England and Wales Court of Appeal (Civil Division) Decisions

IN THE SUPREME COURT OF JUDICATURE
IN THE COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM RUNCORN COUNTY COURT
(HHJ DAFYDD HUGHES)

		Royal Courts of Justice Strand London, WC2
		4th October 2005

Tuesday, 4th October 2005

1. LORD JUSTICE MUMMERY: This is a case about whether a claim to recover land has become statute barred. The appeal is from an order made by HHJ Dafydd Hughes in the Runcorn County Court on 30th November 2004. He declared that the claimant's title to land bounded on three sides by the colour yellow and on one side by the colour green on a plan annexed to the order between Units 1 and 2, Halton Business Park, Runcorn, had been extinguished by the operation of the Limitation Act 1980. He ordered the claimants to pay the defendants' costs, subject to a detailed assessment, and he refused permission to appeal. Permission to appeal to this court was granted by Neuberger LJ on 17th May 2005.
2. The claimants in the action, who I will refer to as "the appellants", are Mr Barrie Tennant and Mr Eric Burke. Their dispute was with the defendants, Richard Adamczyk and William Ellis, who I will refer to as "the respondents". The appellants occupied Unit 2 of the Halton Business Park. They first did so in March 1992 as the lessees of a company called Ross Brown Developments Limited. In October 1993 they moved their business to the other side of a service road that ran through the business park. In September 2003 the appellants purchased Unit 2. They were registered as proprietors of it on 26th November 2003. On 1st March 2004 they began proceedings in the Runcorn County Court against the respondents. They claimed relief against the respondents requiring them to remove a fence referred to in the Particulars of Claim. They claimed a declaration that they owned the land fenced off by the respondents and a declaration as to the true boundary as contended for by the appellants. They also claimed damages for trespass, mesne profits and interest.
3. The respondents had on 14th June 1991 taken a transfer of Unit 1. They moved into that unit at about the same time. The respondents' defence to the claim was that it was statute barred. They pleaded various acts in their defence. They said that their business required the use of the land in question. It had been used by them since they commenced occupation of their unit for the parking of vehicles, the passage of goods vehicles into and out of the unit, and the cultivation of a flower bed. That use, they said, is and had been extensive. They also pleaded that they had erected a chainlink fence in the early part of 1992 and that that was replaced by a palisade fence in the autumn of 1994. They accordingly denied trespass. They pleaded in paragraph 4 of the defence:

"... because any such claim is now barred by the operation of the Limitation Act 1980. The Defendants' occupation has now been for the time set out below adverse to the Claimants and their paper title has been extinguished by the operation of sections 15 and 17 and schedule 1 of the Limitation Act 1980 and the Land Registration Act 2002."

4. They made a counterclaim, repeating their defence and seeking a declaration that the appellants' title had been extinguished as pleaded. There was a reply and a defence to counterclaim. The reply denied that the claim was barred or that title had been extinguished. It was specifically pleaded that, since the first acts of possession alleged to have been made by the respondents were in 1992, no 12 year period under the Limitation Act can have expired before the coming into force of the Land Registration Act 2002 on 13th October 2003. Section 96(1) of the Land Registration Act 2002 provided that no period of limitation should run against any person, other than a chargee, in relation to an estate in land. Section 96(2) of the Land Registration Act 2002 provided that section 17 of the Limitation Act 1980 did not operate to extinguish the title of any person where by virtue of the section a period of limitation does not run against him.
5. It was also pleaded that under the Limitation Act 1980, even if the relevant provisions of the same had not been repealed in relation to registered land, the respondents would have had to have erect the fence before 1st March 1992, which they do not assert and which is, in any event, denied. There was therefore a defence to the counterclaim.
6. The respondents served voluntary particulars pursuant to a directions order of 24th May 2004 made by the District Judge. I shall quote the whole of this because it crystallised the issue that fell to be decided by the Judge at the trial and it features prominently in this appeal:

"For the avoidance of doubt, the period of advance[sic] possession that is claimed to support the relief sought (namely a Declaration) begins in June 1991 immediately after taking occupation upon the transfer of their registered title to them when Defendants servants or agents employees and themselves began parking cars and other vehicles on the disputed land, using the same for turning vehicles around, storing vehicles/or stock therein, and generally using what appeared and appears still to be the unit yard as a light industrial factory unit's outdoor area, without which the unit cannot usefully be used for business purposes of the kind carried on by the Defendants. Further in late July 1991 some Russian Vines were planted on the disputed land for decorative effect and as a marker of ownership. For these reasons the 'Reply' is wrong in law."

