right as the registered proprietor of the freehold of No.125 Alcester Road and is based on a continuing wrong. It does not derive from any historical claim which his father (or his father's trustee) may have had on 29^th April 1999 or at any time prior to Ausman Ramzan becoming the registered proprietor of No.125 Alcester Road. Nevertheless, Mr Stenhouse asked me to allow him time to consider, in the light of the issues being canvassed, whether or not to obtain any formal assignment or assignments from the official receiver and seek the permission of the Court to adduce them in evidence.
22. After hearing argument from both Counsel, for the reasons given at the time and re-stated in my interim ruling of 21^st February 2008, I acceded to that request. I emphasised that it was not for the Court to suggest to the Claimants what, if any, course of action they should pursue, and that the outcome of any future application was by no means a foregone conclusion. It was important to consider the position of the Defendants and any prejudice which they might suffer. I gave directions that the Claimants should have until 15^th February 2008 to make any application to adduce further evidence they wished, and to seek to make any further amendments to their statements of case, if so advised. I also set out a timetable for the Defendants to respond to any such application and for the Claimants to reply. I indicated to Counsel that I would make my ruling on any application by the Claimants to adduce further evidence, and incorporate the reasons for it, in this judgment. I subsequently granted a short extension of the original timetable, when it became apparent that the official receiver was out of the country and unavailable to deal with the matter within the timescale initially envisaged.

THE CLAIMANTS' APPLICATIONS TO ADDUCE FURTHER EVIDENCE

23. The Claimants did make an application to adduce into evidence two deeds of assignment, namely (a) a deed of assignment by the official receiver of the £5,850 rental deposit to Mohammed Ramzan and (b) a deed of assignment by the official receiver to Ausman Ramzan of all claims and rights arising out of the appropriation of the store room in 1999 by Brookwide and/or Agra. Both these deeds were signed by the official receiver on 22^nd February 2008. There is also an application to make minor amendments to the Particulars of Claim in each action by adding express references to the assignments. The applications are supported by witness statements of Mohammed Ramzan and Ausman Ramzan dated 25^th February 2008 and a skeleton argument lodged by Mr Stenhouse.
24. The Defendants raised a number of detailed objections to the applications. In summary, Mr Clarke submitted that there was no proper justification for allowing the assignments to be adduced in evidence or permitting these amendments at this exceptionally late stage, and that it would be unfair to them to do so.
25. After considering the arguments raised by Counsel, I have concluded that I should accede to the Claimants' application to adduce in evidence the deed of assignment to Mohammed Ramzan and to amend the Particulars of Claim in the first action, but refuse the application to adduce in evidence the deed of assignment to Ausman Ramzan and make the consequential amendment to the Particulars of Claim in the second action. My reasons are as follows.
26. The deed of assignment of the £5,850 makes no difference to the legal position of the parties. However, the order of HH Judge Norris Q.C. appears to leave it open to the Court to decide that the money should be paid out to the trustee in bankruptcy, presumably on the basis that if Mr Ramzan received payment he would be under a legal obligation to pay it over to his trustee, as it would still form part of the bankrupt estate. The letter of disclaimer was intended to make it clear to the Court that the official receiver was not going to lay claim to the money, but it is not as plain as it might have been. The deed of assignment to Mohammed Ramzan puts to rest any lingering concerns about the position of the official receiver regarding that money. The fresh evidence does not prejudice the Defendants, since they have already parted with the money, but it ensures that the picture before the Court is complete and free from any ambiguity. It is therefore appropriate that, in the very special circumstances of this case, permission should be granted to adduce that deed of assignment in evidence and to make the further minor amendment to the Particulars of Claim.
27. That removes any possible obstacle to the payment out of the £5,850 plus interest to Mohammed Ramzan, and I shall make an order that it be paid out to him.
28. The second deed of assignment is more problematic. Mr Stenhouse's position is that this deed of assignment, like the other, is merely confirmation that Ausman Ramzan has title to sue, and confirmation of the official receiver's position regarding any claims pertaining to the appropriation of the store room. It is not the provision of an essential missing link without which the claim by Ausman Ramzan would fail. To quote from Mr Stenhouse's skeleton argument : "Ausman Ramzan…has suffered loss in his own right as titleholder, and continues to do so. His locus standi arises from the Transfer of 125 Alcester Road between the Trustee and him." Mr Stenhouse submits that if the second deed of assignment is adduced in evidence merely for the purpose of clarification of the position of the official receiver, it cannot prejudice the Defendants. It does no more than confirm Ausman Ramzan's existing case, and lays to rest any doubt about whether the letter of disclaimer was intended to cover the claims relating to the store room itself.
29. Unlike the first action, there is no court order in the second action which raises the prospect of the Court determining that the damages should be paid to the official receiver instead of to the Claimant. Ausman Ramzan does not seek to pursue any claims relating to the land which vested in Mohammed Ramzan or his trustee at the time when he was the registered proprietor of No.125. He has expressly eschewed any intention of relying on the assignment for that purpose. If Ausman Ramzan's claims are brought in his own right by virtue of his status as the freehold proprietor of No.125 Alcester Road, there would be no possible basis for the trustee in bankruptcy to lay claim to the damages if he succeeds. The official receiver's attitude towards claims which Mohammed Ramzan (or his trustee) may have had in respect of the appropriation of the store room, but which are not being pursued by him or anyone else, is not a matter of concern in these proceedings.
30. There is no justification for the Court agreeing to allow a Claimant to adduce in evidence after the conclusion of the trial a document on which he places no reliance, and which he says makes no difference to his position one way or the other. In my judgment, therefore, there is no good reason for me to accede to this very late application to adduce the deed of assignment to Ausman Ramzan in evidence. The application is therefore dismissed.

THE CLAIMS IN THE FIRST ACTION

31. I have already dealt with the payment out of the money in court to Mohammed Ramzan, and with the appropriate rate of interest on that sum for the relevant period. In the first action, the only remaining matter is the assessment of the quantum of damages for conversion of the items which were taken from the store room on 29^th April 1999, and the rate of interest on those damages.
32. The Claimant sought to amend the Claimant's Schedule to include an item (namely an ice-maker) which was not on that Schedule when judgment on liability was given. Mohammed Ramzan's evidence was that it had been omitted from the Claimant's Schedule by mistake. That may be so – but having already obtained judgment on liability, which is conclusive as to what was taken from the store room, Mohammed Ramzan is estopped from seeking to re-open that issue by adding another item to the list.
33. Having heard Mohammed Ramzan give his evidence, and having considered the invoices which he produced in support of his claim and all the objections raised by the Defendants, I am satisfied on the balance of probabilities that he had title to all the items on the original Claimant's Schedule, that he paid for them, and that they had the values attributed to them in that Schedule. I am not persuaded by Mr Clarke's argument that some of the items, namely, those acquired by Mr Ramzan prior to his bankruptcy, (items 1 and 3 on the list) did not fall within the exception in Section 283(2) of the Insolvency Act because they had been put in storage. Even if they were kept in storage for a considerable period of time, the two microwaves and the dough-making machine were necessary for use by Mr Ramzan in connection with his business – the business of running a restaurant.
34. I will therefore award Mohammed Ramzan damages for the conversion of the items in the store room in the sum of £8,100 together with interest from 29^th April 1999 to the date of judgment at the rate of 7% per annum, which in my judgment is an appropriate rate to reflect the average of commercial interest rates over the relevant period. I will leave it to Counsel to reach agreement upon the interest calculations.

THE CLAIMS IN THE SECOND ACTION

A. LIABILITY

35. I turn now to consider the claims of Ausman Ramzan arising in consequence of the appropriation of the store room on 29th April 1999. Ausman Ramzan's claims relate to the continuing (allegedly unlawful) registration of the freehold title to the store room in Brookwide's name, and its possession by Brookwide from the time when he acquired title to 125 Alcester Road from the trustee in bankruptcy, to the present day. In essence, his case is that there was and is continuing wrongdoing in that Brookwide should not be the registered proprietor of the store room, and he is being deprived by Brookwide of the use and enjoyment of land which is his property. He seeks declaratory relief, an order for rectification of the Land Register under s.65 of the Land Registration Act 2002 so as to show that the store room forms part of the title No. WM562684, or damages, including aggravated and/or exemplary damages.

BACKGROUND HISTORY

36. On 22 January 1988, Agra, the Defendant in the first action, became the registered freehold proprietor of No 123 and No 125 Alcester Road, together with a number of other properties in Alcester Road and one property in Salisbury Road. All these various properties were registered under a single title number at HM Land Registry, number WM278950.
37. Agra is a property investment company. At all material times its directors have included members of the Noe family. Brookwide is a wholly-owned subsidiary of Agra, in the same line of business, and it has some directors in common, including Mr Salaman Noe, who is the managing director of both companies. After their acquisition by Agra, the properties at 123 and 125 Alcester Road were managed by a firm of commercial property consultants named Lee Baron. The managing director of Lee Baron was Mr Salaman Noe's son Leo, who was also a director of Agra. Mr Salaman Noe did not give evidence, but the nature of his involvement in the business was explained by Mr Landy, of Lee Baron. He said that Mr Salaman Noe was the man who made decisions on behalf of Agra and Brookwide, and Mr Landy's point of contact with those companies. Mr Noe would commission feasibility studies for building projects and, if they were feasible, he would give the instructions for them to go ahead. He was "not someone who would come down to the sites and get his hands dirty."
38. When Agra acquired the freehold, the property at No.125 Alcester Road was occupied by Mr Javed Iqbal under a leasehold estate which was vested in him by assignment on 14^th November 1985. The lease in question had been granted to one of Mr Iqbal's predecessors in title for a period of 21 years from 7^th December 1970. The parcels clause in the lease provides, so far as is material:

"All that piece of land situate in and fronting Alcester Road… together with the retail shop and dwelling accommodation over with a hostel at the rear thereof and with the outhouse buildings and premises belonging to erected on the said piece of land or on some part thereof all of which premises... are known as 125 Alcester Road aforesaid."

