England and Wales Court of Appeal (Civil Division) Decisions

Case No: B2/2000/2015

IN THE SUPREME COURT OF JUDICATURE

COURT OF APPEAL (CIVIL DIVISION)

ON APPEAL FROM HIS HONOUR JUDGE COOKE

CENTRAL LONDON COUNTY COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Friday 1st December, 2000

LORD JUSTICE MUMMERY:

These are appeals by the occupiers of flats in Oval Mansions near the Oval Cricket Ground in Kennington. They appeal against orders of HHJ Cooke, sitting at the Lambeth County Court on 13 March 2000. After 6 days of oral evidence, including evidence from almost all the present occupiers of Oval Mansions, he made orders for possession on the application of the Lambeth Borough Council (the Council). Mr Paul Morgan QC appears for the appellant occupiers. Mr Andrew Arden QC appears for the Council. Neither of them appeared in the court below.

The main point raised in the appeal, for which the judge gave permission, is whether he was right to reject the contentions of the occupiers that the Council's possession proceedings against them are statute barred, that they have acquired title by adverse possession and that the Council now holds the freehold flats upon a bare trust for them under section 75 of the Land Registration Act 1925.

Oval Mansions comprises 8 self-contained blocks of 60 flats in all dating from the 19th century. The judge ordered possession of Blocks 5 and 7. There is no appeal against those orders. The occupants of Block 6 compromised the action with the Council before trial. The appeals are only concerned with orders for possession of Block 1 (excepting flats 6 and 7) , Block 2, Block 3 (excepting flat 28), and Block 4 (excepting flat 38).

The Cross Appeal

There are cross appeals by the Council against the refusal of the judge to order possession against the occupiers of the 4 flats excepted from the orders under appeal, with the addition of the entirety of Block 8 (Flats 58-60) which had been in the sole occupation of Mr John Burgess continuously from January 1985.

The judge dismissed the Council's claim for possession in those cases on the ground that the occupiers had acquired title to the respective properties by adverse possession.

The Council also cross appeals against rulings by the judge in favour of the occupiers on points raised by their defences of adverse possession.

Behind this dry legal summary of the nature of the appeals before the court there is a dispute almost as remarkable for its facts as for some of the legal arguments inspired by them.

The appellants' case is that, as a result of rent free occupation of Oval Mansions by a shifting population of squatters since the mid 1980's, millions of £'s worth of public housing stock in one of the poorest boroughs in the country has passed gratis into private ownership. At the end of the day, there is, in this costly mass of verbiage (12 appeal files and 4 files of legal authorities), one document which resolves all the appeals and all the cross appeals. How, many might ask, has this state of affairs come about?

Outline of Key Events

The Council has been the registered owner of Oval Mansions with freehold title since 19 June 1979. The properties were acquired as additions to the Council's housing stock.

There were successive waves of squatters at Oval Mansions. During the course of 1983 squatters began to occupy Blocks 1, 3 and 4. In 1984 Blocks 2 and 7 began to be occupied by squatters. Blocks 6 and 8 began to be occupied from the beginning of 1985. Over the following years different squatters continued to come and go.

From the time of the earliest squats the main entrances to each of the blocks from the street were locked by the occupiers of the relevant block; only they had keys to the outer doors, so that neither the Council nor the rest of the world could enter without the consent of an occupier.

The Council did not start proceedings for possession until summonses were issued in the Lambeth County Court on 19 November 1997, following the service of notices on all occupiers on 30 September 1997.

The response of all those in occupation was that the Council's action was statute barred, as its right of action had accrued when it was dispossessed of the properties more than 12 years previously, either by the present occupiers or, in most cases, by earlier occupiers, and that its title to Oval Mansions had been extinguished by more than 12 years adverse possession (a) of the blocks as a whole, including the common parts, so as to create community of property, and/or (b) of the individual flats in the blocks.

