England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION (CARDIFF DISTRICT REGISTRY)
(MR JUSTICE NEUBERGER)

		Royal Courts of Justice Strand, London, WC2A 2LL
		12th February 2003

Lord Justice Schiemann :

The Background

1. The background to this case is complicated and covers nearly 40 years. During this time there have been changes in local government in Wales. However, these are of no present significance and I shall refer to the claimant council and its predecessors indifferently as the Council.
2. The case concerns the compulsory purchase of 2 plots of land. For present purposes there is no distinction between them and I shall treat them as one plot.
3. The Council in 1964 made a Compulsory Purchase Order entitling it to purchase land owned by and in the possession of the appellant, Mr Watkins. I shall refer to this as the Order. The Order was made pursuant to the Physical Training and Recreation Act 1937 and authorised the Council to acquire the land for the purpose of providing public open space. It was confirmed in July 1965. In October 1965 the council served Notice to Treat in respect of the land. On 8^th December 1965 the Council served Notice of Entry in respect of the land. On 14^th March 1966 the Council entered on the land and took possession. Shortly afterwards the Council was wrongfully ousted from the land by Mr Watkins. He has remained there ever since.
4. A reference was made to the Lands Tribunal in March 1968 and compensation was finally assessed by it in May 1977 at £15,000. In November 1987 the Council lodged £15,000 in the High Court in respect of the compensation monies.
5. On 15^th February 1988 the Council executed a Deed Poll vesting the land in the Council. However, Mr Watkins refused to move. So the Council issued possession proceedings in the Cardiff County Court on 26 January 2000. Mr Watkins filed a defence and counterclaim to the effect that he was entitled to stay on the land. He asserted that the Deed Poll was of no effect and that he had been in adverse possession to the Council since 15 March 1966. This defence and counterclaim was largely struck out by HH Judge Moseley Q.C. who gave summary judgment for possession to the Council. Mr Watkins appealed to Neuberger J who dismissed the appeal but suspended the operation of the possession order pending any further appeal. Mr Watkins now appeals with the leave of this court.
6. The appeal involves a consideration of a number of matters: the compulsory purchase machinery which was in place at the relevant time, the Limitation Act 1980, the procedural possibility of challenging the validity of the Deed Poll after this length of time and the substantial merits of any such challenge. As to broad merits, the appellant says he has been on the land for the last 40 years and that it is now too late for the Council to remove him, particularly since the Council no longer want the land for the purpose for which it obtained the CPO. The Council says that what it claims is its relatively recent change of mind as to what it wants to do with the land is irrelevant and that Mr Watkins should not be allowed to have any benefits from his unlawful behaviour in ousting the Council in 1966.

The Statutory Compulsory Purchase Machinery

7. As one might expect with a case with this long background, much of the relevant legislation has now been replaced or amended.
8. The Order was made under the Acquisition of Land (Authorisation Procedure) Act 1946. This Act incorporated in relation to the Order various provisions of the Lands Clauses Consolidation Act 1845.
9. For present purposes three interrelated matters need to be considered: the assessment and payment of compensation, the transfer of title and the taking of possession by the acquiring authority. The usual order of events is that, once the Order has been confirmed, compensation is agreed or assessed, title is conveyed and possession is taken. In the present case, however, the taking of possession was the first thing that happened.
10. The provisions as to the assessment and payment of Compensation were contained in the Land Compensation Act 1961 and do not need further consideration here.
11. In the present case, it appears that back in 1966 the Council was in a hurry and wished to enter into possession before compensation had been agreed or assessed or title conveyed. The statutory machinery allows for this.
12. Paragraph 3 of the Second Schedule to the 1946 Act entitled the Council to enter on and take possession of the land on giving notice to treat and notice of entry. It provided that:

"Where a local authority … have been authorised … to purchase any land compulsorily, then, at any time after serving notice to treat and after serving on the owner … of the land not less than fourteen days notice, the authority … may enter on and take possession of the land …"

13. Taking possession did not have the effect of vesting title in the Council. It did however have the result that the Council was liable to Mr Watkins to pay compensation.
14. From time to time it happens that the landowner is uncooperative. At the relevant time the legislation which governed this situation was contained in sections 76 and 77 of the 1845 Act. The 1946 Act provided that the references in the 1845 Act to "the promoters of the undertaking" should be construed as references to the acquiring authority, in this case the Council. So I have for present purposes amended the 1845 Act accordingly.
15. Section 76 provided:

"If the owner of any such lands purchased or taken by the [Council] or of any interest therein…, on tender of the … compensation … awarded to be paid in respect thereof … refuse to convey … [the] lands as directed by the [Council] ..., it shall be lawful for the [Council] [to pay into the Supreme Court the … compensation payable in respect of such lands]."

16. Section 77 provided:

"Upon any [such payment …] of money as last aforesaid being made … it shall be lawful for the [Council] … to execute a deed poll … containing a description of the lands in respect whereof [such payment …] shall have been made, and declaring the circumstances under which and the names of the parties to whose credit [such payment … ] shall have been made, … and thereupon all the estate and interest in such lands of the parties for whose use and in respect whereof such … compensation shall have been [paid or deposited] shall vest absolutely in the [Council], and as against such parties [the Council] shall be entitled to immediate possession of such lands."

The Pleadings

17. A number of points were in issue in the court below which have no longer been pursued and so the following account is a somewhat simplified version of the pleadings.
18. The Council's Particulars of Claim assert that it is the freeholder by virtue of the Deed Poll. They assert that Mr Watkins occupies the land but that at no time since the date of the execution of the Deed Poll has Mr Watkins had any legal or equitable title in the land or any right or permission to occupy the land or part of it.
19. The Defence accepts the making and confirmation of the Order, the decision of the Lands Tribunal, the serving of the Notice to Treat, the payment into court and the execution of the Deed Poll. However it denies that the Council is the freeholder entitled to possession. It makes the following assertions, mostly in the alternative:

"By the autumn of 1984 the Council had abandoned any intention to use the land for open space but had expressed the intention of selling it for housing purposes;

Mr Watkins retook possession in March 1966 and had been in adverse possession ever since;

By letting 22 years elapse between the confirmation of the order and the execution of the Deed Poll the Council was estopped from asserting that time did not start running against it until the execution of the Deed Poll;

Mr Watkins had been in adverse possession since 2^nd May 1977…."

