Conflict avoidance can have its downsides
A short summary of a recent decision of the Upper Tribunal on an application for adverse possession after negotiations between the parties to purchase the land failed.
Conflict avoidance is usually a good thing
Conflict, or even the potential for it, can be extremely stressful. This is particularly so when the issue affects a person’s home or business and could involve court proceedings. It is perfectly rational to wish to avoid conflict and any associated legal costs wherever possible. In cases of adverse possession, there may be a desire on both sides to negotiate for the sale or purchase of the land in question to avoid litigation. However, a recent case in the Upper Tribunal highlights some of the complexities inherent in adverse possession cases and in particular, that caution should be exercised if engaging in such negotiations.
Mr & Mrs Adams
The case of Windmill Holdings SPV Ltd v Adams & Anor  UKUT 228 (LC) involved an appeal against a decision of the First Tier Tribunal (FTT) on an application for adverse possession of two sections of disused railway land. Mr & Mrs Adams had purchased a plot in 1993 and believed they also owned two strips of land to the south and north of the property. They built their house on the main plot, a driveway on the northern strip, and the southern strip formed part of their garden. Unfortunately, the title at the Land Registry only showed Mr & Mrs Adams as having title to the main plot.
Windmill Holdings purchased the southern and northern strips of land in 2018 from the registered owner and shortly afterwards, contacted Mr & Mrs Adams offering to sell the southern and northern strips to them, provided that the transaction was prompt. Mr & Mrs Adams considered the offer, and some negotiations took place via email and telephone. Ultimately, Mr & Mrs Adams did not proceed with the purchase offer. Instead, they applied to the Land Registry to be registered as the owners of the two strips of land, on the basis of adverse possession of the land for 10 years.
The counter notice
Windmill Holdings served a counter notice requiring Mr & Mrs Adams application to be dealt with in accordance with paragraph 5 of Schedule 6 to the Land Registration Act 2002. Under paragraph 5 of Schedule 6, the person claiming adverse possession must show that at least one of three conditions is satisfied. The effect of this counter notice is to place an additional burden of proof to satisfy one of the conditions, or the claim for adverse possession will fail.
The conditions in paragraph 5 of Schedule 6 are:
- That it would be wrong to prevent the application for ownership of the land, based on a sudden change in the attitude of the registered owner, which was not apparent before and is to the detriment of the applicant (called equitable estoppel).
and that the circumstances are such that the applicant ought to be registered as the proprietor (paragraph 5(2) a & b Schedule 6)
- For some other reason, the applicant is entitled to be registered as the proprietor (paragraph 5(3) Schedule 6).
- The land subject to the application is adjacent to the land belonging to the applicant
and the boundaries between the two have not been determined under the section 60 rules
and for at least 10 years of the period of adverse possession ending on the date of the application, the applicant reasonably believed that the land to which the application relates belonged to him
and the estate has been registered for more than one year prior to the date of the application (paragraph 5(4) a,b,c & d Schedule 6).
How did the previous negotiations to purchase the land affect proceedings?
Mr & Mrs Adams relied upon two of those conditions, that of paragraphs 5(2) and 5(4) of Schedule 6. This is where the previous offer to sell the land comes back into play. Windmill Holdings submitted that records of negotiations between themselves and Mr & Mrs Adams regarding the sale of the land amounted to a recognition by Mr & Mrs Adams that Windmill Holdings held good title (as in the case of Edginton v Clark  1 QB 367). They argued that Mr & Mrs Adams could not reasonably believe that they owned the land, which is a requirement of the third condition under paragraph 5(4) of Schedule 6.
Mr & Mrs Adams sought to have the records of negotiations struck out of evidence, claiming they were ‘without prejudice’. The without prejudice rule prevents evidence from being put before the court, to prove admissions by one of the parties, where the communication was made in a genuine attempt to settle an existing dispute. Whilst there is no need to be involved in litigation at the time of the communication, there must be a dispute or the risk of one (Bradford & Bingley Plc v Rashid  1 WLR 2006) and the subject of the communications and the dispute must be closely related. The FTT found that the negotiations were without prejudice.
Windmill Holdings appealed this decision and argued that there was no dispute when the negotiations took place. However, it was clear from the evidence that the negotiations mentioned Mr & Mrs Adams’ belief that they had previously purchased the two strips of land in question with their main plot, the very subject being litigated in this case. Windmill Holdings were therefore aware of the potential for a dispute at the negotiation stage. In addition, there was evidence on site (in the form of the driveway) that at least the northern strip of land was under disputed ownership. The negotiation material was therefore excluded from evidence under the without prejudice rule. It could have turned out differently for Mr & Mrs Adams had they spoken in different terms. The decision of the FTT was upheld, and Mrs & Mrs Adams were successful in their adverse possession claim for both strips of land.
There are various lessons to be gleaned from this case, primarily:
- Buyers must ensure they know exactly what land they are purchasing. This applies to both Mr & Mrs Adams and Windmill Holdings.
- It is vital to conduct a site visit and compare the site layout with the seller’s plans
- The title registration of the purchased land should reflect the buyer’s understanding of the land purchased, and the title should be checked carefully after registration.
- Adverse possession claims are complex, and especially so where there is a dispute
- Seek legal advice before entering into negotiations to buy or sell land, where it is subject to ongoing adverse possession.
The case also shows that in circumstances of adverse possession, the desire to negotiate the purchase or sale of the land to avoid the stress of disputes and litigation can possibly have unintended consequences. It is therefore important to seek early legal advice in all matters relating to disputes in property or land to avoid pitfalls later during proceedings.
If you are having any issues with adverse possession or issues around property or land, our expert teams are here to help. Please contact our experienced lawyers in the Real Estate or Dispute Resolution team for assistance.