REF/2004/0765

The Adjudicator to Her majesty’s Land Registry
LAND Registration act 2002

IN the matter of a reference from hm land registry

BETWEEN

Richard Alfred Thompson & Barbara Ann Thompson

APPLICANTS

and

Hatherton Marina Limited

RESPONDENTS

Property Address: Calf Heath Marina, Kings Road, Calf Heath, Wolverhampton
Title Number: SF472575

Before: Mr Cousins sitting as The Adjudicator to HM Land Registry

Sitting at: Birmingham Civil Justice Centre at Priory Court
On: 6th and 7th February 2007

Applicant Representation: David Taylor of Counsel, instructed by Messrs Enoch Evans
Respondent Representation: Stephen Eyre of counsel, instructed by Messrs Maitland Walker

DECISION

KEYWORDS: Adverse Possession – Registration with possessory freehold title -  Limitation of action – Alteration of the register – Meaning of alteration and rectification - Land Registration Act 2002 s 9(1)(c),(5), s 11(7), s 65, s 131, Sch 4 paras 1, 5, and 6 – Limitation Act 1980 s 15(1), (6), s 17, Sch.1, paras 1, 8 – Law of Property Act 1925 s 62 - Use by adjoining owners of a strip of land next to a canal for their business – Whether factual possession and intention to possess

Cases referred to:
J A Pye (Oxford) v Graham [2003] AC 419
Powell v McFarlane (1977) 38 P and CR 452
Sainsbury’s Supermarkets Limited v Olympia Homes Limited [2005] EWHC1235 (Ch)

THE APPLICATION
1.	The issue before the Court concerns a dispute over the ownership of a narrow strip of land (“the Disputed Land”) lying alongside an arm of the Staffordshire and Worcestershire Canal at its junction with the Hatherton Branch, near Wolverhampton.  On 14th August 2003 Mr and Mrs Thompson (“the Applicants”) were registered as the proprietors of the Disputed Land with possessory freehold title under Title Number SF472575.  This followed an application made by the Applicants to HM Land Registry for first registration of title based upon adverse possession. 

2.	Hatherton Marina Ltd (“the Respondents”) are the owners of the Hatherton Branch and adjoining land by virtue a conveyance dated 2nd November 1987.  Accordingly they are the paper title owners of the Disputed Land.  On 8th June 2004 they applied for rectification of title on the basis of their documentary title.  That application, if successful, would result in closure of the Applicants’ title.

3.	On 2nd July 2004 an objection to that application was received by HM Land Registry from the Applicants, the grounds of which were set out in a letter dated 1st July 2004 from the Applicants’ solicitors which appears at pages 302 304 of Bundle D2.  The matter was then referred to this Office and the case subsequently was heard at the Birmingham Civil Justice Centre on 6th and 7th February 2007.  This followed a Site View at the locus in quo on 5th February 2007.

THE ISSUE
4.	The question for determination relates to the Applicants’ entitlement, or otherwise, to be registered as proprietors of the Disputed Land.  This in turn is dependent upon the issue whether title has been acquired by adverse possession. 

5.	I should state that at an earlier stage the decision was made by this Office that the burden of proof lay upon the Applicants to justify their claim to be in adverse possession of the Disputed Land and therefore their entitlement to registration.  The Applicants have challenged that decision on the basis that the burden should lie upon the Respondents to justify their claim to rectify the Applicants’ title.  I shall deal with this point later.

6.	The case raises a number of quite complex factual and legal issues for determination.

THE BACKGROUND
7.	Upon the construction of the M6 motorway (which lies nearby) in the 1960s the Hatherton Branch of the Staffordshire and Worcestershire Canal became redundant.  Formerly it connected into the West Midlands and Birmingham canal system, but on the construction of the motorway embankment it was reduced to a culvert running under that embankment.

8.	By a conveyance dated 1st March 1991 (“the March 1991 Conveyance”) the Respondents conveyed to the Applicants certain land and premises lying to the south east and south of the Disputed Land but not contiguous with it.  They retained the paper title to other land including the Disputed Land and land referred to in the case as the “Passageway”.  The conveyance plan appears at page 137 of Bundle D1.  This conveyance was preceded by the exchange of contracts on 28th January 1991 (“the January 1991 Contract”).  The area of land as shown in the conveyance plan was registered under Title Number SF296721 and is known as “Calf Heath Marina”.  This is to differentiate it from Hatherton Marina of which it formerly formed part and which is retained by the Respondents. 

9.	The terms of the January 1991 Contract are relevant to the Applicants’ case as was the apparent conduct and intentions of the parties at the time.  In this context I should state that at one stage it appeared that part of the Applicants’ case seemed to be based upon the fact that the parties’ true intention in 1991 was that the land conveyed by the March 1991 Conveyance should have included the Disputed Land (together with some adjoining land) and that it was omitted from the Conveyance in error.  Thus, it formerly appeared to be part of the Applicants’ case that they were entitled to rectification of the relevant contract and subsequent deed.  That part of the case is no longer being pursued and the point for determination, therefore, is whether  the Applicants are entitled to continued registration as proprietors by reason of adverse possession or whether the Respondents are entitled to be registered as proprietors on a first registration.

10.	I should further state that as a matter of background, and creating some confusion and difficulty in the case, is that the Disputed Land is only part of the land which the Applicants sought to have registered on their application for first registration.  That application was supported by a statutory declaration (“the Statutory Declaration”) declared on 15th January 2003 (at pages 16 to 22 Bundle SC/W).  Exhibit “RAT1” to the Statutory Declaration is a copy of the Filed Plan of Title No SF296721 dated September 1991.  The rectangular area of land coloured red indicates the original area of land sought to be registered.  On the plan, however, at page 9 of Bundle SC/W (being the Title Plan of the Disputed Land) the land edged red shows the reduced area as eventually registered.  It should also be noted that the area of the Disputed Land at its southern end falls short of the land originally sought to be registered by the Applicant in the Statutory Declaration.  This means that there is no physical indication of its termination on the ground.  That position is indicated on the Title Plan by the rectangular area edged brown part of which is contiguous with the canal at the southern end of the Disputed Land.

11.	The strip of land lying parallel to the Disputed Land commencing at the Kings Road Bridge (otherwise known as Hatherton Junction Bridge) and terminating shortly before the ramp to the bridge on the Worcestershire and Staffordshire Canal is (or more accurately was) in fact an access route between the two bridges.  The Respondents hold the paper title of this access route as part of their retained land.  This route is the Passageway previously referred to.

12.	Further, although this is not relevant with regard to the present dispute, the Disputed Land is landlocked by reason of the fact that the land lying at the north east end at the King’s Road Bridge, its southern end and the Passageway on the south east side of the Disputed Land fall within the documentary title of the Respondents. 