There was no plan annexed to that lease.

39. In my judgment, the premises described in that lease as "the premises… known as 125 Alcester Road" undoubtedly included the store room, which had been treated as an integral part of No.125 since at least 1962, and probably for many years before. A reasonable person would undoubtedly have thought, at the time when the lease was entered into, that the demise encompassed the store room. It is hardly surprising, therefore, that Mr Iqbal's evidence was that he believed that the store room was part of the premises for which he was paying rent (though, of course, Mr Iqbal's subjective belief was inadmissible for the purposes of construing the lease).
40. At all material times after Mr Iqbal came into occupation, the ground floor of No.125 was used as an Indian restaurant. The basement and second floor were not in use, and access to them was limited. On the first floor of the property there was a function room and some toilets. A corridor led to the office and store room at the rear of the building, which I have described earlier in this judgment. The door in the store room which led out to the fire escape was locked from the inside and, at least from the time when Mohammed Ramzan came into occupation of No.125, it was alarmed.
41. During Mr Iqbal's period in occupation, he had the property valued on a number of occasions. The store room on the first floor is expressly referred to in the valuations, and in the sales particulars drawn up by Homebuyers estate agents which were used to market the lease of the restaurant in late 1988 and early 1989. In January 1989, when Mohammed Ramzan was interested in acquiring the lease of No.125, he also had a valuation carried out by Debenham Tewson Chesshire. This mentions that on the first floor, as well as the WC and function hall, there were two further rooms (which must be a reference to the office and store room).
42. In about July 1989, Mohammed Ramzan acquired the leasehold interest in No.125 Alcester Road by assignment from Mr Iqbal. Agra's consent to the assignment was given on the understanding that there was to be no change of use, and on condition that Mr Ramzan paid a 1 year rental deposit of £5,850. This was to be held until the lease expired, with all interest accruing to Mr Ramzan. Mr Ramzan paid the deposit to Agra's solicitors on 23rd January 1990, and it was remitted by them to Lee Baron. However when the lease expired in December 1991, the money was not repaid.
43. Mohammed Ramzan began negotiations with Lee Baron (on behalf of Agra) for a new lease of No.125 as early as January 1991. Lee Baron wrote to him to say that they would be sending someone round to carry out an inspection at the end of January. There was no evidence that this appointment was cancelled or postponed, but equally there was no disclosure of any sketches or other documentation relating to an inspection at that time. There was evidence, however, that in July 1991 Mr Coxon, a chartered surveyor then working for Lee Baron, carried out an inspection of No.125 for the purposes of giving advice to Agra about the terms of the new lease. Mr Coxon did not recollect going to No.125 more than once, and it seems probable that Mr Ramzan is mistaken in his recollection that the visit took place in January 1991.
44. It is apparent from Mr Coxon's manuscript notes and sketch plans of the first floor that on this particular occasion he did not enter or measure either the office or the store room. After this length of time, it is hardly surprising that Mr Coxon could not remember, when giving evidence, why this was: he speculated that he may have thought the corridor led directly to a fire escape, or that his access was impeded in some way. The former explanation seems to me to be more likely, because the corridor leading to those two rooms was unlikely to have been blocked. Mr Coxon was also doubtful that he would have been willing to leave an area uninspected if he had been told that it was physically inaccessible. He would have required it to be made available for inspection if not then, at some other date.
45. The reason for Mr Coxon's oversight is immaterial, though it does seem that on this occasion he was not as careful as one might have expected him to be. The fact that he managed to overlook two of the rooms on the first floor does not mean that the rooms were not treated as part of the demise to Mr Ramzan, let alone that they were not being used by Mr Ramzan at the time. Mr Clarke did not suggest to any of the Claimants' witnesses that the office was not being used as an office. There was no evidence that the physical layout of the first floor of No.125 had changed in any way at the time of Mr Coxon's visit: indeed, the evidence of those who were present on the day when the dividing wall was knocked through by the builders eight years later only served to confirm that the internal structural layout had remained the same at all material times up to that date.
46. At some point, though it is not entirely clear when, the negotiations for a new lease turned into negotiations for the sale of the freehold. Whilst these negotiations were going on, Mohammed Ramzan continued in occupation of No.125, even after the old lease expired. He commissioned a report and valuation from Chestertons to assist him in obtaining a bank loan to finance the acquisition of the freehold. Chestertons' report, which is dated 9^th March 1992, refers to an area accessible from the rear office on the first floor which was inaccessible at the time of their inspection – obviously a reference to the store room. I accept Mohammed Ramzan's explanation that the reason why Chestertons could not get into the store room at the time was that items of furniture had been placed in both the office and the store room whilst there was some refurbishment being carried out elsewhere. The Chestertons report is not evidence that the store room was no longer being treated as an integral part of No.125.
47. On 31 March 1992, contracts were exchanged for the sale of the freehold, with completion taking place on 28^th April 1992. Mr Ramzan paid £145,000 to Agra. The parcels clause in the Transfer provides that:

"the Vendor as beneficial owner hereby transfers unto the Purchaser all that the property known as 125 Alcester Road shown on the plan annexed hereto and thereon edged red TOGETHER WITH the easements rights and privileges mentioned in Schedule 1 subject as therein mentioned but except and reserving unto the Vendor and its successors in title … the benefit of all other parts of the property registered within Title No WM 278950."

The plan "annexed hereto" appears to have been faxed to the Land Registry by Agra's solicitors. It is a typical small scale plan, presumably based on the ordnance survey plan which was current at that time. There is a bold line (no doubt marked red on the original plan) drawn around No.125, which segregates it from No 123 on the basis of a straight division between them along the line of the party wall. Thus the plan does not accurately reflect the configuration of No.125 at first floor level, because it does not appear to include the store room as part of that property.

