PROPERTY CHAMBER

FIRST –TIER TRIBUNAL

LAND REGISTRATION DIVISION

 

 

 

IN THE MATTER OF No.5 MELINA PLACE LONDON NW8 9SA

 

CASE No. REC/2013/0036

 

BETWEEN

DAVID PETER CONWAY (1)

JACQUELINE ALICE CONWAY (2)

Applicants

and

 

 

WILLIAM BRYAN SHELTON (1)

FARZANEH SHELTON (2)

 

Respondents

 

 

Before: David Holland QC sitting as a Judge of the First-tier Tribunal (Property Chamber) (Land Registration Division)

 

Counsel for the Applicants: Kester Lees

Counsel for the Respondents: Timothy C Dutton QC

 

DECISION

Issues-rectification of a transfer made in 1992-whether there was a mutual mistake as at the date of the transfer-whether the equity of rectification bound subsequent purchasers-whether the previous purchasers were in “actual occupation” pursuant to section 70(1)(g) of the Land Registration Act 1925-whether the Tribunal should exercise its discretion to rectify.

 

Statutes: LAND REGISTRATION ACT 2002 (section 108); LAND REGISTRATION ACT 1925 (section 70).

Cases cited: SWAINLAND BUILDERS V FREEHOLD PROPERTIES [2002] 2 EGLR 71; CHARTBROOK V PERSIMMON HOLDINGS [2009] 1 AC 1101; NURDIN & PEACOCK V DB RAMSDEN [1999] 1 EGLR 119; MALORY ENTERPRISES V CHESHIRE HOMES (UK) LTD [2002] Ch 216; WILLIAMS & GLYNS BANK V BOLAND [1981] AC 487; LINK LENDING V BUSTARD [2010] EWCA Civ 424; ABBEY NATIONAL V CANN [1991] 1 AC 56; WALLCITE V FERRISHURST [1999] Ch 355; CHAUDHARY V YAVUZ [2013] Ch 249; WRIGHT V MACADAM [1949] 2 KB 744;

 

Textbooks cited: HODGE: RECTIFICATION: THE MODERN LAW AND PRACTICE GOVERNING CLAIMS FOR RECTIFICATION FOR MISTAKE; RUOFF & ROPER ON REGISTERED CONVEYANCING; GALE ON EASEMENTS (19^th edition)

 

Introduction

1. This is an Application by the Applicants seeking rectification under the Tribunals original jurisdiction contained in section 108(2)(a) of the Land Registration Act 2002. As originally constituted, the application sought rectification of a Transfer dated 17^th December 1992. The amendment sought is to the plan annexed to that transfer so that the area lined in red should include a strip of land which has been referred to throughout as “the Access Land” (but to which I shall refer as “the strip”).

 

2. It is accepted by both parties that the transfer was preceded by an exchange of contracts and that this contract included the same plan as was subsequently annexed to the transfer. No copy of this contract survives. Although everyone is agreed that contracts were exchanged on a date in late November or early December 1992, no one is sure of exactly what date. On the first morning of the hearing, Mr Lees, who appeared on behalf of the Applicants, applied to amend the application to include an order rectifying the contract plan. Mr Dutton QC, who appeared on behalf of the Respondents, realistically, did not oppose this application. Neither party submits that there is any difference of fact or of applicable law between the transfer and the contract.

 

Dramatis personae

3. Without, I hope, showing any disrespect to anyone, I shall adopt the following shorthand references:

                                i.            David Peter Conway, the First Applicant: “A1”;

                              ii.            The Applicants collectively: “As”

                            iii.            William Bryan Shelton and Farzaneh Shelton, the Respondents: “R1”, “R2” and (collectively) “Rs”;

                            iv.            The strip of land referred to by the parties hitherto as “the Access Land”: “the strip”;

                              v.            The property known as and situate at 5 Melina Place London NW8 9SA registered under freehold title NGL703311 in the names of As: “No.5”

                            vi.            The neighbouring property known as and situate at 5A Melina Place London NW8 9SA registered under freehold title LN216816 and leasehold title NGL702844 in the names of Rs: “No.5A”;

                          vii.            Andrew Abraham Jeremy Mainz and Beverley Jane Mainz, the former freehold owners of No.5: “Mr and Mrs Mainz”.

                        viii.            Edward Michael Watson-Smyth, the former owner of both No.5 and No.5A: “W-S”.

                            ix.            The transfer dated 17^th December 1992 by which W-S transferred No.5 to Mr and Mrs Mainz: “the transfer”.

Numbers in square brackets refer to page numbers in the trial bundle which was helpfully provided to me.

 

The strip

4. The strip is a rectangular tract of land measuring approximately 5 feet in width by 25 feet in length. Its exact measurements are not relevant to the issues I have to decide. It is covered in what appears from the photographs to be concrete. It is shown in the photographs at [75], [323] and [324]. Along its length it runs in a roughly east-west direction (more accurately it runs south-west to north-east). Along its northern side it abuts the public highway at Melina Place which itself is a residential street running in a south-westerly direction off the Grove End Road in St Johns Wood. Melina Place is a dead end at its south-western end. Nos.5 and 5A sit on the south side of Melina Place very near its south-western end. More importantly, on its southern side the strip abuts the double garage and front door of No.5. One cannot enter or leave No.5 on foot or in a vehicle without crossing the strip. The single garage belonging to No.5A sits immediately to the west of No.5’s double garage (and is indeed contained within the same structure). There is a similar strip of 5 feet or so in width running in front of that garage and sitting between it and the highway.

 

5. The strip is currently within the freehold tile to No.5A. It was transferred to Rs on 16^th June 1993 when they bought both the freehold and leasehold titles to No.5A from W-S. As seek the rectification of the earlier contract and transfer of No.5 by which Mr and Mrs Mainz purchased it from W-S.

 

The issues

6. The parties are agreed that there are three issues which I have to decide:
1. Question 1: Did a right to seek rectification of the contract and the transfer (to include the strip) arise on its execution?
2. Question 2: If it did arise, did that right bind Rs on their purchase of No 5A in June 1993? The key question here is whether Mr and Mrs Mainz were in actual occupation of the strip as at the date of the transfer of No.5A to Rs on 16^th June 1993 within what was then section 70(1)(g) of the and Registration Act 1925. For the avoidance of doubt neither party has suggested that there was any material difference between the date of the transfer and the date of Rs registration (which was on 5^th July 1993).
3. Question 3: If the answer to the two previous questions is in the affirmative, ought the Tribunal to exercise is discretion to rectify the transfer as sought?

 

The parties’ positions

7. As of course seek rectification to include the strip within No.5. In the light of Rs’ case (as described briefly below) they are willing, as a condition of rectification, to enter into a mutual restrictive covenant with Rs for the benefit of each of their properties which will prevent each party building on or over the strip and its extension in front of No.5A’s garage.

 

8. Rs oppose rectification. They assert that I should answer each of the three questions posed in paragraph 6 above in the negative. They accept that As, as owners of No.5, have a right of way over the strip both on foot and in vehicles which right arose, they assert, by implication on the transfer. That right will allow the owners of No.5 not only to walk or drive over the strip but also to park on it temporarily to load and unload. However R2 was very clear in her evidence that, so far as she was concerned, As’ rights over the strip do not extend to parking on it. Rs assert that they need to retain ownership of the strip to ensure that the view from, and the light into, their downstairs bedroom window (which is situated in the return frontage of No.5A and overlooks the strip and the street facing roughly east) is not obscured by either permanently parked vehicles or any extension to No.5 (should the owners of that property choose to build on the strip in future.) The view is clearly shown in the photo at [324].

 

Agreed chronology

 

9. Much of the relevant history is undisputed.

 

10. No.5 and No.5A were, until the transfer, included within the same freehold title, that is LN216816.

 

11. No.5 is a substantial double fronted house which, from the photographs, I would assume to be of Georgian or Victorian construction. It appears to have been added to since the date of its construction. It sits, perpendicular to the road, at the western side of the plot. No.5A is physically attached to the house at No.5 at its northern end. It may originally have been the coach house, servants’ quarters or, perhaps, an artist’s studio for No.5. No 5A directly abuts Melina Place.

 

12. As appears from a photograph (at page [92]) taken in the early 1980s, before the work carried out by W-S, the garden walls of what is now No.5 also abutted the highway but had a gateway in them which lead to a garage which was set back from the road.

 

13. On 21^st November 1983 W-S was registered as freehold proprietor of the property. On 24^th February 1984, the local planning authority, the City of Westminster, granted planning consent for redevelopment. This allowed for: the creation of a separate dwelling in No.5A, with the creation of a front door and windows onto the street; the demolition of the existing garden walls and garage; the construction of a single storey building containing both a single and double garage and a door from the street leading to a passageway which in turn lead to the garden of No.5. Above the single and double garages there was (and is) a terrace accessed from No.5A, the living accommodation of which is on the first floor.

 

14. W-S carried out this work in or around 1986. The effect of the demolition of the existing walls and gate and the construction of the garage block was to pull back the building line by some 5 or 6 feet from the highway thus creating the return wall of No. 5A (into which the bedroom window shown in the photos at [323] and [324] is set) and the strip together with the extension of the strip running in front of the single garage.

 

15. At some time in the summer of 1992 W-S placed the entire property on the market for sale at an asking price of £1.25 million. There is a copy of the estate agents particulars at pages [190-194]. No.5 is referred to as the “main house” whilst No.5A is the “studio house”.

 

16. Mr and Mrs Mainz first viewed the property in August 1992. I shall have to return to the exact circumstances of their purchase when I consider question 1. However they could not, at that time, afford to purchase both the main house and the studio house and, indeed, did not need the extra space which the studio house provided. Thus they eventually agreed to purchase No.5 from W-S for £850,000.

 

17. Each party instructed solicitors: Ronald Fletcher & Co acted for Mr and Mrs Mainz; Pollard & Cope acted for W-S. Mr and Mrs Mainz do not (perhaps unsurprisingly) retain copies of all the documents which related to their purchase and might have passed between them and their solicitor. I have seen a copy of the Replies to Enquiries before Contract dated 2^nd September 1992. There are two additional enquiries, numbers (H) and (I) as follows:

 

“If we correctly understand, the studio house is included within Title No. LN216816. If that is the case, a contract plan will be necessary to identify the property being sold”

The reply was:

“Herewith”

The Enquiry continued:

“Also will cross rights of support and passage of services not also be needed?”

