England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM LLANGEFNI COUNTY COURT
(HIS HONOUR JUDGE CLARKE)

		Royal Courts of Justice Strand London WC2 Wednesday, 10th July 2002

Wednesday, 10th July 2002

1. LORD JUSTICE SCHIEMANN: Lord Justice Buxton will give the first judgment.
2. LORD JUSTICE BUXTON: This is an appeal by the company that was the second defendant in proceedings below, Capital Landfill Restoration (Baths) Ltd, in a possession action that was heard in Caernarfon County Court. It involves various questions under the law of limitation.
3. The background facts, before I come to what the judge actually found, were as follows. The respondent to this appeal and the claimant in the court below, Mr Williams, is a sheep farmer, as had his father been before him. He was, as had been his father, the tenant of various pieces of land in the area of Nantlle in Gwnneed, and more particularly an area of land known as the Mwd. The Mwd is adjacent to a former slate quarry known as the Dorothea Slate Quarry and is a piece of rough grazing land upon which the claimant kept and continues to keep sheep.
4. The short history of the area is this. The freehold title of the Mwd and the quarry was formerly held by the Dorothea Slate Company, and from 1944 the claimant's father was a tenant of theirs of the Mwd. The father died in 1971, by which time the company was in liquidation. The claimant took over the land and paid rent to the liquidator. At some stage thereafter the liquidator sold both the quarry and the Mwd to a company that was called in the trial Comben Homes Ltd (whether this was its correct name does not matter). On that occurring the claimant continued to pay rent which was collected by Mr Medforth, who was Comben Home's local agent or factor. In 1973 that payment of rent ceased; the claimant, however, remaining on the land with Mr Medforth's agreement, on the basis that he would provide for Comben Homes certain care-taking services not in respect of the Mwd, but in respect of the quarries.
5. At some time in the mid-1970s the land was sold by Comben Homes to a Mr and Mrs Darlington, who have not really featured in these proceedings and nobody seems to know much about them. It was the claimant's evidence, not as I understand challenged, that he had never had any dealings either with Mr and Mrs Darlington or with anybody, including Mr Medforth, who was representing them, no payment was made at that time, and no expectation was laid upon the claimant that he should provide care-taking services.
6. The present appellant acquired the paper title to the western part of the Mwd in 1992. The eastern part of the Mwd is an area whose ownership appears to be somewhat obscure, but in which the first defendants (who were not before this court) had, to put it in extremely general terms, some interest.
7. The claimant asserted in the proceedings a possessory title over the whole of the Mwd. The appellants before this court only claim the western part to which they have the paper title, but the arguments deployed apply indifferently to the whole of the Mwd, which was used by the claimant as a single piece of land.
8. Those are the background facts, but the judge made specific findings, broadly in the terms already set out but which it is best to record (page 34 of the judge's judgement):

"The court concludes that Mr Williams' father was the agricultural tenant of this land from 1944 to his death on 2 March 1971. On the death of his father, the claimant became the tenant, clearly accepted and treated as such by the liquidator of Dorothea Slate Quarry, the then landlord. He continued to pay rent until 1973, though he did not pay rent on the due day in May 1974, the rent being paid in arrears. In fact, between times the property had been sold to a Major Griffiths and then on to Comben Homes, though it is not easy to untangle as to exactly when. But rent was clearly being paid to the new freehold owner, confirmation for that being obtained from the evidence of Mr Medforth. Latterly, Mr Williams, instead of paying rent, that is for a short period of time after 1973, did work in lieu of rent for the owners, but this court finds that that did not alter the relationship of landlord and tenant. Clearly there has been no payment of rent since 1974 or any payment in lieu of rent since that time, nor has any rent been sought since then by any person purporting to be the person entitled to title in respect of the land.

This is the factual premise upon which the court acts."

9. The contest before the judge and before us arose under certain provisions of schedule 1 to the Limitation Act 1980, in particular, paragraphs 5 and 8. They read:

"(1) Subject to sub-paragraph (2) below, a tenancy from year to year or other period, without a lease in writing, shall for the purposes of this Act be treated as being determined at the expiration of the first year or other period; and accordingly the right of action of the person entitled to the land subject to the tenancy shall be treated as having accrued at the date on which in accordance with this sub-paragraph the tenancy is determined.

(2) Where any rent has subsequently been received in respect of the tenancy, the right of action shall be treated as having accrued on the date of the last receipt of rent.

8(1) 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.