The Limitation issues

20. The Limitation Act 1980 provides as follows:

"s. 15. Time limit for actions to recover land

(1) No action shall be brought by any person to recover any land after the expiration of twelve years from the date on which the right of action accrued to him or, if it first accrued to some person through whom he claims, to that person.

(6) Part I of Schedule 1 to this Act contains provisions for determining the date of accrual of rights of action to recover land in the cases there mentioned.

s.17 Extinction of title after expiration of time limit

Subject to …

at the expiration of the period prescribed by this Act for any person to bring an action to recover land … the title of that person to the land shall be extinguished.

Schedule 1

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."

21. The first point to be decided is whether a right of action accrued to the Council in 1966 when it was dispossessed by Mr Watkins. This is what Mr Watkins submits before us. He submits that he took possession and was from that moment "a person in whose favour the period of limitation can run". If this submission is right then, subject to the effect of the Deed Poll, Mr Watkins will have acquired title by adverse possession. The Judge did not deal with this way of looking at the matter. This is because a number of more complicated submissions had been advanced before him, which he rejected and which were not the primary way in which the case was advanced before us.
22. The Council submits that s. 15 of the Limitation Act simply has no application to a situation such as the present. They put this submission in a number of different and overlapping ways.
23. First, they submit that it is impossible for a freeholder, such as Mr Watkins undoubtedly was until the execution of the Deed Poll, to prescribe against himself. This submission was unsupported by authority and is in my judgment unsustainable. I see no reason, for instance, why a freeholder who has granted a 21 year lease in year one and dispossesses the leaseholder in year 2 should not be held to have acquired squatter's rights against the leaseholder as from year 13. This submission forgets that the basis of limitation in this context is the right to possession and possessory title.
24. The Council relied on a dictum in Buckinghamshire CC v Moran [1990] 1 Ch 623 at p.636 by Slade L.J. who said:

"Possession is never "adverse" within the meaning of the Act of 1980 if it is enjoyed under a lawful title."

25. In my judgment that sentence is of no assistance to the Council. Mr Watkins did not enjoy his possession "under a lawful title". He had possession and he had a lawful title. But he did not have possession under that title. The sentence has to be read in the context of that case where the issue was whether the possessor had possessed by licence of the landowner who did not want the land straightaway. Immediately after the sentence quoted above Slade L.J. continued:

"If, therefore, a person occupies or uses land by licence of the owner with the paper title, and his licence has not been duly determined, he can not be treated as having been in "adverse possession" as against the owner with the paper title."

26. That, if I may respectfully say so, is manifestly right. The court there was not concerned with an issue between a body who has lawfully taken possession pursuant to statute and a person (albeit with paper title) who has unlawfully dispossessed that body.
27. In principle anyone who has possession of land can maintain an action for possession against anyone who does not have a superior title to be in possession. Mr Watkins had a right to possession which was superior to anyone else's right to possess with one exception - the Council : the Council's right to possession stemming from statute trumped his right to possession stemming from his paper title. Had the council brought an action for possession against him in April of 1966 it would have won. It follows that the Council's right of action accrued in 1966 and, unless the Deed Poll makes a difference, that the right of action based on paragraph 3 of the Second Schedule of the 1946 Act is time barred. It was no doubt because of this that the Council in their pleadings rely on the Deed Poll. If they are entitled to do this then they can not be defeated by any limitation point : the action was commenced less than 12 years from the date of execution of the Deed Poll.
28. In my judgment, the position of Mr Watkins vis-à-vis the Council is no weaker than that of any other person who had dispossessed the Council.
29. Second, the council submit that under the legislation applicable in the present case the only period of limitation contained in the compulsory purchase legislation was that contained in s.123 of the 1845 Act which provides that:

"… the powers of the promoters of the undertaking for the compulsory purchase or taking of lands for the purposes of the special act shall not be exercised after the expiration of the prescribed period, and if no period be prescribed not after the expiration of 3 years from the passing of the special act."

30. They submit that where a Notice to Treat has been served within the three years there prescribed that legislation lays down no further period of statutory limitation and thus they were entitled to execute the Deed Poll when they did. The position has been otherwise since the Planning and Compensation Act 1991 amended s.5 of the Compulsory Purchase Act 1965 but that has no application to the present case. This has not been disputed.
31. Third, they submit that s. 15 of the Limitation Act read with s. 17 is primarily concerned with title and its extinction and that it has no application to a title acquired under statute: in such a case one must look at the provisions in the relevant statute to see what happens to the title. For my part, I know of no authority for this proposition and see no reason for reading down the Limitation Act in the way suggested. Section 17 is concerned with tidying up a situation where, by virtue of section 15 someone has acquired squatter's rights. The person with paper title can then be deprived of his paper title and a new title can be vested in the squatter. If the person previously in possession had no paper title but had been there for 12 years and had thus himself acquired what is often referred to as possessory title then he loses that possessory title after a further 12 years occupation by others.
32. Fourth, they submit that the present situation should not be categorised as one in which the Council is seeking possession but rather as one where the Council is seeking to exercise compulsory powers given to it under Statute. They submit that on 16^th March 1966 the Council could not have succeeded in an action claiming possession but could have obtained relief on the basis that Mr Watkins was preventing the Council from exercising its powers under the Order. In my judgment, the Council having taken possession in 1966 and having been dispossessed was then entitled to bring an action against the person who dispossessed them. The fact that any invocation of the Court's powers in order to displace Mr Watkins might have taken a number of forms is nothing to the point.
33. Fifth, they submit that on entering the land in 1966 pursuant to the 1946 Act the Council did not acquire any estate or interest against which possession could be adverse. They submit that such an estate or interest was not acquired until 15^th February 1988 – the date of the execution of the Deed Poll. If that be right then the 12 year period had not finished running when the present proceedings were started. This led to prolonged citation of the authorities on the effect of a Notice to Treat. In my judgment that discussion is irrelevant to the present issue once one accepts, as I do, that the Council had a right to possession and that therefore once Mr Watkins had re-entered he was a "person in whose favour the period of limitation can run".

