Kingsalton Ltd & Anor v Thames Water Developments Ltd & Ors

When exercising the power to rectify the register under section 82(1) of the Land Registration Act 1925, the court must give special weight to the statutory policy favouring the security of a registered proprietor who is in possession. That policy remains highly material even where the court has an unfettered discretion to order rectification.

Registration gave the proprietor possession of the disputed registered land unless and until it was dispossessed. In the absence of relevant fault by that proprietor, and where refusal leaves the claimant to the statutory indemnity, the balance may properly favour refusal of rectification despite a finding that the claimant has the underlying title.

Kingsalton Ltd and Pollock & Searby Ltd brought proceedings concerning the boundaries of their registered land and land registered to Thames Water Developments Ltd. The Deputy High Court Judge declared that Kingsalton's boundary followed the Blue Line and ordered rectification of the Land Register in Kingsalton's favour.

The defendants did not pursue their appeal concerning the boundary itself. Their appeal concerned only the order for rectification. The central issue was whether the judge had exercised the discretion under section 82 of the Land Registration Act 1925 correctly where the registered proprietor was in possession of the land.

1. Appeal allowed unanimously. The order rectifying the register in Kingsalton's favour was set aside and its application for rectification was dismissed.

2. Peter Gibson LJ, with whom Sir Christopher Slade agreed, held that section 82(3) did not directly restrict rectification made to give effect to a court order under section 82(1)(a). Arden LJ adopted a different construction: section 82(3) remained applicable, but the amendment allowed the court exceptionally to order rectification despite it. All members of the court agreed that the statutory policy protecting a registered proprietor in possession was a weighty consideration in the section 82(1) discretion.

3. The Deputy Judge had erred in treating the defendants' possession as limited or questionable. Registration of their title gave them possession of the disputed land until they were dispossessed, which had not occurred. Their later road works were therefore acts consistent with their registered title, not acts by which possession was wrongfully obtained.

4. The Court exercised the discretion afresh. It recognised factors favouring rectification, including the true boundary, the defendants' awareness of the claim, and Kingsalton's concern about the factory. However, the policy of the Land Registration Act 1925, the defendants' registered possession, their lack of relevant fault, their substantial acquisition cost, and the potentially uncompensated loss to their development outweighed those factors. Kingsalton could seek the statutory indemnity.

5. The refusal of rectification did not breach Article 1 of the First Protocol to the European Convention on Human Rights. The indemnity was reasonably related to the relevant property value and the statutory scheme pursued the legitimate aim of supporting land registration. The Court had no power to impose conditions under the Act, but accepted the appellants' voluntary undertaking concerning the access road.

• Court of Appeal (Civil Division): Allowed the defendants' appeal in [2001] EWCA Civ 20, set aside the rectification order, and dismissed the application for rectification.
• High Court, Chancery Division: Mr David Mackie QC, sitting as a Deputy High Court Judge, declared the true boundary and, by an order dated 12 July 2000, ordered rectification of the register in Kingsalton's favour.