Property Boundaries (Resolution of Disputes) Bill [HL]

Earl of Lytton Excerpts

Friday 11th September 2015 Lords Chamber

Moved by

[The Earl of Lytton]

That the Bill be now read a second time.

[The Earl of Lytton (CB)]

My Lords, in outlining the Bill’s purposes, I have a particular interest to declare. First, I am a practising chartered surveyor, with involvement in the realms of boundary, title and party-wall matters. I chair my profession’s specialist panel in this area, and together we produce guidance notes for members. I am also a property owner—although, thankfully, without any current boundary disputes.

I must express my thanks and appreciation to a number of people, and first to Charlie Elphicke MP, whose original Bill was introduced in another place in 2012, which started all this rolling. I am most grateful to him for his advice and support. Secondly, I thank the group of what I might describe as the top five professional boundary practitioners, under the leadership of Andrew Schofield, FRICS, who took that earlier Bill away and substantially reworked it to produce the document before us today. I particularly single out Mr Schofield because he has been my adviser, mentor and supporter on many of the technical issues relating to this Bill. Thirdly, I must thank the staff of the Public Bill Office for their unfailing assistance and courtesy. Their help with preparing the Explanatory Notes has been frankly beyond price. Perhaps I should also thank Lady Luck, who has favoured my entry in the ballot, enabling me to introduce this Bill.

I also thank the Minister and his department for being ready to listen, even if they do not entirely buy the reasons why this Bill is needed, and, not least, I thank the Minister’s officials for meeting me yesterday at short notice. I note with appreciation and satisfaction the support of my professional body, the Royal Institution of Chartered Surveyors, and, in particular, I thank Mr Martin Burns of the RICS for his advice and encouragement. I thank the Pyramus & Thisbe Club, a learned society, mainly of surveyors but of other professions as well, which has a particular interest in this matter. It so happens that I am a member of that club. A number of individuals showed a positive interest in this. Finally, I express my fondest thanks to my wife for her patience about all the late nights when I have been dealing with this thing and have come home from the office or from this House late in the evening.

I look forward to the comments of the noble Earl, Lord Kinnoull. His late father was a great supporter of the Party Wall etc. Act, which I had the privilege of taking through your Lordships’ House in 1995-96. I very much look forward to what he has to say and to hearing the noble Baroness, Lady Gardner of Parkes, who has such extensive knowledge of the residential world, its foibles and its areas of conflict.

The fundamental premise behind this Bill is the undeniable fact that boundary issues are a matter of technical complexity and, as such, are most amenable to scrutiny by technicians first and foremost and to legal overview as a second stage. This Bill is intended to be in tune with the general direction of policy to reduce conflicts and provide alternative non-judicial means of resolving disputes. This is the broader public interest hook on which the Bill hangs. I know that the Minister and his department are very much aware of this. I hope he does not feel that I am trying to force the pace by this Bill having its Second Reading today; it just so happens that it is the date I was offered.

Any consideration of property boundaries brings with it considerations of title, but title is a legal construct based on the documentary and other paper evidence and in many cases is now registered at the Land Registry. However, on the ground, the proper interpretation of these factors is a matter of observation, identification, physical facts, measurement and cartographic or other documentary interpretation. This is a surveying task. For what is shown by a line on the registered title plan—plotted, as it is, on to a Ordnance Survey plan base—at best denotes the presence of a feature that a cartographer believed to be in the position shown, but it is entirely silent about what that feature is on the ground. Moreover, Ordnance Survey has a standard disclaimer that a line on a map does not reflect a legal boundary, just as the Land Registry has a standard proviso that the title plan accords with what is known as the general boundary rule. This rule ultimately boils down to little more than a plan for identification purposes, though invariably this is ignored by owners, who believe the title plan is to be taken literally. Therein lies part of the problem.

One may be lucky as a practitioner and find a more accurate pre-registration deed plan lurking somewhere, but one quickly runs into the legacy of hand-drawn or traced plans, plans not to scale, or plans defaced with overzealous outlining, subsequently photocopied and then re-coloured. This is a legacy issue, an historic failing of those involved with conveyancing at a time when, I am afraid to say, precise boundaries did not matter that much. Now, with more intensive uses of land, competing neighbour aspirations and high property values, it does matter, and often it matters very much indeed.

