Summer '16 England & Wales

SUMMER 2016 ISSUE

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FIRST COMMENT IN THIS ISSUE: • ABANDONMENT OF AN EASEMENT – CAN WE EVER BE CERTAIN? • FRAUD - AGAIN! • DRAWING A LINE UNDER A DISPUTE • CLAIMS CASE STUDY: ACCESS

Leading Title Insurance

Welcome to the summer edition of our newsletter.

Firstly, we would like to thank you once again to those of you who responded to our recent customer satisfaction survey; your feedback is greatly appreciated. Congratulations go to Amy Jones of Pinsent Masons LLP, who was the lucky winner of our ÂŁ500 experience day voucher.

In this issue, we have contributions from our regular writers Paul Butt (who focuses on fraud) and Kevin Lee (who discusses boundary disputes.)

Our staff contribution this quarter is from commercial underwriter Ben Baker, who considers the abandonment of easements. Lastly, we give an insight into how we deal with claims with a brief case study regarding a recent access claim.

We do hope that you are enjoying the new format of our newsletter. Should you have any feedback, suggestions or comments, please don’t hesitate to send them to us at marketing@firsttitle.co.uk

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FIRST COMMENT

Abandonment of an Easement – can we ever be certain?

With registered titles often revealing the existence of rights burdening land and little evidence sometimes available as to who and what could benefit from the right, Ben Baker, commercial underwriter at First Title, looks at how certain we can be that a right of way has been abandoned.

Abandon is a very definite term; it is used in situations which are particularly black and white rather than circumstances where there may be an uncertain grey area. It is this absolute value which sees it used in the terms Abandon ship and Abandon hope all ye who enter here. Similarly, the abandonment of an easement is a very definite situation, depriving one party of a proprietary interest which they previously benefited from, yet freeing up another landowner from a potentially cumbersome burden. However, the circumstances surrounding how such a scenario can arise are decidedly less certain, containing plenty of the aforementioned grey areas.

The legal position is that it is while an easement can be abandoned, establishing such abandonment is much more difficult.

As a precursor to assessing how an easement can be abandoned it will also be useful to note the other ways in which an easement may be extinguished or released before a more detailed examination of the position regarding abandonment.1

Express release In simple terms, the owners of dominant and servient land can enter into a deed attempting to release a right of way. This will have the effect of extinguishing the right of way in relation to those two plots of land, but caution should be exercised if the right of way has not been released by all the dominant land benefitting from the right.

1 For further reference see Land Registry Practice Guide 62 section 11 and Law Commission Consultation Paper no 186 Easements, Covenants and Profits Ă Prendre

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Unity of ownership Also known as “unity of seisin,” this rule dictates that where the dominant and servient land come into common ownership, the right is extinguished. It is not revived or preserved on a subsequent sale. Therefore, any party wishing to benefit from the rights will need them to be freshly granted once land has been in common ownership.

Statutory Powers An easement can be extinguished by statute or under statutory authority. Circumstances, where this may come into play, include compulsory purchase pursuant to a statutory power or potentially according to s.237 of the Town and Country Planning Acct 1990 which permits the interference with a right to which the section applies.

Termination of an Estate This method comes into play where the estate benefitting from an easement ceases to exist, for example at the end of a lease, so to do the rights benefitting from the right to a certain extent. The Court of Appeal decision is Wall v Collins2 offers a slightly different view on this in upholding that rights granted to a lessee did not extinguish when that party subsequently merged their estate with the freehold.

Implied Release Precedent shows that an easement can be impliedly released through either excessive use or abandonment.

In order to be abandoned due to excessive use, the benefitting land will need to physically change, or the land must have a sufficient change of use. A key point to remember in determining whether there has been

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excessive use of an easement is that it may often be necessary to work out in the first instance the nature and extent of the easement itself. Once the nature of the easement has been established a two-stage test was set out by Lord Justice Neuburger in McAdams Homes Ltd v Robinson3 to determine whether the easement has been lost. These two stages are firstly, the dominant land must be developed in such a way to represent a radical change in character and secondly that the redeveloped site creates a substantial increase or change in the burden on the servient land.