48. Following the Transfer, the property was registered in Mr Ramzan's name under a new title number by the Land Registry, number WM562684. The office copy entry describes the land comprised in the title as "the Freehold land shown edged with red on the plan of the above Title filed at the Registry and being 125 Alcester Road, Moseley". Paragraph 2 goes on to state that "the land has the benefit of the rights granted by but is subject to the rights reserved by the Transfer of the land in this title dated 28^th April 1992 made between Agra and Mohammed Ramzan (NOTE: Copy in Certificate)".
49. The only copy of the title plan in evidence is the one which, according to the Register, was prepared in 2004 based on the latest revision of the ordnance survey map. This happened at a time when certain of the land transferred to Mohammed Ramzan and unrelated to this dispute was removed from title number WM562684, delineated in green on the plan, and given its own separate title number. However, so far as one can make out, and as one would expect, the "land edged in red" on the title plan follows exactly the same lines as the plan annexed to the April 1992 Transfer, and the red line appears to divide Nos 123 and 125 straight along the party wall.
50. Mr Mohammed Ramzan remained in occupation of No.125 Alcester Road, including the store room, after 28^th April 1992. He continued to use the store room in exactly the same way as he had used it when he was the tenant of the premises. The fire escape remained available for use in case of emergencies. Mr Ramzan had had an alarm fitted to the fire door when he first took over the lease in 1989.
51. In May 1994, the remainder of the properties registered under the original title number WM 278950, including No. 123 Alcester Road, were transferred by Agra to Brookwide. No evidence was adduced as to whether any consideration was provided by Brookwide for the transfer. The office copy entry describes the land comprised in the title as " the Freehold land shown edged with red on the plan of the above Title filed at the Registry and being 103 and 105, 115 to 129 (odd numbers inclusive) Alcester Road Moseley and 2 Salisbury Road, Moseley ". Paragraph 6 refers to the removal from this title of land edged and numbered in green on the filed plan and registered under different title numbers shown in green on the plan. Paragraph 8 refers to the rights reserved by the Transfer dated 28^th April 1992.
52. The title plan relating to title No.WM278950 indicates that No. 125 Alcester Road has been taken out of the original title and given the new title number WM562684. The boundary lines between Nos. 123 and 125 on that plan are once again drawn on the basis of a straight division along the party wall between those two properties. Thus the store room appears on the face of that plan to be encompassed within the property registered under title number WM 278950.
53. Nothing untoward happened for a period of almost five years after the transfer of No.123 Alcester Road to Brookwide. At one point, Mohammed Ramzan considered selling No.125 Alcester Road, as he had purchased another restaurant elsewhere. The sales particulars drawn up by the estate agents at this time unambiguously refer to the store room as part of No.125, as do a number of other documents generated in this period which were in evidence, including some plans drawn up in September 1996 for a proposed planning application. Although Mohammed Ramzan gave a licence to a Mr Khan to run the restaurant, (which Mr Khan did for approximately 9 months until June 1997) Mr Ramzan retained the keys to the premises and continued to use the store room for storage.
54. After Mr Khan's departure, Mohammed Ramzan resumed running the restaurant. Ausman Ramzan, assisted him in the business. In August 1998, while Mohammed Ramzan was abroad, his wife engaged a firm called PBL lettings to let the property to a Mr Hussain for a period of 5 years for £100 per week. However, within a short time that tenancy was terminated for nonpayment of the rent. Whilst Mr Hussain was the tenant, Mohammed Ramzan retained the keys to the premises, and continued to use the store room for storage. The evidence was unclear as to precisely when the tenancy ended, but Mohammed Ramzan was certainly back in occupation of No.125 by the time that the store room was appropriated.
55. Meanwhile, when the head lease of No.123 expired in 1997, the Defendants began to make plans for the conversion of the upper floors of Nos 121 and 123 Alcester Road into self-contained flats. Birmingham City Council was willing to make grants available for such conversions, as part of an urban regeneration scheme. A similar conversion was carried out successfully at 117 to 119 Alcester Road, which were also part of the property portfolio by then registered in the name of Brookwide. During 1998 Lee Baron, on behalf of Agra, or Brookwide, or both, entered into negotiations with the tenants of Nos. 121 and 123 Alcester Road for the surrender of the upper floors of those premises, commissioned a feasibility study, and put forward submissions for funding to the Council. The funding application was supported by architectural drawings. By early 1999, most of the elements were in place for the proposed conversion to go ahead, although it still required planning permission.
56. The project managers entrusted by Salaman Noe with overseeing the proposed conversion on behalf of Agra or Brookwide, or both, were a company called Samuel Lawrence & Co Ltd., who had dealt with the successful conversion of Nos 117 to 119 Alcester Road. Their principal, Mr Lawrence Natanson, instructed a consultant in planning and building regulations named Maurice Nathan to carry out a survey of No. 123 Alcester Road and to draw up plans for submission to the local authority for building consent. Mr Nathan, as one might expect, traced his plans from the earlier architect's drawings, but he also visited the property to check matters for himself.
57. No.123 Alcester Road had been leased to Sketchleys Dry Cleaners for a 15 year term commencing on 29^th September 1990. When Mr Nathan visited No. 123 sometime in January 1999, the ground floor and the first floor were still in use by Sketchleys. Mr Nathan realised that an area marked by the architect on the earlier plan as "kitchen void" was completely inaccessible from No.123 because there was a wall cutting it off (as, indeed, is marked clearly on the earlier plan). That area was the store room, which was still an integral part of No.125. Mr Nathan assumed that what was behind the dividing wall was a void, and part of No.123, so when he prepared his own plans he, too, marked it as a void. Mr Nathan noticed the fire escape leading down from the supposed "void" into No.125, but assumed that it was not in use. The plans drawn by Mr Nathan were duly submitted to the Council in around February 1999, and planning permission was granted.
58. In March 1999 the lease to Sketchleys was varied to restrict the subject-matter of the demise to the ground floor lock-up shop. Meanwhile, Mr Natanson, as project manager, had made a preliminary site visit to the premises. In the course of giving evidence, Mr Natanson made much of his extensive experience in the construction industry and of his qualifications, which include a degree in finance. He described himself as "the Landlord's thinking man". Sadly, on this occasion he does not appear to have lived up to his own description. Despite noticing the door leading onto the fire escape from the supposed "void" and that the stairs led downwards into the basement of No.125, and despite noticing that the dividing wall was of sturdy construction and correctly concluding (from the materials) that it must have been in place for many years, Mr Natanson took no steps to check that what was behind that wall actually belonged to the people on whose behalf he was acting, or that it was not an integral part of No. 125, before he instructed the builders to knock down the dividing wall. It is surprising that that possibility would not have crossed the mind of a man of his experience, even if it did not occur to others.
59. Unlike the other witnesses who gave live evidence in this case, who were trying their best to assist the court despite the obvious difficulties caused by the passage of time, I regret to say that I found Mr Natanson to be neither an impressive nor reliable witness. Although he was responsible for giving the instructions to the builders to knock the dividing wall through and brick up the doorway, and he was present on site when it happened, his witness statement barely touches upon those matters. When he did address the events of 29^th April 1999 in his oral evidence, I gained the impression not only from what he said, but from the manner in which he said it, that he was not being candid.
60. Neither Mr Floyd, the builder, nor Mr Landy, of Lee Baron, had a very clear or accurate recollection of what the store room looked like when the dividing wall came down. Mr Natanson, on the other hand, went into a wealth of detail, much of which was obviously coming out for the first time, as it had not been put to the Claimants' witnesses. Some of it conflicted with evidence of other witnesses which there was no reason to doubt; some was inherently implausible. I do not accept Mr Natanson's evidence that the store room was empty (apart, perhaps, from a few odds and ends of no intrinsic value). Nor do I accept his evidence that the fire door had a push bar on it which had been wedged from the inside with pieces of timber to make it inoperable. His suggestion that it was impossible that this door could have been locked because all fire exits must have push bars on the inside, is wrong. So long as the function room on the first floor was available for hire, as it was at all material times, there had to be an operative fire escape at that level. In practical terms it also made sense for the fire exit next door to be readily available for use, in an emergency, by anyone who was working in the office. There was no reason for Mohammed Ramzan to have blocked it off, or to tell the court that it was locked with a key if it had a push bar on it. Nor do I accept that there was a door in the doorway between the office and the store room, which the builders removed and put in a skip. On that point, again I prefer the evidence of Mohammed Ramzan.
61. Nor do I accept that Mr Natanson was unaware that the fire door was alarmed. The photographs show that the wires were easy enough to see, regardless of whether the fire alarm was triggered when the builders broke in. In fact, it was triggered, and anyone who was present at the time would have heard it – indeed, that is what alerted Mohammed Ramzan to what the builders were doing, and, unlike Mr Natanson, he was not standing in or next to the store room at the time. The noise must have been both loud and persistent. I accept the evidence of the security engineer, Mohammed Rashid, that he was called out by Mohammed Ramzan on 29^th April 1999 to find out why the fire alarm had gone off, and to try and shut it off because Mr Ramzan was unable to. That was how they both discovered that the builders had knocked down the dividing wall and were working in the store room. Mr Rashid had to disconnect the fire alarm leads from the main system in order to stop the noise.
62. I also reject Mr Natanson's evidence that he went round to the front of No.125 to speak to the occupier, but was unable to get a reply, and that he was unaware that the police visited the site that afternoon. Mr Rashid and Mohammed Ramzan went up to the first floor and saw for themselves what had happened. Not surprisingly, Mr Ramzan became very angry. He called the police as soon as he became aware that the dividing wall had been demolished. When the police arrived at the site, they declined to become involved, as the matter was a civil dispute, and simply logged the incident. Mr Natanson was the senior man on site and he was directing operations. It is inconceivable that he would not have been told by the builders that the police were there and that they had been called out by the owner of No. 125. If he had wanted to find the owner of No.125 and speak to him, he would not have had to look very far. It is highly unlikely that he made any effort to do so – he did not want anyone interfering with his plans.
63. In my judgment, Mr Natanson was deliberately attempting to paint a picture of the store room as a disused or abandoned space, when it clearly was not, and to play down those elements of the scenario which made it obvious to him that there was a real likelihood that the store room did not belong to his principals and that he was not entitled to give the instructions to the workmen that he had already given and subsequently gave.
64. It may be that Mr Natanson, like Mr Nathan, initially believed that there was a void space behind the dividing wall, because it is not unknown for such spaces to be found in buildings of that age, and because it was marked as a void on the plan. However, I have little doubt that when Mr Floyd and his assistant knocked through the dividing wall on Mr Natanson's instruction, and Mr Natanson saw that instead of the expected void there was a room with a doorway leading through into No.125 and that items relating to the business being carried on at No.125 were being stored there, Mr Natanson realised that something was seriously wrong. However, he decided to go ahead with the planned conversion work regardless, and let someone else deal with the consequences. In so doing, he acted in reckless disregard of the interests of whoever was in occupation of the store room, in pursuit of the interests of his principals. These unexpected developments had the potential to disrupt the conversion process and Mr Natanson was determined to ensure that this did not happen.
65. Mr Natanson observed, in the course of giving his evidence, that the legalities should have been sorted out before he got there, and that he was working from the plans. He said that sometimes things that are physically there on site do not show up on plans and when that happens "you just have to get on with it." I regard that observation, at least, as a fair reflection of his high-handed attitude at the time. Mr Natanson had a job to do, he had the plans, and he was going to adhere to those plans come what may, notwithstanding all the signals that the appropriation of the room might have been unlawful. If it was, that was not his problem. He gave instructions to the workmen to make good the severance of the store room from No.125 and to secure the fire door by bricking it up from the inside. A short time later – it may have been days, it may have been a couple of weeks - he instructed the workmen to sever the fire escape stairs in the manner I have already described. In practical terms, blocking off the room completely from No.125 and getting rid of the fire escape would obviously enhance Brookwide's already strong negotiating position when it came to dealing with the individual who ran the restaurant next door.
66. After the room was appropriated, Mohammed Ramzan put the matter into the hands of his solicitors. Mr Landy gave oral evidence (though it was not in his witness statement) that after a formal complaint was received, Lee Baron instructed solicitors to check the position. Mr Landy's recollection was that the solicitors said that they had checked the transfer and the plans which indicated that the boundary was the party wall, and that there was no indication that the store room was in Mr Ramzan's title. However, under cross-examination Mr Landy said that he did not think that the solicitors saw the 1992 Transfer or transfer plan. He assumed that the solicitors knew where the room was, from whatever plans they did see, but he could not even confirm that without checking his file. Given the understandable vagueness of Mr Landy's evidence after such a long passage of time, and the absence of any other evidence on the matter, it is difficult to reach any reliable conclusion about what the solicitors knew or saw when they gave their advice. In particular there is no evidence to suggest that they were told that the store room had been part of the internal configuration of No.125 when the freehold of that property was transferred to Mohammed Ramzan.
67. The conversion into flats was duly completed. Ever since the events of 29^th April 1999 the store room has continued to be completely segregated from No.125 and accessible only from No. 123. The appropriation of the store room substantially increased the space available on the first floor of No.123 for the conversion. Mr Clarke did tell me that the flats were leased, but there was no evidence about the length of any lease which has been granted in respect of the particular flat of which the store room now forms a part, or about the rent being charged to the tenant.