The Deed Poll

34. I therefore turn to examine the situation on the basis that at the time when the Deed Poll was executed, time had run in favour of Mr Watkins.
35. The Council submit that the effect of the execution of the Deed Poll is to start time running afresh so that Mr Watkins' immediately previous 22 years of possession of the site do not avail him. The submission turns on the concluding words of s.77 of the 1845 Act quoted at paragraph 16 above. The argument goes like this:

i) Mr Watkins is a party for whose use the compensation was deposited;

ii) He had a possessory interest in the sense that he was in possession, albeit wrongfully;

iii) Mr Watkins' "estate and interest" vested in the Council upon the execution of the Deed Poll.

36. For the reasons set out in paragraphs 47-53 of the Judgment of Arden LJ and paragraphs 69-79 of the judgment of the judgment of Aikens J I accept this argument and hold that, subject to the question of the deed Poll's validity to which I shall now turn, time would start running afresh from the date of the execution of the deed Poll.
37. Mr Watkins' substantive challenge to the validity of the Deed Poll rests on the basis that at the time when it was executed the Council no longer had any intention to use the land for the purpose for which its compulsory purchase had been authorised. This assertion is challenged by the Council as a matter of fact. The judges below were not concerned to try the truth of this allegation but struck the pleading out on the basis that it would avail Mr Watkins nothing even if the assertion were true. We also must therefore proceed on the basis that the assertion is true.
38. The legal consequences of that assertion if it be true are accepted to be as stated by Upjohn J in Grice & another v Dudley Corporation [1958] Ch 329.In that case Upjohn J considered section 123 of the Land's Clauses Consolidation Act 1845 which provided:

"And be it enacted, that the powers of the promoters of the undertaking for the compulsory purchase or taking of lands for the purposes of the special act shall not be exercised after the expiration of the prescribed period, and if no period be prescribed not after the expiration of 3 years from the passing of the special act."

39. Upjohn J, at p.339, stated that once notice to treat had been served section 123 was :

"out of the picture and no further period is laid down by statute within which the next step to acquire the property must be taken. In my judgment, however, the authorities …. established the following propositions: first, the acquiring authority exercising statutory powers must proceed to enforce its notice in what, in all the circumstances of the case, is a reasonable period. If the authority sleeps on its rights it will be barred if the delay is not explained. If it is explained, the acquiring authority will be allowed to enforce the notice providing that it is equitable that it should do so in all the circumstances of the case. However, the oppression on the owner of land in respect of which a notice to treat has been given cannot be wholly disregarded however sound the reason for not proceeding to enforce it. Secondly, the acquiring authority may evince an intention to abandon the rights given to it by the notice to treat, in which case the owner is entitled to treat those rights as abandoned. Thirdly, this court has an inherent jurisdiction to control the exercise of statutory powers if, but only if, the court can see that the powers are being exercised not in accordance with the purpose for which the powers were conferred. In such a case the court has the power, and the duty, at the instance of the Attorney General on behalf of the public or of a person damnified, to restrain the further exercise of those powers not in accord with the special act. These three propositions are, in point of law, distinct, but, in practice, they tend to merge one into the other, more particularly the first two, for unequivocal acts of abandonment seldom arise."

40. Before us it has been common ground for the purpose of these interlocutory proceedings that, provided that Mr Watkins makes good his factual assertions as to the Council's intentions prior to 1984, he has a good defence to the Council's possession action. The Council would have evinced an intention to abandon the rights given to it by the series of acts starting with the making of the compulsory purchase order and ending with the assessment of compensation in 1977. Moreover the power to acquire the freehold title would not be being exercised in accordance with the purpose for which the power was conferred.
41. The Council however, submit that it is not open to Mr Watkins to take this point at this stage. It is far too late. He knew of the Deed Poll years before proceedings were commenced. He should have challenged it then.
42. For the reasons set out in the judgment of Aikens J in paragraphs 80-96 I reject this submission.
43. I therefore would allow this appeal.

Lady Justice Arden :