The Council contested the claims of the occupiers that they had continuously been in actual adverse possession and that they had the requisite intention to possess the blocks and the individual flats. The Council also asserted that its title to the blocks and the flats had, within the 12 year period, been acknowledged in writing by or on behalf of the occupiers, so as to stop time running against the Council.

The Appeal Hearing

The appeal was opened by Mr Paul Morgan QC on behalf of the occupiers against whom possession orders were made. The judge held that they had failed to establish, both as a matter of actual possession and as a matter of intention to possess,

(a) adverse possession of individual flats within blocks 1-4 and 7; and

(b) joint or collective adverse possession by a fluctuating community of squatters in the blocks considered as a whole or, at the very least, of the common parts of the blocks.

Mr Morgan concentrated his arguments on paragraph (b). He submitted that the judge had failed to address the crucial questions whether the Council had been dispossessed of the blocks and, if so, of what parts. The critical fact was that the street doors of each of the blocks had been locked by the occupiers from time to time for a period of more than 12 years with the intention of excluding the Council, and the Council had in fact been totally dispossessed and excluded from possession of the blocks, as well as of the flats within them, for that period. It was unable to gain access to the interior of the blocks. That exclusion extended both to the common parts, such as hallways and staircases, and to the individual flats behind the locked street doors. The Council was prevented from exercising any control behind the locked street doors or from doing any of the normal acts of an owner.

The judge had erroneously taken the view that there was no physical occupation of the common parts, such as the hallways and staircases, by the squatters. That approach led to an unacceptable "possessory vacuum." Somebody must have been in possession of the common parts. It was not the Council: it was unable to gain access to the blocks, as the street door of each block was always kept locked. It was unable to obtain access to any of the individual flats as the occupier alone had the key to the access door of the particular flat in his or her occupation. Each occupier regarded his or her flat as their own.

The correct view, Mr Morgan submitted, was that, although the occupiers of flats within each block did not intend to exclude each other from the common parts, each successive occupier of the individual flats within a block intended, as against the Council, to exercise joint possession and control, together with the other occupiers, so as to exclude the Council from the whole of a defined area i.e. the whole of the block, including the common parts, the individually occupied flats and the flats that were empty from time to time. In this way the Council had been dispossessed of each block in contention and its title had been extinguished by the joint adverse possession of successive occupiers for more than 12 years.

These contentions were skilfully developed by Mr Morgan by reference to the findings of the judge and to the leading modern cases on the law of adverse possession: Powell v. McFarlane (1977) 38 P&CR 452 and Buckinghamshire CC v. Moran [1990] 1Ch 623.

When Mr Arden QC responded to the appeal on behalf of the Council he made submissions of law and fact which also formed the basis of his cross appeal. They included a powerful challenge to the way in which the judge had interpreted and applied the law on adverse possession to the cases in which he had refused to make possession orders in respect of 4 individual flats and of the entirety of block 8.

It became clear to the court, as a result of pre-reading of the voluminous papers and the substantial skeleton arguments, that both time (the various appeals were estimated to last 5 days in all) and costs (which have been principally borne by the public purse) might be saved if the parties proceeded immediately to the issue of written acknowledgement of the Council's title to the properties. The acknowledgement issue is narrower, both factually and legally, than the more complex issues of intention to possess, implied licence and the nature of adverse possession. More importantly, its resolution could be determinative of all the actions. The court accordingly asked counsel to make submissions on the acknowledgement issue ahead of all the other issues.

Acknowledgement-The Law.

The relevant provisions are contained in sections 29 to 31 of the Limitation Act 1980. Omitting immaterial parts they provide as follows-

"s.29 (2) If the person in possession of the land....in question acknowledges the title of the person to whom the right of action has accrued-

(a) the right shall be treated as having accrued on and not before the date of the acknowledgement;......

" s. 30 (1) To be effective for the purposes of section 29 of this Act, an acknowledgement must be in writing and signed by the person making it.

