Bhullar and another v McArdle

Land exchange agreement between defendant and A and B – Registered titles remaining unchanged – A selling to claimants – Defendant lodging caution to protect his interest in land taken in exchange – Whether caution vitiated by formal defect – Whether defendant entitled to overriding interest – Claimants continuing to enjoy land acquired from B – Whether claimants estopped from asserting title to land claimed by defendant In 1987 the then owner (T) of Snitterfield Farm, Stoke Poges (the farm), reached a land-swap agreement with the defendant and M, both of whom owned neighbouring properties. The agreement identified four small areas close to the eastern boundary of the farm, two of which, the blue land and the red land, belonged to T. The blue land was exchanged for the brown land, which belonged to M. The red land was exchanged for the green land, which belonged to the defendant. The exchanges were connected by the fact that T could not implement his plans for the brown land (building garages) without securing access via the green land. The agreement was not put into writing, nor were any conveyances executed pursuant to the agreement. On concluding the agreement, M began to use the blue land as a private road, while T started to build a number of garages on the brown land. Over the following two years the defendant made intermittent use of the red land as a children’s play area and for dumping garden waste. In 1988 T created a charge over the farm in favour of a bank. In 1991 the bank sold the farm to the claimants, who were duly registered as proprietors. In 1994 the defendant, desirous of protecting his interest in the red land, lodged a caution against the claimants’ title. By mistake, the caution was expressed to extend to the blue land also. In proceedings taken by the claimants for the removal of the caution, the defendant claimed that the register should be rectified by removing the red land from the title to the farm and including it in the title to the defendant’s property. The claimants’ primary contention was that, because the caution extended beyond the land intended for protection, the court could do no more than order its cancellation. Held The register should be rectified in favour of the defendant. 1. The claimants’ primary contention rested on the submission that neither the registrar nor the court had the power to amend or vary a caution. However, that submission was to be rejected as proceeding upon an unduly restrictive view both of the registrar’s powers as conferred by r 220(3) of the Land Registration Rules and of the power of the court to order rectification under section 82(1) of the Land Registration Act 1925, as considered in Chowood Ltd v Lyall [1930] 2 Ch 156. 2. Because the Law of Property (Miscellaneous Provisions) Act had not come into force at the material time, the defendant had correctly relied on the doctrine of part performance to show that he had the benefit of a specifically enforceable contract to acquire the red land. However, that interest could not be asserted against the claimants as an overriding interest under section 70(1)(g) of the 1925 Act as, on the evidence before the court, the defendant had failed to demonstrate that he was in actual occupation of the red land when it was acquired by the claimants in 1991. 3. Nevertheless, the defendant was entitled to succeed on the basis of estoppel. Since the claimants had no intention of giving up their rights to the brown land, and since those rights derived from the 1987 agreement, they were bound to assume the burdens imposed by that agreement. The underlying principle applied in Halsall v Brizell [1957] Ch 169 (which did not depend on any provision of the 1925 Act) prevented the claimants from choosing what parts of the 1987 agreement to accept and what parts to reject. Because the various transfers were both integral and interdependent parts of one tripartite agreement, it was immaterial that the brown land had not been acquired from the defendant. Lana Wood (instructed by Cope’s, of High Wycombe) appeared for the claimant; Christopher Young (instructed by Le Brasseur J Tickle) appeared for the defendant. Alan Cooklin, barrister