Key points

  • Legislation requires agreements for the sale or other disposition of an interest in land to be made in writing
  • A boundary agreement will not need to comply with this rule where it was not part of the parties' purpose in entering into the agreement that it would lead such a disposition
  • That this may in fact have been the effect of the boundary agreement does not matter

Facts of Yeates v Line

In Yeates v Line, the claimants had applied to the Land Registry to be registered as proprietors of a small parcel of land on the ground that they had acquired title to it by adverse possession. The respondents, who owned the land, objected.

The Land Registry adjudicator who originally dealt with the case ruled that the claimants had indeed acquired title by adverse possession. However, the adjudicator decided not to order the register of title to be altered to show the claimants as proprietors. This was because the parties had had a meeting at which they reached an oral agreement to compromise their dispute, by agreeing that the respondents could keep the majority of the land.

The claimants appealed to the High Court.

What was the effect of the agreement reached between the parties?

The High Court ruled that the effect of the compromise agreement was to require the claimants to dispose of an interest in the land to the respondents.

The claimants argued that the oral compromise agreement was therefore void, because it did not comply with section 2 of the Law of Property (Miscellaneous Provisions) Act 1989. Section 2 provides that a contract for the sale or other disposition of an interest in land must be made in writing and must be signed by, or on behalf of, each party.

Different types of boundary agreements

In previous cases the courts have drawn a distinction between two different types of boundary agreement.

In the first type, the parties may agree (for example) to straighten the line of a boundary, so that in return for a concession by party A in one place, party B will make a concession in another place. This would be a contract for the conveyance of land.

In the second type, the parties are doing no more than identifying on the ground what the title documents describe in words or on a plan. Nothing is transferred (at any rate consciously) - the agreement is to identify, or demarcate, not to convey. This type of agreement is not a contract to convey land.

Did the agreement have to be in writing to be enforceable?

The court in this case noted that there is no express exemption in section 2 for boundary agreements entered into for the purposes of "demarcating" the boundary.

However, applying previous case law, it held that in order for a contract to be a contract "to do" something, the parties had to have as one of their purposes the intention to do that thing.

This reasoning also applied to section 2. So, for a boundary agreement to be one to which section 2 applies, it must have been part of the parties' purpose in entering into the agreement that it would lead to a sale or other disposition of an interest in land. Section 2 would not apply merely because the effect of the contract was that an interest in land was to be transferred, if the parties had no intention to make any such transfer.

Applying that reasoning to the compromise agreement in this case, it was not enough that the agreement had a disposing effect. In order to engage section 2 it must also have had a disposing purpose. That was not made out in this case. The compromise agreement was therefore not caught by section 2 and was valid, despite only being oral. The claimants' appeal was dismissed.

Things to consider

It is not clear on what basis the court concluded that the effect of the compromise agreement was that the claimants had to dispose of an interest in the land to the respondents. Under the regime governing adverse possession introduced by the Land Registration Act 2002, a squatter has no interest in the land unless and until they are registered. So it would appear that, at the time the agreement was reached, there was nothing for the claimants to dispose of. On that basis, section 2 could not apply.

The distinction between an agreement that has a disposing effect and one which has a disposing purpose appears to be rather a strained interpretation of section 2. The courts are clearly trying their utmost to uphold boundary agreements despite their common lack of formality. The reason cited for this is that boundary agreements are "an act of peace", usually designed to avoid litigation, and as such ought to be upheld where possible.

Even where documented in writing, boundary agreements should be used with caution. Their effect on successors in title is unclear. As an alternative, the parties could consider effecting a transfer of the land in question and having this registered at the Land Registry. However, in either case the boundaries of the land will still only be "general" (see our earlier Alert for an explanation of the general boundaries rule).

The only failsafe way to record an agreement as to boundaries is to apply to the Land Registry to determine the boundaries. This is a formal procedure which requires agreement to have been reached between the neighbouring landowners. Following determination, the boundaries will be fixed so that they are not general boundaries anymore.