13.	The somewhat complex factual issues in the case revolve around eight separate gates inserted into chain link fencing lying between the Disputed Land and the Passageway and at the northern end of the Disputed Land and beyond the limit of the Disputed Land at its southern end.  The chain link fence and the various gates are marked on a separate plan prepared by Counsel also on which have been marked the position of a number of photographs.  This plan has been prepared by counsel since the hearing at my request so as to make the factual issues easier to comprehend.  I shall refer to this as the “Site Plan”.

ADVERSE POSSESSION – THE CASE FOR EACH PARTY
14.	The two main issues in the case are as follows:-

(1)	Whether the Applicants have been in possession of the Disputed Land to the exclusion of all others and in particular to representatives of the Respondents;

(2)	Whether the Applicants have manifested the necessary intention to possess.

Access to the Disputed Land is by means of a number of gates some of which restrict access thereto.  The positions of these gates are marked on the Site Plan. 

15.	These are as follows:-

(1)	Gate number 1 
This is the gate at the north east end of the Passageway at the Kings Road canal bridge.  Control of this gate directly affects access to the Disputed Land in that persons other than those holding keys would be unable to gain access to the Disputed Land lying to the south if this gate is locked shut.  This gate is to be seen in the photograph at letter I on page 10 of Bundle PH. 

(2)	Gate number 2 
This is the gate at the north east end of the Disputed Land and controls access to it.  It appears in the photograph at letter E on page 6 of Bundle PH.  It can also be seen tangentially on photographs F, G, and J, at pages 7, 8 and 11.

(3)	Gate number 3
This gate lies at the north east end of the Disputed Land and can be seen in the following photographs – at letters B, C, D, F, G and H on pages 3, 4, 5, 7, 8, and 9. 

(4)	Gate numbers 4 and 5
Gate number 4 is the gate in the chain link fence lying on the north western canal side of the Passageway.  It enables access to be gained from the Applicants’ registered land in Title No SF296721 to the Disputed Land via gate number 5 situated on the opposite side of the Passageway.  Gate number 4 lies immediately to the south of the flat roofed building situate on the Disputed Land.  That building can be seen in the photographs at letters F, G, H, I, P, and R, at pages 8, 9, 10, 17 and 19.  It is common ground that there are no padlocks on either of these gates which can easily be opened and shut.  Gate number 5 can be seen in the photograph at letter K of page 12.

(5)	Gate number 6
This gate lies to the south of the Disputed Land and controls access from the towpath of the Staffordshire and Worcestershire Canal.  This gate appears at letters M and Q at pages 14 and 18 of Bundle PH.  As I have already mentioned above in paragraph 10, it transpired during the course of the hearing the fact that the Disputed Land falls well short of this gate, the land terminating approximately where the line of concrete can be seen to the left hand side of the photograph at letter M on page 14.

(6)	Gate numbers 7 and 8
Gate number 7 is a gate situated at the end of the Passageway and next to it at 90 degrees lies gate number 8.  This is a double gate giving access to a car park on the land comprising title number SF296721.

The essence of the Applicants’ case
16.	In essence the Applicants’ case is that since they completed the purchase of Calf Heath Marina in 1991 they have controlled access to the Disputed Land.  They have exercised such control by locking and unlocking certain gates by means of padlocks.  These padlocks were supplied and placed on the certain gates by them mainly during the period from about 6 to 12 weeks after the purchase.  Some of these gates were and remain seized, thereby preventing access in any event.  Thus the Applicants assert that access is barred to all unless the gates are opened by them or by others who have been permitted by them to do so.  The fact that the Applicants may have supplied keys to others to allow them access to the Disputed Land does not, according to them, limit or qualify their control over the land. 

17.	Further, the Applicants submit that they have exclusively used the Disputed Land consistently from 1991 as part of their pleasure boat business, the Hatherton Belle, moored adjacent to the Disputed Land.  Also a diesel tank, gas canisters and pumping unit are positioned on the Disputed Land and have regularly been used by them to fuel and pump out narrow boats on the canal.  They have also occupied two buildings on the Disputed Land, one being the flat roofed building, and the other being the building with the pitched roof.  It is also said that these acts of possession are a manifestation of the Applicants’ intention to possess the Disputed Land.

18.	I should state that during the course of re-examination by his counsel the First Applicant manifested a certain lack of certainty as to precisely the area of land to which the Applicants consider they are entitled by virtue of the January 1991 Agreement for Sale.  He at first repeated that he thought that he was buying all the land from “the canal to the brook” – this being a reference to Saredon Brook at the southern boundary of Title Number SF296721.  After being requested to do so he then indicated by red edging on a plan the area which he thought lay within their ownership.  This plan became an exhibit in the case (Exhibit “RAT1”).  The curiosity is that the area indicated by the First Applicant did not include the northern spur of the Passageway, nor indeed the continuation of the Disputed Land to the north and up to the Kings Road Bridge although these areas were included as part of the land originally claimed in the Statutory Declaration in support of their claim for adverse possession.  When asked about this discrepancy by his counsel he said that he was not too sure about the northern spur of the Passageway.  This means that although that part of the Passageway lying at and to the south of gate numbers 4 and 5 (see paragraph 15(4) above) does not form part of the Disputed Land, the Applicants apparently still claim ownership to it. 

The essence of the Respondents’ case
19.	For their part the Respondents dispute the contention that the Applicants have had exclusive possession of the Disputed Land.  They say that the directors of the company have at all material times retained keys to a number of the gates and that they have used those keys to access the Disputed Land and pass through it.  This access was maintained on a regular basis.  The Respondents also state that they had the only keys allowing entry to the Disputed Land, although more recently the Applicants have changed at least one padlock.

20.	The Respondents also point to an inconsistency in the Applicants’ case on an important and central feature of the dispute.  At paragraph 9 of the Applicants’ Statement of Case they say that the padlocks were already in place (at page 3, Bundle SCW) and that they were given keys to these existing padlocks.  In paragraph 3, however, the First Applicant states that they put the padlocks in place.

21.	The Respondents therefore submit that the conclusion should be reached that the gates giving access to the Disputed Land had been padlocked by the Respondents; that the Respondents retained keys to those padlocks; and that the Respondents repeatedly entered on and controlled the land in the period after 1991 - although access through some gates was subsequently non- consensually impeded by the Applicants.  In short, it is contended that the Respondents remained in possession of the Disputed Land.

22.	It is also maintained by the Respondents that no part of the Disputed Land nor indeed the Passageway formed part of the subject matter of the March 1991 Conveyance and that the Applicants are not entitled to rectification of the conveyance.  As I have stated above, that issue is no longer being pursued by the Applicants.

THE CASE FOR ADVERSE POSSESSION
The legal position
23.	Section 15 of the Limitation Act 1980 provides as follows:

“15(1)	No action shall be brought by any person to recover any land after the expiration of 12 years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.”

(6)	Part I of Schedule 1 to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned.”