The limitation issue

44. The contention of Mr Geraint Jones QC, for Mr Watkins, is that an equitable interest in the land, the subject of the compulsory purchase order ("the Land"), passed to the Council when it entered into possession of the land in 1966. Alternatively, the Council then obtained the right to possession. Following entry by the Council, as owner of the paper title, the only right of Mr Watkins was to receive compensation. Therefore, Mr Watkins could by adverse possession oust the rights of the Council to the land. The court should not follow the observations of Carnwath J in R v Northumbrian Water Ltd ex p Able UK Ltd (1995) 72 PC&R 95 at 104 that the acquiring authority acquires an equitable interest in such land when the compensation has been assessed.
45. The contention of Mr Joseph Harper QC, for the acquiring authority, is that there was a valid compulsory purchase order. There was no need for the Council to take possession. The Council went into possession but it was dispossessed with violence. In any event, it acquired a separate right to have the Land conveyed to it when the vesting deed was executed. Section 15 of the Limitation Act 1980 does not apply because the proceedings by the Council would be for an injunction to prevent Mr Watkins from interfering with the exercise of its statutory powers. This would not be within section 17 of the Limitation Act 1980. In any event, a person with the paper title to land cannot acquire another paper title to the same land by adverse possession. The Council had no title for the purposes of section 17 until the vesting deed was executed.
46. Mr Harper further submits that there was no time limit for the execution of the vesting deed. The statutory consequences of the execution of the vesting deed are contained in section 77 of the Land Clauses Consolidation Act 1848. If Mr Watkins acquired possessory title to the Land by adverse possession, it would have merged in his paper title. Mr Jones responds that merger is subject to contrary intention, to which Mr Harper replies that it is not possible to rely on contrary intention when seeking to resist performance of a statutory obligation to convey land. In any event, the compensation paid to Mr Watkins was not calculated on the basis that he retained his alleged possessory right to the land.
47. I agree with the point made by Schiemann LJ in paragraph 23 of his judgment that a freeholder can acquire an interest as against the holder of a derivative interest if he occupies the property in such a way as to exclude that holder from exercise of his right without his consent. After entry the Council, in my judgment, had a right to possession even though it was forced out of possession immediately following entry: see Tiverton & North Devon Company v Loosemore (1884) 9 HLC 480. However, in my judgment, Mr Watkins could only acquire (by adverse possession) a possessory interest, as against the Council, subject to the rights and incidents of the notice to treat. If the Council chose to go out of possession and to allow Mr Watkins to take possession, it could do so but the fact that it gave up its right to possession did not impede it from enforcing its rights arising out of the notice to treat. Those rights included referring the issue of compensation to the Lands Tribunal (which it did timeously) and the execution of a deed poll on payment of the compensation.
48. The conclusion reached in the last paragraph is in line with the authorities which establish that the owner of land subject to a compulsory purchase order cannot create new interests in the land with the result that he has a claim for compensation for those new interests, contrary to Mr Jones's submission as to the application of section 77. Thus, in Mercer v Liverpool St Helens and South Lancashire Railway [1903] 1 KB 652, at 662, Stirling J held:

"Now at law a contract for the sale of land creates merely a personal obligation between the vendor and purchaser and does not bind the land; in equity such a contract binds the land and that not only as against the vendor, but also as against all persons claiming under him with notice of the existence of the contract. On the other hand legal rights and interests in and to land bind all persons, whether with notice or not; and I apprehend that rights and interests arising under a notice to treat fall within this rule. It is for this reason, as it seems to me, that it has been held that an interest in land which has been created by the owner after service of a notice to treat is not a subject for compensation under the Lands Clauses Consolidation Act, 1845: see, for example, Ex parte Edwards; Wilkins v Mayor of Birmingham. In accordance with the same principle, it was laid down by Lord Romilly in Carnochan v Norwich and Spalding Ry Co. that the purchase of land in respect of which a railway company has served a proper notice to treat, and in respect of which the company has entered into possession, is 'in truth but the purchase of an interest in the purchase-money'."

49. The judgment of Stirling J in Mercer was subsequently affirmed by the House of Lords in the same case, which is reported at [1904] AC 461.
50. Section 77 of the Land Clauses Consolidation Act 1848 sets out the consequences of the deed poll. The critical wording (substituting "the Council" for "the promoters of the undertaking") is:

"and thereupon all the estate and interest in such lands of the parties for whose use and in respect whereof such … compensation shall have been [paid or deposited] shall vest absolutely and then [the Council], and as against such parties [the Council] shall be entitled to immediate possession of such lands". (Italics added).

51. On execution of the deed poll, therefore, a new right to possession sprang up in favour of the Council which it was entitled to enforce separately from the right to possession which it acquired on serving the notice to treat and entering the Land in March 1996. The section provides for "all the estate and interests in the land, the subject of the compulsory purchase order of Mr Watkins [for whose use and in respect whereof such compensation shall have been [paid or deposited]" to vest in the Council. Mr Watkins' objection is that such interest could not include the possessory interest that he had acquired, which had come into being since the reference to the Lands Tribunal and which did not exist as at the date at which compensation was calculated (15 March 1966). This is not, in my judgment, a good ground of objection for the reasons given above and as explained in the passage I have cited from Mercer. Moreover, any interest which Mr Watkins acquired to possession of the Land was always a defeasible interest and it was duly brought to an end by the execution of the deed poll. So long, therefore, as the deed poll is valid and effective, Mr Watkins has no defence to an action for possession of the property.
52. On the question whether the Council acquired any equitable interest in the Land as a result of entry so that Mr Watkins could acquire that interest by adverse possession, Mr Jones relies on observations in certain cases to the effect that the exercise of compulsory powers comes to an end on the acquiring authority taking possession. This point is reflected in the final sentence of the passage I have already cited, above, from the judgment of Stirling LJ in the Mercer case. In my judgment, in considering this submission, it is helpful to bear in mind that, as Mr Jones accepts, there is no contract at this stage. On that question, the position is set out in the judgment of Wilberforce J in Capital Investments Ltd v Wednesfield Urban District Council [1965] Ch. 774 at 794:

"In my judgment, however, that [viz. the proposition that a notice to treat constitutes a contract within the meaning of section 10 of the Land Charges Act 1925] is clearly not so. First of all, there is the matter of principle. There is, by the mere service of a notice to treat, no consensus between the parties, because at this point the price has not been fixed. A notice to treat does nothing more than establish conditions in which a contract might come into existence, either a voluntary contract or a statutory contract. As a matter of authority, it seems to me that the position is clearly established in Haynes v Haynes and also stated by Fry on Specific Performance, 6^th ed., p.62, both of which, to my mind, make it plain that a contract does not come into existence by the mere service of a notice to treat before the compensation has been determined. It has been said that for certain purposes and to a certain extent the notice to treat constitutes the relation of vendor and purchaser, but in the same passages in which this statement has been made it has also been made clear that the notice does not constitute a contract but only a preliminary step bringing the parties together either to agree or to refer the matter to a jury or other tribunal. I refer to Adams v London & Blackwall Railway Co., per Lord Cottenham and also to Haynes v Haynes." (Footnotes omitted).