Abandonment of an Easement As previously alluded to it is difficult to establish that an easement has been abandoned. The Land Registry note the judgment of Buckley LJ that in order to have abandoned an easement the benefitting party must have “demonstrated a fixed intention never at any time thereafter to assert the right himself or to attempt to transmit it to anyone else.”4 This provides us with the starting point that an easement will not become abandoned in the eyes of the law purely by lack of use. This was the key point behind the decision in Benn v Hardinge5 to hold that even though an easement had not been used for 175 years, it had still not been abandoned. There is a suggestion that such extensive non-use would need to be justified in order for the courts to infer that it had not been abandoned, yet in this case the only justification was that use had been made by the owners of the dominant land of an alternative access.

Furthermore, the more recent case of Dwyer v Westminster Council6 shows that even the registration of servient land with Possessory Title following 40 years of exclusive possession does not lead itself to the presumption that a right of way has been abandoned.

2 [2007] EWCA Civ 444, [2007] Ch 390, 3 [2004] EWCAA Civ 214, [2005] P& CR 30, 4 Tehidy Minerals v Norman [1971] 2 QB 528, 5 Benn v Hardinge (1993) 66 P &CR 246, 6 2014] EWCA Civ 153

FIRST COMMENT

The Law Commission suggest that there is “a conspicuous reluctance on the part of the courts to find that an easement has been extinguished.”

This leaves the law in a particularly unhelpful position for landowners with property burdened by such rights.

Short of definite action to release a right of way, land could conceivably be bound by rights created in years gone by for perpetuity, limiting the scope for further development or use of the land in accordance with the present day landowners wishes. While this makes perfect sense in relation to rights that are still being exercised, where dominant land would appear to retain no practical benefit, there are inherent risks in seeking to use land without accounting for these apparently obsolete rights.

On the other hand, one must bear in mind, as has been pointed out by the courts throughout the legal history of this issue that property owners and the beneficiaries of rights do not want to be under an obligation to make constant use of a right in order to stop it being taken away.

In contrast to covenants there is not a mechanism currently in place allowing for the modification of a burden affecting land that is no longer relevant, nor is there always the possibility of obtaining an express and final release of rights burdening servient land.

The effect of this is that it is not possible to ever be certain that an easement has been abandoned without the facts being determined by the court. The precedent set by the courts appears to establish that where possible circumstances will be construed to ensure the perpetuation of rights.

What next?

Profits à Prendre7 sought to address these issues. It recommended the establishment of a body similar to the Lands Chamber allowing for a court to determine the status of an easement. It also recommended that a continuous period of 20 years without use should create a rebuttable presumption that it has been abandoned. Clearly this would not definitively address the uncertainty attached to easements that appear to have been abandoned. It would take the courts to determine in due course on what basis we would avoid the presumption and therefore the necessary certainty regarding future dealing with land subject to such rights will still not be achieved.

In practical terms, a landowner finding rights on their title which might have been abandoned will be faced with the following considerations, either under the current regime or to a similar extent under the Law Commissions suggested regime, when looking to deal with their property: • Do they avoid or amend any development to prevent interfering with a valid right of way?

• Should they approach owners of dominant land to secure a formal release with the risk that this is not forthcoming, or all dominant land owners cannot be traced?

• Can they afford to take a chance that no third party will seek to exercise the easement?

None of these options are ideal and yet there does not appear to be a perfect solution taking account of all relevant interests. Consequently, all interested parties will need to continue weighing up how best to deal with the inherent uncertainty regarding potentially abandoned easements and looking at ways that they can manage the risk this represents.

While it is now around five years old, the Law Commission report on Easements, Covenants, and

7 LAW COMM No 327

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Fraud - Again!

