REF/2005/0679

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

IN the matter of a reference from hm land registry

BETWEEN

Pauline Alison Newell & Simon Murray Mills

APPLICANTS

and

Robert Guy Anderson

RESPONDENT

Property Address: 44 and 45 East Street, South Moulton, Devon EX36 3DQ
Title Number: DN425046 & DN293860

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

Sitting at: Pocock Street
On: Friday 8 February 2008

Applicant Representation:	Mr Michael Templeman, of Counsel, instructed by Messrs Parkinson Wright, Solicitors
Respondent Representation:	Mr James Barker, of Counsel, instructed by Messrs Keogh Caisley Solicitors

DECISION ON COSTS

KEYWORDS – Burden of proof – application to alter the register pursuant to Land Registration Act 2002, Schedule 4, paragraph 5(a) on grounds of a mistake by HM Land Registry – withdrawal of application – whether costs should follow the event or whether Respondent should contribute to the Applicants’ costs on the basis that he had failed to plead the terms of a disclosed document namely an Assent referring to the benefit of a right of way -

THE APPLICATIONS FOR COSTS
1.	On 4th February 2008, some three days before the hearing was due to commence in this matter, and two days before the scheduled site view, the Applicants’ solicitors gave notice to the Respondent’s solicitors that the application to alter the register was being withdrawn by the applicants.  As a consequence the hearing was vacated save for oral submissions made as to costs.

2.	Normally, in this jurisdiction costs follow the event and as result the Respondent would have expected a costs order to be made in his favour save for any interlocutory costs orders which have already been made.  The Applicants, however, have submitted that the circumstances of their withdrawal were somewhat unusual and at least some of the responsibility for such withdrawal can be placed at the door of the Respondent.  The Applicants therefore argue that for some of the period since the reference was made by HM Land Registry to this jurisdiction until the withdrawal there should be no orders to costs and also for a part of the period the Applicants are entitled to seek payment of their costs by the Respondent. The respondent rejects this submission and contends that the Applicants should pay all his costs.

3.	In order to understand these respective arguments, it is necessary to have regard to the merits of the respective cases of each party, and to unravel the factual basis of the case.  I have been assisted in the process by Counsel both of whom are experienced Chancery practitioners. In this investigation I shall make reference to a bundle of documentation produced for the hearing (“the Bundle”).

THE BACKGROUND
4.	The Applicants are the registered proprietors of title number DN293860 being property known as and situate at 45 East Street (“No 45”), South Molton, Devon.  No 45 was originally registered at HM Land Registry in January 1991.

5.	The Respondent is the registered proprietor of the adjoining property (No 44 East Street (“No 44”)) which is registered at HM Land Registry under title number DN425046.  No 45 was first registered on 2nd December 2000. 

6.	Both titles show the existence of a right of way in favour of No 44 over a passageway (“the Passageway”) which forms part of No 45 and therefore owned by the Applicants.  The Passageway separates the southern extremities of No 44 and No 45 from each other.

7.	Entry number 2 in the Property Register in the title of No 44 states as follows:-

“The land has the benefit of a right of way on foot only over the passageway hatched brown on the filed plan to gain access to the rear garden.”

The relevant entry in the title of No 45 is entry number 1 of the Charges Register is in the following terms:-

	“The land hatched blue on the filed plan is subject to rights of way.”

The Passageway is the same area as the land hatched blue on the filed plan of No 45.

8.	In a letter dated 23rd November 2004 the Applicants’ solicitors applied to alter title number DN425046 (No 44) by the removal of entry number 2 from the Property Register, and to alter DN293860 (No 45) by removal of entry number 1 from the Charges Register.  This application was made on the basis that it was claimed that no such right or rights had come into existence. 

9.	The Applicants’ case, before it was withdrawn, was that the two Entries ought never to have been made by HM Land Registry by reason of the fact that the right of way to which they refer did not exist.  In effect it is submitted that the Land Registry had made a mistake in registering the right of way over the Passageway. Consequently such entries should be deleted.  The Respondent’s case, however, was that the Entries accurately reflect the existence of the right of way which affords access from the street for the purpose of access to and egress from the rear of No 44 via a gate situated on its eastern boundary.

10.	Apparently in the year 2004 the Applicants prevented the Respondent from using the Passageway by installing a new lock on the door from the street, to which the Respondent was not given a key.  This, not unnaturally, resulted in considerable acrimony between the parties which culminated in the dispute. This was ultimately referred to this Office pursuant to section 73(7) of the Land Registration Act 2002 (“the 2002 Act”), the reference being made on 28th April 2005.  