7. The court has been supplied with a bundle that includes a photograph of the two units showing the yard between the respondents' Unit 1 and the appellants' Unit 2, showing the palisade fence enclosing the yard with a gate, and also showing in the particular photograph a van parked up against the wall of the respondents' unit. It is common ground that the part of the yard immediately adjoining the respondents' unit is the property of the respondents so that, for example, as regards the photographed van, part of that van facing the wall of Unit 1 is parked on the respondents' land and part of it is parked on the appellants' land. This fact has also been illustrated by an agreed coloured plan which shows that, in effect, the claim to adverse possession is not to the whole of the yard. It obviously does not include the part of the yard that abuts the respondents' unit, as it already belonged to them. The claim is only in respect of a part of the yard to which the appellants have a paper title.
8. The Judge heard evidence from the parties. We have been referred by Mr Hall, who made excellent submissions for the appellants, to parts of the evidence. It is not necessary to read out verbatim extracts from the transcript because it is quite clear that it was accepted that, as a matter of fact, about 70 percent of the activities which were pleaded by the respondents as acts of adverse possession in fact took place on land which belonged to them, not on the land to which they claimed adverse possession. Details were also given of the various activities of the respondents in relation to the use of the land, deliveries, unloading pallets, sorting stock out in the yard, cultivation of the flower bed where the Russian vine was planted. It was also clear from that evidence as pleaded and as explained by the Judge, that no fence was erected by the respondents until after the critical date of October 1991.
9. The judgment has been criticised by Mr Hall with regard to the Judge's conclusions in pages 9 and 10 of the transcript. There is no challenge on this appeal to any of the primary facts found by the Judge. The challenge is to the legal conclusion that the Judge drew from applying what he conceived to be the correct legal test to the facts he had found. The Judge held:

"The crucial issue before the Court, it seems to me, is what was the position from certainly June 1991 until October 1991? Did the Defendants take possession of that land? Did they have the intention to possess it to the exclusion of all others? Or was this, as is suggested by the Claimants, land which was there for the benefit of other occupiers of units on the estate including the Claimants themselves?"

10. I pause there to say that it is accepted by Mr Askey, on behalf of the respondents, that the Judge was right in confining the crucial period to that from June 1991 until October 1991. Any acts on which the respondents relied after October 1991 were too late to support a plea of limitation, since they would be acts within the crucial 12 year period from October 1991 to October 2003.
11. The Judge then went on to say this:

"What I had described to me (and the Claimants, of course, are not in a position to give evidence about this particular period), is that the Defendants maintain that this land was used from the very time that they acquired it in June 1991, for accepting deliveries of stock to their premises, for unloading stock which usually took the form of large pallets which would be then unloaded by hand, for the parking of vehicles, admittedly on land which is not in dispute, the Defendants' land anyway, but certainly for the gaining of access by vehicles to that area of land. It does seem to me that I have to accept the evidence that has been placed before me by the Defendants as to the extent of their activities from June 1991. Their evidence is clear. I do not have any reason to doubt that what they are saying is an accurate description of their activities on the land during that crucial period of time and that the erecting of the chainlink fence in the first place and subsequently the palisade fence, that those acts were simply an affirmation of the position that had existed from the time that they acquired the premises in June 1991.

Essentially, I find that there has been no change in the use of that land throughout the time from June 1991 up to the present and it does seem to me that it is not without significance that these activities, in particular the erection of the chainlink fence and the palisade fence, went completely unchallenged by the Claimants until the institution of these proceedings."