WAS THE STORE ROOM CONVEYED IN THE APRIL 1992 TRANSFER TO MOHAMMED RAMZAN?

68. The first question for determination is whether, construed in the light of the relevant background facts in which it was executed, the Transfer expressly conveyed the store room to Mohammed Ramzan. In order to answer that question, the court must determine what is meant by "all that the property known as 125 Alcester Road shown on the plan annexed hereto and thereon edged red."
69. The general principles set out by Lord Hoffmann in the well-known passage in ICS Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912 apply as much to a contract for the sale and transfer of real estate as they do to any other contract. The first of those principles is particularly relevant: the court must seek to ascertain 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.
70. In this case, among the surrounding circumstances were that prior to the sale and transfer, the vendor had been the landlord of "the premises known as No.125 Alcester Road" (which included the store room) and the purchaser had been the tenant of those premises, and had continued in occupation with the landlord's knowledge and consent for the short period after the expiry of the lease and prior to the conveyance. Whilst the negotiations between the parties for the sale of the freehold are inadmissible, the fact that they superceded negotiations for the renewal of the lease of those premises is not only admissible as part of the factual matrix, but highly relevant.
71. Mr Clarke submitted that this was a case where the definition of the parcels in the Transfer was clear, and that it was unnecessary to have resort to extrinsic evidence in order to interpret it. The Transfer was of all the property known as No.125 Alcester Road shown on the plan. Although Mr Clarke accepted that a phrase such as "the property known as" would normally require the admission of extrinsic evidence to identify what was "known as No.125", he submitted that in this case there was no tension between "known as" and "shown on the plan" so as to admit of any ambiguity or lack of clarity. "Shown on" in this context meant "more particularly defined by", and the plan was what the parties intended to use as the means of defining the subject-matter of the conveyance. Thus, he submitted, if the parcels clause is read as a whole, it should be interpreted as transferring "that part of the property known as 125 Alcester Road which is shown on the plan", because what the parties intended to be transferred is only that land which is shown on the plan edged in red.
72. In my judgment, that construction is the very opposite of the natural and proper meaning of the words used in the Transfer, particularly when the relevant factual background is taken into account. Considering, first, the wording of the Transfer itself, it seems plain that what the parties intended to transfer was "the property known as 125 Alcester Road" rather than "the property shown on the plan". It is the former phrase which comes first, and which governs all that follows. The phrase "shown on the plan" is subservient, not dominant, and its function is one of general identification, not delineation.
73. The parties clearly intended to transfer the whole of the property known as 125 Alcester Road - everything which had previously been the subject-matter of the lease. Had they intended to transfer only part of it, they would have said so. It would be unnatural to interpret a phrase which explicitly refers to "all the property" as meaning only part of it. Moreover, there was no reason at that time for the vendors to have reserved title to any part of the property "known as 125 Alcester Road", or for the reasonable observer to have thought that they had. In Johnson v Shaw [2003] EWCA Civ 894, at paragraph 36, Peter Gibson LJ referred to the absurdity that the vendor would have wanted to retain any part of the land being conveyed (in that case, a farm) particularly a landlocked part of the property to which he would have had no right of access. It seems equally absurd to assume that Agra would have wanted to retain the part of the property known as 125 Alcester Road which, at the time of the Transfer, was bricked up behind a solid dividing wall and wholly inaccessible from the other properties to which they retained title. The plans for development of the upper floors of 121 and 123 Alcester Road had not been conceived in 1992.
74. Moreover, if the parties to the Transfer had intended that the plan should specifically define what was to be transferred, one might have expected them to use the word "define" or some other clear and unambiguous phrase. If that had been their intention, there would be no need for them to have referred to what the property was "known as" in the parcels at all, because that phrase in itself creates a lack of clarity. Indeed, if one were looking for the best evidence of what was "known as" 125 Alcester Road in April 1992, one would expect it to be found in the situation on the ground, rather than in a faxed one-dimensional small scale ordnance survey plan which shows the relevant part of Alcester Road and Salisbury Road viewed from above. As Mr Stenhouse pointed out, the plan as drawn does not resemble the configuration on the first floor of No.125 which has been established by other reliable evidence; indeed it would be quite difficult to depict the store room at the rear of the property with any degree of reliability on a plan of this scale and size. There were no sales particulars with the transfer, and the description in the parcels is too vague to give the person drawing the red line on the plan any accurate guidance as to how to depict precisely what was being transferred. In the absence of such guidance it is hardly surprising that the red line was drawn along what might be described as traditional party wall lines.
75. It is true that when there is a transfer of part of land comprised in an existing registered title, the Land Registration Rules require that a plan should be drawn to an appropriate scale identifying the land to be transferred by edging in red or in some other appropriate fashion. The Rules envisage that the plan should clearly identify the land as to its size, shape and position. However, as the case law demonstrates, this does not always happen. In the current edition of Ruoff and Roper, paragraph 5-012, the learned editors make this observation:

"Where title is registered to a property which has … overhanging structures above adjoining land but there is no indication of their ownership in the title deeds, they will not be included in the registered extent shown on the title plan and the proprietor will have to rely on the fact that there are general boundaries and on the general words implied in the conveyance leading to first registration in s.62(1) and (2) of the Law of Property Act 1925."

76. Mr Stenhouse relied on the general boundaries rule, which was formerly to be found in rule 278 of the Land Registration Rules and is now in s.60 of the Land Registration Act 2002. Although provision is made in the Land Registration Rules for the fixing of boundaries in the register, in practice such fixing is rare. In all other cases, the registered description of the land should be as accurate as possible, but it is not conclusive as to boundaries or the extent of registered estates. A filed plan is deemed to include the general boundaries only. This means that the exact position of the line of the plan does not indicate who owns any physical feature on the land (such as a wall or a ditch) or whether the boundary runs down one of the sides or down the middle of it. However, some assistance as to where the true boundary is located may be obtained by looking at the filed plan. If the plan and the conveyance do not resolve the issue, the court has to have regard to the position on the ground, including where the nearest natural boundaries are to the line drawn on the plan.
77. The general boundaries rule only applies to the effect of the plan filed with the Land Registry. However where the parties to a transfer use the ordnance map as the basis for their contract, they may be taken to have used the map in the same way as the Land Registry: see Chadwick v Abbotswood Properties Ltd [2005] 1 P & C R 10 at para 59, [2004] EWHC 1058 (Ch).
78. In Cutlan v Atwell (unreported) 30 November 1994, which was followed in Chadwick v Abbotswood, Peter Gibson LJ expressed the view that the judge may have been misled by a decision in an earlier case into thinking that a divergence of 10 feet was acceptable under the general boundaries rule. Mr Clarke therefore submitted that if a divergence of 10 feet is unacceptable, one could not rely on the general boundaries rule to extend the boundary drawn on a plan so to embrace an entire room. I accept that submission. In a case such as the present, the general boundaries rule is of limited assistance to the Court. At most, the rule is indicative that the party wall is not necessarily where the true boundary between No.123 and No.125 lies (at least, at first floor level) even though the plans, on their face, may appear to suggest otherwise.
79. Where the definition of the parcels in a transfer is not clear, the court must have recourse to extrinsic evidence, including the physical features on the ground: see e.g. Freeguard v Rogers [1999] 1 WLR 375 and Turner v Wakefield [2004] EWCA Civ 1725. The latter case has certain similarities to the present, and the way in which the Court of Appeal approached the construction of the conveyances and the plans is of some assistance. The issue was one of title to a stable which formed an integral part of a barn erected on certain land, all of which originally belonged to a Mrs Turner. The southern wall of the stable was the southern wall of the barn; its northern wall was an internal wall some 3.9 metres north of the southern wall. On the floor directly above the stable, there was a utility room, whose southern wall was formed by a stud partition which was located immediately above part of the stable. However that partition did not coincide with the internal northern wall of the stable at ground floor level.
80. The land had subsequently been divided up, and parts of it were conveyed by Mrs Turner to two of her children. The first conveyance, to her son, conveyed "all that freehold cottage situate and known as No 9 Melton Road". The second conveyance, to her daughter, conveyed "all those two freehold cottages situate and known as nos 1 and 3 Melton Road". It was not difficult to identify the cottages themselves without reference to any plan, but the description did not indicate whether it was intended to encompass any part, and if so what part, of the other land owned by Mrs Turner, in particular the barn. Unlike the present case, there was no evidence that either the property "known as No 9 Melton Road" or the property "known as Nos 1 and 3 Melton Road" included the stable or any particular part of the barn.
81. The two relevant conveyancing plans (and the title plans based upon them) showed a different layout from the physical layout of the buildings on the ground. The boundary line shown on the conveyancing plans ran through the stable and so, on the face of the plans, part of the stable was conveyed to one of the parties, and part to the other. Neither party contended that this was what Mrs Turner had intended. The Court of Appeal decided that on the language of the conveyances, the land conveyed was to be identified from what was on the ground, with the aid of the conveyancing plans. The task was to find a natural boundary between the two parcels of land which corresponded with the boundary shown on the plans. The Court of Appeal identified two natural boundaries, namely, the north wall of the stable on the ground floor, and the stud wall on the first floor – but they were in different places, neither of which was accurately depicted on the plans.
82. The Court of Appeal decided the only sensible way to construe the conveyances was that Mrs Turner intended to convey to her son the whole of the stable on the ground floor and all the land on the first floor to the south of the stud wall. The effect of this was that the northern boundary of the land conveyed by the first conveyance was situated in two different places on the ground floor and on the first floor. This created an overhang, or flying freehold, on the first floor; but that accorded with the real physical layout of the property. Thus the Court of Appeal was able to interpret the single straight boundary line drawn on the plan in such a way that the boundary was in two different positions at ground and first floor level. However, unlike the present case, that was not a case in which the boundary drawn on the plan coincided with any party wall. Nor was it a case in which the evidence was that the flying freehold formed part of the land "known as" any of the identified cottages.
83. Given that the present case is one in which the language of the Transfer is unclear, the question of what land was conveyed by the Transfer to Mohammed Ramzan must be answered objectively: what would the reasonable layman think he was buying? The evidence all points one way – the reasonable purchaser in the position of Mohammed Ramzan would undoubtedly have thought that what he was buying included the store room.
84. The store room was part of the property "known as" 125 Alcester Road in April 1992. It had been treated as an integral part of No.125 for many years; it was physically inaccessible from No.123, and it had been part of the demised premises which the prospective purchaser was currently occupying and using, and which the parties had agreed should not be re-let, but sold to him. The plan annexed to the Transfer is not definitive. It did not show the layout of the property above ground floor level and, like the plans in Turner v Wakefield, it did not set out an accurate depiction of where the actual boundaries lay at the time (at least, on the first floor). It certainly did not accurately portray the property known at the time as 125 Alcester Road.
85. When a contradiction between the verbal description of the property in the Transfer and what is shown on the annexed plan becomes apparent when the description is read in context and in the light of the surrounding circumstances, the plan is to be disregarded when construing the Transfer: see e.g. Hatfield v Moss [1988] 40 EG 112. This plan does no more than indicate the location of the property which was being carved out of the existing title and transferred to the purchaser. Although the reference to the plan in the Transfer is not qualified by some phrase such as "for identification only", as the plans were in Turner v Wakefield, that does not matter. Such phrases should not be used in modern transfers of registered land, and their absence does not preclude the plan from being treated as subordinate when it is otherwise appropriate to do so.
86. Accordingly, in my judgment, on the true construction of the 1992 Transfer, the store room was expressly included in the freehold property conveyed to Mohammed Ramzan.
87. In the light of that conclusion I need not dwell at any length on the alternative argument put forward by Mr Stenhouse that if the store room was not conveyed to Mohammed Ramzan expressly, it was conveyed to him by implication by virtue of s.62(2) of the Law of Property Act 1925. That section operates to convey with any land having houses or other buildings thereon "all erections… fixtures … liberties, privileges, easements, rights and advantages whatsoever appertaining or reputed to appertain to the land, houses or other buildings conveyed, or any of them, or any part thereof, or at the time of conveyance demised, occupied or enjoyed with or reputed or known as part or parcel of or appurtenant to the land.." Thus there is no need for the conveyancer to spell out in the transfer of a particular plot of land that the transferee is also to have certain rights of way or other easements which appertain to that land.
88. There is a long-standing and as yet unresolved debate as to whether s.62 can operate so as to increase the extent of the land conveyed. Mr Stenhouse was unable to point to any authority that it could. In Commission for the New Towns v Gallagher [2003] 2 P & C R 3, [2002] EWHC 2668 (Ch), Neuberger J. expressed the view, obiter, that the words "enjoyed with" refer to incorporeal hereditaments rather than physical property, such as a neighbouring garage. However he left open the possibility that these words might be apt to include land not referred to in the conveyance in "very exceptional circumstances".
89. It is strongly arguable that the words "occupied or enjoyed with or reputed or known as part or parcel of " the land conveyed are apt to describe the store room in this particular case. The editors of Ruoff and Roper, in the passage quoted above, appear to suggest that s.62(2) might be of assistance in resolving questions of ownership of flying freeholds where the words in the conveyance are otherwise unclear. On the other hand, the opening words of s.62(2) do appear on their face to be directed towards incorporeal rights (such as rights of occupation or enjoyment) as opposed to rights of ownership. It is unnecessary for the purposes of this judgment to seek to resolve the debate. Suffice it to say that, whilst a licence to occupy and use the store room might well fall within s.62(2), I am doubtful whether that section would have operated so as to transfer beneficial ownership of the room itself to the purchaser of No.125 by implication, if the language of the conveyance had been inapt to convey the room to him expressly. However, I need not express any final view on the matter.