By Paul Butt

Consultant Solicitor, Rowlinsons Solicitors

Introduction Once again Conveyancing fraud is in the headlines – and in particular the vexed question as to whom should bear the loss. Regrettably, it increasingly seems that the answer will be – the Conveyancers! Recently we have had more cases in effect holding conveyancers liable for the fraud of others.

It is now well established – and hopefully well known - that if a conveyancer receives client’s money – whether for a lender or a buyer – that money is held on trust pending completion. So if completion does not take place – or it turns out that what was thought to be completion is fraudulent, the conveyancer will be liable for breach of trust. This is an absolute liability irrespective of fault. So we start with the position that the conveyancer is liable. However, the court has the power to waive liability under s.61 Trustee Act 1925 if the trustee/conveyancer has acted ‘honestly and reasonably and ought

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fairly to be excused for the breach of the trust’. However, remember that a high duty is placed on trustees, particularly professional trustees. So, in deciding whether the conveyancer should be excused from liability, the Court of Appeal has held that the conduct of the entire transaction must be taken into account, not just matters which might have facilitated the fraud: see Santander v RA Legal [2014] EWCA Civ 183. This was a case involving a fraudster in the seller’s solicitor’s offices, but the buyer’s lender’s solicitors could not ‘fairly be excused for the breach’ where they had handled the transaction in a ‘slipshod’ way – for example by failing to get the usual undertaking to discharge the outstanding mortgage and also failing to get agreement to use the Law Society Code on completion – neither of which would have prevented the fraud.

However, the existence of the s.61 power does mean that if we have carried out the transaction in a ‘reasonable’ manner – as most conveyancers do – then we will be relieved of the liability.

FIRST COMMENT

Seller’s Conveyancers Liability Moreover, now we have Purrunsing v A’Court & Co [2016] EWHC 789 (Ch). Here, for the first time, the seller’s conveyancers were held liable for breach of trust in relation to purchase monies paid over to them on completion.

The Facts The facts of the case were slightly unusual.

In 2012, the fraudster, pretending to be a Mr. Dawson retained A’Court & Co, solicitors (ACC), to act on his behalf in relation to the sale of the property in Wimbledon. Mr. Dawson’s instructions to Mr. A’Court were that he was not living at the property; the property was vacant and had been given to him by his father in 2008 and that a speedy exchange and completion would be required because he needed the money. Mr. Dawson told Mr. A’Court that he was living at an address in Maidenhead. He produced a water bill and an electricity bill addressed to him at that address and also a bank statement addressed to Mr. Dawson and his wife at that address and what appeared to be a British Passport for Mr. Dawson.

The passport was a forgery, but it was not alleged that Mr. A’ Court should have been able to detect that it was not genuine.

As the judge commented, the unusual situation here was that there was no connection between the seller and the property he was claiming to own: the addresses for service entered on the Register of Title were the property and an address in Cambridge, not the address in Maidenhead. Unfortunately, this did not seem to be strange to Mr. A’Court.

As will be appreciated, none of the utility bills supplied by Mr. Dawson to ACC were

addressed to him at either the property or 163 Huntingdon Road, Cambridge. ….It is common ground, but in any event, I find, that had ACC attempted to contact Mr. Dawson at the Cambridge address they would have made contact with the real owner, and the fraud would have failed. I make this finding because, when an attempt was made to register the claimant’s title, the Land Registry made contact with (as it turned out) the true owner at the Cambridge address and it was this that led to the discovery of the fraud. …Mr. A’Court could have asked for utility bills or council tax documentation for the property. Given Mr. Dawson’s instructions that the property was empty, this ought not to have been a difficulty. Mr. A’Court did not do so.