53. The observations of Carnwath J in the Northumbrian Water case, which Mr Jones criticises, are consistent with this analysis. If there was no contract between the parties at the time the Council took possession, it is difficult to see how any equitable interest in the Land could by then, or on the entry into possession, vest in the Council. Accordingly, I reject Mr Jones' argument based on the proposition that the Council acquired some equitable interest in the land on entry. In the circumstances of the overall conclusions which I have reached on this appeal, it is not necessary for me to express a view on the further question, which has not been argued, whether Mr Watkins could, in the event that the deed poll is invalid, acquire any equitable interest in the Land by adverse possession as against the Council following the fixing of the compensation by the Lands Tribunal.

The public law issue

54. Mr Watkins puts forward the following claim in his defence and counterclaim:

"(h) By not later than the autumn of 1984 the Claimant had abandoned any intention to use the land for any of the purposes set out in Section 4 of the Physical Training and Recreation Act 1937 and then had the expressed intention of selling same for housing development.

Particulars

The Defendant will rely upon the minutes of the Claimant's Leisure and Recreation Special Sub-Committee dated 13 September 1994 and the Claimant's numerous attempts to negotiate a sale of the said land to national house building companies since that time. The Defendant is unable to give full particulars thereof until such time as disclosure takes place.

(j) Since mid 1984 the Claimant has been in negotiations with large house building companies (including Barratts and Lovells) to sell the land to them for residential development for very substantial sums of money.

(k) The Claimant vested the land in itself by a Deed Poll dated 15 February 1988 as averred by the Claimant in paragraph 5 of its Particulars of Claim."

55. It is not suggested by Mr Watkins that prior to the date set out in subparagraph (h) above, the Council had changed its mind about using the land for the purposes set out in section 4 of the Physical Training and Recreation Act 1937. The relief which the defendant seeks is (so far as relevant) only a declaration that the deed poll is null and void. He does not seek either an order setting aside the notice to treat or a declaration that the compensation which the Council has paid should be repaid to it. In Grice v Dudley Corporation [1958] Ch.329, on which Mr Jones relies, Upjohn J held that the authority serving a notice to treat no longer had statutory power to acquire land in circumstances where the order under which the notice had been served was for the acquisition of land for specific purposes which the authority had abandoned. Accordingly, the notice to treat in that case was no longer effective. However, Mr Harper has not sought to distinguish that case or to argue that, as the compensation for the Land was assessed in 1977, the rights of the parties were crystallised and transformed into the rights conferred by a statutory contract of sale or that the decision which the Council had to make in 1988 was not a decision that needed to be made for the purposes of section 4 of the 1937 Act. In my judgment, there is a real prospect of success on Mr Watkins' argument that the Grice case applies.
56. The Council disputes the allegations made in the pleading which I have set out above and contends that at the date of the deed poll it was exercising its power to acquire the Land for the purposes of the 1937 Act. However, Mr Harper has not sought to uphold the judge's judgment on the basis that there is no substance in the matters pleaded and that the defence is fanciful on the facts (cf. Clark v University of Lincolnshire & Humberside [2000] 1 WLR 1988).
57. In the circumstances, I agree with Schiemann LJ and Aikens J that a challenge to the deed poll can be made in private law proceedings and that such a challenge raises issues of fact making it inappropriate to grant summary judgment.
58. On that basis, in my judgment, it is necessary to consider the consequences for the Council's summary judgment application of the possibility of the deed poll being set aside. There is no time limit for the execution of the deed poll, but unless the Council were to reconsider the matter on the proper basis, the court would have to decide whether the Council had any subsisting right to possession under the notice to treat, assessment of compensation and payment into court, which the court is not being asked to set aside. In those circumstances, I am not satisfied that Mr Watkins would not have a real prospect of showing at trial that he had acquired an interest in the land by reason of adverse possession. Accordingly, in my judgment, summary judgment should not have been granted even on the limitation issue.
59. The appellant did not pursue the Convention points raised in the notice of appeal. In the circumstances, no issue under article 6 of the European Convention on Human Rights arises. Nor indeed could it have arisen if summary judgment had been properly given (Z v UK (2001) 34 EHRR 97). Likewise, if the appellant's rights in the land had by no later than 1977 been duly translated into rights in compensation money pursuant to statutory powers enacted and exercised for public benefit, no issue under article 1 of the First Protocol to the Convention would arise (S v United Kingdom, application number 13135/87, 4 July 1988). As the judge noted, the compensation money was determined on the basis that a certificate of appropriate alternative development under section 17 of the Land Compensation Act 1961 had been issued. In other words, the Lands Tribunal assessed the compensation payable to Mr Watkins on the basis, which was accepted to be more favourable to him, of the classes of development other than public open space to which the Land might have been put.
60. Accordingly, I would allow this appeal.

Mr Justice Aikens:

61. The Council's claim is for the possession of the land that has been occupied by Mr Watkins since he wrongfully ousted the council from possession on 15 March 1966. The Council pleads (at paragraphs 5 and 7 of the Particulars of Claim) that its title derives from the Deed Poll dated 15 February 1988, which was executed pursuant to the provisions of the 1845 Act. The Council asserts that at no time since February 1988 has the defendant had any legal or equitable interest in the land. Mr Watkins has pleaded several defences to this claim. HHJ Moseley QC gave summary judgment for possession of the land to the Council. An appeal to Neuberger J was dismissed, although he suspended the operation of the possession order pending the current appeal.
62. Mr Watkins pursued two principal defences on this appeal. They were: (1) that the Deed Poll was of no effect because by the time it was executed, the Council intended to use the land for a purpose other than that for which the Compulsory Purchase Order was originally granted. (2) The Council took possession of the land on 14 March 1966; Mr Watkins dispossessed the Council on 15 March 1966 and he has been in "adverse possession" of the land continuously since then. Counsel for Mr Watkins explained that he meant two things by the phrase "adverse possession". First it meant that Mr Watkins was in possession "adverse" to the Council's possessory title, to which it was entitled immediately it served a Notice to Treat in October 1965. (This particular point was not pleaded but no objection was taken to the argument being raised in this Court). Secondly Mr Watkins was in possession "adverse" to the Council's equitable interest in the land which, he argued, it obtained either when it took possession in March 1966, or upon the promulgation of the decision of the Lands Tribunal on 2 May 1977. (The latter point was pleaded at paragraph 11 of the Defence, but the former was put at the forefront of Mr Jones' argument).
63. These two defences can be called "the public law" and the "limitation" defences respectively. The second point was argued first, so I will deal with it first. However I should note that it was not in dispute that Summary judgment will only be given to a claimant if the defendant has no reasonable prospect of successfully defending the claim. On the limitation defence the Council's argument, which was successful below, was that as a matter of law Mr Watkins had no such defence. On the "public law" point, the Council's argument, also successful below, was that Mr Watkins was not entitled to raise this point so long after the execution of the Deed Poll. In this Court, Mr Geraint Jones QC, for Mr Watkins, has argued that Neuberger J was wrong to reach both those conclusions and was therefore wrong to uphold Judge Moseley's order that there be summary judgment in favour of the Council. Mr Jones submitted that there are issues of law and fact that must go to trial.