The reply was:

“Yes. Sewerage service only”

The next Enquiry was:

“Please specify the garages and garden included in the sale as the studio house is not being sold and the Agents Particulars related to both in combination”

The Reply was:

“Double garage is included with licence to occupy roof terrace above by owners of Studio House. The single garage is not included in this sale.”

 

18. In a letter dated 26^th November 1992 sent by their solicitors to Mr and Mrs Mainz, the former stated:

“I enclose a copy of the plan for ease of reference from which you will note that there is reference to Garage 1 and 2 at the bottom of the plan and the side of the plan. Please confirm that the Double Garage is in fact Garage 2 and that garage 2 is included within the red edging”

By the side of this passage is written in Mr Mainz’s handwriting: “Confirmed”.

 

19. Because of the way the sale was to be structured there were in fact two plans. They were both based on the same plan drawn by Awford Philips Associates, Chartered Building Surveyors and dated 5^th August 1992.

 

20. Contracts were exchanged in the last week in November or the first week in December 1992. No copy of the contract apparently survives although I have seen an undated draft, headed “Amended Agreement for Sale” (at pages [195-201]).

 

21. The transfer is dated 17^th December 1992. The land transferred is referred to as follows:

“the land shown edged red on the plan bound up within and known as 5 Melina Place St. Johns Wood London NW8 and double garage being part of the title above-mentioned Together With the rights referred to in the First Schedule hereto EXCEPT AND RESERVED the rights contained in the Second Schedule hereto AND the Transferor covenants in the terms set out in the Second schedule”

 

The rights granted in the First Schedule are as follows:

 

1. The right of connection to and passage and running of electricity gas water and soil if applicable to the Property at 5A Melina Place or any part thereof.

2. Such right of access to entry upon the premises at 5A Melina Place as is necessary for emergency purposes or for the proper repair or maintenance to the structure of 5 Melina Place or services thereto.

3. The right of support and shelter from 5A Melina Place as at present.

4. At all times to indemnify and keep indemnified the Transferees and all other occupiers of the Property from and against all costs claims actions proceedings and demands of whatsoever nature arising out of or in respect of any of the matters aforesaid in connection with the works or in connection with the maintenance of the Property.”

 

The rights reserved in the Second Schedule are as follows:

 

1. The right of passage and running of electricity gas water and soil at all times if applicable to the Property at 5A Melina Place St. Johns Wood London NW8 and to keep a ventilation flue pipe through the party wall separating 5 Melina Place from 5A Melina Place at the point marked X on the plan annexed hereto.

2. At all times to indemnify and keep indemnified the Transferees and all other occupiers of the Property from and against all costs claims actions proceedings and demands of whatsoever nature arising out of or in respect of any of the matters aforesaid in connection with the works or in connection with the maintenance of the Property and the use of the ventilation flue pipe.

 

 

22. There are two things which strike one about the transfer. Firstly, it is clear that the strip is not included within the land edged in red on the plan. The red lining clearly runs along the line of the door and double garage. The second point is that there are no express rights granted over the strip. As such, on the face of the transfer, the property is, as Mrs Mainz put it, landlocked. Of course, as Rs concede, there would clearly have arisen rights over the strip pursuant to section 62 of the Law of Property Act 1925 and/or the rule in Wheeldon v Burrows.

 

23. The red edging clearly excludes the single garage (marked as “Roof Terrace 5A”) and No.5A itself.

 

24. On the same day as the transfer, the same parties entered into a 999 year lease whereby Mr and Mrs Mainz leased the surface of the roof over the double garage to W-S as owner of No.5A. The land demised is thus described:

ALL THAT premises known as part of the roof terrace 5A Melina Place St Johns Wood London NW8 on the first floor level (being the terrace above the double garage of 5 Melina Place) as the same is more particularly identified on the plan annexed hereto and thereon edged red. (“the Premises”).

The same plan as that in the transfer is used save that the red edging outlines only the roof of the double garage. It is also worth noting that, included within the tenant’s covenants is the following:

“Not to use the first floor roof terrace area above the said garages for any other purpose than as a garden patio nor to make any alterations or addition to the said roof nor to carry out any development.”

The point is that there is here an express restriction on the use to which this piece of land can be put.

 

25. The reason for the lease was and is of course that the roof terrace (which is the only outside space for No.5A) extended and extends over the roof of both the single and the double garage and only the single garage was being retained by W-S for on sale with No.5A.

 

26. Freehold title to No.5, via a new title number NGL703311, was first opened on 14^th January 1993. If one looks carefully at the title plan one can see the strip as the red lining does not come level with the street front of what is now No.5A. However one would have to know that the highway did not extend that far to be able to tell that the strip is private land.

 

27. On the other hand, No.5A was retained in the former title number LN216816. If one looks at the amended title plan it is quite clear that the strip exists and is retained within that title. The plan shows the original extent of both properties edged in red with the land registered under No.5’s title (NGL703311) edged in green.

 

28. I shall have to return to consider the activities on the strip between the date of the transfer and the date of the transfer on No.5A to Rs when I consider question 2 below.

 

29. Rs have at all material times lived and worked in Florida USA. They first viewed No.5A in May 1993. They contracted to purchase it from W-S on 1^st June 1993.The transfer to them was completed on 16^th June 1993. They were in the UK on the date of the exchange of contracts but were back in the USA on the date of the transfer.

 

30. Both the contract and the transfer of No.5A describe the land by reference to the two titles: the freehold LN216816 and the leasehold NGL702844. There is no reference to any right being retained or reserved over the strip in favour of the owners of No.5. Rs were registered as freehold and leasehold proprietors on 5^th July 1993.

 

31. For their purchase, Rs retained a solicitor, a Mr Glatt. They told me that they never met, spoke to or had contact directly with W-S. So far as they were aware, neither did their solicitor. They told me that they were made aware at the time that they owned the strip by Mr Glatt who had looked at the Land Registry plans. I accept this evidence. As I have stated, it is quite obvious from the plan annexed to the registered freehold title to No.5A that the strip is there and within the ownership of No.5A. Without being in any way rude to Mr Glatt, it is not exactly very difficult to spot.

 

32. Rs have remained the registered proprietors of No.5A ever since. They have however only ever spent between 2 and (at most) 3 weeks every year staying at the property.

 

33. Meanwhile Mr and Mrs Mainz lived at No.5 between the date of the transfer and 1^st April 2013. They lived there initially with their two daughters who were aged 8 and 5 at the date of the transfer. On 24^th October 2008, No.5 was transferred into the sole name of Mrs Mainz. I was told that this was to give her some financial security in the event that Mr Mainz predeceased her.

 

34. In 1997/1998 and again in or about 2000, Mr and Mrs Mainz carried out substantial works to No.5. During the first period of works a mechanical digger was driven over the strip and through the double garage on a daily basis. During the second period of works a skip was parked on the strip. At no stage, they told me, was any complaint or protest ever raised by or on behalf of Rs. Mr and Mrs Mainz told me, and I accept, that throughout the period of over 20 years in which they lived at No.5, they had a number of small cars and regularly, indeed mostly, parked these on the strip both during the day and overnight. Although they always had a residents parking permit, there were only three spaces on Melina Place and these were almost always occupied. Thus for the vast bulk of the time, the car was parked on the strip. At no stage was any comment or protest made by Rs. Nor was there ever any assertion made by Rs that they owned the strip. Indeed Mrs Moss, a neighbour who acted as key holder for Rs, would on occasions seek the Mainz’s permission for her guests to park on the strip.

 

35. In the Spring or summer of 2012 Mrs Mainz placed No.5 on the market for sale. I have seen the estate agents particulars. These particulars [302-314] were accompanied by what was called a “feasibility study” by a firm of architects which showed a potential development of No.5.  I accept the evidence of Mr and Mrs Mainz that these architects’ proposals (which, as Mr Dutton pointed out, included the demolition of at least part of No.5A’s terrace) were produced at the behest of the agents and without reference to the vendor.

 

36. In at least two of the plans in this “feasibility study” which showed the existing ground floor there is a reference to what is called a “parking area” where the strip is situated in front of the existing double garage.

 

37. As contracted to purchase No.5 from Mrs Mainz on 1^st November 2012. The Property Information Form dated 22^nd October 2012, which preceded the exchange of contracts is at [24-38]. In answer to the question at 8.2, namely “Does the property benefit from any formal or informal arrangements over any neighbouring property?” the answer given is “No”.

 

38. As completed their purchase on No.5 on 1^st April 2013.

 

39. A1 told me that, despite the fact that certain of the plans in the agent’s particulars indicated that there was a “parking area”, at the time of their purchase, As thought that the strip was part of the public highway. A1 thought that the use of the words “parking area” was “agents speak”. As however did think, he told me, that they would be able to build underneath the strip if necessary. A1 told me that he was not aware that the strip was not part of the highway and indeed that it was part of No.5A’s registered title until he was prompted to make inquiries following an email dated 21^st May 2013 sent to him by his architect, Marek Wojciechowski. In that email [325] the architect had stated:

“We have presumed that you own the pavement outside your garage (and that you can build beneath this space). Do you have a copy of your title plan that you could email to me please?”

 

 

40. A1 is a solicitor and his firm had acted for him on his purchase of No.5. Neither he nor his firm, he said, had at the time checked the registered title to No.5A. It was, he said, only on doing this after he had received the email from the architect that he first realised that the strip was private land and was not included within the title of No.5.

 

41. It became clear once R2 was giving evidence, that A1s version of events in this regard was not accepted by Rs. As this is the case and as questions of credibility arise, it is right that I now turn to examine the various witnesses and what I made of their evidence generally before turning to deal with the three questions.

