REF/2006/0601

ADJUDICATOR TO HER MAJESTY’S LAND REGISTRY
LAND REGISTRATION ACT 2002

IN THE MATTER OF A REFERENCE FROM HM LAND REGISTRY

BETWEEN
1.	MARTIN CUUMMINGS
2.	VICKY CUMMINGS

APPLICANTS

and

CHURCH COMMISSIONERS FOR ENGLAND

RESPONDENTS

Property Address: Land at 77 High Street, Byers Green, Spennymoor
Title Number: DU285791

Made by Mr. Michael Mark sitting as Deputy Adjudicator to the Land Registry
 
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COSTS ORDER
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The Applicant is ordered to pay to the Respondents £2500 in respect of their costs of this reference by 14 February 2008.

Reasons

1.	The Applicants have withdrawn their application so that the Respondents have successfully resisted the application.  Normally, this would mean that the Respondents would be entitled to their reasonable and proportionate costs.

2.	However, there appear to me to a number of reasons why the normal rule ought not to apply in this case.

3.	In particular, I am not satisfied that the costs claimed by the Respondents totalling £24,593.63 are either reasonable or proportionate.  This dispute concerned a small strip of land in Spennymoor, County Durham which had been occupied by the Applicants and their predecessors in title for many years, on which a garage had been built, and to which they claimed a possessory title.  The Respondents, the Church Commissioners, alleged that the strip was part of a much larger area of land owned by them and let to Spennymoor Town Council as successors in title to the local authority to which the land had been let by the Church Commissioners in 1930.  The strip was adjacent to the access from the highway to allotments which appear to have been sublet by the Town Council.  The Church Commissioners took the view that it was important to assert its title in case the allotments were subsequently developed and the strip was needed for access.

4.	The Town Council asserted no claim to the strip, and indeed advised the Applicants that the strip was outside their lease.  The Church Commissioners conceded in the course of the reference that any title the Town Council may have had under its lease would have been statute barred.  They pointed out, however, that so long as the tenancy continued time could not run against the Church Commissioners as freeholders.  This was plainly correct, so that the real issues in the reference were whether either their title, which derived from a conveyance to them in 1890, or the 1930 tenancy extended to the disputed strip of land, and, if so, whether there had ever been a break in the tenancy so that time could start running against the freeholder.  This involved an examination of title deeds, including the tenancy agreement of 1930, and of local plans and maps.  

5.	The Applicants had applied for registration of the strip in November 2005.  They had purchased their home some years before, understanding that the strip was included in their title.  It was only when they tried to market it that it had emerged that the strip was not included.  Notice of the application was served on the Respondents at the beginning of January 2006, and objection was made by letter dated 25 January 2006.  That letter, from the Respondents’ legal office, contended that the strip was part of land let to the Town Council by a lease dated 26 March 1930, and that the Respondents had been in receipt of rent ever since.  The lease was stated to be of allotments to the rear of the Applicants’ property and of the accessway to the allotments.  No copy of the lease was produced, and when the Applicants enquired of the Town Council, they were told in writing by letter dated 30 January 2006 that the Town Council had no interest in the strip and that it had not been included in the lease to them.

6.	The Respondents persisted with their objection and provided the Land Registry with some further documentation, but this did not include a copy of the lease or of the 1890 conveyance which was the Respondents’ root of title.

7.	This remained the case when the Chief Land Registrar referred the matter to the Adjudicator on 2 May 2006 and continued to be the case until disclosure was given of the 1890 conveyance with the Respondents’ Statement of Case which was served under cover of a letter dated 11 August 2006.  The 1930 lease was only disclosed under cover of a letter dated 23 October 2006.

8.	 It is apparent that the Applicants could not properly consider the Respondents’ case without sight of these documents, and in particular of the lease.  Under rule 42(1)-(3) of the Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003, in making an order as to costs I am required to have regard to all the circumstances including the conduct of the parties during (but not prior to) the proceedings, whether it was reasonable for a party to raise, pursue or contest a particular allegation or issue, and the manner in which a party has pursued or defended his case or a particular allegation or issue.

9.	I am unclear why I am unable to take into account the conduct of the parties before the proceedings.  This is contrary to the rules that would apply in proceedings in the courts where pre-action protocols must be observed and where a failure to negotiate can have an adverse effect on the costs of a successful party.  I also note that unlike the CPR, rule 42 does not lay down any general rule that the unsuccessful party will ordinarily be ordered to pay the successful party’s costs, although in practice this is generally the rule that is applied.
 
10.	The hearing was set down to be heard on 5 and 6 September 2007 in Durham following a site view, and the solicitors for the Church Commissioners indicated that they did not plan to call any witnesses.  The Applicants, acting in person, had indicated that they proposed to call one witness, a local councillor, although I am unclear what useful evidence he could give, and no witness statement appears to have been provided by him.