Mr. Purrunsing sued both firms of conveyancers involved. Both ACC, who acted for the fraudster and the licensed conveyancers who acted for him, House Owners Conveyancers (HOC) in north London, admitted liability for breach of trust concerning the purchase money, which was sent by ACC to an account in Dubai and had disappeared; the trial was about whether they had acted ‘honestly and reasonably’ to be entitled to relief under s.61 of the Trustee Act 1925.

The Decision HHJ Pelling held that ‘The vendor’s solicitor is as much a trustee of the purchase money while it is in his possession pending completion as is the purchaser’s solicitor.’ Moreover, “there is no obvious justification for interpreting s.61 more leniently in respect of such a breach of trust by a vendor’s solicitor than would be the case in relation to such a breach by a purchaser’s solicitor”.

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He found that A’Court had made “no serious attempt” to carry out risk-based due diligence and comply with anti-money laundering regulations to prevent the fraud. Critically the firm obtained no documentation linking the seller to the property – it had failed to make further enquiries even though the fraudster had provided an address that was neither that of the property nor the alternative service address that appeared on the Land Register.

The judge relied upon and quoted extensively from the Law Society Practice Note on Property and Registration Fraud and ACC was found wanting: ‘The reality is that Mr. A’Court simply did not know of the terms of the rules and guidance to which he was subject,’ the judge found. ‘Had these enquiries been made as and when they should have been, it is unlikely the fraud would have occurred in the way it did.’

Conveyancers, please note all of these comments!

However, what of the buyer’s conveyancers?

Unusually HOC had asked a specific question about identification. They asked: ‘“Please confirm you are familiar with the sellers and will verify they are the sellers and check ID to support same.”

He went on:

No comment on the grammar of this!

The Note warns specifically of a rising incidence of “… fraudsters targeting the properties of … individuals …” by means that can include identity fraud – see Paragraph 1.2. At Paragraph 2.3, the Note identifies certain properties as vulnerable to registration frauds. Five types of property are listed including two applicable in this case being (1) unoccupied properties and (2) high-value properties without a legal charge.

ACC replied:

Paragraph 3.1 of the Note warns that identity documents may not conclusively prove that the person is the person they are purporting to be or that such person is the registered proprietor of the property. This leads to Paragraph 3.1.1, which summarises the obligations imposed by Reg.5 of the MLR including in particular Reg.5(c) before saying of this provision that it “… means more than just finding out that they want to sell a property. It also encompasses looking at all the information in the retainer and assessing whether it is consistent with

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a lawful transaction. This may include considering whether the client is the owner of the property they want to sell”…..In my judgment the factors pointing towards the need for such consideration, in this case, include that the property was a vulnerable property because it was (i) unoccupied (ii) unencumbered and (iii) high value and also because (iv) it was one where the address given by Mr. Dawson was not either of the addresses for service that appeared on the proprietorship register.

‘As explained to you over the telephone, prior to being approached to act on the sale we have no personal knowledge of Mr. Dawson, but we confirm that we have met him in person and have seen his passport (and retain a copy of the photo page) together with utility bills etc showing his UK address as notified to us.’

HHJ Pelling said that HOC should not reasonably have been satisfied by this answer, so again no relief from liability. Having asked such a question, presumably, the only ‘reasonable’ answer would have been ‘Yes we verify that he is the seller.’

However, does this mean that we should all now be asking such a question and insisting on such an answer? Alternatively, would HOC have been better not to have asked the question – most conveyancers do not - and would they then have been relieved from liability? Moreover, what about CQS firms or

FIRST COMMENT

indeed any firm stating that they will comply with the Law Society Protocol? Step 2 of this states that both parties will ‘Carry out and record – verification of identity and compliance with money laundering regulations.’ Is it ‘reasonable’ to assume that such firms have done that, or should we ask for confirmation? The case raises more questions than it answers, I am afraid.