 

The witnesses: credibility and correspondence

 

42. I heard from five live witnesses: Mr Mainz, Mrs Mainz, A1, R1 and R2.

 

43. I have no hesitation in accepting the evidence of both Mr and Mrs Mainz. Although one has to take into account that, as a professional expert witness, Mr Mainz is accustomed to giving evidence, nevertheless I thought his evidence was clear, cogently expressed and meticulous. Mrs Mainz gave evidence in a somewhat more agitated fashion on occasions but I nevertheless accept what she told me. It was not suggested that they came to give evidence to the Tribunal because they feared proceedings being issued against them by As. As such they were disinterested parties and I have no reason to doubt what they told me.

 

44. A1 had much less relevant evidence to give. However I accept what he told me. He is a practising solicitor and, whilst that does not of course by itself entail an automatic assumption of credibility, I thought he gave evidence in a measured and credible fashion.

 

45. However I have much more difficulty with certain aspect of Rs evidence. They too are both professionals. They are engineers. R2 gave evidence first. R1 essentially adopted everything that his wife had said.

 

46. R2 tended in cross examination to become rather aggressive and somewhat emotional when answering, or attempting to answer, questions put to her. That again, of course, does not mean that I should not believe what she says. However the rather defensive attitude, in my view, betrayed a lack of conviction and only served to highlight what I regard as certain unsatisfactory aspects of Rs’ evidence.

 

47. The first unsatisfactory aspect is this. In their witness statements and in cross examination, Rs insisted both that they were aware at the time of their purchase of No.5A that they owned the strip and that they regarded it as important as this meant that no one could obstruct the light into, and the view from, their ground floor bedroom window. R2 specifically told me in one of her witness statements that she could clearly recollect conversations with her husband about this at the time. R1 states in one of his witness statements that they would probably not have contracted to purchase No.5A if they had not thought that they owned the strip. As I have already indicated, I am prepared to accept that they were made aware at the time by their solicitor that they owned the strip (that much being obvious from a quick look at the registered freehold title plan). However I have very great difficulty in accepting the evidence that they regarded this as particularly important to them. This is a window in a return frontage. The room is a bedroom on the ground floor (the main living accommodation being on the first floor leading out onto the terrace). The view from the window is directly out onto the garage doors, the strip, the pavement and the street. On seeing the photographs my initial reaction was that one would want to obscure the view from this window with curtains or blinds as one would not want to risk passers-by looking into ones bedroom. Indeed in one of the photographs [323] the curtains are drawn. Whilst the view out onto the street is by no means the least pleasant view from a window in central London, it does not strike me as particularly scenic.

 

48. Now of course I accept that different people may value different aspects of a property. However my initial scepticism of Rs evidence in this regard was strengthened by the other matters.

 

49. The first was the complete absence of any complaint made by Rs to Mr and Mrs Mainz about any activity on the strip between 1993 and 2013. Mr and Mrs Mainz’s evidence was that they had constantly parked on the strip and, indeed, that they had used it in various ways (described above) when carrying out building works. They said that they had never had any complaints from Rs nor was there ever any suggestion made to them by Rs that they owned the strip. Rs, in turn, did not assert that they had ever made complaints or any such assertions to Mr and Mrs Mainz. Whilst it is true that they have only ever occupied No.5A for 2 to 3 weeks every year, it is inconceivable in my view that, during their various stays at No.5A, Rs did not notice some activity (at the very least some overnight parking) on the strip by their neighbours. Besides, they had another neighbour, Mrs Moss who acted as a key holder for them. The evidence of Mr and Mrs Mainz was that she was well aware of their parking on the strip (and indeed sought their permission on occasions for her guests to do so). Again I find it difficult to believe that over the years, Mrs Moss did not make Rs aware, at least in passing, of Mr and Mrs Mainz activities on the strip. R2s clear evidence was that she objected to any parking other than to load and unload. I take the view that over the years Rs must have been aware of Mr and Mrs Mainz’s cars parked on the strip. If they had genuinely been as concerned as they now tell me they were, I find it very difficult to accept that they made no complaint.

 

50. This leads on to the second unsatisfactory aspect which is the assertion by R2 that she never noticed any parking on the strip by Mr and Mrs Mainz. As will be clear from what is set out above, I do not accept that account. Even allowing for the brevity of their regular visits to No.5A over the years, accepting (as I do) the evidence of Mr and Mrs Mainz, I find it inconceivable that Rs were not aware of at least some overnight parking on the strip. If Rs were, as they would now have me believe, throughout concerned to prevent obstruction of the view from, and the light into, their bedroom window, I find it inconceivable that they would not have said something to their neighbours over the years. They said nothing. Indeed the evidence of Mr and Mrs Mainz (which I accept) is that on occasions whilst using the strip, they saw Rs on their terrace above and greeted them cordially.

 

51. The third and perhaps most significant of these unsatisfactory aspects is reflected in the correspondence which passed between the parties as and when the present dispute arose.

 

52. As contracted to purchase No.5 on 1^st November 2012. Although this evidence did not appear in any witness statement, it is accepted that on or around 17^th November 2012, A1 had a telephone conversation with R2. In that telephone conversation, A1 spoke of the possibility of As purchasing No.5A from Rs. No agreement was reached.

 

53. More importantly, in cross-examination, R2 asserted that on a date in February 2013 a further telephone conversation took place between her and A1. R1 answered the phone, he said, and handed it to R2. R2 asserts that in this conversation, A1 asserted that there had been a mistake in the original transfer of No.5 in that it did not include the strip. A1, she said, asserted that the transfer should be rectified. R2 asserts that she said that both she and her husband were engineers and that they knew what they had bought and that there had been no mistake.

 

54.  A1 had to be recalled to deal with this allegation (as it had not been put to him in his original cross-examination). He accepted that the phone call in November 2012 had taken place but he denied that there had been the phone call as alleged in February 2013.

 

55. There is thus a clear clash of evidence in relation to the February 2013 phone call. On this issue I prefer the evidence of A1. I find that there was no such phone call as Rs now allege. There are a number of reasons for this.

 

56. Firstly, there is no mention of this alleged phone call in any of Rs witness statements. Secondly (and more importantly) the fact of the alleged call was not put to A1 in his original cross-examination. Mr Dutton is an able, experienced and thorough advocate. Had he been aware of this allegation at the time, it would have been surprising if he had not put it to A1. The clear implication is that he was not aware of it as Rs had not told him.

 

57. Further, as A1 told me, if he had been aware in February 2013 that the strip was private property and not part of the public highway (as he thought) then, as this was before the date of completion of the purchase, he would have been duty bound to inform the firm of solicitors which was separately acting for As potential mortgagees. This would almost certainly have led to significant problems in completing As’ purchase on No.5. None of this occurred.

 

58.  Further, if A1 had been aware of the problem with the strip in February 2013, it is difficult to see why he would not have informed his architect of that fact. Thus A1’s alleged knowledge of the problem in February 2013 is inconsistent with the email from his architect dated 21^st May 2013 and quoted above. It is also inconsistent with the letter dated 27^th June 2013 which A1’s firm sent to the Land Registry [98] in which it is asserted that the existence of the strip had been brought to their attention “consequent to registration”. I assume that this is intended to mean either “subsequent to registration” or “as a consequence of registration”. Either way, as registration did not take place until 15^th May 2013 [54a], the terms of the letter are inconsistent with A1 having knowledge of the existence of the strip as part of No.5A in February 2013.

 

59. Finally, and most significantly, the alleged conversation in February 2013 is, in my view, inconsistent with the terms of the correspondence between the parties in 2013 to which I now turn.

 

60. On 2^nd July 2013 A1 sent an email to R2 [100]. It is in perfectly friendly terms and starts off by referring to a planning application which As had made for development at No.5. It then includes the following passage:

 

“At the same time I mention that an issue has been discovered in connection with the registration of the title of myself and my wife to 5 Melina Place. That is, when the original owner of both 5 and 5A sold off 5, the plan attached to the transfer deed for 5 did not extend the boundary to the small strip of land in front of the entrance door and double garage. This, therefore, inadvertently remained in the title to what had been 5 and 5A and is still included in the title to what is now 5A.”

 

He then encloses a Statutory Declaration from Mrs Mainz and asks for Rs’ agreement in principle to the transfer of the strip to As, as owners of No.5. There is of course no reference to a previous conversation on this issue which there almost certainly would have been if such a conversation had taken place in February 2013 as Rs now allege.

 

61. There was no immediate response. A1 sent a chasing email some two weeks later on 15^th July to which R2 responded on 16^th July 2013 [101] as follows:

“Thank you for your various letters and emails (however to date we have not received any letter from you although you reference in your email). We do need to take advice from our own lawyers on this point and are doing so. We do not want to comment further at this stage, but equally at this stage, we are not prepared to agree to vary the plans or the title to our property as you are suggesting.

We would be grateful if you would please send a complete copy of what you have sent us to our UK lawyer, Mr. Richard Schmidt of SGH Martineau…”

 

If, as Rs now assert: they had always been aware that they owned the strip; ownership of the strip was always important to them in order to maintain the light into and view from their bedroom window; they had discussed this very point with A1 in February 2013, then it is quite extraordinary that there is no mention of any of this in the email.

 

62. On that date A1 sent an email to Mr Schmidt essentially in the same terms as that dated 2^nd July 2013. This was acknowledged by the latter. A1 stated that he would put a copy of the Statutory Declaration in the post to him.

 

63. Eventually on 21^st August 2013 [106], Mr Schmidt sent an email to A1 in these terms:

 

“Thank you for your email below. I have reviewed the papers and have reported to my clients. They want to do some further research on this matter. My clients are coming to the UK in mid-September and have instructed me that they will review matters with me when they are here. You will appreciate that this is not straightforward, and my clients want to consider the matter and their position as carefully and as completely as possible.

If you are minded to refer the matter to the Lands Tribunal in the meantime, then my clients have confirmed that my firm is authorised to accept service. Please ensure that the papers go to our London office and are marked for my attention.”

 

Again, if, as Rs now assert: they had always been aware that they owned the strip; ownership of the strip was always important to them in order to maintain the light into and view from their bedroom window; they had discussed this very point with A1 in February 2013, then it is quite extraordinary that it is said that Rs need to “do some further research”. One might well ask: what further research was needed? I find that this was a deliberate attempt by Rs to “stonewall” and delay.

