Articles, News
30th May 2024
Daniel Dovar considers the decision in Brown v Ridley [2024] UKUT 14 (LC) and the crucial nature of the timing of an application for adverse possession under paragraph 5(4)(c) of Schedule 6 to the Land Registration Act 2002.
Introduction
As a child, for a long time my favourite James Bond was Roger Moore, a preference cemented by the outer space epic that was 1979’s Moonraker. The eleventh film in the franchise, it hopped from California to Venice, Rio de Janeiro to the Amazon Rainforest before Bond stole a space shuttle and headed to outer space to stop Hugo Drax from wiping out the world population and replacing them with a master race. Wikipedia reports the high production cost of $34m did not stop the mixed reviews.
“Moonrakers” is the name of the land at the heart of the dispute in Brown v Ridley [2024] UKUT 14 (LC), but that is probably where the similarity ends. The scope of the dispute was over a small strip of land in Consett, in County Durham, which is about 14 miles south-west of Newcastle upon Tyne. The Judge at first instance, as is usual, undertook a site view, but then the hearing was conducted remotely. The only other geographical shift was when the parties (or at least their counsel) attended the appeal before Johnson J at the Rolls Building, Fetter Lane, London.
Whilst Moonrakers, the litigation, may not have the same geographical scope as Moonraker, the movie, it does, at least for lawyers, have some magic of its own. Johnson J determined that both he and the judge at first instance, Judge Bastin, were bound by Court of Appeal authority on the timing of an application under paragraph 5(4)(c) of Schedule 6 to the Land Registration Act 2002 (LRA 2002) (about 20 pages of the decision) BUT in his view, the Court of Appeal were wrong (about 11 pages of the decision). As a result, he allowed the appeal against the decision that the application had been made in time, but effectively wrote the permission to appeal application himself.
Paragraph 5(4)(c) of Schedule 6 to the Land Registration Act 2002
Since 13 October 2003, the LRA 2002 has significantly curtailed the ability of a squatter to obtain title through adverse possession. No longer is 12 years enough to establish a right to title. Whilst the period has been reduced to ten years, the squatter must establish one of three grounds to overcome an objection by the registered owner. The first is based on unconscionability arising from an equity by estoppel (paragraph 5(2)). The second is “for some other reason” (paragraph 5(3)). The third is found under paragraph 5(4), being (with my emphasis added)
(a) the land to which the application relates is adjacent to land belonging to the applicant,
(b) the exact line of the boundary between the two has not been determined under rules under section 60,
(c) for at least 10 years of the period of adverse possession ending on the date of the application, the applicant (or any predecessor in title) reasonably believed that the land to which the application relates belonged to him, and
(d) the estate to which the application relates was registered more than one year prior to the date of the application.
This exception is aimed at small pieces of land running along the boundary between properties where the legal title does not quite match up with what is on the ground. Typically, a new estate may have been developed and each parcel identified on plans may not match where the boundaries have been laid on the ground. Alternatively, fences and boundary features may have moved over time without any party being conscious of the movement. In Dowse v Bradford MBC [2020] UKUT 202 (LC), Fancourt J clarified that the paragraph only applied to land that was adjacent to the applicant’s land, not simply part of it.
Time for application under paragraph 5(4)(c)
Zarb v Parry [2011] EWCA Civ 1306 concerned land in Welland, Worcestershire. The owners of Daisymore sued their neighbours, the owners of Fleet House, seeking declarations as to the boundary and injunctions. Whilst the judge at first instance, HHJ Pearce-Higgins QC, considered legal title was with the Zarbs, he went on to consider that the Parrys had acquired the disputed strip along the boundary by adverse possession and through paragraph 5(4). The latter issue came down to whether the ten-year period referred to in sub paragraph (c) was either:
- A reasonable belief held for any ten years in the period of adverse possession up to the date of the application; or
- A reasonable belief held in the ten years immediately prior to the application.
Arden LJ considered (again, with my emphasis added):
“…the necessary effect of the way that paragraph 5(4) is expressed is to make the unreasonable belief of the adverse possessor in the last ten years of his possession prior to the application for registration a potentially disqualifying factor even though his belief started out as reasonable but became unreasonable as a result of circ*mstances after the completion by him and/or his predecessor in title of a ten-year period of possession. The consequence of that is that the paper title owner will have a last chance to recover the land if the adverse possessor did not have a reasonable belief during the last ten years. The moral is that, as soon as the adverse possessor learns facts which might make his belief in his own ownership unreasonable, he should take steps to secure registration as proprietor.”
(Zarb at paragraph 17.)
It follows that Arden LJ considered that the reasonable belief had to be held immediately before the application, not at any time. Further, in a postscript, Arden LJ commented that an application under paragraph 5(4) should be made “promptly” once an adverse possessor discovered that they were on their neighbour’s land.
