There has been an important restatement of the scope of the boundary exception in claims to adverse possession under the Land Registration Act 2002. This is set out in the judgment of Fancourt J in Dowse v City of Bradford Metropolitan District Council  UKUT 0202 (LC).
As is well known, the 2002 Act brought about fundamental changes to the law of adverse possession for registered land.
No longer were the provisions of sections 15 and 17 of the Limitation Act 1980 and the 12-year limitation of title applicable. No longer did a claimant have to prove 12 years’ possession adverse to all others in order to extinguish the owner’s title, whereupon the claimant would be registered with a new possessory title. Instead, a process of notice was proscribed.
A harder task
Since October 2003, a squatter claimant has been able to apply for registration on the basis of at least 10 years’ adverse possession. But if the registered proprietor then serves a counter notice requiring the application to be dealt with in accordance with schedule 6 paragraph 5 of the 2002 Act, the application will be rejected unless one of three specified exceptions applies.
As such, the 2002 Act has made it much harder for a squatter successfully to claim adverse possession. As Henderson J stated in Baxter v Mannion  EWHC 573, “the general policy of the 2002 Act was severely to limit the circumstances in which a squatter could acquire title to registered land, and to offer greater security of title for a registered proprietor than existed under the previous law”.
The three exceptions which allow the squatter to rely upon the shorter 10-year period provided for in schedule 6 paragraph 5 are:
- If there is an equity arising by estoppel.
- If the applicant is entitled to be registered for some other reason.
- If the boundary exception applies.
The boundary exception provides that a squatter applicant is entitled to be registered as the new proprietor if: (a) the land to which the application relates is adjacent to land belonging to the applicant; (b) the exact line of the boundary between the two has not been formally determined; (c) for at least 10 years
of the period of adverse possession ending on the date of the application, the applicant reasonably believed the application land belonged to him; and (d) the estate to which the application relates was registered more than 1 year previously.
Dowse was an application for registration based upon the boundary exception. Mr and Mrs Dowse owned and lived at number 135. To the rear of their back garden were eight or nine acres of land owned by the council designated as surplus housing land.
For many years, Mr Dowse had grazed horses and stored caravans and other vehicles on part of that land. In 2002, following an unsuccessful application to Land Registry for registration, his use of that part of the land intensified with the growing of hay, storage of materials and the effective exclusion of the public.
Nonetheless, Judge McAllister sitting in the first-tier tribunal held that this did not entitle the Dowses to rely upon the boundary exception. She found that the boundary exception is intended to and does deal with situations “where there is a dispute as to the exact position of the boundary between the applicant’s land and the disputed land, and where the applicant reasonably believed that he had paper title to this disputed land”.
She described the provision as “a safety valve to deal with one of the problems associated with general boundaries” which is “tightly drawn... and is limited in scope”. In this case, the disputed land extended far beyond the boundary and Mr Dowse knew he did not have paper title to the disputed land. There was no mistake as to the boundary. She added that the applicant must “establish that he reasonably believed that he owned (in the sense of having paper title to) the land”.
On appeal, Fancourt J agreed that the application could not succeed. He held that the boundary exception applied only where there was an uncertainty about the true position of a common boundary. The justification for the exception had nothing to do with adverse possession but everything to do with the fact of the common boundary.
He said: “If, instead of No 135 and the application land having a common boundary, there had been a narrow road between them, owned by someone else, the appellants’ application would fail. That is because the application land would then not be ‘adjacent to’ No 135… The adverse possession of the appellants and their reasonable belief could have been exactly the same as they were in fact… and yet the appellants could not establish their entitlement [under the boundary exception]. That demonstrates that the justification for the exception… depends on the fact of the common boundary.”
The boundary exception could only operate where the whole (or substantially the whole) of the disputed land could properly be described as being adjacent to the applicant’s land. Here, only a small fraction of No 135 and the application land were physically joined.
However, Fancourt J disagreed with Judge McAllister that it would have been necessary for the Dowses to show that they reasonably believed they had paper title to the disputed land. That was reading words into the statute that did not exist. What was necessary was a belief that the disputed land “belonged” to the applicant, whether this arose out of a mistake as to the extent of the paper title; or whether it arose out of 12 years’ adverse possession prior to 2003; or from some other genuine and understandable mistake as to ownership enduring for at least 10 years.
The encroaching tenant
The judgment thus makes plain that the boundary exception is only available where the disputed land is in the area of the general boundary between the applicant’s land and the registered proprietor’s land. It is a narrow exception to the rule that service of a counter notice in time will defeat an application under schedule 6 of the 2002 Act.
But highlighting the narrowness of this exception raises further issues. It makes it difficult to see how the landlord and tenant presumption of encroachment (ie where a tenant occupies land outside of their demise which land belongs either to the tenant’s landlord or to a third party) fits within the scheme of the 2002 Act.
To rely upon the boundary exception, an encroaching tenant will need to assert that the application land was adjacent to land which belonged to them and that they reasonably believed the application land belonged to them. The judgment in Dowse emphasises that the use of the term ‘belonged’ in schedule 6 was conscious and deliberate. But demised premises cannot be said to belong to the tenant – rather they belong to, or are owned by, the landlord who holds the freehold title.
Equally, an encroaching tenant is unlikely to believe the encroached-upon land belongs to him, in the sense of such land being owned by him. If this is so, and encroachments are viewed as some variant of adverse possession (as the majority, including Lord Scott, held in Secretary for Justice v Chau Ka Chik Tso  2 HKC 441) it seems that encroachments can never prevail under the 2002 Act in the absence of some form of inaction by the registered proprietor – whether by failing to serve a counter notice or failing to bring possession proceedings thereafter....