(2) Where a right of action to recover land has accrued and after its accrual, before the right is barred, the land ceases to be in adverse possession, the right of action shall no longer be treated as having accrued and no fresh right of action shall be treated as accruing unless and until the land is again taken into adverse possession."

10. The judge found that the claimant, Mr Williams, had been in continuous possession of a nature relevant to the Limitation Act from 1971 onwards. There were four elements in this finding: (i) he had been in possession as a tenant up to 1974; (ii) when he ceased to provide what were then the services that were the quid pro quo for his occupation, paragraph 5 meant that it was sufficient to establish adverse possession that he remained in occupation, as it were holding over on the statutory determination of the tenancy; (iii) as a matter of fact, he had continued to use the land after 1974 in the same way as he had when a tenant; (iv) none of the various Acts that had been done after 1974 by other persons (including the second defendants, but not the predecessors of the first defendants) had dispossessed him for Limitation Act purposes.
11. The judge summarised that conclusion in a passage at page 28 of his judgment:

"The court does find that the claimant was in possession of the land from 1971 to date, using that land for his sheep as part of his farming business. The court finds that Mr Williams used the land in the way in which you would expect the land to be used, having regard to its nature and to the business which he was carrying out."

12. These conclusions are attacked by the appellants in the following way. First, the change from payment of rent to provision of services in 1973 was not a continuation of the tenancy but the creation of a licence or some other similar interest to run sheep on the Mwd. The claimant thereupon lost possession, so when he ceased to provide the services in 1974 paragraph 5 could not apply to him in any event. This submission was never pleaded. It is, on the evidence found by the judge, impossible to sustain, and I do not pursue it further. It was clearly contrary to the evidence of Mr Medforth, the landlord's agent, who was accepted as a reliable witness by the judge. The judge said this of Mr Medforth's evidence which he quoted at page 14 line 4 of his judgement:

"Mr Williams continued to supervise the quarry areas for Comben (as he describes it) Homes. Mr Williams did not charge for his services and Comben Homes did not take rent, so it was really services in lieu of rent."

13. That is a quotation from Mr Medforth's evidence, and the judge found in respect of it as follows (page 14 of his judgement):

"Accordingly he confirms the tenancy of the claimant, the claimant being the person in sole possession of the land at the time of Major Griffiths when he was acting as the agent. His evidence is evidence which this court, as I have already said, accepts."

14. That is therefore conclusive, in my judgement, against this contention. I give no weight, here or elsewhere, to the occasions upon which during his evidence the claimant, who was a small farmer in rural Wales, referred to himself as having a licence or permission to graze sheep on the land. The question was what the arrangements established in law, not how an unsophisticated layman sometimes talked about them.
15. Second, as a matter of law the effect of section 5 was only to deem the tenancy to be at an end for the purposes of the Limitation Acts, so that the paper owner could not object to time running on the sole ground that an ex-tenant was there by grant. The possession obtained by operation of law by the creation of the tenancy expired with the expiry of that tenancy. Thereupon the tenant had to establish possession by corpus and animus in the same way as any other person, and he had to do so under the rules envisaged under paragraph 8 of the schedule as had been understood in the well-known judgment of Slade J (as he then was) in Powell v Mac McFarlane recently upheld in all material matters by the House of Lords in Pye & Graham 2002 UKHL 30.
16. Third, the judge had specifically held that the claimant did not satisfy the requirements of Powell v McFarlane, so he had not discharged the burden of establishing possession sufficient to displace the holder of the paper title. To the extent that the finding of possession based upon holding over after the termination of the tenancy was inconsistent with that, it could not prevail over the judge's review of the full facts. That review was in some detail, and because it plays an important part in the appellant's submissions it is necessary to set it out, and not to summarise it, in this judgment:

"What is being relied upon is a number of factors that bring us to the factual possession. As I say, the possession must be adverse to the paper title and to the rest of the world drawing upon the principles which are laid down. They go on about Ryan Griffiths being ejected by Mr Medforth rather than by the tenant, though having said that, it is Mr Medforth who was the agent of the landlord and you may expect that a landlord may just as easily carry out that task.

The TV mast, of course, was not removed. That has to be said. It was allowed to remain on the land. Not the acts perhaps of somebody who is seeking to repel the world at large in relation to that matter. But sheep straying would not be prevented, though in fairness that may have been difficult to prevent. But he did not fence. He does not fence for one reason, which is to stop the sheep from going on to higher ground, but he does not fence to interfere with the rights of anglers as well, so he is acknowledging the rights of others. The fact that he has not fenced off his own land is not necessarily determinative. He has not made any other use of the land. He has not mined slate, for example. What he was interested in doing was grazing sheep. He does not have to develop the land this court would find. It is really saying that the use he has maintained has been more than that of one where somebody has had an easement or the profit á a prendre situation. It is much more akin to that than ownership. That is what is being looked at. They are not acts of factual possession.