Anyway, in the case itself, the Judge finally concluded that HOC and ACC must each bear equal responsibility for the loss.

rule. Moreover, if (as in the Telegraph case) there is a need for bank details to be given more speedily than through the good old fashioned ‘Snail Mail’, then use the telephone. On-line conveyancers already have sophisticated security checks in place to ensure that the person on the phone is whom they say they are and such checks should be used by all of us when obtaining or giving important information over the phone.

Liability to Land Registry

Friday Afternoon Fraud – Still!

Moreover, then we have Chief Land Registrar v Caffrey & Co [2016] [EWHC] 161 (Ch)

On April 23rd, the Daily Telegraph reported: “Property sellers warned not to email solicitors: ‘We lost £204,000’”. The followed a lengthy report on Friday Afternoon fraud where buyers had received an email, apparently from their conveyancer, giving the bank account details into which the purchase monies were to be paid. However, the emails had been hacked and the email received by the clients – ostensibly from the conveyancer – gave the fraudster’s bank details, not the conveyancer’s, and the money disappeared. The report continued:

This reminds us that there is yet another way of holding conveyancers liable for the fraud of others – we can be required to reimburse Land Registry for the compensation paid out by Land Registry to those who suffer loss due to fraud.

As an example of this, Land Registry recently obtained judgment against solicitors who enabled a borrower’s fraud by failing to spot forged discharge documents. Land Registry had indemnified the lender and made the claim by way of subrogation to recover its loss.

“Telegraph Money disclosed the first cases of this fraud 12 months ago in May 2015. Since then, the legal community has done little to protect homebuyers and sellers. Fresh cases continue to emerge, with this newspaper being aware of at least three six-figure losses arising since February.

It continued “Between November and January, 35 reports have been made resulting in a combined loss of £2,665,819.”

The conveyancers in question said that their email system had not been hacked, and so they could accept no responsibility for the loss. However, the answer to this fraud is simple. We tell clients that we will NEVER under any circumstances send (or accept from them) bank details by email. Moreover, we make sure that fee earners comply with this

The Facts Caffrey & Co was a firm of solicitors. In October 2009, it had been instructed by William and Evelyn Turner who were joint proprietors of Walnut Tree Farm in connection with the discharge of a mortgage over the farm in favour of DB UK Bank Ltd. Unusually, however, instead of requiring Caffreys to deal directly with the bank, the Turners handed over a Form DS1 purportedly signed on behalf of the bank discharging the mortgage.

Caffrey’s instructions were simply to submit this to Land Registry and obtain the removal of the charge from the title. Although it is not unusual for instructions to be received to discharge a

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mortgage, a client coming along with an executed DS1 is unknown in the writer’s experience. Why didn’t they just send it to Land Registry themselves?

Caffrey’s submitted the DS1 to Land Registry, which raised a requisition requesting confirmation that the signatory of the form was authorised by the bank. Caffrey’s then contacted the Turners (why not the bank?) and the Turners supplied Caffrey’s with a power of attorney allegedly from the bank authorising the signatory to sign the DS1 on its behalf. Land Registry consequently discharged the mortgage. At no stage had Caffrey’s contacted the bank directly or through the solicitors whom the Turners alleged had acted for the bank in connection with the discharge.

Subsequently, Mr. Turner purchased Mrs. Turner’s share of the property, raising finance to do so from Santander on the security of a charge on the property. In 2011, DB Bank discovered that its charge had been removed, and applied to alter the register to reinstate it. In 2012, an adjudicator ordered that the charge be reinstated, but ranking after that of Santander. DB Bank then sought and obtained an indemnity from Land Registry.

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The Chief Land Registrar then brought proceedings against Caffreys to recover the monies paid out on the indemnity claim. The first ground of claim was that he was entitled to be subrogated to the claim that the bank would have had against Caffreys.

(Under s 103 Land Registration Act 2002, the Registrar is entitled to bring any cause of action which the bank could have brought). However, Master Matthews held that as Caffrey’s were not acting for the bank, it owed no duty of care to it. So as the bank could not have sued Caffreys, neither could Land Registry.