A similar approach was taken in IAM Group Plc v Chowdrey [2012] EWCA Civ 505, where Etherton LJ proceeded on the assumption that the reasonable belief must have been held for ten years up to the date of the application. In that case, there was no dispute that the adverse possessor had 18 years’ reasonable belief, but the appeal was on the basis that, as of around 2010 when possession was challenged, he could no longer hold that belief. That would only have been significant if the ten years’ reasonable belief had to be up to the application, rather than at any time in the period of possession.
Brown v Ridley: Take 1
At first instance, Judge Bastin concluded that the adversely possessing Ridleys started a reasonable belief as to ownership of the disputed Moonraker land in 2004 but could not have maintained that reasonable belief after February 2018. They had not made their application to the Land Registry until December 2019.
However, Judge Bastin concluded that they were able to bring themselves within the paragraph. Firstly, and through a concession, he considered Zarb, insofar as it dealt with paragraph 5(4) (c), was obiter. Secondly, he considered the language was ambiguous. He then considered that “…Parliament cannot have intended that a squatter makes an application on the day his belief ceases to be reasonable…” and that “…paragraph 5(4)(c) should be construed as meaning any 10 year period…”. He drew support from the fact that to find otherwise would mean that:
- There would be uncertainty and difficulties in determining whether an application had been made promptly.
- There would be an impetus to commence a formal application and dispute before exploring alternative means of resolution – echoing the words of one of the authors of the LRA 2002 that “no sane person wishes to initiate a boundary dispute“.
Brown v Ridley: Take 2
Johnson J in the Upper Tribunal had two grounds of appeal. Firstly, that Judge Bastin had failed to follow the binding authority of Zarb (the concession at first instance having been withdrawn). Secondly, that in any event, Judge Bastin had wrongly construed paragraph 5(4)(c) in not requiring belief up to the date of the application.
Take 2: Part 1
There followed a dissection of Zarb to determine the ratio and whether it was that paragraph 5(4)
(c) meant belief up to the date of application. If it was, then, following R (Kadhim) v Brent LBC Housing Benefit Review Board [2001] QB 955, that construction was binding on both Judge Bastin and Johnson J. He considered it did form part of the Court of Appeal’s ratio in Zarb. Although not the subject of argument, it did form a necessary step in reaching their conclusion as to whether paragraph 5(4)(c) could be relied on.
As a result, the FTT’s decision could not stand, was set aside, the appeal was allowed and the original application dismissed.
Take 2: Part 2
Notwithstanding that view, Johnson J went on to consider whether the Court of Appeal in Zarb had got their construction right, the first port of call on statutory construction being the guidance of Lord Hodge in R (O) v Secretary of State for the Home Department [2022] UKSC 3.
The Judge considered that the wording in paragraph 5(4)(c) is ambiguous. He decided the issue based on the fact that, if the construction was as found in Zarb, then that raised “…such serious difficulties for the operation of Schedule 6 that it is impossible to accept that Parliament intended those consequences” (at paragraph 141 of the judgment). He went on to detail the consequences:
“…If however the reasonable belief must continue for the period of ten years ending “on” the date of the application, the reasonable belief must exist on the day when the application is made. On this hypothesis however, and for the reason which I have just given, it seems inevitable that the person in adverse possession will not be able to demonstrate the required reasonable belief when the application is made. The overall result is an absurd one. It is impossible to accept that Parliament intended the Reasonable Belief Condition to operate in this fashion.”
(Paragraph 142.)
He did not consider that a period of grace, allowed by implication by Arden LJ when she suggested an application “could be made promptly”, was the answer to the issue. Not only did that not accord with the wording of the paragraph, but it also ran counter to the overwhelming desire to avoid boundary disputes in the first place.
“It is hard to see how the important and laudable objective of parties avoiding neighbour disputes going to court is advanced or respected, if the correct construction of paragraph 5(4)(c) is that the person in adverse possession must make the application for registration promptly after the period of their reasonable belief in their ownership of the relevant land has come to an end…”
(Paragraph 149.)
Where now?
Zarb remains good law.
Given Johnson J’s obiter view, a plucky adverse possessor may bide their time before making an application, with a view to racing up the appellate system to overturn Zarb, but that is a risky and expensive strategy.
To the less plucky, the moment a boundary adverse possessor realises what they are, they must act promptly to make an application to the Land Registry. This may clash with issues of privilege if their realisation only dawns when being advised by their lawyers. It also means that disputes will be accelerated into formal litigation prematurely without breathing space to allow parties to negotiate. Whilst an application could be issued and stayed, legal costs will already have been run up by that point.
In that regard, Moonraker the movie has another similarity with boundary disputes in that both have high production costs. In the movie, the world was saved and, until Goldeneye, it was the highest grossing film of the series. In litigation, a win often comes at a price and a loss can be financially and emotionally ruinous. It is a shame that in this arena, which is already fraught, there remains a technical trip wire whose operation does seem absurd.
This article was first published in Practicle Law UK here.
Team: Daniel Dovar
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