Then we look at the question of animus in relation to this matter. One is pointed to page 328 - that is his answer to the possession proceedings - where what he is setting up is himself as an agricultural tenant. He is looking at him as a tenant. He is not looking at himself as somebody who was seeking to say 'I am the owner of this land'. There is some force in that argument when it comes to the question of looking at the animus. What is the intention of the person? Of course, they are arguing that if you look at 1995, in fact there is not any intention to occupy as the owner even as recently as that. Counterbalanced against that, of course, is in 1994 his solicitors are writing as an owner, but that is obviously a powerful matter which comes to light from the proceedings in 1995. Even at best, his attitude towards the television mast is equivocal. What he is saying is he thinks of himself, from the nature of the papers in this case, particularly the 1995 proceedings, as a tenant.

When the court reviews all of those contentions, following the test which it has to apply, looking at the nature of the use made of the land, accepting, of course, that he is going to be using the land as a tenant who is using it for grazing sheep though there may be not a lot more he could do with this land, but one does know what his attitude was perhaps with regard to the television mast or to other users of the land, and then when you start to look at the attitude he was explaining in his answer to the court in 1995. When all those matters are taken into account, this court does find that the contentions of the defendant, some of which the court has obviously rejected but the court looks at it overall, have some force. This court does not find that, on the balance of probabilities, Mr Williams is able to show both factual possession and the necessary animus Possidendi for an uninterrupted period of 12 years up to the time proceedings were commenced in 1998. "

17. In the light of those submissions my conclusions are as follows.
18. 1. Miss Williamson for the respondent strongly argued that during the currency of the tenancy a tenant necessarily and by definition had possession as against his landlord. At the moment when paragraph 5 operated to determine the tenancy, that possession became adverse against the landlord for the purposes of limitation. The strongest authority for that view is to be found in the judgment of Russell LJ, agreed in full by Davies LJ, in this court in Haywood v Chaloner [1967] 1QB 107 at 122F. I will read that passage. In so doing I will substitute for Russell LJ's references to the then legislation references to the relevant paragraphs of the schedule which are in the same terms as the statutory provisions to which Russell LJ was referring. The Lord Justice said this (at page 122F):

"I have no doubt that for this purpose the possession of a tenant is to be considered adverse once the period covered by the last payment of rent has expired so that paragraph 8.1 does not bear further upon paragraph 5. Nor do I doubt the applicability of paragraph 5 to the present case just because the freeholders were content that the rector should not pay his rent and did not bother to ask for it for all those years. In Moses v Lovegrove, in this court it was assumed on all hands when paragraph 5 apparently operates, adverse possession starts: see especially Lord Evershed, and Romer LJ. The principle clearly accepted was that once the period covered by the last payment of rent expired, the tenant ceased to be regarded by the Limitation Acts as the tenant."

19. 2. However, since Miss Williamson conceded in terms that paragraph 8 applies to every case covered by the schedule, she is not able to rely on Russell LJ in his literal terms. Hayward v Chaloner was a case where there was found to be actual possession on the part of a former tenant throughout the 12-year period, so the issue argued in our case, that the claimant did not have anything that could properly be called "possession" at all, and possessed because and only because of his status as a tenant, did not arise. I think that the proper way of approaching Russell LJ's observation is to concentrate on his reference to adverse possession. Russell LJ did not have the benefit of the exposition of this expression that is now to be found in the speech of Lord Browne Wilkinson in Pye v Graham, paras 35 to 38. However, I cannot think that the Lord Justice made the error there identified of thinking that for possession to be adverse there must be a positive act of ouster or dispossession. And, in any event, as Miss Williamson pointed out, that latter case of ouster or dispossession is addressed in the schedule to the Limitation Act by paragraph 1 and not by paragraph 5, paragraph 1 specifically directing itself to what occurs where there has been an act of dispossession or discontinuance. Rather, Russell LJ pointed out that on the determination, at least for Limitation Act purposes, of the tenancy, the possession held by the tenant moves from being a possession with the landlord's consent to being possession held without his consent, and thus for limitation purposes adverse.
20. 3. I agree that this analysis does not exclude the possibility that a tenant might have so feeble a connection with the land (the example given in argument was of a man who has gone off to Australia leaving the front door of the demised premises open) that on the determination of the tenancy he could not be said to be in possession at all. But that in my view would have to be an extreme case. The judge specifically found that it did not arise here, by his findings at page 28 of his judgment which I have already set out.
21. 4. It follows from that analysis that Mr Cooper for the appellant was in my judgement wrong in his argument that on the determination of the tenancy the matter ought to be looked at afresh, by straightforward application of the approach in Powell v McFarlane, without regard to the fact that the tenant was a tenant holding over. Such an approach would be plainly inconsistent with what this court said in Haywood v Chaloner. I consider, therefore, that Mr Cooper's predecessor in representing the appellant was in fact correct when he said this (paragraph 14 of his first skeleton argument):

