Defining boundaries

Solicitors often struggle to impress upon clients the importance of preparing detailed, Land Registry-compliant plans when transferring land, but failure to do so can lead to problems further down the line. Despite much litigation over many years on the subject of boundaries, at great expense to the parties involved, disputes are still being heard by the courts.

The recent Court of Appeal decision in Norman and another v Sparling [2014] EWCA Civ 1152 confirms existing case law, and reminds us that the courts will consider the conduct of the parties and admit it as extrinsic evidence to determine the line of a boundary where the documentation regarding the boundary is found to be lacking.

The importance of clearly defining boundaries in transfers or conveyances when land is sold or gifted cannot be understated.

Boundary lines

Mr and Mrs Birch owned Hebron Farm, along with land which surrounded the farm. In 1988 they gifted a parcel of land to Mr Birch's mother. The deed of gift (the 1988 deed) described the land by reference to the length of its frontage and other boundaries, shown 'for identification purposes only' edged red on a plan. The length of the boundary between the plot being gifted and the remainder of Hebron Farm was omitted from the 1988 deed. The scale of the plan was 208.33 feet to an inch, which meant that the plot being gifted was less than an inch on the plan.

On the gifted parcel of land, a house known as Arnwood was built, and a steep bank was constructed by Mr Birch between Arnwood and Hebron Farm.

At the time of the dispute, Arnwood was owned by Mr and Mrs Norman and Hebron Farm by Mr Sparling. Sparling argued the boundary between Hebron Farm and Arnwood was on the bottom of the bank, on the Arnwood side. Mr and Mrs Norman claimed that the boundary line was on the top of the bank, on the Hebron Farm side.

In the county court, the judge recognised that the starting point for determining the boundaries was the measurements and the plan in the 1988 deed. However, this provided no assistance due to its small scale and the fact that measurements were missing. The judge considered the subsequent conduct of the parties as extrinsic evidence and found in favour of Mr and Mrs Norman that the boundary line was the top of the bank.

Sparling appealed the decision on the basis that the bank was not in existence at the time that the land was gifted to Mr Birch's mother and should not be used as evidence to determine the boundary.

Parties' conduct

The Court of Appeal upheld the decision of the county court judge and looked at Mr Birch's conduct following the gift of the land to his mother. In particular:

• He sought to mark the boundary of the land (by the building of the bank) without any objection from his mother;

• He allowed Mr and Mrs Norman to plant bushes and other plants on the Arnwood side of the bank without objection; and

He put posts along the top of the bank to indicate the boundary line at the time of the conveyance of Arnwood from Mr Birch's mother to Mr and Mrs Norman.

Care should always be taken when describing land being sold or transferred as this will be the main basis for establishing the boundary line. In particular, consideration should be given as to whether the plan or the description will be sufficient to clearly identify the extent of the land. Plans must be Land Registry compliant, using a preferred scale and containing sufficient detail to be accurately identified on the Ordnance Survey map.

This recent case is a useful reminder that costly disputes may arise over relatively small areas of land when the boundary is not clearly defined in documentation, and that the courts may use the subsequent conduct of the parties when determining where boundaries actually lie on the ground.

Proprietary estoppel

Farming businesses and partnerships, often family run, can be subject to the odd argument (or two), which, if they escalate, will often end up in court. Although there is no new law here, the following case provides an illustration of the doctrine of proprietary estoppel in a family farming context. On a practical note, the case serves as a useful reminder that it is possible to avoid such disputes by including family members in decisions about succession planning, and by drafting a will and other documents that clearly reflects those plans.

Davies v Davies and other [2015] EWHC 1384 (Ch) is an example of such a dispute, where the court was asked to consider a claim for proprietary estoppel following a family dispute about the beneficial ownership of a farm in Wales.

Proprietary estoppel is an equitable remedy available to claimants which is based on three elements:

• A representation or assurance made to a claimant;

• Reliance on it by the claimant; and

• The claimant acts substantially to his detriment as a consequence of his reliance.

Once the above elements are established, equity arises (the value of which is dependent on circumstances and at the court's discretion). The fundamental principle is that equity prevents unconscionable conduct by the defendant.

Family farm

The claimant in this case was Evan James Lloyd Davies (J). The defendants were his mother and two of his siblings as executors of their father's will. J's father (through his will) left the farm on trust for J until he was 60 (or until he died if earlier), after which the farm was to be sold and the proceeds divided (one-fifth for each of J's siblings and one-fifth for J's children).

Although his father died in 1999, J was only made aware of the provisions of the will in relation to the farm in 2012. His mother had asked the executors not to obtain probate as she was concerned it would cause a family row.

J claimed the provisions in the will were contrary to (oral) promises made to him by his father that if he worked on the farm it would eventually be his. It was due to his reliance on those promises that J had never pursued an alternative career path and had instead continued to work on the farm from the age of 16 at low wages for long hours. His siblings pursued other careers.

The oral promises were repeated by J's father over the years, although none were confirmed in writing and there were no other witnesses to the promises. After his parents' semi-retirement, J spent over £177,000 on works to renovate the farmhouse, build new farm buildings, and make other improvements, and he continued to work long hours on the farm, largely on his own.

The High Court considered these were significant factors. The court also considered the partnership accounts: J and J's wife bought his parents' share in the partnership in 1998.

Essential elements

The court found the essential elements of proprietary estoppel were established and that equity had arisen in J's favour. The conduct of J's family gave assurance to him that the farm would be his. In finding that proprietary estoppel existed, the court could not allow the provisions of the will to take effect and it would be unacceptable to deny J equity in the farm. The court did not hesitate in awarding J the whole of the beneficial interest in the farm.

It was interesting to note, however, that the court did not award equity to J in the bungalow on the farm which was built by his father for his retirement. J was already making a monthly payment to his mother, which the High Court considered it was only just that he should do so for the rest of her life.

On the facts of the case, it was understandable that the claimant’s father was keen to keep the farm in the family, wanted to treat his children equally, and found it difficult to discuss his promises to the claimant with the other children. The siblings knew nothing of the promises made by their parents and, perhaps understandably, challenged their brother’s assertions.

Succession planning is a very sensitive issue which needs to be handled with care and tact. Farming families, depending on their circumstances, may often need specialist tax, trust, and property advice in order to avoid serious disputes in the future and to ensure that the livelihood of family members is protected. SJ

Caroline Nemecek is a partner at Lodders