The second ground of claim was based on negligent misrepresentation. By completing and submitting the application to Land Registry, Caffrey’s “expressly or impliedly represented to the Claimant that it had taken sufficient steps or measures and/or knew of sufficient facts to satisfy itself that” the discharge form had been properly executed, and that the power of attorney was valid.

FIRST COMMENT

Further, Caffrey’s “knew or ought to have known that the Claimant would rely upon” these representations in dealing with the application to discharge the bank’s charge and that therefore “the Defendant owed to the Claimant a duty to take reasonable care to ensure that the [representations] were true.”

Caffreys took no part in the hearing – it had been closed down by the SRA in April 2012 – and so these claims went uncontested. The Master expressed doubts but eventually stated “I am narrowly persuaded that on the peculiar facts of this case, which may not be replicated in other cases where the solicitors challenge the allegations of express or implied representations …, it is right to treat the Defendant as having assumed a duty to take care in the representations which it made to the Claimant”. Judgement was entered in favour of Land Registry.

Comment So the case is authority for the proposition that when submitting applications to Land Registry conveyancers represent that they have taken sufficient steps to satisfy themselves that the documents are valid. However, in the vast majority of cases, this is not imposing further obligations on us. We already owe that duty to the buyer or lender clients for whom we are acting.

Conclusion So there still does seem to be a lot of fraud about, so we must be careful and alive to the risks.

However, as long as we behave honestly and reasonably, if the worst does happen, and one of our clients is the victim of fraud, we should be relieved of liability under s.61. And of course, most conveyancers are reasonable – well most of the time anyway!

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FIRST COMMENT

Drawing A Line Under A Dispute

By Kevin Lee Hill Dickinson LLP

As most practitioners will be aware, Land Registry title plans are illustrative and not determinative. S.60 (1) of the Land Registration Act 2002 (the 2002 Act) provides that “the boundary of a registered estate is shown for the purpose of the register is a general boundary, unless determined under this section”.

S.60 (3) then provides that “Rules” may make provision, enabling or requiring the exact line of a boundary to be determined. Turning to the rules themselves, Rule 119 of the Land Registration Rules 2003 provides that where on an application the Registrar is satisfied that a plan does identify the exact line of the boundary, then he should notify adjoining owners of that fact and if the adjoining owners object to the Registrar’s decision, then the Registrar must cancel the application. If there is a dispute as to the Registrar’s decision, then the matter will be referred to the Land Registration division of the Property Chamber, First-tier Tribunal (“the FTT”). On 1 July 2013, the tribunal replaced the role of the Adjudicator to HM Land Registry. One of its roles is to determine disputes arising from objections. The tribunal is totally independent of the Land Registry. Any appeal from a decision

of the tribunal is dealt with by the Upper Tribunal (Tax & Chancery Chamber).

Boundary disputes have always been dealt with by the tribunal and the Adjudicator before it. However, in Murdoch - v - Amesbury (2016) the Judge in the Upper Tier Tribunal found that the FTT had exceeded its jurisdiction. In this case, the FTT had found that the plan prepared by the applicant as the correct plan for determination was not sufficiently detailed. However, it then went one step further because it decided to determine the boundary itself on the evidence before it. It was this that His Honour Dight, sitting the Upper Tribunal objected to.

He ruled that the FTT had exceeded its jurisdiction in determining the boundary. In his view, the FTT could merely determine the correctness or otherwise of the Registrar’s original decision. It was

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not for the FTT to decide itself what in fact the true boundary was.