THE CLAIM FOR DECLARATORY RELIEF AND RECTIFICATION

90. The problem in this particular case is that the Register, and the title plan for Title No WM 278950, indicate that Brookwide is the registered proprietor of the store room.
91. Mr Stenhouse submitted that what was taken out of Title No. WM278950 and registered under the new Title No. WM562684 was the land which was the subject-matter of the Transfer to Mohammed Ramzan – including the store room. The Register registered title to all that land which was conveyed to Mohammed Ramzan by the Transfer, and not to what is shown on the face of the transfer plan or the title plan based upon it. Upon registration of Title No. WM563684, Mohammed Ramzan became the registered proprietor of the store room and held both legal and beneficial title. The problems only began with the registration, after the transfer from Agra to Brookwide of title to the freehold property reserved by the Transfer to Mohammed Ramzan (under Title No. WM 278950). The transfer from Agra to Brookwide could not have operated to vest any title to the store room in Brookwide, because title to that property was already vested in Mohammed Ramzan. Agra had no interest in the store room which it could pass on to Brookwide. The title plan to Title No. WM278950 wrongly depicted the store room as part of the land registered under that title, and Brookwide therefore became the registered proprietor of the store room by mistake, some years before it was forcibly subsumed back into No. 123 Alcester Road.
92. Mr Clarke submitted that, subject to the general boundaries rule, that which is depicted on the registered title plan within the coloured lines is the land to which the registered proprietor has the legal title, and neither registered title plan shows the store room as falling within Title No WM. 562684. Even if, on its true construction, the Transfer conveyed the beneficial ownership of the store room to Mohammed Ramzan, the inaccurate depiction of the physical layout of No.125 Alcester Road on the title plan to WM 562684 precluded the legal title from vesting in him upon registration. Any other interpretation would flout the intention behind the registration scheme, namely that the entries on the face of the Register should provide certainty. The store room remained registered as part of the land of which Agra remained the registered proprietor, and that land was transferred to Brookwide, which was also the registered proprietor at all material times.
93. Nothing turns on which of these submissions is correct, because on any view Brookwide should not have been registered as the proprietor of the store room at any time after the 1992 Transfer to Mohammed Ramzan. Mohammed Ramzan should have become the registered proprietor of the store room immediately on registration of that Transfer, and it was Agra's legal responsibility as vendor to ensure that he did. It was also Agra's and Brookwide's responsibility to ensure that when the land reserved by that Transfer was registered, it was made clear that the store room was no longer part of their registered title.
94. There is some attraction in Mr Stenhouse's submission that what was registered under Title No.WM562684 was the land conveyed by the Transfer to Mohammed Ramzan, which on its true construction included the store room. The editors of Ruoff & Roper appear to envisage that title to "flying freeholds" may not be ascertained simply by looking at the Register. However, the two relevant registered title plans ought to be interpreted consistently. They are, to all intents and purposes, identical in their depiction of No.125 Alcester Road. They do not indicate that the store room falls within the red line delineating the land falling within Title No.WM562684. Neither do the descriptions of that property in the entries on the Register. The general boundaries rule does not take the matter any further. Anyone looking at those plans, or at the Register, would think the store room was part of No.123 and that Brookwide was the registered proprietor.
95. Mr Stenhouse's analysis would mean that Ausman Ramzan became the registered proprietor of the store room under Title No.WM 562684, but that Brookwide also became its registered proprietor under Title No. WM278950. Alternatively, it would mean that, on a proper interpretation of the title plans, Brookwide is not the registered proprietor of the store room, despite its falling within the boundary line shown on the title plan for title WM278950 – but it was common ground that Brookwide is the registered proprietor of the store room. Moreover, inconsistently with Mr Stenhouse's submissions, the relief sought by Ausman Ramzan includes "rectification of the Land Register ... so as to show that the Room forms part of the title number WM 562684". That presupposes that it does not currently form part of that title number. I conclude, therefore, that Mr Clarke's analysis is to be preferred. Any order for rectification would have to relate to both the removal of the store room from Title No. WM 278950 and its clear inclusion in Title No WM 562684. However Mr Clarke's analysis, far from improving his clients' position, makes it worse.
96. The act of registration operates to vest the legal estate in the registered proprietor of the land even without any conveyance. It is possible for a registered proprietor to acquire his title as a result of fraud or mistake, but the legal estate will be vested in him unless and until the register is rectified against him. That does not mean that he can act in a way which damages the interests of the true beneficial owner, or deny the right of that person or his successor in title to claim rectification or damages. If he denies possession to the beneficial owner and appropriates the land for himself he will be liable in trespass.
97. Mohammed Ramzan, the beneficial owner of the store room, was in actual occupation of the store room both at the time of the execution of the Transfer to him, and when that Transfer was registered on 28^th April 1992. It was being used by him to store items connected with the restaurant business which he was running from the premises at No. 125 Alcester Road. He was also in actual occupation of the store room at the time of the registration of the Transfer of the freehold of, inter alia, No.123 Alcester Road to Brookwide in May 1994. If Mr Clarke's analysis is correct, as in my judgment it is, any legal title which remained vested in Agra and was subsequently vested in Brookwide upon the registration of the transfer from Agra to Brookwide was always subject to Mohammed Ramzan's overriding interest: Malory Enterprises Ltd v Cheshire Homes (UK) Ltd and others [2002] Ch 216. Brookwide's title was a "paper title", and it held the land in trust for his benefit. Mohammed Ramzan had a continuing right to call upon Agra, and subsequently on Brookwide, to cause the Register to be rectified to perfect the Transfer to him.
98. Mr Clarke submitted that if the store room was never registered under Title No. WM 562684, the fact that Mohammed Ramzan's trustee in bankruptcy subsequently transferred the land which was registered under that title number to Ausman Ramzan did not operate to transfer to Ausman Ramzan any cause of action for declaratory relief, or for rectification of the register. That cause of action stayed with the trustee in bankruptcy. With respect to Mr Clarke's ingenuity, that submission is not only unattractive, but contrary to authority. The current registered proprietor of the land registered under title number WM562684 is the only person who has any right to have the Register and/or the title plan corrected, so that it plainly includes all the land which should be registered under that title. That right passed to him with the registered title. Section 63(1) of the Law of Property Act 1925 provides that:

" Every conveyance is effectual to pass all the estate, right, title, interest, claim and demand which the conveying parties respectively have in, to, or on the property conveyed, or expressed or intended so to be, or which they respectively have power to convey in, to or on the same."