24.	Schedule 1, paragraph 1, provides as follows:

“Where the person bringing an action to recover land, or some person through whom he claims, has been in possession in the land, and has while entitled to the land been dispossessed or discontinued his possession, the right of action, shall be treated as having accrued on the date of the dispossession order discontinuance.”

25.	Schedule 1, paragraph 8, provides:
“(1)	No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as ‘adverse possession’) and where under the proceeding provisions of this Schedule any such right of action is treated as accruing on a certain date and no person is in adverse possession on that date, the right of action shall not be treated as accruing unless and until adverse possession is taken of the land.
(2)	…..…..
(3)	………
(4)	For the purpose of determining whether a person occupying any land is in adverse possession of land it shall be not assumed by implication of law that his occupation is by permission of the person entitled to the land merely by virtue of the fact that his occupation is not inconsistent with the latter’s present or future enjoyment of the land.
This provision shall not be taken as prejudicing a finding to the effect that a person’s occupation of any land is by implied permission of the person entitled to the land in any case where such a finding is justified on the actual facts of the case.”

26.	Thus, the right of action to recover the land is barred whenever 12 years have elapsed from the time when any right of action accrued.  It does not have to be a period immediately before an action is brought. 

27.	The question, therefore, is simply “…whether the Defendant squatter has dispossessed the paper owner by going into ordinary possession of the land for the requisite period without the consent of the owner…Beyond that…the words possess and dispossess are to be given their ordinary meaning.” (per Lord Browne-Wilkinson in J A Pye (Oxford) v Graham [2003] AC 419 at paragraphs 36, 37). 

28.	Legal possession is comprised of two elements:

(1)	A sufficient degree of physical custody and control (“factual possession”); and

(2)	An intention to exercise such custody and control on one’s own behalf and for one’s own benefit (“intention to possess”).  “What is crucial is to understand that, without the requisite intention in law there can be no possession.  Such intention may be, and frequently is, deduced from the physical acts themselves.” (ibid paragraph 40).

29.	Actual possession has been described as follows:

“It signifies an appropriate degree of physical control.  It must be a single and [exclusive] possession…Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time.  The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed …Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no one else has done so.” (per Slade J in Powell v McFarlane (1977) 38 P and CR 452 at pp. 470-471, cited at paragraph 41 in J A Pye (Oxford) v Graham): - 

“The only intention which has to be demonstrated is an intention to occupy and use the land as one’s own …If the evidence shows that the person was using the land in the way one would expect him to use it if he were the true owner, that is enough”, (per Lord Hope in J A Pye (Oxford) Ltd v Graham, at paragraph 71). 

30.	Thus, in short, what is required is the intention to exclude the whole world from control of the land, not the use of the land.  If the squatter has and manifests the intention to exercise exclusive control of the disputed land, and in pursuance to that control permits the owner to make limited use of it, then he will have the intention to possess.  There must be a deliberate intention to exclude the owner.  He has to demonstrate an intention to occupy and use the land as one’s own.

THE FACTUAL POSITION
31.	As I have stated above, the factual position as to adverse possession in this case is somewhat complex.  Accordingly I requested that Counsel produced a schedule of the evidence (“the Schedule of Evidence”) and a schedule setting out the various claims and counterclaims in respect of each gate (“the Summary of Evidence”).  These documents were produced towards the end of March.  As with the way of these matters there are some points of disagreement between Counsel as to what in fact was said in evidence.  I am most grateful for these documents which have greatly assisted me in reaching my conclusions.  I do not propose to set out in extenso the evidence relating to each gate in such circumstances as the points of conflict in the evidence presented can be seen in the Summary of Evidence.  

		Credibility
32.	I find that Mr Thompson was a most unsatisfactory witness as to the manner in which he gave his evidence.  His evidence was, in my judgment, unreliable. There were a number of discrepancies not only between the statutory declaration and the statement of case and what was said in the witness box, but also between what was said in the witness box in the morning and what was said in the witness box in the afternoon of the hearing.  I have already made mention of the lack of certainty he manifested as to precisely the area of land to which the Applicants considered they were entitled under the January 1991 Agreement for Sale (see paragraph 18, above).  The contention, and one that was maintained, was that Mr and Mrs Thompson believed that they had acquired and owned the Disputed Land.  There were, however, discrepancies as to the area which he believed they owned.  The statutory declaration refers to an area including the Passageway.  The oral evidence on the second day of the trial before and after lunch was different.  In the morning of the hearing he stated that he believed he owned everything up to the King’s Road Bridge or the King’s Road Gate.  In the afternoon he stated that he did not believe that he owned that area but he thought that was owned by British Waterways.  As to Exhibit RAT1 Mr Thompson was asked to mark on the plan the land he believed he owned.  This appeared to be yet another version.

33.	As Counsel put it, there was also a simple unwillingness on the part of Mr Thompson to accept some clear facts as an attempt to avoid inconvenient evidence.  An example of this is the pre-contract letter dated 4th January 1991 from the Applicants’ solicitors, Messrs David Edwards & Co, (at p.47 of bundle D1).  Under cover of this letter a copy of the plan attached to a draft contract is returned.  This indicates with red edging the area of land to be sold.  It is abundantly clear that this does not include the Disputed Land or indeed the Passageway.  In this letter the following sentences appear:- 

“Our clients tell us that the areas of land which we have coloured blue are to be included in the land.  Again may we please have your comments.  We also understand that our clients will be entitled to a right of way to the property from Kings Road.  We are awaiting the result of our Local Search which we hope will confirm that the access way is in fact adopted.”

34.	Mr Thompson in evidence gave a disingenuous and an unsatisfactory response to this in that he asserted that this was something the solicitors had done off their own bat.  Two points arise out of that.  First the Applicants’ solicitors were questioning the status of the land edged blue as to whether it was included in the proposed sale.  It is an indication of the care being taken by the Applicants’ solicitors to check that the proposed conveyance was to include all that they believed they were getting.  It is noteworthy that the Disputed Land was not included as part of the information sought.  Secondly, the letter raises the query as to the entitlement to a right of way to King’s Road.  The question therefore arises - if the Applicants genuinely believed they were getting the land up to the King’s Road Bridge, why were their solicitors asking if they had a right of way to it? 

35.	Not only is that account varying and mutually inconsistent, it is contrary to all the contemporaneous documents.  It is manifest from the conveyance plan (at p.137 of Bundle D1) that the Disputed Land was not included.  Further the plan is signed by Mr and Mrs Thompson and by Mr Murrall and one other person on behalf of the Respondents.

36.	Finally on the general question of credit I refer to the evidence of Mr Rees who formerly worked for the Applicants.  His witness statement records a conversation between himself and Mrs Thompson which occurred on an unknown date in connection with painting out an advertising logo on the diesel tank situated on the Disputed Land.  In his evidence he says that he cannot remember whether it was with Mr or Mrs Thompson.  The substance of this was that it was said to him that the Applicants did not own the land and that Brian Bowen could take it back unless the sign was painted out.  In the event the sign was painted out..  This statement was disputed by Mr Thompson but Mrs Thompson chose not give evidence.  I accept the truth of this statement as being a clear recognition of the fact that the Disputed Land was not theirs. 