Practitioners, the judiciary, the professions, local government and public bodies all agree that boundary disputes are toxic. Evidence from Citizens Advice in correspondence with me reveals that last year it dealt with around 3,600 inquiries in England and Wales. Practitioners believe that with the cases they handle, usually via solicitors, the total may be in excess of 5,000 per annum, but I admit that no accurate records are kept. One well-known specialist practitioner recently advised that additional staff had just been taken on to deal with the increasing workload. Other practitioners share the view that the problem is growing.

Although there is, of course, access to forms of alternative dispute resolution, such as mediation, arbitration or adjudication, the parties to a property boundary dispute can very seldom be compelled to use them and even less to honour the spirit of the process. Furthermore, for voluntary ADR to work, it needs to be in the common and reasonably balanced interests of the respective parties—often even for voluntary agreement on the process to be reached, let alone on being bound by the outcome. There is seldom the necessary convergence of financial strength, commonality of motives or intended outcomes to make this a reality. Sadly, owners of property can be very defensive about boundary issues, which are often tied up with other matters: pets, trees, children, lifestyles, poor living conditions, poverty and maybe racial or cultural differences. Bad or uncertain title can be added to that rather heady mix.

The fact that it is difficult, expensive and, in terms of disposing of property, a serious barrier to transactions means that there are abuses, with some owners apparently wilfully ignoring the mores of polite society and being prepared to chance it to see what they can get away with or just in total denial that they might be in the wrong. A neighbour, realising that the defence of their property carries a high tariff, has to either accept the incursion or fight it to the bitter end.

Once parties start down the road of litigation, it very quickly becomes impossible to reverse the process because of the rapidly accumulating costs. These costs can quickly overtake the original issue to become the real bone of contention, and frequently dwarf many times over the economic value of the disputed land. I am inclined to give clients a bit of advice that the ferocity with which boundary disputes are pursued is in inverse proportion to the value of the land in question, and after many years I have no reason to resile from that advice. Because of the effects on transacting property subject to a dispute—effectively it is a block on being able to dispose of it—there is no retreat: a conclusion must be reached some way or other.

Practitioners’ experience is that a boundary dispute that goes to court is likely to cost on average in excess of £100,000. When coupled with the costs of the winning party, this can be ruinous for the loser, and most specialist practitioners are aware of cases where a party has been forced to sell their property to meet the bills. While it is, of course, a free world in which a fool and his money may be deemed to take their chance or be parted, I submit that it is also the duty of public law and administration to have such measures in place as will reduce, if not completely protect citizens from, such activity, if not their folly.

We also know that the civil courts cannot cope with present workloads and have been described in some quarters as sclerotic. Boundary cases in the courts typically take years to reach a conclusion. I think it was David Powell, FRICS, a well-known practitioner and technical author, who once remarked that when meeting a new client on a boundary case, he would warn that such disputes can be hugely expensive, so much so that for the same money one could have a very good family holiday in some delightful foreign spot or even construct a swimming pool in the back garden. He then added that the majority of clients ignored his advice, which is why he enjoyed many foreign holidays and had a large swimming pool. I give that as an anecdote. Citizens Advice’s recent email to me observed that many of its cases relating to planning also have a boundary element but are not included in its boundary inquiry figures. It is often in the planning and construction of home extensions that the need to know a boundary position with precision is most pressing. The definition of “title” has not kept up with this, or with advances in measurement and positional accuracy.

The views of the judiciary in some high-profile cases have been quite illuminating. In the case of Moncrieff v Jameson before the House of Lords in 2007, the noble and learned Lord, Lord Scott of Foscote, noted the regrettable and surely unnecessary falling out of neighbours who had lived in amity for many years. Lord Justice Sedley, in the Court of Appeal case of Strachey v Ramage in 2008, similarly observed how defective conveyancing has led to war being unnecessarily declared between neighbours, with costs that vastly exceeded the value of the land. The 1997 court case of Alan Wibberley Building Ltd v Insley induced Lord Justice Ward to lament the dread with which judges would greet the label “boundary dispute”. Later, in the same case before the House of lords, Lord Hoffman referred to them as a particularly painful form of litigation, with disproportionate amounts of money spent and claims often involving small and valueless pieces of land but,

“pressed with the zeal of Fortinbras’s army”.