 

64. I fear that Rs true attitude is reflected in an email sent the day before, on 20^th August 2013 [239], by R2 to the Local Planning Authority, the City of Westminster , in which she wrote as follows:

“We are writing in reference to planning application “ref 13/06347/FULL” made in relation to No 5 Melina Place. We would like to bring to your attention some fundamental issues as follows:

1. We are the owners of Ransom Strip the strip of land separating the road and the double garage and entrance Rate to 5 Melina Place

1. We are the owners of 5A Melina Place (No 5A) located on the SW-NE boundary on the NW side of 5 Melina Place (No 5). Prior to 1992 No 5 and No 5A Melina Place were one combined building under one ownership belonging to Mr Watson Smyth. In December 1992 Mr Watson Smyth sold No 5 and retained the ownership of 5A and the land/strip in front of No 5 double garage, gate entrance to the garden and Melina Place road; this strip of land is known as a Ransom Strip (please see attachment 1 Land Registry NGL 703311 for 5 Melina Place dated 17th December 1992 and as outlined in page 2 in red clearly depicts that the land in front of the garage and gate entrance to 5 Melina Place is not included in the title of 5 Melina Place. Land Registry LN216816 page 3 (attachment 2) depicts the area in red minus green to be freehold belonging to 5A Melina Place. 5A Melina Place is registered to consist of freehold of a two story house and a single garage, a freehold Ransom Strip, and 999 year leasehold of the roof terrace above the double garage of 5 Melina Place.

2. As mentioned above the land between the front of No 5 double garage and gate to the garden entrance and Melina Place road is owned (freehold) by us as the owners of No 5A. This is the SW-NE boundary on the NW side of No 5 property. It is shown almost correctly on Drawing 13_06347_FULL-D_12. Other drawings show it incorrectly including on the planning application map on your web pages:…This is particularly worrisome when drawing 13_06347_FULL-D_12 shows basement excavation beyond the true boundaries of 5 Melina Place. As the owners of the Ransom Strip we are astonished that Westminster Council is entertaining a planning application which includes our land without permission from us.

3. The servicing of a building site for No 5 to carry out construction activities such as contained in the referenced planning application is not possible since the Ransom Strip cannot be used for such activities and hence the Council should not grant such planning permits.”

 

 

65. The tone and content of this email are completely inconsistent with the assertion made by Rs solicitor to A1 the day after that Rs wanted to do some “further research”. As I find, Rs knew at this stage exactly what their rights in relation to the strip were. No further “research” was needed. The term “ransom strip” could only have come from advice received from their lawyers. I find that this email betrays Rs’ true attitude. They had belatedly discovered (or re-discovered) that they owned the strip and were using this fact to object to As planning application. It is also worth noting that it was no part of As’ proposals to build on or over the strip, although they did wish to extend No.5 under it. The proposals would not therefore have had (other than temporarily) any adverse impact on the view from the bedroom window of No.5A. I’m driven to think that Rs true attitude to ownership of the strip was (and is) not genuinely to protect the view from and light into their bedroom window, but is, and since 2013 has been, to use their ownership of the strip to attempt to gain financial or other advantage from the owners of No.5.

 

66. There followed email correspondence between A1 and Mr Schmidt in which the former threatened to apply to this Tribunal. A draft witness statement in support of this threatened application was sent on 20^th September 2013. Eventually on 23^rd September 2013 [116] in a letter to A1 of that date, Mr Schmidt wrote:

 

“Mr & Mrs Shelton have given the matter, and the various papers you have sent them careful consideration and have taken advice on them. Having done so they do not agree with the contention that the transfer plan was incorrect, or that there was a mistake as to the areas to be transferred, and retained on both sides of that transaction.

Their reasons for having reached this decision are that the plans were clearly prepared by the seller’s architect, and clearly show what was intended. More importantly the retention of the strip of land in the ownership of 5a Melina Place is essential to preserve the outlook/view from and the access of light and air to the bedroom window in the ground floor of 5a Melina Place.

You have indicated that if Mr. & Mrs Shelton decline your request for an amendment to the transfer plan, you will commence proceedings for rectification and I confirm that this firm is authorised to accept service of proceedings.”

 

This is the first mention, some 2 ½ months after the correspondence started, of the supposed importance of preserving the view from the bedroom window. As I have indicated, I find it extraordinary that, if it was of genuine importance to Rs, then it was not mentioned before this.

 

67. A further detailed letter was sent by A1’s firm to Mr Schmidt on 24^th September 2013 [117-118]. This elicited a letter from a Mr Redding (of SGH Martineau’s litigation department) dated 26^th September 2013 [125] in the following terms:

“Mr & Mrs Shelton have given the matter careful consideration. Having regard to the fact that the plans were clearly prepared by the seller’s architect and presence of the bedroom window in the ground floor of 5a Melina Place and the need for air and light, your contentions are rejected.

Further please note that we are instructed not to communicate further with you in the absence of the proceedings which you have alluded to. In that regard I confirm that this firm is authorised to accept service.

Finally I am sure that I do not need to remind you but your use of the land in front of the garages at 5 Melina Place is strictly restricted to passing and re-passing to the garages ancillary to normal domestic use.”

 

68. Despite the tone and content of this letter, on 30^th September 2013 A1’s firm wrote a further lengthy letter [127-128]. On 1^st October 2013, a specialist instructed by As sent an email to R2 asserting that he had been instructed to drill a borehole [129]. The response was an email from Mr Redding of the same date [129] in which he said:

“We attach a copy of our client’s title together with a copy title plan. Please note that under no circumstances may you conduct any site survey or investigation on or over or under the land which we have coloured blue.

Any breach of this clear sanction will lead to proceedings being taken against your company together with the person presumably instructing you, Mr David Conway, with such proceedings seeking an injunction against further intrusion, punitive and or exemplary damages and costs on an indemnity basis.”

 

 

69. Despite the tone and content of this communication, A1’s firm sent further emails to Mr Redding on 1^st October [131 and 130]. This elicited a further email from Mr Redding on 2^nd October 2013 [132] in which he stated, inter alia:

“When we wrote on 26 September we indicated that we were instructed not to write to you again until you commenced proceedings. Lest there is any misunderstanding as to why we are so instructed, it is because we need to make sure that there is no issue concerning recovery of our client’s wasted costs. Once you issue proceedings, you will be at risk from costs and you may rest assured that our client will be looking to recover the same.”

 

This is a clear invitation for As to issue proceedings before Rs will engage in any further dialogue. The email continued:

“The only point that we will refer to concerning your letter of 30 September is that of intensification of user. As you are a solicitor, you will know that you have an easement across our client’s land for the purpose of gaining access and egress to the domestic garages. If there is any intensification of that user then injunctive relief will follow.”

 

The email ended as follows:

 

“We hope that this is the last time we have to communicate with you regarding this matter but we are instructed to accept service of proceedings if they are issued”

 

70. Despite the tone and content of this communication, A1’s firm sent a further lengthy letter to Mr Redding’s firm dated 2^nd October 2013 [134-136]. That letter sought to discuss, inter alia, exactly what was meant by the “intensification of user” which might result in injunctive relief being sought. This letter drew a response from Mr Redding by email dated 3^rd October 2013 in the following terms:

“First here with your title plan. Our client’s demise is in fact as we shaded the same, or, is as we shaded for all material purposes.

As for the balance of your letter and email we are constrained to ask what part of the expression “We are instructed not to correspond with you” do you not understand?

If you, your servant or agents communicate with us or our clients again, absent the issue of proceedings, concerning your proposed development of we are instructed to report you to the SRA and will bring injunction proceedings to stop the harassment.”

 

71. As I commented to Mr Dutton during his closing submissions, I regard the tone and content of this email as wholly inappropriate. It is inappropriately dismissive and discourteous. The threat of a report to the SRA is particularly obnoxious. This is not how English solicitors ought to communicate with each other, no matter how fraught the dispute with which they are concerned. No doubt on more mature reflection, Mr Redding would not have expressed himself thus (although I note that a further threat of a report to the SRA was made in a subsequent letter dated 2^nd April 2014 [299]). More importantly, I asked R2 when she was giving evidence whether she had instructed her solicitor to threaten to report A1 and his firm to the SRA. She said that she had not but she did add that she felt that she was being “harassed” by the correspondence and indeed still felt that way.

 

72. Unsurprisingly, given the tone and content of the correspondence emanating from Rs’ solicitors, this application was issued on 15^th October 2013.

 

73. Whereas the correspondence set out above will no doubt have been drafted by Rs’ solicitors, I have equally no doubt that the tone was set by Rs themselves. Along with the, frankly surprising, assertion that R2 felt “harassed”, it is entirely in keeping with what I have described above as R2’s rather aggressive and somewhat emotional attitude when  giving evidence.

 

Witnesses: conclusions

74. Where there is any conflict between the evidence of Mr and Mrs Mainz and A1, on the one hand, and Rs, on the other, I prefer the evidence of Mr and Mrs Mainz and that of A1.

 

75. In particular, I do not accept Rs’ evidence that they were unaware of Mr and Mrs Mainz parking on and otherwise using the strip as they indicated.

 

76. I do not accept that the telephone call described by Rs as having occurred in February 2013 took place as alleged by them or at all. I accept the evidence of A1 that it did not take place.

 

77. Whereas I accept that Rs were made aware at the time they purchased No.5A that they owned the strip, I do not accept their evidence that, at any time until July 2013, they regarded the ownership of it as important. In particular, I do not accept their evidence that they specifically wanted to own the strip in order to preserve the view from and/or light into their ground floor bedroom window. Even if I could accept such a desire as credible without more, Rs assertions to that effect are wholly undermined by: their failure to make the point in correspondence until 23^rd September 2013 and the email of 20^th August 2013 to the City of Westminster. I regard their account of the importance to them of the strip as a belated invention. Their true aim may be to seek to extract value from their ownership of the strip which they regard as a “ransom strip”. I make it clear that there is nothing wrong with seeking to profit from ownership of a ransom strip. It happens all the time. What is illegitimate is to seek to disguise what may be their true intentions by inventing a false reason for their attitude.

 

78. I now turn to deal with each of the three questions.

 

Question 1: Did a right to seek rectification of the contract and the transfer (to include the strip) arise on execution?