The Gates and the use made of the  Disputed Land by the Respondents
37.	The other area of the case which casts doubt on the credibility of the Applicants’ evidence relates to the specific evidence given as to the padlocks and keys to the gates in the fencing surrounding the Disputed Land and access to the land by the Respondents.  At least three different versions have been put forward by the Applicants.  The statutory declaration of Mr Thompson refers to the Thompsons placing padlocks on the Gates.  The Statement of Case refers to keys being given the Respondents in order to access existing padlocks.  Paragraphs 9 and 11 of the Statement of Case are of particular significance.  Paragraph 9 is the paragraph where the reference is made to keys being handed over.  Paragraph 11 says:

	“The access to the waterside and passageway from both the canal bridge and King’s Road is barred by gates and has been since the Applicants purchased the property, unless the gates were opened by the Applicants.”

38.	The version in Mr Thompson’s evidence during the hearing was that they placed new padlocks on the locks, but they gave keys to Mr Murrall and Mr Bowen.  As Counsel asserts, that was a new version wholly inconsistent with the other versions. 

39.	These versions are mutually inconsistent with each other.  They manifest, in my judgment, important inconsistencies in the Applicants’ case giving rise to serious difficulties on the question of credibility.  This in turn is of crucial importance as to the question of the control of access to the Disputed Land and the assertion of ownership having been gained by dint of adverse possession. 

40.	I now turn to the evidence relating to the individual gates and access through them.  The evidence given on behalf of the Applicants was given principally by Mr Thompson.  The other witnesses were Mr Tyler, Mrs Sutton, and Mr Grice. The Respondents’ evidence as to the use of the Disputed Land is principally based upon the testimony of Mr Bowen and Mrs Murrall.  Other witnesses for the Respondents were Mr Roberts, Mr Smith, Mr Rees and  Mr Howlett.

41.	Turning to the specific evidence relating to each gate, as I have stated above, I do not propose to go into the detail of the evidence given in respect of each gate.  This evidence is set out in the Schedule of Evidence and the Summary of Evidence.  It is, however, necessary to make certain findings of fact in respect of such evidence.

Generally
42.	In the Applicants’ Statement of Case it is stated that all the keys to the various padlocks were handed over to the Applicants on completion of their purchase in 1991.  This included the keys to the padlocks on the Gates thereby restricting access to the land.  The Applicants regularly locked the Gates each night.  In his evidence in chief, Mr Thompson stated that some 6 to 12 weeks from the purchase he made changes to all of the Gates.  He purchased 8 locks and 70 keys so that he could give others keys, including Mr Murrall and Mr Bowen.  He did this because they wanted access to their land on the other side of the canal via Gate 1.

43.	The Respondents dispute this and state that it was they who fitted padlocks to all the Gates after their purchase in 1987 and copies of these various keys were given by Mr Murrall to the Applicants upon their purchase of Calf Heath Marina in 1991.  The originals, however, were retained by the Respondents, in particular Mr Murrall and Mr Bowen.  As the Respondents state in their Statement of Case, it was they who insisted on the Gates being locked and who originally fitted those locks.  They retained the original keys and exercised access at all material times.  Mr Bowen in cross examination stated that the Respondents put locks on all 8 Gates, such locks all being operated by the same key.  

44.	It is, however, the evidence of Mrs Murrall which I consider to be crucial to my findings in this case.  I consider that the importance of Mrs Murrall’s evidence cannot be underestimated in this regard.  In her evidence in cross examination she stated as follows:

“I knew the locks were put on in 1987.  It was my husband who had the key.  I believe all the locks were operated by the same key.  There was a master and then individual keys for each lock.  My husband had a master and I believe Brian Bowen also did.  I don’t know how many master keys there were.  The master key I have opened Gate1.” 
	She then went on to say that the same position occurred in so far as all the other gates in that there was originally one master key which operated all padlocks to all of the gates.  Mrs Murrall produced in evidence a key which she said was a master key retained by her husband.  I accept this evidence.
45.	In such circumstances, I accept the evidence of the Respondents as to the fact that the padlocks were fitted by them after their purchase in 1987 and that copies of these padlocked keys were given to the Applicants upon their purchase in 1991, but that the master original was retained after that sale.

46.	In such circumstances, I find that throughout the subsequent period from 1991 control over the Disputed Land was maintained by the Respondents and not by the Applicants as a general proposition.

The evidence as to the specific Gates
47.	Turning to the individual Gates I shall refer to these in turn:-

(1)	Gate number 1 – I accept the evidence of the Respondents in that the padlock on Gate 1 is an original padlock and was not changed by Mr Thompson as he asserted in his evidence on purchase of Calf Heath Marina.  In other words, it was not a padlock which was changed by him on purchase in 1991 and he therefore did not hand over a key to that padlock to Mr Murrall and Mr Bowen as he asserted in his evidence.  Indeed, at the site view which took place on 5th February 2007 Mr Chew, a representative of the Respondents who met us on site, opened up the padlock to this Gate in my presence.  It has been agreed between Counsel that the key used to open this gate was provided to him by Mrs Murrall as part of the bunch of keys formerly in the possession of her late husband.  Mrs Murrall confirmed in evidence that on occasions she used the master key in order to open this Gate.  It was also stated by Mr Roberts that he opened Gate number 1 using a bunch of keys handed to him by Mrs Murrall. I therefore do not accept the evidence of Mr Thompson.

(2)	Gate number 2 – Mr Thompson asserts that in March 1991 this Gate was seized closed and rusted and that it did not have a padlock on it.  He stated in evidence that between 6 and 12 weeks after purchase he unseized this Gate and placed a padlock on it and put the padlock from Gate number 3 on Gate number 2 then placed a new padlock on Gate number 3.  There was an inconsistency as Mr Thompson in his evidence also said that he did this between 1 year or 18 months after he made the other changes.  He said that both Mr Murrall and Mr Bowen could access Gate number 2 as it was the same key which operated both Gate number 1 and Gate number 2.

The evidence given by Mrs Murrall was that the same as with Gate number 1 in that a key to the padlock on Gate number 2 was provided on sale.  She stated that she had been through this Gate with her husband and that she had opened Gate number 2 with that key.  Similar evidence was provided by Mr Roberts.  It is common ground that about 18 months ago a new padlock was put on this Gate, an original padlock having been cut off by the Respondents.