11.	The basis of the Applicants’ assertions in their Statement of Case dated 30th June 2005 was that at the times when the relevant Entries were made by HM Land Registry (i.e. 1991 and 2000) there was no satisfactory evidence of the existence of the right of way over the Passageway and that accordingly “the Registers of both titles require to be rectified by the removal of all entries relating to the alleged rights of way” (see paragraph 5).  It was asserted that on the balance of probabilities that none of the following applied:-

(a)	the grant of an express right of way;

(b)	no implication of the grant of a right of way under the rule in Wheeldon v Burrows or section 62 of the Law of Property Act 1925 (“the 1925 Act”);

(c)	an inference on the basis of the doctrine of lost modern grant;

(d)	no evidence of any prescriptive right of way;

(e)	no right arising by estoppel.

12.	For his part, the Respondent asserted in his Statement of Case that there was sufficient evidence to demonstrate that there had been a grant of a right of way on the following alternate bases:-

(a)	by prescription under the doctrine of lost modern grant;

(b)	by prescription under the Prescription Act 1832;

(c)	implied by virtue of the provisions of section 62 of the1925 Act.  

In April 2007 permission was granted to the Respondent to amend his Statement of Case to add a further defence on the basis that even if no right of way had existed in 1991 when the adverse entry was made on the title to No 45, the circumstances surrounding that entry were such that the Applicants were estopped from denying the existence of the right. The Applicants for their part asserted that all the claims made by the Respondent were weak.  

13.	The parties’ pleaded cases remained on the above basis until the date set for the trial of the action. Shortly before the hearing, however, the Applicants were advised by their Counsel to withdraw the Application.  The basis for this is that (as submitted by Mr Templeman) that the Respondent’s position was “transformed” (as indeed was that of the Applicants) by the production of a copy of an assent (“the Assent”) dated 10th June 1955.  This was originally faxed to Messrs Parkinson Wright (“PW”) (the solicitors for the Applicants) by Messrs Keogh Caisley (“KC”) on 22nd June 2007, but, as the Applicants’ Counsel states in paragraph 6 of his Submissions on Costs, the Applicants failed to appreciate that the Assent “transformed” the Respondent’s case until they instructed Counsel for the hearing of this case.  I was informed by Counsel for the Applicants that he was only instructed by PW on 1st February 2008.  It is further asserted by the Applicants that the responsibility for this could be laid at the door of the Respondent in that the significance of the Assent was “obscured” by the conduct of KC who had stated that did not alter their client’s case and there was therefore no need to amend his Statement of Case.

The Assent and its significance 
14.	The Assent conclusively provides evidence of a right of way in favour of No 44 over the Passageway.  A copy of the Office Copy of the Assent appears in the bundle of documentation (“the Bundle”) at pages 130/132.  It is made by Beatrice Sarah Haskings, in her capacity as the personal representative of her late husband  (a predecessor in title to the Applicants), in which she assented to the vesting in herself of all the property comprised in No 45:-

“together with the use in common with the owners and occupiers for the time being of the messuage and premises situate on the western side of the hereditaments of the passage leading from [East Street] to the yard and garden belonging to the said hereditaments hereinbefore described…”

	Thus this Assent clearly demonstrated that No 44 had a right of way in common with No 45 over the Passageway.

15.	It is for that reason that when eventually the significance of this document was appreciated, the Applicants were forced to withdraw their application. It is therefore necessary to have regard to the provenance of the Assent, and the circumstances surrounding the first registration of No 45 in January 1991 and the significance of its production in June 2007.   

The provenance of the Assent
16.	On 18th January 1991 Beatrice Sarah Haskings transferred No 45 to Mr Nicholas Andrew Hutter and Susan Anne Tomlin. This was followed by an application for first registration to HM Land Registry made by Furse Sanders dated 28th January 1991 (at pages 148, 150 and 151 of the Bundle).  Furse sanders acted for the Applicant’s predecessors in title. This application was produced (together with other documentation to which I shall refer) under cover of a letter dated 25th October 2006 from Mr Berry an Assistant Land Registrar at the Tunbridge Wells District Land Registry (at pages 324/325 of the Bundle). It is instructive to note that this letter was sent in response to a letter dated 20th October 2006 from KC (at p 323).  PW for its part had apparently made no such inquiry from the Land Registry seeking an explanation as to the reasons why such an entry had been made. As Mr Berry states in his letter it was he who authorised the “subjective right of way entry” to be entered on the Register resultant upon the information provided to him.  This followed an investigation made by the Land Registry which included a survey. Such investigations are quite common where some doubt has been raised as to a proposed registration of an interest. 