11.	To deal with this relatively minor case, the Church Commissioners instructed Central London solicitors, Farrer & Co., who have submitted the claim to which I have referred, claiming at the rate of £365 per hour for a partner’s time, and rates varying from £170-£180 for a legal executive to £195-£260 for assistant solicitors.  The total work said to have been done by the solicitors is in excess of 53 hours, the case settling shortly before the site view and hearing were due to take place.  Counsel’s fees claimed total £3700 + VAT.

The conduct of the Applicants and the Respondents

12.	Bearing in mind the failure of the Respondents to produce until August and October 2006 the two basic documents on which their case depended, and the written statement of the Town Council to which I have referred, it is plain that the Applicants acted reasonably in pursuing this application.   If the Respondents had available the two documents to which I have referred, then at the very least, they should have been produced at the start of these proceedings – I am compelled to disregard the fact that they should have been produced to the Land Registry.  If the Respondents did not have those documents to hand when these proceedings commenced or immediately afterwards, it does not appear reasonable to me that the Applicants should bear any additional costs incurred by the Respondents in tracing them and producing them, or any additional costs involved in the preparation of their case as a result of either document not being immediately available.

13.	Even after disclosure, it was by no means clear that the paper title to the disputed strip was vested in the Respondents and let to the Town Council, and the Applicants were reasonable in all the circumstances, including the position of the Town Council, in pursuing their claim. 

The reasonableness of instructing Central London solicitors

14.	In Sullivan v. The Co-operative Insurance Society, [1999] 2 Costs LR 158, May LJ stated at p.165 that:

15.	“Thus in determining whether it is objectively reasonable to instruct lawyers who may be said to be out of the way or a luxury the court takes account of and balances a wide range of relevant circumstances.  The fact that a union or other organisation no doubt for understandable reasons habitually uses a particular firm of solicitors is a relevant factor but of limited relevance on taxation in an individual case.  Litigants are entitled to engage any lawyer they choose, and from a subjective point of view the choice may be entirely reasonable, but the question is to be judged objectively.  The fact that a case has no obvious connection with London is a relevant factor, the more so if the case does not require expertise only to be found there.”

16.	The focus, as Potter J, as he then was, pointed out in a passage approved by Kennedy LJ in the Court of Appeal in Wraith v. Sheffield Forgemasters Ltd. [1997] EWCA Civ 2285, is primarily on the reasonable interests of the party employing the solicitors, so that “one looks to see whether, having regard to the extent and importance of the litigation to a reasonably minded [party], a reasonable decision has been made.”

17.	This was a case which basically turned on a well-recognised principle of law to be applied to facts which were essentially to be determined from an examination of two old title deeds and plans and an assessment on the basis of documentary evidence as to whether a tenancy had terminated between 1930 and about 1994.  The law was uncomplicated and the facts did not give rise to any special problems.  I can see no reason why this case could not have been competently handled by one of the firms in Newcastle who were experienced in property litigation.  Indeed two of those firms are recommended in Chambers UK Guide for property litigation.  I do not consider that it is objectively reasonable for an entity with extensive property interests throughout the country to rely on one firm of London solicitors for all their property matters.  Indeed, it might well be thought to be in the interests of the charity for whom they hold the property to engage highly competent and recommended local solicitors at significantly lower rates than the rates charged by the London solicitors, and whose charges for attending a hearing would also be reduced by the fact that they would not need to travel any significant distance to the hearing.

The reasonableness of the time taken

18.	In addition, the 53 hours of work claimed for appear to me to be wholly disproportionate.  They appear to be accounted for in part because, despite the fact that the whole matter had already been aired in the Land Registry and had been referred to the Adjudicator on 4 May 2006, it took the Respondents, or their solicitors, who describe themselves in a letter dated 26 September 2007 as familiar with the Church Commissioners’ lands, titles and administrative workings, until October of that year to provide a copy of the alleged tenancy document.  Indeed, in their Statement of Case, served a few days late under cover of a letter dated 11 August 2006, it is only pleaded that there was an annual tenancy granted by the Church Commissioners that was presently vested in Spennymoor Town Council.  Paragraph 8 of the Statement of Case even states that the Church Commissioners had been unable to establish if the tenancy was a written tenancy despite the fact that the original letter of objection to the Land Registry identified the date of the lease.   

19.	The sheer extravagance of the 53 hours spent on this case is illustrated by the claim that it took a legal executive charging £170 or £180 per hour 7.5 hours to prepare the costs schedule, attend to the preparation of the hearing bundles, peruse the draft skeleton arguments etc.  This is on top of 6 hours correlating documents for the hearing bundle, 3.5 hours dictating the hearing bundle index, and a further 6 or 7 hours performing other tasks in relation to it.  I also note that almost 11 hours was said to have been spent in attendances, communications and work done in relation to counsel and his clerk and that counsel, in addition to drafting the Statement of Case, advising on evidence and drafting the 6 page document comprising the skeleton argument, list of issues and chronology, also charged £1200 for reviewing plans and advising on telephone and in conference in October and December 2006.