The law

79. In closing Mr Lees made clear that his case was put solely on the basis of mutual, rather than unilateral, mistake. The law in this regard was not seriously in dispute.

 

80. In SWAINLAND BUILDERS V FREEHOLD PROPERTIES [2002] 2 EGLR 71 (at paragraphs 32-4) Peter Gibson LJ set out the relevant principles as follows:

 

“32. Before I turn to the rival contentions advanced before us, let me state the conditions which must be satisfied if the court is to order rectification in a case where it is alleged, as it is here, that there has been a mistake common to the parties.

33. The party seeking rectification must show that:

(1) the parties had a common continuing intention, whether or not amounting to an agreement, in respect of a particular matter in the instrument to be rectified;

(2) there was an outward expression of accord;

(3) the intention continued at the time of the execution of the instrument sought to be rectified;

(4) by mistake the instrument did not reflect that common intention.

34. I would add the following points derived from the authorities:

(1) The standard of proof required if the court is to order rectification is the ordinary standard of the balance of probabilities.

“But as the alleged common intention ex hypothesi contradicts the written instrument, convincing proof is required in order to counteract the cogent evidence of the parties' intention displayed by the instrument itself”: Thomas Bates and Sons Ltd v Wyndham's (Lingerie) Ltd [1981] 1 WLR 505 at page 521 per Brightman LJ.

(2) Whilst it must be shown what was the common intention, the exact form of words in which the common intention is to be expressed is immaterial if in substance and in detail the common intention can be ascertained: Cooperative Insurance Society Ltd v Centremoor Ltd [1983] 2 EGLR 52 at page 54, per Dillon LJ, with whom Kerr and Eveleigh LJJ agreed.

(3) The fact that a party intends a particular form of words in the mistaken belief that it is achieving his intention does not prevent the court giving effect to the true common intention: see Centremoor at page 55 A–B and Re Butlin's Settlement Trusts [1976] Ch 251 at page 260 per Brightman J.”

 

81. This formulation was expressly endorsed by the House of Lords in CHARTBROOK V PERSIMMON HOLDINGS [2009] 1 AC 1101 (at paragraph 48). In that case Lord Hoffmann added comments on how the common intention is to be established. He held that the continuing common intention has to be established objectively. He said:

“Now that it has been established that rectification is also available when there was no binding antecedent agreement but the parties had a common continuing intention in respect of a particular matter in the instrument to be rectified, it would be anomalous if the “common continuing intention” were to be an objective fact if it amounted to an enforceable contract but a subjective belief if it did not. On the contrary, the authorities suggest that in both cases the question is what an objective observer would have thought the intentions of the parties to be.” (paragraph 60)

“Unless itself a binding contract, the prior consensus is, by definition, not contained in a document which the parties have agreed is to be the sole memorial of their agreement. It may be oral or in writing and, even if the latter, subject to later variation. In such a case, if I may quote what I said in Carmichael v National Power plc [1999] 1 WLR 2042 , 2050–2051:

“The evidence of a party as to what terms he understood to have been agreed is some evidence tending to show that those terms, in an objective sense, were agreed. Of course the tribunal may reject such evidence and conclude that the party misunderstood the effect of what was being said and done.”

In a case in which the prior consensus was based wholly or in part on oral exchanges or conduct, such evidence may be significant. A party may have had a clear understanding of what was agreed without necessarily being able to remember the precise conversation or action which gave rise to that belief. Evidence of subsequent conduct may also have some evidential value. On the other hand, where the prior consensus is expressed entirely in writing, (as in George Cohen Sons & Co Ltd v Docks and Inland Waterways Executive 84 Ll L Rep 97) such evidence is likely to carry very little weight. But I do not think that it is inadmissible” (paragraphs 64 and 65)

 

82. I remind myself that this is a case in which the alleged continuing common intention is alleged to have been manifested (at least in part) orally. It is also a case where the subsequent conduct of the parties may be relevant.

 

83. In his book on the topic (RECTIFICATION: THE MODERN LAW AND PRACTICE GOVERNING CLAIMS FOR RECTIFICATION FOR MISTAKE) HHJ Hodge QC provides, by way of summary, a checklist of requirements as follows:

The party seeking rectification must prove by convincing evidence that:

(1) the parties had a common intention, whether or not amounting to an agreement, in regard to a particular matter in the document to be rectified;

(2) that common intention was manifested by an outward expression of accord;

(3) that common intention continued up to the time of the execution of the document sought to be rectified;

(4) by mistake, the document as executed does not accurately represent that common intention;

(5) if rectified as claimed, the document would accurately represent the true common intention; and

(6) there is an issue between the parties capable of being contested.

 

The evidence

84. Rs accepted that they had no evidence to give on question 1. As, unsurprisingly, had no evidence to give on the topic. Thus the evidence on this issue was largely if not entirely oral and came entirely from Mr and Mrs Mainz.

 

Mr Mainz

85. In his written and oral evidence Mr Mainz told me as follows. He said that he had a clear recollection of the purchase of No.5. When he and his wife first looked at the property they were shown round by W-S. He was selling No.5 and No.5A together as one property. It was clear to them that it was in effect two separate properties each of which had its own separate access, garage and off street parking. At no time did anyone ever suggest anything to the contrary. The only overlap between the two of which they were aware was the part of the roof terrace attached to the studio house which sits on top of the double garage forming part of No 5. They could not afford and did not want what became No.5A. They therefore negotiated and finally agreed with W-S that they could purchase the main house alone at a price of £850,000.

 

86. They were, he told me, aware during the negotiations that the strip existed: i.e. that there was a strip of private land between the garage doors and the front door and the highway. Throughout these negotiations and as part of the final agreement, they made it clear that they wanted the whole of what is now No.5 including the strip. They wanted the off-street parking facility afforded by the strip and were always clear on this point. The existence of off-street parking on the strip was, he said, one of the big attractions of the property. It was a significant benefit. They expressly discussed the off-street parking with W-S.

 

87. Conversely, he said, they did not want any part of what is now No.5A. W-S was to retain ownership of the studio house which would become a wholly separate property for ownership purposes which W-S could subsequently sell on as a separate property. They therefore agreed with W-S that they would purchase all of No.5 except those parts of the property which were to be expressly retained as parts of No.5A: the studio house; the single garage and the strip in front of it; the roof terrace. There was, he told me, never any discussion between themselves and W-S about any exclusion of the strip from the extent of the property they were to acquire. They always understood that they would be buying this as an integral part of No.5 and that W-S was to retain in his ownership the extension of the strip which runs in front of the garage belonging to what became No.5A. Nor was there ever any discussion at any time about them being granted rights of access over the strip because they believed they were purchasing it as part of No.5. Had it ever been suggested, by W-S, the solicitors or anyone else, that the strip was not to be included, then they would have withdrawn from the purchase as they were very keen to acquire the off-street parking which the strip represented. They would not have wanted to negotiate rights of access over the strip.

 

88. He told me that they had a series of discussions with W-S personally both at the property and on the telephone. In fact most of their negotiations were with him and not with the Estate Agent. They found him to be a very pleasant and honourable man who, they believed, liked them. He was, for example, prepared to extend the time for completion in return for a payment of £10,000, when they had difficulties in selling their previous property. There were other prospective buyers at the time but W-S preferred to sell to them.

 

89. He was, he told me, somewhat neurotic about the purchase but they were particularly concerned at giving up the roof of the double garage which formed part of the terrace of the property which was to be retained by W-S, that is what became No.5A. They only agreed reluctantly to lease it back to W-S. It was for that reason that, when the plans for the draft contract were sent to them, they concentrated on that which delineated the roof terrace over the double garage which was eventually annexed to the lease and not on the other plan which was annexed to the transfer.

 

Mrs Mainz

90. In her written and oral evidence Mrs Mainz told me, additionally, as follows.

 

91. She confirmed what her husband had told me to the effect that they agreed with W-S that they would purchase all of the property except for those parts which were to be retained as No.5A. She specifically recalls W-S mentioning during one of their visits that they could park off-street in front of the double garage. She said that, having inspected the property, she was very pleased to have the facility of off-street parking. She specifically remembers mentioning this to W-S during one of their viewings. She was an artist and worked from home as well as having two young daughters at school.

 

92. She told me that it was agreed with W-S that the extent of the land which they would purchase would, on the frontage, abut the highway. She said that she would not have agreed to purchase No.5 if she had thought that they were not acquiring the freehold ownership of the whole property including the strip. She and her husband were always clear that they wanted the freehold ownership of the whole of No.5 and it was never suggested in any of their negotiations with W-S that the strip would be excluded from the sale of No.5. The agreement with him was always that they would own the whole of No.5 except that expressly reserved as No.5A. They never agreed that the strip was to be excluded from the land they were to purchase.

 

Documents

93. There are few contemporaneous documents which shed much light on the matter. However, as already noted, there is nothing in the transfer by which an express right is granted to the owners of No.5 over the strip. Absent gross negligence, it would be extraordinary for the Mainz’s solicitors (who also acted for their mortgagee) to have allowed them to purchase what was in effect a landlocked property without, at the very least, taking an express grant of the necessary rights. There is discussion of such express rights in specific enquiry (H) (quoted above) but no mention of express rights of way in favour on No.5 over the strip.

 

94. As noted, the lease granted contemporaneously with the transfer includes an express user covenant. Thus, if W-S was genuinely concerned to protect the view from or light into the ground floor bedroom window of No.5A, through his solicitors he could easily have extracted a restrictive covenant in relation to the strip of a type which is now offered by As.

 

95. Further at least some support for the Mainz’s description of what they agreed with W-S is contained in the draft “Amended Agreement For Sale” [195] in which the property to be transferred is described as “All that property known as 5 Melina Place, St Johns Wood, London NW8”.