Obviously with the passage of time recollections of events can be faulty and it is sometimes difficult to make an appropriate finding of fact in such circumstances.  I do, however, find that on purchase in 1991 the Respondents provided keys to a padlock with had been fitted to Gate number 2 by them to the Applicants and that it is probable at a subsequent stage that the Gate itself became seized.  I also find that Mr Thompson subsequently changed this lock and provided keys to Mr Bowen and Mr Murrall.  I find, however, that he did not provide those keys in the purported exercise of his dominion over the Disputed Land, but in order to be helpful to the Respondents.  Once the Respondents more recently realised that the Applicants were claiming adverse possession of the Disputed Land this padlock was then removed and replaced by a padlock provided by the Respondents.  In such circumstances, I do not consider that the Applicants have made out their case for adverse possession on the basis of providing keys to this padlock to the Respondents, as they assert.

(3)	Gate number 3 – As I have stated above, it is asserted by Mr Thompson in his evidence that the padlock on this Gate was removed and placed on Gate number 2 and a new lock was then placed on Gate number 3.  He stated in evidence that by 1992 Gate number 3 had a new padlock on it to which he had the only key and no key was given to anyone else.  More recently the Respondents cut off this padlock and this was replaced by another padlock applied by them.

The evidence of Mr Bowen, for the Respondents, was that he stopped using this Gate in about 1993 or 1994 in case the pillar next to it fell into the canal.  At that stage he then started to use Gate number 5.  In about the mid 1990s a chain was put around Gate number 3 and it was sold and used thereafter.  Crucially Mrs Murrall stated that she had been through Gate number 3 since 1991 on social occasions.  The last time that she went through this Gate with her late husband was probably in the late 1990s.  On one occasion she used the master key to try to turn the padlock which moved but did not open.  This was the only lock that had not been changed in recent years.

Again, with the passage of time recollections can often be faulty.  It does seem, however, that Mr Thompson cannot be correct in his assertions in so far as this Gate is concerned.  There is a direct conflict of evidence between his contentions, the effect of which is that after purchase he fitted a new lock on to this Gate and supplied keys to the Respondents and placed a new padlock on to this Gate thereby preventing access by the Respondents through this Gate, and the evidence of the Respondents which is directly contrary.  Again, I accept the evidence of the Respondents in this regard.  I particularly accept the evidence of Mrs Murrall that she went through this Gate with her late husband on social occasions which probably was in the late 1990s using their own key and not one supplied by the Applicants.  The effect of this means that Mr Thompson did not change the lock on Gate number 3 and therefore did not supply the padlock from Gate number 3 to Gate number 2.

(4)	Gate number 4 – Again, there is disagreement between the various witnesses as to this Gate.  Mr Thompson asserts that on the purchase of Calf Heath Marina in March 1991 there was no padlock on this Gate.  In summary it was never locked and could be opened. Since 1992 it has been locked, but Mr Bowen and Mrs Murrall could go through it.  This is confirmed by Mr Tyler’s statement where it is stated that the [second] gate leading from the main part of the land to the property is kept locked.  This is also the position provided by Mrs Sutton in her witness statement.  Mr Tyler, however, during the course of his evidence stated that Gate number 4 was kept open.  

Both Mr Bowen and Mrs Murrall stated in evidence that the position was, in effect, the same as Gate number 1, namely that this Gate was locked by means of a padlock and after the sale in 1991 Mr and Mrs Thompson were provided with a key.  Mr Bowen stated in cross examination that he remembers Mr Thompson changing the lock on Gate number 4 and giving him a key to it, but Mrs Murrall has no recollection of that.  For his part Mr Rees in his statement says that he never saw this Gate locked and this was confirmed in his cross examination.

Again, it is difficult to reconcile these various versions.  It does seem, however, that upon sale to the Applicants this Gate did have a padlock and a key was provided to them by the Respondents at that stage.  It may well be that subsequent to this the Applicants did remove this padlock so that the Gate then could not be secured.  In these circumstances although I accept the evidence of the Respondents that upon the sale of Calf Heath Marina by them in March 1991 there was a padlock on this Gate to which a key was given by them to the Applicants, at a subsequent date some 6 to 12 weeks after sale this padlock was removed by the Applicants and replaced.  By doing so the Applicants presumably were attempting to demonstrate that the Disputed Land was therefore in some way incorporated into their property.  This, however, I do not accept and I find that any such removal did not and does not constitute a sufficient degree of factual possession, or intention to possess.  

(5) 	Gate number 5 – This Gate lies opposite to Gate number 4. Mr Thompson in evidence in chief stated that since 1992 Gate number 5 has never been locked and Mr Murrall and Mr Bowen could go through it. 

Again, there is a conflict of evidence between the Applicants and the Respondents in this regard Mr Bowen stated that both before and after the purchase by the Applicants of Calf Heath Marina Gate number 5 was locked and a key was retained by the Respondents after sale.  Mr Bowen stated that he went through Gate number 5 approximately twice per week after that date.  Mr Bowen also stated that the Applicants would leave this Gate open during the day and lock at it at night. Mr Rees stated that it was never locked.

Mrs Murrall stated in her examination in chief that she would go through Gate number 5 along the Passageway to attend clay pigeon shoots.  For his part, Mr Rees stated that there were no locks on this Gate. 

As I have stated above, the current position is that currently there is no padlock on this Gate.  I do find, however, that although this Gate may have no lock at the present time upon sale by the Respondents to the Applicants in March 1991 this Gate did have a padlock to which a key was provided by the Respondents.  This is again, in my judgment, an indication of the lack of control on the part of the Applicants in that the fact they may well have removed the padlock in more recent times does not indicate a sufficient degree of intention of possess or factual possession sufficient for adverse possession.

(6)	Gate number 6 – This is the Gate which lies to the south of the Disputed Land and controls access from the towpath of the Staffordshire and Worcestershire Canal.  This Gate does not have much bearing on the case in that it lies well short of the southern end of the Disputed Land.  I find that although on sale in March 1991 a key was provided by the Respondents to the Applicants to this Gate so that they could gain access to the former towpath, it is clear that from an early stage this Gate became seized.  I consider that it has little bearing on the issues in the case. 

(7)	Gate number 7 – In this case Mr Thompson, during the course of his examination in chief, agreed that when Calf Heath Marina was purchased Gate number 7 was in a working condition and was locked by means of a padlock.  He was given a key to it by Mr Murrall and this was on the bunch of keys which Mr Murrall gave him.  Mr Thompson, however, does state that between 6 to 12 weeks from the purchase he put a new lock on this Gate and this was operated by the same key as operated locks on Gates 1 and 2.  He says that Mr Murrall and Mr Bowen would have had access to Gates 1, 3 and 7 by using the same key. Mr Thompson stated in evidence that in about 1996/1997 he placed a new lock on this Gate but somebody stole it.  He then put a different sort of lock on this Gate but he could not remember if he gave Mr Murrall or Mr Bowen a key to this.  