(2) For the purposes of section 29, any acknowledgement ...-

(a) may be made by the agent of the person by whom it is required to be made under that section ; and

(b) shall be made to the person , or to an agent of the person whose title or claim is being acknowledged......

s. 31(1) An acknowledgement of the title to any land.....by any person in possession of it shall bind all other persons in possession during the ensuing period of limitation."

In Edginton v. Clark [1964] 1 QB 367 Upjohn LJ, giving the judgement of the court, held that

1. All that is required to constitute an acknowledgement is that, as between himself and the paper title owner, the person in possession acknowledges that the paper title owner has the better title to the land (p. 376).

2. Whether or not a particular writing amounts to an acknowledgement depends on the true construction of the document in all the surrounding circumstances (p.377). It is not possible to lay down any more general rule than that.

Acknowledgement-The Background Facts.

Both before and after 19 November 1985 (i.e. the relevant date for the calculation of the 12 year period prior to the issue of the proceedings) various letters and other documents were sent to the Council, which relies on them as acknowledgements of its title by the persons in possession or by their agents. In order to determine their effect it is necessary to relate the circumstances of the contact between the occupiers and the Council over the years.

In October 1983 an association called the Oval Mansions Co-operative (OMC) began to correspond with the Council through its Chairman and Secretary, Jay Hosie. The letters were typed on notepaper headed with the address of 38 Oval Mansions, the flat in block 4 occupied by Mr Hosie. A letter to Councillor Hazel Smith (the Chair of the Housing Committee) dated 2 January 1985 was signed by both him and the treasurer of OMC and concluded

"May I wish you luck with the project for Oval Mansions and thank you for allowing us all to live here in the past."

A letter of the same date and expressed to be written "on behalf of the members of Oval Mansions Housing Co-operative" in similar terms was sent by them to Mr Cantle (the Acting District Housing Manager).

By the summer of 1987 OMC was defunct. A successor association was formed. It was called Oval Housing Co-operative(OHC). Rules were adopted in the latter part of 1987 and a committee (on which each block had a representative) and secretary were appointed. It held its first formal meeting attended by 28 people on 13 October 1987. It later claimed to have 49 members. Although not every occupier was a member, many members attended the meetings and were broadly content that OHC should negotiate with the Council.

The principal objective of OHC was to take control of Oval Mansions, to operate an allocations policy and to acquire a licence from the Council so that it could grant sub-licences to the occupiers. One of its leading figures was Edna Fury who occupied flats 6 and 7 in block 1 from January 1985 to June 1992.

At its meeting on 26 January 1988 OHC appointed the Solon Housing Association Limited (Solon) of 381 Clapham Road London SW9 as a "secondary" housing co-operative to help develop proposals and obtain funding. In 1990 Lambeth Self-Help Housing Association were appointed in Solon's place. Until 1993 there were intermittent negotiations between Solon, or the Lambeth Self-Help Housing Association on behalf of OHC, and the Council for the grant of a licence to OHC to occupy Oval Mansions. There was also correspondence on the subject of a licence between Marc Thompson of 10 Oval Mansions, as Secretary of OHC, and the Council.

On 26 April 1988 Solon wrote to the Council, saying

" I am writing on behalf of Oval Housing co-op for whom Solon act as development agents . In this capacity I am pursuing the possibility of obtaining a licence for the co-op [OHC] to occupy Oval Mansions, a mansion block opposite Kennington Oval cricket ground. The property is owned by the LB Lambeth as I am sure you are aware".

No licence was ever granted by the Council to OHC or to Solon or to any of the individual occupiers. In the absence of a licence to OHC the allocation scheme was generally ineffective.

On 18 January 1989 a petition was presented to the Council. According to a manuscript note on the petition it was "Presented by Cllr Cornwall at Council 18.1.89." The evidence adduced by the defendants was that the petition was presented to the Housing Committee.