20.	It appears to me that part of that time is likely to have been taken up in searching for the 1930 lease and the 1890 conveyance, and that time must also have been spent trying to draft and revise the Statement of Case in the absence of at least the lease.  It is only this that could account for the time taken by counsel in drafting the document, advising on evidence and on the telephone and reviewing the plans between 7 August and 19 October 2006 at a cost of £1700 + VAT.  The Statement of Case is by itself very straightforward and ought not to have taken more than a total of 3 hours had the documentation presented to counsel been in order.

21.	The problems encountered also appear to me to explain the excessive time claimed (nearly 11 hours) liaising with counsel and his clerk.

22.	Much of the time claimed for communications with the Adjudicator appear to have resulted from a letter from the Adjudicator’s office dated 3 November 2006 pointing out apparent deficiencies in the Respondents’ case, to which a lengthy response was received enclosing plans and other documents which had not previously been sent to the Adjudicator although they ought to have been sent by 12 October 2006 pursuant to the Adjudicator’s order dated 31 August 2006.  Had the order been complied with in the first place, that expense could have been avoided.

23.	Returning to counsel’s charges, I note that they include £900 in relation to a conference on 7 February 2007.  Following that conference, Farrer & Co. wrote by letter of 22 February 2007 to the Applicants accepting that the land had been enclosed and occupied for a period in excess of 12 years, so that, in effect, the Applicants were entitled to succeed as against the Town Council.  The Applicants therefore succeeded on that part of their case.

24.	I have received a detailed critique of the solicitors’ costs schedule from solicitors now instructed for the Applicants, upon which Farrer & Co. has commented.  I am satisfied that it was wholly disproportionate and unreasonable to instruct Central London solicitors at Central London rates to deal with this case, and I am very far from being satisfied that the amount of work that was done by them, bearing in mind the involvement of counsel as well, was reasonable, or that the rates charged by them for that work in relation to a relatively straightforward property dispute in County Durham were reasonable.  

25.	I am also concerned that the threat of being saddled with these disproportionate and unreasonable costs bill, increased by an additional £10,000 to cover the site view and hearing, in the draft costs bill included in the trial bundle, may have driven the Applicants from the judgment seat and deprived them of justice.  While it is right that litigants in person, and indeed other litigants, should be aware of their potential liability in costs, it is wrong that they should feel unable to proceed because of a threat to claim vastly excessive costs from them.

26.	My discretion as to costs under Rule 42 of the Adjudicator to Her Majesty’s Land Registry (Practice and Procedure) Rules 2003 permits me either to award a fixed sum by way of costs, or to assess them.  I find that the use of Central London solicitors was disproportionate and unreasonable and that, whatever the reason as between the Church Commissioners and their solicitors, the time taken by those solicitors was disproportionate and unreasonable.   

27.	In my judgment, a case of this type, with no witness statements, and dependent almost entirely on the documentation read in the light of a site view would have been very competently dealt with by local solicitors to the stage reached at a total cost of around £5000 to £7000, to which would have to be added, at most, counsel’s fees for the Statement of Case and advice of £1000 (based on £500 for a Statement of Case raising the one point on which the Respondents ultimately based their case and £500 for an opinion)  and for the skeleton argument etc. of £1000.  I do not consider that local solicitors would have found it necessary to take further advice from counsel at the additional cost of £1200.  They may well have pleaded the quite straightforward Statement of Case without reference to counsel.  Further, in view of my findings in this case, I would in any event disallow the costs of preparing the costs schedule.

28.	I do not consider it reasonable to require the Applicants to pay the additional costs resulting from the delay first in producing the 1890 conveyance and the 1930 lease, and secondly in producing to the Adjudicator the documents first sent in November 2006.  Nor do I consider that they ought to be required to pay the costs incurred in relation to the issue whether the disputed strip had been occupied by the Applicants and their predecessors for over 12 years.

29.	Further, given the way in which this case proceeded initially, and given the reasonableness of the Applicants’ position in view of the written advice from the Town Council to which I have referred and the absence of documentation from the Respondents, I do not consider that it would be reasonable to require them to pay any costs in respect of the period up to the end of November 2006.  Finally, it appears to me that any award ought to reflect my concern that sheer size of the costs liability with which the Applicants must have felt threatened is likely to have had an effect on their financial ability to pursue their claim even in person.  Whether it did or not in this case, it appears to me that using excessive costs claims to try to persuade parties to settle or abandon litigation ought not to be encouraged, and some allowance for this ought to be made in my decision awarding costs.

30.	It does not appear to me to be possible, in the light of the factors to which I have referred, to assess costs in any meaningful way.  Instead, I exercise my power to award a fixed amount which I consider appropriate for this case, taking into account all those factors.  I have concluded that an award of £2500 inclusive of VAT is the appropriate award to make in all the circumstances.

31.	Having reached this conclusion, I can find nothing in the submissions made on behalf of Applicants to cause me to award any lower amount by way of costs.   

Dated this 16th day of January 2008

By Order of The Adjudicator to HM Land Registry