"Property" is defined by Section 205 as including any thing in action, and any interest in real or personal property.

99. In Malory Enterprises Ltd v Cheshire Homes (UK) Ltd (above) the defendants became the registered proprietors of some land after purchasing it in good faith from a company which fraudsters had dishonestly caused to be incorporated in England, with a virtually identical name to that of the true owner, an overseas corporation named Malory BVI. The fraudsters had succeeded in procuring a new land certificate in favour of the bogus company. The true owner was in actual occupation of the land, and succeeded in a claim for rectification of the Register. The Court of Appeal decided, inter alia, that Malory BVI had an overriding interest by virtue only of its right to seek rectification, and that the defendant's status as registered proprietor was subject to the rights of Malory BVI as beneficial owner. Malory BVI was also entitled to pursue a claim against the defendant for trespass.
100. In paragraph 68 of her judgment Arden LJ said this:

"In my judgment, the right to seek rectification to reflect a proprietary interest in land fulfils the criteria approved in Willams & Glyns v Boland, above, namely that it is a right in reference to land which is capable of transmission through different ownerships of land. There is no reason why the sale by Malory BVI of its beneficial interest in the rear land with any rights attaching thereto should not be effective to vest in the purchaser the right to apply to the court for rectification of the register. Berkeley Leisure Group Ltd v Williamson [1996] EGCS 18 (Beldam and Morritt LJJ) (30 January 1996), which is cited by Megarry & Wade, Law of Real Property, 6^th Ed (2000) para 6-128, supports this conclusion. In that case the Court of Appeal held that the equity to claim rectification of an agreement for the sale of registered land could pass on sale by the vendor of adjoining land to the purchaser of the adjoining land as a result of the operation of section 63 of the Law of Property Act 1925 (which applies to all conveyances of land). (In that case the land and the adjoining land were previously part of a single property within the same title and a mistake had been made with respect to the boundary between the subdivided plots). As respects transmissibility there can be no distinction between the equity for rectification of a document and a claim for rectification under s.82. Moreover in this case the right cannot be exercised in isolation from the interest in the land Malory BVI has, and thus in my judgment is a right in reference to land".

101. The situation which gave rise to the claim for rectification, at the behest of the purchaser of the adjoining land, in the case of Berkeley Leisure Group v Williamson referred to by Arden LJ, appears to have been very similar to the present case. In my judgment, the passage which I have quoted suffices to answer Mr Clarke's attempt to raise a technical objection to Ausman Ramzan's claim.
102. Under the Land Registration Act 1925, the term " rectification " was used to describe a number of situations in which the register might be altered. The Land Registration Act 2002 has changed that terminology. Schedule 4 defines "rectification" as an alteration of the register which involves the correction of a mistake and prejudicially affects the title of a registered proprietor. Paragraph 2(1) states that the court may make an order for alteration of the register for the purpose of "(a) correcting a mistake" and "(c) giving effect to any estate, right or interest excepted from the effect of registration." Subject to the limitations in paragraph 3, therefore, the court undoubtedly has the power to order the register to be altered so as to bring about the state of affairs for which the parties to the 1992 Transfer bargained, namely, that the store room should be part of the land registered under Title No. WM 562684.
103. Paragraph 3 applies to the power under paragraph 2 so far as relating to rectification. Sub-paragraph (2) states as follows:

" If alteration affects the title of the proprietor of a registered estate in land, no order may be made under paragraph 2 without the proprietor's consent in relation to land in his possession unless

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

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

Sub-paragraph 3 provides

" If in any proceedings the court has power to make an order under paragraph 2, it must do so, unless there are exceptional circumstances which justify its not doing so."