In so far as the Respondents’ evidence is concerned, they say the same position applies to this Gate as applies to all the other Gates on sale of Calf Heath Marina. There was a direct conflict of evidence in so far as this Gate was concerned in that Mr Bowen in examination in chief stated that he would use this Gate to access land on the other side of the canal before March 1991.  After that date he would go through this Gate approximately once a fortnight until about 2000.  He stated that the lock remained the same.  Mrs Murrall stated that she would use either Gate number 6 and/or Gate number 7 when attending the clay pigeon shoots.  In such circumstances, I consider that Mr Bowen’s evidence prevails in that the lock remained the same until 2000 and that he would pass through this Gate about once a fortnight.

(8)	Gate number 8 – Again, I do not consider that the aspect in relation to this Gate takes the matter very much further.  Mr Thompson in his evidence stated that when he purchased Calf Heath Marina this Gate was seized and had no lock.  It remained seized until 1992 when he placed a lock on it.  He says he gave a key to Mr Murrall and Mr Bowen.  He says that thereafter for some two or three years the Gate would be opened at about 9am and locked at approximately 6pm to allow access to the shop.  After that it was closed and locked permanently using the same padlock so that Mr Murrall and Mr Bowen could continue to have access through it.  In about 1992 the lock apparently went missing and then a combination lock was placed on the Gate which was welded on.  Mr Thompson said that he did not give this combination to either Mr Murrall or Mr Bowen and they did not ask for it.

For his part Mr Bowen stated that similar considerations applied to this Gate as applied to all the Gates, namely that on sale keys were provided by the Respondents to the Applicants for the purpose of locking and unlocking this lock.  He stated that after March 1991 he used this Gate when he parked next to the restaurant and walked over the bridge.  At that stage the Gate was unlocked.  Mrs Murrall similarly stated that on sale keys were provided to the Applicants by the Respondents.

It is clear that probably from about 1999 a combination lock was placed on the Gate by Mr Thompson and this does not appear to have been the subject of any action by the Respondents.  Again, however, although this might be considered to be an act of dominion by the Applicants to prevent access to and from the Respondents’ unregistered land from and to the Disputed Land, I am not satisfied that this did not constitute such an action.  In any event, this is of recent origin.

FINDINGS OF FACT
48.	This is a case where the credibility of the respective parties is of crucial importance. If the position were that all entrances to the Disputed Land were controlled by the Applicants, then I would find it difficult to find that the Applicants had not acquired title by adverse possession.  Conversely if it is a case where they have not controlled the land then adverse possession cannot arise.  I have already made reference to the lack of credit worthiness on the part of Mr Thompson.

49.	Based upon the facts as presented to me I find that the Applicants have not exercised the requisite degree of legal or factual possession to satisfy their claim to Adverse Possession over the Disputed Land.  The essence of my findings of fact are that I do not accept the evidence presented by the Applicants to the effect that they have exercised dominion over the Disputed land since 1991 by controlling access to it, or that they supplied padlocks to certain gates shortly after the purchase, or that they have exclusively used the land since then.  

50.	In particular I accept the evidence of the Respondents as to the fact that the padlocks were fitted to all the gates by the Respondents after their purchase of Hatherton Marina in 1987.  I accept that Mr Murrall gave copies of all the padlock keys to the Applicants upon their purchase in 1991 of Calf Heath Marina, and that he retained the master original.  The master key still fits at least one padlock e.g. to Gate number 1.  Mr Brian Bowen also retained an original key.  I also accept that it was the Respondents who originally insisted on the Gates being locked and once having fitted the locks retained the original keys and exercised access at all material times until such time that they were prevented from doing so in respect of certain individual gates. 

51.	In my judgment there is therefore little scope for misunderstanding as to the Murrall and Bowen evidence.  Either Mrs Murrall and Mr Bowen are giving substantially truthful evidence, or they are falsifying their evidence about going through particular gates at particular times onto the Disputed Land.  I find their evidence to be truthful.

52.	Even on the Applicants’ case, Gate number 5 has never been locked.  In terms of impeding access to the Disputed Land, the best that Mr Thompson’s evidence provides is probably in respect of Gate number 3 - as to which there is a dispute on the evidence.  Even on Mr Thompson’s evidence, the asserted acquisition by adverse possession is somewhat strange in that one end of the Disputed Land remained unenclosed; a gate was left open on one side of the land; and at the highest he altered the lock on a gate on the other side of this strip of land - apparently to prevent access.  

53.	Mr Thompson also apparently accepted that until 1997 Gate number 7 was operated by the same key as Gate numbers 1 and 2. On his case until 1997 there could be access through Gate number 7.  Thus even on Mr Thompson’s evidence, a 12-year period of limitation to October 2003 is not made out.  

54.	Accordingly, I find that the Applicants have not made out their claim to have acquired the Disputed land by adverse possession.

THE PROVISIONS OF THE 2002 ACT
55.	It is then necessary to turn to the 2002 Act.  A number of points have been taken by both Counsel as to the effect of certain provisions of the 2002 Act, and in particular the provisions of paragraphs 5 and 6 of Schedule 4 and Section 11(7), of the Act.  Reference was also be made to Section 131 of the Act.

Possessory Title
56.	Before embarking upon an analysis of these provisions, it is necessary to have regard to the nature of possessory title.  As is stated in Ruoff and Roper (in Registered Conveyancing) at paragraph 6.001ff possessory title (together with qualified or good leasehold title) are only granted on first registration: 

“in the very small minority of cases where, for one reason or another, the Registrar has had a reservation as to whether a good holding title has been shown because there is something more than a mere technical defect in the title deduced which prevents the giving of a unqualified guarantee.” 

55.	The basis for making such a registration is the evidence available to the Registrar.  This normally consists of a statutory declaration by a person having full knowledge of the facts, but also can be supported by such documentation as may be available.  It must be stressed, however, that although a Land Registry surveyor may visit the locus in quo and take photographs and measurements, the evidence usually before the Registrar is in the form of the statutory declaration put forward by the applicant for first registration.  This may or may not exhibit documentary evidence.  There is nothing in the nature of a hearing of any dispute with any other possible interested party, and often, as occurred in the present case, the paper title owner is not notified prior to the registration being effected by notice, advertisement, or otherwise.

56.	To reach this conclusion the Registrar must be of the opinion that by virtue of that estate the applicant is in actual possession of the land or in receipt of its rents and profits (see section 9(1)(c)) and that there is no other class of title with which he may be registered (see section 9(5)).

57.	Registration with possessory title can be found in Section 11(7).  This provides as follows:- 

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

58.	Thus the effect of such registration is similar to the effect of registration with an absolute title (being the highest quality that can be obtained) in that the title is guaranteed.  In the case of possessory title, however, the guarantee is effective only in so far as dealings after the date of first registration are concerned.  Thus no guarantee is given as to the title prior to first registration. This must be investigated by any potential purchaser in the same way as if the land were not registered.  Further, no indemnity will be provided by the Land Registry in so far as any problems which may become manifested after registration but involving the title prior to first registration.  Thus any claim to implied rights arising under Section 62 of the Law of Property Act 1925 prior to registration would undoubtedly be of no effect.  In this context, therefore, unless and until the title is upgraded to absolute title possessory title is precarious and so is the position of any potential purchaser. 