12. So he concluded at the end of his judgment:

"In those circumstances the Claimants' claim must fail and, accordingly, there will be judgment for the Defendants. It is quite clear from the evidence and it is purely a factual issue that the Court has to consider, that they have established adverse possession over this land from June 1991."

13. Mr Askey, for the respondents, sought to support that reasoning of the Judge. It is unfortunate that he did not, for the purposes of this hearing, produce a respondents' skeleton argument, setting out the respondents' arguments on the points made by the appellants in their skeleton, on the basis of which Neuberger LJ concluded that this appeal had a real prospect of success. Mr Askey said that he only needed a one-line skeleton argument, which was really no more than saying that the Judge had come to the correct conclusion, and that he was not obliged to put in a more substantial skeleton. He is mistaken in that. Part 52, paragraph 7.6 requires a skeleton argument to be submitted. It is essential that this be done when, as is bound to be the case on the full hearing of an appeal, permission to appeal has been granted by this court on the basis of a detailed skeleton argument which leads this court to conclude that the appeal has a real prospect of succeeding. A full written response is required. We do, however, have the benefit of the skeleton argument that Mr Askey successfully used in the court below. It is clear from the submissions made in that skeleton how the Judge, in my view, fell into error in his reasoning and conclusion.
14. Mr Askey submitted, having referred to the pleadings and the voluntary particulars relating to the period of adverse possession, that the adverse possession began in 1991 with the parking of cars and other vehicles on the disputed land, the use of it for turning vehicles around and later, by the end of July 1991, by the planting of Russian vines. There was no mention at that point of any fencing. But then, under the heading "Adverse Possession", having cited the speech of Lord Browne-Wilkinson in J A Pye (Oxford) Ltd and Others v Graham and Another (see below), he submitted that there was factual possession by the proven nature of the occupation that had occurred, plus the erection of the fencing after October 1991 and outside the crucial period to which the Judge had correctly directed himself in posing the questions for decision.
15. Mr Askey then submitted to the Judge:

"The intention to Possess: evidenced by the nature of the occupation, the facts speak for themselves and fencing the land to entrench a settled intention to regard an area as one's own - where it is argued that the fence that is put up is in reality adding no more than a physical marker to what is already being treated as the Defendant's land."

16. That argument is, in substance, what Mr Askey submitted to this court on this appeal. In my judgment, he is wrong.
17. As far as the law is concerned, there is really no dispute between the parties. The only case cited was the decision of the House of Lords in J A Pye (Oxford) Ltd v Graham and Another [2003] 1 AC 419. This is the highest authority on this area of the law. It contains the most helpful exposition of the principles. Although a number of speeches were given, I need only refer to short passages in two of them, both of those passages being based on the first instance judgment of Slade J in Powell v Macfarlane [1977] 38 P&CR 452.
18. Lord Browne-Wilkinson said:

"40. In Powell's case Slade J said, 38 P&CR 452, 470:

'(1) In the absence of evidence to the contrary, the owner of land with the paper title is deemed to be in possession of the land as being the person with the prime facie right to possession. The law will thus, without reluctance, ascribe possession either to the paper owner or to persons who can establish a title as claiming through the paper owner.

(2) If the law is to attribute possession of land to a person who can establish no paper title to possession, he must be shown to have both factual possession and the requisite intention to possess ('animus possidendi').'

Counsel for both parties criticised this definition as being unhelpful since it used the word being defined - possession - in the definition itself. This is true: but Slade J was only adopting a definition used by Roman law and by all judges and writers in the past. To be pedantic the problem could be avoided by saying there are two elements necessary for legal possession:

1. a sufficient degree of physical custody and control ('factual possession');

2. an intention to exercise such custody and control on one's own behalf and for one's own benefit ('intention to possess').