It was headed as follows-

" PETITION FROM RESIDENTS OF OVAL MANSIONS AGAINST THE SALE OF OUR HOMES TO UJIMA HOUSING ASSOCIATION BY LAMBETH COUNCIL".

The Ujima Housing Association was a body in conjunction with whom the Council contemplated a redevelopment project, which was ultimately dropped. The petition was signed by at least one resident in each block the subject of the appeal, and by at least one resident of each of the flats and of block 8 which are the subject of the Council's cross appeal. Against each signature was the name of the signatory, the flat number and a summary of the position of that person in respect of Lambeth Housing Waiting List (e.g. number on Housing List, or pending application). If the petition is an acknowledgement, it defeats all claims to adverse possession whether of the blocks as a whole or of the individual flats.

On 24 January 1989 a letter addressed "Dear Sir/Madam " was sent by Jan Irwin , the Assistant Secretary of OHC , saying

"In our endeavours to secure a licence from Lambeth Council, we, the Oval Housing Co-operative, request that this matter be placed as an item on the agenda of the next Housing Committee meeting on February 14th 1989."

The letter referred to a meeting with the Housing Committee on 7 December 1988 at which the Chair of OHC (Mr Peter Johnson) explained the difficulties of OHC "operating without a licence."

On about the same date another letter addressed "Dear Councillor" was written by Marc Thompson , as secretary of OHC, asking for support

"...in our endeavours to secure a licence from the District Housing Office......We organised ourselves as a housing co-op in the summer of 1987 and have been trying to obtain a licence from the Council so that we can put our collective energies into refurbishing the buildings and making them a decent place for our present and future members to live."

On 30 January 1989 OHC was incorporated and was registered as an Industrial and Provident Society.

The negotiations with the Council by OHC direct or through Solon or Lambeth Self-Help Housing Association ceased in 1993.

The Judgment

The judge rejected the Council's contention that its title to Oval Mansions had been acknowledged in the period 1985 to 1997 so as to stop time running and to make it start running all over again. The judge based his decision on this issue on a number of grounds.

1. Some of the documents relied on could not be read or construed as an acknowledgement. The judge regarded the signed petition of 18 January 1989 as failing on this ground.

2. Although two of the documents could be construed as an acknowledgement (the Solon letter of 26 April 1988 and the OHC letter of 24 January 1989), they did not satisfy the requirements of section 30 of the 1980 Act, as OHC was not an agent of the occupiers and did not have actual or apparent authority to make the acknowledgements. Neither OHC nor Solon on its behalf were acting on behalf of the individual occupiers; they were seeking to negotiate the grant of a licence of Oval Mansions by the Council to OHC (who would grant licences) and not by the Council to the individual occupiers. So far as the occupiers were concerned OHC was acting as a spokesman rather than as an agent within the meaning of section 30.

Conclusion

I disagree with the judge on the acknowledgement issue. The short answer to this entire litigation is that the petition on 18 January 1989 is an acknowledgement within sections 29 and 30 of the 1980 Act.

The Judge said

"This was a petition presented against the sale to Ujima. It did not request a licence or anything else. I cannot see that it amounts to an acknowledgement."

A request for a licence to occupy the property (or a request for something else) is not the only means by which a person in possession may acknowledge that another person has the better title to the property. This petition is a clear acknowledgement by those signing it that another person (i.e. the Council) has the better title to Oval Mansions. It seeks to persuade the Council not to sell Oval Mansions, where they live, to a named third party i.e. Ujima. The petition does not question the power of the Council to sell or challenge its right to do so, let alone assert a better title to Oval Mansions so as obstruct a sale by the Council. The document implicitly recognises the power and right of the Council to sell, but petitions it not to go ahead with the sale to Ujima.

The petition was signed by all the defendants to the actions or by their predecessors, so that no question arises of whether the acknowledgement was by an agent. As the petition was actually placed before the Council (by one of the councillors), no question arises on whether the acknowledgement was made to an agent of the Council. It was made to the Council itself.

