Land registration – Adverse possession – Oral agreement – Appellants claiming adverse possession of respondents’ land – Parties reaching compromise agreement with disposing effect – Whether oral compromise agreement constituting valid contract for sale or other disposition of interest in land within section 2(1) of Law of Property (Miscellaneous Provisions) Act – Appeal dismissed
The respondents were the registered proprietors of a triangular parcel of land measuring about 34 metres by 24 metres at its widest point. A deputy adjudicator the Land Registry decided that the appellants had acquired title to the land by adverse possession. However, she decided not to direct that the register of title should be altered, pursuant to the power conferred by Schedule 4 to the Land Registration Act 2002, since the parties had reached an oral agreement to compromise their dispute which was legally binding contract, amounting to exceptional circumstances which justified not altering the register. Instead, the adjudicator directed the registrar to cancel the application. The effect of the compromise agreement was to require the appellants to dispose of an interest in the land to the respondents.
The appellants appealed on the ground that, because the oral agreement had a disposing effect, it fell foul of section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 which provided: “A contract for the sale or other disposition of an interest in land can only be made in writing and only by incorporating all the terms which the parties have expressly agreed in one document or, where contracts are exchanged, in each”.
Held: The appeal was dismissed.
An oral demarcation agreement, i.e., an agreement to demarcate an unclear boundary described in title documents or delineated on a plan, was not void by virtue of section 2(1) of the 1989 Act even though the agreement had a disposing effect, because the words “a contract for…” in section 2(1) referred to an agreement which had a disposing purpose: Neilson v Poole (1969) 20 P & CR 909 and Joyce v Rigolli [2004] EWCA Civ 79, [2004] PLSCS 35 applied.
The court did not accept the appellants’ argument that that interpretation of section 2(1) did not apply where more than a trivial amount of land was disposed of. The Court of Appeal in Joyce v Rigolli had applied the reasoning of Megarry J in Neilson v Poole, and it was no part of Megarry J’s reasoning that a contract to demarcate which had a disposing effect was a contract to convey where more than a trivial amount of and was disposed of. Moreover, Arden LJ’s interpretation of section 2(1) was not dependent upon the fact that only a trivial amount of land was disposed of; she had only mentioned that in connection with the fact that there was a conscious transfer of land. Therefore, a demarcation agreement which had a disposing effect did not fall foul of section 2(1) unless it had a disposing purpose and more than a trivial amount of land was disposed of.
As a matter of interpretation, the court rejected the appellants’ submission that section 2(1) distinguished between demarcation agreements and other types of agreement. Parliament had not impliedly enacted that a demarcation agreement need not comply with section 2(1). Section 2(5) expressly excepted certain types of contract from the scope of the section, but demarcation agreements were not mentioned and it was not possible to imply a further exception. The reason why a demarcation agreement did not have to be in writing was simply because the words “a contract for…” in section 2(1) referred to an agreement which had a disposing purpose, whereas a demarcation agreement did not have a disposing purpose. It might have a disposing effect, but that was not the acid test. Section 2(1) referred generally to “a contract” and “land”, without distinguishing between boundary agreements and other agreements, or between a boundary and any other land and, even on a purposive interpretation, one could not give the word “for” one meaning in relation to boundary agreements and a different meaning in relation to other agreements: Melluish v Fishburn [2008] EWCA Civ 1382 considered.
The court’s task was to interpret section 2(1), in the light of the reasoning of the Court of Appeal in Joyce v Rigolli. A demarcation agreement was no more than an example of an agreement which did not fall foul of section 2(1), because it did not have a disposing purpose even if it had a disposing effect. The compromise agreement in the present case was another example. Accordingly, the compromise agreement was not an agreement “for the sale or other disposition of an interest in land” within the meaning of section 2(1) and, despite being oral, it was a valid contract.
Samuel Laughton (instructed by Coleman & Betts, of Kingston upon Thames) appeared for the appellants; The respondents appeared in person.
Eileen O’Grady, barrister