So the Bill, or at any rate its principle, has the support of several key sectors. I suggest that it would have the following advantages. It would restrict occasions of conflict; reduce costs; lower the burdens on the courts; give greater certainty of outcomes; substantially reduce timeframes for resolution; provide a determinative conclusion; and retain ultimate redress on matters of law to the courts. It would also do the same for easements and rights of way. However, being based on the construct of existing land entitlement, it would not address or determine adverse possession cases, though it might clarify just how much of the possession was actually adverse. It seems to me that if the boundary is uncertain, you cannot log the degree of your adverse possession. As I said earlier, though, it is in line with the general thrust of public policy, which I know to be espoused by the Minister: that these cases should be kept out of the courts at all costs. It is a public interest issue of a pressing and apparent nature, and I believe that it can no longer be ignored.

The Bill is in effect largely enabling legislation, empowering the Secretary of State to make orders governing much of the finer detail. This is deliberate. The power is confined within the Bill’s purposes, so it would not afford a wider power—even less a Henry VIII provision—but it provides for future flexibility. It provides for boundary dispute cases to be referred to technical experts first, rather than to litigators. It would intercept certain existing cases before the courts as well as providing a trigger mechanism where, before action has been commenced, a boundary issue has arisen. It then provides for a dispute resolution process that is very similar to that in the Party Wall etc. Act 1996, which, as I have said, it was my privilege to take through your Lordships’ House at the time. That Act has been in force since 1997. It is believed that around 500,000 to 600,000 cases have been dealt with under its umbrella, and only about three cases of substance have proceeded to the senior courts and not many more than that to the county courts. It is a tried and tested formula in which surveyors are appointed and charged with objectively considering the issues and producing a document, known as an award, setting out their agreement and determination. On matters where they cannot agree, there is a third surveyor who will effectively act as a referee. The award so produced, by either the two surveyors or one or other of them, or the third surveyor, as the case may be, is appealable to the courts. So there is judicial oversight.

Unappealed awards, however, would require registration of the outcome with the Land Registry as a determined boundary. The determined boundary is a specific process, which means that, as opposed to the general boundary rule, the actual boundary in question—not necessarily the whole boundary of the property but the particular boundary—becomes part of the registered title, and any future purchaser has due notice of that. So it makes that boundary definitive for the purposes of the registered title, and the purpose of that is to avoid the case then resurfacing at some future date because of a change of ownership.

The Bill provides for the role of surveyor to be discharged by certain specified types of person. There are some precedents for this; for example, in some agricultural arbitrations the arbitration function has to be exercised by a chartered surveyor. The point is that the exercise of technical expertise in boundary matters must necessarily be done by someone with the requisite training, subject to continuous professional development and with a proper policy of indemnity insurance. Only professional bodies such as those referred to in the Bill encompass all of these and monitor them year on year.

To summarise: I believe that the Bill, or something like it, would defuse many potentially contentious situations; provide orderly and more predictable outcomes to cases that have become contentious; reduce costs; and substantially reduce timeframes from years to months. A typical party wall case, for instance, is normally dealt with in a matter of a few months, seldom running into years. More to the point, it would contain the risk and reduce the heartache, stress and bitterness of these often very emotive situations. I believe that the courts would thereby be freed up. It would prevent serious and protracted blocks on transacted property and, with that, the corrosive risks of attendant uncertainty. It would be flexible and, as I have suggested, reasonably future-proof.

There have been some criticisms of and comments on the Bill, and I will address one or two of them. First, it has been said that it would somehow cut across title issues. For the reasons I have already stated, I do not believe that that is the case. It has also been suggested that it is unnecessary, but I believe that I have made the case for its necessity, even though the numerical incidence of such cases may appear low in statistical terms. It has been suggested that the Bill would sit ill with adverse possession cases. Again, I do not believe that the Bill trespasses—if I can use that term—on that territory.