17.	At page 152 of the Bundle is form A13 which contains the list of the title documents sent to HM Land Registry by Furse Sanders in support of the application for first registration.  It will be noted that document number 9 is the Assent which was one of a number of documents returned to that firm. Those retained were marked with an asterix. 

18.	Included in this copy application at page 149 of the Bundle is a Land Registry internal memorandum.  The internal memorandum under the heading “Mapping Particulars – Special Instructions” contains the following cryptic wording:-

“[Please] consider limitation of part shaded in pencil on the F.P.DIR plan (for ident only) includes such area whereas deeds prior to that infer that a [right of way] only is claimed – together with adjoining owners.  Property information form para 6.2 states the vendor regards the passageway as part of the property.”

	At the end of the form there is reference to the Assent being a “root deed”. This is corrected in another person’s handwriting which states that a conveyance dated 10th November 1923 is a “good root”.

19.	The documents also sent under cover of Mr Berry’s letter include an internal Land Registry document headed “MB1 – Requisitions by Legal Staff or Remarks by Plans Staff” with a copy deed plan, the area to be surveyed plan and the surveyor’s use plan attached, together with Form TQ1, and other documents and correspondence.  Part of Form TQ1 (at page 157) refers to the land hatched blue on the filed plan as being subject to rights of way.  Form MB1 contains a number of important entries the first of these contains the following wording:-

“Please consider the returned LR survey result herewith and also note on page 4 of IB regarding passageway.  Despite survey result it is still unclear as to what is included in this title.  Please therefore consider further action” (18th June 1991).

A further entry makes the following reference:-

	“With the evidence now available to us should we exclude the strip of land from the title [No 45] by way of limitation or should we complete mapping to include?” (6th January 1992).

	The last entry of importance is the following:-

	“Both the conveyance of 10/11/1923 and the assent 10/6/55 appear to refer to “the use of … passageway leading from the Street to yard and garden belonging to the said hereditaments.”  Therefore as the 1971 Conv. for the adjoining property number 44 refers to this area for ER1 It can hardly be exclusive to LSTBR surely the best that can be done is to enter ROW over this land?  Please advise as to action to be taken?” (9th January 1992).

20.	I also refer to a letter dated 31st July 1991 from the Land Registry to Furse Sanders (at pages 187/188 – a typed transcript is at pag194) sent under cover of Mr Berry’s letter. This letter was sent in connection with Furse Sanders’ request (on behalf of the Applicants’ predecessors in title) to have the Passageway shown as being within the freehold ownership of No 45.  The first paragraph of the letter is in the following terms:-

“The plan to the Transfer dated 18th January 1991 [this being the transfer that Furse Sanders were seeking to have registered] appears to include the whole of the strip of land coloured blue on the Ordnance Survey map extract herewith [i.e. the Passageway]: however the Assent dated 10 June 1955 together with the earlier deeds refers only to the use of a passageway leading from Street to the yard and gardens please see highlighted extract from said deed.”

21.	In a letter dated 7th January 1992 (wrongly dated 1991) from the Land Registry to Furse Sanders (at page 192 - typed transcript at page194) it is stated that:-

“I also enclose a copy of the 1955 Assent in which it is clear that the passageway is not treated as land but as an easement.  Are the owners of No 44 aware of this and do they use the passage and what rights do they retain over it?”

22.	Following the Land Registry investigation, as stated in his letter, Mr Berry then authorised the right of way entry on the register of No 45 i.e. “the land [i.e. the stat dec area] is subject to rights of way” (see the entry on Form D33 made by Mr Berry on 23rd March 1992, at page 169).  The reference to the statutory declaration is a reference to an engrossed statutory declaration from Mr and Mrs Bouquet at pages 85-88 (the Respondent’s predecessors in title) sent under cover of a letter dated 11th February 1992 from Furse Sanders to the Land Registry (page195). It is accepted in this declaration that the Passageway is within the ownership of No 45 and that No 44 has a right of way over the Passageway. I should also state that there is further statutory declaration of Mr Peter Bouquet dated 8th November 1999 where he declared that in his capacity as the then owner of No 44 he had always used the Passageway “… as of right without licence or consent of any person and without payment of any kind.  The use has been on foot to gain access to the rear garden.”

23.	Thus, by early 1992 the Land Registry was convinced that there was an historical right of way over the Passageway in favour of No 44, albeit that such right was shared with No 45.