The Limitation Issue

64. There are, in fact, two main components to the limitation issue. The first concerns the effect of the sequence of events leading to Mr Watkins' wrongful act in ousting the Council from possession of the land on 15 March 1966. By the "sequence of events" I mean the making by the Council of the Compulsory Purchase Order for the land (in 1964); the service of the Notice to Treat in respect of the land (in October 1965); the service, by the Council, of a Notice of Entry in respect of the land (on 8^th December 1965) and the Council's taking possession of the land on 14 March 1966.
65. In relation to this sequence of events, I think that the two questions are: (i) did the Council acquire a right of action to recover possession of the land on 15 March 1966, when Mr Watkins ousted the Council from its possession; (ii) if so, then did that right become time – barred by virtue of sections 15 and paragraph 8 of Schedule 1 of the Limitation Act 1980?
66. I agree with Schiemann LJ that from the moment the Council obtained possession of the land on 14 March 1966, it had "possessory title" to the land. It was entitled to take possession because it had exercised its rights under Paragraph 3(1) of the Second Schedule of the Acquisition of Land (Authorisation of Procedure) Act 1946 - the 1946 Act. The Council was dispossessed on 15 March 1966 by Mr Watkins. He was acting in a manner that was inconsistent with the Council's statutory right to take possession under the 1946 Act which it had, in fact, exercised.
67. For the reasons that Schiemann LJ gives in his judgment I agree with him that section 15 and paragraph 8(1) of the Limitation Act 1980 apply to the circumstances that prevailed in respect of the land from 15 March 1966. Accordingly, like Schiemann LJ, I have concluded that the effect of those provisions is that the Council could not sue for possession of the land based on its possessory title after the lapse of 12 years from the date when Mr Watkins ousted the Council from possession on 15^th March 1966.
68. This means that it is unnecessary to deal with Mr Jones QC's alternative argument under this heading. This was to the effect that Mr Watkins obtained a possessory title that was adverse to the "equitable interest" that the Council had in the land from either 1966 or 1977. I was not attracted to that argument in any case.
69. The second component of the limitation issue concerns the effect of the Deed Poll. The Council executed the Deed Poll on 15 February 1988. It did so after the Lands Tribunal had assessed the compensation payable for the compulsory purchase of the land at £15,000 and after the Council had lodged that sum in the High Court in November 1987.
70. The argument of Mr Joseph Harper QC, for the Council, was that even if it is assumed that the Council's right to sue for possession (that had accrued after Mr Watkins had ousted the Council on 15 March 1966) was time – barred after 15 March 1978, a new cause of action for possession arose upon the execution of the Deed Poll on 15 February 1988. As the proceedings were begun in the Cardiff County Court on 26 January 2000, this claim, based on the Deed Poll, is not time – barred by the Limitation Act 1980.
71. The point depends on the correct construction and application of the closing words of section 77 of the Land Clauses Consolidation Act 1845. Schiemann LJ has set out the section in the form as amended by the 1946 Act. I will do so again for convenience:

"Upon any [such payment …] of money as last aforesaid being made … it shall be lawful for the [Council] … to execute a deed poll … containing a description of the lands in respect whereof [such payment …] shall have been made, and declaring the circumstances under which and the names of the parties to whose credit [such payment … ] shall have been made, … and thereupon all the estate and interest in such lands of the parties for whose use and in respect whereof such … compensation shall have been [paid or deposited] shall vest absolutely in the [Council], and as against such parties [the Council] shall be entitled to immediate possession of such lands."