What is crucial is to understand that, without the requisite intention in law there can be no possession. Remarks made by Clarke LJ in Lambeth London Borough Council v Blackburn [2001] 82 P&CR 494, 499 ('it is not perhaps immediately obvious why the authorities have required a trespasser to establish an intention to possess as well as actual possession in order to prove the relevant adverse possession') provided the starting point for a submission by Mr Lewison QC for the Grahams that there was no need, in order to show possession in law, to show separately an intention to possess. I do not think that Clarke LJ was under any misapprehension. But in any event there has always, both in Roman law and in common law, been a requirement to show an intention to possess in addition to objective acts of physical possession. Such intention may be, and frequently is, deduced from the physical acts themselves. But there is no doubt in my judgment that there are two separate elements in legal possession. So far as English law is concerned intention as a separate element is obviously necessary. Suppose a case where A is found to be in occupation of a locked house. He may be there as a squatter, as an overnight trespasser, or as a friend looking after the house of the paper owner during his absence on holiday. The acts done by A in any given period do not tell you whether there is legal possession. If A is there as a squatter he intends to stay as long as he can for his own benefit: his intention is an intention to possess. But if he only intends to trespass for the night or has expressly agreed to look after the house for his friend he does not have possession. It is not the nature of the acts which A does but the intention with which he does them which determines whether or not he is in possession.

Factual possession

41. In Powell Slade J, at pp 470-471, said this:

'(3) Factual possession signifies an appropriate degree of physical control. It must be a single and [exclusive] possession, though there can be a single possession exercised by or on behalf of several persons jointly. Thus an owner of land and a person intruding on that land without his consent cannot both be in possession of the land at the same time. The question what acts constitute a sufficient degree of exclusive physical control must depend on the circumstances, in particular the nature of the land and the manner in which land of that nature is commonly used or enjoyed. ... Everything must depend on the particular circumstances, but broadly, I think what must be shown as constituting factual possession is that the alleged possessor has been dealing with the land in question as an occupying owner might have been expected to deal with it and that no-one else has done so.'

I agree with this statement of the law which is all that is necessary in the present case. The Grahams were in occupation of the land which was within their exclusive physical control. The paper owner, Pye, was physically excluded from the land by the hedges and the lack of any key to the road gate. The Grahams farmed it in conjunction with Manor Farm and in exactly the same way. They were plainly in factual possession before 30 April 1986."

19. Lord Hutton said:

"76. I consider that such use of land by a person who is occupying it will normally make it clear that he has the requisite intention to possess and that such conduct should be viewed by a court as establishing that intention, unless the claimant with the paper title can adduce other evidence which points to a contrary conclusion. Where the evidence establishes that the person claiming title under the Limitation Act 1980 has occupied the land and made full use of it in the way in which an owner would, I consider that in the normal case he will not have to adduce additional evidence to establish that he had the intention to possess. It is in cases where the acts in relation to the land of a person claiming title by adverse possession are equivocal and are open to more than one interpretation that those acts will be insufficient to establish the intention to possess. But it is different if the actions of the occupier make it clear that he is using the land in the way in which a full owner would and in such a way that the owner is excluded.

77. The conclusion to be drawn from such acts by an occupier is recognised by Slade J in Powell v Macfarlane, at p 472:

'If his acts are open to more than one interpretation and he has not made it perfectly plain to the world at large by his actions or words that he has intended to exclude the owner as best he can, the courts will treat him as not having had the requisite animus possidendi and consequently as not having dispossessed the owner.'

And at page 476:

'In my judgment it is consistent with principle as well as authority that a person who originally entered another's land as a trespasser, but later seeks to show that he has dispossessed the owner, should be required to adduce compelling evidence that he had the requisite animus possidendi in any case where his use of the land was equivocal, in the sense that it did not necessarily, by itself, betoken an intention on his part to claim the land as his own and exclude the true owner.'

In another passage of his judgment at pp 471-472 Slade J explains what is meant by 'an intention on his part to ... exclude the true owner':

'What is really mean, in my judgment, is that the animus possidendi involves the intention, in one's own name and on one's own behalf, to exclude the world at large, including the owner with the paper title if he be not himself the possessor, so far as is reasonably practicable and so far as the processes of the law will allow.'"