104. Brookwide has not given its consent to an order for rectification.
105. At all times up to the date of the physical appropriation of the store room in April 1999, Mohammed Ramzan (and subsequently his trustee in bankruptcy) had a right to call upon Agra, and subsequently on Brookwide, to cause the Register to be corrected so as to perfect the original Transfer (on Mr Clarke's analysis) or so as to correct the mistaken inclusion of the store room in the land registered under title No WM 278950 (on Mr Stenhouse's analysis). Had the mistake come to light during that period, Brookwide would not have been in a position to rely on sub-paragraph 3 of Schedule 4. There would have been no good reason for the Court to have refused to make an order for alteration of the register to reflect the bargain made between the parties to the 1992 Transfer and to ensure that the entries on the Register accurately reflected the position on the ground.
106. Brookwide is only in possession of the store room now because it misappropriated it, in circumstances where its agent acted with reckless disregard of all the physical signs that it belonged to someone else. In my judgment that is an important factor. The right of the beneficial owner to seek rectification did not cease by virtue of the misappropriation of the land. It devolved upon Ausman Ramzan when he acquired title to the land registered under WM 562684 from the trustee in bankruptcy. Although by that time Ausman Ramzan could not be in actual occupation of the store room, his interest was overriding, and continues to be so.
107. On either analysis put forward by Counsel, Brookwide acquired its legal title as a result of mistakes on the Register. On Mr Clarke's analysis, which I prefer, the first mistake occurred on registration of the land conveyed by the first Transfer. The mistake at that stage was largely brought about by a lack of proper care on the part of Agra, or its legal representatives, or both, which Brookwide, its wholly-owned subsidiary, then perpetuated by failing to take any steps to cure it. The original error was then compounded by the mistake in the subsequent registration by Agra and Brookwide of the title to the land reserved by the Transfer, which of course reflected the original inaccuracy in the drawing of the boundary line.
108. The initial obligation to ensure that Mohammed Ramzan became the registered proprietor of all the property then known as 125 Alcester Road, including the store room, was the obligation of the vendor, Agra. Despite the observations of the Court of Appeal in Scarfe v Adams [1981] 1 All ER 843 that small scale ordnance survey plans are "worse than useless" and that they should not be used in conjunction with the transfer of part of a larger plot of land, Agra, or its solicitors, used a plan which was plainly inadequate in terms of size and scale to give any accurate depiction of the physical layout of No.125. They appear to have sent it by fax to the Land Registry, making it even more difficult to decipher. The fact that Mohammed Ramzan's solicitors would have countersigned the plan, and that they failed to spot that the documentation did not adequately denote the flying freehold on the first floor, does not exculpate Agra from its own carelessness, which at least substantially contributed to the initial mistake.
109. There was also a mistake when the title to the property reserved by that Transfer was registered when it was transferred from Agra to Brookwide – though this mistake was probably the natural concomitant of the initial error. Both Agra and Brookwide were involved in the registration of the transfer to Brookwide which inaccurately portrayed the store room as part of No.123 Alcester Road. It would appear that neither company checked to ensure that, when that transfer was registered, the store room was properly shown as part of the land depicted on the relevant title plan as taken out from that title, lined in red, and registered under WM 562684. A clear verbal description or a more accurate transfer plan may have been more appropriate than seeking to draw the correct outline of the boundary at first floor level on a copy of the ordnance survey plan, but none of those steps was taken.
110. Brookwide is not in the position of an unconnected third party purchaser of the land who knew nothing of the terms of the earlier Transfer. There is no evidence that the transfer to it by Agra, its holding company, was anything other than gratuitous. On the evidence before me, the only director making decisions on behalf of Agra and Brookwide was Mr Salaman Noe, although he entrusted day to day matters of property management to Lee Baron. The knowledge of one of the Defendant companies is to be attributed to both of them. They shared the responsibility to take due care to ensure that the entry on the Register pertaining to the inter-company transfer did not conflict with the terms of the earlier Transfer of No.125 to Mohammed Ramzan.
111. Mr Clarke submitted that there was no evidence that Agra or Brookwide knew at any material time that the store room was an integral part of No.125 Alcester Road or that Mohammed Ramzan was occupying and using it – and if they did not, neither the language of the Transfer of that property nor the entry in the register relating to that Transfer would have enlightened them. No blame could therefore be attached to them for the mistakes in the Register. He pointed out that, during Mr Iqbal's period in possession of No.125, when Agra acquired the freehold, there were no rent reviews, and that Mr Coxon did not spot either the office or the store room when he carried out his inspection of the interior of No.125 in July 1991.
112. I find the idea that a professional property investment and development company such as Agra purchased the property portfolio which included 123 and 125 Alcester Road without first having a comprehensive survey carried out, far-fetched. In my judgment it is far more likely that at the time of the Transfer to Mohammed Ramzan, Agra carelessly overlooked the need to cater for the special configuration of the store room, than that they had no knowledge that it formed part of the internal layout of No.125.
113. However, even if I were to assume, in Brookwide's favour, that they and Agra had no knowledge of the flying freehold, and that neither they nor Agra were substantially to blame for the mistake or mistakes, which were the result of an innocent oversight by all parties, then on the face of it this would appear to be an example of a case where Schedule 4 paragraph 3(2)(b) might apply. The commentary in Ruoff & Roper at paragraph 46.016 supports this view. Among the examples given in that paragraph of "compelling circumstances" which would warrant the court in exercising its discretion to order rectification in the absence of fault are "where the registered proprietor has taken the benefit of a mistaken transfer of land, which both he and the transferor did not intend to be conveyed to him, and which then put him in a position to extract a ransom payment from the transferor. Another would be where the registered proprietor agreed to take a transfer of land on the assumption that it would be subject to the claimant's option, but where, owing to a mistake, the notice recording the option was not registered."
114. In the present case, the current registered proprietor has taken the benefit of a conveyance of a small piece of land which was never intended to be conveyed to him as part of the transfer, because the transferor, his predecessor in title, had already sold and conveyed it to the claimant's predecessor in title. The transfer to Brookwide was always subject to the overriding interest of the beneficial owner. At the time of the mistake, the registered proprietor had no use for the store room, whereas the true owner, who was in possession of the store room, did.
115. Thus the initial impression is that it would be unjust for the alteration not to be made. The alteration of the Register would mean that the person who is currently the beneficial owner of the store room would become its registered proprietor, as was always intended. Rectification under the 2002 Act is prospective, so any rights acquired by third parties – such as the bank to whom the land is charged, or any lessee – would not be prejudicially affected.
116. However, in a case like the present, paragraph 3(2)(b) of Schedule 4 and the exception in paragraph 3(3) must be inextricably linked, as it would be illogical for the Court to decide that it would be unjust not to make the alteration and then refuse to make it on the grounds that there are exceptional circumstances. I bear in mind, of course, that if the Court has the power to rectify in the face of Brookwide's objections, the language of paragraph 3(3) of Schedule 4 is one of compulsion, not discretion.
117. Mr Clarke submitted that rectification would not be justified in the present case, and that even if the Court has power to order rectification there are exceptional circumstances which militate against such an order being granted. The store room has for many years been part of a flat which has been leased to tenants, and on which Brookwide has incurred expense in the period since its appropriation. Ausman Ramzan was not the owner in possession at the time of the appropriation: when he acquired his title from the trustee, he was well aware that the store room was now part and parcel of No.23 and had been for about two years, so he had no realistic expectation that the room would be restored to its original state, and no use for it himself.
118. Mr Clarke further submitted that Mohammed Ramzan bore a share of the blame for the mistake. Mohammed Ramzan admitted in his evidence that he took no steps to check the Transfer plan, assuming that it would accurately reflect the state of affairs on the ground. Nor was there any evidence that Brookwide or Agra consciously appreciated that the store room belonged to Mohammed Ramzan when the appropriation occurred. Finally, Mr Clarke submitted that the Claimants had dragged their heels in seeking relief from the Court, and that the first action was not commenced until 2004 (and then, of course, by the wrong person). An order for rectification in a case such as this was analogous to a mandatory injunction, and anyone who fails to act swiftly when seeking injunctive relief is confined to a remedy in damages.
119. Although Mr Stenhouse maintained his claim for rectification, he realistically acknowledged that this was a case in which declaratory relief and damages were more likely to be appropriate remedies.
120. The fact that the store-room is now part of No.123, and that an order for rectification could result in the tenant paying rent to a different landlord in respect of part of the first floor flat is obviously a valid consideration. However, it would not normally lie in the mouth of a party who has ridden roughshod over the legitimate interests of the true beneficial owner to pray in aid his own steps (or those of his agents) to consolidate the situation by making rapid physical alterations to the structure of the misappropriated land and then leasing it out to a third party. The fact that Brookwide may have expended money on the conversion, and on the maintenance of No.123, does not in itself make the circumstances of this case exceptional – though the period of time which has elapsed since the conversion may.
121. It must be borne in mind that, whatever its financial outlay, Brookwide has derived an income from letting out the flats during the period of its unlawful occupation. Moreover, although the evidence fell short of establishing actual knowledge at the time of the appropriation that the store room was not Brookwide's property, there was recklessness in the face of clear evidence on site that it was an integral part of No.125 Alcester Road and was being occupied and used by the owner of the freehold of that property. Brookwide's behaviour in taking possession of the property in those circumstances, ring-fencing it from No.125, and then keeping it for itself cannot escape censure. Even though Brookwide may have believed that it was entitled to do what it did, and it may have received some reassurance from its legal advisers (albeit only after the event) it knew there was a risk that the property had been conveyed to Mohammed Ramzan with the rest of No.125. That was a risk it was prepared to take.
122. In my judgment, there is more force in the point made by the Defendants about the lengthy delay in seeking rectification, for which no explanation was given. Whilst I appreciate that Mohammed Ramzan may have been unable to afford to embark on litigation in the aftermath of his bankruptcy, Ausman Ramzan's lengthy period of inactivity after his acquisition of No.125 from the trustee in bankruptcy remains unexplained. After the initial flurry of solicitors' correspondence in 1999 threatening an application for an injunction, nothing happened. Brookwide could be forgiven for assuming that the matter was not going to be pursued. Delay is an important factor, although it is not the critical one: in my judgment, it is unlikely that Ausman Ramzan would have succeeded in an application for rectification even if he had made it immediately upon his acquisition of title to No.125 Alcester Road. Indeed, it is far from a foregone conclusion that even an application for rectification made by the trustee in bankruptcy in the immediate aftermath of the appropriation would have been successful.
123. The fact that rectification could not restore the situation which existed prior to the misappropriation is, in my judgment, the most significant factor. The store room has been an integral part of the flat on the first floor of No.123 Alcester Road for almost nine years now, and the title plans accurately reflect the current physical configuration of the two neighbouring properties. An order for rectification would result in the legal boundaries having to be re-drawn in a different place from the natural physical boundaries which currently exist between Nos 123 and 125 Alcester Road. That is patently undesirable. There is no realistic prospect of the store room ever being restored to No.125, and the legal title to it is of no use to Ausman Ramzan – save for the commercial leverage it would give him to extract a payment for conveying the store room to Brookwide.
124. The realistic consequences of an order for rectification are that Brookwide would have little choice but to enter into an agreement with Ausman Ramzan for a transfer of the legal title to the store room to them in return for payment. An order for damages for loss of the room and fire escape should provide compensation to Ausman Ramzan for Brookwide's wrongdoing, whereas rectification would effectively put him in a position to dictate terms to Brookwide. If anyone would be holding anyone else to ransom on that scenario, it would be Ausman Ramzan. On one view, given Brookwide's behaviour, that would be no more than it deserves. However, even if I do not make an order for rectification, unless and until Ausman Ramzan transfers his beneficial title in that land to Brookwide, or consents to their occupation of the store room, they will remain liable to him in damages, and (subject to any double recovery) will be liable to account to him for any profits they have made from leasing the store room. Thus, refusing to confer the legal title upon Ausman Ramzan is unlikely to have a significantly adverse impact on his commercial bargaining position or to cause him any unfairness.
125. Taking all these matters into consideration, I have concluded that if the requirements of Paragraph 3(2)(a) of Schedule 4 are met, there are exceptional circumstances justifying my refusal to make an order for rectification in this case. Alternatively, if, contrary to my primary view, those requirements are not met, it would not be unjust to refuse rectification. Justice can be done in this case by an award of damages.
126. Accordingly, I will grant declarations that the store room was included in the freehold land which was the subject-matter of the Transfer to Mohammed Ramzan dated 28 April 1992, and that it should have been included in Title No. WM 562684 on registration. I will also grant a declaration that Ausman Ramzan is the beneficial owner of all the property included in that Transfer, including the store room. However, for the reasons I have stated, I refuse the application for an order for rectification of the Register so as to make Ausman Ramzan the registered proprietor of the store room.

B. DAMAGES

127. The fact that Brookwide was the registered legal proprietor of the store room in April 1999 did not give it the freedom to do as it wished with that room. It was not entitled to take any steps which were contrary to the interests of the beneficial owner. It was not entitled to seize possession of the room from the beneficial owner, (particularly when he was in actual occupation), let alone to keep possession thereafter, denying his overriding interest and profiting financially from the misappropriation of his property.
128. Ausman Ramzan's claim for damages is based on the continuing (and continuous) infringement by Brookwide of his rights to enjoy the use of his property since he acquired the beneficial interest in the store room and the fire escape on 23^rd May 2001. The second action was commenced within six years of that date, and accordingly Ausman Ramzan is entitled to damages from 23^rd May 2001 onwards. It may not matter precisely how the cause of action is framed: Brookwide's behaviour was, and is, undoubtedly tortious. It was and is a breach of trust, a continuing trespass on land, and a denial of Ausman Ramzan's right in equity to have the freehold title conveyed to him. There was and is a derogation from the grant made under the 1992 Transfer by Agra.
129. I reject the alternative characterisation of Brookwide's wrongful possession of the land as a nuisance. Trespass is a direct entry on the land of another, and is actionable without proof of any special damage; nuisance is the infringement of the claimant's interest in property without any such direct entry. In the present case there was direct entry onto the property in question, and physical appropriation of it. At all material times after the initial appropriation Brookwide has remained in possession of the store room, denying Ausman Ramzan his lawful rights to and in respect of that property. That is a continuing trespass, not a nuisance.
130. In my judgment, the claim pleaded in paragraph 16 of the Particulars of Claim in the Brookwide action for allegedly making false or wrongful representations to the Land Registry must be dismissed. Mr Stenhouse put this, in argument, on the basis of a knowing and deliberate failure on the part of Brookwide to correct the wrongful registration of the store room as part of its title No.123 Alcester Road when there was a positive and continuing duty upon it to do so. However, there was no evidence that Brookwide appreciated that the entries on the Register were incorrect.
131. Brookwide was entitled to defend the claim against it on the basis that the April 1992 Transfer, on its true construction, did not convey the store room to Mohammed Ramzan. There was no reason for me to question the bona fides of that defence. The fact that the defence has failed does not retrospectively turn Brookwide's failure to take steps to correct the mistake in the Register into a misrepresentation by conduct or any other form of actionable wrong. Nor does the fact that Brookwide's agent, Mr Natanson, acted recklessly at the time when the room was appropriated. Appreciation that there was a real risk that the store room was someone else's property is different from a positive awareness that the entries on the land Register pertaining to Nos 123 and 125 Alcester Road must be inaccurate. In any event, that appreciation only came about some years after the transfers.
132. As this stage of the proceedings is confined to liability only, I will order that there be an inquiry into the damages suffered by Ausman Ramzan.