Although it is unnecessary to deal with any of the other documents on which the Council rely as acknowledgements (including some further documents sent by OHC in 1988, but which were not produced by the Council or by the defendants at trial), I should not be taken as agreeing with the judge's conclusion on the agency point relating to the letters from Solon to the Council 26 April 1988 and from OHC to the Council on 24 January 1989. Having posed the question on those letters as to whether OHC had authority to bind the squatters the judge said that the first relevant factual matter was that

"[OHC] was at all material times an incorporated body having a separate legal existence from its members."

Unfortunately the judge overlooked the fact that OHC was not incorporated until 30 January 1989 and the letters which he considered could be construed as acknowledgements were sent on 26 April 1988 and 24 January 1989, at which times OHC was still an unincorporated association of individuals. It could therefore be argued that the letters were acknowledgements of title by the individual members of OHC acting through an agent. It is not, however, necessary to express a final view on that point or on the judge's ruling that an acknowledgement given to an individual councillor does not satisfy the requirement of acknowledgement to an agent, as individual councillors do not act for the Council.

It is also unnecessary to express a view on the remaining points in the appeal and the cross appeal and in the skeleton arguments. As a result of the course taken on the appeal the court did not hear argument on most of those points.

The only issue, apart from acknowledgement, on which the court heard full argument from Mr Morgan concerned the claim of joint or collective adverse possession of each relevant block as a whole.

In my judgment that novel and far reaching contention fails on the facts found by the judge. The argument rests almost entirely on the fact that throughout the relevant period only the occupiers had the key to the street door to their block. Even assuming that this amounted to dispossession of the Council in respect of each block with a locked street door preventing the Council from gaining access, it does not follow that the defendants and their predecessors, who went into occupation of the property at different times, were collectively or jointly in adverse possession of the entire block, including its common parts, throughout the limitation period of 12 years. It is provided by Paragraph 8(1) of Schedule 1 to the 1980 Act that

" No right of action to recover land shall be treated as accruing unless the land is in the possession of some person in whose favour the period of limitation can run (referred to below in this paragraph as "adverse possession") and where under the preceding provisions of this Schedule any such right of action is treated as accruing on a certain date and no person is in adverse possession on that date, the right of action shall not be treated as accruing unless and until adverse possession is taken of the land."

The judge was entitled to find as facts that there was no consensual arrangement affecting the basis of occupation of the individual flats within the blocks (the allocation arrangements being scant or non-existent); that there was no exercise of effective joint or communal control over the individual flats themselves; and that there was no physical occupation or joint adverse possession of the common parts i.e. the hall ways and staircases about which he heard evidence. The judge heard no evidence of joint occupation of other common parts of the blocks, such as the outer walls, foundations and the roof, which would also be relevant to the acquisition of a freehold title to a block of flats by adverse possession.

In the light of those findings of fact the judge rightly rejected the contention that the Council were statute barred from recovering possession of (a) the blocks in which no title by adverse possession had been established to any of the individual flats and (b) individual flats in respect of which no title by adverse possession had been established.

Order

I would dismiss the appeal and allow the cross appeal.

LORD JUSTICE LATHAM:

I agree with both judgments.

LORD JUSTICE SIMON BROWN:

"Oval Housing Co-operative is an open democratic organisation dedicated to housing people in need. ... The Co-operative is dedicated to working with the Council to work out ways of solving the provision of housing and in particular the housing of single parent families living in bed and breakfast accommodation." So wrote OHC in 1988, a period when they (and Solon, a housing association acting as their "development agents") were discussing with Lambeth a licence for the continuing occupation of Oval Mansions. How times change. By 1997, when Lambeth sued for possession, the concern of the then generation of squatters was not with the needs of public housing but rather in securing, inevitably at public expense, the private windfall of title by adverse possession.