59.	The procedure available to the paper title owner having been confronted with the fact of such a registration is then to challenge it based upon the asserted fact that the Registrar should not have acceded to the application to register possessory title.  This means that such registration is challengeable based upon the strength, or otherwise, of the evidence available.

60.	Thus, the submissions from the Respondents’ Counsel were directed to the point that Section 11(7) of the 2002 Act governs the position.  In other words the fact of the registration of the Applicants’ possessory title does not affect the enforcement of the Respondents’ rights if it can be proved on the evidence available that the same had not been defeated by adverse possession at the date of registration i.e. in the present case 14th August 2003.  If this can be demonstrated then there is, in effect, a reversion to the status quo ante i.e. back to the position as if there had not been any registration of the Applicants’ alleged interest.  The Respondents do not accept that the position is governed by the procedure contained in section 65 of, and Schedule 4 to, the 2002 Act (alteration of the register) or if it is, then the provisions of paragraphs 5 and 6 of Schedule 4 apply (see below).

Paragraphs 5 and 6 of Schedule 4 to the 2002 Act
61.	The Applicants do not accept these submissions.  They contend that the fact that in August 2003 there was registration of the Applicants’ title to the Disputed Land, albeit possessory, means that the fact of registration is not defeasible at the present stage except by reference to the provisions of paragraphs 5 and 6 of Schedule 4 to the 2002 Act, if applicable, and in particular the provisions as to rectification of the register. 

62.	It is necessary to look at these provisions in some detail. They are as follows:

Alteration otherwise than pursuant to a Court Order.
5.	The registrar may alter the register for the purpose of –
(a) 	correcting a mistake,
(b)	bringing the register up to date,
(c) 	giving effect to any estate, right or interest excepted from the effect of registration, or
(d)	removing a superfluous entry.

6.	(1)	This paragraph applies to the power under paragraph 5, so far as relating to rectification.
	
	(2)	No alteration affecting the title of the proprietor of a registered estate in land may be made under paragraph 5 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.

(3) 	If on an application for alteration under paragraph 5 the Registrar has power to make the alteration the application must be approved, unless there are exceptional circumstances which justify not making the alteration.

(4) 	In sub-paragraph (2), the reference to the title of the proprietor of a registered estate in land includes his title to any registered estate which subsists for the benefit of the estate in the land.”

63.	The reference to paragraph 5 in paragraph 6(1) is to the Registrar altering the register for those four specific purposes.  His power, however, can only be exercised in the case of rectification of the register by reference to the governing circumstances set out in sub-paragraphs (2) and (3) of paragraph 6. 

64.	The Applicants’ submissions on this are as follows: despite the fact that the burden of proof has been placed upon the Applicants to prove its case for adverse possession, the burden in fact is upon the Respondents to prove that they have an “estate, right or interest excepted from the effect of registration” for the purposes of paragraph 5(c) of Schedule 4.

65.	It is contended that if the Respondents have any such estate, right or interest excepted from the effect of registration then –

(1)	The Applicants are the proprietors of the estate to which the application relates;

(2)	They are in possession of the land to which that title relates (within the meaning of Section 131 of the 2002 Act);

(3)	Therefore no alteration should be made to the Register unless one of the grounds referred to in paragraph 6(2)(a) and (b) of Schedule 4 is made out. 

66.	In the absence of consent on the part of the registered proprietor it is submitted that the burden of proving that the grounds referred to in those sub-paragraphs are made out lies on the Respondents and that is a heavy burden (see Mann J in Sainsbury’s Supermarkets Limited v Olympia Homes Limited [2005] EWHC1235 (Ch) at paragraph 90).  Ruoff and Roper is also prayed in aid in support of this contention (at paragraphs 46.015 and 46.016) where it is stated that in the absence of fault on the part of the registered proprietor which led to the mistake and capable of correction by the Registrar under paragraph 5(a) of Schedule 4 - 

“…it should require some highly exceptional circumstance to warrant the Court in exercising its discretion to rectify the Register against the registered proprietor who did not give his consent.  The wording of the relevant test as a double negative indicates the general policy of the Act that it is unjust to rectify the Register without the consent of the registered proprietor if he has not, at the very least, substantially contributed to the mistake.”

An example is then cited of such a compelling circumstance where, for instance, 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. 

67.	It must be said at this stage, however, that although the words “exceptional circumstances” appear to be a reflection of the wording in paragraph 6(3) of Schedule 4 the quoted words used in paragraph 46.016 appear to be an incorrect analysis of this provision.  In fact it is the reverse in that the registrar is, in effect, under a duty to rectify the register unless there are exceptional circumstances not to do so. 

68.	Be that as it may, the Applicants submit that, as they have been in adverse possession of the Disputed Land since the date of the Conveyance of Calf Heath Marina to them on 1st March 1991 which led to the registration of their interest with possessory title, then the Respondents do not have an estate, right or interest excepted from the effect of registration for the purposes of paragraph 5(c).  It is argued that it follows that the Respondents’ ability to bring possession proceedings against the Applicants expired on 2nd March 2003 (see Section 15 and Schedule 1 to the Limitation Act 1980).  Accordingly, any estate, right or interest excepted from the effect of registration expired on the expiry of the twelve year limitation period and was therefore extinguished by operation of Section 17 of the Limitation Act 1980.  It is therefore said that there is no case for rectifying the Register.

69.	I do not agree with these submissions and I consider that they are based upon an incorrect analysis of the principles of the 2002 Act.  I appreciate that the relevant provisions are not particularly easy to construe especially when the words “alteration” and “rectification” appear on several occasions throughout Schedule 4.  It is therefore necessary to look at the scheme of the Act. 

70.	The starting point for this analysis is section 65 of the 2002 Act “alteration of the register”.  This then refers to Schedule 4.  Paragraph 1 of Schedule 4 provides as follows:

“In this Schedule, references to rectification, in relation to alteration of the register, are to alteration which – 

(a)	involves the correction of a mistake, and

(b)	prejudicially affects the title of a registered proprietor.”

Paragraphs 2 to 4 then deal with the position where alteration is made pursuant to a court order.  These paragraphs have some differences in wording to that contained in paragraphs 5 to 7 (“alteration otherwise than pursuant to a court order”), but I do not consider that this is material to the present case. 