"The true distinction between a 'trespasser case' and a 'former tenant case' is that in the former, animus possidendi is required in order to establish that the paper owner has been dispossessed. That is not necessary in a 'former tenant' case, because as the freeholder has permitted the tenant into possession, he will normally continue in possession, just as he did before the payment of rent stopped."

22. Mr Cooper specifically disclaimed that passage, as indeed he had to do. In my respectful judgement it, at least in the second sentence, was correct.
23. 5. It was however sought to displace the judge's finding as to continuous possession by an argument that that finding was contrary to the facts. In view of the effect of the preexisting tenancy, which I have already indicated and which the judge found, that argument could in my view only be an argument that possession had been lost by the operation of paragraph 8(2) during the currency of the 12 years. That argument was advanced again in the original skeleton argument, but in my view was not well-founded.
24. I take the points that were made very rapidly. (a) it was said that a person who appeared to be trespassing on the Mwd had been ejected from it by Mr Medforth, of whom we have already heard, rather than by the claimant. The judge addressed that question in terms in a passage in his judgement already set out, and considered that that was a perfectly reasonable thing to have occurred in the context of a relationship between landlord and tenant.
25. (b) sheep belonging to third parties strayed on to the land apparently without interference by the claimant. Straying sheep cannot dispossess. It is worth recording that the judge specifically found, on a matter that was disputed, that there had been no grazing of sheep by the first defendants on the land.
26. (c) The first defendant's husband had erected a TV area on the Mwd during the 1970s. A great deal of evidence appears to be given about this. In my judgement is was an act of casual trespass, if it was anything. It would be quite unreasonable to expect a grazing farmer to create a large fuss about that. As was pointed out in the course of argument it would have been a different matter if it had been put up in his back garden.
27. (d) birch trees had been planted on the Mwd. The evidence about that was obscure, and the judge was entitled to ignore it.
28. (e) up to the last payment of rent the claimant did work on the quarry in lieu of rent; but, as I have already demonstrated, that was found to be a continuation of the tenancy. It is quite impossible to argue that at that stage the tenancy was turned into something like an easement or profit á prendre. For that to happen there would have had to have been a definite agreement or negotiation between Mr Medforth and Mr Williams. There is no suggestion at all that anything of the sort had occurred.
29. 6. Miss Williamson conceded that, if it had occurred between strangers, the claimant's act of grazing sheep on the Mwd would be neutral as to possession, and thus could not establish the unequivocal evidence of possession that Powell v McFarlane required. Mr Cooper seized on this as demonstrating that the requirements of paragraph 8 were therefore not satisfied. But it is completely artificial to look at what the claimant did as if he were a newcomer, and thus a potential or actual trespasser. His acts have to be assessed in the light of why he was on the Mwd in the first place, and why it was on the Mwd and not somewhere else that he put his sheep. Against that background, the act of grazing sheep is not equivocal at all.
30. 7. Mr Cooper however argued that the judge's apparent finding of continuous possession could not stand because it was accepted that paragraph 8 applied, and when the judge specifically considered paragraph 8 in the context of Powell v McFarlane he made the finding already set out. The judge seems to have been led into this enquiry because the case was argued before him on two bases, first as to the implications of the cessation of the tenancy, and second and quite separately as a general issue of possession ignoring the fact that the tenancy had been in place. For the reasons that I have already given it was not appropriate for the judge to enter upon the latter enquiry. But the judge put this matter into order and in context when he made it clear that the finding as to continuous possession was the governing finding, and that he realised full well that he was concerned with a paragraph 5 case and not with a paragraph 1 case. He said this at (page 43 of his judgment):

"The court has already made it plain that it finds on the balance of probabilities that the claimant has remained in continuous possession of the land since 1971 when he became the tenant. It has not found him to be in adverse possession in the sense of the Powell v McFarlane which is really where paragraph 1 Schedule 1 applies. But is Powell v McFarlane the test which operates here? Or is it simply to be in accordance with the provisions of paragraphs 4 and 5, as urged by the claimant and as amplified by paragraph 8 and the authorities that once non-payment of rent occurs, and if you remain in occupation, then that is a sufficient act of possession... possession is not a live issue, as far as this court is concerned, because it has come to a determination that the claimant has been in continuous possession since 1971."