Although I, like my Lords, am content to decide all these appeals by reference solely to the various written acknowledgements, I am not to be taken as affirming the approach of the judge below to any of the myriad other issues raised before him. Nor does it appear to me that the case of Ellis v Lambeth LBC (1999) 32 HLR 596 was necessarily rightly decided in the squatters' favour at first instance (although I respectfully agree with the Court of Appeal decision to reject the particular argument advanced by Lambeth on appeal).

Very often, as has proved to be the case here, the question of acknowledgement can be resolved as a substantially discreet issue and certainly as an issue involving infinitely less in the way both of evidence and of argument than the dispute as a whole. It therefore seems to me highly desirable in a case like this to decide acknowledgement as a preliminary issue. Had that course been adopted here, it would have produced a huge saving in time and public expense, at any rate on the assumption that the issue had been decided correctly.

On the issue of acknowledgement, I agree with all that Mummery LJ has said. The policy underlying the requirement that any acknowledgement of title must be in writing is plain and, as Mr Paul Morgan QC helpfully pointed out, is conveniently reflected in a passage in Lord Templeman's judgment in the Privy Council in Browne v Perry [1991] WLR 1297, 1301-2:

"If an oral acknowledgment were allowed to constitute an interruption litigation would be encouraged and litigants would dispute what was said, by whom and to whom. ... Once an acknowledgment has been reduced to writing, there is certainty about the words used and the court need only decide whether the words which have been written amount to an acknowledgment. There is no room for fraud, mistake or failure of memory. The written word speaks for itself."

In deciding, therefore, how far into the surrounding circumstances it is permissible to go in search of the true construction of the document[s] in question, the court will be astute not thereby to reintroduce the risk of "fraud, mistake or failure of memory" which the rule is designed to avoid. But the court need not otherwise be inhibited in its inquiry. Jones v Bellgrove Properties Limited [1949] 2 KB 700 is an early and good illustration of this principle in action. The court had no difficulty in allowing the plaintiff there to establish by evidence that his particular debt was included in the total sum acknowledged to be due to a number of creditors. There is, in short, no reason why the court should strain against finding an acknowledgment of title (or debt) in these cases, so long only as the certainty of the writing avoids the risk of fraud or mistake.

Nor by the same token does it seem to me that the courts should feel any particular reluctance to find the necessary relationship of agency to satisfy the requirements of s.30(2) of the 1980 Act as to the making of an acknowledgment in writing.

Turning then to the facts of the present appeal - which are sufficiently set out in Mummery LJ's judgment and which I do not repeat - I for my part would have had no hesitation in regarding as an effective acknowledgment not merely the petition presented to Lambeth on 18 January 1989, but also Solon's letter of 26 April 1988, written expressly "on behalf of Oval Housing Co-op," and OHC's letter of 24 January 1989. The judge below rejected both as effective acknowledgments on the basis that OHC had no authority to bind the squatters, and the letter of 24 January 1989 on the additional basis that it may have been sent to an individual councillor and councillors "do not act for the Council". In my judgment he was wrong on both grounds. It seems to me clear here that OHC were acting on behalf of the individual occupiers in their discussions with Lambeth and that that would be so irrespective of whether or not they were incorporated at the time. Similarly it seems to me that the letter of 24 January 1989, even if sent to a councillor, must be regarded as having been sent to him/her as Lambeth's agent given that the letter in terms "request[ed] that this matter be placed as an item on the agenda of the next Housing Committee meeting on February 14 1989".

To reject as effective acknowledgments of title documents of the kind here in question, sent in the particular circumstances which obtained here, would in my judgment represent a needless and inappropriate indulgence towards those who could at the time have had no thought whatever that a later generation of squatters might adventitiously benefit from being in occupation on the twelfth anniversary of the initial unlawful entry.

I too would dismiss these appeals and allow Lambeth's cross appeals.