71.	Under the 2002 Act the concept of rectification is one particular form of alteration of the register and is limited to those cases where there is a mistake in the register which needs correction and which prejudicially affects the title of the registered proprietor (paragraph 1).  Thus not every mistake will amount to rectification.  Where a mistake has been made the registrar may alter the register for the purpose of correcting the mistake under paragraph 5(a), or for giving effect to any estate, right, or interest excepted from the effect of registration under paragraph 5(c), but where such an alteration involves rectification (i.e. where the provisions of paragraph 1 apply), then it can only be done in the circumstances set out in paragraph 6(2) where there is no consent on the part of the registered proprietor.  If on an application for alteration the registrar has such power then he has a duty to do so “unless there are exceptional circumstances which justify not making the alteration”.  This duty only arises in those cases where there is rectification of the register.

72.	The essential question therefore is this – does the alteration of the register by the deletion of the Applicants as persons registered with possessory title and the closure of the register mean that this is an alteration which prejudicially affects the title of a registered proprietor amounting to rectification under paragraph 1, or is it an alteration pursuant to paragraph 5(c) of Schedule 4?

73.	I find these provisions somewhat difficult to construe, and in particular the relationship between paragraphs 5 and 6 of Schedule 4. One interpretation which could be made is that if the alteration is effected under (b), (c) or (d) of paragraph 5, the provisions of paragraph 6 cannot apply in any event.  The reason for this is because paragraph 6(1) refers to rectification.  This necessarily includes alteration on the grounds of a mistake (see paragraph 1(a)).  If the reference to "correction of a mistake" in paragraph 1(a) is limited to an alteration under paragraph 5(a) i.e. "correcting a mistake", then it would not be necessary to consider paragraph 6 at all in the circumstances where an alteration under sub-paragraphs (b), (c) and (d) is being made.  Paragraph 1(a) does not, however, include the words "involves the correction of a mistake pursuant to paragraphs 2(1)(a) and 5(a)”.  The inclusion of such words (if this is the correct interpretation) would have made matters easier for the purposes of construction.

74.	Putting that on one side, I consider that the position is as follows - possessory title is subject to the rights of the documentary title owner under section 11(7).  Therefore the possessory title holder is not prejudiced when the true owner applies to alter the possessory title and to close it.  It is an application under paragraph 5(c) i.e. the true owner's title is paramount.  All the provisions of the Act are to be read together and the section is to be read with Schedule 4 - alteration correcting a mistake or giving effect to an estate, right or interest excepted from the effect of registration - either way it does not amount to rectification of the register.  Paragraph 6 relates specifically to rectification as defined in paragraph 1 and does not therefore apply to the position here where the true title holder applies for closure of the possessory title.  The indemnity does not arise as the circumstances in which the register is rectified and those when the registered proprietor will be entitled to an indemnity coincide. 

75.	The fact that the Applicants are the registered proprietors of the Disputed Land is as a result of them providing evidence in the Statutory Declaration which was sufficient to convince the Registrar at that stage that there should be registration of title in their favour, but that title was possessory only.  This means that Section 11(7) governs the position in that such registration “does not affect the enforcement of any estate, right or interest adverse to or in derogation of, the [Applicants’] title subsisting at the time of registration or then capable of arising.”  The fact that the claim for adverse possession which convinced the Registrar on an uncontested basis does not prevent the paper title owner from seeking to claim its title at the date of registration.  In other words, in my judgment, the fact of registration with possessory title in March 2003 does not prevent the Respondents from seeking to overturn the registration on the basis that there was no sufficient evidence that possession was truly adverse both as to possession and intention to possess for the relevant period. 

76.	I am fortified in this interpretation when regard is had to Ruoff and Roper at paragraph 46.011.  Where the court gives effect to the preserved, estate, right or interest under paragraph 2(1)(c), and by analogy paragraph 5(c), of Schedule 4, then the alteration will not amount to rectification so that there will be no possibility of the registered proprietor claiming an indemnity.  The alteration would not correct a mistake in the register since the registered estate would always have been subject to the preserved estate, right or interest. 

“For the same reason, the alteration would not prejudicially affect the proprietor’s title to the estate. As a result, the limitation, which prevents the registrar from rectifying the register against a proprietor in possession of the land does not apply to this ground of alteration.”

77.	Thus it would, in my judgment, be unjustifiable for the Applicants case to rest upon the fact of registration in August 2003 as defeating the ability of the Respondents to argue that, based upon the evidence and my conclusions set out above, there had been no true adverse possession during the relevant period.  The answer to the question – is the paper title owner barred or not is therefore in the negative.  Then to force the Respondents to have to fall back on the provisions of paragraph 6 of Schedule 4, and in particular to sub-paragraph (2)(b), is based upon an incorrect analysis of the legal position. 

78.	Further, to pray in aid the provisions of Section 131(1) of the 2002 Act, in my judgment is irrelevant to the issue in the circumstances where paragraph 6 of Schedule 4 has no application.  Whether the Disputed Land was in the possession of the Applicants as the proprietors of the registered estate in land depends upon whether the Disputed Land is physically in their possession.  The sub-section is directed to the question of the “proprietor in possession” and physical possession.  It would appear to be intended to negative the doctrine of “constructive” possession. Its purpose would appear to be to define possession in the context of an alteration of the register amounting to rectification pursuant to paragraphs 3(2) and 6(2) of Schedule 4. 

79.	I therefore agree with the submissions made by the Respondents’ Counsel that–

(4)	It was appropriate for this Office to designate Mr and Mrs Thompson as the Applicants as the burden of proof falls upon them to prove that title had been acquired by adverse possession; 

(5)	The fact that the Applicants have been registered with possessory title on a first registration does not affect the enforcement of the Respondents’ rights if the same had not been defeated by adverse possession at the date of registration (see Section 11(7));

(6)	This is a case involving an alteration of the register, not amounting to rectification.

(7)	There are no exceptional circumstances which justify not making the alteration.

80.	If, however, I am incorrect in this interpretation and that (contrary to my findings) this is a case amounting to rectification of the register, in my discretion I consider that the alteration of the Register should be made whereby the registration should be closed as there are compelling reasons to do so. There are two alternative bases for this under either paragragh 6(2)(a) or 6(2)(b) of Schedule 4. 

81.	First, there must be sufficient grounds for saying that the Applicants as claimed adverse possessors have by lack of proper care caused or substantially contributed to the mistake by making a Statutory Declaration which has proved not to be correct.  If they had not acquired a title by adverse possession  (as I have found to be the case) then their attempt to register title and obtaining a possessory title must amount to a lack of proper care they were not in possession and had not got a title by adverse possession.  This is something which proper care could have established.

82.	Alternatively, it would be unjust for the alteration not to be made by reason of fact that the Respondents would be deprived of their rights as the paper title owners having found against the Applicants.  Having regard to my findings the factual circumstances of the case must be sufficient to fall within the phraseology that “it would for any other reason be unjust for the alteration not to be made”.  

83.	Accordingly I shall make the appropriate order to give effect to the original application made by the Respondents dated 8th June 2004.

Dated this     day of May  2007

By Order of The Adjudicator to HM Land Registry