Defendant neighbour entering into oral agreement to rearrange boundaries with claimants’ predecessor in title – agreement not put into legal form or registered at Land Registry – Claimants acquiring property and disputing effect of agreement – Whether claimants bound by agreement – Judge finding claimants estopped from denying agreement and ordering rectification of register – Appeal allowed
The parties were neighbours in Grays Park Road, Stoke Pages, Buckinghamshire. The defendant had been the owner and occupier of Snitterfield House and the adjoining land (the House) since 1979. Nearby was Snitterfield Farm (the Farm), the registered title of which included land situated at its western edge, close to the House (the Red Land). In 1985 the Farm was acquired by T, the claimants’ predecessor in title. In April 1987 an oral agreement was entered into (the agreement) by T with two of his neighbours, the defendant and G. The purpose of the agreement was to rearrange the boundaries of their respective properties and to effect consequent exchanges of small areas of adjacent land, including the transfer of the Red Land, by T, to the defendant. Although the parties instructed solicitors in relation to this matter, nothing was ever put into proper legal form and nothing was ever registered at the Land Registry prior to the sale of the Farm to the claimants.
In February 1992 the claimants were registered as proprietors of the Farm. A dispute arose over the boundaries and the claimants claimed to be the owners of the red land. The defendant contended, inter alia, that the claimants were estopped from denying the terms of the agreement for as long as they continued to enjoy and assert entitlement to benefits conferred by the agreement upon their predecessor in title, T. The defendant argued that the claimants were thus precluded, by application of the principle of mutual benefit and burden, from avoiding the indivisible obligations created by the agreement, including the obligation upon T to transfer the Red Land to the defendant. The judge found that the claimants were estopped from denying the agreement and, upon that basis, made the orders for rectification of the register. The claimants appealed.
Held: The appeal was allowed.
More than two people had been involved in the agreement, raising the question of whether it was right to decide the estoppel issue in proceedings brought under the Land Registration Act 1925, to which only the claimants and the defendant were parties. This was more than a mere technical point since, if the judge had been right in construing the agreement as creating indivisible obligations, it was important in deciding whether such an agreement gave rise to an estoppel and, if so, what effect it had and how it should be satisfied. There had been no consideration by the court of the effect of any estoppel between G and the claimant. All parties potentially affected should have been joined in the proceedings. Accordingly, the judge could not give full effect to the estoppel by rectification of the register and, for that reason alone, he should have declined to make the order for rectification.
Edward Denehan and Lana Wood (instructed by Cope’s, of High Wycombe) appeared for the claimants; Christopher Young (instructed by Le Brasseur J Tickle) appeared for the defendant.
Thomas Elliott, barrister