20. As Mr Hall submitted, the correct law for the Judge to apply was as stated by Lord Browne-Wilkinson, in particular in the two propositions, relating, first, to factual possession, and, secondly, to the intention to possess. The first question is whether there was a sufficient degree of physical custody and control by the respondents of the land in dispute; the second is whether there was an intention by the respondents to exercise such custody and control on their own behalf and for their own benefit. That is the test of the intention to possess. As Lord Browne-Wilkinson explained later in paragraph 40, intention frequently is a matter of deduction from the physical acts themselves, but he emphasised that there were two separate elements, namely factual possession and intention to possess, in legal possession.
21. On the facts of this case, I have reached the conclusion that Mr Hall's criticisms of the judgment of the trial judge are well made out and that the Judge was wrong in his reasoning on the question of adverse possession. The reference to the fences, whether the chainlink fence or the palisade fence which occurred after 13th October 1991, was irrelevant to the question which he had correctly identified on page 9 of what was the position from June 1991 until October 1991. It was necessary for the Judge to ask whether by October 1991 the appellants had been dispossessed of the land in dispute and whether the respondents were in adverse possession of it by then. Only if he could say that there had been dispossession of the appellants and the taking of adverse possession of the disputed land by the respondents, would he be entitled to conclude that the appellants had a cause of action in respect if which the limitation period of 12 years would begin to run from October 1991.
22. The Judge did not do that. The Judge relied, quite expressly, on matters have that occurred after October 1991, in particular, the fencing. It was not a slip. He had clearly made it a part of his reasoning that, during what he described as the crucial period of time, there had been dispossession and the taking of adverse possession. He relied on the erection, subsequent to October 1991, of the chainlink fence in the first place and then the palisade fence as affirmation of the position that had existed from June 1991. That is simply not correct. The Judge had to ask what factual possession was there of this disputed land by the respondents between June and October 1991? That had to be answered without reference to other acts, which I have to say were of a different quality, namely acts of enclosure, from those which occurred before October 1991. Before October 1991 the acts committed by the respondents on the appellants' land were acts of non-exclusive user, as described earlier in this judgment. They did not involve factually any control or custody or exclusive possession of any part of the appellants' land. There was nothing else done by the respondents on the disputed land to exclude the appellants from the land, to which they had a registered title.
23. The same goes for intention to possess, which is frequently to be inferred from factual possession. All that the respondents intended to do, in my judgment, was to use their own land, which immediately abutted their unit, and to use the appellants' land adjoining that only to the extent that they needed it as an extension of their land for the purposes of parking, unloading and so on. As for the growing of the Russian vines at the beds at the back of the disputed land, I fail to see how that is of any relevance. What the respondents were seeking to claim adverse possession to was an area of the yard on which they could use vehicles, and so on, not for the purposes of limited cultivation in a confined garden bed on the back edge of the yard. It would be of no use for the respondents to establish adverse possession to a flower bed, or a bed for growing vegetation. In any case, I would not regard the planting of a Russian vine as amounting to an act of adverse possession in the circumstances that I have described.
24. In my judgment, therefore, this appeal should be allowed. In a few words, the Judge arrived at the wrong conclusion because he held that the appellants' claim to land had been statute barred when there has been no dispossession of the appellants and no adverse possession by the respondents of the land in question before the critical date in October 1991. The claim was not statute barred. The Judge was wrong to make the order that he did. On the Notice of Appeal, as elaborated in the skeleton argument, the appellants seek an order that they should have the declaration sought in the prayer for relief in their Particulars of Claim, namely that they own the land that was formerly fenced off by the defendants and a declaration as to the true boundary as contended for on Plan A of the Particulars of Claim. They ask that this should be substituted for paragraphs 2 and 4 of the order of the learned judge.
25. As to the remainder of their claim for relief in respect of an order for the fence to be removed for damages and mesne profits, they ask that that should be remitted to the County Court for determination.
26. Subject to any further submissions on the precise form of the order I should make, I would allow this appeal and make an order along the lines suggested by Mr Hall in his skeleton argument.
27. LORD JUSTICE JACOB: I agree.
28. LORD JUSTICE MOSES: I also agree.

(The claim for damages and mean profits was abandoned by the appellants. The respondents were ordered to pay the costs of the trial and the appeal, such costs to be the subject of a detailed assessment, if not agreed.)