24.	Unfortunately, the original Assent has never been located and may well have been destroyed.  It is necessary, however, to investigate the production of the copy of the Office Copy of the Assent and how it first came to light.  The correspondence contained in the Bundle reveals the following features: on 16th January 2007 KC wrote to Furse Sanders (at page 327A) asking whether they might be able to assist with the production of copies of the Assent and the 1923 conveyance.  Enclosed under cover of that letter was a letter from the Plymouth District Land Registry to Furse Sanders dated 7th January 1991 which makes reference to the Assent.  In their response dated 19th January 2007 (at page 327B), that firm stated that the files in connection with the purchase and first registration of No 45 had been destroyed and that the firm was unable to assist with the production of any copies.

25.	The matter, however, (as Counsel put it) “sprang back to life” in June 2007 when a copy of the Office Copy of the Assent was located in the files of Furse Sanders together with the statutory declarations of Mr Bouquet and that of Mr William James Gratton (see the letter dated 21st June 2007 (at page 376).  KC sent a copy of the Office Copy Assent to PW under cover of a letter dated 22nd June 2007).  In this letter KC state in terms that the copy documents produced “substantially affect this matter… In the circumstances we assume that your clients will be immediately withdrawing the current Adjudication proceedings”.  It was also stated that it was expected that the Respondent’s costs would be paid on an indemnity basis as the Applicants clearly had knowledge of the contents of the file from the Land Registry a long time before.  Costs were estimated at being not less than £15,000 at this stage. Thus at this stage PW was clearly warned of the importance of the Assent by KC. 

26.	The point has been made by the Applicants that this meant that the copy Assent was in the control of the Respondent.  The fact, however, that it was produced by the Respondent rather than the Applicants in June 2007 was fortuitous as PW at that stage was also seeking to obtain the historic conveyancing files of Furse Sanders as to earlier transactions relating to No 45 (see e.g. the letter dated 5th June 2007 at page 368). Furse Sanders stated on 7th June 2007 to PW that that file had been destroyed and they confirmed that they held nothing in relation to that purchase of No 45 (at page 371). Thus from 22nd June 2007 PW also had in their possession a copy of the Assent albeit produced by KC and not by Furse Sanders and it must be said that PW appear to have been unaware of its significance until shortly before the hearing. 

27.	Several references have been made in paragraphs 8 and 9 of the written submissions of Mr Templeman as to the dialogue between PW and KC in June and July 2007 and events thereafter. In particular the points have been made that PW were not able to give disclosure before KC on behalf of their clients and that the Respondent should have amended his Statement of Case to plead the changed circumstances. I consider that these submissions miss the point. The important feature in my judgment is that the burden of proof rested upon the Applicants. They had ample material at an earlier stage that the Land Registry had been satisfied that a right of way existed based upon documentary information provided to the Registry at that stage. The Land Registry had conducted an investigation which considered the material then available and reached the conclusion that it did. By June 2007 the Applicants should have been aware that their case was fatally flawed. It was unfortunate that the Office Copy of the Assent was and is no longer available but the copy eventually provided was of sufficient secondary evidence of the significance of the right of way and the Entries made on the registers of title.  The Applicants at that stage chose to continue their claim, and they have proved to have been incorrect in their analysis. I therefore do not consider that the Respondent has obscured the position. 

28.	I also do not accept that the Respondent should have necessarily amended his Statement of Case to plead the terms of the Assent itself. The Applicants were well aware of its existence and its terms from June 2007. Further the existence of the evidence available to the Land Registry which included sight of the original Assent which had been sufficient to satisfy the Land Registry as to the existence of a right of way in favour of No 44 was known to the Applicants from October 2006 and the basis of Land Registry’s interpretation should have been investigated by PW at an earlier stage. As I have said the burden remained with the Applicants to prove their case, in the knowledge that the Respondent was challenging their assertions.

29.	The further point is made that the Assent should have been produced by KC at an earlier stage on disclosure in October 2005. This assertion is somewhat remarkable in the light of the fact that no one was aware of the continued existence of any copy until June 2007 and the original has never been located. It is all the more remarkable in that PW had apparently made no such inquiry from the Land Registry seeking an explanation as to the reasons why the entry had been made in the first place.

30.	Finally, it should be said that had PW sought the advice of Counsel at the stage in June 2007 then considerable further expenditure by way of legal costs by both sides probably could have been avoided.

31.	Thus I find that that costs should follow the event.  I therefore order that the Applicants do pay all of the costs of and occasioned by this reference on a standard basis from the date of the reference, namely 28th April 2005.

Dated this 19th day of February 2008

By Order of The Adjudicator to HM Land Registry