72. Mr Harper's argument under this heading is as follows: (1) even if "adverse possession" was obtained by Mr Watkins, nonetheless a new statutory right in favour of the Council arises on the execution of the Deed Poll. That right is in "all the estate and interest of the lands of the parties for whose use and in respect whereof such compensation shall have been paid or deposited". (2) That wording means: (a) all interests in the land, whether legal estate; equitable interest or possessory right, must pass to the Council at the moment the Deed Poll is executed; (b) the phrase "for whose use and in respect whereof such compensation shall have been paid or deposited" refers to the land in question, not whatever interest and estates that the "parties" may have at that stage. (3) As the last words of section 77 grant a statutory right to possession at the moment the Deed Poll is executed, then a new cause of action arose against Mr Watkins at that time. So whatever the position may have been before then, the Council can rely on that right within 12 years of its accrual.
73. Mr Jones' response on behalf of Mr Watkins is that on the proper construction of section 77 the only "estate and interest" that can vest in the Council are those estates and interest that have been paid for by the compensation (ie. the £15,000 lodged with the High Court). The "estate and interest" cannot include such estate or interest that Mr Watkins has by virtue of his having had "adverse possession" of the land since 15 March 1966 because no compensation was paid for that interest. Therefore Mr Watkins retained his possessory title that he obtained on ousting the Council on 15 March 1966 and because that possession was not challenged within 12 years of that date, it still cannot be challenged, despite the Deed Poll.
74. In order to arrive at the proper construction of section 77 I think it is sensible to consider what would normally have happened. The sequence would have been: (i) a compulsory purchase order; (ii) a Notice to Treat; (iii) assessment of compensation by the Lands Tribunal; (iv) deposit of the compensation if not accepted by the landowner; (v) execution of the Deed Poll if the landowner failed or refused to convey the land to the Council. I think that section 77 assumes that a landowner retains his legal and equitable title to the land at the time of the Deed Poll. In that case, the effect of the Deed Poll is to vest all the interests of "such land" in the Council.
75. In the present case, however, the Council had served a Notice of Entry under the 1946 Act. That gave it the right to immediate possession of the land, which it thereupon exercised. Does the fact that this was done and the fact that Mr Watkins thereafter ousted the Council from possession, make any difference to the position?
76. I have concluded that it does not. In my view the intent and effect of section 77 is to vest in the Council whatever estates and interests in the land the party being compensated had at the time immediately before the Deed Poll. As at 15 February 1988 Mr Watkins still had the "paper" title to the land as it had never passed from him. He had lost the right to possession by virtue of the Deed of Entry, but he had regained possession by ousting the Council from possession and staying on the land for more than 12 years thereafter.
77. In my view the proper effect of the wording at the end of section 77 is to vest in the Council all the estates and interest, whether legal or equitable or of any other nature, that Mr Watkins had or may have had in the land as at 15 February 1988. If Mr Watkins did anything contrary to the rights conferred by the Deed Poll, then time would start to run from the date of the Deed Poll because that is when the Council accrued causes of action based on rights created by the Deed Poll.
78. Accordingly, in my view the Council is correct in saying that Mr Watkins has no limitation defence to the claim for possession based on the effect of the Deed Poll.
79. However if my analysis above is correct, then the Council can only succeed on the limitation defence point if the Deed Poll is valid. Mr Watkins' second defence is that it is not and that he can challenge it in defending the Council's claim for possession.

The Public Law Issue

80. The factual assertion by Mr Watkins, that, by the time of the execution of the Deed Poll the Council had formed an intention not to use the land for the purpose for which a compulsory purchase order had been made, has not been tested at all so far. We must assume that there is an arguable case on the facts, whilst noting that Mr Harper, on behalf of the Council, strenuously denies this allegation.
81. The argument on behalf of Mr Watkins is that the Deed Poll was null and void because it was executed in circumstances where the Council was no longer carrying through the purpose of the original compulsory purchase order. In effect, Mr Watkins is accusing the Council of acting in bad faith in executing the Deed Poll. It appeared to be common ground that, if that were the case, then the Court would, in appropriate circumstances, have the jurisdiction to declare the Deed Poll null and void or to set it aside.
82. Mr Jones accepted that the attempt at challenging the Deed Poll was a "public law" point, in the sense that it was a challenge to the validity of an act, pursuant to statute, by a public authority. He argued that, despite this fact, it was an argument that could be raised as a defence in proceedings that were begun 12 years after the Deed Poll was executed.
83. Mr Harper appeared to accept that it would have been open to Mr Watkins to challenge the validity of the Deed Poll if he had done so promptly by applying for judicial review (under what was then RSC Order 53) in 1988. But he submitted that, as this was a public law point, it ought to have been taken shortly after the Deed Poll was executed. As it was not, then, as a matter of law, it lay within the judge's discretion to strike out this defence as being an abuse of the process of the court because it was now far too late to challenge the validity of this public law act by the Council by relying on the point as a defence in the current proceedings. He submitted that in deciding whether the defence could be run or not, the judge had correctly considered all the relevant factors and he had not taken account of any irrelevant factors.
84. Mr Jones made an unenthusiastic attempt to attack the judge's decision on discretion grounds. In my view his lack of enthusiasm was understandable as he had no proper basis for doing so.
85. So the only point in this part of the case is whether the judge was right, as a matter of law, to hold that because of the immense delay in challenging the validity of the Deed Poll, it gave him a discretion to strike out this "public law" defence after considering all the relevant factors on whether the defendant could be permitted to proceed with it.
86. I must respectfully disagree with the judge on this point. The Council's claim is for possession of the land and Mr Watkins challenges that claim. If my analysis of the limitation issue is correct, then the only basis he can do so is by challenging the validity of the Deed Poll. But before the current proceedings Mr Watkins enjoyed the possession of the land and that had not been challenged by the Council for 34 years after he ousted the Council on 15 March 1966. If his possession was not being challenged (in court) by the Council, then why should Mr Watkins have to take legal proceedings to question the validity of the Deed Poll? I can see no reason why he should need to do so or be forced to do so.
87. But once his possession of the land was disputed by the current proceedings, then why could he not raise the validity point as a defence to the claim for possession as a matter of right, even though it was nearly 12 years after the Deed Poll had been executed? Again, I cannot see why not, unless statute, the CPR or authority prevents it. In my view the House of Lords has stated clearly that public law issues can, in appropriate cases, be raised as defences to what might be called "private law" claims and that this can be done as a matter of right.
88. The leading case is Wandsworth LBC v Winder [1985] AC 461. In that case the House of Lords held that a tenant of a council flat was entitled to raise the defence that two council resolutions raising rents were invalid, so that he did not have to pay the additional amount of the rent imposed pursuant to those resolutions. The House rejected the notion that the resolutions could only be challenged by applying for leave to seek judicial review under what was then RSC Order 53. (The tenant had applied for leave but had been refused as the application was out of time). The Council had argued that the Court's refusal to grant leave to seek judicial review meant that the defence that the resolutions were invalid could not be raised. The tenant argued that he was entitled to wait until he was sued for the outstanding rent and then put forward the invalidity issue as a defence.
89. Lord Fraser of Tullybelton gave the only substantial speech. He recognised that previous decisions of the House of Lords on the question of when a public law issue could be raised had emphasised the need for speedy certainty as to whether a particular public law act or decision is valid, in the interests of good administration and that of third parties who might be affected by the issue. But he also stated that the arguments for protecting public authorities against unmeritorious or dilatory challenges to their decisions must be set against arguments for preserving the ordinary rights of private citizens to defend themselves against unfounded claims. (See respectively 508H and 509D).
90. Lord Fraser then continued (at page 509E):