 

96. Finally, I can place some, but not much, reliance on an email dated 19^th February 2014 [236] from Mr Mitchell, the solicitor who was instructed by W-S on the sale of No.5. He states:

“Whilst I would not be able to speak for Mr Watson-Smyth’s intention at the time I am sure that if Mr Watson-Smyth had specifically instructed me to retain what appears to be a “ransom strip” I would remember it as they are a fairly unusual device”

 

 

 

Conclusions

 

97. I have no hesitation of finding that Mr and Mrs Mainz and W-S had a common intention that the land which the former were to acquire from the latter was to include the strip. It is clear indeed that there was an agreement to that effect. The common intention and indeed the agreement was expressed and manifested in the various oral discussions which Mr and Mrs Mainz told me that they had with W-S. There was express discussion between Mr and Mrs Mainz and W-S about the off street parking on the strip. The agreement was for Mr and Mrs Mainz to purchase all of No.5 save for that which was to be retained by W-S as No.5A. The retained parts were to be: the studio house; the single garage (and the strip in front of it); the roof terrace. Thus W-S was not to retain the strip which formed the access into, and off street parking for, No.5.

 

98. I find that there is convincing proof of the existence of this common intention. As I have stated, I have no hesitation in accepting the clear evidence of Mr and Mrs Mainz to this effect.

 

99. Further, there is also no doubt on the evidence, and I so find, that Mr and Mrs Mainz were, at the date of both the contract and the transfer, under the mistaken impression that they were acquiring the strip as part of their purchase of No.5. Having made an agreement to that effect with W-S, I find that no one told them otherwise. W-S did not inform them that they were no longer to acquire the strip as part of their purchase. Their solicitors never informed them that the strip was to be excluded from the sale.

 

 

100. In his closing submissions Mr Dutton did not seriously contend either that there had been no discussion between W-S and Mr and Mrs Mainz about parking on the strip or that Mr and Mrs Mainz were not, at the date of the contract and the transfer, operating under a mistake to the effect that the strip was included in the land that they were purchasing. This was, if I may say so, an entirely realistic position. However he concentrated on the third limb of the test set out by both Peter Gibson LJ in the SWAINLAND case and by HHJ Hodge QC in his book (both of which are quoted above). In summary he submitted that, whatever might have been agreed between W-S and Mr and Mrs Mainz initially, they both subsequently put the matter into the hands of their respective solicitors. Given the fact that the plan annexed to the transfer (and the contract) clearly does not include the strip within the red lining and given the lack of evidence as to what passed between the solicitors, it cannot be shown, he submitted, by convincing proof, or indeed on the balance of probabilities, that any common intention on the part of Mr and Mrs Mainz and W-S to include the strip in the transfer continued up to the date of the transfer. He submitted that, given that the plan to the transfer clearly does not include the strip, the suggestion by As that the strip was omitted by mistake is just a theory unsupported by any real evidence.

 

101. As I canvassed with Mr Dutton during his submissions, given the clear agreement between W-S and Mr and Mrs Mainz that the latter were to acquire the strip and given that Mr and Mrs Mainz were clearly under the mistaken impression at the date of the transfer that they had acquired the strip as part of No.5, there would thus appear to be three possible scenarios:

(i)                 The common intention that the strip was to be included with the transfer of No.5 continued up to the execution of the transfer and the omission of the strip from the land lined in red was a mutual mistake.

(ii)               W-S changed his mind, instructed his solicitor to exclude the strip from the transfer, but chose not to inform either Mr and Mrs Mainz or their solicitors (neither of whom noticed).

(iii)             W-S changed his mind, instructed his solicitor to exclude the strip from the transfer, informed Mr and Mrs Mainzs’ solicitor but the latter, through gross negligence, omitted to inform his clients of this fact.

As submit that scenario (i) was what in fact occurred. Rs submit that it was either (ii) or (iii) but in any event that there is no convincing proof that it was (i).

 

102. I cannot accept Mr Dutton’s submissions. I think that neither scenario (ii) nor scenario (ii) are in any way likely to have occurred.

 

103. So far as scenario (ii) is concerned, this would, in effect, have amounted to rather underhand, or perhaps dishonourable, behaviour by W-S. The clear evidence of Mr and Mrs Mainz was that W-S was a decent and honourable man who dealt with them in a straightforward manner and indeed was keen to sell his property to them. I see no reason not to accept their evidence in this regard. Thus, for scenario (ii) to have occurred would have required W-S to have acted in a manner which was out of keeping with the clear impression he had given to his purchasers. I find that that is highly unlikely to have occurred. Mr Mainz was clear that he continued to have contact with W-S after each side had instructed solicitors. If W-S had changed his mind then I agree that it would have been likely that he would have informed Mr and Mrs Mainz of that fact. Further, if W-S had genuinely changed his mind and deliberately kept the strip, one might have expected him to have highlighted this to Rs on their subsequent purchase of No.5A. Given my findings as to the initial agreement between W-S and Mr and Mrs Mainz, one would have to assume, in either scenario (ii) or (iii), that W-S had a coherent reason for wanting to retain the strip. Thus it is something which one might have expected him to have expressly pointed out to anyone who purchased No.5A. Yet the clear evidence of Rs is that this did not occur. They had no contact with W-S. They were informed that they owned the strip by their own solicitor who had carried out his own researches.

 

104. For scenario (iii) to have occurred would have required a wholly unlikely degree of ineptitude on the part of the solicitor instructed by Mr and Mrs Mainz who, it must be remembered, also acted for their mortgagee. On this hypothesis, the solicitor had been informed by W-S, or his solicitor, that W-S was removing the strip from the land to be sold. In that case, not only would the solicitor have failed to inform his clients of the fact that they were no longer to acquire a small but significant part of the property they were expecting to acquire, but he would also have failed to point out that No.5 was potentially landlocked and failed to have ensured that express rights were granted over the strip in favour of his clients.

 

105. Further, both scenario (ii) and scenario (iii) would also have involved W-S’s solicitor allowing him to sell No.5 whilst retaining the strip but without granting any express rights over it. He would have been bound to tell W-S that this might potentially cause problems in future for the owners of No.5A, if the owners of No.5 asserted that they had implied rights over the strip which rights had not been expressly granted. I do not think that Mr Mitchell is likely to have been so remiss.

 

106. The lack of express rights granted over the strip in the transfer together with the evidence of Mr and Mrs Mainz and the inherent improbability of scenarios (ii) and (iii), lead me firmly to the view that scenario (i) described above is by far and away the most likely to have occurred. Thus I find that, not only did W-S and Mr and Mrs Mainz have a common intention, indeed agreement, that the strip was to be included within the land to be transferred by the former to the latter but that this common intention continued up to the date of execution of the transfer. I find that both parties to the contract and the transfer thought that the strip was included. The fact that it was not was due to an error by W-S’s solicitor in drafting the plan which error was not spotted by W-S, Mrs and Mrs Mainz or their solicitors.

 

107. This finding is also consistent with the conduct of the parties after the transfer. I find that, after that date, Mr and Mrs Mainz used the strip for access and parking as if it belonged to them with no protest or comment from W-S.

 

108. As a result the contract and the transfer did not accurately represent the common intention of the parties. If the contract and the transfer were rectified as suggested by As, then it would represent the common intention.

 

109. As such, I answer Question 1 (as set out above) in the affirmative.

 

 

Question 2:  Did the right to rectify bind Rs on their purchase of No 5A in June 1993?

110. Both parties accept that the key question here is whether Mr and Mrs Mainz were in actual occupation of the strip as at the date of the transfer of No.5A to Rs on 16^th June 1993 within what was then section 70(1)(g) of the Land Registration Act 1925.

111. It is accepted that a right to have the transfer rectified was and is capable of being an overriding interest (see NURDIN & PEACOCK V DB RAMSDEN [1999] 1 EGLR 119 and MALORY ENTERPRISES V CHESHIRE HOMES (UK) LTD [2002] Ch 216 at paragraph 68). If the right was protected as an overriding interest as at the date of the transfer of No.5A, then it will bind Rs. Neither party suggested that the abolition of the Land Registration Act 1925 and its replacement by the different (and narrower) provisions in the Land Registration Act 2002 made any difference.

The law

112. Section 70(1)(g) read as follows:

1)      All registered land shall, unless under the provisions of this Act the contrary is expressed on the register, be deemed to be subject to such of the following overriding interests as may be for the time being subsisting in reference thereto, and such interests shall not be treated as incumbrances within the meaning of this Act, (that is to say):

…

(g) The rights of every person in actual occupation of the land or in receipt of the rents and profits thereof, save where enquiry is made of such person and the rights are not disclosed

 

113. The authorities are clear in that whether or not someone was in “actual occupation” was and is a question of fact to be determined by reference to the circumstances of each case. In WILLIAMS & GLYNS BANK V BOLAND [1981] AC 487, Lord Wilberforce said this (at 504-5):

“Were the wives here in "actual occupation"? These words are ordinary words of plain English, and should, in my opinion, be interpreted as such…

Given occupation, i.e., presence on the land, I do not think that the word "actual" was intended to introduce any additional qualification, certainly not to suggest that possession must be "adverse": it merely emphasises that what is required is physical presence, not some entitlement in law.”

Lord Scarman added (at 511):

“I expect to find - as I do find - that the statute has substituted a plain factual situation for the uncertainties of notice, actual or constructive, as the determinant of an overriding interest”

 

114. In MALORY ENTERPRISES V CHESHIRE HOMES (UK) LTD Arden LJ said this (at paragraphs 79-81):

“What constitutes actual occupation of property depends on the nature and state of the property in question, and the judge adopted that approach. If a site is uninhabitable, as the rear land was, residence is not required, but there must be some physical presence, with some degree of permanence and continuity: cf Strand Securities Ltd v Caswell [1965] Ch 958 . As Lord Oliver of Aylmerton said in Abbey National Building Society v Cann [1991] 1 AC 56 , 93:

"It is, perhaps, dangerous to suggest any test for what is essentially a question of fact, for 'occupation' is a concept which may have different connotations according to the nature and purpose of the property which is claimed to be occupied. It does not necessarily, I think, involve the personal presence of the person claiming to occupy. A caretaker or the representative of a company can occupy, I should have thought, on behalf of his employer. On the other hand, it does, in my judgment, involve some degree of permanence and continuity which would rule out mere fleeting presence. A prospective tenant or purchaser who is allowed, as a matter of indulgence, to go into property in order to plan decorations or measure for furnishings would not, in ordinary parlance, be said to be occupying it, even though he might be there for hours at a time."

The requisite physical presence must, as it seems to me, in fairness be such as to put a person inspecting the land on notice that there was some person in occupation: see generally per Lord Oliver in Cann's case, at p 87. None of the authorities which we have been shown deal with completely derelict land.”