AGGRAVATED OR EXEMPLARY DAMAGES

133. Aggravated damages may be awarded for tortious acts where the manner of their commission was such as to injure the claimant's proper feelings of dignity and pride – see Clerk and Lindsell (19^th Edn, 2006) at 29-137. If this claim had been brought by Mohammed Ramzan, there may have been a stronger case for awarding aggravated damages. However, Ausman Ramzan does not bring his claim for damages as the assignee of his father's claim, but in his own right. Any claim by Mohammed Ramzan in respect of the events of 29^th April 1999 and the period immediately thereafter would now be timebarred. By the time that Ausman Ramzan acquired his interest in the property, two years later, the conversion into flats was complete. Although his rights as beneficial owner were still being denied by Brookwide, the manner in which they were being denied was not of a type which would attract an award of aggravated damages. The claim for aggravated damages is therefore dismissed.
134. Exemplary damages, by contrast, are awarded to teach the defendant that "tort does not pay" and to deter him and others from similar conduct in the future: see Broome v Cassell & Co Ltd [1972] AC 1027 at 1072- 1073. Such damages may be awarded only in certain limited categories of case. These include a case of trespass to land, where the defendant's conduct has been "calculated by him to make a profit for himself which may well exceed the compensation payable": Rookes v Barnard [1964] AC 1129 per Lord Devlin at 1226.
135. On the face of it, that test is ambiguous: on one view, it suggests that the Defendant must have consciously applied his mind to the question whether the gain from his wrongful act would be likely to exceed his exposure to damages. As unimpressive a witness as Mr Natanson was, the evidence fell short of establishing on the balance of probabilities that he made a conscious assessment that, if Brookwide turned out to be in the wrong, the level of compensation it would have to pay out to the owner of the Indian restaurant next door for taking away his store room was likely to be smaller than the long term financial benefit they would enjoy from renting out the first floor flat created by incorporating the additional space. That point was not put to him in cross-examination.
136. On the alternative interpretation of the test, it would be enough to establish (a) that the defendant's behaviour was motivated by the desire to secure a gain for himself at the expense of the claimant, and (b) that objectively that gain may well exceed the amount of any compensation. In my judgment, this is the correct interpretation of the test in Rookes v Barnard. When setting out the test, Lord Devlin cited with approval certain dicta in the case of Bell v Midland Railway Co. (1861) 10 CBNS 287, which concerned the wrongful obstruction by the railway company of access from the railway to the plaintiff's wharf. Erle CJ said: "when the company's conduct was looked at, careless whether they were doing right or wrong, they prevented all access to the plaintiff's wharf for the purpose of extinguishing his trade and advancing their own profit". Willes J said: "the defendants have committed a grievous wrong with a high hand … and persisted in it for the purpose of destroying the plaintiff's business and securing gain to themselves".
137. Mr Stenhouse submitted that the flat which now exists on the first floor of No.123 Alcester Road as a result of the layout made available by the extra space acquired by appropriating the store room is plainly more attractive than any smaller flat which would have been created without it (always assuming that the proposed conversion would have been viable without the store room). That is why Brookwide wanted the store room. By its actions, Brookwide succeeded in getting a benefit for itself at the expense of the true beneficial owner of the store room. Indeed, the larger space it was able to utilise for the conversion probably meant it was able to charge a higher rent.
138. I accept that Brookwide must have reached the view that it would be better off with the store room than it would be without it: the plans were drawn up on the basis that the supposed "void" would be included in the conversion. However, this was not a case in which Brookwide, or its agents, set out initially with the objective of taking and keeping land which they consciously appreciated was beneficially owned by someone else. Of course, they should have appreciated it, but it seems plain that they did not give the matter any active consideration when the conversion plans were drawn up. By then, some years had passed since No.125 was sold to Mohammed Ramzan. Lee Baron, the managing agents, assumed at the time that the space was a void, and that it belonged to Brookwide. I am prepared to accept that so too did Mr Natanson, at least until the builders knocked down the dividing wall.
139. However, when on 29^th April 1999 Mr Natanson was faced with all the physical signs on site that the store room was an integral part of No.125, and being used for storage of trade related items, he deliberately went ahead with its appropriation and sealing off from No.125 in reckless disregard of the interests of the owner of No.125. Once the dividing wall was down, he did not find the void which he had been expecting, but a room which was in use, with direct access into the rest of No.125, and an obviously operative fire escape, which he knew from his site visits only led down into the basement of No. 125. The visit of the police to the premises later that day, and Mohammed Ramzan's protests, of which he was bound to have been made aware, would only have served to confirm all the physical signs that the store room did not belong to Brookwide. Mr Natanson was, in my judgment, a shrewd individual. The fact that he was prepared to give evidence which was untruthful, all of which was designed to give the court the impression that he had no reason to believe he was doing something wrong, points strongly to the conclusion that he deliberately turned a blind eye to all the warning signals.
140. Salaman Noe would have known that Mohammed Ramzan had purchased the freehold of No.125 from Agra seven years earlier, and that at that time Agra did not reserve to itself any part of "the property known as No. 125 Alcester Road" – but Mr Natanson did not stop to ask Salaman Noe (or even Lee Baron) any of the obvious questions which one might have expected a man of his experience to raise with his principal in that situation. Instead, he took a calculated risk. Thus although Mr Natanson did not know for certain that the store room had nothing to do with No.123, he appreciated that this was very likely to be the case - and went ahead regardless. He knew that there was a real possibility that the store room was not Brookwide's to take, but despite this he caused the access in the party wall and the fire exit door to be bricked up and made good, and subsequently gave instructions to the workmen to sever the fire escape stairs, reinforcing the appropriation and in effect putting paid to any chances of restoring the status quo.
141. The alacrity with which Mr Natanson went about instructing the builders to take steps to ensure that the subsuming of the store room into No. 123 was a "fait accompli" suggests that he was doing everything possible to ensure that the situation created by the workmen would be difficult, if not impossible, to reverse – something which he must have appreciated and intended could only benefit his principals. These measures were not, as Mr Natanson suggested, just a response to security risks on site.
142. In my judgment, Mr Natanson did what he did in order to ensure that Brookwide was able to use the property for its own ends, that Mohammed Ramzan was deprived of access to it, and that if it transpired that Mohammed Ramzan had any rights over it, Brookwide would only be exposed to a claim for compensation instead of having to give the property back.
143. Mr Natanson intended Brookwide to have future possession and enjoyment of the store room; he intended that Mohammed Ramzan should cease to have possession of or access to the store room and that he should no longer be able to use the fire escape. He intended that Mohammed Ramzan (and his successors in title) should not be able to make any further use of the room to store items in connection with his restaurant business. The harm caused to the Claimant was the natural concomitant of the deprivation of the use and enjoyment of the property. The purpose of the appropriation was to enable Mr Natanson's team to convert the first floor of No.123, extended and thus enhanced by the inclusion of the additional space of the store room, into a flat, in order that their principals Brookwide could rent it out for financial gain, for the foreseeable future. Once the store room was taken, Brookwide was never going to give it back.
144. The situation is analagous to Bell v Brook's Wharf, in that Brookwide (through its agents) denied Mohammed Ramzan and his successors in title all access to and use of the store room, careless of whether they were doing right or wrong, in order that Brookwide could have the use and benefit of that additional space to create a larger flat on the first floor of No.123 and enjoy the benefits of renting it out. Brookwide is not entitled to distance itself from Mr Natanson's high-handed behaviour, since Salaman Noe and the managing agents Lee Baron had each given him a wide discretion as to how he should carry out the conversion. His state of mind is attributable to his principals. Moreover, they were prepared to condone what he had done and take the benefit of the results.
145. Appropriating property with reckless disregard of the rights of others, and then taking all available steps to ensure that it cannot be returned, all with a view to making a gain, is almost as bad as deliberately taking for oneself property which is known to belong to someone else.
146. In the light of all these matters, I accept Mr Stenhouse's submissions that this is a paradigm case for an award of exemplary damages and I accede to that application. I am not sure to what extent an award of exemplary damages will, in practice, increase the amount recoverable by Ausman Ramzan. Even if exemplary damages were not awarded, Brookwide would not be allowed to profit from its wrongdoing. Given that Brookwide was a trustee of the store room for the benefit of the true beneficial owner, and owed him fiduciary duties, then it is liable to disgorge any profits which it has made at his expense over the period since he became beneficial owner. However, these are all matters to be explored on another occasion.
147. As this trial was concerned with liability only, it would probably be premature for me to express any view on the appropriate rate of interest on damages. I note, however, that there is no claim for compound interest and that simple interest is claimed at the rate of 8% per annum.
148. I will hear argument from Counsel as to the appropriate terms of an order and on any consequential matters arising from this judgment, including costs.
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