It has been suggested that there are other suitable forms of dispute resolution. Sadly, this does not seem to be the case because, as I say, the parties to a dispute cannot be obliged to use them or adhere to the outcomes. It has been suggested that the Technology and Construction Court, the judicial body to which the Bill proposes that an appeal be made, is not the appropriate forum for that. I have had some very helpful email correspondence with Judge Anthony Edwards-Stuart, who is in charge of the Technology and Construction Court. He said that it was not the right forum, but very helpfully suggested that perhaps the Bill might merely refer to a right of appeal to the High Court, leaving the Heads of Chancery and Queen’s Bench divisions to work out which court should actually deal with the appeal. I am very happy to accept that sound advice.

It has been suggested that the definition of “surveyor” may need tweaking—funnily enough, because it makes a technically incorrect reference to “engineers”. Again, I am very happy to tweak that and oblige by dealing with that in an amendment. I believe that these and other matters can be dealt with by amendment to the Bill. With that, I beg to move.

--- Later in debate ---

[The Earl of Lytton]

My Lords, I thank warmly all noble Lords who have spoken. I hope that they will excuse me if I do not go into a huge amount of detail on what has been said, because all the matters that I feel are important have already been covered.

The noble Earl, Lord Kinnoull, and the noble Baroness, Lady Gardner, raised two core issues: first, access to justice and, secondly, the question: if not this Bill, then what and when? That will perhaps be more apparent at the end of the year, when the results of the scoping study are better known and the department’s further consideration becomes available to us. I live in hope, but at this juncture it is difficult to predict that.

The noble Earl, Lord Erroll, raised a different type of issue. I will ask him to forgive me if I do not go into detail on that either, save to say that questions of orphan bits of land—verges, footpaths, left-over bits from once larger landed estates and so on—are hostage to what can sometimes look like a land grab. With it, the extent of public and private rights and easements are considerations that are often shorn from the resultant successful registration of title by adverse possession, regardless of the physical presence of the representative bits of conduit underneath the ground.

I thank the noble Lord, Lord Kennedy, for the support of his party on this issue. I think that we all share the fundamental aims that we are trying to achieve.

I thank the Minister for saying that the question of the reference to the Technical and Construction Court can relatively easily be dealt with, and I believe that that is the case. He then turned to his core reservations. He felt that expert determination or mediation was the way forward but he regarded this Bill as radical. I do not entirely share that view given that the constituent bits of the mix, as I have explained, have been rather well trailed and bench-tested for the past decade or more. That apart, the Minister still did not explain why under current terms enforcing expert determination and mediation, which is ultimately the only way of corralling these things, can be dealt with other than by being somewhat radical in approach. So we possibly part company there, but it may be a matter for further discussion at some juncture.

I appreciate that an assessment of a boundary may only partly be a technical issue, but getting rid of the assessment of what I might call the physical issues in advance and dealing with it by way of surveyors of both sides would refine the situation in a way that it tends to be refined anyway at the stage when, later on, litigation is well under way. At that point, the trial judge and the protocols demand that a technical expert be appointed by either side if they cannot agree a single joint expert and that a report be then produced which has to be exchanged or, at any rate, comes before the court. However, at that stage, much powder and shot has already been expended in the battle of wits between, as we have heard, often very unequal parties. I cannot help thinking that putting the consideration of the factual and technical basis before the process rather than part way through would be of benefit generally.

Clearly, the Minister has to have the construct of due process and the proper sanctity of the court. He mentioned comments made back in January by the noble and learned Lord, Lord Hope of Craighead, when he referred to excluding the court entirely. I suggest that that is a slight exaggeration of what is contained within the Bill because that is not what it does. It leaves the backstop of judicial scrutiny in place. I understand the issues and in a sense we are where we are, but I believe that the Bill has merit. We should continue to discuss it and therefore I ask the House to give the Bill a Second Reading.

Bill read a second time and committed to a Committee of the Whole House.