 

 

115. In LINK LENDING V BUSTARD [2010] EWCA Civ 424 (albeit in the context of the 2002 Act) Mummery LJ said (at paragraph 27):

“Whether Ms Bustard was in “actual occupation” of the Property at the relevant date was an issue on which the trial judge had to make an evaluation based on his findings of primary fact. As for the law he considered the relevant authorities on the concept of a “person in actual occupation” of land in the earlier Land Registration legislation and now found in the 2002 Act. The construction of the earlier equivalent provisions by the House of Lords is binding on this court. The trend of the cases shows that the courts are reluctant to lay down, or even suggest, a single legal test for determining whether a person is in actual occupation. The decisions on statutory construction identify the factors that have to be weighed by the judge on this issue. The degree of permanence and continuity of presence of the person concerned, the intentions and wishes of that person, the length of absence from the property and the reason for it and the nature of the property and personal circumstances of the person are among the relevant factors.”

 

116. As Mr Lees also points out:

(i)                 The relevant date is the date of completion of the transfer of No.5A that is 16^th June 1993 (ABBEY NATIONAL V CANN [1991] 1 AC 56);

(ii)               Actual occupation of any part of the strip will be sufficient to protect the right in respect of the entire strip (WALLCITE V FERRISHURST [1999] Ch 355).

 

The evidence

117. Again the only evidence is that of Mr and Mrs Mainz. As have no evidence to give on this point. Rs were, at the relevant date, in the USA and had never lived in No.5A up to that time. In any event, as I have already indicated, if and insofar as the evidence of Rs differed from that given by Mr and Mrs Mainz, I prefer the evidence of the latter.

 

118. Mr and Mrs Mainz told me as follows.

 

119. They lived in No.5 from the date of their purchase. They had two daughters aged 5 and 8. They used the strip as follows. It was the only means of access into and out of No.5. They used the door constantly. Mr Mainz worked in the City of London. He left early each weekday morning and returned in the evening, using the door and the strip for access. Mrs Mainz was an artist who worked from home. Her two daughters attended school in South Hampstead. She would leave them to school in the car every morning between 8.00am and 9.00am and return to collect them between 3.00pm and 4.00pm. They would enter and exit over the strip via the door. As at June 1993, they did not use the double garage to park their car. It was used for storage of items, such as carpets, and Mrs Mainz found the doors difficult to use as indeed they were not working very well at that time. They had a small car (Mr Mainz believed it was a Renault) which could easily be parked on the strip without impinging on the highway. This car was regularly, indeed mostly, parked on the strip both during the day and overnight. Although they always had a residents parking permit, there were only three spaces on Melina Place and these were almost always occupied. One could not park on the street otherwise as there were parking restrictions which were rigorously enforced by the City of Westminster. Thus for the vast bulk of the time, the car was parked on the strip. Mrs Mainz said it was very rare for her to park anywhere other than on the strip. They did not use the car on Saturdays for religious reasons.

 

120. All deliveries, including the post, arrived at No.5 via the strip and the door. All visitors similarly entered and left No.5 via the door and the strip. Mr and Mrs Mainz would occasionally stand on the strip adjacent to the door and talk to their neighbours and to callers. It was after all the front door into their house.

 

121. The only people who parked on the strip were Mr and Mrs Mainz and their guests and invitees. Occasionally, Mrs Moss, the neighbour who was the key holder for Rs, asked permission for her guests to be able to park there. The strip, they said, was used exclusively by them and they regarded it as theirs.

 

122. I find that this was the situation from the date of completion of their purchase on 17^th December 1992, through to June and July 1993, and beyond.

 

123. Mr Mainz told me in particular that they were almost certainly at home in June and July 1993 as they normally, at that time, only took holidays in August when they spent a couple of weeks elsewhere in the UK.

 

Discussion and conclusion

124. In his closing submissions, Mr Dutton, unsurprisingly, did not seek to persuade me that the evidence of Mr and Mrs Mainz on this aspect of the case was not to be believed. However he relied heavily on the decision of the Court of Appeal in CHAUDHARY V YAVUZ [2013] Ch 249.

 

125. In that case the facts were as follows. It concerned two neighbouring buildings, 35 and 37 Balaam Street Plaistow. Each building contained commercial premises on the ground floor with residential flats on the floors above. Between the two buildings ran a passageway which was within the ownership of No. 35. Until 2005 there was only one floor above ground floor in No. 37 and access to this upper floor was gained internally. In 2005 the then owner of No.37 carried out works to that property which involved the creation of a wholly new second floor. In early 2006 the then owners of both properties informally agreed that the owner of No.37 would construct a metal staircase at the end of the passageway between the two properties. This would allow secure access to the upper floors of both. This staircase having been constructed, the then owner of No.37 rearranged the ground floor to remove the internal access to the upper floors of than building. Thus from that date the only access to the residential accommodation on the top two floors of No.37 was via the passageway owned by No.35 and then the metal staircase at its end. In early 2007 No.35 was transferred to the Defendant. In April 2009, the Defendant caused the metal staircase to be removed thereby rendering it impossible for anyone to access the top two floors of No.37. The owner of No.37 then commenced proceedings claiming that the removal of the staircase was unlawful as he had a right of way over the passageway and staircase which was binding on the Defendant as owner of No. 35.

 

126. The trial Judge held that the owner of No. 37 was entitled to an easement by estoppel over the alleyway and the staircase which was binding on the owner of No. 35 as the former had been in actual occupation of part of No. 35 at the time of its transfer to the Defendant in early 2007. The Court of Appeal overturned this ruling and held that the owner of No. 37 was not in actual occupation of ant part of No. 35 at the relevant time.

 

127. The sole reasoned judgment was given by Lloyd LJ. He said as follows (at paragraph 28):

“The first question is whether the claimant was in actual occupation of any part of number 35 at the time of the transfer to the defendant or his registration as proprietor. (The position will have been the same at both of those dates.) At first sight it seems counter-intuitive, to say the least, to assert that the owner of dominant land (number 37) is in occupation of other land (number 35) over which he asserts an easement. In Saeed v Plustrade Ltd [2002] 2 P & CR 266 it was said, on a concession by counsel, that the exercise of an easement giving a right to park a car on particular land meant that the owner of the car was in actual occupation of the space, so that such rights as he had would be an overriding interest. Ruoff & Roper on Registered Conveyancing, looseleaf ed, vol 1, makes the comment, at para 10.019, that this confuses “actual occupation” with “actual use”, and that the correct view is that the enjoyment of a right such an easement over burdened land does not amount to actual occupation of the land for this purpose. In the Celsteel Ltd case [2005] 1 WLR 204 , 219E Scott J observed that the plaintiff who was in actual occupation of a garage demised to him was not in actual occupation of any part of the driveway over which he asserted his easement to get to and from the garage.”

 

He continued (at paragraphs 31 and 32):

 

“In my judgment there was no actual occupation of any part of the metal structure by anyone which could give the claimant's rights the status of an overriding interest. The judge did not record any findings of fact as to how the metal structure was used at any given time, other than that it was used by the claimant's tenants to get to and from their flats on the upper floors of number 37 as well, of course, as by the defendant's tenants to get to and from theirs in number 35. Although referred to as a balcony, the part of the structure which ran along the side of number 37 at first floor level was no more than an access way to the front door of the flat at the rear of the property. There was no indication that it was used otherwise than for passing and repassing between the street and the relevant flat or flats. In my judgment such use does not amount to actual occupation. I dare say that no one else was in occupation of the metal structure either, but not every piece of land is occupied by someone, let alone in someone's actual occupation (as distinct from possession). I do not need to consider the use of the servient land in the case of an easement such as a right to park, where the dominant owner may place a large object on the relevant land and leave it there for what may be a substantial time. That issue does not arise on this appeal and I say nothing about it.

[Counsel for the owner of No. 37] sought to support the judge's conclusion in two ways. The first is that the claimant, having put the metal structure in place, was in occupation of the relevant physical space (i.e. that taken up by the structure) by virtue of the presence of the structure itself. He drew an analogy with a person present on land by chattels which had been placed and left there, such as in Malory Enterprises Ltd v Cheshire Homes (UK) Ltd [2002] Ch 216 where using the land for storage was seen as relevant: see para 82. He argued that if the presence of movable chattels can constitute actual occupation, so much the more would the presence of a large structure fixed to the land. I disagree. The metal structure became part of the land on any basis, regardless of whether any part of it, as a chattel, belonged (in any sense, for example as regards a right to remove it) to the owner of number 37, as opposed to his neighbour on whose land it was placed. It thus became part of what could be used or occupied. It makes no sense to say that its presence on the land of the defendant was itself occupation of that land by the person who paid for it to be put up in the first place. Occupation must be, or be referable to, personal physical activity by some one or more individuals: see per Lord Wilberforce in Williams & Glyn's Bank Ltd v Boland [1981] AC 487 , 505B–C—“physical presence, not some entitlement in law”. The only such activity in the present case was that of the claimant's tenants and their visitors (and of course those of the defendant) coming to and fro on the staircase and the level area at the top of the stairs. That is use, not occupation.”

(Emphasis added)

 

 

128. Mr Dutton in his submissions drew heavily on this case. He submitted that it showed that use as if pursuant to an easement could not amount to actual occupation. All that Mr and Mrs Mainz had done, he submitted, was pass and re-pass over the strip and use it to park on. Passing and re-passing was use of the strip as if in the exercise of a right of way. Similarly parking on the strip was use as if in the exercise of an easement to park. Thus the activities of Mr and Mrs Mainz on the strip amounted, in the words of Lloyd LJ (and Ruoff & Roper) to “use not occupation”.

