What is the status of an agreement to abide by an expert determination?

Boundary disputes tend to be bitter, complex and expensive – and some parties find it difficult to draw a line under them. The proceedings in Gibson v New [2021] EWHC 1811 (QB) were issued following an attempt to settle a dispute about new sections of a fence between two residential properties in Essex. The parties attended two mediations, after which they reached a short, informal settlement agreement, signed by the mediators. The agreement recorded that the parties would move forward as neighbours in good faith, acting reasonably. They agreed to ask the RICS to appoint a surveyor to determine their dispute and promised to abide by his decision. The RICS nominated a firm that produced two reports – neither of which satisfied the News, which led to litigation in which the Gibsons sought a declaration as to the true boundary between the parties’ properties, together with an injunction, damages for trespass and costs. Consequently, the court had to decide whether the parties were bound by the settlement agreement – which required the court to consider the impact of section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989 on the validity of the settlement agreement. The Court of Appeal had had to consider whether an oral boundary agreement needed to comply with section 2 in Joyce v Rigolli [2004] EWCA Civ 79. It decided that agreements that serve to identify the boundary between properties will not normally need to be reduced to writing and need not be signed by all the parties to the agreement, even though the parties know that their agreement will actually result in an exchange of land. To hold otherwise would fly in the face of public policy, which is to encourage the parties to resolve boundary disputes without resorting to litigation. It would also be unrealistic to expect the parties to execute a formal transfer of a small area of land because it would be difficult to define the land in question without putting the parties to disproportionate expense. But the News relied on Abid v Nata Lee Ltd [2014] EWCA Civ 1652; [2014] PLSCS 361 – a Court of Appeal decision highlighting the difference between an agreement, the purpose of which is to move a boundary, so as to transfer land from one neighbour to another, and an agreement the purpose of which is to define a previously unclear or uncertain boundary (even if that agreement may involve a conscious transfer of a trivial amount of land). The first type of agreement is subject to section 2. But the latter is not. Both the trial judge and the High Court agreed. The settlement agreement constituted an agreement that “this uncertain boundary will be where the expert determines it to be”. On the evidence, the parties had not intended to convey any land from one to the other – but simply to demarcate an uncertain boundary. And it did not matter that the determination was to be made by an independent expert because there was no reason in principle why a boundary agreement cannot provide for the demarcation of a boundary by an agreed methodology (such as an expert determination). Consequently, the settlement agreement was a boundary agreement, as opposed to a contract to convey land, and was not within the scope of section 2. Furthermore, the way in which the News had behaved, and their desire to wriggle out of the outcome of the mediation, justified an order for indemnity costs against them.   Allyson Colby is a property law consultant