This decision was somewhat surprising. In fact, it was a point specifically raised in the Law Commission consultation paper (“Updating the Land Registration Act 2002”) that was published in March 2016 and which remains open for consultation at the time of writing this article. The consultation paper itself is fairly heavy reading, running to some 496 pages. However, at paragraph 21.15 (on page 440), there is a section on dealing with the jurisdiction of the FTT to deal with boundary issues. The paper notes the Murdoch decision and the fact that the judge, in that case, had held that the FTT did not have jurisdiction to decide where the true boundary did lie. The Law Commission noted that s.60 (3) of the 2002 Act could give rise to disputes that when referred to the FTT, the FTT would not be able substantively to resolve. The Commission, therefore, recommended that the FTT should be given express statutory power to determine where a boundary lies when an application is referred to it under s.60 (3) of the 2002 Act. This was, therefore, the position at the time of the Judgment in Bean and Saxton - v – Katz and Katz, a case determined by Judge Elizabeth Cooke sitting in the Upper Tribunal on 6 April 2016. In this case, a boundary dispute had been referred to the FTT. It had determined that the boundary was of a line contended for by the applicants, save for a small section where it found that the boundary should be at a right angle rather than on a curve as shown on the applicant’s plan. The FTT had obviously felt that they did have the jurisdiction to make that finding, i.e. to make a determination of the true boundary on the evidence before it. Judge Cooke considered that this was correct and that the FTT did have jurisdiction to make the order that it did. She found that there was a distinction between a case where an application is dismissed on the basis that the plan was, for example, technically

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unsatisfactory or where the application is dismissed on grounds where the applicant has failed to establish where the exact line of the boundary is. However, Judge Cooke found that the FTT did have jurisdiction to deal with the issues, namely to examine the Title and decide the success or failure of the application according to where the boundary lay and to direct the Land Registrar where necessary to give effect to any order made. The case was quite different to the case of Murdoch where the plan did not meet Land Registry requirements and was dismissed for that reason. The plan in Bean and Saxton was technically satisfactory, and accurate save for one small section. The Tribunal therefore directed the Land Registrar to give effect of a plan except to a small amendment that Judge Cook made as to its as to its route (the Tribunal had got it wrong in changing the boundary from a curve to a right angle, but this was not a jurisdictional error, but simply an understandable error of facts).

So where are we now in relation to disputed boundaries and the correct manner in which to proceed?

An application to determine a boundary should still be made to the Land Registry under S.60 of the 2002 Act and Rule 119 of the 2013 Rules in the first instance.

Obviously, the application needs to be supported by a Land Registry compliant plan showing the necessary detail and supported by supporting evidence of any alleged verbal boundary agreements, historical title deeds, etc.

If the Registrar is satisfied with the evidence submitted, then the Registrar will serve notice on the adjoining owner. If the adjoining owner objects, then the matter is capable of determination by the First Tier Tribunal.

So in some ways, it seems that Judge Cooke has answered the prayers of the Law Commission.

FIRST COMMENT

Claims Case Study:

Access Becky Morgan Claims Team Manager

What was the background to the claim?

How did First Title approach the situation?

The insured’s property had the benefit of a right of access over neighbouring land. This right, however, only existed for two dwellings.

We arranged for the insured’s solicitor to correspond with the neighbour’s solicitor, who responded with a without-prejudice offer to vary the right of access to allow the development of six houses in return for a financial settlement.

In 2011, the insured was granted planning permission to develop a total of six dwellings at the property and obtained a title insurance policy to provide cover for access rights for all six.

The property was also burdened by restrictive covenants limiting development of the property to two dwellings, and the policy also provided cover in this respect.

When the insured began work on the development of the site he was contacted by a solicitor acting for the owner of neighbouring land, who owned the access way used by the property. He raised a number of queries regarding the proposed development, including the use of the access road for six properties rather than two. The insured duly notified us of a potential claim against the policy.

We then obtained a report from a chartered surveyor, who advised that based upon the valuation of the insured’s property, the financial offer proposed to vary the right of way represented good value.

What was the outcome?

We agreed to the insured entering into a financial settlement with their neighbour, the cost of which was met under the terms of the policy.

In addition, we paid all legal costs incurred by the insured’s solicitor in drafting, agreeing and registering the revised easement.

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