"It would in my opinion be a very strange use of language to describe the respondent's behaviour in relation to this litigation as an abuse or misuse by him of the process of the court. He did not select the procedure to be adopted. He is merely seeking to defend proceedings brought against him by the appellants. In so doing he is seeking only to exercise the ordinary right of any individual to defend an action against him on the ground that he is not liable for the whole sum claimed by the plaintiff. Moreover he puts forward his defence as a matter of right, whereas in an application for judicial review, success would require an exercise of the court's discretion in his favour. Apart from the provisions of Order 53 and section 31 of the Supreme Court Act 1981, he would certainly be entitled to defend the action on the ground that the plaintiff's claim arises from a resolution which (on his view) is invalid: see for example Cannock Chase District Council v. Kelly [1978] 1 WLR 1, which was decided in July 1977, a few months before Order 53 came into force (as it did in December 1977). I find it impossible to accept that the right to challenge the decision of a local authority in course of defending an action for non-payment can have been swept away by Order 53, which was directed to introducing a procedural reform. As my noble and learned friend Lord Scarman said in Reg. v. Inland Revenue Commissioners, Ex parte Federation of Self Employed and Small Businesses Ltd. [1982] AC 617, 647G "The new R.S.C., Ord. 53 is a procedural reform of great importance in the field of public law, but it does not - indeed, cannot - either extend or diminish the substantive law. Its function is limited to ensuring 'ubi jus, ibi remedium."' Lord Wilberforce spoke to the same effect at p. 631A. Nor, in my opinion, did section 31 of the Supreme Court Act 1981 which refers only to "an application" for judicial review have the effect of limiting the rights of a defendant sub silentio. I would adopt the words of Viscount Simonds in Pyx Granite Co. Ltd. v. Ministry of Housing and Local Government [1960] AC 260, 286 as follows:

"It is a principle not by any means to be whittled down that the subject's recourse to Her Majesty's courts for the determination of his rights is not to be excluded except by clear words.""

91. In my respectful opinion that passage applies precisely to the situation in this case.
92. Mr Harper for the Council relied on Clark v University of Lincolnshire and Humberside [2000] 3 All ER 752. In that case the claimant student alleged that the University had been in breach of contract in the way in which had dealt with a dissertation that had been submitted by her as part of final examinations. The judge had struck out the claim as an abuse of process. The matter was compromised after the Court of Appeal hearing but the court gave judgments on two points. The first is on the circumstances when a claimant can pursue an action for breach of contact that is itself based on an allegation that a public body failed to act in accordance with its own regulations; in other words when a "private law" claim is based on an allegation of defaults of a "public law" nature.
93. The judgments of Lord Woolf MR and Sedley LJ emphasise that where the private law claim is based either wholly or substantially on "public law issues" (as I have described them above), then normally the challenge to the public body should be made by way of judicial review. A failure to use that procedure will not be fatal to the claim. But if that procedure is not used and the challenge is made outside the public law challenge time limits, then under the CPR the courts may refuse to allow that claim to be made in "private law" proceedings, on the basis that the excessive delay is an abuse of process. (The current CPR is Part 3.4).
94. Mr Harper relied on the fact that in the Clark case both Lord Woolf MR and Sedley LJ emphasised that under CPR the Court can strike out any claim that is an abuse of the Court process. Mr Harper submits, effectively, that the defence that the Deed Poll is invalid is an abuse of the process because it is made so late.
95. I have concluded that Clark does not help Mr Harper. In the present case Mr Watkins is not bringing a claim based on a "public law" point. He is raising it as a defence. Sedley LJ specifically notes in his judgment (at page 757c) that the House of Lords decided in Winder that where the issue of a private law right depending on a prior public law decision is raised as a defence to a claim, then the point does not have to be dealt with by judicial review. This must mean that it can be raised as a defence to a claim. Therefore the only reason for not permitting the issue to be raised as a defence would be if the Court, exercising its power under CPR Part 3.4, concluded that it was otherwise an abuse of process or concluded under CPR Part 24 that the point had no reasonable prospect of success. So that leads back to the question of whether the defence would be an abuse or could not have a reasonable prospect of success just because, as a public law point, it is raised so long after the Deed Poll was executed. Mr Harper did not point to any other part of the CPR that gave the court a power to rule out a public law defence on the ground that it was raised long after the relevant event had occurred.
96. In my view the position remains as stated by Lord Fraser of Tullybelton in Winder. I have concluded, with respect, that the judge erred in law by holding that CPR Part 24 gave him a discretion to decide whether this public law point could be run as a defence at all. In my view the law does not give a judge such a discretion. It is accepted that the defence, if it can be run, raises substantive issues of both fact and law. Therefore, it should not be struck out.

Conclusion

97. I would allow the appeal on the single ground that the judge was wrong to strike out the "public law" defence.
Order: Defendants appeal against order dated 11/12/01 dismissed; Defendants appeal against order dated 08/02/01 allowed; Claimants applications to strike out Defendants counterclaim and to grant Claimant summary judgment dismissed; Claimant to pay 70% of Defendants costs here and below, such costs to be subject to detailed assessment if not agreed; Defendants costs to be subject to a Detailed Public Funding Assessment the time for requesting such detailed assessment is extended until 21 days after the costs referred to in para 3 above have been agreed or assessed; Defendant's application for permission to appeal to the House of Lords refused. (Order does not form part of the approved judgment)