 

129. I do not agree with Mr Dutton’s submissions. As both the Court of Appeal and the House of Lords have repeatedly emphasised (see paragraphs 113 to 115 above), whether or not a person is in actual occupation of a tract of land for the purposes of section 70(1)(g) of the 1925 Act (or section 29 and Schedule 3 of the 2002 Act) is a question of fact in each case. It depends both upon the nature of the tract of land in question and the nature of the acts said to constitute the occupation. Whilst Lloyd LJ did draw a distinction in the Yavuz case between use, on the one hand, and occupation, on the other, I do not accept that he was laying down any general principle, as Mr Dutton would suggest, that use which might possibly constitute the exercise of an easement cannot also be actual occupation. As Mr Lees pointed out, the use which constituted the easement to use the coal shed in WRIGHT V MACADAM [1949] 2 KB 744 would almost certainly have involved actual occupation of the coal shed for the purposes of section 70(1)(g). He also pointed out that, on the facts of the Mallory case, use of the land for storage had been considered by the Court of Appeal as a relevant fact in deciding whether there had been actual occupation of the tract of uninhabited land in that case. I think that Lloyd LJ recognised this when (in the passage highlighted) he expressly declined to make any ruling on factual situations other than that with which he was concerned. In particular he expressly left open the question of whether parking on a tract of land (which can of course involve the exercise of an easement- see e.g. GALE ON EASEMENTS (19^th edition) at paragraph 9-119) could amount to actual occupation.

 

130. Thus despite Mr Dutton’s forceful and eloquent submissions, I do not find that anything in the Yavuz case would prevent me from finding that the activities of Mr and Mrs Mainz on the strip as at 16^th June 1993 (and indeed as at 5^th July 1993) amounted to actual occupation. At the end of the day, I think that the Yavuz case was one very much on its own facts. I note in particular that the passageway in that case was, at the material time, used by the owners and occupants of both properties whereas, on the facts as I have found them to be here, the strip was used solely by Mr and Mrs Mainz as owners of No.5.

 

131. I return to ask myself whether, given the nature of the strip and the acts said to amount to actual occupation there was “some physical presence, with some degree of permanence and continuity” (per Arden LJ in Mallory). I will consider “the degree of permanence and continuity of presence of the person concerned, the intentions and wishes of that person, the length of absence from the property and the reason for it and the nature of the property and personal circumstances of the person” (per Mummery LJ in Link Lending).

 

132. As I have described it, the strip was and is a flat metalled area of approximately 5 feet in width by 25 feet in length. It was and is situated at the entrance to both the front door into No.5 and the double garage doors. One has to pass over the strip to enter and exit No.5 by foot or on vehicles. One should ask oneself: how would one expect someone to be in actual occupation of such a tract of land? The answer in my view is: in exactly the way that Mr and Mrs Mainz were in occupation of it. They were the owners of No.5. They had sole use of the strip. As I have set out above, they used it to enter into and exit from their property. They parked constantly on it. Had anyone spent a modicum of time observing the strip in June and July 1993 they would surely have come to the conclusion that that strip was being used and occupied by the owners of No.5 and by no one else. If one looked at the strip with the car parked on it in front of (and blocking) the double garage doors, one would, in my view, reasonably (and correctly) come to the view that the only person who would or could do that would be the person who owned the garage.

 

133. In relation to a tract of land in the nature of the strip there was indeed physical presence, with some degree of permanence and continuity. If one looks at the factors spelled out by Mummery LJ they again point clearly to Mr and Mrs Mainz being in actual occupation of the strip.

 

1. the degree of permanence and continuity of presence of the person concerned: the strip was constantly in use by Mr and Mrs Mainz for access and parking.
2. the intentions and wishes of that person: Mr and Mrs Mainz thought they owned the strip and had a right to use it as part of No.5.
3.  the length of absence from the property and the reason for it: the only time that the strip was not parked on and used for access was when Mr and Mrs Mainz were temporarily absent from their property.
4.  the nature of the property: it was, as I have indicated, a strip of land which could only conceivably be used for access to No.5 and for parking on.
5.  The personal circumstances of the person: Mr and Mrs Mainz were the freehold owners of No.5 and the only persons whom one might expect to need to use the strip.

 

134. One might, I suppose, assert that there were other things which Mr and Mrs Mainz could have done to evince their actual occupation of the strip: they could have installed bollards to prevent others parking on the strip (as indeed Rs have now done on that strip of land outside the single garage of No.5A); they could have painted or otherwise marked the surface; they could have erected a sign indicating that this was private land. However, on the evidence of Mr and Mrs Mainz, which I have accepted, they needed to do none of these things: no one else in fact used the strip. Further, the fact that one can, with the benefit of hindsight, think of other means by which actual occupation of land could have been proved, does not necessarily or at all lead to the conclusion that there was no actual occupation on the facts as proven.

 

135. In the circumstances I have come to the clear view that Mr and Mrs Mainz were in actual occupation of the strip at the relevant date. I thus answer Question 2 in the affirmative.

 

 

Question 3: If the answer to the two previous questions is in the affirmative, ought the Tribunal to exercise is discretion to rectify the transfer as sought?

The law

 

136. As both parties accepted, rectification is an equitable remedy and, as such, is described as discretionary. However I do not think that this means that a court or tribunal has an unfettered discretion (in the sense in which that word is used in other legal contexts) to refuse the remedy of rectification. The so-called discretion has to be exercised in accordance with equitable principles.

 

137. Neither party drew my attention to any authority on this point. However in his book (referred to above) HHJ Hodge (at paragraphs 5-02 and 5-03) states as follows:

“Rectification is a discretionary, equitable remedy; and the court may refuse to grant such relief on various equitable grounds, such as laches and acquiescence. However, since damages or equitable compensation are not available as an alternative remedy to rectification, the court may be more reluctant to withhold relief than in the case of remedies (such as specific performance) which fall within equity’s ancillary (rather than its exclusive) jurisdiction. The court should only refuse rectification on equitable grounds if these have some immediate and necessary relation to the rectification sought.”

He continues:

“Because a claimant who is denied equitable assistance by way of rectification may be left without any remedy at all, the refusal of rectification may cause greater prejudice or hardship to an applicant for such relief than in the case of a claimant who is refused an order for specific performance, and is left to an award of damages instead. This consideration must be taken into account by a court whenever it has to weigh the balance of justice or injustice in deciding whether to grant, or to withhold, the equitable remedy of rectification. Thus, if the factual basis for a claim to rectification is made out, an exceptional case should be required for relief to be refused on discretionary grounds. If conduct is to operate as a bar to equitable relief it must have an immediate and necessary relation to the equity sued for: a general depravity is not enough.”

 

The parties’ submissions

 

138. In his closing submissions Mr Dutton did not point to any form of equitable defence (such as laches/acquiescence or that no useful purpose would be served by making an order). He conceded (rightly in my view) that, if Mr and Mrs Mainz had remained as owners of No.5, then it was “tolerably clear” that the equity would have to be satisfied by the grant of the remedy sought. However he relied on the evidence of A1 to the effect that As did not in fact believe that they were acquiring ownership of the strip at the time of their purchase. In those circumstances, he submitted, rectification would give As more than they thought they were acquiring on their purchase of No.5.

 

139. I do not think that this factor is something which provides a defence in equity such that I would, in the exercise of equitable discretion, withhold the remedy of rectification in circumstances in which I would otherwise grant it. However, even if it is, I think that the answer is that provided by Mr Lees. He pointed out that, although As thought that the strip was part of the public highway, they nevertheless thought that they would be able to park on it and extend No.5 underneath it.

 

140. Further, having answered Questions 1 and 2 in the affirmative, I am firmly of the view that I ought to grant rectification. Firstly, it meets the expectations of the original parties to the transfer which, as I have found, bind Rs. Secondly, as already stated, no reason in equity has been shown as to why I ought not to grant the remedy. This is not, in my view, an “exceptional case” (to quote from HHJ Hodge’s book). Thirdly, the concerns expressed by Rs as to the view from and light into their bedroom window can be met by the restrictive covenant offered by As. Fourthly, the practice of Mr and Mrs Mainz and the expectation of As was that they would be able to park on the strip. However, as described above, this was not the position of R2 when she gave evidence. She was adamant that only parking by way of loading and unloading was permitted. Rectification is required to allow the owners of No.5 to park on the strip without fear of any protest or objection from Rs or from any subsequent owners of No.5A. Fifthly, a refusal to rectify would leave the owners of No.5 with only an implied (rather than express) right of access to their land. I think that this is undesirable from the point of view of the owners of both properties. Further, it seems to me that, in the circumstances, a refusal to rectify may well also lead to further disputes as to the nature and ambit of the rights over the strip. R2 did, after all, refer to the strip as a “ransom strip”.

Conclusion

141. I will therefore answer Questions 1, 2 and 3 in the affirmative. I will rectify both the transfer and the preceding contract so that the plan annexed to both includes the strip within the area lined in red. This will be on the condition that As enter into the restrictive covenant which they have offered preventing them and any future owners of No.5 from building on or over the strip. I note that in his witness statement (paragraph 34 at [228]) A1 refers to a “mutual” restrictive covenant. If, by that, he intends that I should order Rs to enter into a similar covenant in relation to any part of No.5A, then I decline to so order. Rs do not seek any relief. Even if technically I had the power to order them to enter into such a covenant (which I doubt) I would not be inclined to do so.

 

142. I will leave it to counsel to draw up and agree an order in appropriate terms. If the terms of the order cannot be agreed, then either party may apply to me in writing giving notice to the other side and (unless I am persuaded otherwise) I will deal with any dispute over the terms of the order without a further oral hearing.

 

143. So far as costs are concerned, at the moment I can see no reason why costs should not follow the event in the normal way. As have won and Rs should therefore pay their costs. However, if Rs wish to persuade me that I should make a different order, then I give them permission to make written submissions to me within 21 days of the date of this decision.

 

144. If no such submissions are made, then I will order Rs to pay As’ costs of the proceedings to be subject to assessment (on the standard basis). I shall make such an order without further hearing. If Rs do file and serve written submissions, then I give As a further 14 days in which to file written submissions in response. Thereafter, I will make a decision on the incidence of costs without a further hearing.

 

145. At the same time, I will order that any party who wishes to claim costs from the other must, within 21 days of the date of this decision, file and serve a Schedule of Costs in the form normally used for summary assessment. Once I have decided the incidence of costs, I will summarily assess the amount. I will give any party ordered to pay costs to the other a further 14 days to make submissions on the amount of any costs claimed.

 

 

 

DAVID HOLLAND QC

8^TH DECEMBER 2014