31. That is clear and sufficient to resolve this point in the claimant's favour, but in any event I do not think the judge was right to hold that his findings did not, in Powell v McFarlane terms, show both factual possession and the necessary animus. So far as factual possession is concerned, the judge held that the claimant used the land in the way you would expect the land to be used. That is the same criterion as was posited by Slade J at page 471 of his judgment, a passage cited with approval in paragraph 41 of the speeches in Pye v Graham. It reads as follows:

"Everything must depend on the particular circumstances, but broadly I think what must be shown as constituting factual possession as alleged possesors in dealing with the land in question as an occupied owner might have been expected to deal with it and that no one else has done so."

32. That seems to me to substantially what the judge found in this case. As to animus, the judge seems to have thought that the claimant must show that he had the animus of an owner because he cites and appears to think relevant evidence that the claimant thought of himself as a tenant. But we know now that that understanding of the law, if it was what the judge held, was a heresy: see paragraphs 42 to 43 of the speeches in Pye, citing the judgement of Hoffman J (as he then was) in Bucks County Council v Moran.
33. These latter reflections do not affect the outcome of the appeal, but they do help to underline that the judge's finding of continuous possession since 1971 is a finding that must prevail.
34. For those reasons, therefore, I would dismiss this appeal.
35. I would only add this. The case was well argued before us by Mr Cooper and Miss Williamson, but I regret I cannot say the same for the way in which the appeal was prepared. No attention at all appears to have been paid to paragraph 8 of the Lord Chief Justice's Practice Direction on the Citation of Authorities [2002] 1 WLR 1001, with the result that multiple and over-lapping bundles of authorities were produced, none of which bore the certification required by paragraph 8(3) of the Practice Direction. That requirement of certification is not a piece of empty bureaucracy thought up by the judges simply to harass the Bar, but a means of ensuring that proper consideration has been given to economy and relevance in the production of authorities.
36. Secondly, the form of the bundles of papers in this appeal is extremely unsatisfactory. Some 560 pages of documents were copied, five or six times over, of which I think less than ten pages were actually referred to in the course of the argument. In preparing the bundles for the application for permission to appeal the appellant's solicitors and counsel (who was not at that stage Mr Cooper) included large amounts of material, for instance as to the ownership and history of the land, about which there was no conceivable issue. One result of that was that this court had before it no less than 21 different maps with the disputed land. Either those maps all showed the same thing, in which case they were redundant; or they showed different things, in which case they ought to have been properly explained. In the event in the course of arguing the appeal Mr Cooper economically produced the one map from amongst this mass, that clearly showed the position, and needed to show us no more. It really is necessary for thought to be given at the permission stage as to the issues in the appeal and what the court needs to see in order to dispose of them. Otherwise, excessive costs will inevitably be incurred, as has happened in this case.
37. Thirdly, contrary to the requirements of Practice Direction 52, 5.11, we were not provided with a chronology, nor with a list of dramatis personae. The chronology set out at the start of this judgment has had to be pieced together by the court from various other material. So far as dramatis personae is concerned, this was a case in which evidence was given before the judge by a large number of people, many of whom had the same or similar names. If there was ever a case where the court needed to be helped by a list of who was who, and who was relevant to the case and who was not, this was that case. It is regrettable that that was not attended to.
38. LORD JUSTICE CARNWATH: I agree that on a proper interpretation of paragraphs 5 and 8 of the schedule the appeal fails for the reasons given by my Lord. I would only add in reference to the Law Commission's recent report on the reform of the Limitation Acts, that attention should be given, in any new legislation reproducing schedule 1 to the criticisms of the term "adverse", as used in paragraph 8, highlighted by Lord Browne Wilkinson in paragraph 35 of his speech in Pye v Graham.
39. LORD JUSTICE SCHIEMANN: I also agree that this appeal should be dismissed for the reasons given by my Lord. I would also wish to associate myself expressly with the comments that he made at the end of his judgment about the state of the papers when they arrived before this court. This appeal will therefore be dismissed.
(Appeal dismissed; Appellant's costs to be assessed in accordance with the Community Legal Service (Costs) Regulations 2000); application for permission to appeal to the House of Lords refused).